And in that spirit, I have to say a silent prayer of thankfulness and a fond goodbye to Phillip J. Schoonover, the now-former CEO of electronics retailer Circuit City, because like Zell, Schoonover’s idiotic business strategy helped to fuel this blog with no end of wonderfully bad management decisions and practices.
Schoonover was canned by the Circuit City board on Monday, as I predicted they would do last December. As The Wall Street Journal noted, Schoonover was brought in from industry leader Best Buy some four years ago to turn around the troubled Circuit City chain. “Instead, the 48-year-old executive, who was named CEO two years ago, presided over a further decline in the company’s fortunes. He attracted criticism for decisions that backfired, such as dismissing veteran workers to cut costs.”
I love the understated simplicity of The Wall Street Journal, but saying Schoonover dismissed veteran workers to cut costs doesn’t really capture the full idiocy of Schoonover’s “management” decision. He didn’t just dismiss veteran workers, he purposely fired his most senior, highest-paid (and most experienced) floor workers and replaced them with lower-paid employees in some misguided cost-cutting experiment that not only demoralized his workforce and damaged customer service, but led to a number of age bias lawsuits as well.
Schoonover never admitted the terrible mistake he made despite withering criticism of his decision in The Washington Post, The New York Times, The Wall Street Journal, and here in the Business of Management blog. Even a big drop in sales and a sinking stock price failed to dissuade Schoonover of the folly of his decision, and his singular denial of any responsibility for his terrible people-management strategy led me to award him and Circuit City as the winner of the 2007 Workforce Management Stupidus Maximus Award “for the most ignorant, shortsighted and dumb workforce management practice of the year.”
The Journal’s story on Schoonover’s ouster quoted Colin McGranahan, a retail analyst at Sanford C. Bernstein & Co., who noted several of Schoonover’s blunders over the years, such as replacing the highest-paid, most seasoned staff in the company’s stores in an attempt to recoup losses caused by falling TV prices. “He underestimated the disruption that would cause,” McGranahan said. “If you worked at Circuit City, the only way to interpret it was that if you do well, you will be fired. It led to bad morale and staff disengagement.”
Yes, it is remarkable that a business strategy that rewards the best in your workforce with involuntary termination would be seen as anything but bad, but that’s why Schoonover won the Stupidus Maximus Award. How could anyone with any sense see it as anything other than dumb and foolish?
So, farewell, Phillip Schoonover. I’m sorry to see you go, because now there is one fewer shortsighted and idiotic manager to write about. But don’t worry about me. I’ll make out just fine. After all, I still have Sam Zell and his gang to keep me busy.
I’ve written before that layoffs are a one-on-one activity, that there’s only one right way to fire someone—in person, face to face, supervisor to worker. There’s a reason for this, and it is simple: It should be handled that way because management should be forced to personally confront the consequences of its actions.
An e-mail firing, I said at the time, is the ultimate management cop-out because it further dehumanizes a process that is pretty inhuman to begin with.
Well, here’s another example of a company letting employees know of a layoff via e-mail, but unlike RadioShack, this instance was due to a dumb mouse-click mistake.
Advertising Age, a sister publication of Workforce Management, reports that “struggling media agency Carat is planning a major restructuring of its U.S. operations, including an undetermined number of layoffs—news it accidentally released today via a memo the agency’s top New York-based HR executive e-mailed to the entire agency that appeared to be intended only for senior managers.”
Yes, the company’s chief people officer accidentally e-mailed Microsoft PowerPoint and Word documents about how the company was planning to handle layoffs “to all staffers before the mistake was realized, and it was pulled back by the IT department.” The documents, which were sent to Advertising Age and are now posted on adage.com, “detail talking points for managers as they talk to clients, vendors, the press and employees as Carat tries to navigate the fallout from the news” of the layoffs.
If you look at the documents, you’ll quickly see that the company was trying to take great care to manage the layoffs and give managers guidance on how to talk to employees and clients and manage the situation to the best of their ability. There’s some silly politically correct language in there—they want layoffs referred to as “right-sizing”—but for the most part, Carat’s management team seems to have been trying to do the right thing.
Unfortunately, those good intentions won’t matter in the end. All the soon-to-be former employees of Carat will remember is that they were told about a mass layoff—that might include them—by e-mail. Sure, it was inadvertent, but no one is going to remember that part. What will persist is the sting of being dismissed in a very impersonal way.
Another problem for Carat will be scraping off the ceiling the people it wasn’t firing—who Carat really wants to keep, in fact—but who also got the misdirected memo. One of the talking points prepared for managers in response to any questions about further reductions noted that “although no one can ever predict what the future will bring, we do not anticipate another action of this nature in the foreseeable future.” Somehow, I don’t think the left-behind employees will buy that.
Advertising Age asked me to comment for its story since Workforce Management writes about these issues all the time. As someone who has occasionally sent out an embarrassing e-mail to the wrong person (which almost everyone does at least once), I feel for Rose Zory, Carat’s chief people officer, who sent out the e-mail in question. She simply made a mistake, in the heat of the moment, and probably wants to crawl into a hole right now.
But as I told Advertising Age, “You would think that the chief people officer would be more careful given their position in the company—a reasonable assumption to make—but that’s not always the case. Owning up to the problem, apologizing and emphasizing it was a terrible mistake won’t solve this or make it better, but can go a long way toward getting beyond it quickly. Still, if I were the CEO, I might want to start looking for a new chief people officer. You pay those people to step up in these situations, not make it worse.”
In my book, one of the toughest things for a manager to do is to let someone go. Taking away a person’s job—their livelihood—is one of those things you never, ever want to do, but it is also one of those things that all managers must face if they are to successfully do their jobs.
