Attention CEOs - Before You Wield That Hatchet
Attention CEOs - Before You Wield That Hatchet
You may be wondering if your organization can successfully weather the storm created by the current economic crisis. And you may be thinking that it's time to for drastic action. The action that is weighing on your mind is almost unthinkable. Although not yet spoken aloud, these are dreaded words ... reduce headcount ... cut staff ... lay people off. You worry about what these words ... this action ... will do to your employees, those who are out-placed, and also those who remain. You can already see the fear in your employees' faces.
Jeff Pfeiffer, the Stanford Business School professor, says:"Until people know who is being laid off, many will be fearful. And there is lots of evidence that those who "survive" layoffs also exhibit diminished motivation and attachment to the organization - sort of "survivor guilt."
In his article: Decencies of Separation, Steve Harrison, Chairman of Lee, Hecht, Harrison, says, "The three greatest tragedies in a person's world are death, divorce and job loss. And you'd be surprised how many people would place these in a very different order. Laid-off workers are not only separated from their jobs, they are also often separated from their reason for being. We know that separated people can slip into depression, self-destructive behavior, and more rarely, into violence targeted at others."
Just last week, the news media flashed the story of a Santa Clara, California software company employee who was laid off in the morning, then returned in the afternoon demanding to talk with the CEO, VP of Operations and head of HR. When they assembled in a conference room, the angry employee shot them to death.
Those who remain after layoffs, sometimes referred to as the "walking wounded", must contend with an array of emotions, the residue of their colleagues' untimely departure.
According to Laura Stack, author of "Leave the Office Earlier", desk rage is on the rise. She says, "Workplace violence that culminates in bloodshed garners a lot of publicity. Far more common, however, are the shouting matches and fistfights that don't make the evening news... Employees have always encountered workplace stress, but several economic and social trends have either intensified or heightened worker sensitivity to it - war, a bad economy, layoffs, greater workloads, increased productivity demands and longer hours."
Stress levels in the workplace are at an all-time high. A major contributing factor to employee stress is their inability to make sense of the company's decisions.
On her blog, Pink Slip, Maureen Rogers says, "If the lay-offs I experienced had been "smart" lay-offs in which off-strategy or non-profitable business units, product lines, offices were closed down, that might have been one thing. They never were. Instead, they were numbers games - How many people do we need to get rid of in order to make the number we have in mind? In any case, I've yet to see lay-offs solve fundamental identity problems (lack of focus, lack of strategy, lack of coherence, lack of will, etc.) of any company."
Before you wield that hatchet:
1. Assure that everyone in your organization understands the potential impact of change to their professional and personal lives, and provide them with stress management resources and support.
2. Reconsider your business model and strategy. What worked well for you in the past may not work in the future.
3. Perform a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Understand who your competition is and what they are doing to weather the crisis.
4. Adopt the tried-and-true approach of scenario planning to better understand what the future may bring.
5. For each likely scenario, perform risk mitigation to assure that you have the best opportunity of being successful.
6. Target your unprofitable business units, products and services for possible action. Learn why they are unprofitable and what it would take to redesign or redirect them toward profitability.
7. Identify key roles - those you need today and will need tomorrow, and review your leadership talent (not only those who are in leadership roles today, but also those who are emerging leaders) to assure that you have the right people in the right roles.
8. Communicate your intentions through a comprehensive communication plan that addresses all levels and all constituencies within your company and also within your community. Changes in your company have impact beyond your walls.
9. Provide support to your first line managers to strengthen their relationships with your employees. They are your employees' strongest link to your company.
10. Provide job transition support to your employees who will be leaving, assuring that they are well- treated and that they have the tools and resources they need to successfully move on. For your employees who remain with you, provide career planning tools and resources focusing on possible new roles and opportunities within your company.
This economic crisis is, more than anything else, a crisis of confidence. Your employees are looking to you for signs of what is to come. Take the time to "wander around" and talk individually with your employees. This is a great way for you to learn what's going on with them. At the same time, let them know that you recognize their efforts to bring the company through these turbulent times. You are the standard bearer, the leader of your company. If you project a positive, encouraging attitude, your employees will be reassured and they will come to believe, as you do, that your company - their company - will ultimately succeed.