Downsizing Digest Saturday, 22 June 1996 Volume 01 : Number 002
In this issue:
Downsizing List Digest Now Available!
Healthcare Downsizing
Downsizing information
Reasons for Downsizing
Re: Reasons for Downsizing
Re: Reasons for Downsizing
Downsizing Information
Downsizing reasons
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From: "Bill Casti, CQA (Moderator)"
Date: Thu, 20 Jun 1996 23:23:18 -0400 (EDT)
Subject: Downsizing List Digest Now Available!
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From: "Platt.Charles"
Date: Fri, 21 Jun 96 09:39:46 EST
Subject: Healthcare Downsizing
It looks like I am going to unsubscribe to the downsizing list
and I wanted to share what other members of the Downsizing List
said about Downsizing and healthcare.
See ya,
Charles
platt.charles@mail.mccg.org
Subject: Reply to: Healthcare Downsizing
Author: RIVAS.GEORGE_A@HINES.VA.GOV at Internet
Date: 6/10/96 11:18 AM
Charles, having been the victim of healthcare downsizing-three
times in the past eight years, I would be glad to establish
dialogue concerning this issue.
Subject: Re: Healthcare Downsizing
Author: "William J. Nowack" at
Internet
Date: 6/10/96 10:34 PM
I am interested in the interaction of downsizing and the quality
of health care. At this point I am more likely to listen to what
others have to say than to put in my speculations on a thorny
issue. I would like to hear what others have to say on this
point.
Subject: Re: Healthcare Downsizing
Author: "HM1 G. A. Baum" at
Internet
Date: 6/11/96 3:00 PM
Yes, of great interest. Over the last couple of years military
hospitals are in the same boat so to speak.
HM1 G. A. Baum
Assistant Head, Navy Blood Program
Bureau of Medicine & Surgery
2300 E Street NW
Washington, DC 20372-5300
Subject: Re: Healthcare Downsizing
Author: TMcK0128@aol.com at Internet
Date: 6/11/96 6:48 PM
Charles
In response to your question regarding downsizing in
Hospitals/Healthcare. I am extremely interested in what is
happening to the healthcare delivery system. My area of
expertise is Home Heathcare, fortunately, this is one of the
growth areas in this era of consolidation and re-configuration.
Unfortunately, there will be losers in this sector as well as the
hospital
sector.
Tad McKeon
TMck0128@aol.com
Subject: Re: Healthcare Downsizing
Author: "William J. Nowack" at
Internet
Date: 6/11/96 9:08 PM
Hello everyone! I'm most interested in (and affected by)
downsizing in the area of medical care. Particularly, I am
concerned about the interaction of the quality of medical care
and the imperatives of downsizing. It is easy to get up on a
soapbox and declaim on the basis of anecdotal experience, but
does anyone have any hard data?
I can recognize the economic factors which drive downsizing but
am not sure it is an unalloyed good idea in this arena.
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------------------------------
From:
Date: Sat, 22 Jun 1996 10:45:00 +12
Subject: Downsizing information
Fellow list members,
I recently asked if there were any positive examples of downsizing
and there have been somegood instances quoted which is heartening.
(Sorry Joe for missing your previous post)
I also see Charles Platt about to depart the list seemingly in
frustration in not seeing any constructive dialogue about issues -
Did I get it right if you are still there Charles?
It seems to me that in organisations of any size the subject is vast
and complex and this may be the reason why some feel we are not
able to get to down to the heart of the matter?
Having been through one downsizing on the management side (but not in
strategic management) and another where I chose to be on the
departers side I have a modicum of experience. As a consultant since
(in Quality) I have seen others from the side lines.
How about talking about one aspect at a time of the subject. I humbly
offer the following breakdown of topics. We could talk about each
issue and how to control it, in the light of our collective experience.
1. It seems to me that organisations decide to down size mostly
because they become 'currently disfunctional' so that survival is
threatened. How they got into that state is the first area of concern.
2. In planning the event the next issue is how they handle it with
respect to staff, systems (quality) and customers. The use of
consultants, how and what they tell/involve the staff etc all come here.
3. It seems that there is often a DAY or WEEK when it all happens
and many plans get changed so the execution (sorry - the way it is
done) is important.
4. The survivors 'are' the new company so how they are considered
and subsequently 'nurtured' (or not) is critical to the success of
the exercise.
