The following article appears in the journal JOM, 46 (1) (1994), p. 64. JOM is a publication of The Minerals, Metals & Materials Society

Downsizing and the Metals Executive: Handling the Stress

What should a metals fabricator and manufacturer do about stress among executives? Stress is a psychological state of mind that robs an executive of the ability to function well; sometimes, it takes away the ability to function at all.

Downsizing in industry, for example, has brought about a surge of stress that has crippled a good number of companies. Some specific examples are presented in the sidebar.

"Downsizing has created as many problems as it solves," says Edward Lawler, director of the Center for Effective Organizations at the University of Southern California. In his study of 531 companies that have downsized, Lawler found that "many companies doom themselves to difficulty by restructuring the wrong way. Companies think that all they need to do is to cut heads. But the people left behind, under stress, often fail to perform effectively and efficiently. Many companies are unaware of this phenomenon, and only a few companies have learned to do something about educating their employees how to live with stress and still function well."

Kenneth P. De Meuse, an expert on downsizing at the University of Wisconsin, reached the same conclusion: "Recent findings by our own study indicate that profits at big companies decline faster after layoffs than before. Not only is a reduction in force not a quick fix, as many companies believe, but it's most likely not a fix at all because stress robs the remaining executives of ability to work well. What companies need to do is to try to help their employees live with stress without reducing efficiency."

In researching the results of restructuring at 42 companies (six were metal fabricators/manufacturers), the University Research Center found one clear result. While some companies benefited from restructuring and others did not, there was a strong upsurge of stress among middle managers and supervisors, and there was a strong decline in efficiency among these same executives. Stress seems to be a sort of disease that afflicts white-collar personnel and has devastating results in executive performance. (See, for example, "Who Gets Fired Under Restructuring," Business Horizons, Indiana University, October 1991.) However, research has shown ways of alleviating stress.

A stress manager teaches managers how to relax; how to set goals and manage time well; how not to try to move mountains or break through an immovable wall (just go around it!); how to accept the system and work within it; and how to adopt a problem-solving attitude and implement it.

Often, it is difficult for executives to think clearly amidst the fog that stress creates. That is why an outsider helps in defusing the tension. For example, according to the noted stress expert Ann Ladd, there are a series of questions that stressed executives can answer to cut through the fog:

• What is this situation all about? What are the basic facts?

• What is fiction? What is being exaggerated or being made into a catastrophe?

• What is the worst thing that can happen? How likely is it—really? So what if it did happen? How can I deal with it effectively?

• What will probably happen? What might I do to increase the odds for the "best" possible outcome? What are the realistic options? What network do I have that I can go through to get information and gain control?

• How might I use this situation as an opportunity?

There are not many stress managers who are familiar with both the psychology of stress management and the way industry operates. Although some stress managers know executive behavior only through information gleaned from books, there are a few stress consultants who do have an intimate knowledge of executive behavior in industry, of the sort of decisions that have to be made, of how decisions are made, and of the responsibility involved. For a study on establishing a nonstressful working environment, see "Creating A Sense of Executive Community" in the August 1992 issue of Administrative Radiology.

EXAMPLES OF STRESS AND THE EXECUTIVE

Stress robs an executive of the ability to think carefully, realistically, and objectively. Stress also undermines team cooperation. Here are two examples.

In the first case, the manufacturer of components received some complaints from a major customer that the last few shipments contained a high number of below-standard parts. A team went into action to seek the cause. The team found that as a result of restructuring, a quality inspector had been hurriedly promoted to quality manager due to the release of one tier of management. As a quality inspector, the individual had been personally responsible for calibration, components testing, and final assembly testing. As a manager, the individual was unaccustomed to delegating details and trying to cover all bases. The quality manager's stress unnerved the manufacturing and assembly supervisors, who felt harassed and permitted products to by-pass many of the testing procedures so that shipments went out on time. Confronted with the customer complaints, the quality manager broke down, pleaded the burdens and stress of responsibility, and asked to return to quality inspector. To undo the stress among the supervisors and managers, a consultant in stress management held some sessions with the executives, which helped defuse the tension.

The second case involves a company that kept most aspects of manufacturing in-house. This included design, metal fabrication, and final assembly. The strength of this manufacturer, according to the chief operating officer, was its ability to break down an assembly line and start another in a short period, thereby enabling the manufacturer to accommodate a very high product mix in low- to medium-length production runs. However, the recession forced a restructuring. Pruning the middle-management ranks, the company soon found that cooperation vanished among design engineering, manufacturing engineering, production, sourcing, and quality assurance. Each department became so tense over being shorthanded that no one had the patience to confer with any other department. Teamwork seemed to disappear and was replaced by stressful bickering among middle managers over the uneven flow among design, manufacturing, and assembly, as well as responsibility for errors. Orders that heretofore had been shipped 98 percent on schedule, slid down to 80 percent, then to 68 percent, and settled around 50 percent. Stress among managers led to two resignations. When two major customers left, the board asked the president to resign. A new president, after six months, still had not been able to reestablish teamwork in the executive ranks.