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(Precious) Words of Wisdom : "Wall Street makes its money on ACTIVITY, you make your money on INACTIVITY." ~ Warren Buffett

Job cuts!! Is it the right answer?

The economic scenario has turned bad. The reasons are, of course, known to all and well debated. The reaction of the companies to this has also been predictable - job cuts. But is it the right thing to do? Is it not just a short-term remedy? Is this not going to affect the long-term sustainability of the business?

People are not liabilities. On the contrary, they are the most precious assets. Take the case of Japan. It is a small earth-quake prone country, which was completed devasted in the 2nd world war in 1945. It hardly has any natural resources or a large domestic market. Yet, within 25-30 years it became an economic superpower. This was purely due to their recognition that people are the most important assets.

It would not be wrong to say - "Take care of your people and the business will take care of itself".

Therefore, how far is it justified that CEOs and Top Management continue to fly in private jets while cutting innocent jobs? Should not they fly normal commercial airlines and that too economy class? Why don't they take 50-70% cut in their salaries instead of cutting jobs? Why don't they sell non-performing physical assets like their luxury cars, luxury homes etc. and lead a relatively more austere life? Why make poor employees pay for their luxuries and misdeeds?

You cannot buy People-Assets with money.
Trust - that’s the currency you need. In all your relationships, be it with your partners or employees or customers or mentors or others, trust will be the bedrock. And that is what you must endeavor to build in all your relationships.

People-Assets are irreplaceable assets, especially the good ones.
Therefore, they need nurturing and tender care, lest you lose them – sometimes forever. This nurturing happens thru’ a mutually beneficial association.

People are not machines or robots.
They have feelings, fears, hopes and aspirations. You will, therefore, have to relate to them accordingly. Logic does not always work with people. Emotions do.

Each person is unique.
A single formula will, therefore, not work for everyone. Respect everyone for his individuality rather than imposing your ideas on them.

Every one is driven by self-interest.
Therefore, you need to know what buttons to push as different people have different buttons. Strong motivation drives people more than their competence & expertise. Hence, even average persons can do what excellent people can’t if the motivation is right.

People also depreciate.
As the world changes, as the ways of doing things change and as businesses change, old skills cannot produce the same return. Also, the age catches up with them. Therefore, like any other asset you need to invest in them. You need to train & renovate them or gracefully retire them and acquire new ones. You just can't throw them out once their utility is over.


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