CXO

Prepare for the reality of business downturns

Every rose bush has its thorns just as every economic boom will have a bust. Instead of cursing the thorns, learn to deal with them. This week's Artner's Law provides insight on how managers can make the best of bad times.


Editor’s note: TechRepublic contributor Mike Sisco is filling in for columnist Bob Artner during December.

As I watched the space station move across the night sky last week, I recalled a time in the late 1970s when a major news story was about space debris falling to earth. The “good news” was that our scientists knew approximately when the debris would hit. The “bad news” was they didn’t know exactly where it would hit or how big the chunks would be. A 10-pound piece of metal falling from the sky can ruin your day.

The Russian space station Mir came down on March 23, 2001, in a controlled trajectory after orbiting for 15 years. Despite the progress in space flight and exploration, the demise of Mir was inevitable.

The same principle is true with business, the economy, your IT organization, and almost anything else you want to consider. I’m not suggesting you should be fatalistic in your views or paranoid. You just need to be prepared.

With every situation also comes an opportunity. The darkest clouds often do have a silver lining; you just have to find it. If you have a situation that’s too good to be true, it probably won’t stay that way forever. So accept the fact that you will see economic downturns during your career. When you acknowledge this reality, you can begin to learn how to deal with down cycles in a professional manner. In this column, I want to present a strategy IT managers can adopt to survive, and maybe even thrive, during an economic downturn.

Discuss this topic for a chance to win a TechRepublic coffee mug
In our Discussion Center, we're talking about preparing for a business down cycle in your organization. To add to this discussion, post your comment to this article. Each week, the person who provides the best feedback to an Artner's Law column will win a free TechRepublic coffee mug.
To find out who each week's winner is and to subscribe to Artner's Law, sign up for the TechRepublic TechMail now.


Adjust your management style
Your management approach has to change a bit during the tougher “tighten your belt” times that we are experiencing. Many younger IT managers have not experienced the issues that veteran managers face when the company is forced to downsize to protect the company’s viability. Most managers with 15 years or more of experience have been involved in a company reduction in force and can draw on the experience to help them today.

You can also draw upon what you’ve learned from other professional challenges. For instance, as a consultant, I managed the assimilation planning and implementation of more than 30 IT organizations. Every company was unique. In some cases, the goal was to keep the IT operation running just as it was when we bought the company. In other situations, we needed to eliminate the IT organization totally because it did not fit our business model. These situations are very similar to downsizing events, and I learned a lot while managing these challenges.

So what do you do as a manager if you are with a company struggling to adjust to a downturn? First, don’t panic. Yes, there will be tough decisions that have to be made. But these decisions will be easier to make if you do two things:
  • Anticipate the downsizing messenger’s visit.
  • Understand that this economic down cycle will turn around at some point.

The key is to remain focused and to keep several thoughts in mind as you go through your own “adjustment analysis.”

Anticipate the downsizing messenger's visit
Here are steps you should consider before layoffs or budget cuts are required:
  • Focus harder on projects that can provide short-term savings or improvements.
  • Stay in tune with your company’s situation and the impact that events like Sept. 11 and other economic factors are having on your industry and your company. Anticipate future implications to current events.
  • Define your plans and communicate them to management. Managers who have strategic perspectives and real plans that address company needs often see less of an impact than those who do not. The key will be to ensure your department initiatives are critical to the company and not discretionary.
  • You should have already been addressing poor performers. If you still have them around, you need to motivate them to change their work habits. If that’s not possible, reassignment, demotion, or termination might be necessary.
  • Almost every organization has some amount of fat. Identify it and remove it now in order to avoid cutting muscle later.
  • In tough times, it is possible that IT may need to spend more to focus harder on projects that have financial benefits. Don’t overlook the value that IT has as a leverage force to improve productivity of the company. Your ability to help identify initiatives that have short-term, tangible benefits is key.

Here are some steps you should consider after budget cuts or layoffs have taken place:
  • If a downsizing is required, try to ensure that only one round of layoffs is needed. Repeated layoffs create employee doubt and distrust, even cynicism.
  • Although IT managers may have little influence on some layoff decisions, do what you can to assist employees who lose their jobs. Make a strong case to senior management to give at least a month’s severance to workers who are laid off.
  • Provide outplacement support. Even if it’s simply providing resume preparation guidance and lining up a recruiter to provide job search and interviewing tips, the support effort goes a long way and isn’t expensive to offer.
  • Write a letter of recommendation for outgoing workers, if your company policy allows it.



Understand the economic down cycle will recover
Keep your morale and demeanor upbeat but realistic. Your employees will be looking to you for both verbal and nonverbal input and need guidance on where they fit into company plans. I’m not suggesting that you create an unrealistic, happy “spin” after your organization has suffered a setback. Nothing will foster distrust faster than an insincere reaction from a manager. Don’t dwell on the negatives of the past. Use your leadership skills to focus on taking your organization to the next level. Above all, deal with where you are today and move forward.

Go about your transition changes in a humane and decent way, and your legacy from the employees will include comments such as: “We did not like the decision, but we appreciate how professionally you treated us during the transition.” Believe me, outgoing employee feelings are heard loud and clear by the employees who stay on board. Your ability to move forward has a lot to do with the attitude and morale of your remaining employees.

Mike Sisco founded MDE Enterprises, which provides IT management training and consulting services along with IT assessment and planning services. In a recent publication as part of his IT Manager Development Series, Sisco includes a chapter about motivating an IT staff during a down economy. More of his IT management insight can be found in Sisco’s series and MDE’s free newsletter.


 

Editor's Picks