The Test Of Our Culture

Until the 1980s, it was rare for companies to use layoffs to balance the books. Simon Sinek describes it as “using people as fodder to make short-term financial results right.” This changed in a big way when Jack Welch became the CEO of General Electric in 1981, making cutting jobs a central plan of his drive to increase the company’s share price. By the 1990s, “downsizing” had become a popular word in business. For public companies, announcements of downsizing are often followed by a jump in the company’s share price as investors celebrate these “fat” organizations shedding “unnecessary headcount.”

Rightsizing, de-layering, business reengineering, streamlining… these are some of the other euphemisms for the now-routine business practice of eliminating jobs to improve profit. Downsizing has become a reflex response to business adversity—like tapping your knee and seeing your leg kick up—to bolster financial performance, raise investor confidence and boost share price. We know of one company that deliberately over-hires when times are good so it can let people go and get a bump in the share price when it needs to.

Again, Simon Sinek puts it this way: “In the military, they give medals to those who are willing to sacrifice themselves so that others may gain. In business, we give bonuses to those who are willing to sacrifice others so that they may gain.”

Executives seldom take unconditional responsibility for layoffs. Standard justifications are poor market conditions, mistakes made by the previous management or some other force out of their control. It would be refreshing to hear a senior executive say, “We really didn’t get this right. We made a lot of mistakes in our assumptions about the business and markets, and unfortunately our people are going to have to pay for our mistakes.”

You rarely hear leaders talk with compassion about the impact of layoffs on the lives of individuals and their families after companies send them home with damage to their self-worth and a dramatic loss of income. Eighty percent of people report a negative impact on their health within a year of getting laid off. The frequency of absences due to sickness doubles in downsizing companies.

I frequently ask people in various audiences, “How many of you have ever been laid off?” Usually a third of the people raise their hand. I ask, “How did it feel?”

The emotions come pouring out: “It was the worst day of my life. It’s such a rejection. I was told to clean out my desk by five o’clock and see the personnel department for my final check. I was told, ‘You’re gone, we don’t need you anymore; we can’t afford you anymore.’ Then I had to go home and break the news to my family. The shame I felt was almost unbearable. I had to say to them, ‘I don’t know how we’re going to make the mortgage payment, the car payment, pay the college tuition. I don’t know what I’m going to do because nobody is hiring.’”

It is even rarer for companies to consider the impact on those who remain in the organization after witnessing the devastation and shoddy treatment of the people they had worked with. It is difficult to assess the extent of such “collateral damage.” My son Scott was working as a consultant at a firm when they had massive layoffs. He didn’t get cut, but many of the people who used to sit near him did. He knew them and their families well and was thoroughly demoralized, as were many others in the company. In such situations, those left behind default to survival mode; passion, creativity, optimism and caring go out the window.

The Great Recession of 2008-2009

All through the mid to late 2000s, Barry-Wehmiller was growing rapidly and profitably. Along the way, I had three distinct realizations that transformed the way I thought about leadership. They led our company away from traditional management practices to Truly Human Leadership—a people-centric approach where our team members feel valued, cared for and an integral part of the company’s purpose. I was out having dialogues about our Guiding Principles of Leadership (our company vision, a result of my realizations, that states, “We measure success by the way we touch the lives of people”) with people all over the U.S., as well as in Europe. Every time we acquired a new company, I’d sit down with the people and talk about what we believed in and what they could look forward to now that they were part of the Barry-Wehmiller family.

When you talk about something repeatedly and you talk about it genuinely, it becomes an integral part of you. These weren’t just words to me anymore. Leading up to the 2008–2009 downturn—several years into our Guiding Principles of Leadership and soon after we had launched Barry-Wehmiller University—I was feeling deeply grateful and blessed. Our culture was in harmony with who I wanted us to be, with my faith, with my parenting. Everything in my life felt aligned. It was a priceless feeling.

