I was asked recently why after 20 years in business strategy, I never worked in restructuring with any of the big global consultancy firms. My answer? Well, I’d sooner cut off my own arm.
In 2003, Aron Ralston was climbing in Blue John Canyon in Utah when his arm got caught between the rockface and a dislodged boulder. After 127 hours of being trapped, screaming, out of food and water, in tremendous pain, bleeding, passing in and out of consciousness, and hallucinating, Aron made the painful decision to cut his arm off to save the rest of his body. He used a dull multi-tool, a crude and inefficient device, to painfully sever his right arm, and free himself to find help.
People in an organization are like parts of a body. Information and money are like oxygen and blood that keeps the various systems working together in harmony. The finance, manufacturing, human resources, and sales departments all work together to keep the organization working well. Until one day, when something in the market happens that the management did not anticipate, like a dislodged boulder, and the body feels trapped.
All too often though, leaders run to a brand name consultancy for help, where well-meaning consultants inevitably pull out the dull and rusty mid-1980’s multi-tool of job cuts, and begin hacking away at the organization in an attempt to save its life. Here’s the thing though: this is not Blue John Canyon, and companies are very rarely truly stuck between a rock and a hard place. It’s more often than not a simple lack of imagination, combined with the short-term cash flow gains manufactured by a forced amputation of talent, that leads some consultancies to recommend redundancies to achieve budget savings targets.
They then write their hefty invoices, while patting themselves on the back for how much money they saved by cutting jobs, and it’s a bit like congratulating Aron Ralston on his rapid weight loss. A monumental adventure in missing the point. It’s crude and painful, and in high contrast to Aron’s bravery, it’s not courageous at all to cut people out of your community, just because they missed a few sales targets. Never mind the effect it has on the people that were cut off, what about the years of rehabilitation required for the parts of the body that remain behind? Do you think those left in the organization will trust their leadership after that? How long will it be before the remaining staff spend any less than 30% of their workday looking for a new job? How long until trust and transparency are recovered, until input seeking behaviors and quality decision-making are back up to peak operating levels? Years.