unemployment

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Giving Back During Tough Economic Times, Part 1

In writing consistently about our flagging economy, the problems we’re facing and the expected duration of this situation, I’ve realized that the tone and scope of my articles have been increasingly depressing.

Don’t get me wrong. I’m not depressed, but I recognize that the tone has nonetheless been dour.

That’s why my upcoming series of articles will provide a variety of ways for you to make a positive difference during these times of hardship. It’s important that we don’t all adopt the Turtle Mentality and keep our heads in our shells. We need to be a part of our community and give back however we can, even and especially if that giving back isn’t or can’t be monetary.

My first piece of advice is about layoffs.

As a CEO, owner, or manager, you may understand all too intimately that these times have unfortunately required layoffs and company closures.

As a turnaround professional, I understand better than most that cash is tight, but if you find yourself in a position like this or advising someone who is, be especially sensitive to the personal needs of those severed. Be sensitive when you have those difficult termination meetings; be sincere, and it will show.

Consider offering options like out placement services, extended health insurance and networking meetings. Let people know – if it’s true – that when positive cash flow and profits return, their jobs will be filled again by them, if possible.

This kind of approach deepens your understanding of others’ plight and demonstrates that you have compassion for your fellow human beings.

In some cases it might be appropriate to create lesser positions within your company part time. Though this may be insulting to some and result in a lessening of benefits and pay, it will allow them to remain employed in some capacity and ensure that when the time comes, they will be easily able to restart their previous positions (this can be very challenging and quite uncomfortable for all involved as a subject but weigh the benefits and ask those to whom you might offer this to do the same).

In short, do whatever you can to soften the blow to those less fortunate when the economy requires that you downsize in ways you would prefer not to.

Please stay tuned for more posts on giving back during a touch economy. I think that this series will allow us all to generate and act on some ideas that will be to the benefit of our community and country.

Please share your ideas for giving back below.

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“I Would Like to Say That Your Jobs Are Safe”

To a lot of people out there, this is no laughing matter (though thank you for the chuckle, Working Daze). Their jobs are on the line or long gone. They’re out of work, looking for work or at least brushing up their resumes.

If you’re one of these people, it’s hard to give you concrete advice that’s going to yield employment soon. Yes, we’re hearing that the economy is improving and that unemployment is creeping down (however slowly), but in my opinion, these numbers are a bit doctored. Not in any particularly malicious way, but at the end of the day, I believe that unemployment is flat and will hold where it is for a while (if it doesn’t get worse…).

So what can you do?

As someone who has – and I’m sorry this is so – had to lay off a lot of people in his day, I know how horrible it is to see people put out of work. But for every job I have to end, five are saved along with a company that would otherwise have collapsed under the weight of divisions and personnel that it didn’t need. Not many laid-off people take solace in this knowledge, but there’s no manager, CEO, president or leader who wishes to lose good people.

Stand Up and Stand Out

If you’re in a division or business that’s getting downsized or eliminated, you need to do your best to stand out as someone who is indispensable. You may have heard in the past that if you are so good at your job that no one else could do it then you can never move up because you can’t be done without where you are. True as that may be in great times, these aren’t those, and you’re going to need to stand out as exemplary and someone without whom things will not run well.

You can do this by bringing ideas to management, both right above you, and if it’s called for, higher up the ladder. When I go into a business to restructure it, I often promote from within, seeking the best talent and those who understand the inner-workings of the business, those who have seen what works and what doesn’t and have ideas for improvement in efficiency and quality. I ask current managers for recommendations, and I leave my door open to all – often including letting people know where I’m staying so that they can come to me with greater anonymity if need be.

In a bad economy with high unemployment, don’t squander an opportunity by laying low. Put in the extra time, make yourself and your good ideas known and heard. Consider getting additional education to bolster your current perceived value. Leverage your network to create business for your business – those who bring in business are rarely let go. Even if I have to lay off someone who seems valuable because my hands are tied, I look for where else I can use him. But if I have no idea who you are or why you’re useful, I have to let you go and not worry too much about it.

Are you out of work? How are you seeking employment? Have you saved your job recently? How did you stand out to do so?

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If You Want Glory, Join the Marines – Turnaround is Not About the Accolades

The greater the obstacle, the more glory in overcoming it.

  • Moliere

If overcoming obstacles of enormous size yielded glory in such volume, there would be more awards in the turnaround business.

I appreciate the sentiment, Moliere, I really do, but I have to say that I’m not with you 100%.

Turnaround Accolades

General MacArthur was certainly acknowledged  for his work in the Pacific Front during World War II, speaking of enormous obstacles and the glory that goes with them, but for us turnaround professionals, the glory is less, shall we say, pronounced.

