Whenever the economy heads south, downsizing rolls forth. Before the Roaring 90s got underway, we found ourselves in a deluge of downsizing. Back then, there were plenty of corpulent bureaucracies, so trimming the fat was not only fashionable, it was necessary.
The problem was, downsizing became the quick-fix du jour when profit margins narrowed, with many organizations cutting into their muscle and seriously damaging their core strengths. This rash, and often ruthless slashing, was the target of savvy criticism.
Today, most of yesteryear's over-staffed, overly-layered, bloated bureaucracies have faded into history--with a few notable exceptions. [In the 'good times' before the 'dot-com bubble burst blues' reawakened investors to the importance of the bottom line, some organizations allowed themselves to fall off their lean and mean diets.] Today, cutbacks have more to do with diminished demand, than with strategic streamlining.
Back in 1994, we wrote about The Perils of Appalling Downsizing. The conclusions we reached nearly a decade ago are still valid today. Some companies are engaged in 'smart-sizing' and 'smart staffing.' Flex-staffing strategies (involving outsourcing, temp-workers, and the forging of a new employee contract) have greatly changed the organizational landscape.
On the employee side of the ledger, we find a growing belief that everyone is self-employed. Employees increasingly see themselves as free-agents--an attitude that now appears to be necessary for survival, let alone success.
You can easily spot free-agent employees by their: concern with continuous learning and personal growth; determination to overcome fear of working without security; ability to reconcile independence and interdependence; and ready-to-email resume.
The new employment contract has its costs. Employees may be committed to goals and the work at hand, but not to the company. Trust has all but vanished from many organizations, eroding a sense of sustained purpose and self-integrity. Landing a new job has become a cue for gearing up for the next new opportunity. Employees are also playing their 'new idea cards' closer to the vest, with a mind toward capitalizing on their creative notions when the right situation comes along--perhaps their next job, or the one after that, or their own enterprise.
This situation is at loggerheads with the spirit of Building Profits by Putting People First, the subtitle of Jeffrey Pfeffer's The Human Equation, written in the halcyon days of 1998.
The economy has become more chaotic. Job security is virtually extinct--a relic of an Age that seems 'golden' through the romanticizing lens of time past. As Gary Hamel and C. K. Prahalad wrote in Competing for the Future, "What employees hear is that they're the firm's most valuable assets; what they know is that they're the most expendable assets." This is the insidious paradox so many companies have created but all must now face.
In this hypercompetitive, ceaselessly changing economy, brewing a free-market mind-set, chanting the mantra of "only the paranoid survive," and breeding a work force of free-agent employees, how can organizations achieve success when people are the key?
We believe there is a sound course to follow--one that meets the business challenges of this 'next' or 'new' or 'whatever' economy. That course is to stay true in action to the enduring basics of:
Nothing radical. Nothing shockingly new. But for a lot of organizations, the enduring basics (survivors that have adapted and prevailed) will seem revolutionary, cutting-edge, and future-focused. For many, putting these basics into action (not just mouthing the words) will indeed be radical! In a year or two, you'll read articles echoing these same ideas. Deja vu all over again!