Does downsizing stifle new ideas?

By Noah Graff,

Mitchell Lee Marks, a teacher at College of Business at San Francisco State University, wrote an editorial in today’s New York Times challenging an often used company mantra in a period of downsizing, “The company will identify ways to ‘work smarter’ and not just ‘work harder.’” He brings up the point that when people see coworkers laid off, they become averse to risk, holding back trying new, creative ideas which often require trial and error before they can become successful.

He also argues that having less people will mean less brainpower to come up with new solutions, which will stifle a company’s potential to make it out of the doldrums.

Marks says, “research shows that downsizings result in one-time-only cost savings to employers, but leave them no better able to compete in the marketplace. Downsizing has been referred to as corporate anorexia — companies that downsize get thin, but it’s no way to get healthy.”

Playing devil’s advocate – unfortunately sometimes “one-time-only cost savings” is the only thing that can save a company from going under that vary day. In the case of a manufacturing company which simply has no jobs going at the moment, letting go of people may be the only option to keep its doors open.

But I truly do believe that when a company, or team, or even an individual, has to compete with less resources, they often surprise themselves with what they can accomplish, and even do great things they might not have tried had they had their previous resources.

Today I am blessed to be one of those lucky individuals posed with the challenge of working harder, and smarter at an organization with less resources. I will take risks and try new things. If I don’t, there will be no future for Today’s Machining World.    

Question: Do you believe that downsizing more often stifles creativity or encourages it?

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