VANCOUVER — Simon Sinek, the corporate guru with a knack for making leadership lessons go viral, has a new message for managers: Great bosses don’t lay off employees.
“A company is a modern-day tribe. Hiring someone for your company is akin to having a child,” Sinek said in a well-received TED talk Friday. “If you have hard times in your family, would you ever consider laying off one of your children? We would never do it. Then why do we consider laying off people inside our organizations?”
The advice seems to contradict both economic realities and the oft-quoted wisdom that managers should “hire slow and fire fast,” quickly jettisoning workers who can’t perform or don’t fit into a corporate culture. But Sinek says a different approach is necessary in the workplace. “Hire slow and fire never or almost never.”
The reason, he says, is that layoffs destroy culture. The best companies foster a sense of trust between employees so they can focus on achieving goals together, rather than fighting internal politics. The only way leaders can build what he calls a “circle of safety” is by protecting employees.
He cited the example of a New York-based technology company, Next Jump, that has implemented a lifetime employment policy. Employees there essentially cannot be fired, and if performance issues arise, managers will help workers get training to improve.
Another company he held up is St. Louis-based manufacturer Barry-Wehmiller. When it needed to save $10 million in labor costs during the height of the recession in 2009, it implemented four-week unpaid furloughs for its roughly 7,000 employees instead of layoffs. The CEO’s pitch: Far better for all to “suffer a little than any of us should have to suffer a lot.”The move saved $20 million, and ultimately increased morale.
Contrast this to other industries that have slashed their workforces in the past five years in the wake of the recession. Americans become outraged with CEO bonuses and big payouts on Wall Street, Sinek contends, when leaders achieve them by continually cutting costs. “Great leaders would never sacrifice the people to save the numbers. They would sooner sacrifice the numbers to save the people.”
Like many of the best TED talks, it may be more idealistic than practical, particularly at large public companies under pressure to continually impress Wall Street. But the entrepreneurs, CEOS, nonprofit leaders and celebrities in attendance here embraced the message. So many people rushed to buy Sinek’s book after his talk that the on-site bookstore ran out of copies. On Twitter, attendees praised his ideas.
Sinek said being a leader is like being a parent. Both need to give their children opportunities for growth, education and opportunities to fail.
“Leadership is a choice, not a rank,” he says. “It’s choosing to look out for the person on your left and to look out for the person on your right.”
Read more coverage of TED2014 here. Photo: James Duncan Davidson/TED.