Leading through downsizing: Face the facts, but keep the faith

Allana Coulon, our Managing Partner, looks back on a challenging time for the firm earlier this year when we had to downsize. She shares some lessons that may help leaders of other organisations facing further staff reductions.

At the start of this year my firm faced the reality that we would need to make some of our people redundant. We’d already had a sinking lid for several months, not replacing people as they left us, but we knew demand was going to fall off further. We’re a New Zealand-owned firm with a 30-year history of often working for government clients, and so the impact of the new government’s public-sector cuts flowed quickly through to us.

Organisations all over New Zealand, both public and private, have been faced with similar challenges this year and many people have lost jobs as a result. I’ve hesitated to write about my experience as a leader working through these changes, but it’s clear many organisations are facing more workforce reductions and other changes, and I hope that sharing my own experiences here might help.

The Stockdale paradox

As we returned to the office in January, and it became clearer to us that we would need to take steps to protect the organisation, I was reminded of the Stockdale Paradox – “Face the brutal facts, and keep the faith” – and I carried those words with me through the following months.

James Stockdale was a US Navy aviator who was shot down over North Vietnam in 1965. Held prisoner for eight years, he observed that prisoners who were either too optimistic or too pessimistic didn’t make it out – they gave up and died of a broken heart. Those who lasted the longest found an almost paradoxical balance between acceptance of the brutal reality of now and an unwavering faith in making it out in the end.

Stockdale’s very hard-earned insight about finding that balance has often been cited since as a management concept relevant for leading people through difficult change, and I think it armed me well for this challenge.

For me the challenge was personal and familiar. As well as being the Managing Partner of MartinJenkins, my practice for the last 20 years has been supporting organisational strategy, performance, and change. But it’s one thing to support other leaders, it’s another to lead change in your own organisation.

I knew that in every communication and interaction with our people we had to be straight-up and transparent about why we had to reduce our workforce, and why we needed to disestablish certain roles and not others. I also knew we needed to stay hopeful and inspire belief across the whole firm in our ability to pull through.

Organisations all over Aotearoa, both public and private, have felt the impact of the last year's public-sector funding cuts

It was a process that hurt everyone at MartinJenkins. Foremost of course were the people who lost their jobs, but those who stayed also felt it. For a leader, downsizing your workforce is one of the bigger challenges you’ll face – it’s hard making decisions that affect the lives and livelihoods of people you know and care about. And yet, doing nothing was likely to be worse for everyone. The hard decisions and communications are unavoidable, and guiding people through this requires a delicate balance of decisiveness with empathy, of clarity with compassion.

We didn’t always get it quite right, and I learned some things along the way, but the following key principles guided me well through this time, alongside my fellow leaders and our people:

·        Provide certainty in uncertainty

·        Say it straight

·        Be firm and move quickly

·        Honour those leaving.

Provide certainty in uncertainty

We all know personally that uncertainty breeds anxiety. So don't go dark, and don’t be evasive: communicate early and often, even if you don't have all the answers yet.

If you can’t initially be precise about your proposals or decisions, you can still set a clear timeline of when you will talk to people and what process you’ll follow to arrive at decisions.

During our change process, I learnt a valuable lesson at one point when I decided we’d left too much of a gap between staff meetings and so added in an extra meeting to bridge it. I thought I was being a good leader by communicating more, but one of our team later shared with me that the announcement of an unanticipated extra meeting was, for that individual at least, extremely anxiety-inducing. They thought maybe something had gone really wrong and the news was going to get worse.

So lesson learned: think carefully about the plan, set the plan, communicate the plan, and stick to the plan. But most definitely plan to communicate often.

Managing Partner Allana Coulon talking with MartinJenkins people

Say it straight

This is where “Face the brutal facts” comes in. Empathy and compassion are important, but don’t get too caught up in emotions, and don’t fudge the truth with euphemisms or long-winded explanations. You may worry about being too blunt, but people appreciate directness and honesty.

We opened our books as much as we could and told people about our business performance and the market conditions. We did this almost weekly as we worked through the process of deciding how much we were going to have reduce costs and deciding which positions would go.

Most importantly, avoid mixed messages that leave room for false hope. People can handle reality, but vagueness and ambiguity erode trust. 

Be firm and move quickly

Perhaps the hardest part of all is making and communicating the final decisions. As a leader, it’s tempting to put off decisions, perhaps under the guise of “making sure we get it right”. But for people waiting to hear whether they do or don’t have a job anymore, dragging out decisions just prolongs the uncertainty and anguish. And frankly, it does for you too.

The process needs to be speedy, while at the same time not being rushed. Moving with well-planned speed applies not only to announcing decisions, but also to the next steps in the process. Communicate end dates, transfer responsibilities swiftly, and move people through the offboarding process. Where possible, let people go early if they want to – but in any case deal with individuals on their preferred terms as much as possible.

It's kinder to allow people to move forward, and it also enables them to seize opportunities quickly.

Honour those leaving

One of a leader's most critical roles is preserving the dignity of people leaving the organisation, guiding the firm in how to say a fitting goodbye to good people. `

Our need to downsize resulted from external market conditions, and reflected nothing about the commitment and performance of our people who were made redundant. But for those losing their jobs it can easily feel like everything they’ve previously contributed has been undermined or is unappreciated. At a human level that’s understandable, but we knew we still had to do everything we could to authentically recognise each person’s contribution and thank them wholeheartedly.

We also worked hard to help find new opportunities for people leaving. Some former staff came to the party there as well, offering people new jobs. We celebrated as each person found their next role and we have kept in touch.

And finally, don’t rush to what’s next for the firm

I’m probably breaking a cardinal rule by adding an extra item to a list here, but if I had to give one more piece of advice I’d say: Give the firm time to grieve before moving on to what comes next.

Once we announced the redundancy decisions, it didn’t take long for others in the firm to start asking me for our new direction and strategy. Some said they were frustrated that we weren’t sharing this quickly enough. But I was clear that we needed to wait: we needed to let people go well, and give room for that process, before we started to talk about what comes next.

Taking time to honour the people leaving, to say goodbye to good people, matters not only for them, it also matters for those staying. They needed time to grieve not just the departure of valued colleagues and friends but also the larger disruption to what we had planned for the firm. By taking that time to acknowledge the loss and to absorb what had happened, I think we were all in better shape to tackle what was next.

If you’re a leader who has walked a similar journey this year, I would love to hear from you, learn from your lessons and experiences, and find out whether mine resonate with you.