Many years ago, I found myself running about a dozen units that fulfilled similar roles. Most of them did well, but two of them were struggling and needed restructuring. So, we sat down and made the hard decisions, including reducing staff and reorienting the local organization. The changes we made weren’t exactly the same across the board, but they were quite similar and had the same broad strokes.
Of course, nobody involved was excited about this process. But the numbers were clear, and so was the solution, even if we didn’t like it. My job throughout this was to help create the plan, and the local team was responsible for implementing those ideas successfully.
I visited all my divisions, but when I got to these two units, I noticed very different energies. Both had seen a small tick down as the changes settled in, as expected. But where one began to crystallize and regain performance in both sales and profitability, the other just kept limping along.
I visited the recovering unit, and I was struck by their strong executive who had accepted the painful cuts and decided to move forward. His attitude was clearly one of, “Here’s what we need to get done, this is what we can do, now let’s focus on what we can achieve.” With his hands-on leadership, their numbers continued to trend upwards for another two to three years, and that unit was a glowing success story of resurgence after making difficult decisions.
The other unit did not have that same kind of leadership. Over the next year, they never even recovered to their prior performance. And I noticed, when I visited, that there was a somber, sad air hanging over the office. Desks were still filled with former employees’ equipment, workspaces were never reorganized to account for the new size and makeup of the team, and people would lament about employees who had gone and comment that they missed “the good ol’ days.”
That unit was rife with palpable malaise. There was a begrudging acceptance that they’d been in a bad place and had to make changes, but nobody wanted to move on. Leadership allowed them to wallow in that feeling and ossify. Nothing changed because they were doing the same old work with fewer resources, and local leadership implemented no changes that would have made them more agile or efficient. The executive had accepted the cuts as necessary, but he never looked for a path forward.
I believe that the tale of these two companies hinges on their respective executives. The first unit’s exec acknowledged the hard thing, did it and then moved on to help his unit thrive and grow in a new direction.
The second executive struggled to come to terms with the hard decision and never moved forward. That team was so reticent to accept the difficult thing and the change that followed that, a year later, they had to be further restructured, which proved to be the only way to fix their downward spiral.
In retrospect, I realize my error in this tale was not recognizing that the second executive was unwilling to embrace the future and didn’t resolve that problem myself. Had I done that, perhaps these two units could have had similar positive endings, rather than one performing so poorly that further cuts were necessary.
As you take stock at the beginning of this year, are you where you want to be? Is your company performing well, or do you see difficult changes on the horizon? Now is a good time to look ahead and prepare, rather than being caught unawares at a critical point. There are two paths forward: one is begrudging, and the other is understanding and effective. Which are you going to choose?
Doug Phares is the former CEO of the Sandusky News Group. He currently serves as managing director of Silverwind Enterprises, which owns and provides management services to small businesses. He can be reached at doug@silverwind.biz.
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