Leaders and Success: IBD's 10 Secrets To Success
Think Twice Before Downsizing

From: Investors Daily
By:Cord Cooper – Friday, April 20, 2001

Investor's Business Daily has spent years analyzing leaders and successful people in all walks of life. Most have 10 traits that, when combined, can turn dreams into reality. Each day, we highlight one.

  1. How You Think Is Everything: Always be positive. Think success, not failure. Beware of a negative environment.
  2. Decide Upon Your True Dreams And Goals: Write down your specific goals and develop a plan to reach them.
  3. Take Action: Goals are nothing without action. Don't be afraid to get started now. Just do it.
  4. Never Stop Learning: Go back to school or read books. Get training and acquire skills.
  5. Be persistent And Work Hard: Success is a marathon, not a print. Never give up.
  6. Learn To Analyze Details: Get all The facts, all the input. Learn from your mistakes.
  7. Focus Your Time And Money: Don't let other people or things distract you.
  8. Don't Be Afraid To Innovate; Be Different: Following the herd is a sure way to mediocrity.
  9. Deal And Communicate With People Effectively: No person is an island. Learn to understand and motivate others.
  10. Be Honest And Dependable; Take Responsibility: Otherwise, Numbers 1-9 won't matter.

9. Think Twice Before Downsizing
If you're a division head or manager looking at a payroll cut, think before you slash, say executive coaches Bruce Tulgan and Sharon Jordan Evans.
Layoffs can have unexpected consequences, says Jordan-Evans whose clients include a range of Fortune 500 companies. \"If you're thinking of cutting, know the potential results beforehand,\" she said in an interview.
Below are reasons to rethink a possible layoff, Tulgan and Jordan-Evans say.

  • Downsizing causes "survivors" to leave. "After a layoff, employees who aren't cut typically have to pick up the slack for those who were," Jordan-Evans said. Six to 12 months later, they're overworked and looking for other jobs, "creating a second wave of departures"
    Layoffs also highlight the survivors' value, says Tulgan, who heads the research firm Rainmaker-Thinking Inc., based in New Haven Conn. "They realize that for the very same reasons they didn't get downsized, they have options in the marketplace," he said in an interview last week.
  • The talent shortage. "The war for talent is alive and well, and will only get fiercer when the economy improves, probably within the next year," Jordan-Evans said. As the demand for production increases. "managers will need good people, but will they be there?"
    Despite a rise in claims for unemployment insurance, "unemployment in the U.S. is still only 4.3%. Since when is that anything but a super-tight labor market?" said Tulgan, who wrote "Winning the Talent Wars."
  • The free-agent mind-set. Two decades of downsizing has made "blind loyalty to companies a thing of the past," Jordan-Evans said. Workers are building their own portfolio of skills, and job-hopping to do it."
    People are free agents cecause they have no other choice, Tulgan says. They've gotten more aggressive because they've had to fend for themselves. the upshot: They've adopted an entrepreneurial approach to the workplace. "They learn what they can on one job and take those skills to the next," Jordan-Evans explained. Additional layoffs only make them more aggressive.
  • Finding a new job has never been easier. Employees don't even have to leave their desks to look elsewhere, Jordan-Evans says. "The most popular log-on time for (job site) Monster.com is 9-5"
    It's not just employment Web sites that are heavily trafficked; headhunters are busier than ever, she says. "While people are working for you guess what? they're looking for other opportunities."
  • The cost of losing talent is high. Salary costs saved in downsizing should be weighed against the cost of losing workers Ñ especially highly skilled employees who leave voluntarily in a second wave. Many employees still haven't fully estimated these costs, Jordan-Evans says.
    "If they've run the numbers at all, they've only looked at hard costs, the expense of replacing workers when the time comes. Few companies have accurately estimated the hard-to-measure costs like the loss of a talented salesperson who may have taken clients with him, the intellectual capital that goes to competitors and gives them the edge, the declining morale that slows production in the wake of layoffs," she said.
    Second-wave departures are especially costly. "often, when a key person joins the competition, his buddies follow. So the loss becomes huge," said Jordan-Evans, who with Beverly Kaye co-wrote "Love 'Em or Lose 'Em: Getting Good People to Stay."
    Surveys have shown that the hard cost of replacing workers often rise to 2 1/2 times their annual salaries. "That doesn't include harder-to-measure costs," Jordan-Evans said. "Talent's a tough thing to put a price tag on."

By Cord Cooper