Why Downsizing is a Good Thing

In the boom years of the mid-20th century American organizations grew with the assumption that bigger was better. The United States became home to some of the largest corporations in the world. At the time, these companies faced little or no competition from foreign firms or even from smaller American companies. There were ready markets for any goods or services that could be produced.

So what was the problem?

Because of their immense size, there was almost complete insulation of top management from outside perspectives. A command-and-control leadership model, designed for the industrial revolution, left the rank-and-file worker ill-prepared to offer solutions or to take initiative. We did as we were told. We built our skills in deep technical grooves with the thought that as long as we performed the tasks that were outlined for us, and stuck to our specific skills, we would have a job for life. The Industrial Age mindset expected that work was more or less a fixed set of routines or duties. Job descriptions spelled out our responsibilities. We “followed direction”, focused on the work right in front of us, and mostly left the larger organizational issues alone. We could labor away in obscurity and still be assured of a job.

Then The World Changed and So Did the Workplace

In the 1970’s and 1980’s several factors converged which transformed American business. The “quality movement”, which found an initial foothold in Japan, introduced techniques to manage output quality and increase customer satisfaction. Competition became global in reach. Technological change and innovation reduced business cycles significantly, reduced time-to-market dramatically, and made it possible – through the use of high-speed computers and high tech communications – for businesses to accomplish more work with fewer hands. Organizations became leaner and more accountable to the demands of world-wide consumers. Small start-up companies, without the baggage of huge overhead, could enter markets quickly with next generation products and establish a powerful niche. Now consumers had global choices, and they demanded goods and services designed for their needs.

In response to these changes American businesses began to adapt. Organizations began to move from hierarchical-bureaucratic structures toward more lateral and networked structures. They changed from organizations built on size to organizations built around speed. Organizations based on the control of others through boss-centered, command-and-control strategies gave way to organizations based on communication with others – team-centered and collaborative in nature. Organizations that relied solely on systems and procedures gave way to organizations focused more on processes and people. Even the nature of the organization environment changed from a sense of order and certainty to one marked by change and ambiguity. A focus on technology and data gave way to a focus on information and knowledge. A focus solely on products now gave way to a focus on customers. Internal competition and one-upsmanship shifted toward internal alliances and collaboration. Organizations changed their focus from a past and present orientation, invoking the status quo and permanence, to an orientation that was more future oriented – embracing change and potential. Even the nature of employee learning changed from separate off-line training to more continuous real-time learning. The mono-cultural face of the 1950’s gave way to the multi-cultural face of the 1990’s. American workers shifted their focus away from accepted definitions of success toward self-fulfillment and a desire for significance. Role-playing gave way to authenticity. Employee compliance and conformity morphed into involvement and creativity. A continual search for a higher standard of living changed into a search for life/work balance. These changes were evolutionary in nature and largely positive and growth-oriented.

Now, in the crucible of the most recent economic crisis, the playing field has changed in another way. Even adapted businesses have decided to hunker down. They are not hiring and they are paring down workers where they can. Downsizing and outsourcing have become legitimate business strategies. Unfortunately, many of us have lived in our organizations as if just doing our job was good enough. Worse still, many of us tried to get by doing the minimum, saving our best efforts and most of our energy for our off-work times. In this new reality, just doing a job is not good enough anymore.

The Upside of Downsizing?

For those caught in the midst of the crisis, especially those who have lost their jobs, it may be hard to make the upside case. But there is an upside.

What it takes to be a star performer in the new organization is less about background, years of technical expertise, rank or status, and more about competence and contribution, thus opening the door for anyone with the wits and the talent to be a high-performing contributor.

The most productive organizational members now must have a broader consciousness. They will make a visible contribution beyond the boundaries of their immediate assignments. Now each of us is responsible for making the organization what it needs to be – overall. We are held accountable for the success of the whole system – “if you work here it’s your problem”. New organizations require new skillsets. Organizations now look for contributors, not necessarily those with a deep technical groove, but those who show a broader base of knowledge of the workings of the organization and an understanding of system dynamics. A new kind of evolved work style is serving to make us better and more productive generally. In the reality of the new organization, most of us have become “knowledge workers” – finding our value through increased understanding, leveraged information and organizational wisdom earned by paying attention to how things work most effectively, not just what specific work we are doing at the moment. Being effective means being more responsive, more creative and innovative, and more responsible to the larger world environment. Our future is not tied to one organization, one industry or even one career. As workers in the new organization we are developing a set of skills that have broad applicability.

Newer, leaner organizations now push decision-making down as close as possible to the problem, integrating work across functional boundaries to address quality, production or customer service issues. Teams have become the primary work unit in high-performance organizations. There is no more “looking-up the organization” for ideas and direction. Employees are increasingly involved and participative in ways that improve commitment, productivity, quality and innovation. The need for collaboration and cooperation is intense. We now compete for ideas and service excellence – not budget and staffs. Our tasks are not narrowly defined, simple tasks, but system-wide applications and broadly-based. Our suggestions about how to make the process work better are continually sought out. We are asked to be people of influence, taking initiative and making our own decisions within our span of control. We are required to be team-players – collaborating with others as appropriate. The knowledge of how to lead and facilitate teams has become a critical skill. Teamwork represents a set of values that encourages listening and responding constructively to views expressed by others, providing support, and recognizing the interests and achievements of each member.

Forget About Weakness, Focus on Strength

The new organization requires that we sharpen our best skills, focusing not on our deficits but on our strengths. For many of us this represents a significant shift in approach. We have been taught from childhood to focus on improving in areas of weakness rather than building on our strengths. We work hard at fixing what is wrong and overcoming our deficits, rather than capitalizing on our talents. The belief that we can best improve by focusing on weakness, although deeply entrenched in our work culture, flies in the face of research. In fact, it takes far more energy and effort to improve from incompetence to mediocrity than it does to improve from first-rate performance to excellence. Too often we choose to spend our time and energy trying to turn lackluster performance into mediocre performance. Our energy, resources and time should go instead to making our areas of competent performance into star-power.

Our organizations have already evolved, thanks to global change and more recent global economic turmoil. Now it is up to each of us to make the changes in our work habits that will define us responsible organization citizens. When we tailor our work styles to the demands of the new organization, we prosper individually and our companies transform from good to great.

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