How to Be a Leader during Layoffs

By Heather Baldwin  •  January 13, 2010

Are layoffs keeping you up at night? As a manager, you naturally will dread having to issue the news to your reps that they no longer have a job. But if you become too wrapped up in the crisis of layoffs and downsizing, you risk "surrendering your leadership focus," warns Joseph Grenny, a speaker, business communication expert, and co-author of Crucial Conversations. "The result," he continues, "is shattered trust and battered morale among leftover employees."

Grenny offers these tips to help managers lead through layoffs and emerge with a strong, trusting team of reps:

  1. Downsize with kindness. Recognize that you are playing to two audiences when you lay off a sales rep – the rep himself and, more importantly, the survivors. This latter group "watches your every move and draws conclusions about how you will treat them in similar circumstances" says Grenny. "You must be honest, open, proactive, generous, and caring. If you come across as any less than all of these, your reputation and relationships with employees will suffer for years to come."
  2. Be transparent. It’s impossible to offer job security these days but you can offer predictability. Be as open as possible about when reductions will happen, which departments they will affect, how decisions will be made, how much notice people will receive, what kind of severance – if any – will be provided, and so on. Fear is rooted in uncertainty and lack of information. By providing your reps with as much information as you possibly can, you reduce "the psychological cost and misery associated with the unknown," says Grenny. You also help them feel more in control of their future.
  3. Build confidence in the future. Some leaders feel so guilty and defensive about announcing bad news that they start "hiding" from employees, says Grenny. Instead, do the opposite. Spend as much time as possible with your remaining reps, showing them how the company is securing the future and where the company is headed, motivating them and urging them forward. Otherwise, employees will lose confidence in their leaders and find themselves waiting around for the axe to fall.

Finally, Grenny urges senior sales executives to spend "enormous amounts of time" with first line sales managers. In a time of layoffs, trust begins at the top. When executives consult with their front line managers about tough decisions, when they share "every scrap of information" they can, when they discuss the complexity of the problems they’re trying to solve and help managers understand the motives behind the decisions, and when they delegate some difficult decisions to those managers, managers can better understand and sympathize with the pressing issues of the company. In turn, that understanding and clarity will rub off on the rest of the sales organization, resulting in a stronger, more trusting team going forward.

For more information, visit www.josephgrenny.com.