LO & Big Layoffs LO5839

John Zavacki (jzavacki@epix.net)
Sun, 25 Feb 1996 06:47:10 -0500

Replying to LO5809 --

Rol Fessenden wrote:
> It may be that a fully developed LO can take a decision to downsize.
> >>>>SNIP..... at the
> life-threatening times, the leader steps in because it is his or her job
> to view the whole and be responsible for the whole.
> I just think there is only one person who will be responsible for the
> final decision to downsize.
> Am I wrong about this? Is there a way for the actual decision to be
> jointly owned? Can the participants really over-ride the CEO? Do we
> disagree or not?

I have participated in big layoffs, as champion of the "we haven't tried
hard enough at other levels" school of salvation; and then again at the "I
don't like this, but..." school of acceptance. Rol's final questions have
some BIG implications.

Is this a learning organization? Is the CEO a systems thinker? Can
causal loops show alternatives? In most organizations I've lived in, the
CEO is normally linked at the hip to the CFO. Historically, both have
MBA's or some functional equivalent (in very large companies), say a BS in
Business Administration. Recently, operations and even quality executives
have been given the helm, but there's not much information available on
the results.

The links to downsizing are balance sheet links. Stock holder needs are
considered first, then, as an afterthought, customer needs, and finally,
those being laid off. The financial picture is a performance model based
on notions like ROI and RONA. The place of the company on the wheel of
life is not considered. The relationship to externals (community, family,
customer, supplier) is usually a sub- or un-conscious throbbing in the
brain. The decision is made on the basis of relative input:output. There
may be many good alternatives, but the climate is never right for learning
in these types of crisis. Even the most enlightened falter and succumb to
the balance sheet. Personal survival overshadows the herd mentality.

The alternatives, of course, are to substitute more meaningful metrics in
the financials. Metrics which can show positive growth and potentials
based on organizational structure would be more compelling reasons for
holding off on the downsizing. The strength of the predictors would need
to be quantified (confidence levels, etc.) Financial potential metrics
would be a good excercise for the open book management compensation
structure team.


jzavacki@epix.net John Zavacki The Wolff Group 900 James Avenue Scranton, PA 18510 Phone: 717-346-1218 Fax: 717-346-1388

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