Over the last few months, businesses have shifted from a growth-at-all-costs mentality to seeking to conserve cash at all costs, and many organizations have had a reduction in force (RIF).
On the latest episode of High Growth Matters, we spoke with Alexis Kavazanjian, seasoned fast-growth executive and CPO at Sendoso, about moving through and forward after a reduction in force (RIF) – and just as importantly, what we can learn this time around, so it doesn’t happen again.
This blog has been adapted from that conversation and covers:
- How to best navigate a RIF
- Moving forward following a reduction in force
- Avoiding future RIFs by learning from current experiences
Don’t miss the full episode: How to Move Forward After a Reduction in Force (RIF)
How to navigate a RIF
Once a decision has been made to let people go, it can be challenging to plan and implement a RIF. Each decision affects real people's lives, and navigating the challenges and emotions of implementing those decisions can seem formidable.
“Approach the process objectively, fairly and treat people with respect,” Alexis says. “That's really going to set the stage for your leadership values and who you are as an organization.”
Reduction decisions shouldn’t be made in haste. Instead, companies need to consider how they found themselves in a position where a RIF is necessary.
Alexis suggests asking the following questions:
- What is the business rationale that led us here?
- Did we over-invest in an area?
- Are we failing to meet business goals?
- Have plans changed, making functions unnecessary?
Once the root cause of a RIF has been determined, it may be easier to utilize an objective approach to analyze which positions should be eliminated to provide an optimal business result.
The importance of proper leverage
Companies can sometimes make RIF choices that unintentionally cost more in the long run — effectively eliminating entire functions that need to be outsourced or replaced. When RIF decisions are made too quickly, short-term benefits can result in greater long-term implications.
According to Alexis, one way to ensure proper reduction leverage is to implement regular and thorough evaluations and assessments.
“Ensure you have the right people at the right stage of the company regularly,” she says. “Determine what roles will be most critical over the next 12 to 24 months, and make sure they’re filled with the right people.”
Moving forward after a RIF
The biggest differentiating factor between success and struggle following a RIF is communication. You must help employees understand the situation, how the business arrived there and how the company will move forward.
Reductions will impact different groups across the organization in various ways. Therefore, creating and tailoring communication to each is essential in influencing reaction and understanding.
“Define a cascading communication plan, where you start with leadership, then people managers, then the impacted group. Then ultimately, your remaining employees,” Alexis says.
As a part of this cascading communication plan, training and equipping managers to navigate difficult conversations and respond to tough questions will be essential for the success and longevity of your company. But unfortunately, manager support is a factor that is often overlooked.
“Your leaders are critical for success. The focus of training shouldn’t be speed,” Alexis says. “If you want your leaders to be involved in the process, you must establish trust with them.”
Alexis shares her philosophy on developing and maintaining a cascading communications plan during and following a RIF. To learn more about how to build trust with your leadership teams and people managers, communicate with impacted people and rally your remaining team members after difficult decisions, listen to the full episode.
Avoiding future RIFs by learning from current experiences
Changing and uncertain economic environments, unforeseen circumstances and many other factors mean difficult scenarios like RIFs are not completely avoidable.
However, a few mindset and strategy shifts can help avoid future RIFs.
“Instead of spending X to achieve Y, companies are shifting towards an approach that requires proof of X to receive Y,” Alexis says.
Rather than focusing on perceived value, companies should focus on actual value backed by data-driven proof, especially in a cost-savings environment that values sustained growth over growth at all costs.
Inward focus, communication and alignment are also necessary for avoiding any potential future RIF. While people need time and space to process, acknowledging the events and working to understand them in the context of forward movement is a necessary step in business.
“You have to set the team up for success by having a really clear path forward,” Alexis says. “People need to understand what success looks like as a business and the plans to achieve it.”
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