Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

This post is from 2014, but layoffs are again in the news. Almost every day another company talks about cost-cutting and rumors start to fly. Contrary to what you might think, there is a right way and a wrong way to handle a layoff.

Read other Golden Oldies here.

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

The need for a layoff can happen to any company of any age or size, but most companies and managers bumble the task and end up doing far more damage than necessary.

The damage is not just to those laid off, but also to those left behind, themselves and the company.

As most of you have read, Cheezburger Networker just laid off a third of its staff, but great credit goes to CEO Ben Huh for bending over backwards to do it with the least damage possible.

• • He cut his vacation short when he realized what had to be done, as opposed to delegating it and staying away until it was over.
  • He was honest, open and candid with his entire staff, thus avoiding the kind of rumors that typically circulate.
  • He did everything possible to ensure those laid off found new positions, including personally reaching out to other companies and setting up his own job fair.

In short, he did everything I recommended in 2008.

I only know of one manager who got his jollies laying people off (he always tried to do it just before Thanksgiving or Christmas) and he was, without doubt, a sadist.

Most managers, like Huh, find them to be tremendously emotional and not at all fun.

“Often, when faced with a problem, you want to run in the other direction. It’s like seeing a lion in the jungle. But I have to do what is best for the company, even if it sucks emotionally.”

There’s one more required action after a layoff and that’s dealing with the empty space, which can’t be ignored, but can be done positively without spending big bucks.

Image credit: HikingArtist

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

I think the best commentary on this post comes from a comment on the original that validates it.

You just nailed the main issue with failed change efforts. Change starts in the head (pun intended. . .). Many times when I’m brought into a company, bosses want me to help change everybody else but them. Doesn’t work!

It always amazes me how bosses are more willing to waste money than to change their thinking and behavior. The trick is how to find a way to help bosses see the ROI of changing the way they think and behave before trying to embed those changes throughout their organization.

Great post! – Dr. Ada Gonzalez

No one ever said change is easy and it’s still harder when it is your MAP that needs to change, but it is possible. More on change during the week.

Read other Golden Oldies here.

The thing she [behavioral psychologist] taught me—and this sounds obvious—is that behavior is a function of consequence.  We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem.  I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news. —Joseph Jimenez, chief executive of Novartis

The behavioral psychologist was brought in after a consulting group was paid to provide “better, more robust process, with more analytics,” which changed nothing.

When we started RampUp Solutions in 1999, we spent a good deal of effort coming up with a tag line that easily explained the services we provide.

After several iterations we finally settled on “To change what they do change how you think”

Over the years, I’ve heard and read story after story of how all kinds of changes—from turnarounds to improved productivity to retention — all started with a change in the way the boss thought.

And that applied whether the boss was CEO, team leader or somewhere in-between.

Stories and discussions about change tend to focus on the actions that bring about the changes, instead of starting at the beginning with the hardest work.

Work that requires the boss, at whatever level, changing the way they thinks and then dispersing and embedding those changes throughout their organization.

So before you hire expensive consultants or seek help from advisors look in the mirror to determine how much of the problem is you.

Image credit: manymeez

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Last week KG shared a quote from Marc Andreessen.

“First and foremost, a start-up puts you on an emotional rollercoaster unlike anything you have ever experienced. You flip rapidly from day-to-day – one where you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. 

Over and over and over. 

And I’m talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. The level of stress that you’re under generally will magnify things to incredible highs and unbelievable lows at whiplash speed and huge magnitude. 

Sound like fun?”

It’s likely Marc wrote this with founders in mind, but it applies to all employees, as well as those whose lives are connected in whatever way — spouses, kids, relatives, friends, etc.

Actually, it is worse for them, because they rarely have a full picture of what’s going on.

Sometimes that’s good; workers need to concentrate on their work.

But they also need to know when difficulties arise; they need to know if their job may be going south.

They need honesty and transparency from the person they’ve chosen to follow and whose vision they are working to make real.

It’s part of the social contract Matt wrote about a few years ago.

