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Post Recession Stress Disorder CEO Journal


Dan Marcus, TDC Consulting Inc., Amherst, Wisconsin T


he need for a financial turn- around is more commonly precipitated by too much busi- ness than too little. When my mentor, Joel, first mentioned


this intriguing observation to me, I looked at him sideways, squinted my eyes, and did not believe. When he then growled “Believe it, sport,” I decided (as I always do) to give him the benefit of the doubt. My experience over the past 10 years has proven him right. As this recession gives way to recov-


ery, and given that many have cut both hourly and salaried staff to the bone, metalcasters are in high danger of being overwhelmed by too much business. This happens when demand rises faster than an already stressed-out organization can handle, and the relationships be- tween metalcasters and their customers and banks are stressed to and beyond the breaking point. Precisely because of this post recession stress disorder, our industry has typically seen more plant closings in the aftermath of recessions than it has during the depths of the recessions themselves. The root of this disorder is in the


choices management makes as it struggles to cope with an oncoming recession. One option is to hold much of the organization together at significantly reduced wages so it can be there, more or less intact, to handle the stresses of recovery. The more common approach, however, is to cut the organization to the bone through layoffs. This choice is made in some cases because there is legitimately no other option. Yet in many other cases, this path is taken simply because it’s easier, familiar and mitigates the financial pain of those who continue to work through the recession. On the other hand, a smaller num-


ber of metalcasters have chosen, and continue to choose, to equitably share the pain and hold the organization together through the recession. Even though this is the more difficult “road less traveled,” management has good


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reasons to take it. Foremost among them is to avoid, or at least minimize, post recession stress disorder. Metalcast- ers who chose this path have a more difficult time during the relatively short recession but a much easier time dur- ing the longer recovery period. For this reason, they remain continuously able to fully satisfy customer requirements and put themselves in a position to grow at the expense of other, less well prepared competitors. Employee loyalty is another reason to choose this option. Treating people


Surviving a deep


recession while keeping the organization largely intact will burnish any company’s reputation among customers, current employees and prospective employees.


as if they are expendable is a recipe for an endlessly revolving door and all the headaches it entails. Doing the opposite builds trust, loyalty and an increasingly skilled and valuable workforce. These are important advantages in and of themselves, but they are multiplied when the substantial costs—financial and otherwise—of rehiring and retrain- ing are factored in. Making this difficult choice also eliminates the need for a “recovery plan.” In short, precious resources will not be needed to figure out how to get out of an organizational mess because adroit management will have prevented the mess from occurring in the first place. Maintaining the ability to take ad-


vantage of opportunities is another important advantage of pursuing this


approach. For example, even in this difficult recession, customers contin- ued to develop new products, make engineering changes and demand quality improvements. Being able to keep up with, and even stay ahead of, these demands can only improve customer satisfaction and competi- tive standing and, in turn, bring in more opportunities. Surviving a deep recession while


keeping the organization largely intact will burnish any company’s reputation among customers, current employees and prospective employees. With the coming scarcity of manufacturing talent, being known as a company that actu- ally cares for its employees—and puts its money where its mouth is—will pay handsome dividends. Such a reputation will make it easier for metalcasters to at- tract and retain the high caliber people who have traditionally eschewed our industry, the kind who value a sup- portive organization culture over cold hard cash. Similarly, such a reputation will make it easier to attract and retain new, high caliber customers, the kind with a global perspective who value integrity, stability and dependability over the lowest possible price. Although metalcasters can’t change


the past, the moral of this story can be applied to this recession going forward. One possible way of doing so would be to consider hiring now, in advance of the crush, so as to fill important gaps in the organization in a more patient and considered way than will be possible in the months ahead. Also, getting a head start on the recovery and the competition will provide an opportunity to train new employees in an environment conducive to learning, thus increasing the chances of heading off the singularity which most often pre- cipitates post-recession bankruptcy—a massive quality failure.


MC


Dan Marcus is the owner and principal consultant in the firm TDC Consulting Inc., Amherst, Wis.


MODERN CASTING / June 2010


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