In this issue's column, I'll address the subject of how a manager deals with the human Resources matters that impact him or her during stressful economic times. Despite the difficulties, it is possible for a manager to keep a team together.
The Current Market
I recently asked a friend in a major bio/pharma marketplace what the trends look like for the next year. Mark D. Dibner, Ph.D., president of BioAbility, has always proven to me to be an excellent forecaster for the ups and downs of this industry. He describes the current atmosphere as guarded, with the potential for more layoffs, mergers and acquisitions.
Dr. Dibner's company, a consulting firm that develops strategic business information about biotechnology, is headquartered in Research Triangle Park, NC - a location that has seen a fair amount of upheaval in what has historically been a very strong region.
"There is no doubt that the current economic climate will fuel additional layoffs, mergers and acquisitions," he forecasts, "but unlike in the past, these will be fueled by the financial fragility of some companies and bargain hunting by others."(For most of us, working in a small company that looks like a "bargain" is just as dangerous to one's career as being in a big company that has announced layoffs.)
When asked about the consequences of this bargain hunting, Dr. Dibner indicated that more downsizing will result. He's already seen a lot of really good employees on the street and says that this recession will lead to new opportunities - and challenges - for the manager who will be charged with strengthening the company's ability to survive at the same time as doing good science.
"Steering a strong team through a difficult period is a tough job . . . much more difficult when, as in some cases, you are asked to pare down to the best potential staff. The challenge for most will be managing the most important resource of their companies, the human capital," he said.
Another acquaintance, a senior officer of a small biotech company, has been through some of these rough waters personally. He's come away with excellent experience that adds value to his own résumé - he guided his employer through severe layoffs, found another firm with a common interest, and pulled them together as a joined entity rather than as competing businesses.
"We're all engaged in R&D and need huge amounts of capital," he told me. "In fact, there are only two ways to get that money. For one, you can go to the equity market and sell stock to pay those bills. Or, you can look for complimentary partnerships where both parties have technology that fits together and where there is a synergy in the combination."
This fellow went through some gut-wrenching H/R issues in the process: "In a merger like this, or in any scenario where a company must cut back dramatically, there is a great effort to focus only upon vital projects; this leaves some people whose skills are no longer a fit. Project prioritization must take place, and this means that the manager must pick the best people possible to manage these."
When asked about what he might do differently and what lessons he learned along the way, he suggested the following guidelines for a manager faced with similar challenges:
"We lost some good people and learned a few lessons," my contact told me after the process was completed. He believes his company emerged stronger as a result, but regrets the time spent "contemplating" layoffs before they actually occurred.
"That's when many of our best people left," he told me.
Motivating a Reorganized Team with Incentives
It's easy to lose good people, even in the best of times. The difficulty is pulling them back together after a period of layoffs . . . scientists and engineers feel they are doing creative work, as opposed to assembling widgets. They need to feel that they are being given the opportunity to use their unique skills and particular gifts. And as a result it is certainly not only salary that will hold them together.
Salary is mighty important in making the decision to take a job, but it isn't the reason that people stay. (You'd be surprised how fast your newly reorganized team would fall apart if you did nothing other than offer them an 8% salary bump.) Instead, the major motivators after a period of turbulence are recognition amongst peers, the challenge of the work itself, responsibility, advancement and personal growth. These are the keys to "satisfaction-based" reward systems that work better than salary at holding people together after a layoff.
Read over my seven key screening factors below as you consider any incentive programs your company may implement to revitalize your affected teams:
Everyone running a project in a company that has had layoffs has the responsibility for bringing the reorganized team back together, producing more with less total resources. Incentive programs are just one piece of the manager's arsenal in order to get this accomplished.
The Down Side of the Roller Coaster
In any recessionary employment marketplace, there are always downsizing firms, as well as companies that are going through dramatic periods of growth. One thing remains constant through it all: No matter what your current position or whether you are in a biotechnology startup or big pharma, you will agree that we live in exciting times.