It’s Zach Ware’s focus about what to do when a startup needs to close.

It’s what the founders of Shift and WrkRiot chose not to do — to the total detriment of the people who trusted them.

It’s my recommendation regarding bad news.

It’s on you because it’s your rollercoaster, your responsibility to do the safety checks and your job to notify people before it jumps the track.

Image credit: HikingArtist

Three of the inviolate rules for a great culture are accepted and respected.

• Tell the truth.
• Show initiative.
• Care

The other three not so much — especially the last one.

• Make a mess.
• Take responsibility.
• Apologize.

But for a culture to be great culture they must apply universally, not selectively

Messes of all sizes happen; they are a fact of life.

People taking responsibility for the messes they make are not.

Apologies for the messes are less common still — especially as people move up the ladder.

But apologies are a necessity — as Intuit CEO Brad Smith points out.

Apologies person to person enable trust; keep teams strong and productivity humming.

Apologies from companies to customers also enable trust and earn a second chance.

Assuming, of course, that the apologies are authentic.

Image credit: pshutterbug

It’s well known that what goes up comes down; programmers know that ‘garbage in/garbage out’ always holds true (and applies to more than programming, but that’s another post) and bosses (should) know that at some point current employees become former employees.

While people leave because of layoffs, it’s often by choice; either way it’s bad news and, like all bad news, requires clear communications to avoid repercussions.

However, there’s one repercussion that even the best communications can’t avoid and that’s what I call boss/company stupidity or BCS.

Granted, there’s a lot of BCS floating around the workplace, but this particular BCS ranks in the top three.

It’s the attitude that no matter how great employees are when they leave they are suddenly no good, their time with the company had no value and the resources invested in their growth were wasted.

The traditional way of looking at the “return on investment” on the training and coaching of employees is that it is truncated the moment they walk out of that door.

Which is really, really stupid.

Stupid because both companies and bosses have street reputations and while current employees contribute to them, those who leave have an outsize impact that lives everywhere forever in our social, wired world.

Flickr image credit: library_mistress   

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

The need for a layoff can happen to any company of any age or size, but most companies and managers bumble the task and end up doing far more damage than necessary.

The damage is not just to those laid off, but also to those left behind, themselves and the company.

As most of you have read, Cheezburger Networker just laid off a third of its staff, but great credit goes to CEO Ben Huh for bending over backwards to do it with the least damage possible.

• He cut his vacation short when he realized what had to be done, as opposed to delegating it and staying away until it was over.
• He was honest, open and candid with his entire staff, thus avoiding the kind of rumors that typically circulate.
• He did everything possible to ensure those laid off found new positions, including personally reaching out to other companies and setting up his own job fair.

In short, he did everything I recommended in 2008.

I only know of one manager who got his jollies laying people off (he always tried to do it just before Thanksgiving or Christmas) and he was, without doubt, a sadist.

Most managers, like Huh, find them to be tremendously emotional and not at all fun.

“Often, when faced with a problem, you want to run in the other direction. It’s like seeing a lion in the jungle. But I have to do what is best for the company, even if it sucks emotionally.”

There’s one more required action after a layoff and that’s dealing with the empty space, which can’t be ignored, but can be done positively without spending big bucks.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A few days ago I was asked if it was OK to warn a startup team by email that it was doubtful funding would happen before the money ran out.

My response was ‘absolutely not!’

The final word from a variety of experts is that it is not OK to fire, lay-off, break up, ask for a divorce, ground kids or any similar action by email, text or even by phone.

These are all subjects that must be done face-to-face for a variety of reasons, but all falling under one of the falling categories,

• Respect
• Trust
• Authenticity
• Transparency
• Fairness

The list goes on, but I’m sure you get it.

That said, I thought I’d repost a slightly edited how-to for dealing with bad news that is as applicable today as it was when hard-copy memos, wires, carrier pigeons and smoke signals were the normal modes of communication.

