“Right-Sizing” Your Team With Empathy

Problem

I walked into a new job at one point, overseeing a software technology division. We had multiple product lines, one of which was in dire distress. It was hemorrhaging revenue, and it was my job to fix it.

Doing so involved making a lot of very difficult managerial decisions. Essentially, I had to eliminate costs. The unfortunate truth is that in software development, the word “cost” is synonymous with the word “people”. Part of the solution involved “right-sizing” the organization. Layoffs were one task that had to be carried out.

Initially, I was given a week to make the decisions on who would be laid off. I told them that we needed to take a more intensive approach.

Actions taken

The goal was to do what we needed to do while ensuring that the organization that we were left with would be able to scale effectively. Otherwise, it may not survive the transition. We spent around three months walking through the organization and getting an idea of the types of people that we would like to keep. The cuts being made were extensive, but we wanted the message sent to the rest of the team to be to focus on what was good for the company as a whole.

Then, the task became one of rebuilding the culture of the organization. We wanted to analyze what the previously-enjoyed growth had done to us and how it had led us to the problems that we were dealing with currently. Were our managers coached and mentored? I decided to take care of the client-facing side of things, eliminating that aspect of the job so that the people who were building and developing were more able to focus on their work.

We put in metrics that helped us to reorient the work that we were doing. It got to a point where we had to tell our ICs to step away momentarily so that we could go in and decide how best to make the changes that we had in mind. We wanted to remove any and all restrictions in the working environment that we wanted to create. We introduced KPIs that allowed us to measure the progress of our teams. This led to an increase in ownership and engagement.

The process went on for twelve months; that following year, we were finally breaking even.

Lessons learned

• You have to cut costs if your affairs are out of line. If you’re laying people off, you need to have a strong, business-related need to justify the upheaval. None of us enter this line of work to get rid of people.
• The goal should always be to grow the organization. If you lay off a certain percentage of your team, you will find that others also leave on their own during the transition. This comes from a feeling of dismay, in my experience.
• When down-sizing, you really do need to modulate your emotions. This can be very difficult to do, but if you don’t, the task will rip you apart. The irony is that it will get easier; after finishing the task, you need to actively be reconnecting those feelings inside of you.
• You should always make a deliberate effort to remain as transparent as possible. We aren’t working for the CIA. More damaging than knowing the truth is an employee with their mind running wild with fear and uncertainty. You never want to blindside anybody.
• Down-sizing damages the culture of the company. After restructuring, you need to make a deliberate investment in whoever is left. The people are what come out of the effort. Being able to engage with them and to pull everybody back together again will help you mitigate any emotional damage or feelings of distrust.