Rightsizing: An opportunity in disguise

Is rightsizing a euphemism for downsizing? For both invite lot of cynicism. The answer is both yes as well as no. In times of major changes triggered by technological advancement and new product innovations, transformation involving reorganization or restructuring businesses is no more a once in a decade exercise but almost a daily affair. With change in technology, overnight some products become out of date and an organization has to undergo a huge change to align itself with this ever changing need for change.

One myth about rightsizing is that it is always cost cutting or reduction of work force. This may not be true. In my experience in a large public sector bank, I can say that many a times rightsizing involves realignment of employees from surplus pockets to deficit pockets, from diminishing verticals to emerging verticals. When new processes are put in place for effective customer service, rightsizing also involves strengthening certain departments to serve the customers. Therefore, rightsizing does not always result in reduction of the staff. This is a myth that we need to clarify across the organization.

In a competitive scenario when organizations are increasingly adding new lines of businesses and are competing to reach out to customers, rightsizing may also involve outsourcing certain traditional functions and realigning surplus staff to new lines of business and as such, rightsizing is now a daily affair in the organization with associated HR issues like training, retraining, confidence building, clarity of roles, issues of mobility both within city and intercity, issues of incentives etc. If these issues are handled on pro-active basis, rightsizing efforts generally pass the test. A leader like a CEO would understand the feelings of employees and take pro-active measures such as building an open communication culture in the organization, install mechanisms for employees to reach out to the top in case of serious personal problems and a listening management at operating level to demonstrate and accommodate cases of serious personal issues. It is the fear of unknown and normally lack of homework by the HR that leads to cynicism in the minds of employees about any efforts to reorganize or restructure. Wherever, there is clarity about goals of rightsizing and right culture, where feelings of employees are respected, the implementation of any reorganization and restructuring is smoother against those organizations who imitate right sizing because it is fashionable to do so. My own experience is that sufficient data should be generated and shared across about the benefits of rightsizing and cost of not rightsizing. 

One myth that prevails across is that it is only lower level employees and their trade unions who oppose right sizing. The fact is that managers including senior managers and their associations demonstrate equal opposition to any effort of re-organization and in some cases they make common cause with those whom they supervise in the process of corporate transformation and re-organization. Such examples are galore especially in public sector organizations.

The larger issue is to create a corporate culture that promotes sharing and listening and finally a caution – abrupt changes always result in disproportionate reaction of employees. In any such exercise, therefore, the role of CEO is strategic – in understanding the issues and stitch the processes in a manner that are not seen as rushed. What is in interest of sustaining an organization and in the best interest of customers and other stake holders has to be initiated. Organizations need to promote agility, mobility, learnability and accountability through well-meaning and well planned reorganizations. Rightsizing therefore is not a demon but a welcome opportunity.