As managers, most of us have likely been faced with the mandate “from above” to cut heads. And, as the smart managers that we are, we moaned and groaned a bit, and then ultimately obliged.
How did we manage to pull of such a feat?
Did we somehow miraculously improve efficiency? No. Improve productivity? No. Extend working hours for the remaining staff? No. Reduce requirements? You guessed it – No.
The answer, then, must be this: we had too many people to begin with!
Then what make us so smart?
We are “smart” because we managed to hold on to those people to be prepared for the eventuality of the mandated cut. We knew it would come, and we were right. See how smart we are?
And to show that we continue to be smart, we will strive over the next few years to rebuild our staff to excessive levels (115% is usually a good target) so that we will be ready for the next down cycle.
Brilliant! Let’s all dislocate our shoulders as we pat ourselves on the back.
The other benefit of being “smart” is that we always take the path of least resistance. Rather than properly managing our staff by giving proper feedback (which includes letting someone go when they are not up to par), we simply hold on to the sub-par employees, until the layoff mandate is given. That way, we can look like the good guy, and blame the cut on “corporate” or a “bad economy”.
Putting all of this into a present day context, one might wonder about the thousands upon thousands of layoffs over the past six months, being blamed on a down economy and low oil prices. One might theorize that the majority of these layoffs should have been done years ago.
But who wants to worry about layoffs when times are good, and the company is making more profits than ever before?
The smart leader does, that’s who.
The smart leader knows that no matter how well the company is doing, it can’t be doing its best if the people and processes are not optimized. And the smart leader knows that the company should always be doing its best, no matter how well it is already doing.
Imagine if labor costs accounted for 70% of your total costs (which is not unrealistic), and you were carrying 10% too many people. I would bet that a 7% difference in costs would make the difference in being competitive or not. Even if you were still competitive, a significant bottom-line opportunity is being lost.
The smart leader realizes that carrying extra staff by keeping poor performers is not fair to the rest of the employees, as the good employees see that they are doing most of the work. In most cases, the high performers are doing additional work to rectify the shortcomings of the poor performers.
And you’re not doing your employees any favors by holding on to them in a job at which they will never excel. The time they spend waiting for the eventual layoff (unbeknownst to them) could be time well spent in another role at which they could prosper. I have seen first-hand significant improvements in employee performance as a result of simply moving an employee from one role to another. If your employee is not working out for you, it might not be the wrong employee, but rather the wrong role.
We have seen many articles, especially here on LinkedIn, touting the differences between managers and leaders. Considering the above, can you see a difference between a smart manager and a smart leader?
Postscript – I realize that there are many good solid employees who get laid off (i.e. it’s not only the lowest performing employees). These situations often involve issues such as office politics, loyalties, and culture changes. We can perhaps address that in a future article.