You Don’t Have To Be An Executive To Understand How Layoffs Work
Employees may find it easier to cope with layoffs if they understood why they occur in the first place. Core to understanding the event is knowing that business owners and employees think differently.
Life’s Turmoil
Most adults understand or should understand that life is cyclical. There are periods in life when resources (i.e., people, places, things, events, and ideas) are more or less available. These cycles of availability may differ for each individual. Yet, there are some aspects that impact us collectively. As an individual, for instance, there are times when we have an abundance of romance in our lives. Then, there may be periods when romance is scarce. There are also times when it’s easy for us establish friendships. And, there are periods when it is difficult to establish friendships. As a collective, there may be periods when it’s easy secure employment and there may be periods where it is difficult to secure employment.
The Need To Stabilize Life
To reduce the volatility caused by the cycles of abundance and scarcity in their lives, practical people tend to accumulate and/or preserve their resources. The goal is to maintain the right type and amount of everything they need throughout their expected lifetime. In so doing, they hope to maintain or establish a life that is mentally, physically, spiritually, and emotionally fit.
Businesses Are Different
Most entrepreneurs do not manage their business like they conduct their lives. The entrepreneur’s aim is not to build a single lifetime enterprise that surviving cycles of abundance and scarcity. Their goal is to scale the enterprise up which requires the entrepreneur to separate the company from the products and services it offers. In the process, it acknowledges that products and services have a cycle. However, it seeks to avoid down cycles for the company by innovating (i.e., swopping out old products with new products when the old ones fail to grow).
When Businesses Get It Wrong
When a company fails to grow, the owners must reassess it processes, structure, product mix, and take corrective action. Oftentimes, it is difficult for a company or company division to see its own flaws. So, company owners tend to bring in an outsider to assess the company’s current state. (Employees refer to the outsider as a hatchet man or a wolf.) Part of the wolf’s job is to render a judgment as to whether the company is salvageable. If the organization is salvageable, the wolf right sizes the organization. He parses down the product offerings, eliminates nonessential employees (i.e., employees whose roles add the least value to the organization), and refines core and supporting processes. If the company is unsalvageable, on the other hand, the wolf executes all of the same tasks minus the refinement of the company’s core processes. He preps the company for sale.
What do you think?
