Organizational leadership is much more complex, gut wrenching, and emotionally draining during times of economic decline than in boom times.  I’ve written several books and numerous articles on leading organizations in ways that will help them survive the trauma of downsizing, rekindle morale, and rebuild and productivity.  If I were to shift gears and write about how not to do it, here are three leadership behaviors that contribute to layoff survivor sickness.

Leaders Who Don’t Walk Their Talk.  In times of economic turmoil, reduced revenue, and cost cutting, leaders are under an intense spotlight. Their behavior is scrutinized by their employees who are particularly sensitive to gaps between what they say and what they do.   When employees are asked to do more with less, and cut or eliminate projects they value and have spent their careers advocating, it does not give them a warm fuzzy feeling to learn that their leaders are spending money on attending conventions or giving themselves large bonuses. In times of crisis, leaders need to exhibit an image of restraint and self-sacrifice.        

Leaders who Under Lead and Over Manage.   Many top managers are guilty of managing without a license..  They are way too involved in the nuts and bolts and are, thus, disempowering those employees who are paid to manage and putting their own priorities in the wrong place.  The role of senior leaders is to set direction, formulate strategy, inspire excellence, and hold managerial employees accountable.  It is not their role to do line item budgeting and become personally involved in operational decisions. In periods of economic decline a key top leadership role is to assure that there is a strategy for re-recruiting a demoralized work force.  Many top managers do not perform this vital function.

Leaders who Collude to Perpetuate a Dysfunctional Team.  A bickering, fragmented, non-aligned top management team is toxic to organizational recovery and individual initiative.  When times are tough and people are asked to stretch to do more with less, seeing a leadership team embroiled in their own power struggles and turf issues pours cold water over any spark of risk taking and extinguishes creativity.  Too many organizations have top managers who are engaged in secrecy,  back-room deal making, and using a crisis to get even with past rivals. The unfortunate result is a self-serving group of non-aligned individuals, not a leadership team that is of any value to the recovery and productivity of their employees.

Leaders that make a difference in today’s rapidly shifting environment will need a new set of skills that, most of the time, are not found in traditional leadership development or executive education programs.  Leaders need to take personal responsibility to develop these skills.  Here are ten practical things you can do to help yourself:

Get involved in the leadership of a volunteer organization.  Pick one that does not receive funding or support from your organization.  Helping manage a volunteer organization is a powerful feedback and developmental experience.  It removes you from your positional power base and allows you to assess your true impact.  It is very different when people don’t have to listen to you or tell you what you want to hear.  Many volunteer organizations are fractionated, political, and made up of conflicting special interest groups, yet they have to accomplish something.  What better way to learn how to manage singles interests into the collective good.

Take evening courses or sign up for special programs that teach helping skills…  The macro-leadership competency of the future will be the ability to help yourself, your organization, and your employees facilitate change and transition.  The so called soft-skills are really the hard-skills, and certainly the relevant skills!  Management will become a helping profession and managers will need the same kind of helping skills as other professionals in the field.  The bad news, at least for the validity of their curricula, is that these kinds of offerings are not often found in business schools.  The good news is that they can be found in other schools and departments such as psychology, sociology, counseling, organization development, and educational psychology.  There are also one-time seminars and special programs put on by universities and consulting organizations.

Complete a professional 360-degree feedback instrument.  By professional, I mean that you should use an instrument that has a history, validity standards, and norms.  Have the results interpreted by someone trained in helping you understand what it means and doesn’t mean.  Some organizations have their own 360-degree instruments and others use instrument licensed and certified by external vendors.  There are also some excellent external organizations you can hire to administer such instruments. 

Attend a professional leadership training program.  This type of training is different from a program on marketing, quality, or performance management.  It should focus on intra-personal insight, inter-personal skills, and the systems perspective necessary to develop a culture that leads to organizational learning.  There are some very good in-house programs and many excellent external offerings.

Find a Truth Teller.  It is particularly important for top managers to cultivate and use truth tellers.  A truth teller is someone in the organization you can rely on to, as is said in baseball “call them they way they see them.”  Truth tellers provide unfiltered feedback.  They have three characteristics: they are tuned in to what is going on at all levels of the organization; they are secure and have no personal ax to grind; and you trust them.

