Biblical Business Radical: Rightsizing?

In the title, I used the least offensive euphemism for increasing the number of unemployed people in your community. Other euphemisms: terminating, axing, headhunting/headcounting  (harsh and sounding final like death), downsizing (like dieting for someone who’s overweight), laying off (off or aside makes it sound like there’s another storage spot for them). Chances are pretty high unemployment will increase this year because of...(take your pick of prognostications):

• Reduced imports because of tariffs reducing levels of inventory buffers
• Supply chain shocks due to a cessation of freight from China due to coronavirus (COVID-19)
• Reduction in service, hospitality, leisure industries as various nations, including the US, figure out ways to mitigate the spread of a pandemic
• Reduction in logistics industry, especially airlines, for the various reasons above and dictated embargoes of China and European travel
• Reduction in oil consumption for logistics
• Price wars in energy industry and immediate layoffs this week in that sector
• Ripple effect into other economic sectors as a few economic sectors weaken but announced mitigation with some economic assistance for small businesses and individuals

How should a Christian business leader deal with a reduction in business? What are the acceptable, biblical options for reducing the number of employees? First, let's set some guidelines:

• We're not talking about performance issues of individual lower-level employees (like the "unjust" or "shrewd" steward/manager in the parable recounted in Luke 16 or Joseph being jailed for allegedly trying to molest Potiphar's wife); we're not assuming the employees are being fired for cause.
• We're not talking about 'acts of God'--such as the coronavirus or declared war or a financial crisis such as happened in 2008--just as Israel and kingdoms have suffered from droughts, wars. Or in another case, the Lord did everything possible to have a successful vineyard and He didn't get the results He was looking for (Isaiah 5.1-4). Some things are indeed outside of our control.
• We are talking about malfeasance or maladministration on the part of the executives, such as the kings of Israel and Judah who did wrong in the sight of the Lord and the people suffered; or a situation like Achan, the head of his family 'business', disobeying the rules, causing 36 'innocent' warriors and their families to suffer and then later cause his whole clan to be put to death he confessed; unrelated people suffer from one person's greed (Joshua 7)
• We are talking about executives who have put their trust in their 'horses and chariots' (Psalm 20.7) which for modern businesses is our technologies, our financial strength, our academic prowess, etc. The rule of thumb from management guru Joseph Juran is that 80% of a company's problems are under the control and influence of management, not the lower level employees. We're responsible for providing tools, materials, education, strategic planning, allocating resources, hiring, policies, procedures, etc. These things influence results more than individual efforts.
• We might be talking about Gideon's reduction in force for his army, the impetus coming from the Lord--"You have too many men and you will think you did this with your army instead of realizing the victory is from Me, the Lord" (Judges 7.2).
• We can't serve two masters, especially wealth and God (who will have no other gods taking their place beside Him in our lives). We are motivated by rewards--money, fame, prestige, power, etc.--or a burden for serving others--loving God and loving our neighbors--as Patrick Lencioni has pointed out.When facing decisions, how much are we weighing company finances, our own finances against our employees' families finances?

When tough times hit, we can rationalize why we're not at fault. If you read public companies' annual reports during an economic downturn, almost none relate their woes to management's failure to anticipate normal business cycles. (Since 2009, the US has enjoyed a long recession-less period in its economic history, surpassed by climbing out of the Depression into WWII 1932-1944 and the post-war globalization of markets 1958-1973 and high-technology productivity gains 1992-2007.) We might blame fickle consumer trends, or regulatory pressures, or the rain in Brazil. Whatever the reason, it's not our fault that the company is doing poorly. We might even cite how badly everyone else is doing.

But who pays the price for poor strategic planning, or a lack of planning sufficient reserves? Most often it's not the people in charge of those areas. Demand is low for front-line activities so it must be front-line employees that need to go, right? They didn't make the mistake but they're suffer the consequences. In almost every business, the top layers have financial cushion, whereas those at the bottom are one lost-paycheck away from financial disaster--or one medical bill, or one car repair, etc.

Let's look at the principle of accountability. If executives make a mistake, shouldn't they suffer the consequences as well if not more? Sports coaches who have a talented team but fail to win are often the first to be fired. Why not in business? God often calls the priests and leaders to account for not guiding the people correctly (read Malachi). If we haven't created a robust, resilient, 'antifragile' organization, there's no one else but us to do it; we are responsible for our organizational vulnerability and fragility. (The term antifragile comes from the book by N. Taleb.)

So if we must reduce our employment numbers, let me suggest some options:

• Maintain front-line employees as financially secure as possible. James 5.1-6 warns against cheating workers of wages, and if we make them suffer for our mistake, that's a little or a lot like cheating them. In this day, when companies have a lot of cash, they can continue to pay wages a lot longer than executives think. There are some creative job-sharing schemes that allow more people to keep working. All those projects we never had time to do...now we do and we have the people to do them. It's a perfect time to explore new market segments, R&D and other investments for the economic bounce-back.
•  Seeking the maximum executive pay and stockholder value is worshiping money more than God. Some companies, like one for which I was an executive--and we did it twice during recessions--and Walker Manufacturing, paid employees for doing community service to help maintain their take-home pay.
• Executive pay, especially bonuses, should be cut first before any other wage reductions are made. Executives should be laid off first. The people who really make the company run are not in the C-suites or the ivory towers. This just might be an application of “the first shall be last [to be paid]” and “the first [customer contact] should be last [to be laid off]”.
• Be as transparent in your communications. Don't lie; don't offer false hopes. If you hired too many people (like Gideon), be honest in your mistake; take responsibility and try to protect them as much as possible from calamity.
• Be just and fair (Colossians 4.1) which means, besides the above of placing consequences on those in control the most, but also practicing due process--sorting out who's really committed to making the company a success, who's serving the organization and its employees or just themselves, etc. Remember fair is not the same as equal--an employee who's tardy 3x because of late night partying should not be treated the same as a single parent who's tardy 3x because of sick kids. Try to reward employees with continued employment for the work they've done and their attitude of respect and enthusiasm. Don't make lay-offs a threat (Ephesians 6.5-9).
• Figure out some ways for former employees--and other marginalized, disadvantaged people or businesses--to glean, i.e. capture some of your company's revenue without going through your company's purses first.
• If you must lose some employees, remember to celebrate their contribution and rebuke any 'blame gaming' or shaming. "Don't judge lest you be judged..." Accordingly, in recognition of their contributions, contribute to their continued success by assisting them in the short-term with direct assistance--transit fees, grocery store gift cards, etc.--and indirect assistance--job search counsel, referrals, etc.
• Pray that God will be seen in this trial and that there's a greater benefit to be gained for them and you, despite your weakness or failure. Joseph was sold into slavery and God redeemed the situation for a later time--drought and relocation--to prosper his family.

Note: I’m trying to limit our scriptural exploration to the principles I laid out in the first two posts in this series (Part 1 and Part 2) in that I’m trying to limit myself to scripture that deals with organizations—businesses (like farmers, herdsmen), churches, tribes, nations.