Downsize today: while thinking about tomorrow: today's economic realities are forcing many firms to shed jobs and space. Those that consider the whole picture--the people and real estate--can smartly cut and maintain productivity while simultaneously creating an environment for when the recovery comes.

• Author: Pratzel, Bob
• Position: PRODUCTIVITY

Since employees and real estate are a business's largest expenses, the current deepening economic downturn is driving many companies to choose between reducing jobs, adapting space or both. Indeed, headlines chronicle massive job cuts, forced retirements and layoffs by the thousands--in efforts to bring operating expenses back into balance with profitability.

Real-estate issues--while they don't often make the front page--are a prominent part of the same crucial drive for liquidity.

To be sure, cutting staff and space are urgent measures designed to address urgent financial issues. But it's important to not compound the problem of massive sudden change by acting without consideration for the short- and long-term consequences of such actions. Often such "slash and burn" tactics prove to be a massive waste of time and money.

Effective downsizing is not just calculating how many people to cut or how much space to vacate. The goal is to make reductions without affecting the organization's capabilities and productivity. It's also smart to keep an eye on recovery somewhere down the road.

The biggest obstacle to this approach involves emotion. Job cuts and real-estate downsizing always create emotional storms within an organization. Employees being let go are naturally concerned about their livelihoods and futures.

Those who escaped the cuts may feel relieved, but they're undoubtedly anxious about their own futures. They still have a job, but that job is more demanding with the same workload falling on fewer shoulders.

If space planning was not addressed effectively, they may be doing their job in a "twilight" workplace among the empty workstations of their former colleagues. And hovering over it all hangs the unanswered question: "Will I be next?"

Even those executives making the downsizing decisions are not immune to the jitters. A well-run organization can feel like a family. When that community is shattered by layoffs or drastic cuts, there's a common feeling that all bets are off. This can play havoc with performance, just at the time when the company needs to be more productive than ever.

All of these considerations illustrate why it makes sound business sense to consider expert help for managing downsizing projects. It's often easier for an outsider to clearly assess the actual value in situations in which insiders are blinded by company conventions.

Outsiders aren't constrained by concerns that "the CEO won't like that," or "we can't...