How to fire talent without the drama
The headlines tell the story: 'Merck to cut up to 13,000 jobs ... HSBC to trim 30,000 jobs in cost-cutting move ...RIM to cut 2,000 jobs in bid to slash costs.' Makers of everything from pharmaceuticals to loans to BlackBerries are shedding employees.
Gary Burnison is chief executive of Korn/Ferry International, an executive search company more identified with helping clients hire than fire. But he has some advice - gained from personal experience - for firms delivering such bad news to staff: it is better to do it in one hit than drag it out.
Burnison earned a bachelor's degree in business administration from the University of Southern California and worked as a partner in global accounting firm KPMG from 1984 to 1995. He has also held top positions at global securities firm Jefferies & Company and became chief operating officer of a technology-consulting company for several years before joining Korn/Ferry in 2002 as its chief financial officer.
Burnison assumed the additional role of chief operating officer in 2003. Four years later he became chief executive of Korn/Ferry, which has 2,500 employees and operates in 40 countries. Since then, Burnison has had to handle his own firm's layoffs during the 2008-2009 global financial crisis. He sat down with the Post recently to share his views on how to procure talent - and let it go.
You have just penned a book, No Fear of Failure, on how top management should handle crises. What are the most common mistakes executives make in a crisis?
When we look at great business leaders there are common qualities - authenticity, humanity and being a lifelong learner. These are the three things we generally see in the executives profiled in this book.
There are some multinationals going to the emerging markets and they assume what they are doing in their home market would work well in the new market. But, in fact, that's by far the biggest mistake because of culture shock. This isn't just about Western companies going to the emerging markets; it's the same with Chinese companies going to the US and [other] Western markets. When companies go overseas, such as US retailer Wal-Mart going to China or Japanese carmaker Toyota going to the US, they have to adapt to the local culture.
How did these leaders cope with the 2008 global financial crisis?
Every crisis has its opportunities. Take Korn/Ferry as an example. We had to lay off some staff during the crisis. Back in the summer of 2007, I thought the economy was turning. I asked our staff to prepare for the volatility of the markets.
Then when the crisis came in 2008 and 2009, it was in fact a good opportunity to buy at a good price and to recruit talent. We made three acquisitions during the crisis. This strengthened our brand and market position.
Trimming staff is a common method to cope with economic downturns. What's the best way to go about doing lay-offs?
Never do it slowly, as the worst situation is to create uncertainty. Better to do it quickly rather than allow rumours to spread for several weeks around the office.
It should be done with humanity. People will get angry if they or their friends are being laid off. Explain to the staff why it is necessary. Nobody likes lay-offs. You have to explain that to keep the jobs of 100 people, the job of one may have to be sacrificed. It is terrible but it helps the company to survive.
What type of talent are most companies looking for today?
Since many companies are now looking to expand in the emerging markets, the No 1 trend in executive search is that clients are looking for people who can handle cross-cultural issues. Those who have multilingual skills, who can understand different cultural issues, and who have worked and lived in other countries are the most sought.
This is in line with companies looking at opportunities outside their home countries - such as Chinese companies looking to invest in Brazil, while US and European firms want to invest in India or China.
And what about company directors? What traits do they need these days?
In terms of boardroom levels, companies focus on three elements: board members must understand risk and know how to manage risk; they need to have strategies; and they also need to be aware of succession planning.
And no matter how good and how experienced you are, you need to be able to learn.
The PepsiCo chief executive, Indra Nooyi, is an immigrant in the US and she said a chief executive should adopt an immigrant mentality - that is, your job can be taken off you at any time. As a chief executive, no matter how senior you are, you always have to be able to learn.
What type of person does it take to be a successful headhunter?
People who understand the strategies and the changing markets. Most important, it takes a person who can read human behaviour. Companies hire for what you know but fire for who you are.
The amount in cost savings, in US dollars, that UBS said last month would be generated by cutting an undisclosed number of jobs