Hire, Don’t Fire!

Now, I’m not here to tell you how or what to invest in but I want to pose a question to you about your people strategy during and after COVID. The parallel I’m going to use is stock market investing and the people in an organisation.

In the 2008 financial crisis, there was a 50% decline in the value of stock on most indices compared to a 30% decline in March due to COVID (a loss that’s already been made good).

However, over the last 10 years, global equities have actually increased by 212% and canny investors will tell you that the markets are the best investment vehicle over the long term if you adopt the right strategy.

In fact, those canny investors know that it’s best to be stoic and ride out the lows without selling anything because global markets always recover. They are the Bulls.

On the other hand, panic investors always seem to sell at the worst possible moment and usually face an uphill battle to regain their losses once markets recover. These people are the Bears.

Just for reference, a Bull market is one that is on the rise because the economy is doing well and a Bear market occurs when the economy is in trouble (perhaps due to a number of factors such as a banking crisis, a pandemic etc) and then most stocks decline in value.

So here’s the question:

Are you a Transformation Bull or a Bear, and right now, should you be stoic or do you panic?

We published our COVID leadership change curve back in March when we talked about the potential for workforce reductions. Those job losses are still coming and rising fast. These will increase even more as governments withdraw their financial support for jobs. 

Therefore, the race to the bottom for some companies is now becoming obvious and, because they are in panic mode, they have moved their transformational change from real transition to what we recently heard is now being called “workforce compression”!

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However, if you fire lots of people you could be firing people who are subject matter experts and who actually know how your current systems and processes work. Indeed, they know your business. And you might just end up firing the very people who might be best placed to support your transformation. 

Of course, a focus on cost or expenses might give the impression that your profits are sound and that you are affecting real change but in reality, you are not. And it is unsustainable over the long term. Plus, when it becomes an “employees” recruitment market again then your company could have a black mark against it in the wider talent pool. So we recommend that you don’t be a Bear.

What we do recommend is being a Transformation “Bull” leader. Invest in your current people right now, educate them for the transformation needs of next year, once you stop protecting cash this year. And educate yourself about transformation because all of our analysis and conversations with numerous companies show is that 2021 will be the year of transformation. Not as a fad but for actual survival.

The difference between an agile transformation or a digital one or a business one or indeed a cultural transformation is important. And embarking on the wrong one, without the right skills or knowledge, in what will become a highly competitive climate for talent, could mean the difference between success or failure.

Therefore, you should avoid 2021’s war for talented people. But more important than anything else, you should encourage your senior team to see transformation as real change, soon to be necessary change and not a reason to panic or an excuse to downsize at the worst possible moment.

Flow Academy is a leading advisory and implementation practice specialising in business transformation. Our tools help companies make the best use of their existing assets while reshaping their business to meet new demands.

Fin Goulding is a world-class CTO/CIO who in the past five years has transformed into a business agility expert having worked for organisations like Visa, RBS, HSBC and digital startups such as lastminute.com and paddypower.com. Fin also coaches executives through the challenges of transformation.

Haydn Shaughnessy is a business economist and innovation expert who has consulted to some of the world’s leading organisations helping senior executives to plan the next-generation enterprise.

Transformation Sprint is their new book, due for publication in October, which builds upon their best selling business books Flow: A Handbook for Changemakers and 12 Steps to Flow.

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