Lately, Mr Powor was seen as the most powerful and feared person in this particular unit of a famed multinational company. He was the vice president (human resources) of the unit- quite an upstart executive and recently recruited from outside. Why was he becoming more and more important? You will get the answer soon after you read the next few paragraphs.
The unit’s local management and corporate management of the company had dismal record of managing this unit. The unit was just not breaking even despite all the mumbo-jumbo things the company management was trying, forget about making any profit. The company, as a whole, was majorly in the sellers’ market except for a few units spread in different countries all over the world. In these units, including this particular unit about which we are writing this story, the product lines presented a challenge from competition and the top and the senior management just did not seem to have any grip over the situations presented in this kind of buyers’ market and tough competition.
Easiest of the solutions which most companies use to get out of any problems faced by the company is to lay off the employees. There are various names given to this lay off procedure: some management calls it downsizing and others who position themselves as more scientifically refined management, nowadays, call it as an ongoing process of rightsizing. In stark reality, both mean firing the people, the same people who contributed pretty decently all along and who were promised great careers in the company at the time of their recruitment (i.e. at the time of selling the jobs to them and luring them into the company). Perhaps, many of them left a better job to pick up the new one because of the promises made to them.
Presently, Mr Shomy, the executive director, the number one of this particular unit, called Mr Powor at his residence. A part of his residence was used as his home office for the company’s business. Being invited for a meeting at his home office was seen as a prestige point among various executives of the unit. It was well known that whosoever was invited at Mr Shomy’s home was about to become his pet or favorite executive and that executive was likely to be showered with lots of authority soon. There used to be competition among the executives of the unit to do something or anything to please the boss which would trigger this kind of invitation.
So, Mr Powor met Mr Shomy at his home office. As he was entering the premises of Mr Shomy’s residence, he saw the unit’s senior vice president (manufacturing) Mr Lenny, the number two of the unit, drive away through the other gate of the premises.
The meeting between Mr Shomy and Mr Powor started over the drinks with small talk and soon Mr Shomy took Mr Powor into confidence, “Mr Powor, you are aware that our unit has a critical objective of breaking even and registering some profit by this year end. I have worked out among other things, some interventions to achieve the same. I want you to take charge on the HR front. This is the time to test your expertise. You should show me a reduction of 30% in unit’s payroll in next one month. Mr Lenny and I have drawn up a list of eight executives who are not contributing much in the organization. Their absence from the organization, thus, does not matter. So, you can work to see them part with the company. You too can examine on your own if Mr Lenny and my assessment is correct about these eight managers. If you feel the same way as we feel, you can go ahead with these eight persons without reverting to me. I will support you fully and I am giving you all the authority. But show me the results. One major consideration in your appointment was your expertise in downsizing in your earlier assignments. But, I do not want any trouble. Can you handle it on your own?”
Mr Powor was delighted to be taken in confidence by the boss. He assured the boss, “Sir, leave it to me. I will work it out without any problems.”
The meeting was over and Mr Powor came out of Mr Shomy’s office quite satisfied with himself.
Within a week, most employees were gossiping the ouster of a senior manager on some charges of a framed up corruption on him. In next two days, the employees were talking in a hush hush manner about another incident of another senior manager being kicked out. The reason was not known. Some said, “Oh, that manager had a fight with Mr Powor in his office and there was a show down. And the manager was advised to resign or the matters could go worse for him.”
Mr Powor, having achieved these initial successes, became more bold and confident. It was a long weekend and day prior to it; six managers were stopped at the security gate (the entrance of the unit) by the security department and were asked to wait in the security department’s office. Chief security officer and Mr Powor were seated in the office of chief security officer. They had invited the unit’s chief medical officer (the doctor) to join them and so, he too was there. Each manager was called inside the office one by one. And then, Mr Powor said to each one of them, “The management has decided that your services are no more required by the organization and either you put in your resignation letter or here is the pink slip. We are giving you one month’s pay in this envelope towards the notice period, take it and you need not have to attend the office from now on. We wish you good luck.”
After this drama was over, chief medical officer asked Mr Powor, “Why was I required to be present in this meeting?” To this, Mr Powor clarified, “In the event of any shock or trauma to any of these six managers due to their sudden removal from the organization, medical attention would have become necessary. After all, we are a huge and reputed multinational company and cannot take any chances. I always take care of such vital things. Thanks for coming.”
By laying off eight well paid managers in the manners described above, Mr Powor was satisfied that he had achieved the target of 30% reduction in the payroll of the unit. He decided to present his report to the executive director, the first thing after the long weekend.
Mr Powor enjoyed that weekend the most in his life. After all, he was a very important member of the top management team now, being very close to the executive director and so, even sky was not the limit for him as far as growth in this company was concerned. He whistled and hummed.
With a cheerful mood, Mr Powor drove to his office the first day morning after the long weekend only to be stopped at the security gate by the security guard. Mr Powor was offended badly but composed himself and asked, “What’s the matter. Is there any trouble in the plant?”
The security guard said, “There must be some. I have been instructed that there is a top level meeting at the security gate office and your presence is required in it.” He then escorted Mr Powor to the office of the chief security officer. Mr Lenny, the senior vice president (manufacturing) was already present there.”
Mr Powor asked, “Where is the boss (meaning Mr Shomy, the executive director)? Isn’t he coming?” To which Mr Lenny crisply said, “No. Just you, the chief security officer and me.”
They sat around the table. Without wasting even a second, Mr Lenny spoke, “I have to communicate to you, on behalf of the management of the organization that your services are no longer required in the organization. The local news paper people have started enquiring about the incidents of sudden recent departure of eight senior managers. We could get a very bad publicity and our management has come to conclusion on deeper investigation that you handled the entire thing in an absolutely messy way. We will now tackle the issue with the press but we do not wish you to be around. Here is twelve month’s severance pay, as a very special case as against the normal one month’s. Please go back home and pack up and leave the town with your family within couple of days. You will not meet any of the news paper guys.”
Mr Lenny handed over the envelope containing the money to Mr Powor and advised the chief security officer to ensure safe arrival of Mr Powor to his house.
Related Books
1. "Sensitive Stories of Corporate World" (available from Amazon, get it online as a paperback or an eBook)
Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World" available online from Amazon as an eBook as well as a printed book.
2. "Sensitive Stories of Corporate World (Volume 2)" (available from Amazon, get it online as a paperback or an eBook)
Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World (Volume 2)" available online from Amazon as an eBook as well as a printed book.
Other Related Reading
For everything you wanted to know on building leadership and management, refer Shyam Bhatawdekar’s website: http://shyam.bhatawdekar.com/
Also, refer our High Quality Management Encyclopedia at: http://management-universe.blogspot.com/
For “out of box thinking” articles by Shyam Bhatawdekar, refer: (Out of Box Ideas) http://wow-idea.blogspot.com/
Read other blogs of Shyam Bhatawdekar at: (Home Page for Writings of Shyam Bhatawdekar) http://writings-of-shyam.blogspot.com
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