Thursday, January 29, 2009

Cutting Your Way to Success in Today’s Economy – Are You Kidding?

Today, “Unemployment hits new record” is the main headline on the It appears that the current definition of executive leadership in many companies is defined as “how quickly can we cut 10% of the workforce”. That’s not leadership – it is the lack of imagination to conceive the correct way to grow out of new challenges. The long term impacts on those left behind become hard to measure, but loyalty to help the company live long enough to fight another day is gone. Other incentives may keep the key players together for now, but when the tide shifts – look out!

The truly great companies which survived previous down cycles and have grown successfully during difficult times have always triumphed because of how they treated their talent. A number of large companies that fit this talent-first profile are highlighted in the book “Built to Last” by Jim Collins. There are also some great examples in Colorado that are smaller in size like CH2M Hill and MWH that put their talent first. That talent combined with the right leadership rewarded these organizations with:
    1) the insight to figure out how the competitive landscape had changed
    2) the knowledge to deliver new and redesigned offerings to match customers' new needs
    3) the courage to quickly execute any required channel changes
    4) the skills to develop and acquire new capabilities
All leading to results that drove revenue up in spite of the bad economy.

Why did these organizations succeed? Because everyone cared about the same things and worked together. They felt empowered by the trust and a clear vision that great leaders had established for them. All this success when other companies were cutting investments and expenses until the business just became no longer relevant. What type of organization do you live in? A message to business leaders everywhere - before you cut talent to meet a number, can you lead? Let me know if you agree or am I just short-sighted.


  1. Steve - I believe in leading by example. In the long term, a company cannot build credibility and loyalty within its walls if it treats its colleagues (employees) like chattel. The shareholders may agree with layoffs but that is VERY short-sighted and cripples the workforce. Let's all lead by example. Let's get creative in working through the tough times. Involve the team, ask for input, BE NIMBLE. Eliminate the 'it's all about me' thought process. We are all part of a larger community and a larger problem. Short answer: Think globally, act locally and follow the golden rule.

  2. I appreciate the thoughts left by ABGBPB. I think that overcoming large challenges can only be accomplished by motivated talent. Leading your team as you would want to be led is a great golden rule.

  3. Steve, Whether it is to address inadequate performance or to solve a difficult, but real operating expense challenge, terminating an employee is one of the most serious and most difficult responsibilities of a business leader. It is not always avoidable, and innovative alternatives frequently aren't considered in the rush to solve cash flow problems, especially in larger companies. Skills to deal with these tough management responsibilities aren't popular training topics, and most managers learn them by doing them on demand with less than perfect results. Being terminated with your self-respect intact and your relationship with your leader in good order is evidence of professional maturity on both sides.
    Barbara Bauer

  4. I concur with Barbara about the importance of treating people with respect when a change needs to be made for the better of the business. The issue right now is the volume of talent being let go. Are CEO's just finding it convenient to clean house because they know that the market will actualy reward them for doing now what they should have been doing over the last few years? Making sure their talent matches the business needs.

  5. As the son of immigrant parents, I was taught that no matter how much success I achieved, I should still consider myself to be no better than any other person. I was also taught that everyone puts their pants on one leg at a time. Perhaps that is why I have a more cynical perspective on what is going on with executives.

    I believe that the executives get out of touch. They lose a sense of reality. You've probably heard about an executive that was "down to earth". This expression is used, because it is a rarity to find a "down to earth" executive. They are privileged and expect to be treated as such. Just two weeks ago, the Senior Vice President of Sales for a Fortune 100 company told me that he was accustomed to and expected to go to the front of the line.

    So what is the answer? Well, it is a cultural issue that requires leadership from the CEO. You see attitude reflects leadership.

  6. Steve,

    I agree with you that many times leadership fails to do what is necessary in easy times, and then acts indiscriminately and draconianly in hard times. I am fortunate to have been one of the few to experience a parting of the ways done professionally and respectfully as Barbara outlined.

    What I think is easier to say than to do however, is to understand the current reality and especially to divine the future when there is so much change and chaos. That's a big factor separating the survivors - and even moreso, winners - from the rest of the pack. I hope your next blog lays out some of your thoughts on how to do that in general or in particular for a specific situation(s). In any case, keep it coming!


Please tell me when you agree with me and really let me have it when you don't. Thanks.