Making tough decisions (such as downsizing) with a people focused mindset

(Profit vs People) or (Profit and People)

 With the organizations we are working with, I am noticing a significant clash between two "normally" opposing forces, "Profit focus" and "people focus". But this does not have to be an either/or, there are ways of reconciling these forces on how to work together. Let’s first review these ideas: 

 ·         A "Profit Focus" or a "bottom-line focus" implies cost cutting, productivity and efficiency increases, financial and operational optimization.

·         A "People Focus" means caring about your clients and your employees. It's about creating a great people experience (CX Client Experience, EX Employee Experience), or in other words building a great workplace experience where people will give their best.

 Organizations are going through significant survival challenges during this COVID era. Speaking of self-actualization (exploration of human potential) is sometimes challenging when people are concerned with some fundamental needs of safety, security, and pay. These survival pressures are resulting in obvious cost cutting measures for organizations. When cost cutting measures start, it is very easy to discard all the people focus, workplace culture strategies and practices. A lot of leaders are struggling with reconciling these two opposing forces working together.

Some leaders falsely think that being people focused organization is about being a people pleaser, avoiding difficult conversations, seeking consensus all the time

Some leaders falsely think that being people focused organization (high engagement, high trust) is about being a people pleaser, avoiding difficult conversations, seeking consensus all the time. This is not the truth. Here is what is means to be a people focused organization:

 What does it mean to be a People Focused Organization?

· Optimizing business strategies and people strategies together (actually not even seeing them separate!)

·  Leading in a way that brings business needs and people needs together

· Seeing the business/work as an opportunity to grow people

· Developing people practices from a human centered perspective, understanding employee needs

· Genuinely caring about your people as human beings.

· Trusting each other's strengths, decisions and behaviours 

A People Focused Organization is not about:

·         Avoiding difficult conversations

·         Pleasing everyone all the time

·         Consensus decisions making

·         Avoiding accountability

Being people focused does not mean avoiding tough decisions! 

So here is the question: “How can you remain people focused while you are cutting costs and laying people off?”. Here are strategies and tactics coming from real life observations from the good and bad practices I am observing.

1. First seek productivity increase as a cost cutting measure

As a first resource, seek for productivity increases, through operational efficiency, digital transformation and innovation opportunities. Layoffs should always be a last resource for a people organization. A best practice I am observing is to tie these financial savings to saving of actual jobs and people in your organization. For every $X0,000, you can save a head count! You will notice how everyone becomes one team to help each other out. Another best practice is to seek for stories on how you have made leaps in efficiency in the previous years and share those stories to inspire new opportunities. 

 2. Being people focused does not mean avoiding tough decisions. It's about implementing them in the most humane way.

 I know an organization that is one of the last in their industry to announce job cuts. This organization has resisted cost and job cuts until it started to be financially detrimental to the organization. So, in order for the organization to survive (not to thrive), the executives needed to make this tough decision. They are conducting both operational cuts and job cuts. Now their focus is how the process will be conducted: in a humane, respectful, caring, people focused way.

 I’ll share an example for two airways in North America. One announced job cuts the same day as the news was announced to the press. Some employees first heard from the news about these layoffs. Another airline conducted waves of announcements. They initially asked who wanted to take an early retirement. In the next wave, they asked for those who could take unpaid time off with sufficient financial resources so the organization could support those that needed the job most. While some terminations happened based on performance, some other groups, such as the pilots took a salary cut to have less layoffs. Eventually this airline announced the layoffs on social media with messages honoring the people the left, openly thanking them so the remaining thousands of people could keep their jobs. Both chose to handle layoffs in very different ways.  

3. Communication: You can hardly overcommunicate in difficult times.

Starting with the CEO, executive and corporate communications is key. Leaders need to build trust through candid, authentic, genuine communication. Trust is one of the key elements. You cannot ask your employees to trust you, you need to earn it. Lack of communication or poor communication creates frustration and feeds gossip. Don’t try to make your communication too corporate, make it more humane, acknowledge the truth, acknowledge the emotions. This does not make the problem bigger; it demonstrates that leaders really understand their people.

Don’t try to make your communication too corporate, make it more humane, acknowledge the truth, acknowledge the emotions.

4. Leadership: Give ultra-focus on “Self-awareness”

Difficult times require leadership excellence. These difficult times are great opportunities to show leadership strength. But don’t forget that leaders are human beings, and they need support as well. This is why we are supporting 75 senior leaders across Canada through our executive/leadership coaching programs. Leaders need to continue focusing on self-awareness and be sure they don’t turn into their low selves/ worse selves during the difficult times. If you are a leader, the great news is that the paradigm on being the almighty leader has already changed. It’s ok to acknowledge your struggles and your concerns constructively with your people as well.

In summary, leaders need to make the right decisions and execute them in the most people focused possible way. Being people focused does not mean avoiding tough decisions. Collaborating, informing and consulting people is vital but we should not forget that leaders are accountable for making the decisions. Seeking for efficiency opportunities and digital transformation are great starting points for cost saving. Layoffs should be last resorts.  If there are layoffs, communicating with respect and care makes a big difference in how we show support for the people leaving. An exciting part of the work we do at Maslow Centre for Executive Leadership is coach around approach and intention, and find ways to transform workplace cultures to be able to sustain these people focused practices on their own.

For more information reach out to us at www.maslowleadership.com, follow us on Linkedin.