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Affluent Christian Investor | October 23, 2017

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Get Efficient at Managing People, or You’ll Have to Get Efficient at Laying People Off

Unemployed Miners at Scott's Run, West Virginia (1938)

Unemployed Miners at Scott’s Run, West Virginia (1938)

The degree to which ‘professional management’ – the three-headed monster of the publicly traded companies, elite academia, and Wall Street — has dehumanized business is appalling; and the cavalier manner in which they go about it should cause good people everywhere to be alarmed.

In The Heart and Soul of Manufacturing I wrote,

Understanding the business through the accounting system cannot help but to dehumanize the business, which flies in the face of everything people of faith and principles believe in.  Lean companies bring out the accounting system, overhaul it so that it reflects the way they want to manage the business, then kick it into the background and manage the business directly, relegating accounting to a side issue – numbers that are occasionally helpful but not central to decision making.  In doing so they re-humanize the business.”

To see such dehumanization in action, read the remarks of Claude Mongeau, CEO of the Canadian National Railway.  The volumes of some of the commodities they haul are down, but Mongeau assured Wall Street, “It’s how fast and how efficient you are at reacting that makes the difference.” And what is Mr. Mongeau so efficient at?  CN “Temporarily laid off 600 employees in the second quarter to help pare down labour costs.”

Layoffs happen all the time, of course, but I have to admit this is the first time I have read of a CEO crowing about how fast and efficient he is at it.  The irony is striking… if CN were faster and more efficient at hauling freight perhaps they wouldn’t have to be so fast and efficient at laying people off.

That these are 600 very real, flesh and blood human beings seems to have missed everyone involved… the CEO, the bank people who commented on the news, even the writer who reported the story.  They all seem completely oblivious to the fact that these are 600 people with families and mortgage payments to make on homes they have worked hard for and long dreamed of owning.  These are 600 parents who are trying to put money away for their kids’ education and plan trips to Disney World.

There may well be times when laying people off is simply unavoidable, but to dash the hopes and dreams of all of those people without a second thought – people who conjured up those dreams based on confidence that the management that hired them knew what it was doing – is simply incredible.

And to my mind, it is simply unnecessary and unforgivable.  When we laud management for actions that are completely devoid of the most fundamental elements of human kindness we have sunk to a shameful level.

Bill Waddell has earned a reputation for defining the leading edge of Lean Manufacturing. With over thirty years of manufacturing experience, Bill is a global supply chain expert and one of the original Lean Accounting “Thought Leaders”. As a speaker, Bill has addressed various Professional, Academic, and Military groups on five continents and has taught in virtually every leading manufacturing forum in the United States. Bill is the author of such books as Rebirth of American Industry, Simple Excellence, and his newest publication: The Heart and Soul of Lean Manufacturing.

 

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