From the Lionesses of Africa Operations Department
Empathy is a Superpower along with your Fair but Firm Leadership. Empathy with and for your employees is what is going to get you and them through these challenging times. Empathy is not a weakness, you can understand what they are going through, understand their fears, whilst still doing what is best for the company, your employees and for the community at large. But to do this you must keep in your mind.
You have to drive all decisions by:
doing what is right,
being fair but firm
communicating in a clear, and unambiguous way
and this is so important as we move into the very difficult stage of potentially letting go of your employees (as a last resort).
Sadly, in spite of the fact (as we saw last week) that SMEs are globally the largest employer as a block, and as we know Lionesses give so much more back into their communities, much of what is written about managing through tough times and redundancy is for the large company with thousands of workers. Many of the articles are written in MBA-speak, using very long and important sounding words and much of what is written is done with classroom theory, not practical experience (and as we all know theory and practice are exactly the same…except in practice). As one of our Lionesses complained whilst in London with us at the UK/Africa Summit said: “I keep on employing MBAs in my search for a strategic CFO, but they simply don’t know how to practically give me what I want and need. They just give me theory”.
So continuing on with our efforts to make large company management advice (leaning heavily on our own personal experiences in both smaller and larger firms) relevant to and applicable to all of us. Whilst keeping in mind George Orwell’s “Never use a long word where a short one will do” rule, to encourage a thinking outside of the comfy box of pre-Coronavirus times, and to keep things as simple as possible because, as we know, in these dark times it is difficult enough to remember where we left the tea bags, let alone where to start saving our company, we move to the next stage. This week we tackle the tough subject of redundancies, and to do that we start with….
How to avoid redundancies.
Are your managers the correct ones ?
A support structure for you and also for your employees also includes your senior and middle managers and here we have to start making a few tough choices. In too many organisations playing the company game is what gets you to the top. ‘Not shaking the boat’, ‘keeping your head down’, ‘never being the messenger of bad news’, all tools to climb the slippery slope to the top. In this time of Coronavirus, those managers may actually be the ones who hold you and your company back and become an extra weight to carry.
None of us start out wanting a room full of ‘yes-men’, but it quickly happens. For the ‘Small’ company in ‘SME’ you may already have or will need a go-to person you trust with whom you can discuss certain issues, deliberate the best route and then (you) decide. It is important for it to be you who decides, because your employees need to see you taking full responsibility. Your ‘go-to’ person can then enact and deliver the required results. This is important, there does have to be some barrier between you and the awful work that has to be done. Although you are the one taking responsibility, please remember you cannot carry it all. Follow Bill De Blasio, the Mayor of New York’s example: “If someone wants to blame someone, or complain about someone, blame me,” he said of his order for non-essential workers to stay at home, but he will certainly have someone who enacts on the front line.
We have discussed in a previous letter how your softly spoken, kind hearted bookkeeper, although great as a bookkeeper is not the person to chase unpaid invoices at this time, so too your management team needs to be ready for the different times ahead. For example if there is a manager who although successful, always seems to lose team members who you thought were actually quite good, perhaps their leadership style is wrong, too abrasive, perhaps they don’t take responsibility for their team or their junior’s actions or are too quick to blame others - who knows, but the last thing you want is for a mass exodus of your team at this time as the pressure mounts (this is why your ‘exit interview’ is so important).
So where can you look for senior or middle management that can help you through these dark days, how do you find those with the required battle-hardened skills?
In pre-Coronavirus times ‘Mavericks’ were considered by many to be amusing but not particularly helpful.
1) They have possibly been through tough times in their past either professionally or privately, which gave them a view that ‘life is too short’ to deal with company politics, lies and deceit, which made them particularly dangerous to those types as mentioned above, climbing (in their own particular way) the greasy pole of management. This is often because such ‘mavericks’ are not afraid to ask ‘dumb’ questions, often exposing others’ lack of thinking, planning or even worse (for those too afraid to say that powerful phrase ‘I don’t know, but I shall find out’), knowledge.
2) This ‘life is too short’ attitude allowed them to make tough and sometimes unpopular decisions because they felt it was the right thing to do.
3) You will have heard the expression: “Don’t shoot the messenger”, i.e. the bringer of bad news was often the one who was yelled at, even although it had nothing to do with them…, well these Mavericks are usually the ones delivering such news, it’s the last thing a ‘yes-man’ would have done. Not a hope!
If you have such people in your company who tick some or even all of these boxes, you are in luck. Likewise in a ‘Small’ company, your ‘go-to person’, must have some of these powers -
You do not want a ‘yes-man’ in these situations.
McKinsey (the global management company) says:
“Leaders with the right temperament and character are necessary during times of uncertainty. They stay curious and flexible but can still make the tough calls, even if that makes them unpopular. They gather differing perspectives and then make the decisions, with the best interests of the organization (not their careers) in mind, without needing a full consensus. For decisions within their delegated authority, they escalate only the trickiest problems for input or approval.”
That last part is important: “…they escalate only the trickiest problems for input or approval.”
