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Duracell's first aid for downsizing survivors.

Duracell's First Aid for Downsizing Survivors

After six difficult months the task of division downsizing is complete. Management has established voluntary separation incentives, negotiated packages for those leaving the company, and even structured outplacement assistance programs for employes whose jobs have been eliminated. The organization now is lean and mean, and the results should start to appear soon in the financial reports.

The results appear, but they are not what was expected. Productivity and morale remain low. Employees' emotional problems have increased, and the employee assistance program (EAP) suddenly seems overburdened. Key managers who survived the cuts are leaving for jobs with competitors. Absenteeism, never before a problem, begins to escalate.

If you think this situation is unlikely to occur at your company, think again. The whirlwind of corporate acquisition activity and competitive pressure that has led to many downsizing programs (and the difficult transitions that follow) shows no sign of abating. A survey of outplaced executives by the consulting firm of Drake Beam Morin Inc. suggests that mergers, acquisitions, and corporate cutbacks may be responsible for more than 60 percent of all job losses among their clients.

Traditionally, personnel executives planning cutbacks have focused their attention on issues relating to employees leaving the company. Now, however, survivor programs have become equally important to managers responsible for seeing their organizations through these periods of change.

The reason is simple: The future productivity and success of the organization ultimately depend on those who stay. Downsizing can have a powerful effect on workers, and this effect actually may undermine the objectives the reorganization was designed to achieve.

Remaining Employees Need Attention

When the US engineering unit of Duracell Inc. underwent its second reorganization in three years, management decided that remaining employees required as much attention as those who would be leaving the company.

A few years ago, Duracell's Waterbury, CT, operation was a manufacturing and engineering facility. In late 1986, management decided to vertically integrate the company's manufacturing operations within its Southeastern plants. As a result, Waterbury was reorganized and its manufacturing operations relocated to other areas.

Walt Christensen, the plant's personnel manager, and his associate, Marcia Bissell, worked with Drake Beam Morin to manage the shutdown and develop outplacement programs for the 250 hourly workers who were laid off. Waterbury became a technical center exclusively, housing the engineering staff that serviced all of Duracell's US operations.

The center's management team, led by Robert Correll, director of engineering and head of the facility, focused its efforts on assembling the necessary staff to meet this new mandate. The unit grew to 95 employees, including engineers and quality control specialists who were recruited from out of state and relocated to Waterbury.

Then in June 1988, Duracell was purchased in a leveraged buyout by a group of investors, including some of the company's senior managers. Among their first objectives was to streamline operations and consolidate the company's engineering staff.

The Waterbury group would be reduced by more than 50 percent, and various staff and administrative functions would be eliminated. The remaining personnel would merge into the corporate technical group and relocate to the company's headquarters in Bethel, CT, 30 miles away.

Faced with his second major upheaval in three years, Correll and his managers had two major concerns. The first -- providing assistance to dismissed employees -- was fairly straightforward to them.

A significant portion of their planning and thinking, however, was directed toward the future of the engineering group. Questions facing these managers included the following:

* Could the survivors function effectively as a unit in the wake of the changes, given that many of the same objectives would have to be accomplished with a reduced staff?

* Would key engineers begin looking for jobs elsewhere?

* Would the downsizing undermine the survivors' company commitment?

* Could Correll maintain his credibility with his staff?

Successfully managing the turmoil and disruption that follows major personnel cutbacks requires several of the following key elements, including:

* Information. The remaining employees must be informed of the changes and the reasons behind them and assured of their status with the company.

* Recommitment. Survivors must make an active recommitment, professionally and emotionally, to remain with the company.

* Ongoing support. Assistance and feedback mechanisms must be available to employees throughout the transition.

These elements are critical to ensuring that survivors are not overlooked simply because they have jobs and that they receive help in adjusting to their new environment. Without such help, workers may feel overwhelmed by the stress and turmoil created by the transition, and the organization can come to a grinding halt.

Stress can originate from numerous sources, ranging from uncertainty as to how to relate to former colleagues and associates to the pressure of feeling that survival was simply luck. Employees who are unsure why they have been chosen to remain with the company may decide their luck will not hold the next time around. They begin searching for another job.

At Duracell, survivor program planning began almost two months before the downsizing announcement date. The initial effort took place with key senior managers who were to remain on the center's staff because they were responsible for much of the day-to-day work with the survivor group. These managers attended individual and group sessions to allow them to assimilate the restructuring. Each manager was provided with personal career assessment counseling to help evaluate the impact of the changes on his or her career with Duracell.

