The economy has taken a major hit, and your business must act fast. The workforce must be pared down, and the horrible decisions must be made. A recent paper suggests more than 69% of executives consider this the most challenging times they have been through, and that its even lonelier at the top now.

So you have to make the hard decisions; survival of the business is the top priority and I don’t want to add to your woes – but how do you ensure that you don’t cut out the heart of your company during the required surgery?

A slew of early retirements may seem a softer blow; losing your more expensive people may look like the easiest target; and training budget is always the first hit. It also common to just throw the problem at your Chief People Officer and leave them to it.

Do you as a leader really see how your business works internally? Are you and your C-Suite now so distanced from the shop floor that you don’t really understand the impact of these hard-hitting decisions? There is a risk of damage greater than the current challenge; it is called the Law of Unintended Consequences. Originally described by Adam Smith, the term was coined by American sociologist Robert K. Merton in the 20th Century.

In our automated, technology driven world, the law of unintended consequences has come to be used as an adage or idiomatic warning that an intervention in a complex system tends to create unanticipated and often undesirable outcomes.

As you look into your organisation, and make decisions about what to cut, it may be advisable to pause and address each decision in terms of its potential outcomes.

Unexpected outcomes can be:

  • Unexpected Benefit – serendipity! A good outcome that you didn’t know was possible when you started the exercise. This is perhaps a performance upshift in your remaining people, or an opportunity to automate a manual process.
  • Unexpected Drawback – detriment in addition to the desired effect. You may reduce manpower costs but the breaks in established business process mean new cost elsewhere or quality suffers.
  • Perverse results – results which are the opposite of the desired effect. This could bea loss of corporate memory and the unrecognized network within the business. Experience shows that the loss of corporate memory can have a greater impact than the presiding trading conditions. Breaking up high performing teams costs you more than you saved, and knowledge of customers, complex processes, and remedial “oil in the works” are not valued until they are lost. Your clients walk away, sadly shaking their heads.

You will feel that you are obliged to make very hard decisions. You may be seriously stressed about it, feeling pretty lonely and weighed down. This is a time to gather knowledge and make intelligent decisions – decisions that will shape your business for many years to come. Make use of your corporate collective intelligence; it’s not all down to you! Engage wise heads in your business, and this includes your non-execs as well as valued middle managers. Start the discussions about how your business works. Take the time to make yourself an up-to-date map, one that you can read and refer to as time goes on and more changes hit.

Use this opportunity to look at how you can buy in services, automate processes, and bring your business forward into a new model, one that can sail the rough seas.

Wendy Boast has a long career in technology and business change, with more than 20 years in executive roles, including founding and running a multi-million change implementation business. You can read her full biography here. Her LinkedIn page is here.