Bob Herbert wrote A Sin and a Shame in the NY Times, where he argues that over the last several years, corporations have used the "desperate times call for desperate measures" sentiment to lay people off, even when their economic situation didn't really require that dramatic a reduction in workforce.
The "surviving" employees feel they have to double down and work much, much harder to keep their jobs. The result is even more profitable corporations (profits up $572 billion, payrolls down $122 billion), whose cash positions have improved (now $1.84 trillion, a 27% increase from 2007) dramatically, and an employee base stressed to the limit.
Here's the real killer - from Q4-2007 to Q4-2009, real GDP fell by 2.5% while payroll fell by 6%. This is big.
Two questions:
- Why is this bad? Is it wrong for corporations to be as lean as possible, to have their employees be as productive as possible, and of course to be as profitable as possible? Isn't this how we judge corporate performance?
- How will this end? Will they relent, reduce profitability, hire back, and expect less? Will people grow to love the idea of being this productive and want to keep it going? Is people's ability to contribute at such a high level sustainable?
Nowhere are desperate times more felt than in the home. It's not as difficult for a company to lay someone off as it is for that person to actually be laid off. For the company it's simply a numeric exercise; for the employee it's about a roof over their head and food on the table. So how do the employees react?
Things don't suddenly hit the fan; there is a lead up that gets to the point when people, despite the risk, say "Enough." It is at this point that revolutions are born, that causes are formed, that the Man is made to pucker.
As the unjust disparity grows, the people's desire to hold on to the status quo shrinks to the point where what was once unthinkable becomes thinkable.
Unjust disparity is the gap between being controlled and being in control. [I just made this up, and I'm sure there are other more "official" terms for it, but this is mine. So there. :-)]
This is not about wealth vs. not-wealth - there is tolerance for this, especially now (with sports and music) that so many once-poor people have struck gold. It's about hitting some kind of personal limit. This is about a more fundamental, and intentionally-created inequity. I'm reminded of the first time I heard Meat Loaf sing I'd Do Anything For Love (But I Won't Do That) (my emphasis); coming from a man who called himself "Meat Loaf," that seemed like quite the repugnant thing.
To the two questions above, corporations must be successful it's what their shareholders expect; the issue is their ability to sustain it. What the leadership does to achieve that is the that that will damage organizations that choose corporate bulimia (purging employees) as an effective strategy.
Of course there are moments in business when extreme effort is required, but they are moments, not months, and they are not sustainable. Greed combined with corporate myopia will take the productivity peak achieved in crunch time and turn it into the worst kind of backlash. There is a progression:
- Those that can't handle the stress begin to fall over or leave
- Those that can handle the stress, but have a sense of moral purpose and the knowledge that they are employable (even in tough times) begin to leave
- Future stars that are now forced to pick up the slack of the current top talent (#2)'s departure begin to leave (this is disaster)
- It goes on...
Smart organizations are actively recruiting disaffected #2s, and one of their selling points is that they won't do that. They are also networking with #3s, knowing that they are much more fickle and open to change. This is not good for those that did do that.
Organizations where HR/Legal/PR rule, where there is a feeling of soullessness, and where management has no empathy or visceral understanding of how the employees feel, will suffer. Their management is so reliant on reports and analysis and McKinsey-type presentations, that they view their people as things, and have little or no sense of what's really going on, be it within their walls, or in the minds of their customers. Good leaders don't allow knowledge to be filtered; they most certainly want to be connected to their people and their customers. Those that claim that it's not possible to manage without the filters are the ones the Board needs to replace.
The unjust disparity is never more clear than when we choose the company over the individual. You can't sustain success when it comes before those that create it.
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