This post is designed as an adjunct to our Layoffs post.
The reality of layoffs hits people hard. No one likes them.
We’ve been on the inside and outside during layoffs. Here at CareerNet, our staff members have plenty of experience with crises. None of it was good. In varied roles, (as rank and file employees, managers, advisors, Board Members) and through any number of events (think about 1986 to the present day), we’ve seen a lot.
Looking back at our collective, multi-role, multi-crises experiences we’ve had ample time to learn a lot and to think a lot, primarily about what we could or should have done. And, was this a business crisis or a management mistake?
Real Causes vs. Excuses
Here, we attempt to determine what is and is not a real crisis and what can and cannot be prepared for in advance.
Classic Crisis – or Force Majeure
We’ve read and written any number of force majeure paragraphs throughout our varied careers. All other crises are excuses for lawyers to defend. Force majeure events are typically events or circumstances that are outside of the control of the parties involved in a contract, and that make it impossible or impracticable for one or both parties to fulfill their obligations. Here are some examples of force majeure events:
- Natural disasters such as hurricanes, earthquakes, floods, or wildfires that make it impossible to carry out a construction project or fulfill a supply chain contract.
- Acts of terrorism, war, civil unrest, or political instability that make it impossible to perform a contract in a specific region or country.
- Epidemics, pandemics, or outbreaks of contagious diseases that require businesses to close their operations and prevent them from fulfilling their contractual obligations.
- Government action such as expropriation, nationalization, or regulatory changes that make it impossible or impracticable for a business to operate.
- Strikes, labor disputes, or other forms of industrial action that disrupt the supply chain or prevent employees from carrying out their duties.
These are just some examples of force majeure events, and the specific events that constitute force majeure may vary depending on the context and the terms of the contract. It’s important to review the specific language of the force majeure clause in a contract to determine what events are covered.
The Real Causes
Here are a few business crises even the best managers cannot foresee:
- Fraud at the Executive Level
- Geo-Political conflict
- An epidemic requiring government action.
That’s it. Notice our glaring omissions?
It’s never the economy. If you are laying off people because the economy is changing due to systemic shifts in things like the cost of capital, guess what? You as a manager or an executive dropped the ball. In the modern world economy information and lead time is all around you and easily accessible. Do not ignore it.
But you are where you are and it happens to all of us at least once. So bite the bullet and start fixing the problems you denied were on the horizon.
Fixes to Management Mistakes that create a crisis.
It begins with transparency and support from the top. Uses your best resources to identify potential crisis and stay ahead of them. Suggestions include:
#1 – Useful, relatable, short weekly reports sent to the inbox of all employees that informs industry metrics and the potential impact on the company’s future business prospects. Employees on the front lines – and the managers that oversee them should be too busy developing, servicing and managing clients and products to do their own research on these trends. At the executive level you are already doing this. Distil it into bite sized paragraphs and send it out weekly. Say Friday. Give your people the weekend to read it and think about it. Keep is short and to the point. That way they’ll read it right away every time.
#2 – Post the KPIs for the company (internally). Notify the entire staff on any amendments or changes. Empower frontline managers to make decisions for their team to meet these KPIs. (You might audible Measure What Matters by John Doerr)
#3 – When a concern for the company’s strategy or future arises, communicate it. But we would suggest this is done verbally to managers then to staff / team members by managers. Not in writing. Why? Emails and posts have a habit of finding their way to people you don’t want to worry. Like customers, media, stakeholders. Worries and concerns are not crises. They are not even alarms. They fall into the category of “Things to look out for.”
We would remind you
Your front line people and the talented professionals you promoted to manage them are your best source for identifying oncoming problems. They see it first from the behaviors of the clients and customers they deal with every day. As an executive or manager, your job is to empower your front line people so they can perform and by extension, your company can perform.
A Crisis is a crisis. A poor strategy or refusal to adjust to visible economic forces is a mistake. How you handle either one will define your company, its success and its longevity.