Wrong Way Leadership

wrong-way-leadership1

People make mistakes. Companies make mistakes. Some mistakes are easier to overcome than others. Here is a lesson on how not to make mistakes:

On February 23rd of this year, troubled computer chip maker Spansion layed off (actually a more correct term would be “fired”) 3000 employees.  Just like that.  No notice, no severance, no outplacement, no thank you.

Nice, isn’t it!

On the heels of that event, Spansion announced raises for key executives and employees.  Then they filed for bankruptcy protection and announced that they would try to pay the fired employees severance out of bankruptcy funds.  It appears as though Spansion’s leadership is trying to get the company sold before the bankruptcy proceedings even get started and the bottom line will look a lot prettier without the salaries of those pesky 3000 employees.

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None of the above is news to anyone who reads the business section of the paper, but it is the most egregious and flagrant example I have seen yet of what NOT to do in a financial crisis.

Why?  Let’s just skip the part about ethics and fairness and go right to the results column:  People remember.

The Spansion organization, whether acquired or reorganized, may never be as attractive again to bright, talented people as it once was.  When this recession is finally over, good people will once again be looking for the most promising companies at which to hang their hoodies. And with the way that Spansion made their downsizing mistakes, they have made it very difficult for themselves to once again attract the best and brightest. Only time will tell. We certainly wish them the very best.

Businesses that see employees as a “cost” will inevitably look for the minimum number it will take to run the business, just as they would with desk chairs or printers.  But today’s employees cannot be commoditized. As time goes on, many talented Baby Boomers will be leaving a large void when they retire in the coming years.

In 2009, the only real competitive advantage any organization can claim is a continuous flow of new ideas and innovation.

That comes from one asset alone: people.   Keeping your talent  on board, interested, and engaged should be job one for any leader that wants his/her organization to be competitive when this recession is over. So be wary of making silly mistakes now. Learn from others who have spotlighted how not to behave while swimming around in the deep end of the talent pool.

Does that mean downsizing should be avoided at any cost?  Maybe not. But it does mean that extraordinary care should be taken to ensure that it is done as part of a thorough restructuring plan and that the accompanying jolt to the survivors is minimized.

What examples have you seen where firms or organizations have done things right when having to trim the workforce? Who are the shining examples of good talent stewardship that should be advertised?

Posted on March 10, 2009 by Contributing Author Sara Zeff Geber, Ph.D.

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One Response

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