Surviving The Corporate Shakeout

January 13, 1992|By Timothy J. Mullaney

When Manekin Corp. was getting ready to lay off about eight staffers last October, Kathleen Brooks knew her job wasn't on the block, but many others weren't so sure about theirs. So why did Ms. Brooks feel so bad?

"Guilt is not a good word, but why them and not me?" says Ms. Brooks, human resources director at the Baltimore-based commercial real estate firm. "Maybe it's empathy or whatever, but there's no elation after it."

Everyone realizes that when the economy slips and the corporate knives start chopping, the people who lose their jobs are left hurting and needing help.

But Ms. Brooks and other managers say businesses should worry about the survivors as well. Their worlds are still whirling, the rumor mill is still grinding and their minds are on almost anything but business.

"I've also been through a divorce," says Peg Lawrence, manager of Manekin's Columbia office. "It's the same thing."

Psychologists say workers who see colleagues fired en masse go through a mental process a lot like someone whose friend has just died. Just as psychologists have crafted theories about how people deal with death, beginning with denial and progressing to acceptance and integration, they are applying those theories to corporate restructurings.

"There's no question that the management team has a tougher time keeping people focused," said John Sapp, vice president of human resources at Signet Bank/Maryland, which cut about 80 people last year. "They're looking at the people who are no longer there and there's a period of mourning."

Managers have to be prepared for the denial of reality as the company begins to do worse, the anger of workers going through what psychologists call the "victim phase," and the fear among remaining workers that they will be cut next, says Michael Bryant, a career counselor who runs Career Transition Services in Baltimore.

"Everyone heals at their own rate," Mr. Bryant said. "You can't legislate healing. People do the best they can with all the insight and emotional support they have. . . . You don't make people happy by ignoring them or not telling them the truth."

In Manekin's case, the pressure came last fall. The commercial real estate industry was depressed nationwide. And everyone knew about the company's problems because nearly the whole office works on the budget. The fiscal year begins at Manekin Nov. 1, and as that date approached, the sense of dread crested.

"The waiting was definitely the hardest part," recalls Ms. Lawrence, who feared Manekin might merge her job with Ms. Brooks' duties. "It was a constant discussion in the lunchroom. Time was spent worrying and passing on tidbits because people were worried."

"The more time you spent in the office, it was a snowball effect," adds John Meyer, a marketing coordinator who survived the cuts. "More rumors spread, more people got down. . . . We knew certain deals had to happen for us to be all right, and they hadn't happened."

Meanwhile, work almost ground to a halt.

If management handles layoffs poorly, the fear and lost productivity can persist even after the cuts.

Studies have found basically similar behavior changes at different types of companies going through layoffs, says Craig Dreilinger, a clinical psychologist and consultant in Bethesda. Survivors do only the minimum required, both because they resent the company and because they don't want to stick their necks out by doing things that aren't, strictly speaking, their job.

Meanwhile, survivors might grouse about the company outside "the family" -- criticizing management in front of customers and suppliers and hurting its reputation, he adds. "You see a reduction in sportsmanship."

"Fear immobilizes people. Frightened people are not very productive," says Mr. Bryant, who served as a consultant to Manekin.

That's one reason most corporate downsizings, at least at larger companies, don't achieve their goals, Dr. Dreilinger says. Managers face a choice: Ignore the problem and let paranoia grip the company for months, or be candid and confront survivors' fears.

"It really does go away quickly," he says, if managers make the right moves. "The shame of it is, it's all so treatable. It doesn't have to take months."

Solving survivors' problems, Dr. Dreilinger says, begins with finding ways to rebuild loyalty: If you can't offer people security, offer them something else. He suggests that managers build personal bridges to workers, to replace institutional guarantees that can't be kept anymore.

Training in new skills -- even skills that will make a worker more attractive to another company -- also can rebuild loyalty, Dr. Dreilinger says. So can giving workers broad input in figuring out what their new roles will be, Mr. Bryant suggests.

Most of all, says Dr. Dreilinger, each middle manager should ask the surviving staff what the manager can do for them. "It has immediate work value and it has symbolic value. It says, 'Part of my job is to support you.' "

There are also more concrete things to do.

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