Thursday, August 19, 2010

We have nothing to fear but fear itself. And maybe our bosses.

Fear is rising as a motivating factor in the business community today. The economic climate is fanning the flames, and many businesses are finding themselves being driven not by sound business principles and practices but by fear. Fear of layoffs. Fear of being fired. Fear of being replaced. Fear of things getting even worse.

The law of supply and demand is alive and well, and the supply of jobs is shrinking as the unemployment rate edges higher and higher. Employees from the top down are trying to maintain the status quo and do whatever they can to hang onto their jobs, and whatever's left of that dwindling market share.

A fear driven organization is going to have a hard time righting the ship. By their very nature, fear based decisions do not foster an environment for business to flourish. Nobody ever downsized their way to success. I see a lot of companies slashing budgets in an effort to "do the fiscally responsible thing". Now, certainly there is a place for well thought out budget reductions during an economic downturn.

But, it takes money to make money. That budget is there to operate your business and make sales, create new customers, etc. It's not profit. It's a tool. Money saved by cutting budgets usually isn't money saved, most of the time it's opportunities to make money lost.

A fear based business will make decisions based on short term "band-aid" type solutions rather than sticking with proven policies. This only exacerbates the problem. Stick with what works, change what doesn't, avoid knee-jerk reactions, and keep all channels of communication with your staff open. Let them know what's going on- however, don't invoke the spectre of layoffs unless you are absolutely sure it's the best course of action, and you have a plan in place for it.

Businesses that use the layoff boogeyman to "scare" employees into working harder usually find the opposite effect is achieved- employees are too busy sending out resumes and tuning up their networks they don't have time to make the extra effort needed at crunch time.

Scared people don't do good work. Don't add to the climate of fear.

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