MAKE STRATEGIC PLANNING A FULL PARTNER OF THE DOWNSIZING PROCESS
Planning is concerned with setting goals, evaluating external threats and opportunities, assessing internal strengths and weaknesses, analysing issues, weighing up alternatives, and developing priorities and programmes to achieve stated goals within a timescale. Few people can argue otherwise than that good planning should be a prerequisite of downsizing, but often it does not happen. The circumstances with which the organizational leader has to grapple may be so overwhelming that planning may be challenged at all levels. At IBM Lou Gerstner became CEO in early 1993 with no computer industry knowledge but a track record of innovation, change and cost control at American Express and RJR Nabisco. IBM is faced with declining financial results, aggressive competitors in the PC business, an erosion of the core mainframe business, and an organization with a culture of dominance which may be resistant to change. Shareholders expect Gerstner not only to downsize further and cut costs, but also to develop an innovative global business strategy aimed at restoring profitability. This is perhaps an extreme case where corporate strategy must be rethought along most dimensions, however, many smaller organizations in different industries face not dissimilar challenges. In-house strategic planning capabilities should not be weakened at a time when they may be needed most. However if inhouse planning groups have become bureaucratic, incapable of creativity or going beyond conventional wisdoms then new methods or approaches are needed. Action learning, scenario analysis and leadership development could be useful in such circumstances. Expert outside planning consultants may help in benchmarking the best downsizing practices of other organizations and supplementing in-house skills. Planning techniques and approaches such as portfolio and value-chain analysis can be used for setting downsizing priorities, and should be used in conjunction with accounting tools such as activity-based costing. Where the task of downsizing is undertaken by a team, there should be at least one expert strategic planner as team-member.