Gutless Management.
By Rick Johnson
Monday, 16th November 2009
Economic turbulence can create a window of opportunity to gain market share; At the very least it offers you the opportunity to fix and repair many issues that should have been addressed months or years ago but due to the fact that profit was easy to come by, many of these issues were ignored, overlooked or just swept under the rug.

This is especially true if these issues had a direct impact on employee relationships. In other words, profit covers many sins. Some of those sins can be directly attributed to gutless management. I have to qualify that statement by stating inequivicably that I am a firm believer in servant style leadership.

As leaders we need to serve our employees. However, servant style leadership does not mean that we accept incompetence, below average performance or comfort zone apathy.

I would doubt that there are many companies out there that don't have at least one or two employee issues that have been overlooked or ignored in the past for a myriad of reasons. Let me tell you a secret, the majority of your good employees know long before you do which employees are carrying their weight and are worth keeping. How many times have you struggled with an employee problem only to finally let them go and your employees said ---- "it's about time."

So, you are now faced with a necessary RIF due to economic crisis. It would be a big mistake to make arbitrary across the board cuts. Now is the time to make an across the board evaluation of every one of your employees. Start by looking at the functional contribution with respect to your revenue stream.

Next look at the employee's contribution with respect to top line sales, profitability and their individual performance based on expectations; assuming you haven't set precedent with exceptionally low expectations.

Follow this RIF checklist:

RIF Planning Checklist
  • Communicate the business reasons that make the RIF necessary. You need to be able to document the RIF necessity with economic data that demonstrates changes in the economy and the industry. This is a time to open with your financial statements.
  • Make sure you involve legal council in planning the layoff. Consider obtaining waivers and releases in which employees agree not to sue in exchange for severance benefits where appropriate.
  • Clearly definethe RIF plan other changes that will support the plan
  • Outline in detail the process for implementing the layoff.
  • Be consistent in your actions and don't make promises you can't keep.
  • Clearly define the RIF goals to ensure that the financial objectives are in alignment with the contingency planning goals for the financial stability of the company.
  • Evaluate employees' skills, job performance and personal contributions to determine which employees will be included in the RIF. Be fair and consistent.
  • Kill all the "Sacred Cows".
  • Provide severance benefits where appropriate to minimize individual consequences.
Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com. Don't forget to check out the Lead Wolf Series that can help you put more profit into your business.
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