We’ll be suffering from thoughtless downsizing being undertaken by Musk for president Trump
Downsizing must be guided by a clear strategic plan that refocuses the organization on its core activities. Secondly, there must be a sharing of the pain by the senior management of the organization. Elon Musk misses the mark.
In the 1990s there was a major wave of downsizing in North America. Students of organization studied this process in some detail and came up with a series of recommendations about whether to downsize and the best way of doing so.
Downsizing alone was rarely successful in terms of achieving an organization’s long-term goals of competitiveness and profitability, though short-term cost savings were sometimes achieved.
There were two bedrock principles that were found to be essential if downsizing were to be pursued effectively. First, downsizing must be guided by a clear strategic plan that refocuses the organization on its core activities. Secondly, there must be a sharing of the pain by the senior management of the organization.
The call by Elon Musk, supported by his colleague, president Donald Trump, is the worst possible way of implementing layoffs.
They called for millions of employees to resign their offices in exchange for a few months’ extra salary. Anyone can take it: There was no analysis of which parts of government needed to contract or which need to be reinforced. There was little constraint on who might or might not take the buyout. And, in the background, there was the implicit threat that people might be fired in the future – hopefully after an analysis of where the needs were.
In this form of reducing payroll, the people who are going to take up the offer are the best and the brightest. They are the people who have deep connections with the environment in which they work and with the clients their departments work with. They are the people who can move immediately into decent jobs.
Departments will be hollowed out. The knowledge based on their experience in the agency will be lost. The remaining officials will be handicapped in performing the work that needs to be done.
It is time to pause. They should carry out a careful analysis of the areas that need to be cut back and the areas that need to be given more resources. Shifting personnel between these parts of the government would be a first step. Then layoffs would be targeted at the areas needing reduction.
We now know the Musk scheme failed miserably. Calling for mass resignations across the government is not strategic targeting; firing all probationary employees across the government is not strategic targeting, although it may be legally possible; firing the guardians of our nuclear secrets is not sensible targeting. Move slowly and deliberatively; it is not necessary to ride roughshod over the Congress, laws and the Constitution of the United States.
And I do not see Musk and Trump sharing the pain.
We have seen in the past couple of days reports that Musk got a substantial financial benefit from government at the same time as he was moving to severely downsize it. We have learned that Musk got $400 million contract from the Department of Defense even as he was trying to cancel other contracts across the government.
This does not look good.
To reiterate, the research on downsizing showed that top management sharing the pain was a significant factor in ensuring that downsizing was successful in reducing an organization’s costs. Musk should relinquish his contract and perhaps Trump, also a millionaire, should pay for his own security detail, just as he asked that of Anthony Fauci and John Bolton as he tried to reduce government costs and punish dissenters.
Martin G. Evans is a writer in Cambridge whose contributions on managerial and political issues have appeared in The Boston Globe, Cambridge Chronicle, MetroWest Daily News, Providence Journal, Toronto Star, Globe and Mail of Toronto, National Post of Toronto and the former Toronto Financial Post. He has taught at the Rotman School of Management at the University of Toronto, London Business School, George Mason University, Rutgers University and the Harvard School of Public Health.
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We’ll be suffering from thoughtless downsizing being undertaken by Musk for president Trump
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In the 1990s there was a major wave of downsizing in North America. Students of organization studied this process in some detail and came up with a series of recommendations about whether to downsize and the best way of doing so.
Downsizing alone was rarely successful in terms of achieving an organization’s long-term goals of competitiveness and profitability, though short-term cost savings were sometimes achieved.
There were two bedrock principles that were found to be essential if downsizing were to be pursued effectively. First, downsizing must be guided by a clear strategic plan that refocuses the organization on its core activities. Secondly, there must be a sharing of the pain by the senior management of the organization.
The call by Elon Musk, supported by his colleague, president Donald Trump, is the worst possible way of implementing layoffs.
They called for millions of employees to resign their offices in exchange for a few months’ extra salary. Anyone can take it: There was no analysis of which parts of government needed to contract or which need to be reinforced. There was little constraint on who might or might not take the buyout. And, in the background, there was the implicit threat that people might be fired in the future – hopefully after an analysis of where the needs were.
In this form of reducing payroll, the people who are going to take up the offer are the best and the brightest. They are the people who have deep connections with the environment in which they work and with the clients their departments work with. They are the people who can move immediately into decent jobs.
Departments will be hollowed out. The knowledge based on their experience in the agency will be lost. The remaining officials will be handicapped in performing the work that needs to be done.
It is time to pause. They should carry out a careful analysis of the areas that need to be cut back and the areas that need to be given more resources. Shifting personnel between these parts of the government would be a first step. Then layoffs would be targeted at the areas needing reduction.
We now know the Musk scheme failed miserably. Calling for mass resignations across the government is not strategic targeting; firing all probationary employees across the government is not strategic targeting, although it may be legally possible; firing the guardians of our nuclear secrets is not sensible targeting. Move slowly and deliberatively; it is not necessary to ride roughshod over the Congress, laws and the Constitution of the United States.
And I do not see Musk and Trump sharing the pain.
We have seen in the past couple of days reports that Musk got a substantial financial benefit from government at the same time as he was moving to severely downsize it. We have learned that Musk got $400 million contract from the Department of Defense even as he was trying to cancel other contracts across the government.
This does not look good.
To reiterate, the research on downsizing showed that top management sharing the pain was a significant factor in ensuring that downsizing was successful in reducing an organization’s costs. Musk should relinquish his contract and perhaps Trump, also a millionaire, should pay for his own security detail, just as he asked that of Anthony Fauci and John Bolton as he tried to reduce government costs and punish dissenters.
Martin G. Evans is a writer in Cambridge whose contributions on managerial and political issues have appeared in The Boston Globe, Cambridge Chronicle, MetroWest Daily News, Providence Journal, Toronto Star, Globe and Mail of Toronto, National Post of Toronto and the former Toronto Financial Post. He has taught at the Rotman School of Management at the University of Toronto, London Business School, George Mason University, Rutgers University and the Harvard School of Public Health.
Like this:
Related Stories
A stronger
Please consider making a financial contribution to maintain, expand and improve Cambridge Day.
We are now a 501(c)3 nonprofit and all donations are tax deductible.
Please consider a recurring contribution.