Gerald Wiley - ESG Foundation Contributor

The Real Cost of Corporate Cowardice, Redundancy – When Bosses Pass the Buck

By August 13, 2024No Comments

As an employer of others, the ultimate responsibility on their effective performance rests on the shoulders of the boss. The role is lauded for its prestige, power, and often lucrative rewards. Yet, with great power comes greater responsibility – a responsibility that too many leaders shirk when faced with the harsh realities of business downturns.

Instead of acknowledging their own strategic missteps, these leaders often resort to making other individuals redundant, shifting the blame and consequences onto their employees. The cowardice inherent in such decisions is the nadir of ESG, a failure of sustainability, economic management and good governance.

It’s often said that redundancies are sometimes unavoidable in business. Market shifts, technological advancements, and external economic factors can necessitate difficult decisions. But how many leadership teams do you ever hear taking a salary cut, forgoing bonuses, or even making themselves redundant, before they shift the consequences of redundancy on others?

There is a stark difference between making tough calls out of necessity and using layoffs as a smokescreen for leadership failure.

When a leader opts to make an individual, a team or a whole unit redundant invariably it masks deeper issues within their organisation. Poor strategic planning, lack of innovation, failure to adapt to changing markets, and inefficient management practices should always be examined first, before cutting head count.

The Cowardice of Avoidance

It takes courage to admit mistakes and even more to take responsibility for them. Making others’ pay the price by making them redundant is not strong leadership. When managers deflect the consequences of their own misjudgements onto their employees, they demonstrate a profound lack of courage and integrity. Such behaviour undermines trust, not just within the organisation, but also with investors, customers, and the broader community.

The true test of a leader is not in times of prosperity, but in times of adversity. Strong leaders face challenges head-on, acknowledging their own part in the organisation’s difficulties and working collaboratively to find sustainable solutions. They recognise that their role is to guide, inspire, and protect their workforce, not to sacrifice them at the altar of short-term gains.

The repercussions of cowardly leadership extend far beyond the immediate impact on those made redundant. A culture of fear and insecurity permeates the organisation, eroding morale and diminishing productivity. Talented employees, seeing the writing on the wall, may choose to leave on their own accord, resulting in a loss of invaluable skills and knowledge.

Moreover, the external perception of an organisation that resorts to mass layoffs can be severely damaged. In an age where corporate social responsibility and ethical business practices are highly valued, such actions can tarnish a company’s reputation, making it harder to attract top talent and alienating customers who prefer to support ethical businesses.

True leadership requires a commitment to the people who drive the business forward. This means exploring every possible avenue before considering redundancies. CEOs should engage in honest self-assessment, seeking feedback from within and outside the organisation to understand where they may have faltered. They should invest in retraining and upskilling programs to adapt to new market conditions and explore creative solutions such as job-sharing or temporary pay cuts.

When layoffs are absolutely unavoidable, transparent communication is crucial. Explaining the reasons behind the decision, offering generous severance packages, and providing support for affected employees can help mitigate the damage. Demonstrating empathy and a genuine commitment to those who have been let go can preserve the dignity of both the employees and

The measure of a captain is not in how they steer the ship during calm seas, but in how they navigate the storm. Passing the buck by making others redundant is a sign of weak leadership and a lack of moral fortitude. By confronting your own failings and leading with integrity, bosses can foster a resilient, loyal, and motivated workforce ready to face challenges together.

It is time for leaders to rise above cowardice and embody the true essence of leadership – taking responsibility, making tough decisions with compassion, and always prioritising the well-being of their people.