Tuesday, December 15, 2020

NEW MAGAZINE COLUMN BY HOWARD TULLMAN

 

Don't Be in a Rush to Rehire

Trump is going, the vaccine is coming, so the economy might start to rebound. But it's a mistake to think that you need to bring back all the same people as your business moves forward. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN


Notwithstanding all the pain and grief that the Trump pandemic has caused every organization, his continuing insane protestations, and his malicious if not criminal interference with the transition to the Biden presidency, the end of the nation's nightmare is in sight.  As we start to give serious thought to a more normal operation of our businesses, there are actually a few important opportunities buried amidst all of the political noise, and complex legal, health and regulatory concerns, that shouldn't be overlooked.

Just as the people issues were critical to the virus-necessitated downsizing, they're going to be even more central as you scale your team back up to fighting strength, regardless of where physically or virtually they happen to end up working. And maybe the most significant question at this point is -- putting aside all of the emotional issues, personal connections and loyalties, which is easy to say and very tough to do -- which of your people will you be hiring back? Getting off to the right start is extra crucial at this point because there won't be enough time or any tolerance for do-overs. As they say at NASA: off by an inch at launch, miss the moon by miles.

Part and parcel of the personnel decision-making process is deciding who on your current smaller and sleeker team you're going to trust and involve in the evaluation and selection process. Remember as you work your way through this analysis that, virus aside, there weren't many companies that wouldn't have benefitted from belt-tightening and headcount reductions that might not have been popular or politically correct in the past. Now's a unique moment where you have permission, board support and realistic justifications to make at least some of the changes and cuts that were probably long overdue.

Here's what I can tell you for sure. The easy and wrong answer for virtually every one of us is to try to bring back all those people who used to work for you. Even if, once the first 100 million folks are vaccinated, the economy explodes positively and your customer demand and order volume increases rapidly and exponentially, it still makes sense to take your time  and do an internal audit, including a top-to-bottom review of the entire workforce. We're all anxious to get moving again at warp speed (no pun intended), but this is really a critical juncture where a little extra time is a very worthwhile investment in your future. Nothing's gonna be easy or normal for a while yet and you need the very best people you can attract - not necessarily the ones who are handy, easy or waiting in the wings.

No company has ever addressed these kinds of issues better and more succinctly than Netflix, which developed and articulated the basic Keeper test and all of its corollaries. Simply stated, it asks each manager to decide which of their employees they would fight to keep or, in the current case, who they'd argue aggressively to hire back. In an amazingly high number of cases, the decisions are very clear and fairly easy. It's not about loyalty. It's not about good intentions. It's not about trying hard. It's about production and results. Nothing else puts bread on the table and gets the job done. Look for the meat eaters and the ones who will help you get to where you're headed.

Adequate and average employees need to move on and work elsewhere to make room for exceptional players and stars. It's the same mindset you used to see at auto dealerships and at ad agencies. You sell cars or you hit the bricks. The agency loses a big client and the whole account team is looking for work elsewhere. Economist Tyler Cowen wrote a book a while ago called Average is Over and ain't it the truth. As you pull your team back together, good enough just won't get the job done; you've got to be cold and calculating because the moment you settle for OK, you'll end up with less than you settled for.

And please be sure to watch out for false economies. It's easy to talk yourself into hiring or rehiring people who are underpaid and a "bargain." But they're still a bad deal for your business. The truth is that, if they have any brains and balls, they won't stay long anyway because they'll find a place where they're more valued and appreciated. If their prime virtue is their price and not their productivity, you're selling your business short. Cheap is the solution for managers who can't figure out better.

Bottom line: don't bring someone back for anything but the best of reasons. If they can't help you build a better and stronger future for your business, then they need to find another job and, honestly, not only don't you "owe" them employment, but you'll also be doing them a favor by offering them a chance to find a better opening elsewhere, rather than a crutch or a sinecure. 

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