Downsizing and the Dirty Dozen

Last weekend I flew out to California for a one-day conference just to sit in the audience (as opposed to serving as a presenter, which will be my reason for flying to California for a one-day conference next month).

I'll comment another day about what possessed me go to L.A. for 48 hours. Today, I want to relate one aspect of the conference day: the presence of 3 b-school speakers. Who would have known that university business schools are into positive psychology?

Kit Cameron of the U of Michigan was one of those speakers and he related some of his older research, suddenly pertinent to the current Mini Depression. Cameron and colleagues used to study downsizing companies, especially those caught by unexpected shrinking markets. The current round of lay-offs in the U.S. qualifies for Cameron's description.

Shorthand version: most downsizing companies don't go about the process in ways constructive or respectful. Negative attributes emerge, what Cameron called the "dirty dozen."

1 - Centralization
2 - Crisis mentality
3 - Loss of innovativeness
4 - Resistance to change
5 - Decreasing morale
6 - Politicized special interest groups
7 - Non-prioritized cutbacks
8 - Loss of trust
9 - Increasing conflict
10 - Restricted communication
11 - Lack of teamwork
12 - Lack of leadership

Companies that take the time to counteract these tendencies can instead involve as many stakeholders as possible in strategizing how to downsize. Those companies can produce a better outcome, if not for all the work force, at least for some.

The stats from the Cameron studies are not encouraging: 80% of downsizing companies deteriorate. The much smaller group of 20% come out of the process stronger and eventually profitable again.

Cameron still cites the dirty dozen but takes a different approach to the study of business today, relying on POS, or Positive Organizational Scholarship. And that's the name of the research Center for POS at the Ross School of Business, U of Michigan.

© 2009 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.