Fiona Passantino, early 2023
We suffer from a use-once-and-throw-away mindset. This goes for both plastics and people. Companies exhale and inhale staff on an annual cycle, but nothing ever truly disappears. The plastic particles from a single-use bottle come back into our drinking water, our soil and our air, and the discarded employee will soon be working for your supplier, your client or… your competition. Learn how to reuse, recycle and reduce for sustainable cost cutting and a truly people-first culture. Thanks to Stephen Heidari-Robinson for the inspiration.
Three Rs: Reuse, Recycle, Reduce
Our planet is in trouble, and we have known this for years. Partly thanks to our slow uptake with the three ”R’s”: Reuse, Recycle, Reduce. We buy things wrapped in lots of plastic, we use it once and throw it away. It ends up deep in a landfill, out of sight. We move on to the next shiny object, and the cycle repeats.
Over the past 50 years, the waste each person creates has increased from 2.7 to 4.4 pounds per day, according to the US EPA[i]. And going into 2023, our single-use fixation does not appear to be slowing down.
As we consume and throw away, our landfills grow higher and the toxins from our toothpaste tubes seep back into our drinking water, our soil and our air.
Three HRs: HReuse, HRecycle, HReduce
Change is fast and furious in the post-Covid workplace. Re-orgs are now an annual occurrence in most industries, often the first tool leadership will reach for when faced with industry disruption, unexpected shifts and new demands.
Re-orgs create uncertainty for everyone involved. They cause stress, anxiety, disengagement and, with all the time spent CV polishing and playing politics, can result in a 60% productivity loss for an entire year.
These annual company spring cleaning events mean that employees are permanently bathed in a hot spring of Cortisol, the primary stress hormone. This leads to anxiety, depression, headaches, hypertension, stress and short-term memory loss (resulting in dumber employees)[ii].
Over time, this morphs into actual physical symptoms; not only for those shoved out the door but by the middle-level managers asked to do the shoving.
Re-orgs set off waves of quitting. With the rising lack of psychological safety, toxicity and distraction, the top-performers leave, too.
And they often don’t even work. McKinsey found that more than 80% of re-orgs fail to deliver the promised value and 10% cause actual damage to company culture and operations[iii].
Massive waves of lay-offs, a company’s giant exhale, inevitably leads to the realization that there are not enough people to do the work. Suddenly, leaders need to hire: inhale. Team members, still shaken by the loss of their friends and colleagues now look around and see new faces, names to learn and habits to adjust to. The disconnect is hard to explain away.
As we shift our mindsets and begin to see the planet as a limited resource we need to protect, so we can learn to see people. Like the empty plastic bottle we throw away and think we never see again, the discarded employee doesn’t disappear in a poof, but will continue working somewhere else; before you know it, you see them across the table from you, employed by your supplier, your client or… your competition.
And just like the residual toxins of that red paint seep into the groundwater, the discarded employee will continue to have an opinion about your organization and, depending on how the layoff went, will not hold back from sharing her feelings among her friends, colleagues and contacts. Bad news travels at 10 times the rate of good news, since it’s just that much more fun. This may poison your pool of future hires.
Five ways to transition to a HRRR mindset
The shift is already starting to happen. In PwC’s Global CEO Survey, 52% of CEOs say they will need to cut costs due to outside pressures[iv]. But now, the biggest line item – personnel – is no longer the first place they look for loose change; 60% say they won’t shrink their workforce[v].
1. Understand what needs to change
If cost cutting is on the agenda for this quarter, first find out where the money is going.
Are equipment, materials and contract employee costs too high? Does this carry through to supply chains, transport and partners? Is there a sinkhole in IT platforms, hardware or software? And finally, is the physical space burning a hole in the treasury chest?
If money is the problem, there are many ways to tighten the belt. Taking people off the table, look at operational costs, reducing working hours, hiring freezes and changing suppliers.
2. Identify the underperformers
According to former GE chairman and CEO Jack Welsh, the typical workforce breaks down into a 20-70-10 rule he called “The Vitality Model”. This means that, at any given time at any given company, 20% are high-performers, the “vital 70%” meet expectations and the bottom 10% are re-org bait: underperformers who should be dismissed every year:[vi].
