Most Cost-Cutting Layoffs Fail Because Executives Forget a Key
Factor: Even When Letting People Go, They Need to Motivate Their
Employees
Engaging Employees is Not Just for Good Times –
Energized Employees who “Get It”
are Central to Successful Cost Cutting
Even in Recessionary Times, Leaders Must Motivate, Not Mandate,
and Win Employees’ Hearts and Minds –
Cuts Should Work with the Culture and Can Even Enhance It
Expert Available for Interviews
NEW YORK (Business Wire EON) May 8, 2008 --
Cost-cutting efforts and employee layoffs are already a feature of the
2008 recession and will probably be a reality for businesses for some
time to come. But most cost-cutting layoffs will fail because
executives forget a key factor: Motivation. Even when laying people
off, leaders need to motivate their employees.
Engaged, energized employees are key to cost-cutting programs and can
make or break layoffs and other cost-cutting efforts, according to Jon
Katzenbach, founder and senior partner at Katzenbach Partners and Paul
Bromfield, principal at Katzenbach Partners, a management
consulting firm focused on helping large companies improve
organizational performance. Katzenbach and Bromfield are the authors of “Engaging
Employees in Recessionary Times,” a new
commentary piece that demonstrates that motivating, not mandating,
employee behavior can make the difference between success or failure in
cost-reduction programs.
Said Mr. Katzenbach, “In hard times, it’s
even more important to have a motivated workforce. Motivated employees
will deliver real cost savings, and carry out a cost reduction program
over the long term. If cost-cutting initiatives are ‘mandated’,
the result can easily be ‘phantom savings’
that are never realized. Executives need to work with, not against, the
organization’s culture.”
Mr. Katzenbach and Mr. Bromfield are available for interviews, during
which they can discuss:
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How motivation can make employees “proud
to be thrifty.” Even in the face of
downturns and layoffs, employees can be persuaded to join in to help
save the organization. The trick is to engage employees emotionally
and make thrift a part of the culture. Companies like Southwest,
IKEA and Amazon have made thrift a central focus of the
organization and a point of pride for staff.
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Why mandating doesn’t work, and
motivating does. “Too many executives
think that firmness, discipline and savings are the key to cost
reduction – we may soon see the 2008
version of ‘Chainsaw’
Al Dunlap,” Mr. Bromfield says. But this
top-down approach creates fearful employees who focus on protecting
themselves, not on moving the organization through difficult times.
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The central role of frontline “pride
builders.” In every organization there
are “pride builders”
– demanding frontline managers who are
sometimes unconventional, but who get the most out of their teams.
Executives need to identify and enlist them as leaders in the
cost-cutting effort.
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Questions that leaders need to ask, including:
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Will a simple solution like headcount reduction or cutting bonuses
solve our problem? Or does the solution require the on-site problem
solving power of our employees?
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Will mandated cost reductions be undermined without employee buy-in?
Will "rational compliance" be enough to motivate employees, or do we
also need emotional commitment?
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Will cost reductions damage our value proposition to employees?
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Are we in danger of forcing short term actions that we will regret
in three years time when things are growing again?
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Will cost cutting damage innovation and customer empathy? And, if
so, will that cripple our business?
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“While it’s true
that you can’t motivate your way out of a
recession, an organization will have a better shot if it can get
employees to make a positive emotional commitment to the challenge,”
Mr. Bromfield says. “If you motivate people,
you will get out sooner, and the benefits will be longer lasting.”
For a copy of the commentary, “Engaging
Employees in Recessionary Times,”
or to schedule an interview with Mr. Katzenbach or Mr. Bromfield,
contact Alexandra Corriveau of Sommerfield Communications at (212)
255-8386 or alexandra@sommerfield.com.
About Katzenbach Partners
Katzenbach Partners LLC works with leading global companies to achieve
breakthroughs in organizational performance. The firm applies new
thinking about how organizations work, serving companies across
industries to shape strategy, improve operations and effect change.
Katzenbach Partners is building a different kind of consulting firm, one
that integrates strategic problem solving with pragmatic insight into
people and organizations. http://www.katzenbach.com.
MULTIMEDIA GALLERY http://www.businesswire.com/cgi-bin/mmg.cgi?eid=5680321
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