The Effects of Layoffs on Surviving Employees

This series of blog posts is on leadership in the downturn. In fact, great leadership is always about what you do when things are tough, not when you’re hitting on all cylinders. Great leadership is also about what you do when no one’s looking. By that, I mean doing the right thing, even when it’s tough: Not trimming back on customer quality and services and doing what’s best for employees, as well. This series will try to capture some good strategies for business leaders.

Survivor Syndrome: In an article that appeared in the Washington Business Journal (January 23-29, 2008, p. 34-35) author Jennifer Nycz-Commer outlines quite well the effects of layoffs—now as common as hi-tech stock options were at the height of the tech boom (remember that roller coaster ride in the 90’s). Here’s a quote by Mark Murphy of Leadership IQ, the company which conducted the study on which the stats are based. Murphy’s quote: “There is a great myth that following a layoff the surviving employees will be so grateful that they still have a job that they’ll work harder and be more productive.”
Not so according to the following stats from Murphy's study cited in the Journal article by Nycz-Commer(p.35):

Life after layoffs
Employers may not realize that while they’re saving money on salaries, layoffs often ripple unforeseen repercussions through their staffs. In its study of 4,172 workplace survivors, Leadership IQ found:
• 87% say they are less likely to recommend their organization as a good place to work.
• 64% say the productivity of their colleagues has declined
• 81% say the service customers receive has declined
• 77% say they see more errors and mistakes being made
• 61% say they believe their company’s future prospects are worse

So, if you're thinking about laying off employees--always any CEO's most gut-wrenching task--consider the full impact.

Final Observation from an Executive Coach

Fifth and final observation....

5. Listen and be inclusive: “I will listen to you, especially when we disagree.”
Listen to your detractors with the same vigor as those who would hail you as chief.

Remember to appoint a “devil’s advocate” to offer counter arguments in every major discussion you have. Do this especially when you generate a new idea yourself or whenever it’s an idea proposed by someone who thinks just like you do. No one needs to remind you about the power of diversity.

Finally, let me end with my very best wishes as you begin your journey as president.

“Yes We Can!”

PS...Be sure to listen to perhaps your best sounding board: Michelle!

______________________
[Dr. Steve Gladis is the author of The Executive Coach in the Corporate Forest and serves as an executive coach in the greater Northern Virginia/Washington Metro Area. He may be contacted at 703-424-3780 or at sgladis@stevegladis.com.]

For President Obama from an Executive Coach

Fourth in a series of observations....

4.Lead with trust: “If the people cannot trust their government to do the job for which it exists—to protect them and to promote their common welfare –all else is lost.”

You get what you give, so give trust to get it back from the American public. Be honest, competent, and caring, and trust will always follow you—you won’t ever have to seek it. With trust the government will move quickly, effectively, and efficiently. Without trust, progress will be lethargic, bureaucratic, and frustrating. Consider making the word “transparent” the hallmark of your administration. If people can see what they’re getting and get what they’re seeing, trust will happen and so will rapid progress.