Bosses know when they’re in trouble (duh), but they still seem to think that their people don’t know the facts (double duh).

Too many bosses, from startups through Fortune 100 and everything in-between, clamp down, say nothing, run scared, freeze, bluster, or some combination thereof and do it by email and/or text.

The result is management by rumor, which once started never ends.

The way to deal with bad news is directly, openly and honestly.

Even when the subject is no funding or lay-offs this axiom applies; in fact, it’s the only approach that gives your company or your reputation a chance of emerging intact.

Here are six basics to keep uppermost in your mind—whether they are comfortable or not.

1. Bad news must be communicated in person—just like good news.
2. Employees aren’t dumb—they know something bad is happening—and if they’re not explicitly told what it is, rumors will make any difficulty a catastrophe and a catastrophe a death knell.
3. Management must be explicit about the ultimate potential consequences. In a situation that’s unfolding, such as a funding or economic crisis, when no one knows the ultimate outcome or can predict when it will change, frequent updates are effective.
4. Everyone hates uncertainty, which is all you may have to offer, so analyzing and then explaining the worst case outcome as well as what you’re doing to counter it and how your people can contribute goes a long way to stabilizing the team and gaining their buy-in to your plans.
5. Successful plans are dependent on how well they are communicated, which is what determines employee buy-in; if you choose the delusional approach of minimizing the situation then you should expect minimal results and maximum disruption.
6. Share the outcome of your thinking, whatever it is—layoffs, plant closures, project cancellations, etc. If you don’t trust your people with the information your problems are far more serious than you realize.

Any solution to a crisis must be seen as fair, reasonable, and businesslike. If management’s reaction is illogical, petty, slipshod, unrealistic, draconian or any combination of these, then it’s likely employees will conclude the ship is about to sink and leap off.

People understand that difficult situations demand difficult remedies, and they appreciate that management must at times step up to harsh challenges. But if solutions are irrationally or whimsically applied, they become a demoralizing factor, increasing the difficulties that people encounter in trying to do their jobs.

Finally, you should always attempt to find a positive note to leave with employees. Everyone already knows that things are bad; it’s your job to find a potentially favorable course of action.

Just remember, you hired your people for their brains, so don’t expect them to suddenly go dumb. Employees easily spot propaganda masquerading as a solution.

Predicting an impossibly favorable outcome not only demeans your reputation, but also could affect your future entrepreneurial efforts.

Image credit: HikingArtist

In an article focused on meetings and importance of being direct Tony Tjan, CEO and Managing Partner of The Cue Ball Group, says, “When we avoid conflict or try to skirt directness, it does a disservice to all involved, and often just plain wastes time.”

I’ve voiced similar thoughts about directness in posts about bad news and rumors (supported by some interesting CDC research).

It often seems that subtlety and so-called diplomacy is taking the place of direct, honest communications, which, especially in the workplace, is asking for trouble.

A lack of directness stems mainly from three very different sources.

1. Fear of confrontation: directness is often seen as a confrontational act that may create disagreement unlike subtlety and hints that can be misconstrued.

2. Confusion/lack of clarity: not having a good grasp on what you want to communicate makes it impossible to be direct.

3. Laziness: it is far easier to talk about, around, over and under the subject than it is to sort it out and plan how to best communicate it.

Another misconception is that being direct means being rude.

It doesn’t.

Rudeness is as much a function of presentation as it is of wording.

It’s simple to clean up wording; sanitizing non-verbal communications takes a bit more effort.

It means eliminating negative or demeaning body language (like sighs and eye-rolls) and focusing on displaying respect for those to whom you are speaking.

It may even require an adjustment to your MAP, but the pay-off is worth it.

Less confusion, less disagreement, less acrimony; increased trust and improved productivity and creativity are just a few of the benefits of clear, direct communications.

Flickr image credit: haven’t the slightest

The thing she [behavioral psychologist] taught me—and this sounds obvious—is that behavior is a function of consequence.  We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem.  I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news. —Joseph Jimenez, chief executive of Novartis

The behavioral psychologist was brought in after a consulting group was paid to provide “better, more robust process, with more analytics,” which changed nothing.

