Most Cost-Cutting Layoffs Fail Because Executives Forget a Key Factor: Even When Letting People Go, They Need to Motivate Their Employees

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Engaging Employees is Not Just for Good Times - Energized Employees who "Get It" are Central to Successful Cost Cutting Even in Recessionary Times, Leaders Must Motivate, Not Mandate, and Win Employees' Hearts and Minds - Cuts Should Work with the Culture and Can Even Enhance It Expert Available for Interviews

Too many executives think that firmness, discipline and savings are the key to cost reduction - we may soon see the 2008 version of 'Chainsaw' Al Dunlap

Cost-cutting efforts and employee layoffs are already a feature of the 2008 recession and will probably be a reality for businesses for some time to come. But most cost-cutting layoffs will fail because executives forget a key factor: Motivation. Even when laying people off, leaders need to motivate their employees.

Engaged, energized employees are key to cost-cutting programs and can make or break layoffs and other cost-cutting efforts, according to Jon Katzenbach, founder and senior partner at Katzenbach Partners and Paul Bromfield, principal at Katzenbach Partners, a management consulting firm focused on helping large companies improve organizational performance. Katzenbach and Bromfield are the authors of "Engaging Employees in Recessionary Times," a new commentary piece that demonstrates that motivating, not mandating, employee behavior can make the difference between success or failure in cost-reduction programs.

Said Mr. Katzenbach, "In hard times, it's even more important to have a motivated workforce. Motivated employees will deliver real cost savings, and carry out a cost reduction program over the long term. If cost-cutting initiatives are 'mandated', the result can easily be 'phantom savings' that are never realized. Executives need to work with, not against, the organization's culture."

Mr. Katzenbach and Mr. Bromfield are available for interviews, during which they can discuss:

-- How motivation can make employees "proud to be thrifty." Even in the face of downturns and layoffs, employees can be persuaded to join in to help save the organization. The trick is to engage employees emotionally and make thrift a part of the culture. Companies like Southwest, IKEA and Amazon have made thrift a central focus of the organization and a point of pride for staff.

-- Why mandating doesn't work, and motivating does. "Too many executives think that firmness, discipline and savings are the key to cost reduction - we may soon see the 2008 version of 'Chainsaw' Al Dunlap," Mr. Bromfield says. But this top-down approach creates fearful employees who focus on protecting themselves, not on moving the organization through difficult times.

-- The central role of frontline "pride builders." In every organization there are "pride builders" - demanding frontline managers who are sometimes unconventional, but who get the most out of their teams. Executives need to identify and enlist them as leaders in the cost-cutting effort.

-- Questions that leaders need to ask, including:

"While it's true that you can't motivate your way out of a recession, an organization will have a better shot if it can get employees to make a positive emotional commitment to the challenge," Mr. Bromfield says. "If you motivate people, you will get out sooner, and the benefits will be longer lasting."

For a copy of the commentary, "Engaging Employees in Recessionary Times," or to schedule an interview with Mr. Katzenbach or Mr. Bromfield, contact Alexandra Corriveau of Sommerfield Communications at (212) 255-8386 or

About Katzenbach Partners

Katzenbach Partners LLC works with leading global companies to achieve breakthroughs in organizational performance. The firm applies new thinking about how organizations work, serving companies across industries to shape strategy, improve operations and effect change. Katzenbach Partners is building a different kind of consulting firm, one that integrates strategic problem solving with pragmatic insight into people and organizations.

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Alexandra Corriveau
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