It was April 12, 1996. My day that has lived in infamy. I went to work early as usual, though, like the past several weeks, I had been up all night trying to see how to salvage the company. Because of a sudden world-wide shortage in product and a bad decision on my part, the company had lost nearly a million dollars in the space of a month.
It was just 5 short years since I started the company by myself in my basement. Sales had doubled every year. We were sitting at five million in sales with a great new idea and a million dollars in advertising placed and running to ensure our success. We had 45 excited, exceptional team members ready to soar into the next segment of growth and ready to hire many more. We were on our way to doubling sales this year also and possibly tripling. I literally had an offer every three weeks from some competitor or investor to buy the company for two-to-three times its value. Things looked really good.
Then, the bottom fell out. We couldn’t get the larger quantities of product to sell that we had planned—we couldn’t even get what we were getting.
On that fateful morning, I had assembled the entire team in the conference room to share the bad news. We couldn’t afford to keep all of the team, and the remaining staff would have to take serious cuts to survive—if it was even salvageable. I had to cut 35% of the staff and my heart felt like breaking.
After I shared the news, I broke down and fell to my knees. Here were my friends, my family, people that had followed me into the battle to build something from nothing. I had let them down, and for many of them, I had to let them go. I wept there on my knees in front of my family and friends. I had failed. They gathered around me and prayed for me. I wept some more.
Failure is an event, not a person (Zig Ziglar).
Then the most amazing thing happened. Those that I let go had an incredible attitude about them and were thankful for the opportunity. The opportunity? They went about finding new jobs quickly so as not to be a burden on the company. What???? Those that remained had a renewed energy to find a solution, a way to increase sales in spite of the problem. What an incredible team. What an amazing team.
The moment had been so powerful and so renewed my strength, that I committed then to do all that was in my power to work it out. We determined NOT to go into bankruptcy. We also decided to call every one of our vendors and tell them of our troubles and ask them to work with us. We called about 80 vendors and told them of our plight and pleaded with them to work with us and promised them we would pay our debts to them no matter how long it took.
They were all willing to work with us. Every last one. Some begrudgingly, but still willing. It took almost five years to pay it all back, but we did. And it made us much stronger. I remember one vendor to whom we owed the most money. He was also the one to receive the final payment. He was so thankful and couldn’t believe any company would work so hard to meet its obligations and not file Chapter 11.
But the most memorable part of the whole situation happened just after the meeting with the team on that painful April morning. One of the team members asked to speak with me and we shuffled off to my office.
His words will always be with me. He looked straight at me and said with gentleness, “It doesn’t have to be this way.” I asked him what he meant. He said that we don’t always have to follow the same principles of a RIF (reduction in force) that the world follows and just because we are hurting we don’t have to dump part of the team. Granted we have too many people for the current sales and we need to adjust, but there’s got to be a better way to work with the team to make this a win-win for all.
I knew he was right. Leadership is about people—always has been, always will be. I had been through a dozen RIFs in my lifetime before I had my own company and they all followed this pattern—
• Financial trouble of some kind not being dealt with properly
• Plan to reduce team members and other expenses to fix it
• Take buyouts and/or begin RIF
• Struggle with remaining team/workload
• Repeat cycle in two to three years
It’s a mentality—a mindset. It’s almost like it’s planned obsolescence. “If we get in too deep, we can pull the RIF card and get back to normal. It can become a bean counters savior when all we live by are the numbers.
But ‘normal’ never happens. We loose additional people because they are afraid of who’s next. We loose some of our best people because they have the ability to go elsewhere. In some ways we are starting over, or are at least knocked back several steps.
Plus, our hearts are hurting. The leaders on the Titanic were not simply throwing people overboard so they would be off the ship—they were placing them in lifeboats so they had a better chance of survival.
I’m not saying don’t reduce your force—you may need to. But the how is crucial. The need for an uber candid/honest spirit is mandatory. Rumors, truths, half-truths, and more are going to fly anyway. You cannot keep it a secret. But the way you work with people speaks volumes on your leadership ability and experience.
