Leading Through Layoffs

Abstract

With much uncertainty and stress surrounding layoffs, this article focuses on those employees who remain after layoffs and next steps for those in executive, management, or leadership positions. Further, an argument will be made that if some of the suggestions below were done in the first place, layoffs may potentially have been avoided or severely lessened.

Introduction

With multiple high-profile layoffs splashing across today’s headlines, it’s not a surprise that there is heightened anxiety with the stability and uncertainty of the labor market especially for “knowledge workers” (i.e. those that make their living from generation and maintenance of concepts, ideas, creativity, etc.).

Layoffs have a monumental impact on so many peoples’ livelihoods. Of course, there is an obvious impact on not only those who were formerly employed, but their families and surrounding businesses that support those who were employed. There is also an impact on those who remain at the organization as well. Overall, layoffs have a deep ripple effect from multiple angles.

What’s happening upon announcement of the layoffs?

So, the announcement of the layoffs have just been made. For those that are “lucky” enough to retain their jobs after a layoff, there are typically two types of behaviors of people in your organization:

1.      The “panicked” – people running around like the world’s on fire, trying to undeniably show their worth and prove why they were kept

2.      The “paralyzed” – those that are in a bit of denial or shock, not really knowing what to do, or just simply waiting back to see what happens

These two behaviors could be seen as coping mechanisms for dealing with a stressful situation, a version of fight or flight, if you will. Further, the organization is also in a mourning period of loss, full of confusion, guilt, fear, anger, sadness, and even hostility – all feelings that need to be processed to some level before moving on.

Additionally, “survivor’s guilt” is common for those who remain. As found in a study by LeadershipIQ, there are some non-optimal impacts in post-layoff organizations, including:

·       74% of employees who kept their job amidst a corporate layoff say their own productivity has declined since the layoff

·       61% of surviving workers say they believe their company's future prospects are worse

While there is an urgency in action needed in your organization (after all, there was a reason for the layoff), you, your colleagues, and the rest of the remaining employees need reasonable time to mourn the loss of former colleagues and the “way we were”, even if it was dysfunctional and/or non-optimal.

You’re in a different era now. There needs to be a shift.

Where do you go next as a leader post-layoff?

From the minute the concept of layoffs entered into the consciousness of your organization, whether via rumors or a more formal notification, your organization changes.

With such a huge impact on the remaining employees of the layoff, my hope and wish for executives, managers, and leaders is to consider taking the following actions:

1.      Revisit your values and principles as an organization. Do you have organizational values and principles? Did you demonstrate your organization’s values and principles consistently before and during the layoff? If not, hold a retrospective on why.

The actions of leaders have the greatest impact on their people in their organization, not just words. People will remember more about how they felt and how they were treated versus words especially in high stress situations. Perception typically will be in the driver’s seat over tangible facts. Don’t just say your organization’s values and principles. Live them. Every hour. Every day.

2.      Focus. Trim your active work portfolio. There are less people. Until your organization regroups and norms to a high enough level of psychological safety and employee commitment, you and your teams must do less until you get to a more stable place. This will require, undoubtedly, tough choices on what is truly most important for your organization. It will require that some work in process, sometimes even high-profile work, to be temporarily put on the backburner or even shelved altogether.

Some suggestions to enable focus on the most important items for your organization include:

a.      Revisit the mission statement for your organization. Why does your organization exist, especially after the layoffs?

Ensure your remaining employees know how they specifically and positively contribute to achieving the mission. Feeling a direct connection with a greater purpose is essential. Those remaining will likely want to know explicitly why they are still at your organization when others, sometimes their friends, were let go.

b.      Complete a Business Model Canvas (BMC).

BMC’s are a high-level one-page document that helps organizations visualize their business, from who are your customers, what value you provide to your customers, your key resources, costs structures, revenues, and how you get your products/services to your customers, etc. This can help remind you and your organization why you are in business from high-level strategic and operational perspective.

c.      For critical initiatives, complete a Lean Model Canvas (LMC).

