The Game Plan: The business makes people cuts before the AI tools are ready

Phase 1: Pre-Launch Considerations

What considerations should the business keep in mind before it makes an irreversible workforce decision?

Dora Peake: It’s not enough for us to say this feels risky. We need to be able to translate the risk into commercial terms – from a customer impact perspective, capability loss, execution risk, and ultimately the cost of getting it wrong.

Cassandra Hatton: There’s three groups of questions I would be asking this particular scenario – the work questions, the RAT questions (risks, assumptions and tests) and the alternatives questions.

• Work questions: Anytime we’re making changes to structure, we should never start with the structure. We should start with deeply understanding the work. What are we actually trying to achieve? That’s an outcomes question. How will the work get done? That’s a process and workflow question.
  
  And what are the capabilities we need? We no longer have six generations in the workplace – we actually have six generations plus machines. So we need to consider: What are humans good at? What are machines really good at? And how can we design the work for both of them to complement each other rather than compete with each other?
• The RAT Questions (Risks, Assumptions and Tests): What are the risks of doing this? What are the risks of not doing this? What will the impact of the decision be, and how permanent could that possibly be? Our role as senior people executives is to hold those risks up for the board and for our fellow executives.
• The Alternatives Questions: Have we locked in too quickly to a solution, or have we properly considered other pathways?

James Hancock: This board is rightly worried about productivity, but they’re getting very much balanced to one side only of the equation, which is cost out. You never want to leap from a point of deficit when you’re doing this, otherwise you’ll be in a pretty dire scenario.

What they haven’t looked at in any way is value creation, and that’s alarming and also common at the moment.

Ross Leonardi: Urgency should shorten the feedback loop, but not the thinking. As a people team, our role is to make sure we’re not slowing down, but bringing our expertise to ensure that sustainability becomes a primary discussion point. The ask from the board is to act with urgency, but that doesn’t mean we need to lower the quality of the decisions made.

“Urgency should shorten the feedback loop, but not the thinking. As a people team, our role is to make sure we’re not slowing down, but bringing our expertise to ensure that sustainability becomes a primary discussion point.” – Ross Leonardi CPHR

Phase 2: Responding to execution failure

The board is panicked and has authorised an emergency budget to rehire the roles cut. What is your advice to the board?

Ross Leonardi: My first priority would be supporting the people dealing with the impact today. Leadership needs to be visible, really honest about what’s gone wrong and focused on making the workplace safer – whether that means cutting lower priority work or bringing in temporary support. People in a business can forgive a failed experiment more readily than leadership pretending that it has not failed.

Cassandra Hatton: The fact that we removed 15 per cent and then it didn’t work doesn’t automatically mean we need to put 15% back in – that’s definitely not the solution.

When we made that change, we changed the dynamic and the puzzle pieces. I wouldn’t rehire; I would redesign. I love co-designing and involving our staff – getting input from the ones closest to the work.

Dora Peake: The redesigning concept is absolutely one I would take to the board. It does require patience and being more deliberate than perhaps we have been. But what it enables us to do is deeply understand the type of organisation we are, the type of work we’re doing and keeping the automation and augmentation agenda alive, but in a way that’s far more deliberate and co-designed with our teams.

Phase 3: The issue snowballs externally

The Australian Financial Review breaks a whistleblower’s story titled “The $50 million mistake” – it uncovers how HR warned of the failure, technology requested additional testing, risk recommended delaying the launch and the customer service team raised concerns about servicing impacts.

Employees see the story before you’ve had the chance to run any internal messaging. What do you do next?

Ross Leonardi: The leak is the symptom, not the problem. The real issue here is trust. We need to go to the CEO and the board with very straightforward advice: acknowledge the outcome, treat the concerns as legitimate and approach it with no defensiveness or relitigating details publicly.

Accountability is what really buys us the right to be heard. How do you turn that reputational hit into a governance reset?

James Hancock: Trust is built over 1000 moments and taken away by one. Anything you now say and do in response to the media will get scrutiny, and anything you don’t say will be interpreted in its own way.

I’d love to see accountability play through and focus heavily on customers and employees – as an investor, that would give me great confidence that we’re doing the right thing next.