A Tale of Two Companies

Many years ago, I found myself in the position of running about a dozen units fulfilling 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 that involved 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 it was on the local team to implement those ideas successfully.

I visited all of my divisions, but when I got to these two units in particular I noticed very different energies. Both of them had seen a small tick down as the changes settled in, which was to be expected. But where one started to crystalize and regain performance in both sales and profitability, the other was just continuing to limp 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 2-3 years, and that unit was a glowing success stories about resurgence after making difficult decisions.

The other unit did not have that same kind of leadership. Over the next year, they never recovered even to their prior performance. And I noticed when I visited that there was this somber air of sadness 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 covered in a 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 make peace with the hard decision and never moved forward. That team was so reticent to accept the difficult thing and the change that follows 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 that my own error in this tale is that I didn’t realize 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 instead of one of them 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?