Hunkering Down and Cutting Back – Where is the Fairness?

Here in Alberta we are confronting a new possible normal…in 2 to 3 years back to oil at $45/barrel? We are staring at a 7.9% unemployment rate – the highest since August 1995, and the natural resources/mining sector has been hard hit with losses of some 15,200 jobs in the past year. Wilma Slenders of Transcend Management Advisors Inc hosted a very interesting discussion with us recently, and we examined the behaviour and the reaction in the Calgary workplace to the depressing economic environment.

To set the context Wilma reminded us that as Milton Friedman asserted in 1970, that the sole purpose of a business is to make a profit for shareholders. While we may disagree that it is its sole purpose, without profitability businesses would not exist. At a recent Soul of the City event(hosted by Calgary Economic Development) discussion centred around the economic challenges and the fact that Calgary is not known for innovation. As the pressure increases, companies are hunkering down and cutting back. One would think that a natural reaction would be to innovate, however, a quick survey around the table did not reveal much evidence of innovation.

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As the pressure increases in Alberta companies are hunkering down and cutting back.

So we talked lay-offs, using as the basis for our wide-ranging discussion several case studies which Wilma introduced. For me, there were a few significant takeaways.

Stress leads to poor decision making. Uncertainty leads to stress. We agreed that though it can be difficult, the worker who is able to take control of their own life will make better decisions and provide better support for their staff. We heard an example of the HR director who sees their name on the cut list and takes the bull by the horns to negotiate their package first before tackling the others. It takes courage! But it leads to certainty.

“Don’t take it personally” is a phrase which will never land well. The leader who anthropomorphizes “the company” and uses that as an excuse can never get away from sounding pejorative. It is personal.

The high performing team or individual can get isolated. When you are on sinking ship watching the captain load supplies onto a dinghy you know you can’t get on, it can test your spirit of generosity. Different business, and indeed different units of the same business, are having very different experiences in this downturn. Some are contracting and some are growing. When both are happening in the same company it is challenging. To keep staff motivated, managers must be transparent and open with the challenges they face.

Involve employees in the decision making. This can be good for keeping employees engaged, but it can also be dangerous – as it is not always possible to keep promises made even with the best of intentions. When the price of oil changes, everything changes.

Separate the people from the problem? This is a quote we use quite often in conflict resolution. One story shared tested this – the fellow who arrives at “the meeting” with the spreadsheet of metrics & performance statistics to make the cut decisions, looking around the room. Didn’t you bring your spreadsheet? he says to the others. No. We know who has to go. All decisions are made at some level on emotion and gut instinct. Every company facing cuts is facing complex decisions – laying off the high performer to save the job of the new parent? This is a problem that cannot be separated from the people.

There are no rules for this new normal. We struggle with a larger than ever and uncontrollable circle of concern. As we grapple to enlarge our circle of influence, our values will be tested, our security will be tested, and so will our conscience. Hang on, it is going to be quite the ride; it isn’t over yet.

Through Transcend Management Advisors Inc. Wilma Slenders provides professional objective guidance for growth and change.

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