The Role of HR in a Downturn
(Jan 23, 2009) It’s a downturn. They happen. There are things you do in the down cycle. There are things you don’t do in the down cycle.
Talking your company into the purchase of new toys or radical departures from normal practice isn’t a very smart idea. After the layoff, when people are trying to get the same work done with the remaining shell-shocked 80% of the people is not a good time to garner support for your vision. When risk-aversion is high, don’t ask people to jump.
That doesn’t mean that you can’t jump. The very same dynamic that makes it silly to introduce new ideas makes it possible for broad personal experimentation. More layoffs are coming; now is a great time to innovate. You’re probably going in the next wave anyhow. What have you got to lose.
In good time and bad, do your job extremely. If you aren’t risking a firing, you aren’t really an A list performer (even if you’ve kissed lots of management behind.) Real results come from operating at the edge of the acceptable envelope. There’s more leverage there.
The paradox is that there are more rewards for personal risk taking in a downturn. There are fewer rewards for organizational risk. The purse strings are tight for a reason; money is hard to get. The value of initiative soars while the institution’s ability to give permission responsibly declines. If you want your adventure sanctioned, you’ll have to wait. If you want to act first and get permission later, now is the time.
In a downturn, it is always better and easier to apologize for not getting permission. Consensus building and budget authority are for the flush times.
The Economist has an amazing article on the consequences of Moore’s Law in this recession. “There is strong demand for technologies that do the same for less money, rather than more for the same price.” Constant improvements in processing capacity have created a software industry that delivers more functionality each year.
Our trade show system, with its annual marketing orgies is a direct outgrowth of this explosion of new and better ways to do things. There is an entire industry of analysts and marketing firms who help perpetuate the notion that growth in functionality is a business cycle-proof natural law. New toys drive the finances of the analyst, marketing and events firms.
So, it’s no surprise that you see HR analysts complaining about the money people running roughshod over the well inentioned HR folks. Sadly, when HR folks listen to this sort of stuff, they lose even more of their organizational credibility. Now is a time to be circumspect in gentle in resource requirements and bold in personal action. It’s a time for imagining and living your dreams. It’s not such a good time to drive organizational change.
Instead, HR should be hammering its vendors for cost reductions. Get the same for less money; resist the promises more capability for the same money. In this environment, cash is king and HR must be a part of the effort to find it anywhere it can.
The one area in which new ideas can be useful is in the trimming process. Most organizations confuse loyalty and political skill with importance and contribution. The good times political skillset is a liability when it’s time to cut. Find new ideas about preserving and expanding the company’s leverage in the trim. Help the cuts position the company for the inevitable upturn.
Over and over again, the question of whether or not HR merits a leadership role is on the table. HR has the capacity to greatly influence the structure and behavior of the organization. Telling people to stand up when they should be ducking is not a good example of what to do. Knowing the difference between individual opportunities and organizational realities is the first part of good leadership.
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