Career Advice Tuesday – Rats and Ships

March 29, 2011

Dear Infosecleaders, 

I’m part of the ops team for a mid-sized technology business. This week, a coworker was laid off due to “financial cutbacks.” In the same timeframe, a respected manager has left the company for what seems like a lesser or equal position at a new company in the same market.

My question is: what are some warning signs that my company is failing, and how do I tell if I’m next on the chopping block?

“Sticking his neck out”

Dear SHNO,

Up front, I think you have the answer to your question (at least for your specific case): sounds to us like things are getting a tad ugly around there.  And I would bet that you have other indications that things are going badly that you haven’t mentioned here… the symptoms you mentioned are usually later indicators that things are going bad.

That said, let’s talk about the more general case.  Here are five (perhaps counterintuitive) things to look for to determine whether your company may be in serious trouble (special thanks to Melina Murray for her HR expertise on some of these):

  1. Significant Executive Turnover: One of the first signs that a company is going south is that the executive position in charge of managing the core business goes through major turnover without a turnaround.   In the product / consulting space, most companies that are going badly will jettison their VP of Sales first – if that doesn’t turn the company around and they end up getting rid of another one, it’s likely that the problems are more systemic and bad things are to follow.  As a similar example, Lehman Bros went through two CFOs in the year before its bankruptcy.
  2. Loss of Focus: Companies that are on the way down often tend to try to get revenue however they can.  This can lead them to attempt to radically diversify into whatever area seems to be “hot”, regardless of whether they have the staff/resources that can execute in that area.  This flailing often hastens their decline.
  3. Communication Style Changes: If you’re at a company that normally has a lot of communication from the executive team and that changes, watch out.  Similarly, companies that are normally less communicative can sometimes become overly communicative in the hope of placating employees.  Whenever the tenor of communication from executives to the rank-and-file changes radically, it usually indicates that something worth watching is going on.
  4. Tightness of Resources: While it’s a good practice to keep a tight rein on expenses, when a company starts to go south it often places restrictions on “mundane” resources first.  If you used to be able to just pick up a box of pens in the supply room and now have to go through six pages of justification for why you need red ballpoints, you should probably keep your eyes open.
  5. Limiting Social Interaction: As a co-point to the previous, companies that are having trouble often cancel social interactions among the first wave of cuts.  If your company has always had a Friday evening happy hour that suddenly gets cancelled, it could spell some trouble.

None of these by themselves are indicative, but if you start to notice a few of them (along with key employees leaving and other layoffs/cutbacks as in your situation), you’ve got a pretty strong indication that something is likely going wrong and you might want to have a contingency plan for a potential “career incident”.

Mike & Lee

Posted by mmurray | Filed Under Career Advice Tuesday 


Comments are closed.