Before And After The Layoff, Use Open Innovation And Open Talent Strategies To Build Your Future Workforce

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As a recent article put it this way: “After a banner year for tech, layoffs are here.”

Companies are taking advantage of a troubling economic times to reduce cost in part with layoffs. Few companies have been spared, from Robinhood to Microsoft, Ford to Nike, Exxon to Apple. Meta is planning to reduce by 10%. As a key investor in Meta put it, “Like many other companies in a zero-rate world—Meta has drifted into the land of excess—too many people, too many ideas, too little urgency. Meta needs to get its mojo back.”

How effective are layoffs in helping companies get their mojo back? Are there creative and strategic ways of approaching workforce changes in conjunction with the layoff? And, how can a more flexible, blended, workforce and open innovation approach contribute?

Let’s start by remembering that layoffs are a blunt tool. They eliminate people but savage employee engagement. Layoffs have an outsized negative impact on morale and trust for obvious reasons. Expect lower productivity, more absenteeism, and greater attrition by those whom the company would rather not lose. Remember, recession or not, top talents have options. And, for those who without options, disengagement is likely to spread fast as the company loses reputational luster by its remaining employees as a former star growth company.

Consider a recent Bloomberg report on Twitter :

“With Elon Musk’s deal to buy the company set to close in one week, employees are bracing for layoffs — which Musk has been telling investors could slash 75% of staff, according to people familiar with the matter. That pain will coincide with likely changes in leadership, priorities and values under Musk.

“This week was also a “focus week” at Twitter, periodic week-long stretches where employees take fewer meetings so they can get more done. Many staff members said they used the extra time to look for other jobs, as well as to consult personal lawyers about severance and stock compensation.

“Concern is growing that the stock awards will not be paid, the people said. .. Some employees are discussing and researching labor laws to ensure they get the correct type of severance, said another person familiar with the matter, who also asked to remain anonymous discussing private information.”

So, how might companies more creatively address financial needs without doing massive harm to employee trust and investor confidence? And, what role might open talent and open innovation play? Here are strategies other companies have used successfully:

Tiger Teams for Innovation. Google typically give employees 60 days to apply for other roles if jobs are cut or projects cancelled. Why not kick it up a notch and offer affected employees the chance to team up to pitch a new business idea or propose a plan to grow a new capability? Some employees won’t be interested, but others will. And these “tiger teams” provide the company with another look at talented employees, and offer the potential for solutions to challenging problems, and new products or services of value to the company.

Better or Bust. Some years ago, Exxon Mobil executives told employees they were shutting down a particular oilfield and laying off employees, but agreed to keep the team together if productivity improved. With help from HR consultants at RBL.net, local management hatched a plan that actively engaged employees. It worked. Moreover, the team continued to enjoy high engagement as a result of a more inclusive management style.

Your Layoff is My Profit Center. Many years ago, Honeywell Bull sought help. They had 500 power systems engineers in US operations, and now needed different capability. The problem was solved through a layoff and retraining, but they might have had the makings of a new company offering design and build services in power systems. Is your layoff candidate a “carve out” business in disguise? Revelio Labs, a very successful young data science company, was founded after a RIF in IBM. Pixar was a minor part of LucasFilm before it became a multi-billion dollar entertainment star. Bain Capital was a small division of Bain Consulting. And so on. Looking for big win/win opportunities like these should be part of the planning process.

One Plus One Equals Three. Arrow Electronics and Freelancer.com banded together. Arrow brings to the collaboration a large volume of high-quality, high-value projects with demand for innovation and talent. Freelancer brings the talent. Experfy.com, a marketplace for A.I and machine learning experts, has joint ventured with Deloitte in supplying A.I. expertise both to Deloitte operations internally and when clients require A.I. skills. And, the list goes one. The goal isn’t simply a soft landing for employees. Where thoughtfully constructed and successful, it creates an additional revenue stream and opportunity for individuals and the company.

Help Them Find Their Feet. Wearerosie.com did this during the pandemic. Clients who’d lost their job were invited to join the wearerosie.com freelance platform and participate in the activities of the community. It gave them a virtual home base, education to help them kickstart a temporary or longer term freelancing career, colleagues to learn from, administrative support, and often the chance to team up with others when going after a larger project opportunity. Want to guess how many of these individuals support and actively recommend Wearerosie.com?

Stocking the Pond. The chances are good that your company will want to create a proprietary talent platform. Over 50% of HR leaders see value in having ready access to selected freelancers according to a recent survey by MBOpartners.com and emergentresearch.com Unilever has a prop platform. So does Phillips. So does Shell. Most however are not very effective because relatively few members get sufficient project opportunity to make it worthwhile financially, and these platforms are rarely engaging to the freelancer. Stocking the platform with known talent – say from the layoff – and promising a base level of work could be powerful.

Rethinking the Workforce. This won’t offer immediate benefits as might some other strategies described above. But, we know the future workforce is different because technology has disconnected work from geography for many professions. The new generation of worker seeks a hybrid relationship and both locational and schedule flexibility. And, professionals have moved away from the notion of career long engagement in a single organization. Careerists these days are increasingly project oriented, not role or career, and see the industry as the unit of career rather than any specific organization. There are a few organizations that are thinking beyond the layoff and asking how a more efficient, engaged, and change-ready workforce can be constructed. For the most part, they are considering variations of a flexible, blended, workforce that seeks the best combination of internal and external expertise in key projects. There are also more sources of best practice on change planning. For example, Open-Assembly.com’s Center for the Transformation of Work brings together corporate leaders, academics, and experts in the creation of open talent work systems.

Unilever is among the best at taking the long view in staffing and resource planning. Here’s what they say: “Traditional employer-employee dynamics are no longer fit for either individuals or businesses … Older and more experienced workers are increasingly choosing to work for longer; and younger people are after meaningful jobs with more flexibility. And Covid-19 forced us all to think differently about how and where we worked. So we’re pioneering new ways of working to create a flexible environment that values openness and adaptability, builds resilience, and elevates skills and performance.”

So, what do that mean for layoffs? Before turning to layoffs, smart companies actively seek more creative ways to solve cost challenges. A flexible, blended, workforce avoids much of the pain of layoffs by building in the ability to pivot quickly and cost efficiently. But, companies not yet there can still do better. Being transparent with employees makes a difference. Seeking alternatives to RIF makes a difference. Sharing the pain makes a difference. Involving employees in finding solutions makes a difference. And good planning about what comes after layoffs makes a difference.

Viva la revolution!



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