By the same token, no serious manager ever makes light of having to fire, cut or “downsize.” Not only is it poor form and can bring on bad karma, it’s just not right.
Any executive who publicly seems to delight in getting rid of people deserves to walk the plank or get tossed into Dante’s lowest level of hell. And that’s where Randy Michaels comes in.
Tribune has been cutting employees left and right, and everyone thinks there are more firings to come. Many of the cuts are being executed by a bunch of executives Zell brought in from radio giant Clear Channel, the company that has essentially destroyed local radio in this country. One of them is a former DJ, the aforementioned Randy Michaels.
This was all too much for one copy editor. “She stood up and confronted Michaels. … She brought up that a) we were working and b) 100 of us were going to be jobless next month. He made some crack about how it wouldn’t be so bad.
When she continued to press the issue, bringing up such obscure facts as how it sucks to live without income and insurance, he basically made an exaggerated sad face and told her to cheer up.”
Later, COO Michaels got into an e-mail exchange with a Tribune reader where he made light of all the layoffs. “Who cares, he says, if the Tribune fires a couple of hundred journalists: ‘The fact is that we can hire as many great journalists as we like because almost all papers are letting them go. Pointing out problems is not helpful,’ ” the blog post said.
I don’t know Randy Michaels, but from everything I have read and heard, he’s a pompous and arrogant ass. And in my book, this exchange only goes to prove it. No serious executive boasts that he can fire as many people as he wants because there is a ready supply of fresh meat available. Doing so invites bad karma and all sorts of other terrible things that I am sure are in Randy Michaels’ future.
Think you have a better candidate? Think Randy Michaels, Sam Zell and the management team at Tribune already have wrapped it up? Let me know with either a comment here or an e-mail to jhollon@workforce.com.
Are guns at work ever a good idea? Most sensible people would quickly say no, but good sense sometimes gets sidetracked, as it recently did in Florida.
Earlier this week, Gov. Charlie Christ signed a bill “that will allow Florida residents to keep guns locked in their cars at work.” The new law doesn’t take effect until July, and will likely be challenged in court, but according to a story in The Miami Herald, “Under the new law, businesses cannot prohibit employees or customers from keeping a legally owned gun locked inside their cars, as long as the owner has a permit to carry a concealed weapon.”
Businesses in Florida are worried—rightly, I think—that letting workers have easy access to firearms in the workplace is not a good idea. In fact, both the Florida Chamber of Commerce and the Florida Retail Federation have hired legal counsel to sue the state over the new law.
“In the past, deranged employees who wanted to mow down their boss and colleagues had to drive all the way home to fetch their guns. It was the waste of a perfectly good lunch hour, not to mention the gasoline,” he added. “Soon, however, any simmering paranoid with a concealed-weapons permit will legally be able to take his firearms to work. If a supervisor rebukes him for surfing porn sites, or a co-worker makes fun of his mismatched socks, he can simply stroll out to the parking lot and retrieve his Glock or AK-47 (or both) to settle the grievance.”
I can see Hiaasen’s point, and it hits home to me because I used to work with a guy who did a lot of hunting who just happened to carry his rifle in the trunk of his car—that he drove to work. He wasn’t a bad guy, but he could get angry and scary on occasion, and that’s not a good combination for someone packing heat in their car.
My guess is that Florida’s new gun legislation, dubbed the “Disgruntled Workers’ Speedy Revenge & Retaliation Law” by Hiaasen, will get held up for a few years, or more, as the courts work it out. Maybe more sensible heads will prevail in the end—at least I hope so. But I’m not holding my breath. After all, Florida is a state where many people still haven’t figured out how to vote. And that doesn’t give me confidence that they will figure out why guns in the workplace just makes no sense at all.
Just this week here in California, two prominent human resources executives were in legal hot water over actions they took as part of their executive teams. The result may be jail time for them, and maybe even a longing for the days when they were doing something a little less strategic than fiddling around with stock options.
The first is Stephanie Jensen, the former vice president for human resources at San Jose-based Brocade Communications Systems. Jensen went on trial Monday on stock-option backdating charges. In opening arguments, a federal prosecutor said Jensen colluded with her boss to conceal employees’ salary packages from company auditors, shareholders and federal regulators.
Former HR chief Jensen “was initially charged with eight felonies, including fraud against the government in Brocade’s SEC filings,” the Chronicle said. “But prosecutors, without explanation, dropped six of the charges earlier this month, leaving one count of falsifying company records and one count of conspiracy to falsify the records. Jensen is not accused of personally profiting from her actions.”
The second HR executive caught up in a legal drama is Nancy Tullos, the former vice president for human resources at Irvine-based Broadcom Corp. She reportedly has agreed to plead guilty to obstruction of justice in connection with a federal probe into the manipulation of stock option grants at the California chip maker.
A story in the Los Angeles Times said that “Tullos has agreed to cooperate with investigators examining allegations that top Broadcom executives backdated stock options to secretly benefit employees, according to three people with knowledge of the probe.” According to a 10-K form the company filed with the Securities and Exchange Commission, Tullos “was heavily involved in the flawed option granting process.” She might not have assigned dates herself, but she “was fully aware of what was occurring, and encouraged, assisted in, and enabled it,” the 10-K says. The stock option charges have been costly; in January, Broadcom took a $2.259 billion charge in non-cash expenses for the years the alleged manipulation took place.
Beyond the legal implications and personal tragedy in these cases, there is a sobering lesson here for any HR executive, and it’s this: The power that comes with having a seat at the table carries with it some heavyweight ethical and legal responsibilities. It’s not that HR has the stark choice of being either a low-level paper-pusher or an executive felon—both Jensen and Tullos presumably had a moment in which they could have said, “This is wrong; we have to stop.” But these examples do show that being at the table sometimes means putting your business and personal life on the line.
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