The last week highlighted some effects of retrenchment - as part of a turnaround strategy, on organisation development and organisation performance. We emphasised that the dominant paradigm during turnaround strategies is predominantly financial, with the focus on affordability and short term ROI’s. This paradigm often leads to retrenchments.
Just yesterday, a quote on LinkedIn (see image) noted that the standard approach to change is as a linear process. However, even project management teaches that projects include progressive elaboration – details emerge as the project progresses. I will respond to the quote by saying that linear organisational change can only be done when working with inanimate aspects of business such as IT or Finances.
The minute "free thinking" people become part of the process, a systems- or process-methodology is required. Such approaches include frequent stops and starts and many iterations. This perceived “uncontrollability” frightens many managers into searching for fixed solutions and accepted “routes” from point A to point B.
Perhaps the question one should ask when discussing “turnaround strategies” is not “what can be saved by retrenching staff” but “what will be lost when retrenching staff”. It is then that issues such as breakdown of organisational learning, loss of experience, future cost of re-training, damage to organisational core competence, loss of top performers (they get jobs first) and loss of credibility in future recruitment drives come to the fore. In this week a large accounting firm lamented the damage to their image and resultant inability to attract top students from universities. To my mind this is a direct result of their recent retrenchment process
The few effects mentioned are just the tip of the iceberg, as we have not even touched on aspects such as survivor syndrome/ survivor guilt or drop in productivity. The human impact of retrenchments – on organisation functioning and organisational image – lasts much longer than any planned turnaround strategy.
These effects can be compared to attempting to push-start a vehicle while the handbrake is on.