Live to fight another day, terminating employees is often necessary, but never easy.
Someone just sent me a great Paul Harvey email. In it, he was expressing how he wished kids could grow up and skin their knees a little bit, get a black eye for standing up to something they believe in, and listen more to their grandparents. He was doing a monologue on learning lessons as a youth so you could appreciate life more and be able to navigate hard times when you get older.
Hard times are inevitable.
This quick email got me thinking about the difference between wisdom and experience. Experience is learning from your mistakes, Wisdom, is learning from OTHERS experience.
I’d like to cover a technique, or a process, that may just save your company if it runs head on with an economic crisis, like our current recession.
As we look around in business today, during this recession of the early 2000’s, we see the large corporations laying off staff left and right.
If you spend time in the middle markets, and even more so, in the smaller businesses, as I do, you notice a tendency of the smaller companies to try to hang onto every employee they have and gut it out.
This is a perfect time for me to mention Tiger Woods, again.
As business owners, we can take another lesson from Tiger Woods.
Tiger Woods, arguably the greatest golfer to ever live, has been quoted as saying that he has a coach because he can’t see his own swing.
This is a general reference to the fact that since he is swinging the club, he’s inside the swing, thus he can’t see what mistakes he might be making. If he has a coach standing over him, that coach may be able to see what part of his posture or swing is getting mis-aligned.
As business owners and managers, it is critical that we often step back and realize that we can not see our own swing. When we are in the day to day throws of business, it’s easy to forget to step back and ask others what they are seeing.
In how this relates to this article, I want to view this from the standpoint of how close business owners and managers get with their employees in the smaller markets. How often have you either worked for, or worked with a business owner or manager who seemed a bit distant from their employees? In the small to mid markets especially, there is a lot to be said for that.
One of the most difficult roles for a boss is the termination of an employee.
You are taking away their paycheck, their car payment, their air hose.
Many companies have failed because of the difficulty of letting employees go. Many employers are simply not built to handle termination well. We are all wired different.
I want everyone reading this to write this next sentence down, save it, and read it once a year.
Letting someone go may some day save this company.
I know first hand how difficult this can be.
In my early years I often sacrificed my paycheck so another family’s check cleared. (wife loved that one) The byproduct of owners sacrificing a personal paycheck is the equivalent of not putting gas in the car. It simply can’t run. If the engine isn’t fueled, the vehicle eventually comes to a stop. Companies are no different. The leadership is the engine. The dog wags the tail. Many business owners believe that the employees are the engine. That is simply not the case.
There was a great article written in the Wall Street Journal the first week of January, 2009. It described many different great techniques for terminating an employee.
It referenced how to help them with letters of recommendation to explaining how and why that it’s not personal.
The point I want to make here is that today companies may need to shift their focus temporarily from “profit” to “let’s live to fight another day”.
There is a sure-fire way for companies to ride out slow periods or endure economic storms. Make sure that every employee that comes in understands that “the whole is greater than the parts” and that if the company ever runs into an economic downturn, or has a financial challenge of any kind, employees are the largest fixed expense, therefore the first item that will be trimmed. I would even recommend that this point gets put into the hiring manual.
If you have an existing company, you can accomplish this by calling a company meeting and explaining the principles in the Wall Street Journal article and letting everyone understand the long-term success of the company is the greatest priority.
I would go so far as to showing a forecast chart of what could happen to the company if gross sales dropped but the company kept it’s fixed expenses and full payroll.
They will get the picture.
The best time to do this, of-course, is upfront, during the hiring phase.
If it’s made clear upfront, that the company is ran on a model that engineers profit at any gross income level, and that the company may need to trim expenses at a moments notice, including payroll, to maintain the overall company profit, IT RESERVES THE RIGHT TO DO SO.
This is obviously easier to implement in the beginning, but if you are seeing layoffs in the next few months, years, or just know that at some point layoffs may happen, it can’t hurt to have a company meeting and role out this new practice.
Too many companies have failed for no other reason than they put their love of each employee over their overall love for the company and supplying employees with a job and opportunity.
In short, fall out of love with your employees and fall back in love with your company.
If leaders can make the paradigm shift to fall out of love with the employees and again fall in love with the company, it’s much easier “engineer profit”.
“Engineered profit” is just a fancy word for trimming expense fast enough to always maintain a profit.
Do yourself a favor, begin to engineer profit immediately.
For more information, here’s a great article from the Wall Street Journal on how to let staff go as gently and warmly as possible.
Hope it helps.
Growth Consulting for Today