Then we were hit with the worst economic crisis of our lifetime. The news in the financial pages was unremittingly grim; the country and, indeed, much of the world was engulfed in the worst recession since the Great Depression of the 1930s. The unthinkable was becoming commonplace. Many large financial institutions were on the brink of total collapse, national governments around the world had to bail out massive banks and stock markets were crashing everywhere. The housing market collapsed like a punctured balloon, and consumer wealth declined by trillions of dollars. By October 2009, the U.S. unemployment rate would reach 10.1 percent, roughly double the pre-crisis level. By then, the average person was working only 33 hours a week, fewer than at any time since the government started collecting such data in 1964.

At our January 2009 board meeting, one of the board members brought up the L word. “Well, I guess you’d better consider doing layoffs. We need to get our costs in line with these shrinking revenues.”

I said, “No, I think we’re going to be OK.” At that point, our executive team felt that our backlog of orders and prospects coupled with our spare parts business was good enough to get us through without impacting our people.

The next month, while visiting our Italian operations, I received an email. PCMC, one of our largest divisions, had a major order put on hold. In fact, several customers were canceling or putting on hold existing large orders—orders against which they had already paid large non-refundable deposits.

It’s one thing not to get new orders because the market is shrinking. But when your backlog (which we thought was going to get us through the crisis) starts evaporating, it’s a much bigger blow. It felt like all our customers had stopped doing anything and were hunkered down in survival mode. Our level of concern was rising, and the news from the economy was growing graver by the day. Financial liquidity had nearly dried up; borrowers and lenders were frozen in place, uncertain about where all this was headed. It felt like an irresistible riptide pulling us away from the shore and from safety. When would it stop? When would our feet touch solid ground again? I sat in my hotel room in Italy and thought, “Oh my God, it’s going to hit us, and I don’t know how hard. What are we going to do?”

We couldn’t simply absorb the costs and run the risk of violating our banking covenants. Such a “head in the sand” approach to preserve the status quo could potentially destroy the company’s future. We had to find a way to keep our financial results tolerable while keeping the pain to our people at a minimum.

How could we deal with this crisis in a way that was consistent with our leadership vision? Before we had embraced our Guiding Principles of Leadership, if something like this had happened, we would have “right-sized” our organization with little hesitation, laying off people in the offices and plants experiencing a significant drop in new orders. It was considered good and responsible management, and I had done it for years. This meant that the burden was primarily carried by the manufacturing team members who were directly engaged in executing orders; senior executives were rarely touched. But our culture and values had changed dramatically along the way due to our continual dialogue about our Guiding Principles of Leadership. If we responded as we had done before, it would seriously damage and potentially destroy the wonderful caring culture we were building. It would render our assertion, “We measure success by the way we touch the lives of people,” hollow and essentially meaningless.

Beyond the impact on our culture, if we let people go in that brutal economic environment, it would devastate them and their families and even some communities. There were simply no other jobs to be had. Many people would lose their homes, some their marriages. Children would have to drop out of college. The human toll was almost too painful to contemplate. I felt that we simply couldn’t inflict that kind of pain on our people.

Responding Like a Caring Family

Our journey to Truly Human Leadership had given us a moral compass that we didn’t have before. It called on us to face the economic crisis with a much deeper sense of responsibility for the lives in our care. I immediately started thinking about how best to respond to the crisis in a way that was consistent with our vision. I asked myself, “What would a caring family do when faced with such a crisis?” The answer came to me right away: All the family members would absorb some pain so that no member of the family had to experience unbearable pain. Everybody would pitch in with a sense of shared sacrifice and a shared destiny.

So I started crafting ideas. I made a list of natural ways for all of us to take a little pain so that we didn’t hurt anyone too much. It came from my heart, which had grown so much in talking about the GPL for all those years. I thought, “What if we implemented a furlough and everyone took a month off without pay?” I emailed my leadership team and said, “Let’s find a way to deal with this crisis through shared sacrifice. Here are some initial ideas.”

Because our executive team had clarity about our shared values and how to respond in accordance with those values, implementation throughout our global organization was quick and smooth. The furlough plan was rolled out within 10 days company-wide. To further emphasize our adherence to our Guiding Principles, we said we wouldn’t compromise our commitment to education or to our continuous improvement events. We encouraged team members to use idle time to take classes in our university. We used gaps in the production schedules to accomplish major Lean improvement events. Continuing our signature recognition events, team members found creative ways to make them meaningful without spending a lot of money on the celebrations.

