Layoffs the Crisis at Delarks Case Study

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The survivors need to be involved in the change process, and not just at the senior management level. They need to feel proud of their company, but unless they feel as though they have some input, they will not feel proud.

There has been little security at Delarks. Nobody feels safe. What was needed from Denton was a clear understanding of what his vision for the company was. From there, security can be defined. It can be explained to the employees what the company was looking for in employees, so that employees can either envision themselves as part of the new Delarks or choose to leave on their own. Even Wazinsky did not feel secure, and by the time of the case neither did Denton, faced with a succession of senior management defections. Denton had not defined what a secure employee might look like. He had not allowed the employees the opportunity to see their own future in the company because he had not provided any security to them. They had traditionally enjoyed absolute job security, for example, and when he shattered that he did not provide the employees with any idea of what they could do to earn their job security in the new Delarks.

There are a number of steps that I would undertake to resolve this crisis. The first would be to apologize for not including the employees earlier. Atoning for past mistakes and demonstrating humility is the first step to regaining trust. The second step is to have a clear vision, one that includes employees. At this company, the employees are accustomed to giving their careers to the company, and the employees still want to have that mindset. Denton either needs to allow this, or explain to them what mindset they should have. This involves creating a vision for each employee of his or her own future.

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The crisis can be resolved over time, but it will take a while to build back the trust that has been lost. Attrition will remain high, so Denton must commit to hiring in order to bring in staff that fit his vision. The survivors need to know that they are still around because they have been hired fresh, meaning that the company believes in them and wants to support their long-term goals. Then Denton needs to back this up, with money or training or other incentive. This means investing in the survivors.

Ultimately, this crisis did not need to occur. There might have been some problems as Denton needed to renew the sales force in particular, but the manner in which the change program was conducted invited mistrust and low morale. In order to resolve this, Denton must first cease making mistakes, and this includes handling his town hall meetings better. He did not even take the time to learn about the issues the employees had before he went to talk to them. The culture of communication and top-down management must change, but something more fundamental needs to change as well for Denton. He needs to put the interests of the employees ahead of the interests of Wall Street. A rapid turnaround might look good today, but if it does not stick it was not a good turnaround. Denton needs to work within the constraints of the company to implement the turnaround, even if it takes a little bit longer. He needs to envision a turnaround model that has the company making money and completing the turnaround using an employee-centric model. If not, he will have trouble attracting and retaining talent at all levels of the organization, something that will destroy a retailer. A shift in perspective, as well as communication, will go a long way to resolving this….....

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