The True Cost of Cowardly Management

OK, I’m warning you, this is a bit of a rant. I’m peeved. I have no tolerance for abject, short-sighted stupidity.

Last week a close friend of mine (a senior software engineer) was fired without warning. He didn’t embezzle company funds, threaten his coworkers, or indeed commit any major transgression that would warrant such extreme action. First thing on a sunny Friday morning, he was called into a meeting and told that his job performance wasn’t acceptable. Believe it or not, this “You’re fired, get out now!” conversation was the first time his manager (or anyone at his company) had mentioned any problem with his work.

To add insult to injury, my friend was treated like a criminal. While he was being fired, they removed his laptop from his office without telling him. Then they told him to leave the building immediately. Weirdly, the only reason offered for his dismissal was trivial – unrelated to his core tasks, and contradicted by evidence. My friend was given no opportunity to discuss this decision. The firing was a done deal before he walked into the meeting. He still does not know the real reason why he was fired, and it’s unlikely he’ll ever find out.

Yes, I know this has become the common method for letting employees go, at least in the US – even though it really only makes sense in the most dire and rare circumstances. Such lack of communication and clarity on a matter of paramount importance is cowardly and cruel. Even worse, it’s very bad business.

Why should employers care? Aren’t surprise firings efficient? Don’t they prevent damage by “disgruntled employees?”

Absolutely not. Only the most naive executives and managers believe such corporate fairy tales. Disgruntled employees are made, not hired. Clear communication is the key to keeping employees “gruntled” in the first place.

The truth is, surprise firings are very costly and risky for business. That’s a shame, because this practice causes otherwise promising companies to rot away from the inside.

Here’s how that works…

Companies that fire employees suddenly and/or capriciously incur the following costs:

  1. Increased recruiting costs: It takes time and costs money to find and bring in someone new. This process usually involves advertising of some sort, filtering responses, multiple interviews, checking references, internal meetings, human resources administration, etc. Each step takes time and costs money.
  2. Increased training costs: Once a new employee is hired, he or she must be brought up to speed on the organization, team, culture, business mission, market, current challenges, systems and tools, and much more – all in addition to that employee’s specific job responsibilities. Even when there is no specific budget line-item for training, this process must occur. That takes time, and time is always money.
  3. Opportunity cost: When employees receive guidance and a fair chance to develop, more ultimately gets accomplished in less time. Well-managed employees feel valued and inspired to create value. If you’ve ever hastily fired an employee for not being telepathic or instantly/totally perfect, you have probably drastically underestimated how much value that employee could have produced for your organization. That, literally, is your loss.
  4. Sabotaged investment in remaining employees: In any company, when one member of the team suddenly gets fired, everyone notices – and everyone gets nervous. Whether they say it or not, each remaining employee starts wondering, “Am I next? If they fired him/her with no warning, how can I know how secure my job really is?” This is when the remaining employees stop trusting the employer. That’s when the whole working relationship begins to unravel. Employees who feel expendable start to put less effort and care into doing their jobs. They start scouting out options for work elsewhere. They might well decide to quit suddenly, with little or no notice – probably at an inopportune moment when that departure can cause damage. Such “blowback” has undermined the success of many key projects and mission-critical functions.
  5. Lost credibility: Like individuals, organizations rely on their reputation. People do talk – directly and indirectly, publicly and privately, formally and informally. Few things can undermine a company’s credibility faster than evidence of inept management. Sudden firings, or a wave of employees jumping ship, are a prominent signal of management problems. Customers, partners, and competitors aren’t likely to miss that. No one wants to do business with an unstable organization. Furthermore, a demonstrable inability to manage or retain key staff at crucial times also can be publicly embarrassing. That’s just a different aspect of “costly.”
  6. Dangerous new competition: Today’s thoughtlessly dismissed employees can become tomorrow’s formidable competitors, more easily than ever. If they know your weaknesses and can think circles around you, it really doesn’t matter what kinds of nondisclosure agreements they may have signed. Welcome to the free market.

WHAT’S MANAGEMENT FOR?

All of these extra expenses fall squarely on the shoulders of managers.