A series of meetings between Duracell managers and Drake Beam Morin consultants responsible for the design of the program identified three major phases of activity for the program -- announcement activities, immediate follow-up, and long-term support.

Staff announcement activities were structured to ensure every employee was informed individually of his or her status with the company following a full staff meeting. Survivors were informed about the support services available to those leaving the company so that they would know exactly what was happening with their friends and colleagues. They also received an outline of the assistance they would receive as survivors.

Behind this decision was the desire to ensure that the remaining personnel would have the information to make an active choice to stay. Management also hoped it would help staff begin the psychological and emotional process required to make the transition successfully. Workshops were planned for the following day to help achieve this goal.

Dealing with the Shock

During the two days after the announcement, survivors were split into cross-sectional groups that included the senior management of the center. Each of these sessions was structured to examine the emotional, work, and career issues that surface following any major organizational change.

The first sessions were targeted toward the emotional impact of the announcement. They gave employees the opportunity to discuss how they felt about the layoffs, their future with the company, and the future of the center as a team. These meetings were an important first step in rebuilding morale and productivity.

As a result of questions raised by survivors at these meetings, follow-up sessions were held with members of each department to discuss specific work-related issues. Senior managers presented the new organizational structure to all groups, as well as information on revised work assignments, priorities, and objectives.

These discussions were particularly useful in resolving survivors' concerns regarding management's productivity expectations following the reductions. They were effective in reassuring survivors that they would not be asked to cope with unrealistic work loads.

Perhaps the most important aspect to the long-term success of the program was the ongoing support available to survivors in the months that followed the layoffs. Key management, which had always had an open-door policy, was encouraged to meet with the remaining staff frequently and informally, often during lunch or over coffee. Several meetings were even held in airports to accommodate staff travel schedules. A significant amount of effort was put into periodic pulse taking, and managers regularly discussed the results of these conversations with each other.

Extra efforts were made to make Christensen and Bissell available to employees who wanted to discuss work or personal concerns with someone other than their line manager. Reminders of the existing EAP, which was available on a 24-hour, anonymous basis through an outside consulting service, were distributed as well.

Finally, a follow-up meeting with the survivor group was held approximately two months after the downsizing to ensure all relevant issues had been addressed and assess the organization's progress.

Duracell still considers itself involved in its survivor program, although the center's managers feel the program has met many of its goals. Despite active recruiting by competitors, only two survivors have left the company for other jobs. In general, the staff has maintained its productivity in spite of the cutbacks and is committed to remaining with Duracell.

The feedback and comments received from the survivors clearly indicate that the attention they received through the program was critical to them personally and professionally during this difficult period.

Christensen and Bissell, the human resources specialists responsible for much of the design and execution of the program, were not among the survivors. They knew up front that their positions were among those to be eliminated and that their functions would be assumed by the human resources staff at Duracell's headquarters.

Despite their obvious personal concerns, the pair remained at Duracell for two months after the downsizing to manage the implementation of the program for survivors.

"In a strange way, the fact that we were committed to the program even though we were leaving the company gave us an added degree of credibility in working with others," Christensen says.

Bissell adds, "Our own experience as survivors of the manufacturing lay-offs in 1986 made it easier to understand issues raised by staff members in spite of our own positions."

Sharon Carrington, who headed the consulting team that worked with Duracell, acknowledges that such programs are not for everyone.

"The success of any effort directed toward survivors requires a great deal of individualized effort and a major commitment from senior management," Carrington says. "Reorganization breeds strong reactions from employees, and managers have to be prepared to deal with the impact of these changes over time to make the program work. It can be as stressful for senior managers as it is for employees."

Correll adds, "Our personnel decisions were painful ones. There was not one person in the survivor group whose skills were not critical to the future of the company. It was absolutely essential that our group continued to maintain its contribution to the company, despite all the changes that were happening."

Duracell's experience underscores a message that many personnel administrators have learned the hard way. When planning downsizing strategies, do not overlook the employees who are staying with the company. After all, the company's future depends on them.

Lee Feldman is a principal in Peters & Feldman Marketing Communications in New Canaan, CT, and a free-lance writer.
COPYRIGHT 1990 American Society for Industrial Security
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Author:Feldman, Lee
Publication:Security Management
Article Type:column
Date:Feb 1, 1990
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