Bracing for Impact: Share the Sacrifices in a Slowdown

Spreading the pain instead of laying people off worked for Barry-Wehmiller CEO Bob Chapman during the Great Recession.

Among the principles that Bob Chapman includes in a management philosophy he calls Truly Human Leadership is the idea that when times are tough, CEOs figure out how to share sacrifices across the company. That’s what employees of the St. Louis-based diversified company he leads, Barry-Wehmiller, did during the Great Recession.

“One of the things that people don’t ever know how to calculate is when you decide you’re going to let 100 people go, you know exactly what you’re going to save in compensation and benefits – but you can’t calculate the impact on 100 people who stay,” Chapman, who codified his leadership approach in the book Everybody Matters: The Extraordinary Power of Caring for Your People Like Family, told Chief Executive. “They feel the same thing could happen to them. The feeling of safety at a company is incalculable.

“And when we made our decision not to let people go, it was an unbelievable statement of our culture.”

Specifically, at the onset of the Great Recession, Chapman and his top lieutenants noodled the notion that, “If we let people go, we’re going to hurt people,” he said. “And we decided that we can’t hurt people. So what would a caring family do in a crisis? Why, pitch in to help!”

At Barry-Wehmiller, that attitude took the form of Chapman’s request that every employee—there were about 5,000 at the time at a company with annual sales of about $1 billion then—“would take a little pain so that no one had to take a lot of pain. So we asked everybody to take a month off without pay so we didn’t have to let anyone go.

“The reaction of our people,” Chapman recalled, “was astounding. They were so relieved to know that they didn’t’ have to worry about downsizing or right-sizing and layoffs. We even actually had people volunteer to take other people’s [unpaid time] because they didn’t think the others could afford it. There was such great generosity and caring for each other.”

After recovering from that recession, Barry-Wehmiller kept growing and Chapman kept acquiring companies to add to the enterprise, whose annual sales now are about $3 billion and whose employees number about 12,000.

“Unfortunately, we have a society where layoffs and right-sizings are just normal behavior,” said Chapman, who has become a personal ambassador for Truly Human Leadership and has been speaking recently in Europe on his philosophy, after many appearances over the last few years around the United States, including at the Chief Executive Smart Manufacturing Summit in Dallas in 2019.

“Then we wonder why 75 percent of all people are disengaged from what they’re doing,” according to surveys. “People don’t trust their bosses. We have a society where that’s accepted, but it’s actually a cancer, because people don’t feel safe in companies anymore.”