“What is this chasm between how most institutions profess to function and how they actually do; between what they claim to do for people and what they actually do to them? What makes people behave in the name of institutions in ways they would never behave in their own name? Church, school, government — all the same” —
Dee Hock, Founder and CEO Emeritus, VISA
The word “deciduous” shares the same root as the word “decadence”. Both words come from the Latin root meaning “fall.” The leaves and ripe fruit of deciduous trees fall in Autumn and this is why the season is known as “The Fall”. For this Thursday Thought, I want to emphasise both meanings, the fall and decadence because the latter refers to a period of decline that follows an era of great achievement.
Just as a deciduous tree sheds leaves in Autumn, many organisations shed workers during times of corporate stress. We witnessed this following the 2008 financial downturn and again during the Covid-19 pandemic. This makes sense – we are forgiven to believe – after all, organizations must find ways to stave off financial collapse? Well, not in all cases it appears.
Washington Post analysis by Douglas McMillan and colleagues found corporate layoffs do not always correlate with an authentic necessity to avert disaster. While many smaller businesses had no choice but to discharge workers, The Post’s data reveals a “split-screen inside many big companies this year. On one side, corporate leaders are touting their success and casting themselves as leaders on the road to economic recovery. On the other, many of their firms have put Americans out of work and used their profits to increase the wealth of shareholders.. Between April and September 2020, one of the most tumultuous economic stretches in modern history, 45 of the 50 most valuable publicly traded U.S. companies turned a profit. Despite their success, at least 27 of the 50 largest firms held layoffs this year (2020), collectively cutting more than 100,000 workers, the Post found.”
“Never let a good crisis go to waste”
· Winston Churchill
Given the growth of the gig economy and an increasing desire for flexible work, contracting is becoming more of a “social norm”. However, during the 2008 financial downturn and again during the Covid-19 pandemic, many organizations (of all sizes) didn’t let a good crisis go to waste. This is a trend that we will see continue. When organisations fail to meet expectations for their annual cash payments to investors, they react by shedding human capital. Often they use the excuse of an economic crisis or even a pandemic but still turn a healthy profit. Meanwhile, overnight, people are axed with no foresight, with no reason other than a requirement to deliver returns to often already-wealthy investors.
During the pandemic, smaller businesses – despite receiving pandemic support from governments – still jettisoned employees. In some instances, these companies turned higher-than-usual profits as a result of overloading remaining employees while cutting costs. Furthermore, adding insult to injury, these same employers returned to the very people they abandoned and offered to hire them back, but, this time as contractors, no health care, less government tax and of course, BYOD: bring your own device.
This trend, this ebb and flow of seasonal lay-offs is one of the reasons I wrote “Undisruptable, a Mindset of Permanent Reinvention”. A core concept in the book is to “Build Capability Before You Need It” or as JFK put it, “Repair the Roof When the Sun is Shining.” If we prepare for an inevitably turbulent business environment, once the turbulence hits, we have nurtured the necessary mindset to weather the storm. Now when an organisation pulls the rug from under your feet, you will have another rug in place ready to support your next move.
Financial measurement alone can suggest an organization is well, while the underlying culture is often sick (as well as many of those people working there). When it comes to deciduous organizations, they pay no attention to the devastating impact on families, the psychological impact on individuals and society when they chose profits over people. One caveat is that not all companies have behaved in this way, some organizations – big and small – displayed heroic acts of loyalty to their people during seasonal stress, but they are in the minority. Is it any wonder that employees are less loyal today than they have been decades ago?
I leave the final word with Robert Kennedy in a magnificent quote that must be kept alive:
‘The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.”
Robert F. Kennedy (at the University of Kansas on March 18, 1968)