Notes from Leading through layoffs
- Source: How to lead and rally a company through a layoff
- Here’s what you should have already considered: delay hiring, cut salaries, reset senior/junior employee ratio, scale back perks, consult with board.
- Inform and equip your senior leadership. Justify confidentiality. Meet in person with most senior tier of management, talk through alternatives you have evaluated. Let them ask questions. Ask for people manager’s help. Ideally you’ve provided budget and hiring plan context. Be clear that it is not something the employee has done wrong.
- When it’s happening: should flow through organization in hours if a small company or days if it is a large company.
- Two main approaches: call an all hands, CEO makes announcement, people return to desks and direct managers start having team and 1-1 conversations. Or, direct managers announce the news to their teams, company calls an all hands, CEO expands on the news, people return to their desks for 1-1 conversations. The more transparent the culture, the more you start with all hands.
- CEO should take accountability, admit it went wrong, commit to fixing it, outline plan, and restate you’re taking accountability for it. Needs to be conviction on the way ahead. Think of it as a structural change that will allow people to keep their jobs and drive toward a vision.
- Direct managers should deliver the message to each terminated individual. Should train with HR or people team leader. In-House counsel can be resource of what can and can’t be said.
- Severance, help people find new jobs.
- “Give people time to grieve because they lost friends and colleagues. But, after that, quickly orient the company to the future. There should be a celebration of the contributions of those who have left and those who remain. Don’t pretend it never happened, but focus on what’s next”
- “Ultimately, you want former employees to eventually acknowledge that it was a bad and difficult situation, but not fault how it was handled”
Notes from Four things I wish I knew
- Source: Four things I wish I knew
Look at the strategy.
- “The answer to your problems usually isn’t to just blindly cut people. You need to change something fundamental about what the company is doing. As a warning sign, if you’re only saying “We need to cut 20%,” you’re very likely having the wrong conversation.”
- Cut to what you think is bone.
- Are there things you should stop doing?
- Lines of business you should cut?
- Should you change your go-to-market strategy?
- Is now the time to think about a bigger pivot?
- If you are a “people-heavy” business (sales, teaching, store fronts, etc), should you shift your strategy to software? How would you do that? What would it take to get there?
- Try an exercise of rebuilding the company from the ground up
The stages of grief are normal
- “Part of designing the process of a layoff requires realizing that every single person in the company will go through their own stages of grief — from the next set of leaders you tell to the employees that are staying, to the employees that are leaving. So your job is to get to a solid psychological state of acceptance, then help other people through their own stages.”
- You should never make it about you. “One of the big mistakes we’ve seen leaders make over the last couple of years in talking about their layoffs is putting their grief at the center. Even sentences like “this is the hardest thing I’ve ever had to do” are unhelpful. Keep your focus, and the focus of your messaging, on everyone else. No one cares about your pain, real though it may be.”
Focus on the stayers
- Give stayers time to mourn and be angry. Don’t be overly cheerful or optimistic. But help them move to acceptance.
- A lot of that is planning for answering “why should I stay”. “Why should i believe you that things will be different going forward”.
- One leader in charge of stayers.
- All hands the day after the layoff, and maybe a week later too.
- Scripts for 1-1 conversations.
- Compensation or incentives for stayers.
- Offsite to get company together after layoff.
Treat people with dignity and respect while protecting company