Americans are awash with downsizing panic, and for those techno-buffs among us, it’s a time to stop and think.
In recent months, one has hardly been able to pick up a business magazine or tune into a radio news programme without being bombarded with sad tales of displaced middle managers, ousted from their positions in corporations, government agencies, universities and virtually every sector of modern society.
They’ve become the disposable people for an economy in transition. And technology lies at the root of much of their upheaval. We know networked companies and economies don’t need up-and-down, command and control management hierarchies any more. We know disintermediation is real and is happening – in commerce, investment management, government, the arts and even religion. We know the relentless march of globalisation waits for no-one. And we know we can’t turn back the calendar, and nor should we want to.
But what we may not have given as much thought to is the unlucky millions who are paying the price for technological advancement and the other factors. Until now. The scope of the plague has come clearly into focus, in large part because of a remarkable, if depressingly stark, series that ran recently in the New York Times, replete with a numbing array of statistics. Since the Times so often sets the editorial agenda for the rest of the media to follow, it is no surprise that Main Street editors and broadcasters are focusing on the downsizing scourge.
Consider, as the Times reported, that one in ten adult Americans, or about 19 mn people, say that a lost job has resulted in a major personal crisis. That only 35 per cent of laid-off workers find new jobs that pay as well. That almost three-quarters of US households since 1980 have had a close encounter with lay-offs. That 43 mn US jobs have vanished since 1979, replaced often with lower paying, part-time temp work.
We don’t yet possess the technology which will allow us to press a button to cope with personal crises. And nor can every victim of downsizing retrain as an IT specialist.
The upshot: Unlike previous periods of lay-off fever, this plague is now striking managerial workers at even prosperous companies, whose top executives seem to think that draining their reservoirs of talent and experience is an acceptable preemptive strike against the possibility of downturn or an acceptable alternative to more thoughtful evolution.
Lives are being ruined, communities dismantled, and fear and panic lurk in countless thousands of homes, all in the name of shorter-term efficiencies and margins. And Wall Street loves it.
Forgive me for the cynicism, but something is terribly amiss here. The CEO of a giant telecommunications behemoth announces that 40,000 employees will be axed, and he takes home a few million more as the value of his stock options soar.
Is it simply the invisible hand of brutal, predictable capitalism at work? Or has the pace of technology-fuelled change become so unstoppable that we just don’t have time to care about colleagues and peers? Is technology disconnecting us from our sense of community?
What is clear is that anyone, at any time, can be sacrificed.
One can argue that lay-offs today have the same result that inflation did in the 1970s: They provide cover for lousy management. Just as a steadily increasing price level propelled revenue figures upward without any requirement for, say, a better product or more astute marketing, so too does massive blood-letting divert attention from the real challenge of orderly, productive change.
And if you were into macabre humour, the joke would be that lay-offs can actually rob shareholders of the long-term value of their investments in the downsizing company. In his 1995 Corporate Executions, author Alan Downs, himself a former ‘executioner’, suggests that ‘in the long run, a lay-off is the cure that can kill. The side effects from this prescription can be more devastating to both company and employee than the original ailment.’
Among the damaging side effects: Hierarchies that are more rigid, not less, as surviving managers are afraid to offer new ideas; a loss of corporate perspective and history; and, perhaps most painful, an irrevocably broken bond between employer and the remaining employees.
This recently all hit close to home for me with the news that a family friend, a gentleman in his mid-50s with four kids (two in college) is getting the boot from his upper middle management job at Chase Manhattan Bank, soon to be merged with Chemical Bank. For virtually his entire adult life, all he has known is playing the game of big New York banking. Now the message is clear: ‘Hey, thanks for playing by our rules all these years. But now we’ve changed the rules. Sorry about those tuition bills, but you’re out. Go quietly. Republicans don’t cry.’
On the practical level, it is well understood that institutional investors and the influencers of retail investment decision-making, all of whom are under their own pressures to perform, must value expectations of profitability above all else. We’re all on a similar treadmill for immediate results.
But do we need to wipe out a whole generation of middle-aged moms and dads just to win?
More than a few of this magazine’s readers no doubt spend their working lives trying to put the best spin possible on the downsizing addiction. And more than a few fall into a peaceful sleep each night repeating the mantra that tough medicine is sometimes needed for a long-term cure.
But are there any IROs out there who ask: ‘Wait a minute. Maybe there is a better way?’
Doubtful. As author Downs writes, ‘Lay-offs have become the change tactic of choice for several compelling reasons, not the least of which is the reaction on Wall Street. How does an increase in stock price of 8 per cent grab you? When the chips are down and the big boss is watching, it can look really good. Investors often applaud the news of a lay-off as a sign of a corporate turnaround. Yet, like the other pseudo-benefits of a lay-off, any upturn in stock prices is short-lived.’
But not before real, deep wounds are inflicted.
Here’s my prediction. As my friend’s (the banker’s) children – and those of the millions of others like him – enter the work force and begin their own path through adulthood, they will be a much more cynical, disbelieving group than even those of us who grew up during the last days of the Vietnam War. For them, notions of teamwork, sacrifice, of supporting the group over themselves, will be just so much babble.
And when we stop believing in something larger than ourselves, then we all have lost a lot. And no amount of bandwith will ever be a replacement.
Some of us who chose not to work for large corporations, facing the uncertainties of going it alone instead, may now be justified in singing our own amens. Once the surrender of sovereignty, of having to kow-tow to the corporate shoguns, was an acceptable trade off for a life-time of mortgage-paying, tuition-investing, child-rearing paychecks. With that guarantee erased, what’s the point of putting up with the sameness of corporate stoogedom? At least if I fail, it will be of my own doing. Not because some fat guy in a jet wants to pay himself another few million this year.
In times of stress and uncertainty, people traditionally have turned to one of the options they have within their grasp. Some turn to demagogues, of which America and Europe have produced no shortage this century. Today’s option in the States operates under the name Pat Buchanan.
Others retreat inward, grow apathetic and uncaring. In America, a society in which only about half of eligible voters ever bother to cast a ballot, this seems to have been the route taken by many already. Those remaining could turn to the spiritual for guidance.
If the last avenue is your route, either in times of stress or not, then I have an online suggestion for your bookmarks.
A friend and professional colleague, Mark Kellner, has a new book out which has just hit the bookstores,entitled God On The Internet. In it, Kellner offers a wealth of online resources for those with a hunger to connect to the big picture of spirituality, including numerous Web sites hosted by Buddhists, Muslims, Protestants, Hindus, Jews and Catholics. There’s even a report on the first Cardinal in cyberspace and a ‘virtual diocese’.
‘My book helps believers find links to their own faith communities, as well as to gain insights into others,’ says Kellner. ‘I didn’t plan it this way but it might also be a head start for people in a personal crisis.’
For a peak at one particularly intriguing site (at least for this Episcopalian), visit a site hosted by a Canadian Anglican, at http://www.infomatch.com/~haibeck/anglican.html.
And pray your CEO doesn’t have plans for your job.
