HINDSIGHT - WRITE SOMETHING WORTH READING ABOUT OR DO SOMETHING WORTH WRITING ABOUT
Is This the Summer of Rightsizing?
Let's face it: offices
are half empty and many workers aren't really working. Use these four rules to
help you make the difficult decision about who stays on the team.
EXPERT OPINION BY HOWARD
TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH
INVESTORS @HOWARDTULLMAN1
JUN 23, 2024
June could be a very
tough month for thousands of entrepreneurs and small business CEOs. Especially
for those building putative "growth" companies that haven't resumed
their post-pandemic growth yet. The world is going on vacation and they're stuck
dealing with those sad revenue numbers. And they're lonely. The data are very
clear that we're running, at best, at about 50% of prior occupancy rates in
terms of downtown and central business district office spaces. It's also
evident that things aren't likely to get much better any time soon -- and
certainly not over the summer. Everyone I know is trying to shrink their
physical plant and fixed costs.
But that's only half of
the biggest problem facing new business builders today.
Despite what you may
have read, workers who are allegedly working from home simply aren't working.
It's not just a matter of the four-day work week; it's more like four hours of
work a day, if you're lucky, and plenty of time during the week for everything
else. Leisure travel started exploding months ago and continues to grow as the
kids get out of school and the family wants to hit the road. Because they've
been told that you can work virtually from anywhere, we're seeing folks saying
-- with a straight face-- that they're working virtually from everywhere.
Maybe, but they're actually not getting anything much done. Kids, classes,
carpools, cooking, big time binging, the occasional brewski, and plenty of chat
all take precedence over productivity when you're sitting at home.
And since no one was
foolish enough in the last year or two to admit to, or take any
"technical" vacation time, companies and HR staffs are now drowning
in requests for big clumps of accumulated and fully paid time off just when
revenues are likely to be slowing down and buyers across the board are taking
their own beach and boogie breaks. Nothing is a bigger bellyache for a boss
than signing off on full weekly payrolls when the office is barely half full
and employees across the business are on summer sojourns. This situation is
already starting to lead to layoff discussions and other attempts to reduce
headcounts and cut costs.
If you're not there yet
in your business, give it a few more weeks and you'll be part of the payroll
posse as well.
These "talks"
are inevitable, but the outcomes and the resultant impact on the key players,
the people you want and need to retain, and the company's morale and culture
are all going to depend on how well you handle the conversations. Many of us
have been there repeatedly over the years and the lessons we've painfully
learned haven't changed. The faces may be different, but the hard facts are
always the same. It's always about getting more done, with fewer resources, in
less time. But it's also about how well you tell the story and how quickly you
execute the plan. Here are a few tips.
1.
Tell the Truth from Day One
These are never easy
conversations and they're even harder to pull off over Zoom or email. Being
honest and straightforward is the only way to be fair to the employees involved
and to make sure that you are sending the right message to the rest of the company.
How you treat the people leaving has an impact on everyone's attitude because
they're all wondering and worrying about whether they might be the next to go
and how they can expect to be treated. This is why it's also important to make
the deepest cuts at the outset. Don't play the salami game - it prolongs the
pain and makes everyone miserable.
2.
Tell the Same Story Inside and Outside Your Business
If you try to paint a
rosy picture for the press and the outside world while you're firing people and
making other internal changes, you're just kidding yourself and demonstrating
to your own team that you can't really be trusted. Sadly, with social media and
every mope thinking they're the newest media star, there are no secrets these
days. Trying to put lipstick on a pig is a bad strategy and a waste of time.
Tell one consistent story to the world.
3.
Tell Everyone Why the Actions are Necessary.
The good news is that
misery loves company and all you have to do is look around to see hundreds of
other businesses that have also over-hired and staffed up for an expected boom
that has yet to begin. Most likely, you're in the same boat and made similar
bets. Now's the time to take the critical corrective actions, not because the
business premise is bad, or the product isn't ready, but because timing is
always the great unknown. It's just as bad to be too early as it is to be too
late. Don't bother telling people it's not their fault-- it doesn't help.
4.
Don't Make Promises or Commitments About the Future
There's an unfortunate
tendency in these tricky times to make promises you can't expect to keep. First
of all, no one knows what the timing is likely to be in terms of the return to
pre-pandemic levels of demand or how quickly that will positively impact on
your own company's circumstances. Putting these folks into some kind of
"let's see" limbo is a really bad thing to do -- for you and them.
Second, especially with the rapid changes taking place in terms of new
technologies, it's virtually impossible to predict whether their skill sets and
talents will be the right fit for your needs when you start hiring again. And
finally, to be perfectly honest (at least with yourself, if not them), there's
a reason they didn't make the "keeper" cut in the first place. I
never fired a manager too soon. Most likely, not a lot will have changed for
the better with them in the interim and committing to bring them back on
"when the time is right" is simply worse.
Bottom line: Now's the
time for action and to right size your firm. Do it honestly and fairly. Don't
try to do it piecemeal; don't do it slowly; and don't hang on to people that
you need to let go. It's not the employees you fire that make you miserable,
it's the ones that you should but don't.
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