Who gets fired under restructuring?

Business Horizons, Sept-Oct, 1991 by Woodruff Imberman

The current restructuring" trend that has led to the release of many middle management executives (among others), and increased the responsibilities of the remaining executives, has raised two questions; How were the remaining executives chosen? And can they handle the larger responsibilities restructuring has thrust upon them?

As a consultant concerned with aiding corporations in personnel and industrial relations policies and practices, including supervisory and management training and development, it is my everyday business to help evaluate executives. To summarize many years of experience, I am struck by the fact that many of the businesses that have gone through restructuring and removed layers of management have retained some executives who willy-nilly were given larger duties despite the fact that top management often has not clearly analyzed what it wants and why. As a result, the wrong person is sometimes left on the job, and the job won't get done well.

PERSONAL QUALITIES

How are decisions made today about the men and women to be released or retained? I find that the normal processes have been short-circuited. Pressures brought about by the need to cut payrolls, cost containment in manufacturing and distribution, and a more competitive business climate have shifted top management's attention away from personnel problems. Because of these unusual circumstances, two kinds of biases seem to determine company actions in many restructuring cases: overemphasis on personal loyalty and seniority.

Many executives, if they can, promote or retain only those who are personally loyal to them. Such a policy usually makes a company dependent upon the views and decisions of a few men who may think root beer a strong drink or cherish outworn ideas. The policy robs a business of growing leadership.

if loyalty is not the first criterion, selection is often made according to seniority. However, employees chosen according to seniority ma lack the drive to perform well under the new circumstances and may flounder when forced to perform a job of wider scope, less tangible demands, and more complex coordinations. These are personality hazards, not problems of intelligence. They are factors that lie in one's temperament and outlook in life.

There are five rough guides I have found in my consulting experience to be most helpful in appraising executives under consideration for release or retention:

1. Ambition;

2. Attitude toward policy;

3. Attitudes toward colleagues;

4. Supervisory skills;

5. Attitude toward excessive demands.

AMBITION: DESIRE TO GET AHEAD

Virtually everyone, if asked directly whether he is ambitious, would reply in the affirmative. It is almost un-American to confess a lack of ambition, yet a fair number of people do not want to take on increased responsibilities, greater duties, and heavier burdens-unless forced to. As executives, they are poor risks.

Ambition is not simply a desire to get ahead. Ambition may take several forms, and it is the type of ambition one has that tremendously influences his personality and success. Normally, as every keen observer knows, there are three kinds of ambition--three kinds of goals that bring satisfaction to an executive. Some goals are primarily self-oriented; others are social-oriented; and still others are material-oriented.

Self-oriented goals enhance the prestige of an individual in his own eyes. They involve self-expression, a desire to prove one's integrity and competence and to see personal ideas carried into action. Managerial and professional positions attract people who have such goals. Social-oriented goals enhance the prestige of an individual in the eyes of others. They involve recognition, praise, position in the business world, and community stature. Material-oriented goals involve money and property.

In any one person, of course, all these ambitions are intermingled. It is nevertheless true that any one person achieves his primary satisfaction from realizing one of these ambitions. The others are of secondary importance.

Some Examples

A vice president I knew changed the title of his job to general manager because he felt his duties were not those of a vice resident-something no one striving for status would ever think of doing. Many executives have turned down high-salaried jobs for comfortable ones where they liked the people or the work. On the other hand, many people, notably in advertising, cannot work without recognition from their associates, regardless of their income or their fame among others.

Some people cannot work happily without status. In the home office of a large manufacturing company that was going through restructuring, two staff executives were being considered for the position of plant manager in a company plant in a small community. The position carried much more responsibility and a higher salary than their home-office posts, in which they performed well. it involved shirt-sleeve contact with supervisors, workers, and local labor leaders, plus a rough-and-tumble office just off the factory floor. Both men were placed in training for six months. Their home-office titles were removed; their spacious corporate offices were replaced with small cubicles in the plant factory containing a minimum of simple furniture. Because they had no secretaries out front, everyone had direct access to them.