Knee-jerk layoffs will harm your organisation

May 03, 2009 Management, Sunday Nation

During boom times, this is what companies say: “Employees are our greatest asset. We are nothing without our staff. We are a people business. Our greatest mission is to nurture talent. The only sustainable competitive advantage is what we do with people.” Blah, blah, blah…

During recessionary times, this is what companies say: “Challenging global economic conditions have forced us to take stock. Businesses must be lean and flexible to survive in this environment. We are rethinking our business model. Certain staff positions must be eliminated in order to achieve efficiencies. Salaries are our biggest cost line, and savings will inevitably be needed.” Blah, blah, blah…

So which is it? Are employees truly the beating heart of the business, the place where knowledge resides, the competitive edge in the marketplace? Or are employees goats to be herded into pens when the grass is green and then chased away when the dry spell comes? I wish businesspeople would use language with a modicum of sincerity.

As things stand in Kenya today, the threat of layoffs looms large over many organisations. That is not at all surprising: conditions ARE bad; globally, perhaps the worst in a generation. And they could become especially bad in Kenya, where we are often the architects of our own economic misfortune.

But consider what this threat (real or imagined) does to most organisations. Where layoffs have happened, or are about to happen, the atmosphere is thick with gloom and fear. People keep their heads down, they whisper in huddles, they look out for signs, they try to find out who’s in the ‘envelope’. In such times, quality defects and poor service multiply. Even employees who are spared will be very suspicious next time around.

Here’s the unvarnished truth. People ARE the heart of the business – any business. Business knowledge resides in the heads of people, not machinery or computers. Business greatness comes from great leadership – at all levels of the organisation. The most unique asset you can have in your organisation is ‘buzz’ – what the French call ‘esprit de corps’, the spirt of the collective. Outstanding organisations have always released this spirit in their employees – they give a greater meaning to work than is otherwise available.

But there’s a caveat: few organisations extend this importance to ALL employees. Talent, spirit, buzz – these are words that are applied to a select few, not to the greater mass of employees. And it is insincere when many business leaders go around pretending that they feel it for all. I have worked with or studied hundreds of companies across many countries in my time, and the handful of truly outstanding organisations have something in common: they create buzz in every employee; they extend their appreciation and nurturing of talent across the whole organisation.

In excellent firms, most people you encounter enjoy working there – and it shows. People feel part of a bigger purpose, and feel that their work lends meaning to their lives. They are part of a brand they believe in, not exploited by an organisation they despise. They feel valued, appreciated and ‘at home’. It takes a lot to lure them away.

In most of our companies, however, things are very different. There is always a small, elite band, usually directors or senior managers, who are pampered and given various perks. And then there is a great mass of ‘workers’, who are homogenous and expendable. These people are employed en masse in boom times, and sacked en masse when demand wanes. They are given awful working conditions, and even their safety is an afterthought. They leave for better pay without a second thought.

Yet an organisation is only as good as its average employee, not its best one. And we are missing the boat when it comes to motivating the average employee in this country. That is why we encounter so many sullen faces and sour attitudes. Our employment contract is transactional: you need work, I need to eat. Period. I’ll work as little as I can get away with; you’ll dump me the minute you don’t need me any more. And we both know it.

It need not be this way. Whether you employ five people or five thousand, treat each one as a human being with hopes, aspirations and fears. Get the most out of each, by developing an acute understanding of motivation and behaviour. People respond when they are feel they are part of something meaningful. They respond to concern, to warmth of feeling, to a sense of belonging.

As things stand, many chief executives fake the friendliness in good times, and then revert to ruthless layoffs when the numbers go soft. Indeed, there is an unspoken machismo on display during recessions: “I can take the hard decisions, I can send people home.” That is misplaced pride. When you go for big layoffs, it is usually your own mistakes you are correcting, not someone else’s. We should keep our businesses lean and efficient and staffed by people we actually need at ALL times – not just in a recession.