Managers exist to coordinate the efforts of people and resources in ways that yield profit, opportunity, and flexibility. This means that a manager’s foremost duty is to communicate consistently and well. When a manager fails to communicate, decisionmaking is impaired, efforts are wasted, and chaos and frustration reign.

Surprise firings signal a severe lack of management ability and simple decency. When managers lack basic communication skills, their companies pay a high price. After all, people are the biggest investment and most critical infrastructure of any organization.

It makes no business sense to treat people with less care and consideration than machines. I’m serious: Would any company countenance a manager who impulsively purchases an expensive piece of factory-floor equipment, then quickly orders the immediate removal and trashing of that device – simply because the manager could not be bothered to learn how to best put it to use?

There is no such thing as a perfect employee – certainly not right out of the box. Like any relationship, employer-employee relationships take time and mutual effort to develop. That requires ample two-way communication, especially at the beginning. However, inept and unqualified managers often consider communication too much of a burden.

Telepathy should never be part of anyone’s job description. It especially should not be an unacknowledged or secret job requirement. The whole reason why humans communicate is that none of us are telepathic. Developing any effective relationship takes the courage to communicate. Also, you must realize that good communication is iterative – you have to keep at it. It’s not like sending a greeting card.

Investors should not tolerate executives who demonstrate little or no ability or willingness to communicate. Summarily dumping skilled, motivated employees means destroying a valuable investment in those individuals, as well as decimating group morale. Both types of destruction incur very real and significant costs to companies and investors.

…Let alone the fact that companies which lack basic human decency end up hurting people and their families seriously and needlessly, even destroying lives. That is morally reprehensible. The fact that it is morally reprehensible should matter to business people – and to us all. When we neglect that, or cynically accept it, we’re much farther along the road to “seriously screwed up” than we’d care to admit.

Get real. Which employment market do you think offers more benefits for your organization –the nonexistant pool of telepathic lemmings, or the diverse and rich community of smart human beings?

All else hinges on making that decision and acting accordingly.

(Many thanks to Koan Bremner for insight and editorial assistance with this article. She’s also penned her own follow-up, The (in)human side of business)

(UPDATE: My colleague Dave Taylor has continued this theme with an excellent new article: How do you fire an employee?)

13 thoughts on The True Cost of Cowardly Management

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  1. Amy,

    Your own advice: “Get real!”

    This behavior that has generated your outrage has been going on for years. Many of us have experienced it, sometimes repeatedly. Apparently neither you nor your friends have been subject to it – till now. Congratulations that you lasted this long!

    Your comments are true – but, alas, unfortunately, sadly, completely irrelevant.

  2. The True Cost of Cowardly Management
    Amy Gahran at Contentious has a maddening story about a friend fired with little to no notice.

    Now, I’m not necessarily as hostile to “surprise firings”, as she calls them. Termination should be quick and total, and sometimes (e.g., in cases of …

  3. I shudder to think what employees, especially software programmers, might do to protect against such action.

    They could, for example, hide destructive code in software they create, for clients or for in-house use. Fire them and risk the consequences.

    This would lead to companies having to spend money in running suspect code in a protected environment and testing for the “landmines”.

    Mistrust and consequent destructive behaviour would be suicidal for the companies where managers don’t learn to act more responsibly.

    Thanks for writing about this menace, Amy.

  4. Terry said, “Your comments are true – but, alas, unfortunately, sadly, completely irrelevant.”

    …That submissive attitude, frankly, is probably a big reason why sudden firings and other effects of bad management have become so prevalent. People who prefer to cower within a shroud of “What can I do?” are significantly underestimating the power of simply speaking out.

    I suggest you go reread “The Emperor’s New Clothes.”

    Here’s what I believe, due to what I’ve experienced: Speaking out publicly against any destructive, senseless, or cruel practice is perhaps the most vital and relevant form of communication any human being can practice. Yes, it’s hard. People who are accustomed to cynical submission will criticize you for it. Still, it’s important. If you’ve never done it, try it. It’s a skill our society needs.

    If you accept and stay silent about intolerable matters, and if you ridicule or discourage others for speaking out, you become a huge part of the problem.