The reaction was astounding—far better than we anticipated. People had been walking on eggshells for months fearing they might lose their jobs. It seemed like everybody around them was getting laid off: relatives, many of their friends, even their pastor. In an instant, the fear that had been spreading like a cancer was gone, replaced with positive feelings of safety, gratitude and togetherness. The furlough plan affirmed to our team members that we indeed cared about them. They felt an overwhelming sense of relief that they could count on their job and income. There was also a sense of relief that we were acting to preserve the future; prior to our action, some people worried that we might have had our head in the sand, ignoring the realities of the economic crisis. Morale rose dramatically, because people realized they didn’t need to worry about their jobs. Most were happy to offer up four weeks of income, knowing that it was not to make the company more profitable but to keep their colleagues from losing their jobs.

We told people, “Take the time off when it works best for you.”

Some leaders initially said, “Oh, no, Bob, we have to tell them when they can take time off, because we need to make sure we have enough people to do the work.”

But I was adamant about this, saying, “Look, if we’re asking them to sacrifice, then we have to give them something in return. We’re going to give them the flexibility of when to do it, when it is best for them and their families. Just do what you would do if they got sick.”

So our team members were able to take the furlough when it was most valuable to them. Some relished being off in the summer with their school-age children; others used the time to do volunteer work.

Some team members stepped forward and “took the time” for colleagues in more straitened financial circumstances who could not afford to lose four weeks’ pay. They said, “I can afford to take six weeks off. My house is paid off and my kids are through college. If somebody can only afford two weeks, I’ll take their weeks.” Still others needed coaxing to take time away, simply preferring to work through their unpaid time. We insisted that they take the time off and not do any company-related work while they were away. We had people demonstrate incredible caring and an awakened sense of altruism: people helping others simply because they wanted to and expecting nothing in return. In a way, the furlough became a kind of gift to our people, and they responded with generosity and caring.

The Impact of ‘Walking the Talk’

We got through that economic downturn, and the cultural impact was profound. Who you are in the worst of times is not always who you are in the best of times. Your values, beliefs and culture don’t really get tested when times are good.

As Simon Sinek put it during one of his several visits to Barry-Wehmiller, “You cannot judge the quality of a company by the good times. You cannot judge the quality of the crew when the seas are calm. We judge the quality of a crew when the seas are rough. The numbers will never come to your aid. Ever. People will. If you feel that everyone is disposable, guess what? They think the same about you. It’s reciprocal.” Our actions through those toughest of times validated our authentic commitment to the Guiding Principles of Leadership. We witnessed a real coming together in the culture, solidifying us as a company.

Our business rebounded after nine months, well ahead of the broader economic recovery. In fact, our fiscal 2010 was a record year for earnings! Unlike our competitors that had engaged in large layoffs, we did not need to hire people to meet demand. Our people were ready, rested and excited to get back to work. Many of them were more capable than ever, having used the downtime to learn new skills.

Looking back, we can see that our shared vision and fierce commitment to measuring success “by the way we touch the lives of people” gave us the creativity, moral clarity and courage to look for solutions beyond traditional business norms. We recognized that the most fundamental way we touch the lives of our people is by the security of their employment with us. Genuine commitment to Truly Human Leadership means designing a business that offers fulfillment, success and safety for all stakeholders.

When layoffs occur, the impact on the culture through loss of talent and diminished morale can be devastating. Our experience was just the opposite. Although we had been on a leadership journey centered on our Guiding Principles for more than seven years, many team members still weren’t fully convinced of our sincerity.

“Walking the talk” during this tough period did more to convey our beliefs, strengthen our culture and cement our people’s loyalty than anything we could verbalize or proclaim through a framed vision statement on a wall.

Adapted from the book Everybody Matters: The Extraordinary Power of Caring for Your People Like Family, by Bob Chapman and Raj Sisodia in agreement with Optimism Press, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © 2025 by Barry-Wehmiller Group, Inc. and Rajendra Sisodia, 2025.