When an organization faces a roadblock, an impediment that slows or stops the engines of creative productivity, the organization invariably also faces itself. The decisions made during this time will determine not merely the future of the organization but its viability and possibly even its reason for being.
A Personal Case Study
I was a district manager for a Fortune 50 company many years ago. I led the organization’s interests in the Heartland, from Western Missouri to the Colorado line, northern Oklahoma to Nebraska, and parts of Iowa and Wyoming. It was a big job for a young man. I loved it. I took personal pride in that territory and in coaching our talented staff to achieve our goals. A series of unpredictable events, including an EPA disaster on our property, created a massive monthly burden on our profit and loss statement. Suddenly, our facility was covered with drill sites, from the offloading dock at the railway tracks to the front at the Kaw River and in-between. The State and Federal Environmental Protection Agency (EPA) searched for contaminated water tables. Fair enough. No one wants to be a polluter. It hadn’t happened on my watch, but the findings certainly did. I would pay for someone else’s concealed catastrophes of decades before. Life is not fair, but it is the way things are. Now, here is the thing: I was suddenly faced with a profit and loss statement that, for the first time, had more of the latter than the former. When things like that happen, managers get little visits from other managers with bigger titles and bigger paychecks. I got mine. My boss flew into KC from Chicago. He informed me that he would be with me for a week. Do you think that I immediately thought, “O boy! This is great! A full work week with a great business mind! How blessed am I?” Right. When I picked him up that Monday morning from the airport, “Jim” was surprisingly stable: neither ranting, rebuking, reviling, nor recriminating. Such a drastic cognitive-behavioral display concerned me more than if he had been shouting. Today, such leadership tactics would be called “toxic.” Back then, timed intimidation was a quality to be cultivated. Some things do get better. So, back to the story. Jim, my regional manager, began to make his rounds; to the administrative staff, the warehouse, the drivers, and the sales call with our three reps. He specifically wanted to visit the largest customers and the prospects. Finally, my supervisor spent time with the field rep for the EPA and the contractor running the wells and field testing facilities. Friday took a fortnight to arrive that work week. By this time, it was clear that a premeditated plan was in place and that Friday morning would be the “sharing time” with me. That morning I got in early, very early. I had to prepare myself for the inevitable meltdown. I preferred to be alone before the long walk down the corridor to my office. Would this be a “BYOG—bring your own guillotine”—or more of a Bedlam technique, viz., isolate, torture, and tranquilize until I believed I was insane and deserved the darkness? Jim also arrived early. He had taken a taxi. “Odd,” I thought. “Ordinarily, he would direct me to pick him up at the hotel and visit my office for a final show of terrorism. I wonder what’s up?” Well, what was “up” was my moratorium of indecision. “Mike, you have a good customer base. You have good people. They like you (this was always said with the same unmistakable undertone, “Why should anyone like you?”). But this EPA expense is killing your bottom line. What are you going to do?” I looked at him without an answer. Jim popped out of his chair, paced the floor, and with dramatic gestures that rivaled Sir Lawrence Olivier, turned on his heel and announced, “I know what you are thinking!” I didn’t argue with him. I am sure he knew, but I went along with the game. I stared out of the window, fixing my eyes on the warehouse. “I will need to reduce expenses.” Silence. “Go on,” he said. “Well, I think we both know the biggest expense we have.” He encouraged me to continue that line of thinking. “I mean, half of our expenses are wrapped up in . . .” Then, he cut me off. “In what? What constitutes the bulk of your expenses?” He wouldn’t let me answer. “I will tell you what you are going to say.” “He is a diviner of minds,” I thought. “Human capital expenses are the biggest part of our expense pie chart. So, you think that you will have to cut.” I despised the thought. Everyone in the district contributed and made us a team. We had hired to the mission. Each employee had a vital role in our success. I spoke, “I guess I will just have to figure out whom to cut.” At that moment, my boss began to laugh. “So, you think that since you have a crisis of income, the best way to respond is to cut the cheapest and most productive resource you have?” I didn’t understand. I thought he was leading me to admit what I did: that we had to make staffing cuts to meet the budget. His response to me was just the opposite. However, he allowed me to make the statement so that he could begin an intensive time of management and leadership training (two different things, by the way). The gist of his monologue was that a failing business model, or a model that encounters new impediments, is not solved by cutting people. People will help you to adjust the model, get the results, and create a new and better model. The harder step is the right step: review the business model and adapt to the new dynamics (lower prices in the market, product decline, or economic downturn).