As we discussed last week, ‘Leadership’ is not ‘Control’, you have to trust your team. That trust works both ways, your team and managers must know that if they make a decision which is in their power, you must support them in this, even if you think it is wrong, because it is their decision. If you do not, you will soon be deciding on all minor decisions within a very short period of time. “Should I put a first class stamp or second class stamp on this envelope…”. Seriously? Yes. Be warned. You need managers who will take responsibility, not just the paycheck and title. You have enough work to do and far too many things to concentrate on without being distracted by the small stuff. Empower your managers with trust.
If you find that none of your current management tick any of those three boxes or you cannot find any in your organisation that do so, then you need to worry. Your managers will, over the next few weeks, need to make decisions sometimes blind before all of the information comes in; they will have to be nimble, and they must not be afraid to make wrong decisions otherwise they will simply be ‘Rabbits caught in headlamps’. Oh and they will have to be ok with being unpopular.
….and this is as good a time as any to pour yourself that cup of tea. All of what we are suggesting is an attempt so that you don’t burn out from worry, fear and overwork. Tea is not a cure to such things (although our grandmothers would beg to differ I am sure!), but ‘me-time’ will at least calm you for a few moments, allow you to take a few deep breaths, a sort of simple meditation moment.
Welcome back!
You now have your management team or your trusted ‘go-to person’, what tools do you have to put off the fateful day of redundancies.
Freeze on new Hiring.
Sounds fairly obvious, but often forgotten as certain teams will still need to build and will insist until they are blue in the face that new staff are needed - but, tough! The manager in that department must take an employee from a hit area and retrain.
Enforcement of retirement ages.
Sorry old Albert needs to go, even a Director who is over the retirement age, must step down. In spite of their years of experience, you might be able to replace them and if necessary keep them on a small consultancy (for a retiree a small consultancy to supplement their retirement plan is fabulous) - they knew they were on borrowed time anyway and now you have a chance to promote from within.
An immediate end to using agency and contract workers.
These are expensive. Don’t allow any of your teams to be lazy. If there are particular areas of expertise not available in your company, ask why not and look to train up staff.
Active performance management.
In good times you can carry some employees while you try to encourage or retrain them, but now is not the time. These employees are a drain on resources, both in cash and also in that their negative energy saps that of hard working employees. They have to step up or step out.
Annual Holiday.
No one likes employees hanging around doing nothing, but this is paid, so still a drain on your resources.
Unpaid leave.
This is very difficult as there are few employees who have saved up for a rainy day, but perhaps you can put them on quarter wages. Remember any changes to contracts require a signed agreement.
Forced Leave.
Many countries such as Zambia have the following:
“Employment Code Act No. 3 of 2019. The Act allows an employer to send an employee on forced leave. An employer is however required to pay an employee his/her basic pay during this period of forced leave.”
Salary Reduction.
One of the best ways - but guess what - you have to lead by example, remembering that if you are expecting a 25% cut from all employees, you better be cutting your salary by 50%. A good rule of thumb is that whatever you expect your employees to handle, you have to do at least double. Even better if you can manage it, go without any salary at all during this time, you can bet that this information will work its way round the company very fast. This is one of the best ways of increasing staff moral and to show that ‘We are all in this together’.
A large cut by you, your directors and senior management will ensure many keep their jobs at this time - however don’t forget the law, each employee will have to give their prior written and signed consent and if you are large enough to have unionised labour, you must have the Union on your side.
Work from home.
Prior to the Coronavirus, many surveys found that employees would be willing to take a lower salary to work from home. Perhaps this can be a way of lowering costs. All top companies with inspired leaders in the Northern Hemisphere have brought in work from home for those workers that can. But this is only for roles that can be done from home and obviously it is not easy to implement in countries without good wifi or with a low ownership of laptops. Please be very careful of security of company information during these times.
Sick Leave.
We have discussed previously sick leave. It’s crazy, to say nothing of the danger, to have someone walking around your office/warehouse/factory with Coronavirus. Check the rules regarding Government assistance.
Family Responsibility Leave.
Zambia, 7 days to nurse a sick child, spouse or dependent and an extra 3 days for care, health or education of a child, spouse or dependent. Each country will have different rules, but still you have to continue paying so will drain your cash. Again, check if there are rules governing how much pay you must give if Family Responsibility Leave runs over the maximum time. As with sick leave, there may be Government assistance.
Employee swap.
The new Nightingale Hospital (the Excel Conference Centre in London) with 4,000 ICU beds that was put up in 14 days by amongst others, the British Army. It is going to be staffed not only with Doctors and Nurses, but also Cabin Crew and employees from Virgin Atlantic and EasyJet. This is a classic case of excellent leadership. How can I protect my business so I don’t lose highly trained staff, yet keep them busy (and possibly paid by someone else) while I wait for my market to return…? Those in the medical arena or essential food sales will need extra staff, extra offices, extra warehouses, please do not give up this opportunity. Approach these businesses, don’t be shy. Once the virus has calmed down, your trained staff can return and you can take your company (or Sales Team) out of its medically induced coma or slow-down mode.
Furlough workers.
