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Avoid Knee-Jerk Reactions in Uncertain Times

by Kathryn Gray

The media is bombarding us with the news: American business is facing unprecedented hard times, the economy is crumbling and we have no past experience to tell us how to cope. Anyone operating a business is feeling an understandable sense of anxiety.

Recently, clients have called and reminded me that their most expensive budget item is people. Cost savings are necessary, the future is scary. So how many employees should they get rid of!?! My query back is: Are the doors about to close, are you running in the red? Hesitantly the answer is usually, 'Well, no.'  I then ask them to stop, take a deep breath, and re-focus. A panicked plan of cutting heads should be their last resort. Anyone who has tried to recruit good people in the last decade knows how hard it is to attract, train and retain a solid workforce. So before you allow the media, the uncertainty, and your own fears to cause a knee-jerk reaction and irresponsibly damage your business, consider the following:

1.
 Your best hedge against difficult times is a highly motivated, engaged, and trained workforce. If you have one of those, thank the heavens and do all you can to keep them. If you have holes in your employee performance, eliminate any under-performers and replace them with quality people, stupidly let go by other panicked company owners. Knee-jerk reactions like layoffs and pay cuts are appropriate if the wolves are truly at the door and your company is in jeopardy. However, if you aren't yet in dire straits, but want to completely de-motivate your workforce, lay off their peers, quit providing free coffee and create an unproductive atmosphere of doom. If cutbacks are necessary, look to the executive group's salaries, bonuses, perks and luxuries first and then be very mindful of cutting anything beneath you.
2.
 Be logical in your actions. One of my most admired CEO's told his staff that they all needed to be mindful of expenses and careful in their budgeting and planning. But that each manager had to keep in mind that they had a business to run and cuts that could negatively impact the company in the long run should be talked about and evaluated carefully. Every decision should be explored, not just based on cost alone, but on the impact to the organization both short and long term.
3.
 Speak candidly to employees about where the company stands. Your employees are seeing the same news reports that you are and are anxious. Not getting the facts of your particular situation out to your people encourages them to stand around the water cooler and theorize, lowering productivity. So address the issues. Be frank, be honest and be as upbeat as your situation allows. And whatever you do, don't delegate this responsibility. Whether it is live, web-based or in writing, people want to hear from the top. They may love you, hate you, or have no personal feelings for you whatsoever, but they do know/believe that their professional lives are in your hands. Let them know the reality of the situation so they can get back to being productive, not speculating on the unknown.
4.
 Use this time to have your employees help you outreach to customers. Make sure that more than ever, employees understand that the company's success rests on the continued good will from customers. Customer service employees should thank each caller; sales people should thank every customer for their business; you should call key clients and thank them for continuing to work with you. Both in bad times and in good, people like to be appreciated - in bad times, it's especially good to acknowledge customers who continue to work with you.

This uncertain time is hard for everyone. But if we take this opportunity to make sure we do the smart things - not the expedient things - and be thoughtful in our actions, it can force us to be wiser and more practical in how we expend energy, funds and resources. Knee-jerk reactions aren't smart, practical or effective. Before you look at your costliest asset and think 'CUT!' - evaluate all the ways you can use that asset to strengthen your position now and for the future.

Kathryn Gray is an Associate with Cerius Interim Executive Solutions, the largest provider of Interim Management services. She specializes in Human Resource and Organization Development strategies, and is a strong advocate of Interim Executive Management as an essential component of workforce strategy.

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