The Colors of the Holiday Season: Red and Green; Pink and Blue

We all know the #1 goal of a for-profit organization is to make a profit. The additional objectives, such as treating employees with respect and fairness and being a good social and global steward, are hopefully priorities met along the way to the profits.

My experience about how executives approach the final quarter of the year echoes what I hear colleagues mentioning - most organizations have their eyes on two things: the financial performance for the year ending, and the strategic goals for the new year. Finding the right balance between profits, quality performance, future consumer demands, staffing levels, workload, and advancing technologies is quite a leadership art. CEOs usually find the solution for balance wrapped in organizational assessments and restructuring activities focused on integrating new processes and technologies in order to provide greater efficiencies while reducing costs. Unfortunately, this often results in cutting jobs.

As if on cue, earlier this month we began to learn of plans within the semiconductor industry to address a downturn in business through layoffs and the closing of plants. The first announcement came from Advanced Micro Devices, Inc. (AMD) on November 3rd; ten percent or approximately 1,400 positions being eliminated through restructuring efforts. Next, Adobe Systems announced it would be restructuring and reducing its workforce by seven percent. Additional semi industry firms are reportedly also anticipating layoffs, and who knows how the domino effect will play out across other direct and indirect industries. To get an idea of how far-reaching the impacts of layoffs can be, check out the creative, interactive Domino Effect posting on my Whiteboard at the end of this blog. It specifically addresses the housing market, but you’ll get the idea.

So What’s Next?

The new norm for annual planning appears to be a hand-in-hand combination of business assessment along with strategic and workforce planning. This newly-established partnership between operating executives together with finance, organization development and human resources leaders seems like a "dream team." Get the right people in the room with the right information about future expectations and facilitate a creative and innovative exploration of practical options for achieving the appropriate balance between financial, stakeholder and employee expectations. As I wrote in my book, Learning to Live With Downsizing, layoffs are not the only solution – but in order to identify others, the team needs the leadership and courage to explore out-of-the box alternatives, along with the likely risks associated with each.

The simultaneous timing of organizations’ strategic planning and restructuring framework with a holiday season of personal reflection and connections with friends and family in a spirit of love and kindness seems ironic. While employees are being thankful for what they have and sharing with others less fortunate, the rug may be about to be ripped out from under their feet.

I believe as a result of this emerging trend in planning and subsequent layoffs during a season framed in kindness and celebration, organizations should pay particular attention to the emotional needs of the employees being let go, as well as those remaining. Both will be impacted by the changes the organization is introducing; albeit in different ways.

As organizational leaders, we have a responsibility to employees who have contributed to the journey so far to be as fair and respectful as possible with the process of separation, and the process they face for moving on. In a blog I published in July 2010, I addressed this specific issue. I felt it might be helpful to repeat it here, so here is a link to Separation – Do It with Grace.

If your Year-End To-Do List includes an event that will impact employees such as restructuring, layoffs, rebranding, mergers, etc., consider these pillars in framing your approach:

1. Promote honesty and openness – tell the story of why the event is necessary for the success and/or survival of the organization.
2. Prepare to communicate, communicate, and then communicate some more – not everyone will hear the entire message the first time, or even the third time. Remember, if you don’t tell them, they’ll fill in the gaps with their own ideas.
3. Don’t ever say "that’s the end, we’re done" – you just can’t know what’s around the corner. So if you have to initiate layoffs, don’t announce that there won’t be more.
4. Prepare your managers – this type of organizational work gets personal and can be painful. Decisions being made will impact the lives and families of your employees. Managers may need assistance to deal with their own emotions and should be prepared for reactions that most likely will be emotional. Use EAP and outplacement experts, as appropriate.
5. Offer assistance – the re-employment process is not impossible, but in this market it is very challenging. Offer as much assistance to separating employees as possible. Firms such as ours offer books, coaching, workshops, webinars, and one-on-one sessions to meet the needs of employees and managers. Remember, employees will be watching and judging how friends and colleagues are treated, influencing their future engagement and motivation levels.

Economists are suggesting that 2012 will continue to be a challenging time for business, and perhaps we won’t see any clear signs of a strong recovery until after the November elections. If that’s the case, what advice would you add to improve the success of restructuring and layoff processes?

Tim Logan and Josh Renaud