Growth tips 30 seconds to business enlightenment.

Making Staff Redundant

29-Jan-2009

"Easy times are the enemy, they put us to sleep.  Adversity is our friend, it wakes us up." (The Dalai Lama)

Making staff redundant is not something any business leader looks forward to.

However, the ability to quickly scale your business to match market conditions can be vital to your survival.

Guy Kawasaki’s new book “Reality Check” offers his opinions on this subject.  Here is our summary of his key points:

• Take responsibility for the decision to downsize.  Don’t blame it on the board of directors, the economy, or the competition.  If you don’t have the courage to do this, don’t be a leader.
   
• Cut deep and cut once.   It is a mistake to hope things will get better soon, and make frequent small layoffs in anticipation of a miracle.  Better to cut too deeply and risk the problem of having to rehire.  “Death by a thousand cuts” is terrible for the morale of the employees who are left.
   
• Don’t let your people choose whether or not to get laid off - you might lose your best people.  Make sure you pick the team you want to keep.
   
• A layoff is a good opportunity to terminate poor performers.  Those who remain will see that you know who the top performers are.
   
• Beware when hiring friends or relatives.  When downsizing happens, employees will be looking to see what happens to them – particularly if they are marginal performers.  Is it cronyism or competence that counts at your company?
   
• Share the pain. Cut your pay. Take a smaller office.  Downsize the company car. Fly economy class. Do something, however symbolic.
   
• Don’t ask for pity. The person who suffers is the one being laid off, not the manager.  Don’t be like the boy who murders his parents and then asks the court for leniency because he’s an orphan. 
   
• Provide support. Usually the people getting laid off aren’t at fault. More likely, it was the fault of the leadership for inadequate strategic planning or poor hiring practices.  Where possible, provide counselling, résumé-writing assistance, and job-search help. 
   
• Immediately after a layoff, don’t hide in your shell.  Now is the time to put on a brave face and get out there and encourage the troops.  Demonstrate what Tom Peters calls MBWA (Management By Walking Around).  Put in plenty of face time so employees see that you really care.

Remember, the number 1 job of a business leader is to rally your people to a better future - and then provide a clear description of how you plan to get there. 

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