Chapter 8 – Keeping Your Teams Productive During a Downturn

The ominous economic drums are pounding out the rhythms of recession again, but no one – including us – knows whether we’re headed for a downturn; and, if we are, it’s totally unclear how serious the financial undertow will be.

Still, as responsible executives, managers and entrepreneurs, we have to be ready for a slowdown. And, from our perspective, that means making sure every team remains productive regardless of the economic cycles. It also means that “A” players must be bolstered and encouraged so they can continue to drive the best possible results even if business loses velocity.

All this is easier said than done, though. The anxieties that wash over us during an economic contraction are often overwhelming and frequently drown good decision-making in their wake.

There are clearly no right or wrong answers here, but in our view the best insurance against recession comes from year-round visibility into your organization – day in and day out clarity about which employees are doing what – as well as the ability to track specifics in a simple and ongoing way.

This transparent approach makes good business sense and can smooth out spikes in the economy.

It also offers three key benefits for your company.

First, it helps avoid over-investment during good times and allows you to cut more effectively during the bad times. Companies have a tendency to spend excessively – or even carelessly – in up cycles. If you have visibility into the objectives, tasks, ownership and dependencies for each department on an ongoing basis as a matter of course, you’ll understand what’s on deck, what’s committed and what’s completed, as well as which employees and programs are linked to budget items. Then you’ll have a better sense of how – or whether – to allocate future investment.

Second, it helps you retain the “A” players during both good and bad times. If you have visibility into what these strong performers are doing and how they work with others, you’re less likely to make a costly mistake that could cause them to leave during a downturn. It’s especially important that you understand the dependencies that team members have on “A” players so you can factor this in if you have to make a cut. You don’t want to trim people if it means that your “A” players become saddled with low-value work that bores them and bogs them down. You need to make sure your “A” players feel like they are working on high-priority projects if you want to hold on to them during a recession because these are the people who willingly embrace the challenge of doing quantities of quality work efficiently.

Third, it renders the political jockeys useless. If executive management has a clear picture of what is happening in the organization during good times, the decisions made during a downturn will be well-informed and based on accurate information – rather than exaggerated, distorted or biased employee assessments. This avoids the constant political jockeying, water- cooler gossip and otherwise unproductive behavior that festers during a tough economy because everyone is worried about job security, wants to look productive and tries to be linked to priority objectives.

Sales teams are a great example of how this works. When a sales person is fired, there is no drama, no water-cooler talk, and no political battles. Why? Because everyone knows that that sales person wasn't making his or her numbers. The metrics are right there – measurable and transparent to one and all. Unfortunately, most non-sales functions in a company operate with fewer measurable components, so performance can’t always be tracked in the same way.

Despite our current knowledge, we haven’t always been able to track performance effectively either. But we’ve learned a lot from our miscalculations. In good times, someone would present us with a great idea and we wouldn't necessarily know – across the board – how that idea stacked up against others already in progress. When the bad times hit the dot com world, we downsized from 800 employees to about 300, but it was tough to know exactly which people contributed to the highest impact / highest priority functions of the business. We just didn’t have the right tools to offer us insight into our operations.

The result: a lot of manual effort and plenty of judgment calls. During the first quarter of 2001, for example, we spent several 18-hour days laboring over a major workforce and expense reduction that had to be implemented. Fortunately, we ended up keeping our major players, even though they had to assume twice the responsibility. But no matter how we sliced it, the downsizing was definitely dramatic. And when we looked up from our spreadsheet, we’d gone from 820 people to just under 400.

We saw the true impact our decisions had on productivity several quarters later, when we went back to the chopping block and cut another 80 people. It turned out that our initial perspective on the structure and nature of things wasn’t clear – or 100 percent right. There was still a lot of room left to reduce costs even further, without materially impacting the company. In many areas, things had actually picked up because the inefficient parts of the operation had been cut away and – thanks to the sharp, substantive people who still worked with us – simpler, better working methods and processes had been developed to accomplish the same things. If we’d only had real visibility into our business, we might have been able to see all this upfront and anticipate the newly discovered productivity sooner.

When we need this kind of insight and intelligence about our company, we often turn to Vince Lombardi, the legendary coach of the NFL’s Green Bay Packers. Lombardi was a master of management – even though he probably didn’t think a lot about business cycles. He understood his teams well and knew how to make sure they were always productive and effective – no matter what the game conditions were.

In his book, for example, Lombardi talks about how the tackles would come off the field with tremendous intensity after each game; they knew the blocking assignments they had missed and that they would be measured and held accountable in a transparent team meeting that reviewed the game films frame by frame the next day. Indeed, Lombardi's methods of performance tracking were measurable, consistent and reliable. There was absolutely no miscommunication around who did what on the field – it was all right there on the screen whether the team was winning or losing. Success and failure was clearly etched in each player’s mind, and it was understood that those who pulled their weight got credit and those who needed improvement practiced harder.

To paraphrase Lombardi, you play each and every game with passion and precision – and then you measure to see if you delivered on the field or not. That’s great advice for executives, managers and entrepreneurs confronting the possibility of recession today.