Appendix F — Downsizing

when the project survives but shrinks

• The grid in the introduction assumes a project either carries on or comes to an end
• Downsizing is a third case: the project continues, but with significantly less money, fewer people, or both
• A 50% cut is not fatal by itself, but enough that “business as usual” is no longer an option
• The cut is usually someone else’s decision made on someone else’s timetable
• The goal is not to close the project or hand it over, but to shrink it without breaking it

F.1 Accept the New Reality

• The most common response to a cut is denial dressed up as commitment
  • Keep the old roadmap, stretch everyone, and hope the money comes back
• (Weitzel and Jonsson 1989) calls this the “faulty action” stage of decline: the wrong remedy (working harder) applied to the wrong diagnosis (the project has shrunk)
• The first step downsizing is to re-plan around the resources you actually have, not the ones you used to have
• Answer two questions:
  • What must this project still do to be worth continuing?
  • What can it afford to stop doing?
• Don’t wait for certainty: “we’ll get through this somehow” is not a plan
  • Plan for the cut being permanent, and treat restoration as a bonus

F.2 Re-decide What the Project Is For

• A significant cut invalidates the mission statement, which was written for a project you no longer have
• Re-derive a minimum viable project from first principles
• Everything outside that core is now:
  • Deferred: shelved with a note explaining what it was and why it was cut
  • Delegated: handed to community members who can carry it independently
  • Dropped: acknowledged as no longer part of the project
• A 50% cut is “do half the things properly, or do everything half as well”
  • Choosing the former deliberately greatly improves chances of survival

F.3 Sequence the Cuts

• Cut in an order that protects the project’s ability to recover
• First, reduce scope: it is reversible, and it costs no people
• Then, simplify process and tooling
  • Fewer platforms, fewer active commitments, fewer moving parts
  • But beware consolidation that creates new single points of failure
• Then, reduce people, as late and as fairly as you can
• Last, cut the things that generate future resources
  • Final reports, funder relationships, and reputation
  • Losing eligibility for the next grant accelerates decline (Wruck 1990)
• Write down each cut and the reason for it so it can be reversed if resources return
  • This is the opposite of abrupt closure, where restoration is usually off the table

F.4 Renegotiate, Don’t Just Absorb

• A funding cut is not a quiet instruction to deliver the same results for less
• Renegotiate deliverables and deadlines with sponsors and users
  • Silence and minimization do more harm than honest news (Coombs 2021)
• The project’s advance directive should include “what happens if we lose half our funding”
  • If it does not, writing that answer down is the first concrete step

F.5 Who Stays and Who Goes

• Deciding who stays is the hardest part of leading through a cut
  • Firing and Being Fired covers the mechanics
  • This section is about choosing
• Make the criteria explicit and apply them consistently
  • Perceived favoritism does lasting damage to the people who remain
• Decide by the project’s future needs, not by seniority or by loyalty to the past
  • The skills that built the project are not necessarily the ones it needs now
• Involve others in the decision where you can
  • You are not objective, and you may be the last to see your own blind spots
• Do not make departure contingent on training a replacement

F.6 Survivors

• The people who remain are not necessarily the lucky ones
  • They keep the project but inherit more work per person
• Survivor guilt is real and common:
  • Name this explicitly and make space for it
• If the people who left were not treated decently, the people who stayed will assume they are next and will start looking elsewhere
• Don’t “reward” survivors with impossible expectations
  • “Thank you for staying, now do two jobs” turns a cut into a slow-motion shutdown

F.7 Watch for the Death Spiral

• A cut rarely lands all at once
  • It triggers indirect losses that can be larger than the cut itself
• The most capable people often leave voluntarily once the future is uncertain
• Cascading failure: collaborators and funders scale back their involvement, which justifies further cuts
• Sometimes the honest conclusion is that a 50% cut is really the first step to closure
  • In that case, treat it as deliberate closure rather than letting the project bleed out slowly

F.8 Exercises

F.8.1 The Minimum Viable Project

1. Write a one-paragraph description of the smallest version of your project that would still be worth keeping alive.
2. List three things that you would defer, delegate, or drop if your funding and/or team was cut in half.

F.8.2 Renegotiate

Your project’s funding is being cut by half in three months.

1. Draft the message you send to your funder explaining what you will still deliver and what you will no longer be able to.
2. Draft the one-sentence message you send to your users. How does it differ from the funder’s message?

F.8.3 Who Stays

Your project is losing half its people.

1. What criteria would you use to decide who stays?
2. What criteria are you most tempted to use, and how do they differ from the ones you just wrote down?
3. Who else should be in the room when the decision is made?

Coombs, W. Timothy. 2021. Ongoing Crisis Communication: Planning, Managing, and Responding. 6th ed. SAGE Publications. ISBN 9781071816646.

Weitzel, William, and Ellen Jonsson. 1989. “Decline in Organizations: A Literature Integration and Extension.” Administrative Science Quarterly 34 (1). https://doi.org/10.2307/2392987.

Wruck, Karen Hopper. 1990. “Financial Distress, Reorganization, and Organizational Efficiency.” Journal of Financial Economics 27 (2). https://doi.org/10.1016/0304-405X(90)90063-6.