5. The reconstruction phase also was important in my experience
for larger places as the initial plan could not be carried out in detail.
6. The end result. Is the organisation better for the experience?
7. Finally would they do it the same way again? What were the
alternatives in retrospect.
I apologise for soaking up bandwidth but when people start leaving
a list that has/will affect so many people so strongly, I wanted to
make faster progress. I will post my personal answers to my own
questions seperately.
Bill Radford
wradford@midland.co.nz
------------------------------
From: Ray Martin
Date: Sat, 22 Jun 1996 12:53:49 -0500
Subject: Reasons for Downsizing
Bill Wradford, other Downsizing colleagues"
Bill, your 'Dowinsizing information' post is thoughtful. Why firms
downsize, e.g., "how they got into that state (where they had to or
decided to downsize)," is crucial. While you could be right--that firms
become "'disfunctional'"--hopefully some downsizings are less knee-jerk,
more thoughtful?
Rational decisions would be based on the ratio of cost to effectiveness,
with people part of the cost and key to the effectiveness. Hopefully
most downsizing decisions are rational?
There are, I believe, pressures in the international economy that make
upsizings and downsizings more likely than in the past. My dated list,
from a US perspective, roughly rank ordered, includes:
* Increased international competition
* Decreased trade restrictions
* Increased taxes and government spending
* Decreased management layers in US industry
* Increased government regulation
* Increased need for knowledge over manual work
Downsizing colleagues, are these valid? Are there more?
Ray Martin, Ph.D.
Management Consultant
165 Palisades Drive, No. 936
Universal City, Texas 78148
210-659-8377 (tel/fax)
210-212-0783 (alphanumeric pager)
RMartin@texas.net
------------------------------
From:
Date: Sat, 22 Jun 1996 15:59:31 -0400 (EDT)
Subject: Re: Reasons for Downsizing
Bill and Ray,
I just tuned in so I don't have the benefit of seeing Bill's comments.
I would like to address Ray's though.
Could you add some detail to your assumptions, like
> * Increased international competition
> * Decreased trade restrictions
> * Increased taxes and government spending
These increases and decrease lead to "x" which leads to "y" which
leads to downsizing.
> * Decreased management layers in US industry
Isn't this a result rather than a cause?
> * Increased government regulation
Doesn't this usually lead to more effort rather than less?
> * Increased need for knowledge over manual work
Does this mean knowledge instead of manual work? Work smarter?
Here I thought downsizing was due to finding ways to work faster and more
effectively with the "computer age" upon us. Have I been mislead?
Neil Steeman
Change Management Solutions
We solve tomorrow's problems.
CMSolver@scescape.net
Neil Steeman
Change Management Solutions
We solve tomorrow's problems.
CMSolver@scescape.net
------------------------------
From: Ray Martin
Date: Sat, 22 Jun 1996 21:43:43 -0500
Subject: Re: Reasons for Downsizing
cmsolver@scescape.net wrote:
>
> Bill and Ray,
>
> I just tuned in so I don't have the benefit of seeing Bill's comments.
>
> I would like to address Ray's though.
>
> Could you add some detail to your assumptions, like
> > * Increased international competition
> > * Decreased trade restrictions
> > * Increased taxes and government spending
> These increases and decrease lead to "x" which leads to "y" which
> leads to downsizing.
>
> > * Decreased management layers in US industry
> Isn't this a result rather than a cause?
>
> > * Increased government regulation
> Doesn't this usually lead to more effort rather than less?
>
> > * Increased need for knowledge over manual work
> Does this mean knowledge instead of manual work? Work smarter?
>
> Here I thought downsizing was due to finding ways to work faster and more
> effectively with the "computer age" upon us. Have I been mislead?
>
> Neil Steeman
> Change Management Solutions
> We solve tomorrow's problems.
> CMSolver@scescape.net
>
> Neil Steeman
> Change Management Solutions
> We solve tomorrow's problems.
> CMSolver@scescape.net
Bill Radford, Neil Steelman, Mike Townes, other Downsizing colleagues:
Bill, Neil, Mike, thanks for the thoughtful responses. Especially
yours Neil. I have not visited some of these items for a while. It is
enjoyable to rethink my reasons.
* Increased taxes and government spending
Neil: These increases and decrease lead to "x" which leads to "y" which
leads to downsizing.
