The MOST Important Ingredient is OFTEN the First to Go

The MOST Important Ingredient is OFTEN the First to Go

These are tough times.

Quarterly reports validate it.

Companies are suffering – industries are suffering.

Meanwhile the financial markets are screaming – and your company has obligations it has to meet.

Pandemic be damned.

Which is why we now hear the distant drumbeats – layoffs, restructures, and downsizings are being whispered about.

For many organizations, headcount is the greatest cost to your bottom line – and the easiest target to carve in order to meet your “commitments” to the street and/or your board.

Why then would any company not make the excision – and with the quick and surgical precision required to “just get it over with?”

Maybe it’s because the long term cost to your culture is much more devastating.

I’ve spent multiple decades in industry – consult with a number of companies on leadership – and can attest to the fact that far too many organizations “race” to sever a finger and kill the patient at the same time.

Headcount reductions are real – their impact on the morale of your survivors is just as real. The most elegantly written Values Statement is quickly erased with a stroke of the proverbial scythe – never, in some cases, to recover.

Author Simon Sinek talks about a textbook strategy St. Louis company Barry-Wehmiller employed a decade ago that some companies are pulling a page from today. Faced with a cataclysmic recession and lost revenue that couldn’t be recovered, the company CEO faced the prospect of a massive employee lay-off.

Instead, that company took what was – at the time – a bold move. No lay-offs. No terminations. Barry-Wehmuller implemented unpaid 4 week furloughs that every employee was required to take – including senior executives. It hurt but the CEO posited, “we can all suffer a little instead of some of us … suffering a lot.”

The company met and exceeded their financial goals – but the impact on their culture was far greater. Employees remembered – and their faith in the company grew.

I’m seeing similar moves today – and with some organizations, senior executives are doing more than instituting furloughs – they’re forfeiting their own salaries. In this, the era of what some describe as CEO gluttony, a powerful move.

I’ve learned a few things over the years – one of the most important is that the lifeblood of EVERY company comes from its people, its leadership, and its culture.

The only resource that is sustainable is Human Capital. The message to leaders – HANDLE WITH CARE.




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