Skip to content


CEO Title Does Not Equal Leader

A company, with which I am very familiar, recently conducted layoffs in order to combat these very trying economical times our nation finds itself in. While I completely understand the need for companies to make business decisions that impact employees in order to actually stay in business, I think there are some right and wrong ways to go about it.

To begin with, this company kept the layoff decision and process at a very, very high level. The CEO did hold an informal “lobby” meeting to talk about the current company situation, but he kept it very vague, not every employee in the corporation was invited, and he veiled the impending layoffs by saying “we are going to have to make some tough decisions.” There was actually one department who didn’t even get invited to the meeting, and they were ultimately impacted by the layoffs.
Understanding the need to not start a panic or mass exodus, I can partially forgive them for not letting more people in on the “secret”. However, what does this show the associates who are still there? That the upper management doesn’t trust them? Probably. So why should those associates trust upper management? Every time there is a meeting of the minds behind closed doors, the remaining associates are going to be thinking the worst. The results: productivity plummets, trust dissipates, gossip boils over, and you’re left with demoralized staff members who are most likely sprucing up their resumes.

Oddly enough, a very funny movie popped into my head that gives a good example of what happens when CEO’s make morale impacting decisions without caring enough to get the pulse of their organization. Christmas Vacation starring Chevy Chase is probably one of my favorite movies of all time. I’ve watched it so many times that I can quote it line by line. You might wonder how I found a comedy to have relevance to such a serious topic as layoffs. Well, in the movie Chevy’s boss, Mr. Shirley, decides to suspend Christmas bonuses without telling the employees. Clark Griswold, Chevy’s character, has already counted on the money as part of his salary and has begun putting in a family swimming pool. When the “check” finally comes and it is not a check at all, but an enrollment in a jelly of the month club, Clark is devastated. When confronted with what he’s done, Mr. Shirley sees how his decision impacts his employees on a personal level. He understands immediately how making the decision to suspend bonuses without really thinking how it would affect those who make his business successful was not a good decision at all.

So, what’s the connection? Communication and options. First, regardless of how horrible a decision is going to be received, you owe it to your staff members to be honest. Treat them with dignity and respect at all times. In Clark’s situation, a meeting to address the issue of bonuses could have been held to discuss the decision. If Clark would have known that all he was going to get was jelly then he wouldn’t have started the pool project.
In the layoff scenario, don’t veil it. Let people know ahead of time that workforce is going to be reduced because of the economic climate. Give people a chance to make some decisions, ask questions, and even leave on their own if they so desire.

Second, think about options before making such impacting decisions. If the company was in financial hardship, maybe Mr. Shirley could have offered half bonuses or full bonuses, but paid in quarterly installments, or maybe there were other options.
With the other company, maybe they could have let everyone know that layoffs were going to happen and could have asked for volunteers. Maybe there was someone close to retiring or someone close to quitting who would have taken a severance package. Maybe there was someone who has a spouse who works enough that a severance package would have been enough for them to live on. This, at least, would have helped the employees keep some faith in the company and that it wasn’t “every man for himself”, especially at the top.

In the movie, Mr. Shirley actually added 20% to Clark’s bonus from the previous year. However, that’s a movie. Real life says there might be more layoffs and/or people are just going to start jumping ship. Either way, damage was done in this company that is going to take a long time to restore. True leadership is not just about the P&L statement. True leaders also take care of the people who make that P&L statement possible. Hopefully, this company will work on their communication techniques and possibly involve more people to help think of options other than simply saying “off with their heads.”

><(("> Julie Silbar

Julie is a ><((“> Friend of Catch Your Limit, a management and marketing firm with offices in Tallahassee, Florida and Richmond, Virginia. To contact Julie email her at julie.silbar@redlion.com or to learn more about Catch Your Limit, visit www.catchyourlimit.com.


Posted in Leadership.

Tagged with .


0 Comments

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.



Some HTML is OK

Connect with Facebook

or, reply to this post via trackback.