When we started RampUp Solutions in 1999, we spent a good deal of effort coming up with a tag line that easily explained the services we provide.

After several iterations we finally settled on “To change what they do change how you think”

Over the years, I’ve heard and read story after story of how all kinds of changes—from turn arounds to improved productivity to retention—all started with a change in the way the boss thought.

And that applied whether the boss was CEO, team leader or somewhere in-between.

Stories and discussions about change tend to focus on the actions that bring about the changes, instead of starting at the beginning with the hardest work,

Work that requires the boss, at whatever level, changing the way she thinks and then dispersing and embedding those changes throughout her organization.

So before you hire expensive consultants or seek help from advisors look in the mirror to determine how much of the problem is you.

Flickr image credit: manymeez

One of the dumbest things consultants and HR dreamed up a few decades ago was using pretty words and euphemisms in place of the real ones—fired and terminated.

I’ve written about Guy Kawasaki, read his books and enjoyed hearing him speak since I met him at a talk in 1999—very smart and very funny. He knows that laughter opens minds to new ideas.

But Guy can also be serious when called for, as he is in The Art of Laying People Off.

Most managers hate laying people off, although I’ve known of a few who take sadistic glee in it.

Layoffs damage everybody—those doing it, those to whom it’s done and those left standing afterwards.

Guy lists 12 actions to keep the layoff from crippling your company—

1. Take responsibility. Cut deep and cut once. Management usually believes that things will get better soon, so it cuts the smallest number of people in anticipation of a miracle. Most of the time, the miracle doesn’t materialize, and the company ends up making multiple cuts. Given the choice, you should cut too deeply and risk the high-quality problem of having to rehire. Multiple cuts are terrible for the morale of the employees who have not been laid off.

2. Move fast. One hour after your management team discusses the need to lay off employees, the entire company will know that something is happening. Once people “know” a layoff is coming, productivity drops like a rock. You’re either laying people off or you’re not—you should avoid the state of “considering” a layoff.

3. Show Consistency. I cannot understand how companies can claim that they have to cut costs and then provide severance packages of six months to a year of salary. You would think that if they wanted to conserve cash, they’d give tiny severance packages. Typically, there are three lines of reasoning for generous severance packages:

   • Cutting head count, even with severance packages, is cheaper than keeping the employee around indefinitely, and we don’t want any lawsuits.
   • We have lots of cash, so our balance sheet is strong, but we need to cut heads to make our profit-and-loss statement look better.
   • Wall Street (or your investors) is expecting dramatic actions, so we need to do this to show the analysts that we’ve got what it takes to be a leader.

   None of these reasons makes sense. If you need to do a layoff to cut costs (and conserve cash), then provide minimal severance packages, cut costs as much as you can, conserve as much cash as you can, and deal with your guilt in other ways. If nothing else, it’s a consistent story.

   1. Clean house.

   2. Whack Teddy.

   3. Share the pain.

   4. Show consistency.

   5. Don’t ask for pity.

   6. Provide support.

   7. Don’t let people self-select.

   8. Show people the door.

   9. Move forward.

I included full text on the three I think are most critical, but they’re all important, so take the time to not only read them, but also understand the reasoning behind them, because if they don’t resonate with your MAP you won’t be able to implement them should the need arise.

Guy’s subtler than I, but we agree that immediately after your announcement the dumbest (my adjective) thing you can do is go to your office—no matter how much you want to hide.

Your people need you now more than ever, both the folks leaving and the ones staying. The minutes and first hours after the announcement all your managers need to be with their people—no exceptions, no excuses.

No matter how sick a company is people often manage to convince themselves that somehow it will all go away. I’m watching that happen now with a woman I know and it’s sad; sadder because she knows she’s kidding herself, but still does it and puts off any effort to find another position.

Shift happens and the world has shifted.

So if you have to do it, do it right.

Image credit: flickr