The dangers of mindless management strategies

One of my neighbors just got laid off. He is absolutely livid. He has worked for the company for 12 years, and is 56 years old. He was hoping to retire from there.

I’m not sure what he does, but he claims to have serviced all departments and to have been most in demand out of all his colleagues. He seems like a pretty good guy, and it sounds like he did a great job. “I never expected to be the guy that turned out the lights,” he said, “but I never thought I would be among the first to go!”

When he questioned his superiors, the VP said it was a “management decision” – end of story. There’s not much anyone can learn from an answer like that.

Let’s give my neighbor the benefit of the doubt and assume he had been doing a great job. It’s not that big a risk, as it seems the very best people in other departments were laid off as well. For instance, their best manufacturing engineer also was dismissed. My neighbor surmises the motivation was to cut the largest salaries. If that’s true, it just may be another one of those absolutely myopic management decisions.

Now, I know nothing about this company. Even so, isn’t American industry in enough trouble already? How long can we survive with managers making decisions like this? It’s not the first time I’ve heard of this strategy. I can tell you that many of our foreign competitors aren’t quite that stupid. Yes, they may have some labor cost advantages, but they won’t need them for long competing against decisions like this.

You see, we have to consider both sides of the equation. Some people may cost more, but is the value of what they’re producing worth it? What do we lose by not having them around, not just in what they do, but in the guidance they provide to their less experienced colleagues? Now, where do those colleagues go the next time they have a problem outside their experience range?

Surely, they can learn and even solve these problems anew, but why pay for such solutions several times, especially if you’re trying to save money? How much down time is there while a new team is trying to figure out what somebody, who used to be there, already knew?

Now, I’m not suggesting seniority-based layoffs, where the most senior people are automatically protected. We’re not necessarily talking about length of service, but rather quality of service. When people do well enough to get big raises and promotions, there’s probably something there worth keeping.

But perhaps the most damaging part of all this is the message to all the other employees: “Don’t struggle to improve! If you get raises along the way, you’ll be the first to go in the next crunch.”

I’ve worked with a lot of different companies, and I can’t even imagine what it would be like to work in an organization where improving yourself or your performance is a liability. Their competitors must be rejoicing.

I can’t help but wonder if the VP understands the logical extension of his strategy. Laying off one VP might save as much as laying off all those other top performers, and it might even be far less damaging. How about the CEO?

These guys are probably far more responsible for getting this company into its current slump than the people who worked for them. I’m always amused at management teams who are so willing to take credit for any growth in their businesses, no matter what the cause. Any shrinkage, however, is attributed to someone or something else.

NHBR has its annual BOB (Best of Business) Awards, which have become quite popular. Maybe they should also institute the WOB (Worst of Business) Awards. I imagine it would be tough to get this VP and others like him to show up at an award ceremony to collect their WOBs, but you never know.

In any case, we have to alert other management teams to really think through such strategies before trying to implement them. They are free to choose their strategies, but not the associated consequences. The consequences come standard, whether we like it or not.

There are just too many empty industrial buildings in New Hampshire already.

Ronald J. Bourque is a consultant and speaker from Windham. He has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871; fax 603-894-6539; bourq@att.net; www.bourqueai.com.