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 The
greatest danger facing the corporate world today is the diminishing
ability of organisations in every sector to survive the post-crisis
era, observes Dr E J Sarma
In
my last article I had written about handling the effects of downsizing
at the time of slowdown. I think the subject needs to be seen in
a closer perspective to bring out ways and means to get out of the
crisis. At the time of a war-like situation on the economic front,
most private organisations, government owned companies and even
non-profit organisations alike are exhausting whatever efficiency
and cost-cutting measures that can be extracted from re-engineering
and downsizing. Many companies later on tend to discover that they
have not only cut the fat, but also much of their muscle and even
the veins and arteries, that is their best employees. Fortunately,
every crisis contains in it, not only danger, but also room for
opportunity. This article shares with you the secret to transforming
crisis into an opportunity for your organisation to flourish.
 There
indeed is a dangerous crisis looming large today. It has to do with
the diminishing ability of organisations to survive the post crisis
era. As every IT company will look forward to replenish, preserve
and nourish this blood and muscle, they will be faced with a generation
of workforce that has faced the trauma like never before, in last
few decades! A community whose confidence is shaken and morale is
down. IT professionals often planned to quit or thought of quitting
when the boom time was there, making loyalty a management issue.
But, in the future, management and employees alike may like to forget
the concept of loyalty.
Fortunately,
every crisis contains in it not only danger, but also room for opportunity.
Based on our research and work with employers across the country,
we have identified the distinguishing traits of organisations that
attract, retain and motivate the best employees. In a nutshell:
 Pay/benefits:
Companies might have frozen increments or given voluntary pay cuts.
But, it is advisable to keep benefits like group medical/hospitalisation
in tact or even enhance it. This will generate the feeling of care
and concern.
Security:
The people who are spared of being layed off in an organisation
are more insecure. Those who are sure of not being layed off at
least feel safe in the organisation. This is what I call selective
job security. Offer them more than money. This reminds me of the
recent incident where a CTO of a company after 10 years suddenly
quit, and the CEO was obviously in pain. But would not even say
that “the organisation needs you”.
Pride
in work: Money is necessary, but not a sufficient condition to retain
and motivate an employee. One will go to work for a pay cheque and
benefits plan, but won’t really work hard (at least best work),
unless there is some other worthwhile motivation. It is the quality
of the work itself and of workplace relationships that draws one
to the best organisations and keeps them there, performing at peak
effectiveness. While salary and benefits have only a 2% impact,
job satisfaction, job quality and workplace support, have a combined
70% impact, which is 35 times greater.
 Information:
The only way you can beat the post job-cutting era of suspicion
is to be frank and open about the performance of an employee. I
have faced the situation when the CEO tells me for one hour how
grim the next quarter looks and the next moment the sales team is
allowed to present a rosy picture of the prospect lists. People
only get confused. Putting up a bold face does not help. Communicate
to all employees the business conditions and company strategy that
resulted in the decision to reduce staff levels. These communications
must be candid, clear and comprehensive.
A
recent survey conducted by the Gallup organisation researching the
‘Impact of employee attitudes on business outcomes’. They
found that organisations, where employees have above average attitudes
toward their work have:
-
38% higher customer satisfaction scores
-
22% higher productivity, and
-
27% higher profits
To
keep the employees satisfied, by ensuring that they have meaningful
work and are treated with dignity, is not only a nice thing to do;
it makes good business sense.
Is
it a French Execution?
During
the French Revolution the practice of ‘cutting heads’
was popular. The idea has percolated to the corporate world, albeit
without the gruesome aspects of the guillotine. The company’s
edict to ‘cut heads’ can emanate from a variety of situations:
a.
The share price is sagging, which has put the CEO’s job in
jeopardy with the Board. We need to look like we are doing something
to raise the stock price.
b.
We promised huge savings in merger synergy and we are going to deliver
on that promise, no matter what.
c.
We have accumulated deadwood over the last few years so we should
cut each department’s staff by ten percent.
d.
Benchmarking studies show that revenue per employee is below average
for our industry segment.
e.
We need some quick cost savings to appease the analysts.
These
reasons given are dangerous and flawed as they are afterthoughts.
Intellectual capital is a precious corporate asset. Removing any
of the organisation’s brainpower is a job for thoughtful and
skilled leadership.
Downsizing
attacks the wrong problem. IBM cut 40,000 jobs in 1993 and 35,000
in 1994, with the goal of becoming half its peak size. Traditional
IBMers suffered from lack of imagination and innovation, caused
by a stiff bureaucracy and hidebound culture. That is why IBM formed
a strategic alliance with arch rival Apple Computer to get access
to the creativity it lacked. Even drastic cuts will not help if
the company’s culture stays the same. So, if you want to transform
the danger into an opportunity for your organisation, pay attention
to things that mean more than just money. Your finance man will
always find items adding to cost, but so long as you want to be
in business you must protect and preserve what can be preserved.
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