Thursday, September 2, 2010

After the Storm, Smaller but Stronger

In one of my last articles for Remodeling magazine, I wrote that "[s]maller-but-stronger teams – more with less, in effect – could be a lasting silver lining of the post-recession clouds." This morning, heading into the Labor Day weekend, try to find a few minutes to learn how one builder/remodeler approached some of the painful decisions that the downturn required.

"The Unthinkable," below, came from John Abrams of South Mountain Company, an employee-owned design/build firm on Martha's Vineyard, Mass. John shared this with me in early 2009.

the staff and ownership of South Mountain Company

"The Unthinkable," by John Abrams 

One of the things I love about these times is it is causing us to think more broadly about the work that we do and think differently about some things than ever before.

For 33 years there has been full-time productive work for everyone in our company every day of every week of every month of every year. We have never laid anyone off, and the last two years we have done everything possible to avoid it. back then we had a wonderful conversation at a Board meeting entitled: "What Happens If The Unthinkable Happens?"

There were three parts:

1. How will we handle it if there is not productive work for everyone?

2. What could we be doing - that we're not already doing - to assure that that doesn't happen?

3. What could we do with our shop and/our people to make valuable work (even if non-revenue producing) if there were ever work shortages?

Asking these questions led to deep discussions that ultimately produced a sequential series of steps we would take in the event that possibility 1 - not having enough productive work for all - became a reality.

In January 2009, the company's 15 owners accepted these steps by consensus, and they became company policy.

In the event of not enough work to provide full-time employment for all individuals in the company, Management, in consultation with Personnel where appropriate, will enact the following plan, in the following order: 
Voluntary temporary rolling furloughs;
  • Employ people doing speculative work (income postponed) for a limited period of time;
  • Employ people doing non-income-producing work for a limited period of time; 
  • Strategically reduce hours worked;
  • Reduce wages across the board, graduated from highest paid to lowest; 
  • Involuntary temporary rolling furloughs. 
Only after all of these have been exhausted would we resort to layoffs, which remain on the Unthinkable list. 
John concluded:

It's great to be employee owned at times like these and to therefore have 1) a group of people who is thinking about each other more than themselves and 2) the ability to use our profits for our common good because our profits belong to the group, not to any one person. 

    So, that was a year and a half ago. Earlier this week, I checked in with John to learn the outcome of the "unthinkable" plan. Here's his response:

    "Well, despite our efforts, and we did do all those things, downsizing was impossible to avoid. The Unthinkable happened. We didn't have to lay off many; just a few.  And that need, too, spawned an important process. It was very painful, but highly productive and we are a stronger (and slightly smaller) company today."

    What about you, readers? How have you weathered the storm, and how strong is your team heading into the remainder of the year?

    Leah Thayer

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