This is obviously not the way to run a business. However, it’s good to identify that lower 10%. A series of discrete interviews will pinpoint the ones that are dragging teams down. They are the bottlenecks, unwilling to change, evolve and grow. Often, not relating well with others. More like rock, less like water.
3. Engage the 5%
Of that lower 10%, perhaps 50% of them are just in the wrong place, in the wrong job, with the wrong manager, doing the wrong tasks at the wrong time. They might have been “nonboarded”, ignored, undeveloped or misunderstood. They might need a bit of support, investment, training, coaching and the chance to shift to a new role.
Identify this group and who they report to. If there are too many of these under one particular manager, chances are, the manager is the problem.
Form individual re-skilling plans with clear goals and benchmarks over a 6-8-month period. Connect with this group and explain the plan; they have time and training, investment, to grow and show their value. When shown this plan, most people will rise, improve and join the “Vital 70%”. The ones that don’t, join the 5% “lower pool” and will be shown the door eventually.
4. Working hour reduction
If the full working community knows that cost-cutting is a necessary fact this year, engage and convince them to take on a comprehensive hour reduction, going from a 40 to a 32-hour week. If everyone takes a haircut, no one will need to be released.
A “cap-and-trade” hour-trading scheme can be implemented where employees who might want more downtime due to at-home pressures or a passionate side-gig can trade hours for those who cannot sustain a pay cut at this time.
The CEO announces she will be the first to take a cut – more than the average, perhaps – to show that the chief of the tribe is not immune to hardship.
5. Communicate clearly
Explain what’s going on. Discuss the different options on the table. Allow the community to brainstorm together to find places to cut costs – unnecessary projects and programs to cut, expensive off-sites, acquisitions, externals and even office locations. A Co-Creapalooza might be needed to generate ideas and cultivate widespread buy-in.
Reaping the reward
A working community is often referred to as a “family”. If a family is undergoing hard times, we do not eject our underperforming children or in-laws. We all take a hit together and keep our tribe intact. If staying together is a core value of the company and actions are taken to prove it, the organization reaps the benefits of engagement: feelings of belonging and safety translate directly to lower churn, higher productivity and increased creativity.
This cultural stand radiates outside the walls of the company. A policy that’s fact rather than theory is also shared on the socials of your people, the business, and beyond.
This is a good place to work.
Get the book.
What does it mean to be “engaged” in today’s workplace? How do we inspire, inform and connect a working community, build a culture of irreplaceability, trust and listening to keep people onboard and rowing together?
Engagement is about bringing our best selves to the office, being heard, supported, feeing irreplaceable and free. This bright, funny comic book is a road map for leaders at any level, at any organization, telling the story of Covid, offering a clear, research-driven roadmap towards our future of work.
[i] Sturrock (2012) “Reuse means changing mindset about what is ‘new’” The Oregonian. Accessed March 30, 2023 https://www.oregonlive.com/environment/2012/04/reuse_means_changing_mindset_a.html
[ii] Mayo Clinic (2020) “Chronic stress puts your health at risk” The Mayo Clinic. Accessed March 30, 2023 https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/stress/art-20046037
[iii] Heidari-Robinson, Heywood (2016). “Getting Reorgs Right A practical guide to a misunderstood—and often mismanaged—process”. Harvard Business Review Magazine. Accessed January 12, 2022. https://hbr.org/2016/11/getting-reorgs-right
[iv] Brown (2023) “The best source of new talent? Your current talent” PwC Global. Accessed on March 30, 2023. https://www.pwc.com/gx/en/issues/c-suite-insights/the-leadership-agenda/the-best-source-of-new-talent-your-current-talent.html
[v] PwC (2023) “Winning today’s race while running tomorrow’s: PwC’s 26th Annual Global CEO Survey” PwC https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey-2023.html
[vi] Brown (2014) “Should You Fire 10% of Your Employees Every Year?” Inc Magazine. Accessed March 30, 2023. https://www.inc.com/paul-b-brown/should-you-fire-10-of-your-employees-every-year.html