Three weeks ago I told you about Jim’s quandary in supporting his CEO’s approach to layoffs, asked what you would suggest he do and in a follow-up post shared more about the culture, the CEO and ideas I’d given Jim. I also promised to tell you the outcome, it’s just taken longer than we expected.

Jim called yesterday and told me that he started by sending links to both posts to his CEO, “Sue;” when she reacted positively he asked permission to send them to the rest of the executive team.

Sue refused, saying that she wanted to send them herself, thanking Jim publicly for taking the initiative to start an alternative ball rolling and ask her executive team to bring still more ideas to a brainstorming session two days later.

Sue also said that she had been horrified by reader reactions; she had really thought that her approach was a fair one until she saw it through outside eyes.

Jim said that the entire exec team was super excited; all of them had been struggling; trying to decide who to lay off, when and how to maintain morale during and after the process.

Here is an overview of what happened at the meeting;

• Sue had already discussed a pay cut with the board, but decided that increasing it to 50% would not just be a good gesture, but would help preserve jobs.
• She also asked the executive team to accept a 25% cut, which they all did.

The savings from these two moves would prevent immediate layoffs and give them time to take more creative actions.

• They agreed that it was important to level with all the employees simultaneously in order to squelch the rumors that had started flying.
• The information would include the size of the cuts that Sue and the executives were taking.
• The announcement would be by live webcast instead of email to avoid anyone forwarding it outside the company without thinking.
• Each vp would schedule a Town Hall meeting immediately after the webcast for his department, including everybody.
• After an open discussion and answering questions as transparently and honestly as possible they would ask their people to come up with every possible idea to increase revenue, save money and avoid layoffs.
• They decided to set up a suggestion box on the company intranet to make contributing ideas simpler; they chose to use a wiki so that people could comment and add to other’s ideas, stressing that there were no dumb ideas and people should post anything they thought of.

They started implementing as soon as the meeting was over.

Most of the staff were blown away with the salary cuts they had taken. The meetings went over really well and suggestions are pouring in.

The really great thing is a number of the ideas related to increasing revenue, including new market opportunities. Jim says that the sales team really caught fire and is pushing ahead with these and several others that had been shelved for lack of faith.

Almost everyone agreed that they would rather take salary cuts or rotating furloughs to avoid layoffs.

To date, trust levels have skyrocketed, morale is sky-high and, best of all, the sales pipeline is up 4% and growing.

Sometimes bad stuff is the best stuff that can happen—if it is handled well.

Image credit: arte_ram on sxc.hu

This entry was posted on Tuesday, August 11th, 2009 at 1:30 am and is filed under Business info, Communication, Compensation, Culture, Motivation, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
Tags: Culture, fairness, question, solution
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