For years, in my work in the corporate world, I’ve heard the slogan “change is the only constant,” but it has always seemed hollow to me. Instead of developing a workforce and leaders who are nimble and capable of constantly adapting, many organizations in the business world are, in fact, having a very difficult time adjusting to change. Sudden changes in their operating environment seem to cause them to hit the reactive, panic button, laying off employees; slashing development, improvement, and quality programs; cutting off contracts with suppliers; and retreating into downsizing.
Even though companies and organizations say they will make their cuts strategically, this is most often not what happens. Instead, the cuts often turn out to be “across the board” and irrational, damaging the organization’s short-term and future interests, while preserving the deadwood and the obsolete. The best and the brightest are often the ones who “take the package” and move on.
Needless to say, this plays havoc with organizational culture. I’ve seen it happen many times: Employees quickly become anxious, fearful and cynical; they stop seeing themselves as having a long-term future within the organization. Their loyalty to the company, and sometimes to each other, declines dramatically. It’s “everyone for themselves.” The loss is more than financial. The biggest cost is to the spirit of the organization: demoralization; lost confidence, morale and investment; and a decline in people’s commitment to, and ownership of the company.
In one organization I know, the CEO reacted immediately to one of the recent downturns, pulling the trigger on across-the-board cuts without consultation. In doing so, he destroyed a brilliantly successful change initiative that was under way, which had already made a dramatic improvement in the company’s bottom line. Needless to say, when the market began to recover, he lost a significant number of his best people, who had just been waiting for a chance to jump ship.
Here’s another example: A division head of a global company took a completely different approach, for which he endured some tough scrutiny from the head office and other divisions. He trimmed expenses very carefully and strategically ‐ first by laying off a very few under-performers, and then by gathering his leadership team and having in-depth conversations about how to implement further cost reductions while boosting morale. People agreed to switch roles and take on more responsibility, working hard to make the changes successful. The division was the only one in the company to achieve its targets throughout the toughest time, and the division head attracted support and admiration from across the company ‐ as well as a promotion.
The young adults who are now graduating from universities do not expect that they will be able to stay in a firm for the long term, or that the firm will be loyal to them. The concept of “job for life” has long gone by. Therefore, they are only prepared to make a limited investment in a workplace that may well use them up and spit them out. They also want a more balanced life than their parents had, and they are not willing to sacrifice their own families, relationships and children to the interests of an employer.
In the coming years, companies will be forced to look hard at their people practices if they want to survive the ups and downs and come out the other side with an engaged, motivated, aligned workforce, and a loyal clientele that will continue to buy their products and services.
It may be too early to tell, but it seems as if we are all learning to live with more instability than before. The recession that started in 2008 has never really ended, and the roller-coaster seems constantly off again.
There is no gyroscope for managing organizations through uncertainty and upheaval, but it is becoming increasingly obvious that a set of constant cultural or people-values and a long-term vision are more important than ever ‐ because the era of constant change has finally arrived, and slogans alone just aren’t going to cut it.