Doing more with less is often thought to be great for business but bad for employees.
When times are tough, a typical response from companies is to cut staff and reduce spending. Research indicates staff layoffs have become a popular management tool to reduce costs and initiate organizational restructures. While such measures might help generate short-term gains, they rarely help senior leaders achieve their goals.
Often, those left behind have to manage with fewer resources and experience a decline in job satisfaction, organizational commitment and overall productivity. Moreover, in light of the COVID-19 pandemic, doing more with less and being challenged by uncertainty could lead to more severe workplace health issues such as burnout. The COVID-19 pandemic has forced many organizations and their people into a state of high anxiety.
Research shows the impact of the pandemic on work/life balance, with employees reporting working longer hours than before the pandemic. As many businesses face significant economic challenges posed by COVID-19-related lockdowns and restrictions, leaders need to consider more productive ways of “doing more with less” – without putting their staff at risk of severe stress and other mental health issues.
Leaders will need to be clear about what projects are helping the organization achieve its competitive advantage and strip back the projects that are not, says UNSW Business School’s Associate Professor Catherine Collins. “It’s about being savvy, not necessarily about what each individual does but rather what is the direction of the collective energy of the employees and the projects that are working on?” she says.
To do this, leaders should identify the projects that need to be completed first and decide which ones can be put on the shelf until more resources become available. Then, consider what products or services will continue to punch above their weight? This in turn helps prioritize the organization’s collective energy.
“When things are tight within an organization, how that organization competes with other organizations needs to be clear from the executive, right down to the team level, and what the frontline team leaders need to do is translate that large vision for the whole organization. It’s about ‘where do we spend that time and make sure that we’re taking some priorities off the list rather than half baking everything?’,” says A/Prof. Collins.
There are pros and cons for organizations in this process. Past research suggests managers and organizations need to be ambidextrous, a concept that was first applied to the world of management by the academic Robert Duncan in 1976 and has since entered various streams of business research. An ambidextrous organization can balance tensions, and specifically, it can balance coordination across business units for efficiency alongside frontline flexibility for innovation and engagement. Both of these tensions are needed for teams to thrive. The way managers implement ambidexterity requires employees to do both things: align and conform to existing systems while engaging in adaptation to innovate – or put more simply, managers ask employees to manage their own time, explains A/Prof. Collins.
There is evidence to show that when organizations are ambidextrous, they deliver superior organizational performance. One study shows companies that use ambidextrous structures are nine times more likely to create breakthrough products and processes than those using other organizational structures. However, recent evidence from A/Prof Collins featured in Managing Uncertainty with Ambidexterity: Good for Business but Bad for the Employee? (due to be published later this year) shows employee wellbeing is negatively impacted by organizational ambidexterity. Importantly, this effect was “not a once-off”, says A/Prof. Collins.
“The initial longitudinal study was with a large Australasian engineering organization undergoing digital transformation, alongside other organizational restructuring,” says A/Prof Collins. “Then we replicated this effect in an experiment with employees from a range of industries. The effect was the same: organizational ambidexterity has a negative impact on employee wellbeing. This is highly problematic since organizational ambidexterity has shown to have positive effects on gross profit, including in this engineering organization I researched.”
So what can leaders do? A sole focus on profitability is no longer palatable in business, explains A/Prof. Collins. A broad range of stakeholder views is crucial for work to be sustainable. And in the current environment with COVID-19 lockdowns and working from home, she says employee wellbeing is of paramount importance. So rather than relying on individuals to resolve the challenges associated with ambidexterity, she suggests organizations need to find system solutions to address the downsides of organizational ambidexterity.
“Perhaps the number of projects an individual employee juggles needs reducing and thought with the work being done more sequentially? Perhaps the priority of projects can be more clearly communicated so employees have clear expectations about how to divide their time (rather than guess or refer to outdated role descriptions). It’s not about working harder; it’s working smarter. The question I pose to managers is, ‘are your systems prompting employees to work smarter? And if not, what can be changed to achieve this?” she concludes.
When faced with the prospect of doing more work with fewer resources, leaders need to work on how they communicate with employees. Clear communication in terms of what they have to do and the reasons why the organization has decided to cut back its resources are important, says Karin Sanders, Professor at UNSW Business School.
For example, she says: “If you can communicate why it is needed, and how you are going to cut staff and reduce spending and resources, employees will understand the decisions better (probably they still do not like it, but at least they see that their managers try to solve the problems in a fair and honest way).”
In addition, she says it is essential that leaders take the time to answer questions of the employees and provide links, webpages, and ways to assist their employees. “If leaders do not communicate their decisions and strategies in a consistent and fair way, employees will be upset, angry, anxious, and this will all have a negative influence on productivity and morale,” she says.
Evidence shows that when leaders include employees in their decision-making and explain the problems, employees will be willing to help. However, they will not work harder if leaders show they do not care about their employees or are unwilling to listen to employees or ask questions, explains Prof. Sanders. Therefore, leaders should give employees the feeling that they are essential and create an inclusive, collaborative culture.
In terms of fostering better communication, leaders should employ the following five strategies:
In terms of managing the stress and mental wellbeing of employees while at work, when system solutions (point two above) do not work, leaders can “take care of employees” by assuring them that they’re being looked after despite the problematic situation and reassuring them that they’re aware of anxiety and mental health issues. For example, leaders can ask experts to help their employees and provide tips on avoiding burnout, concludes Prof. Sanders.
If you can communicate why it is needed, and how you are going to cut staff and reduce spending and resources, employees will understand the decisions better
Finally, it’s essential for leaders to know how they and their teams perform under pressure. In education, teachers are often taught about the Yerkes–Dodson Law. This illustrates the relationship between anxiety and performance and reveals some stress can be beneficial to performance – but only up to a point, as it also depends on the type of task being performed. For example, complex or unfamiliar tasks require lower levels of arousal to facilitate concentration; by contrast, some people better perform tasks demanding stamina or persistence with higher arousal levels to induce and increase motivation.
“People typically perform better under small to moderate amounts of stress compared to a lot of stress or no stress at all (assuming the stress is short-lived). However, there are large differences between people,” explains Amirali Minbashian, Professor at UNSW Business School. He is the co-author of the paper Emotional intelligence and individual differences in affective processes underlying task-contingent conscientiousness which examines this topic in greater detail.
One of his studies conducted with colleagues a few years ago shows some people tend to withdraw from tasks that cause negative emotions such as stress, whereas for others negative emotions lead to the opposite effect (i.e., they focus more on the task and put in more effort under stress). “We also found that the latter group was characterized by higher levels of emotional intelligence (i.e., they score higher on tests that assess their ability to understand and manage emotions),” he says.
“Beyond this, there are many other personality variables that have been shown to influence how much stress an individual experiences. For example, internal locus of control (i.e., the belief that one’s life is within one’s own control), hardiness, and optimism all make a person less vulnerable to stress, whereas the personality dimension neuroticism has the opposite effect,” he says.
Knowing the different personalities in a team and how they work under pressure is critical to team effectiveness. Recognizing this can help leaders harness the power of their teams and truly achieve more with less in a sustainable way.
This article is republished with permission from UNSW BusinessThink, the knowledge platform of UNSW Business School. You may access the original article here.
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