Being the Conscience and a Businessperson

Laying off your most important assets: Greg is the senior vice president of HR for a very large organization. He has spent a lot of time promoting the fact that employees are his firm’s most important asset. The company has done well for several years, but is now experiencing a major downturn. He has to decide whether to do the “easy” thing and institute a companywide downsizing, which shows the company does not, in fact, see employees as the most important asset (because it’s getting rid of people). Or Greg must help the senior management team figure out other courses of action — such as cutting senior managers’ pay — which shows that employees are the most important asset. What’s Greg’s best course?

Response from Frank Navran, a management and ethics consultant: Greg has fallen into a common trap. He has wrongly defined the problem, equating downsizing with not seeing employees as the most important asset, thus narrowing his choice of options. The problem isn’t whether or not to downsize. The problem is how to survive a (possibly short-term) downturn. This is a question of finding a balance among a trio of concerns: employees, customers and the bottom line. These three concerns are like the legs on a milking stool: They need to be nearly equal if the stool is to be stable. Employees, customers and the bottom line all need to be satisfied. Greg needs to communicate this redefined problem statement to all of the affected players: senior managers, employees, stockholders, vendors and strategic partners. All of these stakeholders can contribute to surviving a downturn through operational efficiencies, payment deferrals, salary adjustments, accelerated retirements, sabbaticals, leaves of absence or a dozen strategies, including layoffs. This isn’t an either/or proposition. It calls for telling the truth, preserving trust and creatively seeking balance.

Frank J. Navran, a manager, trainer and consultant for more than 25 years, knows about downsizing from three perspectives: survivor, victim and change agent. Now Navran is a senior consultant responsible for the design, management and evaluation of ethics consulting projects for the Ethics Resource Center (ERC) in Washington, D.C. In addition, as the center’s director of training, he spearheads more than 50 training seminars and workshops on organizational and business ethics for the ERC and its clients.

Workforce, May 1998, Vol. 77, No. 5, p. 66.