Rightsizing: Getting it right on the first try

There is a lot of talk about rightsizing, so let’s start by identifying the elephant in the room.

Businesses often face changing work environments, consumer behavior trends, and even market forces that are out of their control. While a slow growth may be on the initial plan, a persistent slow growth may mean that it is time to reevaluate the current business model. There are many elements that could be influencing the company's sales. To mention a few:

• Poor Customer service

• Low Service quality

• Absence of sales staff

• High turnover rates, and more.

All of the above have an impact on the performance of your business. However, this article isn’t going to discuss the ways that businesses can increase their sales and scale their business. Rather, we will try to help figure out how to manage slow growth.

Have you heard of organizational rightsizing in the past?

Many haven’t. By definition, the act of strategically letting go of poor performers, hiring new people, or even shifting existing employees between jobs is known as rightsizing.

Introducing rightsizing is a great way for businesses to monitor their profits and identify key areas that could potentially be causing the slow (or no) growth.

There are a few ways that you can successfully incorporate rightsizing to benefit your company. 

Differentiate Rightsizing and Downsizing

The first step is knowing the difference between rightsizing and downsizing. Rightsizing is a process that focuses on implementing strategies to increase profits, meet company objectives, and reduce redundancies. Some of these strategies include thorough analyses, cost-cutting, shifts in the workforce and even reorganizing management. Sometimes laying off employees is also part of rightsizing, which is why it is commonly misunderstood as downsizing. 

Downsizing, on the other hand, focuses more on reducing staff to increase profits. To do this, businesses often take into account how much profit they are bringing in and make decisions on when and who to lay off. Different from downsizing, rightsizing is more of an ongoing process than a hasty one-time action. 

Acknowledge Past Organizational Changes

After identifying the need for rightsizing, the next step is accepting what needs to change. Businesses can achieve this by looking into P&L statements, timesheet reports, and event management  

First, look at company archives and historic reports and try to search for instances where the business underwent a structural change - for example, change of management, downsizing, revising job roles and assignments, relocation of staff, and more. Once you have identified similar cases, start thinking about practical ways you can identify how those changes have influenced the business for good or bad.

• What was the impact on productivity? (hint: look at timesheet reports and employee performance reviews),
• How have margins been affected?
• Has the shift influenced the product or service the company offers? 

Answering these questions will prepare you for all possible situations that may arise as a result of a structural change. If this is the first time that you are thinking about rightsizing then make sure you have the infrastructure to measure its impact. A task management platform, coupled with a time clock app can go a long way in helping you understand changes in productivity before and after rightsizing. 

Conducting a Structural Diagnosis with Atto

So you know you have to “rightsize” your business, you’ve acknowledged potential areas of change and foresaw how such a change may influence the performance of the overall business. The next step would be to conduct a structural diagnosis within the company. To do so, you need to look within each department to see if there are any areas that need to change. With Atto, you can organize teams in departments based on office location, job site, or role. Furthermore, each team member will have the option of allocating time tracked to specific purposes with job codes. 

By keeping track of this data, you will be able to determine areas where rightsizing would be appropriate while also evaluating every employee's performance.

Evaluate Employees

A crucial part of rightsizing is evaluating a company’s workforce and ensuring that employees are happy, motivated, and productive. With this in mind, taking a closer look at employee performance will help businesses understand:

• Is someone working for a client, department, or project a better fit for another one?

• Do we need to re-assign tasks?

• Do we need to let go of someone who is not performing to their expectations, or rather hire someone new to supplement company offerings?

• Is there a need for additional investment in human resources to increase the quality and efficiency of work?

If you have a time management solution in place, the best way to find the answer to these questions is by monitoring your team's activity. A detailed timeline of your team's daily activity will help you determine how long each employee is taking to complete a task, what is the duration of their commute to the job site, and more.

Additionally, you can conduct interviews and hand-out questionnaires to support the insight that your time management platform offers. Interviews and hand-out questionnaires are time-consuming, however, they legitimize your every move when rightsizing - whether relocation, hiring, or firing. Try out Atto now for 14 days, completely free of charge! 

Create a New Plan

After you’ve completed all of the above steps, it’s time to create a strategic plan for rightsizing. As stated previously, there is a need for a mechanism that will measure the impact of all ongoing changes. Rightsizing will only be effective it is continuously improved by past learning. The new action plan should take into account past learnings (if any), organizational structures that need changing, as well as employee evaluation data, to create a strategic, result-oriented framework focused on a single goal. 

Keep rightsizing always in mind, the new plan can change specific areas where needed, introduce new strategies or even invest in the business to support growth. 

Some Final Quick Tips

A few quick tips that can be quite useful regarding rightsizing are:

• Always let your employees know when you plan on incorporating a rightsizing process within the business. It’s important that there is maximum transparency and good company culture is maintained.

• Take the time to listen to employees. Knowing whether someone is right for the job or not does not always mean that you need to fire them. Sometimes a simple role-switch can be quite beneficial instead of spending resources to interview new employees or distribute tasks among the existing working staff.

• It’s important to monitor the performance of all departments. If the rightsizing process only applies to one department, a business may not be able to meet objectives and goals even with changes.

Remember, learning from mistakes is quite a big part of rightsizing. Completing all of the above-mentioned steps does indeed help with business growth.