Challenging economic times are not always appropriately handled by a company's leadership
A letter from the CEO you should have had
CEOs have not valued their employees equal to the rest of their stakeholders.
Today I write the letter that your chief executive should have written to you. I’m assuming you are a man, but it is the same for a woman. Well, most of it, I won’t get into the issue of sexism as that would require whole volumes.
I would like to apologise to you. The past three years have been challenging, stressful and, quite frankly, confusing. It is a situation that I have never seen before, that no executive can be prepared for. This situation has created multiple dilemmas for me on how to manage the company. I have focused on profits, I have focused on the board, I have focused on shareholders, I have focused on suppliers, I have focused on clients. To my greatest shame I have not focused on you.
Did I start this letter with “Dear Employee”? I should have said “Dear Valued Employee”.
To apologise and to make amends I must first walk you through what I faced. In mid-2014 oil prices dropped fast. These things happen. It was a point of concern, but not much. All media reports and announcements from the relevant authorities pointed to a short-term price correction. Every indication was that the oil price would recover back to over US$100 per barrel within months.
As the months passed and the oil price not only did not recover but, worse, continued to decline down to below $30 per barrel I began to become seriously worried. I wanted to look at various scenarios. I wanted to plan for different outcomes. But my board baulked. My board didn’t want to even mention the possibility of oil prices not recovering. A standard risk management procedure, planning for various scenarios, was viewed as political suicide by the board. You see, the board is not selected by the shareholders as would happen in a market based on capitalism. The directors are selected via a different process. This makes the board unaccountable to the shareholders or to any of the other stakeholders. Furthermore the board members are paid large amounts of money, sometimes in the millions of dirhams per year. This actually incentivises the board to do nothing, to avoid rocking the boat and to milk their positions for as long as possible.
Dear valued employee, my heart broke when I watched our board place corporate politics and their own greed ahead of the company’s interests. This went against my value system and my conscience demanded that I resign. But then, dear valued employee, who would be your champion? The board would simply hire a chief executive with no values, at least not ethical values. So I remained, not because I agreed with the board’s focus on their own self preservation but as a line of defence for the employees and other stakeholders of the firm.
Dear valued employee, I watched in horror as the board, in their panicked decision to try and show continuously improving profit in the face of a contracting economy decided to cut expenses, starting with employee compensation. Instead of renegotiating the extravagant packages of the executives, they started to terminate lower level positions. Even with that decision, the board did not take the leadership to outline a vision for where they wanted the firm to be that would guide me and my fellow executives in setting a strategy for our manpower planning. No, a simplistic across the board cut was asked for. This belied the complete incompetence of the board in not understanding that a firm cannot be downsized by a pro-rata cut across departments. Unfortunately it also allowed the less scrupulous executives to play favourites, keeping sycophantic employees and terminating the value-added employees.
I know you are scared. I understand the paralysing fear of not knowing what was happening. I know that you are desperately trying to find out what is happening in the company without signalling fear. If you show too much interest then you might be targeted for “downsizing”.
Downsizing. Corporations think that it is a humane way to describe a firing. It’s like calling a murder “life cessation”. Perhaps the words you are exposed to are “rightsizing”. Perhaps something else. But you know what it means. They insult your intelligence.
I know that you don’t have anyone to talk to. I mean really talk to. It’s one thing to get together with your colleagues and complain about being mistreated. It is something completely different to show your vulnerability, to talk about the soul crushing fear of what it means to lose your job in a challenging economic environment. How do you say to a work colleague that you are petrified that you might end up on the street?
But that pales in comparison to talking to your wife about it, doesn’t it? She already knows that there is something happening. But you absolutely cannot talk to her about your fears, you have to show strength and confidence, because the slightest doubt leads to the questions that you can’t answer but which tear you apart: “Will we have to take the children out of school?”, “Can we make the mortgage on our house?”, “If you don’t find a job in three months then your visa ends and would we have to uproot and leave the country?”
You are in a bad place and you have nobody to turn to. Well, you can turn to me. I will explain to you what is happening and what you can do.
I might not be your chief executive, but I am a chief executive. A good one.
First and foremost get the direction of discussion right. Too often it starts in the office and then goes home. Wrong way around. Your home, your wife, your children, they are your foundation. If you have that sorted out then you have the strength to take on the world.
It is important to talk to your wife, calmly and honestly. She needs, no, she deserves, to know what is happening, otherwise you will fuel her anxiety. You have to do what your board was too cowardly to do: go through various scenarios. Working on solutions is a balm to what might be happening at work.
Your family plan should start with immediate budget adjustments. This is hard, as when you are used to spending at a certain level it can be difficult to reduce your expenditure. A budgeting app is key here. There will be arguments on who should cut what, but best to face these issues head on and early.
The second part of the family plan should be alternatives. If you are an expat, do you want to, and can you, continue living in the UAE? Do you want to go home? Are there other potential destinations? What other career options do you have? Really understand the answers to these questions and even begin the application process for a new job. This is important, because once you know your alternatives, you know the true value of your job to you and therefore how to negotiate with your employer.
Once you have agreed the family plan and you have alternatives in hand, or close to hand, then you are standing on strong ground to deal with work. Your weak board will lead to weak executive decisions. Corporate politics will go through the roof. Value added employees will be seen as a threat to the political employees and targeted. What is important is not to wait for the hyenas to come after you.
As a value added employee, go to your boss early and negotiate. It is absolutely imperative that this begins only when your alternative solutions are well on their way and going well. My experience is that employees will ask the natural question: Why rock the boat? Why not wait to see what happens? I have seen this multiple times. An employee who does not know what his future holds lives in misery. It leads to negative social behaviour, including divorce. Once you have a plan, then why not bring things to a head?
If you are working for a decent company and have a decent boss then the negotiation should go well. The company should understand your fears and should work with you to remove these fears. Should your company be decent enough, consider amending things in ways that are helpful for you. You might consider a long-term fixed contract. You might consider lengthening the notice period. You might consider adding severance pay. The company will probably be caught off guard, so remember that you want a cooperative discussion, not an antagonistic one. But there is a high probability that the company will not negotiate. Some employees would think that this is a bad outcome as they ended their career at the company earlier than would have naturally happened. This is, in my opinion, a false evaluation.
Remember, this approach works only if you have your alternative scenarios developed and you are satisfied that they are better than living in constant fear of losing your job. Also remember that this only works with decent companies.
I hope you regain your freedom from the uncertainties of a weak and incompetent board. I hope you seek a full life rather than remain enslaved to an uncaring company.
The CEO you should have had.