Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 9, Issue 8;   February 25, 2009: Four Popular Ways to Mismanage Layoffs: II

Four Popular Ways to Mismanage Layoffs: II

by

Staff reduction is needed when expenses overtake revenue. But when layoffs are misused, or used too late, they can harm the organization more than they help. Here's Part II of an exploration of four common patterns of mismanagement, and some suggestions for those managers and other employees who recognize the patterns in their own companies.
A captive white rhino

A captive white rhino. The species is endangered, with fewer than five to ten individuals remaining in the wild. A similar number is captive. Nature's analog of layoffs is population reduction at the level of the species. Natural processes generally do ensure that the individuals that survive population reduction will be able to find the resources they need. But in the domain of the national economy, there is no such assurance. Even if an employee survives layoffs, the company can still go out of business, because the layoffs might come too late to save it. Photo "White Rhinos," by Gary M. Stolz, courtesy U.S. Fish and Wildlife Service National Digital Library.

With so many layoffs occurring in businesses all around the world, some are bound to be executed well, and some not. Knowing the common patterns of bunglers helps decision makers steer a better course, and helps others cope with the mistakes of the bunglers. Last time, we examined how the personal perceptions of decision makers lead to trouble. In this Part II, we look at two common tactical errors.

Death by a thousand cuts
To limit layoffs, and to reduce their visibility, management executes small reductions weekly or monthly, forgoing press releases. They might even deny the actions, saying, "We're operating normally, making continuous adjustments as is our usual policy."
But people recognize that layoffs are happening. Many worry they'll be next. They become increasingly determined to survive, even at the expense of others. Toxic politics emerges, wars and anxiety become common, cooperation ceases, and productivity plummets.
At its best, this method is a form of denial; at its worst, a form of procrastination. A more straightforward approach that deals with the consequences of layoffs openly is more likely to create positive internal politics. If your company uses the thousand-cuts approach, recognize that the relative safety you feel at first is probably an illusion. Prepare yourself.
Minimalism
The relief minimalism provides
usually isn't enough to
turn things around
To avoid laying off too many, management lays off the minimum number believed necessary to survive the current situation. They plan to revisit the decision later, and if corrective action is needed, they'll say, "The situation has worsened."
The relief minimalism provides usually isn't enough to turn things around. A little later, the cycle repeats. People remaining after the first action are shocked, but they're glad they personally survived. They recover after the first hit, only to be hit again. Recovery is slower and less complete the second time. After three or four rounds, morale and productivity are both depressed.
As a decision maker, be certain first that the projected effect of any layoff is substantial financial relief, and second, that the resources freed in this way are committed to expand that relief. As an employee, this pattern is a signal to you that the cycle might repeat enough times to eventually target you. After a couple of cycles, ask yourself, "Do I think our decision makers are capable of getting this right?"

Distinguishing a company caught in unfortunate circumstances from a company in trouble because of mismanaged layoffs can be difficult. But by examining how well its leadership responds to severe challenges to its survival, we can sometimes determine whether organizational survival is possible. When organizational survival is in question, voluntary departure or accepting a buyout can be excellent choices. First in this series  Go to top Top  Next issue: The Fallacy of Composition  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Your comments are welcome

Would you like to see your comments posted here? rbrenIJcemoMbVGoiRnvDner@ChacIWpVpgnSfEJIhYkhoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

A rocking chairPoverty of Choice by Choice
Sometimes our own desire not to have choices prevents us from finding creative solutions. Life can be simpler (if less rich) when we have no choices to make. Why do we accept the same tired solutions, and how can we tell when we're doing it?
Suspension cables of the Brooklyn Bridge, which spans the East River between Manhattan and BrooklynDealing with Negative Progress
Many project emergencies are actually the result of setbacks — negative progress. Sometimes these mishaps are unavoidable, but often they're the result of patterns of organizational culture. How can we reduce the incidence of setbacks?
A grove of quaking aspenFinding Work in Tough Times: Infrastructure
Finding work in tough times goes a lot more easily if you have at least a minimum of equipment and space to do the job. Here are some thoughts about getting that infrastructure and managing it.
Perceptual illusions resulting from reificationThe Reification Error and Performance Management
Just as real concrete objects have attributes, so do abstract concepts, or constructs. But attempting to measure the attributes of constructs as if they were the attributes of real objects is an example of the reification error. In performance management, committing this error leads to unexpected and unwanted results.
Henri Laurence Gantt, inventor of the Gantt ChartThe Tyranny of Singular Nouns
When groups try to reach decisions, and the issue in question has a name that suggests a unitary concept, such as "policy," they sometimes collectively assume that they're required to find a one-size-fits-all solution. This assumption leads to poor decisions when one-size-fits-all isn't actually required.

See also Personal, Team, and Organizational Effectiveness and Managing Your Boss for more related articles.

Forthcoming issues of Point Lookout

A review meetingComing December 13: Reframing Revision Resentment: II
When we're required to revise something previously produced — prose, designs, software, whatever, we sometimes experience frustration with those requiring the revisions. Here are some alternative perspectives that can be helpful. Available here and by RSS on December 13.
Raquel Welch (left) and Gilda Radner (right) from a @Cite{Saturday Night Live rehearsal, April 24, 1976And on December 20: Conceptual Mondegreens
When we disagree about abstractions, such as a problem solution, or a competitor's strategy, the cause can often be misunderstanding the abstraction. That misunderstanding can be a conceptual mondegreen. Available here and by RSS on December 20.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenugimLBUjrllkJtcXner@ChacKVWVskWQmTFGMtLMoCanyon.com or (617) 491-6289, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

Person-to-Person Communications: Models and Applications
When Person-to-Person Communications: Models and Applicationswe talk, listen, send or read emails, read or write memos, or when we leave or listen to voice mail messages, we're communicating person-to-person. And whenever we communicate person-to-person, we risk being misunderstood, offending others, feeling hurt, and being confused. There are so many ways for things to go wrong that we could never learn how to fix all the problems. A more effective approach avoids problems altogether, or at least minimizes their occurrence. In this very interactive program we'll explain — and show you how to use — a model of inter-personal communications that can help you stay out of the ditch. We'll place particular emphasis on a very tricky situation — expressing your personal power. In those moments of intense involvement, when we're most likely to slip, you'll have a new tool to use to keep things constructive. Read more about this program. Here's a date for this program:

Ten Project Management Fallacies: The Power of Avoiding Hazards
Most Ten Project Management Fallaciesof what we know about managing projects is useful and effective, but some of what we know "just ain't so." Identifying the fallacies of project management reduces risk and enhances your ability to complete projects successfully. Even more important, avoiding these traps can demonstrate the value and power of the project management profession in general, and your personal capabilities in particular. In this program we describe ten of these beliefs. There are almost certainly many more, but these ten are a good start. We'll explore the situations where these fallacies are most likely to expose projects to risk, and suggest techniques for avoiding them. Read more about this program. Here's a date for this program:

The Power Affect: How We Express Our Personal Power
Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Follow me at Google+ or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.