Ray: Yes, taxes are costs to firms. (But people pay taxes. Firms just do
the bookkeeping and turn them in.) Firms must maintain a favorable ratio of
cost to effectiveness to survive and grow. Some of the easiest costs to see
are direct, say social security or payroll taxes. Downsizing cuts cost far
more than just salary and benefits the employee receives.
Ray: * Decreased management layers in US industry
Neil: Isn't this a result rather than a cause?
Ray: Probably both. But what I have in mind is the recognition and removal
of low-value added management layers. Organizations grew following largely
functional, military-like, bureaucratic models--the private, corporal,
sergeant . . . Commander-in-Chief. Flatter organizations are more
appropriate for modern knowledge workers, especially with modern
communications and other technology. As one young lady from a Fortune 500
firm told me, "All he does (her middle manager) is follow me around to try
to figure out what I am doing so he can take the credit." She was a modern
knowledge worker who could manage herself and her work quite well. Her
division "downsized" a few months after (front page, major papers). The US
military, incidently, has almost completely abandoned the historical layered
structure when conducting operations (e.g., Desert Storm, exercises, when it
matters). The layers are still there, often with a even more complex maze
superimposed for administrative matters.
Ray: * Increased government regulation
Neil: Doesn't this usually lead to more effort rather than less?
Ray: Yes, more effort, but less value added. Human resources (HR), legal,
accounting appear to have been growth areas--their previous value added
diluted into myriad compliance and litigation-avoidance activities. These
people tend to cost the same, but they don't put fenders on cars. Gives
Japanese and others an advantage when relatively more people do value
added (to the product or service). Reason: Firms must still have a
favorable ratio of cost to effectiveness to survive and grow. The final
downsizing occurs with all the government forms completed, all the
government inspectors are gone, and the firm is in receivership.
Ray: * Increased need for knowledge over manual work
Neil: Does this mean knowledge instead of manual work? Work smarter?
Ray: Yes, more knowledge work, less manual work. This is a no-brainer
because it is affecting virtually all areas of the advanced economies.
Smarter? Some firms are working smarter by not working at all--by
outsourcing. Some downsizings are actually outsourcings, sometimes
disguised, sometimes not. Outsourcing, hiring consultants and the like can
allow firms to better focus on their core business--the things they have to
be good at to survive. Hospitals are outsourcing, security for example.
Not so long ago hospitals favored having their own security staff. But
security is no longer just a couple of big guys to restrain an unruly
visitor. It is communications, sensors, security cameras, weapon and bomb
detection, drug accountability--knowledge work over manual. Taxes,
regulations, other people-costs tend to be the same for security people as
health-care specialists. But health care is core. Downsizing/outsourcing
will more likely occur in security.
Mike Townes: current stock prices create a sense of terror in the minds of
many key executives (leading to downsizing).
Ray: Certainly seems to be the case? Bloated US CEO compensation (in my
opinion) relative to other advanced countries help emphasize short term
performance, perhaps over other considerations? I've seen similar
conclusions of people I trust on this, but have not looked at it carefully
myself. But downsizing can almost certainly be a prescription for poorer
performance, even in the short run. Eliminating dead weight or superfluous
layers, on the other hand, should make good economic sense anytime. Anyone
else?
Bill, as I recall, thought someone had left the Downsizing list already?
This list hasn't been around long enough to have done anything wrong! I
think this list is off to a good start. We could solve some problems here?
Or at least understand them?
Ray Martin, Ph.D.
Management Consultant
165 Palisades Drive, No. 936
Universal City, Texas 78148
210-659-8377 (tel/fax)
210-212-0783 (alphanumeric pager)
RMartin@texas.net
------------------------------
From:
Date: Sun, 23 Jun 1996 16:38:08 +12
Subject: Downsizing Information
Fellow List members,
I said I would answer my own questions in my recent post. This is
my personal experience and observation.
As background I should say that in New Zealand the government owned
all the electricity generation and the high voltage distribution
network since the 1920s. The organisation charged with that work was
a department of state and staffed by career public servants. This
lasted until 1987 when government changed the structure and appointed
a board to manage the organisation labelled a 'State Owned
Enterprise' and charged with providing a commercial rate of return to
the government who were (and are still) the only shareholder. This
change was part of a major change in the philosophy of government and
many other governments went through the same process.
<1. It seems to me that organisations decide to down size mostly
Date: Sun, 23 Jun 1996 16:38:08 +12
Subject: Downsizing reasons
In Ray Martins post he asks:"