Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 9, Issue 7;   February 18, 2009: Four Popular Ways to Mismanage Layoffs: Part I

Four Popular Ways to Mismanage Layoffs: Part I

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When layoffs are necessary, the problems they are meant to address are sometimes exacerbated by mismanagement of the layoff itself. Here is Part I of a discussion of four common patterns of mismanagement, and some suggestions for those managers and other employees who recognize the patterns in their own companies.
Christ's Indian Paintbrush

Castilleja christii (Christ's Indian Paintbrush) in Cassia County, Idaho, on Mount Harrison — their only known habitat. The C. christii are the showy yellow spiked flowers in the center of the photo. Named after John H. Christ, they survive on the mountain in a subalpine meadow about 200 acres in size (about 81 hectares). They are therefore extremely vulnerable to the effects of global climate change, because a small change in the climate of that meadow could render their only habitat hostile to them.

Humanity's approach to the problem of global climate change has many of the attributes of the denial and procrastination patterns described here. We have been able to measure the effects of global warming for decades, but only recently has a consensus emerged that they are real effects. Even so, we still have no consensus about taking action collectively. Photo courtesy U.S. National Forest Service.

The news of spreading layoffs, production pauses, and bankruptcy-driven closures is by now upsetting almost everyone and every organization. Sadly, the mismanagement that leads to the need for such drastic actions is being replicated in the way managers deal with layoffs. Here are the first two of four fairly common ways to bungle layoffs, emphasizing the personal perceptions of decision makers.

Procrastination
Management delays action to repair the financial damage, hoping that "things will turn around when <whatever> happens."
Usually, in procrastination, management can no longer repair the company's finances even by doing a major layoff. Because of delay, organizational survival is now threatened. They're willing to consider layoffs only when the alternative is total business failure. Employees have actually figured this out months ago, and some of the best people have already departed or are already searching for jobs.
If you're in a position to do something about this pattern, remember that the earlier you act the better. Waiting rarely helps. And the longer you have already waited, the more important it is to act immediately. Don't worry about getting it perfectly right. It's far more important to make a start than to make a perfect start.
If you aren't in a position to do anything about the layoff procrastination, you have three basic options: you can exit the company voluntarily, you can stay but prepare for a possible exit or layoff, or you can do nothing. Most choose the latter. Preparing for a layoff is probably wisest for those who can't move on. But if your personal situation permits it, exiting voluntarily can be an excellent choice, especially if you're among the first to exit, because once the layoffs begin, competition for available jobs elsewhere might be more rigorous.
Denial
More insidious Denial and procrastination
are costly in themselves,
but they can create some
even more costly
synergistic patterns
than procrastination is denial, because management fails to see the need for reconfiguration. Spending, expansion, and even acquisitions often continue as if future projections were both accurate and optimistic.
In procrastination, the nagging feeling that all is not well has a benign effect — it can make managers cautious. In denial, by contrast, caution is less common — the organization might actually go into a power dive.
As an employee, denial is difficult to recognize, because your main sources of information are the very people who are in denial. But if you examine closely what they say about the parts of the company with which you are personally familiar, you might catch a glimpse of reality.

While denial and procrastination are costly in themselves, they can create some even more costly synergistic patterns. We can be in denial about whether we're procrastinating, and we can procrastinate about examining our actions for symptoms of denial.

We'll examine two common tactical errors associated with layoffs next time. Next in this series  Go to top Top  Next issue: Four Popular Ways to Mismanage Layoffs: Part II  Next Issue

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