(By Jack Zenger and Joseph Folkman)
“These ethical lapses covered a wide range, from failure to comply with company policies, to inappropriate comments to or relationships with co-workers, to financial improprieties like moving excess funds from one budget year to another by generating fictitious invoices. These were indications, for the most part not of outright dishonesty but of poor judgment.“
A very important meeting is held, and you’re not invited. At this meeting, a senior leader announces that since targets were not reached, 150 managers will be laid off, and the purpose of this meeting is to create a list identifying exactly who those people will be. The key question for you is, “How do you keep your name off that list?”
In the 1960s Melvin J. Lerner described a psychological phenomenon called the “just world hypothesis”: People want to believe that bad things happen to bad people. After downsizings, for instance, it’s common for the survivors to believe that only the poor performers were fired.
But is that so?
To begin to answer that question, we gathered a substantial amount of data from one U.S.-based Fortune 100 company after it had gone through an organizational downsizing to see if we could identify factors that might predict which people were most likely to be let go.
One factor that wasn’t very predictive, it turned out, was a history of good performance reviews. Only 23% of those who were laid off had been given a negative review the previous year. The implication is that the other 77% who were asked to leave had no clue this was coming.
But when we examined the 360-degree assessments for the previous two years of all those who’d been let go and surveyed their managers to ask why, we found a very consistent array of problems, all of which were apparent in advance. Specifically, we were able to identify six factors that should have raised red flags. Everyone who’d been laid off shared at least two of the following:
- They were not viewed as strategic. Many of the unfortunate 150 had not been working in roles that provided them with opportunities to create new strategies, and as a result colleagues rated them very poorly on their strategic ability in the 360 assessments. As a group, those who were downsized rated, on average, only in the 32nd percentile on their strategic ability – that is, worse than two-thirds of their colleagues. This is a factor that they might have rectified before it was too late, since they all had received feedback about their strategic ability in the previous two years. What stopped them? The picture that emerges is of leaders who worked hard but were too heads-down and narrowly focused on immediate operational, technical, or functional issues. Many of these were people with valuable technical or functional expertise. But the sad fact is that when times are tough, what most organizations need most are leaders who can create a winning strategy that will ensure competitive advantage.
- They failed to consistently deliver results. Here, too, 360 feedback predicted problems: Those who were terminated were rated, on average, in the 37th percentile on delivering results. These were the people who over that previous two years had had missed deadlines, had committed to projects they hadn’t delivered, or had set the bar too low for others. While they perceived themselves to be working very hard, they looked to everyone else in their 360 evaluations like they were running out of energy and losing effectiveness over time. Some had reputations for not working hard; the older ones in this group appeared to their colleagues to have started their retirements early.
- Their ethics or integrity had been called into question. This was not a common problem, but whenever it existed people were let go. These ethical lapses covered a wide range, from failure to comply with company policies, to inappropriate comments to or relationships with co-workers, to financial improprieties like moving excess funds from one budget year to another by generating fictitious invoices. These were indications, for the most part not of outright dishonesty but of poor judgment.
- They had (very) poor interpersonal skills. Many people with weak interpersonal skills had been promoted based on their technical ability and then were not able to improve their social skills enough to succeed in their new roles. As a group, those laid off averaged in only the 37th percentile in the 360 evaluations of their relationship-building and people skills. Many were viewed as weak leaders who were unable to influence others and foster necessary change. Some were difficult to deal with — or even hostile, volatile, angry, combative, and unable to manage their impulsive behavior. Some were described as creating a psychically toxic work environment. Why had the company waited for a downsizing to get rid of these obvious candidates? Keep in mind that many of these people were also described as brilliant.
- They were resistant to change, both personally and organizationally. In our global database of 360 feedback from 35,000 leaders, we’ve found a strong correlation between managers’ willingness to ask for and respond to feedback and their overall leadership effectiveness. What’s more, we’ve found that the willingness to ask for advice and respond to feedback declines over time (that is, older workers in our database tend to score lower than younger ones). In general, the worst leaders assume that they’re promoted because of their brilliance and all they need to do is keep on doing what they did in the past. But the best leaders continue to look for feedback and to find ways to improve. So it did not surprise us that many of the managers who were let go at this company were described as resistant to change and inflexible to new approaches in their 360 reviews.
- They had lost sponsors or support. Over half the managers who were downsized indicated that they had recently lost the support of their sponsor. So in that fateful meeting where was no one to speak up for them. The lesson here is clear. Not only do you need to ask “Who will be your strong advocate?” but it’s important to have more than one.
That last factor is clearly political, and its pervasiveness suggests that everyone should be a little bit paranoid when layoffs are in the offing. But generally speaking, our research with this company offers up some strong evidence for the just world hypothesis, since none of the unfortunate 150 were laid off for that reason only. Everyone was let go for at least one, and generally more than one, justifiable reason.
What these results also suggest is that positive reviews, and even promotions, can bring a false sense of security. The disparities between the positive performance reviews and the negative comments on the 360s reinforce our longtime findings that it is your strengths that get you promoted – but also suggest that in uncertain times you should take a second look at your flaws, which may leave you vulnerable to being laid off.
If your organization were facing a cutback today, would you be prepared and certain your name wouldn’t appear on “the list”? We welcome your thoughts.