Why Culture is a good indicator of Layoffs

Often times Layoffs are announced after the fact. The organization has not met its earnings forecast, no turnaround is seen in growth, revenue is likely to be flat or negative and a whole host of factors. Any well seasoned executive will tell you that none of this happens overnight. There is always a trend line, symptoms which are tell-tale signs, rumblings in the workforce, macroeconomic winds bypassing the company. There are other industry specific cycles as well. Again, none of which falls under the Unknown category. Then, why are there no actions taken? Do Execs become so busy that its often impossible to act? While there are a whole host of answers, all of them are after the fact.

I tend to believe that the most important indicator, in fact a lead indicator by all means tends to be an organizations’ culture and its variables. A Culture provides the norms and settings within which employees work no matter the level or geography. Its the Dark Matter of a Company encoded in its DNA moving beyond written down processes. Culture is the environment which forces an employee to act in ways , which may loosely classified as behavior. For example, it tends to swing the needle between closing a deal and customer satisfaction. One way or the other. Meaning the choice is heavily influenced by the Culture. If the employee tends to decide by himself, results usually affect only the employee. Fear factor sets in over a period of time. Someone who tends to resist leaves the organization or is forced to leave. But when such a culture deliberately stands up against Collective Good(which is usually long term), the march is inevitably towards massive layoffs. Often short-term or even medium-term gains tend to create blindspots. These promote a false sense of being resilient and in turn seem to provide a luxury of ignoring huge macro trends whether in technology or in the economy. When the Long term turns short term and the company starts missing earnings consistently, the blood letting is invariably the form of huge layoffs.

I argue for a greater emphasis to be laid on Culture by the Board and the CEO. Start creating management models which will adopt Culture as a important facet.

Management Thinkers should move beyond current thinking and current management tools which are woefully inadequate to address the Culture component. There’s a great gap of understanding which has developed over the past two decades. Thinkers who cross this gap will move to the future.

All Comments are welcome! of course you can email me : nckumar@gmail.com


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