Layoffs, Restructuring, oh my!
This is turning out to be the summer of discontent.
However, while layoffs are not always avoidable, they aren’t necessarily inevitable either. But how do they happen? Why do they happen? And why do they seem to come of out nowhere?
It’s because a decision maker of the organization wasn’t looking at the big picture.
This is why organizations need people internally whose sole job it is to look at the market and to look at the internal operations. It’s better if these are two different people, but at the very least, a business needs someone on the inside to constantly monitor the internal situation.
But wait, are you saying that we need to hire MORE people? But we can barely afford the ones we already have!
Yeah, that’s my point. If you have someone at your organization whose responsibility is to align the organization with the market and/or to align the organization’s operations with the mission, then you can continuously monitor your human capital needs which will avoid unnecessary hires and if your organization finds themselves with too many people in one department, a slight restructuring in job functions without laying off employees might be possible. This isn’t to say that you’ll never have to lay off anyone, but it may mean the difference between laying off 5 people and laying off 900.
Why didn’t some of the businesses who did really well at the beginning of the pandemic not realize that the boom wasn’t going to last forever? Who knows? Well, we do know. We can obviously see that they didn’t have someone internally to remind them that the good times weren’t bound to last.
The question is, of course, did employees speak up and no one in leadership listened or did no one speak up at all? Or, even worse, did no one notice that there was an iceberg straight ahead?
No matter the reason, the answer is all the same – have an employee dedicated to organizational development. CEOs and COOs can’t do it all. You need to have a navigator to read the map and look for trees (or deer or chickens or children), while you drive the car.
If you have someone whose job it is to make sure the organization is always running efficiently and effectively, then they will be able to tell you if you do need to lay off someone, or if you need to change someone’s job function. A change of job function can benefit the employee just as much as the organization if you are doing it right. This is where creativity comes in and looking at the organization holistically with a cross-functional mindset. Most job functions do not allow for this, so you will need a separate person to be responsible it. Someone who can look at the map, look at the landscape, know who is in the back seat, and know what kind of snacks were packed. The driver, or CEO and other senior leaders, need to focus on driving. If you do this right, you can fix a small problem before it turns into a big one.
There was a CEO that thought his job was to get rid of employees, department by department. He literally went through every single department and fired one person from each. He thought this made him a brilliant CEO. But this is not a strategy. In order to be a good leader, a good CEO, you need to be much more strategic in your use of human capital. He had a whole department that was useless, but instead wanted to layoff off vital employees that could have helped the organization grow.
The best hire your organization will ever make is hiring someone who can see the entire organization at one time, each of the wheels turning individually as well as together. The single most important hire for your business is hiring someone who not only cares about the success of your organization, but also whose job it is to make the organization more efficient, effective, nimble, and ultimately more successful. Organizational development could be the difference between an organization that stays in business and one that does not.