As businesses continue to shed jobs to maintain a healthy bottom line, there is an element t
o these activities that most financially inspired leaders are missing — the long- term and very real cost of these layoffs. The short-term benefit is theoretically a healthier bottom line. The long-term cost is the impact on intellectual property and corporate culture. And, twelve months from now when these companies start to hire again they will spend time, money, and resources training the new people to do what the terminated and eliminated people already knew how to do. I would like to challenge all business owners to take a broader view at the real essence of the corporation and creatively look past the mere financial components and short-term thinking.
While in Detroit last week, I had an opportunity to reconnect with one of my colleagues, Leslie Kusek. In talking Detroit, layoffs and job losses are always part of the conversation. Leslie nailed it for me when we were talking about the impact of these job losses on the corporation. The impact is more than financial. It is cultural. As Leslie rightly described, “corporate culture is the essence of a company“. One of the fundamental keys to corporate sustainability is corporate culture. Massive layoffs and job reductions will have long-term financial downsides. More importantly, the real and immediate downside is the impact these actions have on the essence of the company — its culture.
Corporate culture is:
- That common thread that connects your people to your clients, your market, and your industry.
- That component from which your unique value proposition is derived and sustained.
- How your team gets motivated and focused on the mission, values and goals.
Anyone can look at a balance sheet and reduce head count to stabilize the financials. Numbers are not creative or innovative; they are just numbers. It takes a real leader to recognize how to creatively make those decisions with an eye toward maintaining the essence of the company — the corporate culture. Before you take another knife to soul of your company, think about both the immediate and long-term impacts these decisions will have on your business and focus on how to save the company while protecting the essence of the business. And, if you get stuck, call me and I will walk you through it.