It’s a fact, the Business Cycle happens. Ride the wave of prosperity and growth and eventually suffer and endure the phases of contraction and pain. When things are good, good companies spend time on their employees and work to create an open and “engaged” culture. They know that employees who stay when they’re wanted to stay are good for business. Good times won’t last however and even “the best to work for” companies can fail to extend their culture building efforts when times get hard and money is tight. And when it gets really bad, sacrifices must be made.
Culture may eat strategy for breakfast but you know what eats culture? Layoffs.
Terminations can happen sometimes a few at a time, sometimes in a wide slash. Business leaders think the worst is over after a calculated purge and some carefully crafted public remorse statement but these actions sting and can gut a culture. In the aftermath terminations can lead to a greater, longer crisis. Employees will quietly question leadership’s decisions and treatment of co-workers and peers. They will lose confidence and trust and wonder about the businesses decisions that led to needing to release certain roles and not others. And they will be looking over their shoulders going forward, paranoid about when their number is going to be up. Make no mistake, one thing is also proven true, in tough economic times collaboration dies. And the longer the recession, the new habit of self-preservation solidifies – worsening the situation.
The best cultures of innovation and creativity emerge in open, transparent environments but when push comes to shove, people hoard knowledge as their world becomes dog eat dog, and executive openness closes quickly when tough people decisions have to be made. The saying “The bigger they are, the harder they fall” applies here. The more you inflate the culture, beyond reality, the bigger the damage when the rug is pulled out. I think the absolute only way to protect a great culture is to temper it some – don’t shoot for an awesome culture when a good one will do. My advice for organizations – Never provide a sense of being infallible, and never hide failures and mistakes. And don’t be fully transparent and open if you feel you won’t maintain it in a downturn. If you do, know that in the end that the company may weather the storm but what of that amazing culture? Never to return.
Mark, very true! Eileen Clegg and I wrote about ‘extremophiles’, ways that organisms succeed in extreme environments, and mapped those diverse strategies to organizations. (Her husband’s a marine biologist who studies extremophiles. ;). There are ways to survive and keep in place a good culture, but it might be contrary to what shareholders want. Still, long term strategies are better in the long haul. And driveby layoffs aren’t them! Wishing you all the best, — Clark
I enjoyed the post Mark. There’s an interesting parallel with individuals and play: the neuroscientist Jaak Panksepp found that when rats smell cat, play evaporates. When people or organisations are under threat their capacity for creativity & innovation is reduced; I guess it’s an adaptive response.
Thanks for reading Nick. I’ll take a look into Dr. Panksepp’s work for sure (links, etc welcome 🙂 ). In this post I linked to a one I wrote on Collaboration in a Downturn. Interesting information from Harvard Business Review. You can read about it all here https://markbritz.com/maintaining-collaboration-in-an-economic-downturn/