How can you do something that’s fundamentally wrong in “the right way”?
Step 1: Get Your Head Right. When a company fails to hit its financial plan so severely that it must fire the employees it went to great time and expense to hire, it weighs heavily on the chief executive. During a time like this, it is difficult to focus on the future, because the past
overwhelms you –– but that’s exactly what you must do.
Step 2: Don’t Delay. Once you decide that you will have to lay people off, the time elapsed between making that decision and executing that decision should be as short as possible. If word leaks (which it will inevitably if you delay), then you will be faced with an additional set of issues. Employees will question managers and ask whether a layoff is coming. If the managers don’t know, they will look stupid. If the managers do know, they will either have
to lie to their employees, contribute to the leak or remain silent, which will create additional agitation.
Step 3: Be Clear in Your Own Mind About Why You are Laying People Off. You are laying people off because the company failed to hit its plan. If individual performance were the only issue, then you’d be taking a different measure. This distinction is critical, because the message to the company and the laid-off individuals should not be “This is great, we are cleaning up performance.” The message must be “The company failed and in order to move forward, we will have to lose some excellent people.”
Step 4: Train Your Managers. The most important step in the whole exercise is training the management team. Training starts with a golden rule: Managers must lay off their own people. Why? Because people won’t remember every day they worked for your company, but
they will surely remember the day you laid them off. They will remember every last detail. The reputations of your company and your managers depend on you standing tall, facing the employees who trusted you and worked hard for you.
Step 5: Address the Entire Company. Prior to executing the layoff, the CEO must address the company. The CEO must deliver the overall message that provides the proper context and air cover for the managers. Keep in mind what former Intuit CEO Bill Campbell said –– The message is for the people who are staying. The people who stay will care deeply about how you treat their colleagues.
Step 6: Be Visible, Be Present. After you make the speech telling your company that you will be letting many of them go, you will not feel like hanging out and talking to people. You will probably feel like going to a bar and drinking a fifth of tequila. Do not do this. Be present. Be
visible. People want to see you. They want to see whether you care. Talk to people. Let them know that you appreciate their efforts.