Organizational De-development

Organizational decline prompts leaders to downsize, reducing the size of the workforce in an attempt to cut costs. This paper discusses some of the dangers of downsizing in which organizations experience an unanticipated and unwanted loss of core competencies. An alternative to downsizing is offered, showing how organizations can 'de-develop' by slowly and deliberately moving to a lower order of organized complexity, retaining essential core competencies and supporting functions. To produce a 'soft-landing' that preserves core competencies, a new identity is forged and connections to the new identity are uncovered. The connections point out what must be preserved, such as a crucial channel for key products, for the new identity to survive and flourish. The de-developed organization preserves customers, products, markets, channels, revenue sources, alliances, skilled people, ways to organize, and/or image crucial to the new strategic identity before letting go of the remaining customers, products, etc. The paper identifies conditions under which de-development can be desirable and suggests a 'devolutionary' process that points out some of the key moves needed to reduce organized complexity and realize a soft landing. Copyright Blackwell Publishing Ltd 2004.