I was talking with an executive the other day who works for a major corporation and like many companies, they have been going through several rounds of layoffs. He mentioned that he felt safer now, they had completed the cuts in his department and he had actually been promoted as a result of the belt tightening. I was relieved for him but as I watched his body language something didn’t seem right. So I asked him, are you happy about this?
His answer didn’t really surprise me but only because I had already heard it a few times before from others. He said, “I’m happy to have a job. I know I’m very fortunate but when times are better I’m going to look for a company that’s a better fit for me.”
We went on to discuss the reasons why he felt the fit was suddenly bad. He has been at this company for over a decade and has always spoken positively about the organization. But the company had handled the layoffs poorly. Communication was weak or non-existent, people were left waiting and wondering for weeks or months then suddenly called in and asked to clean out their office. And that promotion he got, it turned out to be double the work for the same pay – oh and a new title.
What this executive shared with me was that he learned a lot about his company’s leadership during this process. They looked like seasoned and capable leaders when things were growing but when placed under extreme pressure and forced to make tough, quick decisions, they simply handled it the wrong way.
People understand the need to make cuts but they expect an organization to make the decisions using an explainable rationale and communicate with people quickly and clearly. Everyone won’t agree with the decisions, but everyone should be able to understand them. This company made their cuts with no explanation of how or why and people assumed, maybe correctly, that there was no real plan, only panic. Much of the workforce, including those asked to stay and work harder, believes that the business leaders were short sighted and reactive at best. People simply don’t aspire to build a future at a company that’s led that way.
Companies that manage the downturn effectively will create a stronger culture and build commitment among their employees by doing it with clear communication and leaders who are visible, accessible and often humble. They also stand to gain the best talent for the future from companies who don’t and when business begin to grow again, those with the most talented, engaged and committed workforce will lead the way.
Companies that miss this opportunity and lose credibility based on how they deal with adversity will face their next wave of challenges even as the recovery begins. And this one they created all on their own.
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