Downsizing can be one of the most challenging responsibilities for any leader, as it often signifies not only financial difficulty but also impacts morale and job security for employees. However, downsizing can offer strategic benefits when done carefully, acting as a necessary tool for companies to regain focus, reduce costs, and foster long-term sustainability. Leaders who navigate downsizing successfully help to position the organization for a leaner, more competitive future, despite the difficult nature of this process. This article examines the advantages of downsizing when strategically implemented and offers insight into how leaders can manage downsizing without seeing it as a defeat, preserving morale, credibility, and resilience.
With this article, we also get another great interview with Major General (Retired) Ed Dorman discussing how he planned, executed, and learned from downsizing Afghanistan from 2012 to 2021. Take time to become a premium member to learn exceptional leadership lessons while downsizing. Below is a clip that highlights the discussion.
Sources for this Article:
Appelbaum, S. H., Everard, A., & Hung, L. T. S. (2009). Strategic downsizing: Critical success factors. Management Decision, 47(8), 1241-1262.
Datta, D. K., Guthrie, J. P., Basuil, D., & Pandey, A. (2010). Causes and effects of employee downsizing: A review and synthesis. Journal of Management, 36(1), 281-348.
Gandolfi, F., & Hansson, M. (2011). Causes and consequences of downsizing: Towards an integrative framework. Journal of Management & Organization, 17(4), 498-521.
Gandolfi, F., & Littler, C. R. (2012). Downsizing is dead; long live the downsizing phenomenon: Conceptualizing the phases of cost-cutting. Journal of Change Management, 12(2), 177-199.
Mishra, K. E., Spreitzer, G. M., & Mishra, A. K. (2009). Preserving employee morale during downsizing. MIT Sloan Management Review, 50(4), 83-89.
Leading Through Downsizing.
One of the most notable benefits of downsizing is the opportunity to increase operational efficiency by removing redundancy, streamlining processes, and focusing on core activities (Mishra et al., 2009). Downsizing allows organizations to reallocate resources toward profitable areas, ultimately enhancing productivity by ensuring that each role and department contributes value. Research indicates that when organizations prioritize strategic objectives over sheer scale, they may be better positioned for long-term success, even if it requires initial reductions in workforce or services (Gandolfi & Littler, 2012).
As Ed Dorman discusses how we downsized Afghanistan in 2014, it led to more areas controlled by the Afghan Forces. Something critical to the national agreements and to eventually leave the country. This set the conditions for the long-term goals of the United States to allow the Afghanistan Government to reclaim their country. Ed Dorman’s plan for calculated and deliberate reductions provided the proper workload based on personnel. The rush removal in 2021 was the opposite of this plan, and lead to a devastating withdrawal. Something we can all learn from!
Furthermore, downsizing can foster a culture of innovation, particularly if it encourages teams to find creative ways to meet objectives with fewer resources. Leaders can frame downsizing as a step towards creating a more agile, responsive organization, one that adapts to market changes swiftly. This framing can also help to maintain a positive outlook among the remaining staff, who understand that their roles are now critical to the company’s future.
While I was working on the plan in Afghanistan at the end of 2012, we had to find ways to deliver supplies faster and better. With fewer, smaller bases and fewer troops; there were fewer stockpiles and fewer capabilities than before. My unit developed several innovative ways to do this. We also began to network with other units that weren’t necessarily involved in the reduction operations but had capabilities that filled a role. Our innovation and networking made many base closures possible. It also allowed for the next unit to continue to support the mission.
Another advantage of downsizing is that it encourages leaders to prioritize high-impact initiatives and reconsider any non-essential activities that may have accrued over time. By honing in on core competencies and removing less critical projects, leaders have the opportunity to improve alignment with strategic objectives. This, in turn, creates a more focused organization, one where employees are clear about their roles and how their contributions impact the company’s success (Appelbaum et al., 2009). Downsizing can ultimately create a tighter, more cohesive organizational focus, which is particularly beneficial in turbulent economic climates where quick adaptation is essential.
One item I did not discuss in the interview with Ed Dorman was how we decided what bases to keep in Afghanistan after 2014. There was a long discussion with senior military officials, Afghan leaders, state department leaders, and civilian authorities that drove what bases to close versus bases to continue. The bases we decided to stay in were called enduring. The rest were closed based the proper timeline. Downsizing our forces created a priority list based on time or budget.
Another benefit was the force and command structure benefitted from the downsizing. The 2012 Afghanistan military structure was a spider web of agencies and organizations. Much of this complexity came from multi-national commands involved in the mission. After 2012, the mission was streamlined to one command that eventually became Resolute Support to Afghanistan. The command was better connected, even for other nations. We used the downsizing requirements to make the mission succinct.
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Highlighted Lessons from the Full Video with Major General (Retired) Ed Dorman:
How to be a good supporter (Reliability and Adaptability)
How leaders mentor to place people in the right positions.
Leading in diverse and dispersed environments.
Mutual trust and common understanding (Shared Awareness) of the operation.
Effective and clear communication.
What is COMMAND AND FEEDBACK?
Afghanistan 2012 to 2014 Drawdown versus 2021 Drawdown.
Leading through complexity, uncertainty, and risk mitigation.
Bringing supporters along to gain a better understanding of the ground truth.
As a leader, are you making mini-yous?
Understanding your requirements, the rules, and how to frame it to everyone.
What are the 3 Ships?
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