Interview with Dave Ulrich
Interview by - Pradip
ICMR (IBS Center for Management Research).
Dave Ulrich is Professor of Business Administration at the University of
Michigan. His teaching and research addresses the question: how to create an
organization that adds value to employees, customers, and investors? He studies
how organizations change fast, build capabilities, learn, remove boundaries, and
leverage human resource activities.
He has consulted and done research with over half of the Fortune 200.He was
editor of Human Resource Management Journal (1990-1999), and has served
on the editorial boards of four other journals. At present, he is on the Herman
Miller Board of Directors and is a Fellow in the National Academy of Human
Resources. In 2001, he was ranked by BusinessWeek as #1 management educator and
guru, and in 2000, he was listed in Forbes as one of the "world's top five"
He has published more than 100 articles and book chapters and 12 books,
including Why the Bottom Line Isn't: How to Build Value Through People and
Organization (with Norm Smallwood), Results Based Leadership: How Leaders Build
the Business and Improve the Bottom Line (with Norm Smallwood and Jack Zenger),
and Human Resource Champions: The Next Agenda for Adding Value and Delivering
Is 'lay-off' a solution or a problem - Please give your
own views with explanations?
Lay offs are both a solution and problem, depending on the context and how they
are handled. When managers use lay offs as an excuse for poor planning and poor
management of resources, they create problems. Employees lose trust in
management, become cynical, and the firm enters a vicious cycle of failure. But,
when layoffs are strategically conceived, they may be used to reduce costs and
focus the firm on how to organize to compete to win. Strategically using lay
offs means that leaders figure out where they are taking the firm, then allocate
resources to move the firm forward. At time this might mean removing employees
in some areas and hiring more in others. Also, the way management deals with lay
offs send a signal to employees about how important they are.
Should the companies in today's highly
competitive world go for 'lay-off' or should they look for some other
There are often many steps one can take before resorting to lay-offs.
These include: retraining employees, relocating employees, contracting
employees for work, hiring subcontractors who are a buffer workforce,
outsourcing some work and then securing long term employment for employees
who are insourced, helping employees find other job opportunities, sharing
a short term decline in employment, etc. However, at times, lay offs may
be required and if they
are well targeted and well accomplished, they can help the firm go
Some companies 'lay-off' employees saying that it will help them
incur profits in the near future. How far do you think it is true?
Doing lay-offs along will not guarantee profits in the
short or long term. Layoffs often cost money in terms of relocation costs,
downsizing costs (placement costs), and loss or morale costs. However, if
lay offs are done well they can help a firm manage their costs.
Doing lay offs well means informing employees about why the
lay offs are occurring so that there is no surprise, have a fair and equitable
mechanism for evaluating employees so the best performers stay, being
transparent and up front when the lay offs occur, having management answer
questions, helping employees find other opportunities, spending a great deal of
time with employees who are not laid off, and reorganizing work after the lay
off so less work is done. When these activities are done, lay offs can help
firms gain performance short and long term.
Any other point, example or personal experience you want to add/share with
Any particular firm you would like to mention in this
Dell computer did a marvelous job with lay offs when they did it boldly and
honestly. The management team informed people about why they were doing lay offs
and then had a fair process for doing so. Employees who were laid off were given
the opportunity to come back to Dell when it grew again. They were treated with
respect and dignity. Those employees who stayed were also given clear
opportunities to change how work was done. Dell has maintained employee
credibility throughout this process.
One of the largest dangers of lay offs occurs when they go slowly. We don't want
to cut the tail of the dog one inch at a time. When layoffs need to occur,
leaders need to move boldly and quickly. They need to ensure that lay offs are
not just a way of life. Another danger is announcing layoffs 3 or 4 months out
because a large percent of the employees will think they are going to get laid
off and they will become cynical and less productive. Lay offs are difficult,
but sometimes necessary.
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