Posted tagged ‘loyalty layoffs management honesty’

The L Word

January 14, 2009

I doubt there’s anyone left who hasn’t been touched in the past 5-10 years by layoffs. And I certainly recognize that there are times when it is unavoidable. But I wanted to reflect briefly on another L word that is the more significant casualty of this all-too-frequent “solution” to poor resource planning of overly optimistic revenue forecasts by managers. That’s Loyalty.

Here’s the deal:

We are in a services economy. When we were in a manufacturing economy, and forecasted demand fell short of projections, you cut back on production. That is, you made less widgets. Although there were furloughs, shortened hours, and other “people” effects to that cycling, you weren’t the primary target of balancing supply and demand. For anyone who hasn’t figured it out yet, if you’re part of the services economy, that means that YOU’RE the product. That’s one of the reasons that layoffs seem more prevalent than ever.

OK – so be it. If I AM the product, then I should expect to be closely tied to cycles of supply and demand. That’s fair. But for you managers out there who have enough mental mastery to remain objective, here’s what’s not fair:

Don’t expect your employees to be irrationally loyal. The other L word, loyalty, went out with the new deal. The new deal is – you are the product. As a manager, if my company can’t generate enough demand for you, the product, then you become expendable. But if I, as the product, am constantly shopping myself around to find the best price for my services, don’t be surprised. And if you can lay me off with no notice, then I should be able to quit without any forewarning, whether it’s in the middle of your most important project or not. You expect me to be professional when you lay me off? I expect you to be professional when I resign.

And just so I don’t leave you with an overly cynical taste in your mouths, if you want to retain some measure of loyalty, do this:

1. Share your forecasts, projections and general financial health of the business with your staff. And try to do it in a way that’s meaningful to them. Don’t think that just because you’re a publicly traded company that has to post a 10k report that your employees can read it, understand it, and most importantly, connect the dots back to their department’s performance. That’s too much to ask. Help them out. And don’t sugar-coat it. They’re not kids.

2. Put those forecasts, projections and finances in the context of a mission. If your mission is to make gobs of money for shareholders at all costs, tell them that. They’ll figure it out from your behaviors anyway. And then offer them a meaningful employee stock ownership plan (ESOP) so that, if they share your vision, they can put their money where their loyalty is. And if, for some crazy reason, you actually have a mission beyond that, like reducing carbon emissions, curing human African trypanosomiasis (that’s sleeping sickness) or making a better lithium ion battery, share that with them too. Make them feel part of it and spend as much time updating them on your progress toward that goal as you update the SEC and your auditors on your finances. And just as honestly. Just pretend there’s a provision in Sarbanes Oxley where you can go to jail for lying to your employees too…