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The One-Minute Layoff

Written on July 15, 2009 by George Krueger & Mary-Lynn Foster in Management

watch We have a friend who was recently let go from a company for whom he had worked for nearly twenty years. The entire conversation with his supervisor took less than a minute.

To clarify the situation, he was one of twenty or so people who lost his job that day at the local branch of a large company. This scenario was repeated over and over again at all the branches of that company as they responded to low earnings.

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Hear George & Mary-Lynn talk about what employees deserve on The Bigg Success Show! Click the purple player to listen while you read: Play Now | Play in Popup | Download

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So here’s our first question:

Why do corporations treat humans inhumanely?

In most businesses, people are the most precious asset. So why do corporations act like they’re not. And let’s be clear here – corporations don’t do anything. They can’t. It’s humans who treat humans like this.

It’s the managers within those companies who are doing this. It’s probably their managers, or their manager’s manager, who insists that it be done.

Managers within companies are being asked to do more and more with less and less. So some people get laid off. In many, if not most cases, they’re good employees who just happened to be in the wrong place at the wrong time.

They’re reasonable people who can understand that sometimes tough choices have to be made. They’ve cared for their employer; they expect their employer to give them the same respect.

Which leads to our next question:

Why do companies burn bridges?

We’re told from a young age that we shouldn’t burn bridges. We get upset when our employees fail to give us notice. We think we deserve that much respect.

Don’t our employees deserve respect too?

We also believe that you have to understand the bigg picture. These employees you’re letting go today may be your best candidates tomorrow – if you handle it properly.

These people may be customers, too. They may know people who are your customers. What are you doing to your reputation when you show no respect for your employees?

And what are you saying to the employees who remain? Aren’t you saying that people don’t matter? That the only thing that’s important is this quarter’s earnings?

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He deserved more

Doesn’t an employee who’s been with a company for nearly twenty years deserve more than a minute from his manager when he gets laid off? We think so!

We think he deserved a conversation at least twenty times that long! How about a minute for every year he devoted? Is that asking too much? We don’t think so!

We think he deserved a complete explanation about what was going on and why his position was being eliminated.

We think he deserved to be reassured that he hadn’t done anything wrong.

We think he deserved to know if it was possible that his position would be available again if the company turned things around.

We think he deserved his manager’s best guess about the likelihood of that happening.

We think he deserved to know what resources were available to him to find another job or career, even if the company wasn’t willing to pay for it.

We think he deserved a written letter of recommendation that he could use to find that next position.

We think he deserved to be thanked for all that he had done.

We think he deserved to be treated like a human being!

We think managing is a tough job. But don’t make it tougher by treating people inhumanely and burning bridges. Give them the respect they deserve. Otherwise, you’ll lose more in the long run, as a manager and as a human being. Oh, and one more thing, your company will lose even more than you do.

What do you think?

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(Image in today's post by Gastonmag)

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If Elvis was an Entrepreneur

Written on June 25, 2009 by George Krueger & Mary-Lynn Foster in Business Ownership

exit The final chord was sung. The noise from the crowd became a roar. The lights came on. But there was still hope … still a chance that he might appear again. And then there was the voice, saying …

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Hear George & Mary-Lynn tribute "The King" on The Bigg Success Show! Click the purple player to listen while you read: Play Now | Play in Popup | Download

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Elvis has left the building.

You’re probably familiar with those famous words. It made us think:

Elvis always knew how he was leaving the building. If he was an entrepreneur, he would surely know how he was leaving the business.

Learning from the pros

Bankers and venture capitalists know at least two ways that they’re going to get their money back (plus the return they need) before they invest in our business. Shouldn’t we know at least one? It’s one of the lessons we can learn from these professionals.

Why you should know how you’ll exit

In 7 Habits of Highly Effective People, Stephen Covey taught us to begin with the end in mind. We should know how we’re getting out of our business before we get into it.

Know your exit. Elvis did. Professional investors do. Yet many entrepreneurs never think about it.

That may be a reason why studies show that a majority of entrepreneurs don’t expect their business to kick in any money for their retirement.

It’s crucial to consider your exit because small businesses are highly illiquid by nature. Unlike shares in a public company, there is no marketplace where you can go to sell it immediately.

Another reason to know your exit – perhaps a more important reason – is that it your exit should be one of the drivers of your business strategy. How you plan to get out affects everything from how you structure your business, where you get money from as well as a number of other things.

3 common exit strategies

Sell your business outright
Just like selling a house or any other asset, you exit the business by giving up any claims to ownership in exchange for an agreed-upon price. On your way out, just say, “Thank you … thank you very much!”

Redirect cash flows
Let’s say you invest $25,000 to start a business. Let’s also assume that you make $25,000 after-taxes in your first year in business (after fully compensating yourself for your time).

Further, let’s stipulate that you don’t need that money for your existing business. Take that $25,000 out and invest it somewhere else.

You invested $25,000 and you took out $25,000. Essentially, you have no money invested in the business. Yet you still own the business! Get your money out and say, “Thank you … thank you very much!”

Recapitalize
You still own the business with this strategy as well. Let’s say that you invested $25,000 to start your business. You got your business started, built it up and are making money.

You may be able to go to your banker and borrow against your business. Let’s say your banker agrees to a $25,000 loan which you can pay back from the cash flows of your business.

It’s likely that you’ll need a good use for the money to get your banker’s okay. For example, maybe you have an opportunity to buy a piece of real estate that will house your company.

In essence, you’ve cashed out of your business because you now have that original $25,000 invested somewhere else. Repeat this strategy over and over until you have enough money to fund the life of your dreams. That’s bigg success!

Thank you … thank you very much for reading our post today.

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