Attend Laboratory Training.  These sessions used to be called T-groups. Yes, this is sensitivity training, and yes, it is “feely” – but it probably won’t be “touchy.”  The bottom line is that this kind of laboratory training is a very powerful way to get the depth of feedback that will lead to self-awareness.  It is important to assure yourself that the facilitators are professional and the organization sponsoring the session has a track record with organizational managers.

Become familiar with the evolving future search technology.  There is a whole new movement out there, using labels such as “future search,” and speaking of “getting the whole system in a room.”  These large system-change processes go for the jugular in stimulating the learning organization.  If you want to jump-start your understanding of learning in the collective, you need to get on the bandwagon; the technology is growing faster than it can be codified.

Learn how to have a dialogue.  A dialogue is different from a discussion, an argument, a debate, or a business meeting.  The dialogue process is very important in developing learning organizations and is central to collective learning.  There are seminars and workshops.  You can also find some consultants who can teach you and your organization dialogue skills.

Get active in your professional association.  Don’t just attend the national meeting – become a worker, serve on committees, pass out the literature, do time in the information booth, set up the chairs!  The higher up you are, the more the value of the grunt work.  It forces you to see an organizational system from a different perspective and helps you rethink your own skills and assumptions as to what constitutes value-added.

Set up an intensive personal feedback project.  One option involves retaining an external consultant to nearly overwhelm you with feedback from a wide range of data points.  This is a very powerful process.  You can’t escape valid data, and a skilled consultant will help you understand it and do something about it.

At the zenith of the old paradigm there was a reaction to anything that was deemed “soft.” This included feelings, relationships, empathy, and anything that was “touchy-feely.”  This is a strange norm, because being alive and human involves relationships, feelings, and connecting with others. However, the value was facts and figures—“hard” stuff! Even though such rock-ribbed disciplines as physics now report that facts are relative, the bias continues.

 Organizations still talk about human resources and training as the “soft” side of management. But not only are people issues as real as financial and production figures, they require just as much skill and strength. In addition, they require authenticity and the risk of self-disclosure. This is much more difficult than hiding behind a memo or stack of figures.

 The good news is that, despite all the reasons that organizations discount “soft” helping skills, there is a slow but steady revision in progress. Organizational leaders are finding that interpersonal competence is in high demand in the new paradigm, and as they make this discovery, they are not only picking up useful skills, they are realizing a new sense of personal relevance as they discover new behavioral options and plumb the depths of their own repressed capabilities

Today’s critical leadership challenge. This is the second of a two-part posting on some of the academic and practitioner based research on the effects of layoffs and the need to heal the wounds and revitalize downsized organizations.  Here is the leadership challenge for organizations using downsizing as a strategy to deal with economic decline and uncertainty.  The research, both academic and practitioner based is overwhelmingly clear: those who remain, the survivors, do not automatically rebound, nor does productivity automatically increase.  Organizations continue to spend time and money helping those who leave. The 2008-2009 edition of Lee, Hecht, and Harrison’s Severance and Separation Benchmark Practices Survey of 1,072 firms indicates, despite current conditions, that 65 percent have maintained their severance policies and 19 percent actually increased them (American Society of Employees, 2009).  The percentage offering outplacement services to displaced exempt employees also increased to 55 percent. While the focus on those who leave is important from both a humanitarian and, to a degree for those who remain, much more strategic effort needs to be expended on a far more important – in terms of competitive advantage – population: those who remain.  Here are two very important activities that global leaders need to assure take place in order that downsizings have the intended results

Make certain those who leave are treated with dignity, fairness, and respect. The perception of the way people are treated on the way out has a lot to do with the commitment and productivity of those who remain.  In an extensive best practice study of the automotive industry (Cameron & Mishra, 1991) it was confirmed that the way downsizings were implemented had a direct impact on post-layoff productivity and quality.  Fredrick Herzberg (1964) developed a theory that divides motivational factors into those that truly motivate (such as recognition and satisfaction with the work itself) and those that simply keep employees from becoming demotivated (the perception of fair pay and working conditions).  He called the latter hygiene factors, and the way survivors perceive the treatment of those who leave – the process of downsizing – is just that: a hygiene factor.  It won’t automatically ameliorate survivor symptoms, but it will greatly facilitate the odds of recovery.  Organizational leaders can insure a double win by assuring that those who implement layoffs do so in a manner that maximizes survivor hygiene. The first win is ethical; treating those who leave with dignity and fairness is the right thing to do.  The second win is strategic; it will help the organization rebound more rapidly.