    …And to be clear, I’m so angry about this particular cruel practice precisely because I’ve seen people I love experience it time and again. Please don’t assume that I live in some sort of protected bubble. This particular firing was simply the straw that broke the camel’s back, because it is such a clear-cut example of total management failure.

    – Amy Gahran

  5. How do you fire an employee?
    A recent article by my friend Amy Gahran about The True Cost of Cowardly Management has left me thinking about the proper way to tell an employee that they’re on probation and, ultimately, to fire them. While I haven’t fired hundreds of people (no, I…

  6. How do you fire an employee?
    A recent article by my friend Amy Gahran about The True Cost of Cowardly Management has left me thinking about the proper way to tell an employee that they’re on probation and, ultimately, to fire them. While I haven’t fired hundreds of people (no, I…

  7. I do agree with Amy’s assessment on the fact that it does take awhile to build a good employee, and good communication is key, with the need to clearly state expectations. I find a lot of managers that are totally brilliant in there field, but are not the best communicators in the world. I am one of those people, so I finally hired some else to deal with the people! But as a business owner, I see both sides of this equation. I have kept people one, working through their issues, and tried and tried, to no avail, and practically drove the company into the ground in the process.

    I do agree that if it was truly a perfomance issue, or a personality conflict, your friend should have been given the opportunity to correct the situation, and warnings given, which I try to do.

    Then again I am a small business owner who cares about my employees, and do not understand at all the mentality of the corporate world!

  8. I am sorry to hear about the abuse of your friend. As the founder of Nurseprotect I hear these stories from nurse colleagues (and physicians) often. I used to get very upset as I listened to stories of illegal or unethical termination, blacklisting, and false reporting to professional licensing boards. I have learned that such action is common in healthcare. I created Nurseprotect to try to combat retaliatory and illegal termination of health workers. My efforts helped many.

    I realized that union representation is the most effective way to combat injustice against employees. I stated this at work and online. When ordered to practice in a manner likely to endanger patient safety, I refused and often spoke out in a professional manner.

    I see that you live in Houston – I worked in many hospitals there for approximately 5 years. DON’T get sick there.

    I lost almost everything for my efforts to do what is right.

    I am back in California, represented by the strongest nurses union in the world – California Nurses Association. I do not fear termination and I do not have to engage in situations likely to harm patients. Soon I will have the resources, time, relative protection, and energy to devote to Nurseprotect efforts.

    < < Speaking out publicly against any destructive, senseless, or cruel practice is perhaps the most vital and relevant form of communication any human being can practice. >>

    Vital and relevant yes, often at great cost to the few persons speaking out. It is extremely important to protect and support those who speak out but they are often labeled as a troublemaker, malcontent, etc. MOST of the nurses and doctors I have helped through Nurseprotect spoke out against unethical, illegal, and dangerous practices. Some paid with their careers, marriages, physical health – all had suffered emotionally.

    < >

    Many people stay silent about intolerable matters. They often discourage, ridicule, sabotage, or do much worse to those who speak out for the greater good.

    I hope I did not go too far off topic. I believe my experience is directly related to what your friend experienced. I believe the situation for US employees will get worse at least for awhile.

    Thank you for your highly informative web site and ezine.

    Steve Lee, RN
    San Francisco, CA

  9. Having been on the receiving end of this type of behavior I can certainly concur with each and every point in this post. Your comments are hardly “irrelevant” simply because “these problems have existed for a long time”. I believe this type of management style is becoming more and more prevalent. One just needs to look at the spate of reality programming that is predicated on humiliation and arrogance.

  10. This practice is so anti-productive that I’ve never even understood how it could exist… The company where my boyfriend works proceeds this way regularly – calling an employee at 4 pm, by 4:10 he’s out, not even allowed to go back to his office to pick his belongings (which are sent to him later on through mail – and he’s the one paying for this, of course). Then the company innocently worries about not having enough trained people anymore, when they don’t even leave their employees the time to prepare their replacements. Things start to rot as less and less people know how to use the software and, more importantly, correct any problems (nice to have a database that will be irremediably and totally lost at the next failure because no one’s left who knows how to manage it).

    It hurts people, it hurts business, it’s totally irresponsible, and it only leads to resentment and foul blows in the end. Way to go…