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Deal with budget cuts from task side, people side

Nov. 27, 2011 - 03:28PM   |  
By BALDWIN H. TOM   |   Comments

More pain is coming. Agencies face cuts in annual appropriations and more cuts emanating from the 2011 Budget Control Act, commonly known as the debt ceiling deal.

If your personal income is cut by 25 percent, living as if nothing happened is not an option. While panic is not the approach, certainly an urgent effort to see how to deal with life is an imperative. So it is with organizations and the federal government. When an agency's budget is cut and the president wants agencies to also reduce spending, it is not a trivial matter.

The first question at the water fountain is, "What do we do?" Unless leadership is deliberate in taking action, the fallout from knowing that funds will soon dry up for projects and programs will cause concern, worry and even chaos among the working staff. If not dealt with in an orderly and transparent fashion, morale will suffer along with work performance.

One client, the National Oceanic and Atmospheric Administration's Coastal Services Center with a mission to support management of U.S. coasts, took action to head off the expected reduction in funds. The annual technical services contract budget was reduced by 15 percent. This was accomplished by addressing two aspects of the issue the tasks needing to be done and the people needed to get things done. This task-side/people-side framing of any issue is a simple, yet powerful means to get a handle on any challenge.

On the task side, this agency was able to reduce the number of deliverables by 67 percent through consolidation of similar requirements. By doing so, it reduced the number of contract staff project managers by 60 percent. Importantly, there was no reduction in the quality of performance or in the achievement of work requirements.

On the people side, this agency managed the change well by keeping the personnel work groups in place such that the groups served as homes to personnel during the 12-month reorganization. Everyone was satisfied with the effort.

Without doubt, budget reduction means hiring and salary freezes, delays in promotions, force reduction and serious hits to group morale. In this environment, we might even expect personnel to experience the Kubler-Ross model's five stages of grief: denial, anger, bargaining, depression and acceptance. In this case, grieving is in the loss of existing norms in the workplace, along with funds. There are no easy answers, but if one focuses on both the task side and the people side of the equation in seeking answers, the inevitable trauma is minimized.

Here is one approach to frame the issue: Focus on the task side with long-term strategic mission re-planning along with near-term task management, and focus on the people side with culture-driven people management. The process that supports this is change management a structured approach to transitioning individuals, teams and organizations to a desired future state.

Our approach to solving the task and people needs in a change initiative is to use two flow diagrams that depict each step in the change process. This provides a visual map for all participants, helps in communication transparency, and helps offset the back channels (rumor mills) that sidetrack progress. Importantly, the visuals help all participants to be on the same page at the same place at the same time.

While it appears easy to define the task-side changes in work, technology, processes, finances and desired outcomes, it is difficult to address all the people-side issues because not all participants will be lined up at the same point of understanding and action at the same time. Importantly, the chemistries with existing work groups that create leveraged results can easily be destroyed if a review of the value of groups is not made.

The difficulty in executing a change initiative is in the details. Because change affects all aspects of the work and all aspects of the people doing the work, the complexities of a major change effort can be daunting to manage. To succeed, constant clear communication is needed. All stakeholders need to be involved, a knowledgeable facilitator or team needs to control the process, and much patience is needed from all parties.

Baldwin H. Tom is a Certified Management Consultant ™ and the founder and CEO of The Baldwin Group Inc. An expanded white paper, "Managing Change in Times of Crisis," including the flow diagrams, can be found at

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