Avoid unintended consequences. There has been a substantial amount of research e.g. (Brockner, 1986) that connects the prognosis of layoff survivor recovery with the process of downsizing. The key variables are fairness (the selection criteria); equity (the degree to which layoffs are spread across a levels and functions); participation (opportunities for input and choice such as pay cuts, and job sharing); and caretaking (severance, prior notice, and respectful treatment).  In order to avoid untended consequences that could result in significant erosion of any layoff benefits, top executives need to exercise personal oversight over the process.  This will prevent, often well-intentioned, managers from causing irreparable harm by implementing processes such as giving no prior notice and escorting long term employees out of the building.

Empower employees, train managers in helping skills. Researcher Mishra and several colleagues have engaged in multiple downsizing research projects with a number of manufacturing and service organizations over the past twenty years.  They have followed some individual organizations for more than a decade. In a recent update (Mishra, Mishra, & Spreitzer, 2009) they report that the most successful have focused on building trust and empowering their employees.  They point out the necessity of training front line managers in empowerment and communication skills. The Leadership IQ survey (Business Wire, 2008) reinforced this message, indicating that employees who rated their supervisors high in visibility, approachability and candor were 72 percent less likely to report a decrease in productivity. A study of downsized hospitals (Chadwick, Hunter & Walston, 2004) indicated a positive correlation between those hospitals where supervisors focused on surviving employees’ emotional needs and positive financial outcomes.  A study by Kenexa Research Institute (2008) found that key themes in reengaging layoff survivors were building confidence in leadership, helping mange stress, and instilling optimism. The message for global leaders from these studies is that first line management represents a key strategic tool for revitalizing layoff survivors. I have found that training managers in basic helping skills and requiring them to meet individually with their employees is an extremely high leverage intervention that helps both the manager and the employee. 

Adjust to the new psychological contract. As global downsizing continues as primary strategy for reducing costs and responding to economic uncertainty, leaders need to formulate specific plans and exercise ethical and operational oversight for dealing with those who remain.  The research is clear, without paying specific attention to survivors; organizations will not realize the benefits of downsizing.  Innovative, entrepreneurial organizations will have the ability to adjust to a new psychological employment contract that will allow them to compete in the fast moving, temporary business environment of the future.  Success in this new world requires both employees and managers to assume new, often risky roles.  Academics, consultants, and managers need to focus their efforts on helping organizations and individuals cope with the productivity hindering effects of layoffs.  The research is clear; layoffs do not achieve their initial goals and often boomerang and leave the organization worse off then before the reductions.  Since downsizing is an increasing global response to economic decline, those organizations that are most successful in re-recruiting layoff survivors and revitalizing downsized organizations will have a distinct competitive advantage.  I have included the references for this and the preceding posting.   

References

American Society of Employees, “Firms Focus on Severance Study Finds.” April, 2009. http://www.aseonline.org/2009/April/FirmsFocusedonSeveranceOutplacementStudyFi/tabid/6654/Default.aspx

 Bartash, J. “High Tech Layoffs Climb in First Quarter.” Physong, April 6, 2009.  http://www.physorg.com/news158261667.html

 Brockner, J., and others. “Layoffs, Equity Theory, and Work Performance: Further Evidence of Survivor Guilt.” Academy of Management Journal, 1986, 29, 373-384.

 Business Wire, “Leadership IQ Study: Don’t Expect Layoff Survivors to Be Grateful.” December 10, 2008. http://www.findarticles.com/particlesmi_m0EINis_2008_             Dec_16/ai_n31128154

 Cameron, K., & Mishra, A. “Best Practices in White-Collar Downsizing: Managing Contradictions.” Executive, 1991, 5(3), 57-72.

 Cascio, W. “Use and Management of Downsizing as a Corporate Strategy.” SHERM Foundation: Executive Briefing. September, 2009.

 Cascio, W. Responsible Restructuring: Creative and Profitable Alternatives to Layoffs. San Francisco: Berrett-Koehler, 2002.

 Chadwick, C., Hunter, L., & Walston, S. “Effects of Downsizing Practices on the Performance of Hospitals.” Strategic Management Journal, 2004, 25, 405-427.

 DeMuse, K., Bergman, T., & Vanderheiden, P. “New Evidence Regarding Organizational Downsizing and a Firm’s Financial Performance.” Journal of Managerial Issues, 2004 (16) 42-63.

