Partner Article

The truth about redundancy

Leadership coach and facilitator Paula McCormack on dealing with the dreaded ’r’ word and managing businesses through difficult times.

If we believe the politicians apparently we’re no longer in recession yet we continue to hear daily of organisations making redundancies, which prompts me to ask two questions:

• Are we really out of recession yet?
• And are the redundancies really redundancies?

I considered these questions separately but concluded that actually they are inextricably linked.

I work with leaders throughout the region and from a regional perspective the answer to the first question depends hugely on who you ask it of. Some businesses do believe that they are in recession and it is absolutely their reality.

My experience is that it depends very much on the leader and their leadership capability. So irrespective of sector or type of business, evidence demonstrates that those with a confident outlook, who have managed themselves in a way that pre-empted external factors that could have been out of their control, have found themselves in control. These are generally the ones who have a clear vision of their destination, and an even clearer understanding of the organisation’s purpose. Therefore their business is completely aligned to the extent that at present they are actually investing in their people’s development and some are even recruiting.

Those that lead in a more reactive way are the ones who’ve found themselves in the difficult position of having to manage themselves in the midst of external factors that are out of their control. They now have to consider costs and overheads and potentially where the business is going. Its unfortunate for these organisations that the largest overhead generally is the payroll, hence this is where the glaring gaze first goes. It’s an immediate cost reduction, but at what cost? And how do they decide who goes and who stays?

So to address the second question, are redundancies really redundancies? The reality is that some genuinely are but more than 50% is generally not! But how is this so?

The truth is there are two reasons why we do; we start with those that we assess are not adding value to the business, are not performing the way that we need them to; but also we’ve managed the business in such a way that we’re being forced into knee-jerk reactions just to survive!

Choosing those who will be selected for redundancy becomes a game of manipulation. We select the criteria that suits us at the time, to ensure that we retain the ones we want and loose the ones we don’t. But why have we waited for such a situation to occur to loose those we don’t want? We’ve simply become complacent in our management and whilst business is good we can carry ‘passengers’.

And if we’re not managing performance of individuals, its unlikely we’re managing the performance of the business particularly well either. We’re much more focused on today and getting what we can done, than thinking about the bigger picture and the future, hence we quickly find ourselves in the position of reactiveness. One leads to the other without exception.

So whether there is a recession or not, those that manage their businesses with a conscious awareness every day, ensuring that they continuously maintain focus on the wider context, their purpose for being and their direction of travel and who take their people with them and encourage them to drive (not be passengers) are the ones who will always thrive irrespective of what the external environment has to throw at them………………is this you and if not what do you need to do next to ensure it is tomorrow?

This was posted in Bdaily's Members' News section by Ruth Mitchell .