How much more should we be accommodating and kind to those in the church! We are the examples of Christ and the stewards of His bride!! Treating God’s bride with anything less than purity, honesty, integrity, and kindness is neither safe, nor wise.
I offer this methodology as a better way to handle a financial crisis / reduction in force—
- Pray, pray, pray.
- Get the best facts on your financial position including as many years of historical data as possible so you can understand trends. Granted you should have been watching this monthly and dealt with this on a day-to-day basis instead of all at once. But you are where you are.
- Pray, pray, pray.
- Find a mentor or hire a coach (if you don’t currently have a mentor or coach, that could be part of the problem). You need positive accountability from someone you can respect who loves Jesus immensely.
- Pray, pr… you get the idea.
- Bring in a church leadership/problem solving expert for a week and get their input. I know several. You may need to hear something that someone from outside your church has to say—meaning you are too close to it, or are just not willing to hear it.
- Fix the problem. Expenses are never the problem—lack of sales (or growth) is. Selfishness may be the issue and hence, too much spending for pet projects. What needs to be fixed so this doesn’t happen again in the future? Be ready to confess this and share it.
- Gather the paid and lay leaders, and the influencers in the church and share the need and get all input/information into the pool. Take whatever time is needed to answer every question. Every question.
- Devise the plan with the leaders/influencers.
- Gather the congregation and share with them.
- Plan on speaking with anyone and everyone who wants to talk to you about this—every last one—whether 10 or 10,000. You need to answer for the situation to everyone that has a question. Even if all the top staff takes hundreds of hours to do so. We are dealing with people—not just fixing a situation. Seek first to understand, then to be understood.
- Remember that you are accountable to God for this situation and the way you deal with it. This accountability will also help you not get in this situation ever again.
- Do not be frustrated by all the attitudes, questions, and comments. Listen intently and answer honestly and lovingly. Share your own struggle if you need to.
- Know your church’s strengths and calling and consider cutting back things that are not the calling or strength of your church—if only for a while.
- Spend more time with the remaining staff encouraging, checking their temperature, helping them process, helping them mourn. After they get through the initial shock of the RIF and recognize they have been spared, Stockholm Syndrome—survivors remorse—will set in for some of them (DISC model of human behavior S or Supportive personalities are 35% of your team and will comprise most of these)—be on the lookout for that. All of your staff will be more timid than they were—it’s a natural time to process and recover. All of the team will need to be more humble.
- Bring in a church job recruiter or assign someone on staff to work helping everyone who is leaving find a good job with a local—or not so local if they want to move—church—including calling up these churches and finding them work. That’s right—YOU do the work—and you let them know you are going to work with them to help them. If we’re called to die for our brothers, it seems like the least we can do.
- Meet often with the team as a whole and individually and see how they are doing—take their temperature. Encourage and love.
- Renew the core values of your church (and live by them). If they are no longer valid, make changes and move forward.
- Pray, pray, pray. Seek the face of God.
It’s all about people—it always has been, and it always will be. The core to be working on above all else are the two great commandments that God left us with—“’Love the Lord your God with all your heart and with all your soul and with all your strength and with all your mind’; and, ‘Love your neighbor as yourself.’”
Dominant personalities have a tendency to be the leaders of organizations and churches. We can be very short sighted when trying to be People Oriented—which is unnatural for us—as compared to our natural habitat of Task Oriented. The best advice in this situation is to speak the truth in love (emphasis is on love) in everything you have to deal with—bathe it in love and patience. Let them know you are Christians by your love. Whatever scripture or meme it takes to show love—appropriate it. This is where your mentor can help tremendously.
Secondly, show kindness every moment. Weep with people. Hurt with them. Suffer with them. Humble yourself in the sight of the Lord. One thing is for sure—despite everything else that may be going on—God is working on the leaders of your church—and that includes you. If you don’t walk away significantly more humbled and changed—you’re not listening—and you may not learn what you need to learn to keep this from happening again.
Know that I love you and I’m praying for you—even though I don’t know your name.
Because of Christ alone, I remain your servant,