 Dorfman, J. “Heard on the Street.” Wall Street Journal, Dec 10, 1991, pp. C1-C2.

 Ferris, G., Rosen, D., & Barnum, D. Handbook of Human Resources Management. Cambridge: Blackwell, 1996.

 Herzberg, F. “The Motivation-Hygiene Concept and Problems of Manpower.” Personnel Administration, 1964, 27(1), 3-7.

 Kenexa Research Institute, “Priority Number One in the Aftermath of Layoffs: Reenergizing Employees.” Employee Insight Report, 2008, (35).

 Mishra, A., Mishra, K., & Spreitzer, G. “How to Downsize your Company without Downsizing Morale.” MIT Slone Management Review, April, 2009.

 Noer, D. Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations. San Francisco: Jossey-Bass, 2009. 

 Noer, D., & Bunker, K. (Eds.) “Best Practices in Leading Downsized Organizations.” Center for Creative Leadership Conference Proceedings, April, 1995, Greensboro: North Carolina.

 Prime CB, “Thirty Percent of Layoff Survivors Feel Burned-Out.” May, 28, 2009. http://www.primecb.com/30-percent-of-layoff-survivors-feel-burned-out/  

 Rugaber, C. “Mass Layoffs of 50 or more Workers.” AP World Stream, January 28, 2009. http://www.encyclopedia.com/doc/1A1-D960B3MO0.html

 Stjern, A. “Effects of Survivor Guilt Syndrome in the Workplace.” Associated Content, June 24, 2009.  http://www.associatedcontent.com/article/1877291/effects_of_survivor_guilt_syndrome_pg2_pg2.html?cat=55

1. Re-recruit the survivors.  The overwhelming consensus of downsizing research is that layoffs do not achieve their “going in” productivity goals.  Survivors of most organizations are angry, depressed, anxious and fearful.  They are not able or willing to take risks or focus on increasing customer service.  At the very time organizations need them to be the most creative and energetic; they hunker down in the trenches, absorbed in their own toxic survivor symptoms.  Although managers are, rightfully, caught up in cutting costs, they need to be reminded that people are not “things” to be added or deleted to the production equation with mathematical sterility.  Managers need to move beyond layoff administration and planning into formulating strategies for layoff recovery. This involves re-recruiting demoralized employees and working to help them overcome debilitating survivor emotions.  

2.  Facilitate venting.  This goes against the culture of some organizations that managers should not tolerate any whining and complaining. The reality is that without the healthy externalization of layoff induced anger, fear, and anxiety, employees will remain crippled by layoff survivor sickness.  In fact, research shows their symptoms will get worse. It is essential that managers lead the way in establishing organizationally sanctioned processes that facilitate the venting of repressed feelings and emotions.  Many successful organizations do this in groups with the help of a facilitator; others require managers to meet individually with employees.  This is sometimes a counter-cultural activity but organizations with the courage and tenacity to facilitate venting have been amazed with the results and found that healthy venting is a necessary means to the end of moving employees back to productivity.  

3. Communicate with truth and authenticity.  It is a myth that, in troubled times, managerial communication needs to be clear, planned, objective, and structured.  It is a fallacy that expressing uncertainly, ambiguity, or dealing in feelings and emotions is not useful. Surviving employees are attempting to deal with a toxic brew of productivity hindering emotions and need to feel authorized to talk about them. Employees would much rather have managers tell them that they don’t know something as opposed to having them not say anything or make something up.  It is also important that managers understand and communicate the truth about employment security. We are experiencing a fundamental shift in the psychological contract that connects employee to employer.  When the economy becomes more positive, the frequency of mass layoffs will diminish, but long-term, lifetime employment with one organization is a thing of the past. Managers need to emphasize that employees will have to rely on maintaining transferable marketable skills and continually cultivate their professional networks. 

4. Brush up on helping skills and lighten up on controlling skills. Don’t be afraid of feelings and emotions; they are the currency of the realm for helping survivors move back to productivity.  Telling survivors to “suck it up” and that they are lucky to have kept their job is the wrong strategy.   Layoff survivors are not motivated by luck. In fact, evidence is clear that the opposite happens – they are demotivated by survivor guilt and its cousins: anxiety and depression.  Managers who have been most successful in helping survivors overcome the trauma of layoffs have formed helping relationships with their employees. This requires managers to practice and, often, re-learn basic helping skills such as active listening, reflecting feelings and emotions, and giving and receiving non-evaluative feedback.  For many managers this initially feels like an against the grain activity in a time of economic crisis. It, however, has been proven to be an invaluable tool in helping employees overcome the symptoms of layoff survivor sickness and move back into productivity and creativity.       

