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Interview with Dave Ulrich

ICMR India ICMR India ICMR India

Interview by -  Pradip Sinha,
Associate Consultant,
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" business coaches.

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 Results.

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 alternatives?

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 forward.

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 particular firm you would like to mention in this context?

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.

Any other point, example or personal experience you want to add/share with our readers?

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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