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March 18

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Misguided Compassion Can Sink Your Ship

By Michael Q. Pink

March 18, 2009


Recently, I shared with you how one upscale casual restaurant where I live had increased their profits January of 2009 over January of 2008 by 40%. That was a $12,000 bottom line increase in just one month and it occurred while industry revenues were down 15%. Two of their national competitors have filed for bankruptcy, not able to withstand the drop in sales.

The reason why our favorite casual steakhouse is actually thriving and not just holding on is very simple. They refuse to be paralyzed by fear. They are taking action and the actions they are taking are as old as the rainforest and fresh as today’s rain. The first strategy they employed is what I call, the Kapok Strategy. The Kapok tree grows in the rainforest and is one of the few species that actually towers above the canopy level. During the dry season when resources are scarce, (very little rain), the Kapok tree will drop most or even all of its leaves, depending on the severity of the drought.

Leaves on a tree represent the workers in your company. They receive the light (vision) and combine it with water (information or know how) and CO2 (effort) to produce wood or fruit, etc. Leaves are the front line workforce that keeps the company running, but during dry times, the Kapok tree will shed many of those leaves. The Kapok Strategy is a human resource management strategy.

The restaurant that increased profits did so in part by controlling labor costs. They decided they didn’t need six ladies working the hostess position and cut it back to three. They decided they didn’t need 15 servers when the doors opened and brought them in as the day wore on, sending them home as the demand left. They eliminated any slack in the human resource department.

They either let the leaf (worker) go or they trimmed away their idle time. Many of you may find this harsh. The Kapok tree has no emotional issues about letting the leaves fall. God designed it that way because if it tried to nourish all the leaves during the drought, the whole tree would die and there would be no future for any of them with that tree (company).

Two different friends of mine lost their businesses in 2008. They each believe if they had made the difficult decision earlier to let people go, their companies would have survived. They kept them out of compassion and they kept them longer than they could afford to and in a misguided attempt to be kind and caring, the whole ship went down.

Between the two companies, it represented about 200 permanently lost jobs. How much better would it have been to let go all but the skeletal staff (trunk and branches) to run things until the drought ended and then they could hire back when the economy came back, thus restoring the lost jobs. Was it really compassionate to hold on to staff longer than resources allowed? That may have been the motivation, but in the end not only did the leaves go, but also the entire tree.

As you weather the current economic storm, take a look at your human resource management strategy. Get rid of the slack. Either remove the underused and excess or redeploy them into another form of productive use. Just don’t allow idleness or waste if you want to survive this storm. In my next blog, I will continue with the other two strategies. Until then, pursue Him.

Michael Q. Pink

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