The Case Study from Cupertino
The premier case study in adapting to changing markets is Apple. The mind behind the machine was also the creative entrepreneur who understood that laying off human capital is the easiest fix but not the fix that lasts. Steve Jobs had a core vision about Apple that could provide clear guidance during market or organizational turmoil. I quote from Owen Linzmayer’s Apple Confidential:
“This reminds me of what Steve Jobs once said when Apple was going through some tough times: ‘The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament'” (Linzmayer, Apple Confidential: The Real Story of Apple Computer, May 1999).
The Regrettable Exception
The caveat to this advice is equally clear: if you are not staffed to the mission, you are either understaffed or overstaffed. You may have to make reductions if overstaffed and not guided by the vision and mission. This move is a tremendous disservice to the people involved.
People are Everything
As a leader, you miscalculated or ignored the role of mission and people. People are everything. Mission happens because people care. Alternatively, suppose you employ people to accomplish the stated vision and mission. In that case, every person is of infinite value—primarily because of their humanity, the imago Dei in each of them—because of their vital missional role. Your people are gold to you if you have hired based on vision and mission. Your associates represent the way forward. They are the last resource one would cut. They hold the keys to innovation, adaptation, and transformation. For example, who knows the market dynamics better than the sales representative in the field, calling on purchasing managers? How about the custodian who sees waste or notices trends that no one else could see. What if you imagined that every single person is an invaluable contributor to the whole? Because they are. Your people can guide you on efficiency, productivity, product needs, stocking, pricing, and so much more—if you would only ask. I see manager after manager in churches, nonprofits, and higher education, facing the rising waters of change in our society. Rather than innovate out of the crisis, they deepen their place in the problem. Such unimaginative managers (it is hard to call this example “leaders”) are like a hippopotamus in quicksand.
Similarly, organizational heads who seek to solve problems by immediately going to the rotting, old chestnut, “cut personnel,” eliminate the goose that lays the golden egg. Your people hired for the mission will not only rescue you and their organization from the quagmire. They will give their all in all to help navigate the seas and find the route to the deeper, more expansive places of opportunity.
So, before you hit the eject button to reduce a perceived drag on your aircraft (thereby ridding yourself of the brilliant copilot in the dogfight of market volatility), why not revisit the mission? Get the gang together and get real, “This is our mission. These are the problems. What do you think?” And, then, listen and learn.
The Rest of the Story
By the way, I did just that in the case I mentioned at the beginning of the article. My leadership resulted from being pushed to think by that curmudgeonly regional manager. The reflections I have shared in this article were the words of sage wisdom he gave during those days. So, what happened? We laid off no one. However, we did realize that the market was shifting. The ladies in the office receiving the customer inquiries told me that little piece of insight. Our product line was out of sync with customer demand (“So, that is why our inventory costs are rising!”). Within six months, we not only recovered from a P&L crisis but led the region in gross profit. I couldn’t take the credit. My manager couldn’t take the credit. The heroes of the turnaround were the very ones who knew the lay of the land better than any of us, those who tilled the soil every day. Your people hired to fill a role within the organizational vision and mission plan will always be the heroes. To paraphrase Biblical wisdom, value your People, trust them, let them lead, and they “will arise up and call” you blessed.
Linzmayer, Owen W. Apple Confidential the Real Story of Apple Computer, Inc. San Francisco, Calif.: No Starch Press, 2004.
“Her children arise up, and call her blessed; her husband also, and he praiseth her” (Proverbs 31:28 King James Version of the Holy Bible).