5. Attract employees by nutritious work. The best strategy for organizational survival in the new reality will be to attract employees because of the work. The most talented employees will have options; they will choose their employers because they want to be there, not because they have to be there.  Employees will be loyal to their profession and motivated more by the work itself rather than the organization where they perform that work.  Successful organizations will help employees self-motivate by finding nutritious work and an inner sense of purpose rather than relying on contrived external motivational techniques.  Paradoxically, employees who are working in congruence with their unique gifts and purpose will be much more productive and increase the probability of their job security. Successful managers will be much more collaborative and have the ability to lead empowered employees not tied in by benefits, services, and social systems that reward fitting in and conformity and motivated by fear of job loss.

A number of years ago, a frustrated manager was looking for a way to put the pieces together after a downsizing eroded loyalty and commitment.  “With this new psychological contract, how do we keep things in place,” he asked?  “What’s the glue that holds the organization together?”   Together, we came up with a recipe for that glue.  It has become somewhat of a cult piece and, upon a request, I’m posting it here:     

Fill glue pot with the fresh pure,

clear water of undiluted human spirit.

    Take special care not to contaminate

with preconceived ideas or to pollute with

   excess control.

    Fill slowly; notice that the pot only

fills from the bottom up. It’s impossible to

fill it from the top down.

    Stir in equal parts of customer focus

and pride in good work

    Bring to boil and blend in a liberal

portion of diversity; one part self-esteem;

and one part tolerance.

    Fold in accountability.

    Simmer until smooth and thick,

stirring with shared leadership and clear goals.

    Season with a dash of humor and a

pinch of adventure.

    Let cool, then garnish with a topping

of core values.

    Serve by coating all boxes in the

organization chart, with particular

attention to the white spaces.  With proper

application, the boxes disappear and all

that can be seen is productivity, creativity,

and customer service.

A beleaguered manager expressed frustration at needing to work on all this “soft stuff” when his organization was imploding.  It is important that organizational leaders understand that, in today’s world, soft is hard.

 At the zenith of the old paradigm there was a reaction to anything that was deemed “soft.” This included feelings, relationships, empathy, and anything that was “touchy-feely.” If you think about it, this is a strange norm, because being alive and human involves relationships, feelings, and connecting with others. However, the value was facts and figures—“hard” stuff! Even though such rock-ribbed disciplines as physics now report that facts are relative, the bias continues. Organizations still talk about human resources and training as the “soft” side of management. But not only are people issues as real as financial and production figures, they require just as much skill and strength. In addition, they require authenticity and the risk of self-disclosure. This is much “harder” than hiding behind a memo, a stack of figures, or a quantitative decision matrix. 

 The current economic environment is helping with the realization that “soft” is “hard.”  The most effective managers are those who have the ability to engage in authentic helping relationships with their employees.  The next time someone belittles the “soft” stuff, remind them that in today’s environment soft is hard and if they want to be effective in healing the wounds of downsizing, they need to focus on the requisite skills – the “hard” stuff of engaging in authentic helping relationships with layoff survivors.

The Greek God Proteus had the ability to change form in response to adversity, yet remain a God of the sea.  Proteus offers an interesting role model for leaders, struggling to put the pieces together after downsizing attempting to focus on healing the wounds after downsizing.

 Concepts of loyalty, motivation, and commitment have changed as people are more and more being seen as costs to be controlled and not long term assets to be developed.  Reciprocally, employees are increasing loyal to their professions and not the organization in which they ply that profession.

Leaders  need to balance these conflicting concepts, and although they can’t be all things to all people, it is possible to be more things to more people and still remain a steward to an organization.  This is the profound lesson of the Protean way and is good news for those who are locked into the old psychological employment contract for fear of losing their fundamental values or purpose.

 Robert Liftion in his book The Protean Self (1993, p. 82) wrote “A survivor, fundamentally, has two psychological possibilities: to shut down or to open out.”  Leaders, attempting to put the pieces together in a time of paradigm shift regarding the psychological employment contract need to open out, drop outmoded concepts of loyalty, motivation, and commitment, and embrace a new and often ambiguous reality.  This is the challenge of the Protean way.