Had lunch with a slash and burn casualty today. You know the scenario, a newly promoted boss comes on board, has marching orders to make a difference or wants to make a name for himself. They unilaterally cut staff in a ruthless not rigorous way. Blood everywhere. They sure made a difference. Everyone now knows who is the boss and the expenses are down so maybe a short term profitability might have been achieved.
A short term gain that probably causes even more long term pain.
The empirical evidence is quite clear on this. Slash and burn doesn’t work. It only accelerates the decline (How the Mighty Fall, by Jim Collins). Neither do drastic restructuring or dramatic initiatives.
So what do you do when expenses need to reduced and headcount is probably the only way? Be rigorous not ruthless and get back to the basics of what made you a success in the first place. By rigorous, I mean looking closely at the anticipated contributions of every person in company. Everyone. Looking forward instead of just backward. By getting back to the basics, figure out what stopped happening that brought you success in the past and figure out how to do it again in the new situation.
At lunch, my friend related that the new boss pretty much cut people based solely on old news, without looking at the funnel that was being created. Now that funnel is gone because the people bringing it in are gone. They had got back to the basics and were starting the way out of the whole. Without being rigorous they threw out the best performers, setting the operation even further back.
Be rigorous, and get back to the basics that worked before.