Building Trust While Cutting Costs

Article Building Trust While Cutting Costs

During a restructuring, rumors spread and fear takes hold. You can reduce the turmoil by finding ways to inform, empower, and inspire employees.


Rating

7

Recommendation

Almost always, the announcement of a restructuring initiative occasions cynicism and fear among employees – with good reason. Too often, these programs backfire and leave the organization weaker than before. Even apparently successful cost-cutting programs can cause turmoil and damage employee morale. Nevertheless, a well-managed restructuring initiative offers opportunities to create a more agile, more competitive organization. Vinay Couto, Deniz Caglar and John Plansky, experts in strategic cost transformation, outline the elements of a well-led program. getAbstract recommends this article to all leaders and managers of organizations planning cost-cutting programs.

Summary

Restructuring initiatives bring uncertainty, turmoil and fear to an organization. Poor communication leads to insecurity which will affect people’s performance. A botched cost-cutting effort won’t lead to a trimmed, more efficient company but can result in a weaker organization. If, however, leaders provide a clear, detailed strategy to set the company on a successful course and execute that strategy effectively – with empathy and clear communication for employees – the transformation can deliver a stronger, more prosperous organization...

About the Authors

Vinay Couto and Deniz Caglar are leading practitioners for Strategy&, PwC’s strategy consulting group. John Plansky is executive vice president and head of State Street Global Exchange at the financial services and bank holding company State Street Corporation.


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