The Answer to Your Questions Is Probably Inside Your Company

There was a great story in the NY Times awhile back about the new co-CEO at Motorola, Sanjay Jha, Strategy of New Chief at Motorola Appears Poised to Pay Off. It explained:

Looking back, Mr. Jha said that Motorola was in worse shape than he knew when he took the job, largely because of a dysfunctional management culture that missed the shift in consumer preferences from phones intended primarily for talking to those that do nearly everything a computer can do. The company’s engineering talent, which had once developed great phones, remained intact, he said.

As luck would have it, one of those engineers, Rick Osterloh, grabbed Mr. Jha just as he stepped off the stage at that first town meeting in August 2008. Read more

Smart Companies Avoiding Lay-offs

There is an article in this morning’s New York Times that reports on a new trend in this recession: companies avoiding lay-offs by cutting back hours and benefits to their employees. This is happening across the economy, not just in traditional manufacturing. The Times reports:

A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor…The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics.

This is a very smart strategy in the knowledge economy where your intellectual capital is your “factory” and where firing a productive worker is akin to selling off your production lines piece by piece. Companies with a strong labor force can use their employees smarts to cut other costs (see my thoughts on this here) and will be much better prepared when the recession ends.