I know a lot of you probably also read the Evolving Excellence blog, but be sure to check out this post. Kevin Meyer’s doing his best to channel the outrage we usually get from Bill Waddell. I hate to see companies emulating Jack Welch, particularly because investors and folks seem to respond to that (they don’t know any better). Like fictional characters on TV, they think Jack Welch is a god (another funny example here).
The manufacturing company that Kevin writes is getting rid of employees as the result of efficiency gains brought by lean, and they’re bragging about it and what good leaders they are (vis a vis the comparisons to Welch). That completely kills morale…. I don’t see how people can’t understand that.
I wrote this week about Rugar guns and how they were doing buyouts (hopefully somewhat generous) and not backfilling people who left via attrition.
With lean, here are the preferred approaches for handling “excess” people (just my opinion):
- Use lean to grow. Free up people and resources to add equipment, increase production, add new product lines, etc.
- Utilize people in different ways — people in the factory might be great in a sales or technical role working with customers. Maybe employees can be part of lean teams or kaizen event facilitation roles.
- Allow people to leave via attrition (retirements, etc.) and don’t replace them. This isn’t as painful to an organization as layoffs would be.
- If you have to let people go, provide generous buyouts with job retraining, career search help, etc.
Once you give in to the temptation of mass layoffs, you’ll fall into the business death spiral. The good employees who are left will be upset and might leave on their own, given the chance. This isn’t a good cycle to get into.
The only exception to the above might be a true crisis situation, as in “we have to get rid of 30% of the staff or we’ll all lose our jobs.” If you’ve lost a major customer or major product line, then that’s a different situation altogether. Yes, Toyota did some mass layoffs in the early 50’s, but management took responsibility and promised to never do that again. Quite a different approach than the companies that lay off employees constantly.
The hospitals I work with have all made very public “no layoffs because of lean” pronouncements and it’s a great help.
Thanks for reading! I’d love to hear your thoughts. Please scroll down to post a comment. Click here to receive posts via email.
Now Available – The updated, expanded, and revised 3rd Edition of Mark Graban’s Shingo Research Award-Winning Book Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement. You can buy the book today, including signed copies from the author.