BUILDING TRUST ON THE CUSTOMER

“Everything went quiet.” That’s how one manager described the workplace immediately after his company announced a large-scale restructuring — and it’s an all-too-familiar story to employees whose companies have engaged in a cost reduction initiative. Decisions are being made at the highest level of management, but little is known outside that inner circle. Employees still need to do their jobs: serving their external and internal clients, meeting deadlines, and moving existing projects and plans forward. But that’s easier said than done in the face of uncertainty. Worse still, no one can be sure that a slash-and-burn cost-cutting exercise will accomplish its intended result. Often, these efforts weaken a company instead of positioning it to grow effectively.

Restructuring initiatives can have a debilitating effect on the hearts and minds of employees, affecting those who stay as well as those who are let go. In our work with dozens of organizations implementing sweeping cost-cutting programs, we have observed firsthand the turmoil that employees experience — and how frequently their needs are forgotten during the crucial work of planning for the transformation.

But what if the restructuring were more than a slash and burn? What if it appealed to hope instead of fear? What if it not only promised, but actually delivered, a stronger company and a better place to work? Cost management is effective only when it leads to a less sclerotic, more aspirational enterprise — one without suffocating bureaucracy or micromanagement, in which initiative and entrepreneurship are encouraged and rewarded, internal processes serve the customers and employees instead of “the process” itself, and the company outperforms the competition consistently. If the restructuring doesn’t help the company get stronger — if it doesn’t lead to a better way of working for everyone in it — then it probably wasn’t worth conducting the exercise in the first place, because the effects won’t last.