Decision analysis: The corporate HR suicidal move
We know that crisis is a normal part of life, of breaking it to make it better, even though we always struggle to prevent it to happen. It’s our animal instinct, we can’t help it. But in my years helping companies designing good strategies to thrive and grow, there’s one thing in common among 83% of them: when a crisis knock the door, they start burning their own resources. Let’s go straight to the point: they fire people, a lot of them!
When a company face a crisis, either internal and external, their first instinct and what they sadly call a “strategy” is to cut “costs”, beginning with people. This is not only a huge mistake (just like naming this move as a strategy) but also a suicidal move. I know it may be counter intuitive to many, but the company’s first move should be to preserve it’s human assets (yes, in corporate governance people are assets) since the core of any competitive advantage lies on people.
I call it a suicidal move also because during a crisis you need all the resources you can get and use them as intelligently as possible to obtain the maximum advantage over the remaining market. Those who lead companies know the true value of any progress beyond the competition, and when you just fire people you’re literally throwing away your most precious chance to not only survive the crisis but also to standout the competition and win the new opportunities the crisis bring to the market.
If you want to know how well prepared is a company and if it’s strategy is a good or a bad one just look at this kind of attitude being justified as a “strategy”. Sure, many leaders know the negative impact this kind of attitude can generate, but they do it anyway and I must say: there’s always another way, other tactics to prevent this from happening. And sometimes the leaders justify firing lots of people during a crisis as a necessary clean up process to promote a new level of productivity, the famous “doing more with less”. But this is another evidence of bad strategy, since if the company is doing it it’s because their HR processes are performing bad, because those people shouldn’t be there in the first place. In second, there’s no management reason to wait for a crisis to promote adjustments like that, even because it means the company was already wasting precious money for a long period and certainly was feeding the crisis. It should be done right when identified, and if an issue like that is only identified during a crisis it means the leadership is not doing it’s job. And since every fail is leader’s responsibility, they are the only ones to be fired, and the majority wants to punch me when I state my perspective about it.
