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Major Cost Reduction
There are many reasons for an organization to make significantly reduce operating costs including economic changes, market changes, new regulatory standards, and a change the strategic business direction. Regardless of reason for reducing costs many times this results in restructuring, the closing of plants or departments, “right-sizing”, or a standard massive cut to all departments.
This can throw an organization into a tailspin of lowering performance and morale at the same time. In some cases, the highest performers leave the organization leaving the organization scrambling to serve their customers. At the very least, the shake up can have a dramatic impact on breaking down trust in leadership, infighting between employees and a fractured culture that takes years to recover. Even the promise of outplacement services and packages isn’t enough to address the negative impact from the change.
Often times, leadership assumes that the negative impact from downsizing or massive cutting of costs can’t be avoided. However, IMPAQ has assisted several organizations in both making drastic cost cuts and downsizing without the negative impact on the culture or even the morale of the people involved.
IMPAQ provides specific guidance to leadership in leading change through extreme challenging change. The strategy involves addressing and guiding people through different stages of change beginning with the state of uncertainty, moving to the stage of preparing for the change, implementing the change and recovering from the change. IMPAQ’s approach to this cost cutting, downsizing and restructuring includes creating an environment where people “support each other through the difficult times.” Sometimes, leadership through cross-functional collaboration at the middle and senior management levels find alternative solutions that minimize the reduction of people.
- People support each other through the difficulties of losing jobs, being displaced, or increased workload
- Trust between management and employees increase
- Alternatives to cost cutting prevent people from losing their jobs
- People stay focused on the change and day-to-day operations
- Leadership communication and action is proactive, caring and clear for the highest level of effectiveness and positive impact on the organization
- People are developed and prepared for expanding their role within and outside of the organization