Layoffs in a Web 2.0 World

My original blog post seems even move prophetic to me after I read Simon Sinek's new book, Leaders Eat Last, this year. If you have not read the book yet, I highly recommend it. By viewing employees as people, Simon illustrates how emphatic companies can be very successful too. Simon put into words what I was feeling back in 2008 when I came up with the idea for the blog post.

Here are a few of my favorite quotes from his book that emphasize how enlightened leaders and organizations should behave in a "Web 2.0 World":

• There is a lack of empathy and humanity in the way we do business today.
• A culture of caring allowed the people and strategies to flourish.
• Every single employee is someone's son or someone's daughter.
• Letting someone into an organization is like adopting a child.
• Every single employee wants to feel like they are valued by others in the group.
• From a strictly business standpoint, treating people well is more cost effective than not.
• A leader's reputation suffers when they break the social contract of leadership.
• The only thing our leaders ever need to do is remember whom they serve and it will be our honor and pleasure to serve them back.
• It is better that we should all suffer a little so that none of us has to suffer a lot.
• Fear can hurt the very innovation and progress that so many leaders claim they are trying to advance with every re-org.
• How can we ever feel committed to the jobs we have if the leaders of our companies aren't committed to us.

There are many more great ideas in Simon's book, so I encourage you to add the book to your summer reading list.

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With that as an introduction, here is my original 2008 blog post on layoffs:

Is it possible for companies to adopt Web 2.0 practices when they layoff employees?

While layoffs are part of the natural business cycle, what can firms do to put a Web 2.0 spin on this unfortunate part of conducting business in today's competitive environment?

Speaking from recent "Web 1.0" layoff experience, it is not a very pleasant experience and besides being more than a little inconvenient, it just sucks personally. If management at a company facing a layoff problem really sat back and examined the process and implications, it sucks a whole lot more for the company.

So what is a Web 1.0 layoff? A Web 1.0 layoff consists of getting a call to your manager's office, receiving a short but relatively meaningless explanation as to why you're being let go, and getting a big fat envelope containing a bunch of information to read and sign. Then, you have about 30 minutes to clean out your desk and surrender corporate assets, computer, etc. to the HR representative. This whole process makes the former employee feel like a bit like a criminal or pariah - and while there may be some legal implications to the following this strict process, it doesn't breed happiness and literally kills off most if not all loyalty an employee may feel for his former employer.

There are many bad thing about Web 1.0 layoffs. For the employee, there is no closure, no chance to say goodbye to former colleagues, hold a final lunch and celebrate shared accomplishments. Instead, Web 1.0 layoffs are mostly"don't let the door hit you in the behind when you leave."

From the company's standpoint, the impacts are even worse - but I don't know of any companies that have taken the time or effort to analyze it. In my case, they just let more than 3 years of corporate knowledge and training walk out the door when I was let go. There was no chance or even request for me to do any knowledge transfer, hand-off existing projects, or provide a list of pending things that need to acted upon, etc. I'm not saying that I'm irreplaceable, but I do have a lot of accumulated knowledge that would be hard for others to easily figure out. Multiply that by the number of people laid off, and the accumulated knowledge is incredible and may even be irreplaceable.

Pete Blackshaw recently wrote a book titled "Satisfied Customers Tell 3 Friends, Angry Customers Tell 3,000" - which makes me wonder how many friends do "not-so-happy" former employees tell?

So what can employers do to become more Web 2.0 in their process?

Now I'm not an HR or Legal expert, but here are a few tips that draw on my community and Web 2.0 experience:

• Be more transparent -- Web 2.0 is all about transparency. Definitely discuss the layoff internally and when it's over, let the world know what happened. Many companies try to hide the layoffs or are reluctant to discuss them. But in the Web 2.0 world, people are going to find out so you might as well be up-front and announce it yourself along with the reasons and the steps you're taking to help your impacted employees.
• Share the pain -- If you know a layoff is coming, let your employees know about it ahead of time. Maybe they will come up with some creative alternatives to getting over this temporary slump.
• Don't do a big bang layoff -- If at all possible, work with employees to transition their work over a several week period. Sure their productivity may suffer a little and it may cost a little more in termination expenses, but most employees take pride in what they've done and want to make sure that transitions are smooth. I'm sure the worry is that disaffected employees will sabotage operations, but I think the risk is pretty minimal here.
• Introduce impacted employees to your network (borrowed from Phil Bauman) -- The people you are laying off are remarkable employees and they deserve all the help you can give them to land on their feet as quickly as possible. As Phil noted in his blog post:

Here are one hundred remarkable employees. We know they’re remarkable because we hired them. We’re having a tough time right now and we don’t quite know what to do with them. Maybe you or your connections do. Please do what you can because we want our industry to thrive and these people are our industry’s future.

Does anyone else have any other ideas about Web 2.0 layoffs?

January 2009 Postscript - While cleaning out my garage last week, I ran across one of my favorite Dilbert cartoons on the approach some corporations use to solve their headcount problems: