The Hardest Cut

I attended the NACS SOI conference two weeks ago (more about that in next week’s blog).  While there I had a conversation with another business owner.  During the conversation we talked about the ups and downs of owning and, more importantly, being responsible for the life of a company.

It is often easy to think of a company as a monolithic business – a faceless corporate entity that is emotionless and has no personality.  But this is not true.  A company is made up of the people who work there.  Each person has a responsibility that relates to other people in the company and, together, we all combine to form a team or, if we are lucky, something close to being a family.  There are personal relationships that are created within the confines of a company and people learn the tricks of how to be together and overlook others faults for the sake of the organization as a whole – just like in a family.  In fact, to extend the metaphor to the breaking point, you often hear about close business relationships such as “office husband” or “office wife”.

When things with the company are going well life is good. The company grows, new jobs are added, and, one hopes, the benefits and advantages are shared amongst the people within the company as a whole.

But when things aren’t going so well life can become difficult.

The hardest business thing I have ever had to do is to let people go.  I never lose perspective that it is someone’s life and livelihood that I am dealing with.   How will that person be able take care of their family, find new employment, or maintain their healthcare?  These types of questions consistently haunt me when such a move has to be made.

The fact that a termination is based upon performance issues doesn’t make it any easier.  The performance issue justifies the action but does not mitigate the suffering.

But the worse situation is where terminations have to happen because of financial reasons.  Not only am I disrupting someone’s life but it is because I, as the manager or owner, have failed to provide the company with the financial resources necessary to maintain that position.  The actual reasons may be external – new competition, loss of customers, the closure of a road in front of a store – but all of our team members rely on each other and they rely on me to provide business and income to protect their jobs.  Not being able to do so is heart breaking.

When we’ve had financial problems, as many have done in the last few years, my goal has always been to try to save as many jobs as possible.  I would rather spread the pain amongst everyone with an across the board pay reduction than cause someone to lose their job.  The goal is that the financial stress is short term and that things can return to normal in a few weeks or months and the challenge (and hope) is that everyone can share the burden and help us move on to the next opportunity.

But taking a pay cut is not an easy option.  Most people live to the maximum of their income level.  Some people live beyond their income level.  With the possible exception of the super rich, any cut in pay requires big sacrifices to be made – there are mortgages or rents to be paid, schools to be paid for, health treatment costs to be covered, utilities, clothes, gas, and car payments – in addition to putting food on the table.

These are never easy choices and I lie awake at night thinking about them and the consequences on each person that is affected.  Some times life is not fun.