I've already whined about Merrill Lynch and the tone deafness that accompanies spending $1.2 million on an office. And progress, too -- when publicized, John Thain agreed to give the money ...
I've already whined about Merrill Lynch and the tone deafness that accompanies spending $1.2 million on an office. And progress, too -- when publicized, John Thain agreed to give the money ...
Career Management Monday, November 24, 2008
Another week and yet another US bank gets a monster bailout from the taxpayers. This time, it is Citigroup, the worldwide conglomeration of financial services that has a management team that has yet to prove it knows how to make money. Even Saudi Princes have a tough time with their investments in the firm.
Details on the bailout are everywhere on the news; the cautionary tale comes from Paul Krugman, Nobel Prize winner:
“A bailout was necessary — but this bailout is an outrage: a lousy deal for the taxpayers, no accountability for management, and just to make things perfect, quite possibly inadequate, so that Citi will be back for more.”
The problem with these bailouts is that they are inconsistent – some invest in the bank with preferred stock, some just backstop losses, some do a combination of both and AIG just gets whatever it wants. The problem with this inconsistency is that everyone is now playing be different sets of rules and governance. That reduces transparency to something worse than the current blindness.
Plus, the program is now punishing those that did the right stuff during this crisis. It is now almost if you don’t have a bailout from the taxpayers, you can’t operate on a level playing field.
Impact on knowledge workers
The bailouts, easy to get for financial companies and tough to get for automakers, will prolong the pain in the economy. Sure, all sorts of financial institutions failing would be horrible and I’m not sure it would be right to let them fail. But the actions by the government have not eased credit. In fact, banks are continuing to stick it to businesses and consumers with higher rates, bigger fees, and unwillingness to lend – even among their own banks.
After paying for their bailouts, it makes one totally frustrated at the “stick it in your face” attitude of the banks with rates and willingness to loan.
Plus, these actions continue to challenge your employment no matter the industry you work for right now. Inability to get credit and having to pay higher rates means an unwillingness by your management team to be aggressive with growth. Instead, cost cutting reigns – and you are the one that is easiest to cut.
Life in the cubes is tough at the moment. Make sure you fight through the adversity.
Your company just downsized 10%. Every department was affected, including yours. After handling the “survivors” syndrome, it’s time to get back to work. What is the work going to look like? Did your management team simply downsize? Or did your management team figure out what work is no longer going to get done because the management team determined the work was no longer valuable to the company?
The layoff trap
For those that survive the layoff, the trap is to continue to do all of the work – with fewer people. That means YOU get to do all of the additional work that the people laid off were doing. So you work more hours. More days. And drive yourself crazy with all of the work instead of focusing on your family, professional and personal support networks.
A true story
When I had to lay off a group of people that worked for me, we were eliminating a function that we no longer wanted to be doing. While that caused people to be gone from the business, it was clear that my management no longer thought the function was important to be doing. Agree or disagree, at least it was clear and there was comfort to me in that approach.
One month after the layoff, a different department approached me and asked if they could learn about the function that my department was no longer doing. I agreed and we had a two-hour meeting on the work that was done. At the end of the meeting, this department said that they could really help me and could support what I was doing in my department with the function.
When I told them that I would gladly hand over all of the documentation and they could take over the function because we were no longer doing the work, they were surprised.
“Why aren’t you doing this anymore,” they asked?
“Because my management team determined the function was no longer important, so I am no longer working on it,” was my reply. “If you want to work on something management has already determined is no longer important, be my guest.” (If they want to be set up to be laid off later, that’s not my problem…).
In the end, they took all of the documentation. I never offered them any additional help.
What needs to be done
If you accept the premise that the people who were laid off were productive and doing real work, then the management team needs to determine what work will no longer be done. Which reports? Which processes? Which meetings? Management must determine what the most important work is and assign people to do it. Not just keep doing what has always done. Do you think the 50,000+ people being laid off at Citigroup weren’t doing any work?
After the layoff, it is important for the people still working to specifically ask what will no longer be done. It is a critical, defining question for your management team. It will probably not be known the day of the layoff what will no longer be done – but don’t get a non-answer and then forget about it. Bring it up at the next team meeting. And then one more. If your management team can’t tell you after two team meetings, you have your answer.
If your management team can’t tell you what work will no longer be done, it is time to find a new job.
If you don’t, you’ll get stuck doing all the work that was done by additional staff. Work that doesn’t pertain to your goals. And if you don’t work the extra hours and get the extra work done, you’ll be rated poorly all because management wasn’t good enough to define what no longer would be done with less staff.
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Bank of America to cut 35,000 jobs
Over the course of three years. Combine this with 52,000 job cuts at Citigroup and you can populate a city. Glad I could help with the bailout of these companies.
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