LMCs can be considered an adaptation to the BMC, helping organizations focus on the high-risk ideas or products. I like to use LMCs to ensure that an idea has merit (or, in some cases, that an idea has continued merit after a layoff) by answering questions such as: why is this specific project, product, or offering a strategic necessity for your stakeholders? What is unique about your value proposition and any unfair advantages you have over your competition regarding your product? Because your organization has less people after the layoff, you want to be sure that you’re maximizing your investments in people, money, time, and other resources in the right areas and projects.

d.      Co-create Objectives and Key Results (OKRs) between leadership and those executing against OKRs.

When there is uncertainty, our brains can treat ambiguity as a threat, which can reduce our capability to focus and perform where we need to. OKRs can help not only define more tangible goals (i.e. the objectives), but also a set of measures to indicate whether or not you’re making progress towards those goals (i.e. the key results).  

As a further step, co-create your OKRs together (not just a top-down exercise) in a transparent and collaborative fashion with the persons who will be executing against the OKRs. This will not only help in gaining alignment in the direction needed, but it will also tend to lead to greater buy-in from those involved in creating and measuring progress towards that direction.

3.      Establish and regularly execute communication plans. Communication that is “open, honest, and empathetic” is essential for navigating tough and ambiguous waters of layoffs. It’s not just one or two town halls and then you’re done. Your organization has undergone a tectonic shift with a great impact on many peoples’ lives and livelihoods.

Communication is not just one-way, from the top down. Communication is bi-directional. Executives and managers must listen to and authentically, openly, and actively understand and acknowledge the feedback received. It’s a dialogue.

In a layoff, trust has been breached. Listening and acting in a corresponding manner is just one brick on the long path back to building trust in your leadership team.

4.      Revise your workflow. Following layoffs, your processes for getting work done are likely somewhat obsolete; they were based on your prior workforce and capabilities, especially if your organization had over-hired employees.

For those that are remaining, empower them to fix the processes that are likely broken. They are closer to the work than the typical manager or executive and likely have better expertise in exactly what needs to be done. Having a mission, a BMC and/or LMC, and OKRs can help provide the framework in which the new or modified workflows must work.

In the end, don’t try to do what you’ve been doing without change with just simply less people. It is not reasonable to have a “more lean” workforce that just jumps in to do what you’ve been doing all along in terms of process, procedure, and volume of work.

5.      Authentically connect and support those remaining. Establishing psychological safety after layoffs cannot be over-emphasized. It takes time with deliberate action to reestablish trust between the survivors and the leadership team.  

Team building is tricky. For example, do you want to have the impression of “everything is OK” or forced jubilance through a happy hour or a catered “we appreciate you” lunch so soon after the layoffs? Activities like these can easily backfire as being insensitive or leaders being out of touch.

One-on-ones can be an effective tool, especially if they are seen as valuable for both parties (i.e. from the manager/higher-up and the employee). Instead of hyper-focusing on status updates, emphasize instead on what the employee needs for success. Taking a cue from servant leadership, how can you enable your employee to be the best they can be? What do they need not only to reasonably execute their daily job after the layoffs, but also grow and thrive over time? How will executives and management show up for them?

Of course, there needs to be a balance in the one-on-ones as well on how they are feeling, especially around their own fears and concerns. Employees will not be able to focus on the future or what they may need for success without a reasonable level of psychological safety.

Change and the rebuilding of trust takes time. There are many feelings and attitudes that need to be processed, especially for those who remain.

Final Thoughts – Could layoffs have been avoided in the first place?

While many of the items above can be especially helpful during a post-layoff scenario, the question that executives, managers, and leaders should be asking is this: what could have happened if you did the post-layoff suggestions before a layoff scenario in the first place?

Many of the suggestions above can help not only with the focus of the organization (e.g. mission statements, BMCs/LMCs, OKRs), but also in how the work should be done (e.g. values and principles, communication plans, one-on-ones). So, instead of expanding too quickly and correspondingly hiring more people to handle a surge which may or may not be temporary, think about the implications of your business, its goals, and longer-term needs.

Yes, slower expansions may impact the aggressiveness or desired timelines of the most optimistic of plans. But, since layoffs have such a large impact on so many peoples’ lives (i.e. those laid off, the surrounding community, and those remaining employed), do the reasonable due diligence first and make sure hiring is done with thought and responsibility in the first place.