Right Way to Close an Operation

Many managers have never before had to shrink their operations or workforces drastically. Now, as they struggle to weather the storm of recession, they risk making what the author says is a common mistake: assuming that they will have to make the tough initial decision but can leave it to others to carry out. Long experience at Corning, Quest Diagnostics, Masonite International, and Accellent taught Freeman the benefits of what he calls a "soft hands" approach, which involves ensuring that employees, customers, suppliers, and communities are treated with consideration and compassion. Such behavior is simply good business. He offers four commonsensical--but frequently ignored--principles. Treat employees with dignity, fairness, and respect. Tell them why they're losing their jobs, what you will do to help them cope, and what you'll need from them during the transition. Communicate fully and often, be visible and personal, and honor company commitments. Treat your customers and suppliers like valued partners. Keep them informed, consider their needs, maintain your focus on quality, and take pains to transfer the business smoothly. Manage the layoff or closure like a project. Appoint an experienced, full-time project leader and a strong team. Define stages of the process, establish criteria for passing through them, and conduct regular reviews. Use judgment and, if necessary, fight back. Don't be pushed by Wall Street or others to move so quickly that the organization ends up suffering. The shutdown of a Corning plant in Indiana, the merger of Quest with SmithKline Beecham Clinical Labs, and the closure of an Accellent factory in Tennessee illustrate successful outcomes of a soft-hands approach.