Employee furloughs are when employees are required to take mandatory time off work with no pay. During employee furloughs, benefits usually continue, which is one of the ways in which employee furloughs are different from a redundancy. For example, "Marriott International Inc., the world’s largest hotel company with nearly 1.4 million rooms worldwide, said it is starting to furlough what it expects will be tens of thousands of employees as it ramps up hotel closings across the globe.” Not all employees have to be included in this, for example a sales team could be furloughed whilst the operations team continues. We would strongly suggest you take legal advice if you are considering this as not all country’s laws will be the same and it is not something to be done lightly.
Ask your employees.
This has the added benefit that if there is employee engagement, they are far more likely to follow the results. “…looking for alternative economic solutions…” is how the IFC puts it. It is said that in times of true hardship, innovation is at its best and perhaps some of your workers can see a way forward, such as taking one of your branches as a franchise operation, where they see the value that can be gained from lower overheads or by becoming an ‘owner’ (remember for entrepreneurs there are at least 36 not 24 hours in a day - we have all been there); or by helping you recognize that the old distiller that was not perfect enough for your ‘London Gin’ will be perfect for an alcohol based hand sanitiser (you may have forgotten the old rusty distiller, but there is no doubt most of your employees will know where it is!) and so forth.
Fund that business idea!
Your business is on life support and we are suggesting you fund a business idea? Not as crazy as it seems. You are trying to avoid redundancies, put up a business idea competition in your company where the winner/s get an equity investment and perhaps even a small monthly salary (very valuable for any entrepreneur). Who knows, you may end up with a large number of decent business ideas that you would want to invest in. You will avoid redundancies while cutting staff and possibly creating new suppliers or customers. You will already know if you can trust the new entrepreneur (very valuable), they might be wanting to employ a few of your employees and you are personally diversifying by building a portfolio of companies.
Practical steps:
It will be important for you to put one person in charge of checking the latest help available from the government, such as this from the Kenyan Government or banks (many of whom are setting up emergency funding or even grant funding for specific industries). We previously mentioned approaching your Landlord if there is a government imposed mortgage holiday, if they announce support for companies to keep employees on by subsidizing wages, then brilliant (it is better for the economy and for the Government that employees continue in jobs rather than be out on the streets), if sick pay or family responsibility leave assistance, then use that.
If all the above fails…
So you have dreaded this moment. You have gone through all of the suggested ideas from last week’s letter plus tried to find an alternative from the list above, yet the voices in your mind just get stronger and too loud and you finally have to consider putting your business into a self induced coma.
Retrenchments. As hard as this will be, perhaps this is the only solution. However be warned, the employment laws of your country have not changed. We would strongly suggest that you take legal advice prior to embarking down this road and we have a number of Lionesses who have legal practices in various countries who may be available. Obviously we recognize that you are desperate to keep the costs down, but you must not cut corners. Remember, we are talking about your employees with whom you have an understandably close relationship and laws are there not just to be followed, but also to give protection to your employees. This creates a safe path for all parties, you included. Learn to love, not fight the law, it will give you something solid to lean on.
One often used tool is to ask for volunteers. Voluntary redundancy is not only quicker (think cash-flow), but has the added advantage of only saying goodbye to employees who are happier or willing to go.
In addition.
If you have received Grant Funding in the past, please check the rules governing retrenchments from your funder, they often follow the world bank / IFC guidelines. Even if you have not received Grant Funding in the past, the IFC Good Practice Note on Managing Retrenchment is a very good plan to follow (Portuguese HERE). Remember, you do not want to do this, but as the IFC say in their introduction:
“Retrenchment may sometimes be a necessary part of securing future employment for large sections of the workforce. However, the key to a good outcome lies in developing and implementing a retrenchment procedure that achieves the commercial gains of the process while minimizing the impact of job losses on workers and communities.…A well-managed process can help avoid a host of problems and result in better outcomes for the company, its employees and the wider community. This Note contains a range of good practice measures that can help companies think through the key issues, avoid common pitfalls and hidden problems, and design a comprehensive retrenchment plan.”
Note: “…a necessary part of securing future employment for large sections of the workforce…” - if you keep that in your mind during this process, although it will not make it any easier, it might lighten the load.
One other important factor to remember is that funders such as Banks and Grant Funders will want to know what you are planning, keep them informed, they may well have helpful advice or even know of monetary assistance that can be given at this time. As we are seeing from Coronavirus, it is now not just hitting the old, infirm and those with previous medical conditions, but now killing the young and healthier. Likewise the same with businesses, and funders will not want previously healthy companies that they had previously funded, sinking without at least giving them some life-support.
Remember - “If you don’t ask, you don’t get” and although many of you find asking difficult, please keep this advice in mind: You are not asking for yourself, you are asking for your employees, their families and your communities, so that there is a business breathing and a job for when the economy recovers - and it will recover.)
Stay safe, stay strong and stay determined remembering at all times that you are not Super-Woman. It is ok to feel pain, it is ok to cry, just that you have to do it at home with your supportive partner and away from your staff who are looking to you for Empathy, Strength and Leadership.