Chapter 8: Managing People Through Transitions

Overview

In most cases, transformational outsourcing impacts people. Some may lose their jobs, or at least their current responsibilities. Some will be asked to move to a new employer. Even those who are not personally uprooted may have to accept a new way of working. In the managerial fight for competitive success, this part is the hand-to-hand combat. It’s challenging, emotionally charged, and personally wrenching. There are no managerial techniques or approaches that completely eliminate the pain. But there are many that help to minimize it both for the individuals who are dislocated and for those who remain behind. These can be invaluable in helping an organization move on from a difficult transition to a prosperous future.

A recent story from National Savings and Investments shows that these difficult experiences can have positive outcomes. As you will recall from the story in Chapter 1, NS&I retained only 120 people from its original staff of about 4,200; the rest were transferred to its outsourcing provider. Over the next three years, more than 2,000 of the people who were transferred either accepted voluntary redundancy or were re- employed elsewhere as the operation was streamlined. These deep cuts were necessary to position the resulting organization to succeed, and some may have found them more palatable than the insidious incremental downsizings that had been going on for 15 years. However, these justifi-cations didn’t make the experience any easier for the individuals involved.

In 2003, the NS&I executive team held a one-day off-site meeting to communicate its strategy for the coming three years, to which every member of the staff was invited. As the employees of National Savings and Investments filed into the hotel ballroom in early April 2003, they could feel a palpable buzz. The UK government organization had executed a stunning transformation over the past three years, and the CEO had drawn them all together to discuss the organization’s new strategic agenda. After he had laid out the organization’s future plans, individual directors led breakout groups to discuss various aspects of the strategy presented.

We’re talking about a government agency here, so you might be imagining a staid and stuffy day of ‘‘talking head’’ presentations. Nothing could be further from the truth. Steve Owen, Partnerships and Operations Director, led his breakout group in a silver-spangled top hat and tails. Several other key executives appeared in humorous costumes that even the most garrulous participants were reluctant to describe for me. Here’s what happened in one of the sessions:

As the director began to lay out elements of the organization’s future plans, an unfamiliar individual in the second row complained loudly about the quality of the ideas. This went on for several minutes—the director presenting and the heckler throwing verbal darts. Finally, an exasperated government employee in the audience stood up and said to the heckler, ‘‘If you will only keep your mouth shut, you might learn something.’’

The heckler was an actor, hired by the senior management to give voice to some of the issues they thought might be concerning their staff. They had decided that it was more important to get these things out in the open than to let them fester. The vocal employee’s visible and unqualified support for the organization’s leadership was more than they had hoped for. It earned her a bottle of Champagne from the CEO.

The point of the story is that painful transitions can have good consequences for people as well as bad ones. Remember Skip Stitt’s comment?

Point out the people who will have their streets paved for the first time in 60 years and the neighborhood with a crime problem where the additional police will go.

He points out that executives should focus just as much attention on the initiative’s winners as its losers. While initially reluctant, the government employees in Indianapolis got as much out of the change as the constituents. By asking employees to compete with the private sector to run various government processes, Stephen Goldsmith’s administration created an entrepreneurial environment that unleashed creativity, improved motivation, and expanded opportunities for people.

In this chapter, I talk about setting the agenda for transitioning people, communicating about the changes, dealing with unions and with the media, preparing for and executing transitions, and addressing the specific challenges and opportunities that transitions present.