Don't believe all you hear

Whenever somebody loses a job, contract or customer, they invariably hear — in one form or another — that “it's not personal, it's just business.”

Well, I've got news for you. For the people who take the hit, it is absolutely personal. Losing a job causes enormous stress on families and often alters the course of careers. Losing contracts or customers can seriously impede or derail career paths, often resulting in the eventual loss of a job.

I have two friends who recently lost their jobs in the telecom industry, theoretically because of the economic slowdown. One worked for a competitive carrier, the other for an equipment maker.

Friend No.1 is preparing to move to another state. He had asked for the transfer weeks ago so he and his wife could be closer to their families. To its credit, the company agreed, provided that my friend paid the moving expenses. Then the layoff came. Now, despite having no job, he and his wife are forging ahead, feeling it's too late to turn back. At least they have a support mechanism waiting for them in their new state.

Friend No. 2 has it worse. His wife had to go back to work, leaving him at home with a toddler while he does all the things you need to do to find a new gig: update résumés, write cover letters, get grilled by headhunters, network and so on. Plus, he firmly believes he will have to relocate in order stay in the telecom industry — which he sorely wants to do — at the compensation level he's achieved. Of course, doing so would mean he and his family will have to abandon their family and friends.

If this were simply a matter of the economy tanking at warp speed, you could write this off (pun intended) as just so much bad luck. But it's not as simple as that. Anytime a company has a significant work force reduction — particularly cuts in the thousands or tens of thousands over the course of a fiscal year — it has to be due, in some measure, to the fact that somebody wasn't watching the business closely enough. Or they misread market demand. Or they allowed the business to grow too quickly. Or something. And the buck stops with the CEO.

That's why I found it refreshing that CEOs Ellen Hancock of Exodus and George Simpson of Marconi resigned last week (see stories on pages 18 and 24). Though I'm never happy to see anyone lose his or her job — for whatever reason — it seems fitting that Simpson and Hancock would fall on their swords at a time when so many of their former employees are having their lives blown up because of layoffs.

We need to see more CEO accountability. We need to see boards of directors force CEOs to give back compensation when their companies fare poorly. We need to see CEOs paid for performance, not reputation. In other words, we need to see CEOs held to the same standards as their minions.

We also need to see more CEOs like Cisco's John Chambers, who voluntarily reduced his annual salary to $1 in April to save a handful of jobs. At first glance I would concede that saving two or three jobs at a company that announced it would eliminate more than 8000 this year doesn't seem like much. I would also concede that Chambers could afford to make the gesture. He pulled down about $1.5 million last year in total compensation, so he probably has some money in the bank.

But the point is he didn't have to make the gesture at all, and that's what makes it so impressive. Chambers understands that business is about people. And that makes it personal.
Contact Glenn Bischoff at gbischoff@primediabusiness.com.