By José Manuel Casado González, President, 2.C Consulting
I am sure at some time or other you have either read or heard the fable of the goose that lays the golden eggs. Aesop described how there was once a farmer who, when he went to collect eggs from the geese, found that one of them had laid an egg that looked like gold.
Initially the farmer did not believe his luck and was about to throw the egg away. However, he decided to check it out and took it to a specialist. He was very happy to be told that it was indeed gold. He was even more delighted when every day after that the goose laid more beautiful golden eggs and he became extremely rich. As the farmer’s wealth increased so did his greed. He got up early every morning, eager to collect his precious egg. He would wait impatiently and would scold and even hit the goose if she took too long to lay it. Eventually his greed overcame him and he decided to kill the goose so that he could retrieve all the eggs she had inside. However, when he opened her he found nothing. It suddenly dawned on him that he had lost his main source of wealth and had destroyed the best thing he had ever had.
In these difficult economic times, it seems that businesses are following the farmer’s lead.
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Companies look at the efficacy equation (actual production divided by production capacity) and appear to be striving to continuously reduce the denominator. For instance, in 2001 American companies, through redundancy plans laid off 1,890,000 workers. In 2002 a further 1,640,000 people were made redundant. This has been repeated on a global scale throughout recent years and is still continuing despite evidence suggesting that we are coming out of the crisis. These measures have enabled companies to put a gloss on their operating results, but far from achieving an improvement in their bottom line, which was is what they should have been aiming to do, they have actually reduced it. If we continue to reduce production capacity at the current rate, there will come a time, very soon, when we have nothing left to reduce.
Reducing the denominator, killing the goose that lays golden eggs, is not necessarily the best solution. Companies need to be more creative, look further ahead and not forget the hidden costs of layoffs. The negative psychological effect, the damage to a company’s image, perceived social irresponsibility and especially the impact on the confidence of their own professionals should be taken into account and alternatives should be sought whenever possible. If a company does not do this, it will lose the trust of its professionals and should not expect loyalty or commitment from them when the crisis ends. On the contrary, employees, who have seen their fellow professionals “killed” simply because they had decided to stay and help during difficult times will pay back their farmer in kind and fly out of the goose pen. When this happens the company’s goose will be well and truly cooked.