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Downsize wisely: Intelligent team layoffs can maximize adaptation

When company downsizing requires the surgical removal of individuals from work teams, achieving the optimal team composition and disposition can help remaining members adapt, according to research co-authored by Michael Johnson, an assistant professor of management at the University of Washington Foster School of Business.

Leader vs. employee removal
In their investigation of structural approaches to team downsizing, Johnson and co-authors from the University of Michigan and Michigan State University studied 71 simplified work teams comprised of a leader and several supporting players, each serving a different complementary function. Likewise, this downsizing-by-scalpel approach was limited to three scenarios: removing the leader, removing a team member, and removing a team member and shifting the leader into his role. The study found that removing the leader results in the most complete adaptation. “It’s a trigger that things have changed dramatically—not only is the team missing one person, it’s missing the person who used to coordinate the efforts of all of its members,” Johnson says. “So the team is really forced to adapt and share the leadership responsibilities.

“We’re not suggesting that in every team downsizing situation the leader should be taken out,” he adds. “But self-managing teams can be effective when they share leadership responsibilities.”

Emotional stability matters
Additionally, the study found that teams which exhibit a high degree of emotional stability have the strongest chance of adapting most quickly and completely, and performing at a level approaching the pre-downsized team.

“Our research suggests that organizations can prepare in advance for disruptive events such as downsizing by composing teams that are well suited for dealing with disruption,” he says. “Emotional stability is one such factor that managers should use in the process of team selection to enhance teams’ adaptive capacity.”

Johnson’s paper, “How different team downsizing approaches influence team-level adaptation and performance,” is published in the February 2008 Academy of Management Journal. Co-authors are D. Scott DeRue, John R. Hollenbeck, Daniel R. Ilgen and Dustin K. Jundt.