Interesting read, but is anyone in the Crystal Palace listening?


Aug 22, 2002
Found this on the Op/Ed page from Yahoo! Is it any coincidence that Southwest is real similar to the dicussion of Nucor in the study? How long can this company keep performing if the employees are getting kicked in the teeth almost daily?
Poor leadership leads to layoffs
Thu Nov 21, 7:40 AM ET
Jason Jennings
The Business Roundtable last week announced the results of a survey of its
membership -- 150 chief executives of leading U.S. companies -- that had
one truly astonishing finding: 60% of these CEOs expect their total
employment to decline in 2003. In other words, the top leaders of three out
of five major firms believe the weak economy will continue, that they must
cut costs and that they have no choice but to fire people.
These CEOs have embraced the conventional
wisdom of Wall Street analysts: If you don't have
layoffs during tough times, your firm isn't lean and
mean, and you don't have a prayer of becoming
highly productive. But what if that conventional
wisdom is wrong?
Don't balance books on workers' backs
I recently completed a major research project on
the relationship between layoffs and productivity,
and I was surprised to discover that the world's
most productive firms almost never lay off
workers. In fact, they make an explicit promise
that their books won't be balanced through layoffs
-- not even during deep recessions. Instead, they
cut costs and boost demand in other ways.
After evaluating the finances of more than 4,000
public and private firms worldwide, my research
team and I settled on 80 that topped their peers
by every reasonable measure of productivity.
Simply put, these firms sold more, spent less and
made more profit per employee than their
competition, year after year.
The most striking trait these 80 productivity superstars shared was their
passionate opposition to layoffs, even when the economy was in the dumps.
Consider Nucor, America's largest steel maker, which manufactures rolled
steel and steel joists. Nucor has reduced the time it takes to produce a ton
of steel from 11 hours to 30 minutes -- while increasing its earnings for 30
years in a row.
More than 40 U.S. steel companies, stuck with high fixed-cost structures
that make it hard to be nimble, have gone bankrupt in recent years. Yet
Nucor continues to thrive. It pays its steelworkers $70,000 to $100,000 per
year, far above the industry average. And it has never gone through a layoff.
''When business is bad, as it's bound to occasionally be in a highly cyclical
industry like ours, the first thing to go is every executive perk and bonus,
followed by every plant manager and supervisor giving up theirs,'' says
Nucor's CEO, Dan DiMicco. ''Only then are the workers affected. We'll
reduce the workweek to five days and then four and, on rare occasions, even
three, but we don't lay people off.''
'Cure' causes more woes
Leaders such as DiMicco don't act this way for altruistic reasons. They
understand that, except in rare cases, layoffs create more problems than
they solve.
* When layoffs begin, workers become afraid, distracted and preoccupied
with their own financial security. It's hard for them to focus on doing good
work. Teamwork suffers as they spend more time covering their rear ends
and looking over their shoulders.
* Companies that routinely use layoffs to solve short-term problems risk
losing their most valuable workers to more stable environments. A great deal
of institutional memory also is lost.
* Firms that downsize when business is bad face huge recruiting, hiring and
training costs to refill jobs when demand recovers. Add the costs of layoffs,
including severance packages, and savings evaporate.
My advice to those elite CEOs of the Business Roundtable contemplating
layoffs: Focus on your shareholders' long-term interests, not the current
quarter's profits. Stop trying to impress the Wall Street analysts by cutting
staff at the first sign of a downturn. Inspire your workers to help you cut
costs and boost demand. And above all, stop talking about layoffs as if
they're beyond your control. Ultimately, layoffs are not caused by a weak
economy, or industry trends, but by uninspiring leadership.
Jason Jennings, a management consultant, is the author of Less Is More:
How Great Companies Use Productivity as a Competitive Tool in Business.
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I find the most interesting issue is about executive and management bonuses being the first to go at Nucor. At U, not only were they given out while the rank and file were asked to take cuts, but then they got the BK court to absolve the executives of legal liability from their decisions.
Very Interesting article. The keypoints being focused at Un-Inspiring Leadership....or those that refuse to think outside of the conventional realms.

Face it....the observations posed in this article are dead accurate!! Nothing to date , that has taken place at U is remotely inspiring....productivity enhancing...or anything that will lead to survival by design.
U's survival, if it should happen?.....will not be based on it's leaders ability to lead. This sad aspect replays more often than a bad movie on the TNT channel. U's survival...will rest directly upon those whom have always pulled this company through.....and have made sacrifices beyond belief to contribute too. Yes the Employee's!! Need an example..or a reminder? Where are the bafoons that allowed us to get into this fix? That's right....They have profited and flown the coop.

The observations about lay-offs creating un-needed distractions toward profitablilty are dead accurate. I am seeing examples of this taking place daily! Things have only gotten worse with each passing month, since the first furloughs started in OCT of 2001 The feelings of mistrust between employee's and management are indeed grave....and the mistrust between work groups and thier elected representation are little if any better. All in all....We have one heck of a mess to sort through......and sorting rather than displacing is exactly the point where the turn-around needs to take place. This of course will require Inspired Thought and Leadership to accomplish. This of course will allow CCY and it's mignons to really earn thier keep....and that's something that has not been seen in decades.