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Uncertainty, Fear, and Our Response

Posted by Mark Bennett on August 24, 2011

Since the Great Recession we’ve seen mass layoffs followed by weak rehiring. We’re now seeing possible renewed layoffs in response to the latest indications of a slowdown in the recovery. Government programs are being cut as well.

Two recent news items, although unrelated to each other, highlighted to me different ways organizations can respond to the extreme uncertainty of the world economy today. One, with a bias to thoughtful action. The other, not so much.

The first is Starbucks CEO Howard Schultz’s open letter saying that rather than feed the cycle of fear by announcing layoffs, Starbucks would instead pledge to hire – “to accelerate growth, employment, and investment in jobs.” This is what most agree is needed to return to and sustain an economic recovery.

The second is about the plan to shut down the “Statistical Abstract of the United States.” This is produced by the Census Board and is an incredibly valuable source of data, used by a wide variety of organizations. The savings? $2.9 million, but the cost to consumers of this data (i.e. our economy) could quite easily be a very large multiple of that purported savings as they have to either find all that data themselves or contract with someone who will.

So, two responses to current conditions.

In one, the harsh reality is acknowledged, but the plan of action is to create positive change (i.e. Leadership.) In the other, a cut is made under the guise of “we must find every way possible to become more efficient.”

Whatever you think of Starbucks and what it may symbolize to you, the hiring pledge is saying, “We do not have to resort to layoffs in response to economic uncertainty – in fact, it’s harmful to the economy as a whole.” It’s saying there are other ways to keep the business viable in tough times. Time will tell if the pledge will be upheld and how well those other measures work.

Whatever your politics and whatever you think of government programs and whether any can provide value comparable to a private venture, the prioritization of efficiency over effectiveness represents a ham-handed approach to cost-cutting. Just as you should always examine the return gained by the next incremental dollar(s) spent when comparing investments, so you should examine the return loss (if any) that results from the next incremental dollar(s) cut.

In the end, we can choose our response to uncertainty. We can take positive steps to make the situation better the best we know how, or we can say our hands are tied and watch value burn down.

You can have your voice heard in saving the Abstract  here or by writing to ACSD.US.Data at census dot gov.

7 Responses to “Uncertainty, Fear, and Our Response”

  1. I’m with Paul Krugman, NY Times on this one. “Killing the publication for the sake of a tiny saving would be a truly gratuitous step toward a dumbed-down country. And believe me, that’s not something we need more of.”

    • I agree, Lexy, and thanks for sharing Krugman’s quote. What also stood out to me in Krugman’s post was that this is the kind of issue that people who value knowledge, critical thinking, and understanding, no matter what their political/economic leanings, are united on. We can look at the same data and come to differing conclusions, but we have to have the data to work from.

  2. […] Bennett, from the Oracle team, starts us off with Uncertainty, Fear, and Our Response posted at TalentedApps, saying, “How leaders respond to uncertainty shows whether they think […]

  3. […] Bennett, from the Oracle team, starts us off with Uncertainty, Fear, and Our Response posted at TalentedApps, saying, “How leaders respond to uncertainty shows whether they think […]

  4. Here’s an update post from Invictus: http://www.ritholtz.com/blog/2011/09/going-grassroots-on-saving-statistical-abstract/

    He asks that readers “…let their collective voice be heard by writing to the director of the Census Bureau, one Robert M. Groves (Robert.M.Groves(AT)census.gov).”

    In addition, there is still time to write your congressman as the budget that kills it has not yet been passed.

  5. Great article and information. I think that the certainty of misery Is better than the misery of uncertainty. As a leader you have to keep your employees fully informed and tell them the truth. No one likes to go through these tough economic times, and no one likes all the changes and sacrifices required by these times.

    • Alan, I agree that keeping employees fully informed with the truth is always the way to go. When people are not informed, they tend to fill in the story themselves and it frequently is the worst case scenario. This can make them more miserable than they really need to be, which is bad enough in itself, but also has a big negative impact on productivity.

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