Is that maybe because the obstacles aren’t so great?

Far be it for me to crack up the complexity of the problems that face turnaround professionals, but I think most of us can agree that restructuring billions of dollars in debt, successfully renegotiating terms with dozens of creditors, saving tens of thousands of jobs, and preventing hits to the US economy – and sometimes in the business blink of an eye – is no cake walk. And even though much of the work is on a smaller scale, jobs are still saved, money is still recovered and businesses keep going. And all of that is good for the economy.

My reflections on Moliere’s remarks have brought me to the conclusion that the turnaround profession is incredibly satisfying in its own right for the very reasons listed above – accolades be forgotten.

Be Your Own Turnaround Manager

When done right, turnaround work is not the kind of consulting that borrows your watch to tell you what time it is. Turnaround management is about rolling up your sleeves, getting into the trenches and getting your hands dirty. It’s about apologizing for mistakes you probably didn’t make and accepting burdens that weren’t otherwise yours to bear.

This isn’t meant to elevate turnaround management to unwarranted heights or make myself feel better about my work.

I want you to derive a lesson from this when it comes to your business, whether or not you’re the leader of that business.

Why wait to hire a turnaround professional? Sure, experience breeds insight and knowledge into many potential solutions, but if you could take on a lot of what I’ve already said, then you’re halfway to resolving your problems:

– Take responsibility for what’s gone wrong

– Accept the burdens for resolution on your shoulders

– Get dirty by rolling up your sleeves and getting down in the trenches; don’t just sit behind your desk and hide – get out there and make tough decisions

No, these things alone do not turn around companies, but when those around you perceive that you’ve taken responsibility, accepted the burden of making things right, and gotten your hands dirty, they will pull behind you and get on your team. They will listen when you ask them to act; they will share with you and be honest about their ideas and yours.

Conclusion

This is what much of turnaround management is about. As I said, the experience and insight allow us to have a better idea of what will work and what won’t – and how best to do it – but for successful turnarounds, all of this ground work has to get laid down first.

You won’t wind up with a ton of glory when it’s all said and done, but I assure you that it’s rewarding in and of itself. When done right, your job will still be there when you’re done, as will those of your colleagues.

Glory be what it will – I’ll take turnaround any day.

Have you ever accepted responsibility for something that you didn’t have to? What was the outcome?

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6 Questions to Ask Yourself to Face Your Business’s Harsh Reality, Part 1

Over the course of the next few weeks we’ll be fleshing out 6 questions that every business leader should be regularly asking himself or herself.

These questions will help you to confront the harsh realities that all businesses and their owners face, thereby allowing you to protect and grow your business more safely, efficiently and profitably.

1. Am I adjusting to the New Norm or am I being complacent with business as usual?

The New Norm, as you may have heard, is the result of the downturn in the economy in the last 3 years. Some pundits predict a flat economy for as much as 3-7 years as we absorb severe decline in real estate value, credit card debt, unemployment, high energy costs, foreclosures and more. As the leader of your company, it’s your job to adjust your business accordingly.

In order to avoid complacency and being lulled into a false sense of security, take concrete steps towards streamlining your business to operate most profitably. Consider fewer fixed assets and more variable ones. For instance, leased or rented assets, instead of purchased ones, can make your business more flexible. On the other hand, if you can take advantage of competitors’ mistakes by acquiring equipment or inventory for $.20 on the dollar or of the tremendous amount of excess rental, warehouse and manufacturing space all over the country, this might be a great opportunity to do so.

As you think about these issues, consider your business plan and model. Should it be updated based on the New Norm? The answer to this isn’t always “yes” but it does deserve consideration.

2. Am I leveraging my banking relationship to enhance my business’s future?

Know your banker, and be prepared to call on him during difficult times. Establish credit by borrowing and repaying loans consistently, even when you don’t need the money. This way, you’ll avoid having to establish a new banking relationship or credit when you really do need a loan. In addition, it reflects well on your character to establish this credit, inducing your banker to work with you.

Don’t borrow to supplement negative cash flow. Borrow to facilitate operational needs and to establish your credit. The money from a loan could help you take advantage of a great opportunity, like acquiring equipment at a low multiple, or taking advantage of and buying out a failing competitor.

Just make sure to leverage your banking relationship now for banking issues that occur in the future.

Next Wednesday we’ll talk about the next 2 Questions we should be asking ourselves in order to face the harsh realities of our business’s situation. I’d love it if you shared the kinds of questions you ask yourself about your business in the comments below. Read Part 3 HERE.