Winning - Jack Welch [41]
This chapter is about how to manage a parting of ways with as little pain and damage as possible.
Importantly, not all partings are created equal.
First, there are firings for integrity violations—stealing, lying, cheating, or any other form of ethical or legal breach.
Then, there are layoffs due to economic downturns.
Finally, there are firings for nonperformance.
The last of these is the main focus of this chapter because those are the ones that usually turn into bitter messes.
It doesn’t have to be that way.
The antidote is actually very straightforward: managers need to accept that letting people go is not something to be avoided, delegated to HR, or done quickly with eyes closed. Instead, it is a process that they must fully own, guided by two principles: no surprise and minimal humiliation.
But before we look in more depth at how to achieve those goals, let’s talk about the first two forms of separation.
INTEGRITY VIOLATIONS
…are no-brainers. In such cases, you don’t need to hesitate for a moment before firing someone or fret about it either. Just do it, and make sure the organization knows why, so that the consequences of breaking the rules are not lost on anyone.
LAYOFFS DUE TO THE ECONOMY
…are more complicated.*
Think of all the times you’ve turned on the evening news to see angry employees protesting outside the gates of a plant or the front door of an office building. Layoffs have just been announced, and people are in shock. They feel as though a bomb has dropped on them out of nowhere.
You can bet the top team doesn’t feel that way. They probably knew layoffs were in the offing for months.
The fact that everyone else didn’t is really unconscionable. Every employee, not just the senior people, should know how a company is doing.
Of course, financial information is not always that easy to get your hands on. If you are running a ten-person division of a conglomerate, for instance, you may have access to data about your business but know little about how other businesses are performing. On the other hand, if you are running a ten-person machine shop, there is no reason in the world why employees shouldn’t know about every vital sign of the business—the volume of orders, the size and trend line of profit margins, emerging low-cost competitors, and so forth.
For most managers, the availability of financial data lies somewhere between these extremes. Your job is to get as much as you can and get it to your people as clearly and frequently as possible. That way, if layoffs must occur, at least people will have some level of preparation.
The same principle holds for layoffs due to market changes. During the Internet boom, for example, lots of companies scrambled frantically to hire technical gurus by the truckload. As the reality of e-commerce settled in, it quickly became obvious that this hiring had been excessive and some of the techies would have to go. Most managers in this situation had help making their case, thanks to intensive media coverage of the industry’s collapse. But open communication should be the order of the day no matter what.
Last year at a Q & A session in Orlando, Florida, I was introduced to the audience by the owner and CEO of a New England–based consulting and training firm. Before the session, I asked her about her business. She told me it had taken a real hit after the Internet bubble burst. She’d had to lay off half of her thirty employees.
“How did it go?” I asked.
“Incredibly well,” she answered, to my surprise. “My husband and I practiced open-book management.