Patrick McKendry

I have previously ranted about layoffs. I feel they generally leave organizations worse off, with less talent to pursue growth initiatives and do not provide meaningful financial upside for the largest organizations. In some cases, we see companies laying off large swaths of specific functional areas, like recruiting or influencer marketing teams, after shifting core strategy towards a new direction. In many cases, those redirects impart minimal impact on C-suite executives who failed to accurately forecast far enough into the future to avoid the jolting change.

There is one universal impact of layoffs. They crush morale. Speaking from experience, after a layoff round a range of emotions sweeps the company. There are moments of gratitude for being retained, disappointment at projects being abandoned, fear for a future round of cuts, confusion around strategic next steps, distrust over the layoff decision criteria, and anger at the organization over teammates lost. These are all valid responses. After Google’s 12,000 person layoff round in January 2023, the company’s internal Q&A board - Dory - was flooded with questions for executives leading up to the subsequent town hall. Questions included:¹

“How were the layoffs decided? Some high performers were let go from our teams. This negatively impacts the remaining Googlers who see someone with high recognition, positive reviews, promo but still getting laid off.”
“What metrics were used to determine who was laid off? Was the decision based on their performance, scope of work, or both, or something else?”
“How much runway are we hoping to gain with the layoffs? Would you explain clearly what the layoff allows Google to do that Google could not have done without layoffs?”
[In reference to CEO Sundar Pichai’s internal memo] “What does taking full responsibility entail? Responsibility without consequence seems like an empty platitude. Is leadership forgoing bonuses and pay raises this year? Will anyone be stepping down?”

Whether or not you agree with them strategically, layoffs happen. In the days, weeks, and months after layoffs, mid-level leadership gets caught in the crossfire between executives and operating team members. These leaders usually are on the receiving end of orders to deliver layoff news. They often have to watch while their people are let go despite their objections. Some are left with skeleton crews and asked to deliver at or above prior output levels. The constant barrage of angst, questions, and ever-rising expectations can be draining.

Yet, the response of this group plays a critical role in determining how effectively a company accelerates out from its darkest days. I had hoped to follow-up my rants with some more productive thoughts. I want to outline advice to those leaders given the difficult task of rebuilding team momentum after layoffs. We will explore key cognitive and behavioral factors described by Suzanne Kobasa, a leading psychology researcher on the topic of hardiness.² Hardiness is a personality construct that arose from existential psychology. It is composed of three traits - challenge, control, and commitment - that when present help make people more resilient to stress.

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Challenge is the Norm - Acknowledge the Suck

Naval applicants have to fight physical and mental torment to get through BUD/S, a notoriously brutal crucible of military training, just to have the chance to become a US Navy SEAL. The 24-week course peaks in pain during “Hell Week”, a 5-day continuous training consisting of less than 4 hours of sleep, 200 miles of running, and more than 20 hours of training each day.³ A common piece of advice from instructors to candidates to help them get through the endeavor is to “embrace the suck.”⁴ For many trainees, forcing the mind to appreciate the misery is the only way to make it through.

No one knows psychological hardiness like Navy SEALs. Except, maybe, Suzanne Kobasa. Kobasa was a primary contributor in defining psychological resilience in the late 1970s and, in her research, she notes the primary traits that separates high and low resilience individuals. The first is one that SEALs also know well - challenge.⁵

The challenge disposition describes resilient people’s inherent understanding that change and difficulty, not stability, is the default state of life.² In this way, disappointment, failures, and mistakes are seen as lessons to be learned from rather than setbacks. Additionally, highly resilient people do not see negative outcomes as reflective of their self-worth or a critique upon their abilities.⁶ While these people may not necessarily embrace the suck, they certainly expect it and acknowledge it when it arrives.

Layoffs suck in their own way, and acknowledging the reality of the difficult situation is critical. Our mid-level managers know how awkward the first team meeting after layoffs can be. The room or call is quiet. No one knows what to say first. It is natural to want to avoid the uncomfortable conversation, especially if the cuts were outside of our control. Avoid that temptation. Jumping into business-as-usual signals to the team that their emotional response and the team members lost are not worthwhile because they are not worth discussing. Enable that conversation and give your team the space to process their emotions with each other. Further, managers may feel stuck in a tight spot if they disagree with the layoffs but also feel the need to support the company.

Start the conversation by stating that layoffs suck, which is true no matter how you feel about the strategic value. Then clarify the organization’s rationale as you are able based on questions your team has. Most importantly, make sure it is clear that the layoffs happened. And make sure it is clear that the layoff is now in the past and that decision will not be reversed. The decision that the team now faces is how it wants to move forward.

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Focus on Your Locus of Control

Still, acknowledging difficulty is just one leg of the stool. In Kobasa’s research, she notes a second trait that separates high and low resilience individuals is how they identify situational control. Specifically, those who exhibit hardiness have an internal locus of control.⁷ People with an internal locus of control believe they have agency over their actions and the outcomes.⁸

It is also important to delineate between what aspects we can and cannot control. For example, in the financial services industry the macroeconomic pressures of interest rates or inflation can meaningfully influence business performance. But those pressures are outside of the company’s control. To the inverse, the company can control its marketing message to support shifting consumer needs as inflation grows. That is within the company’s control.

During layoffs, managers have the responsibility of re-establishing an internal locus of control for their teams. While this conversation should start with acknowledging company layoffs, it also must clarify both the controllable and uncontrollable factors that lead to the decision. It is ok to say that some forces at play were external to the team. It is also productive to highlight that no amount of conversation or action will ever influence those uncontrollable factors. This framing can help ease the guilt that teams might feel over past work and redirect the feeling of failure.

We have to then establish what is controllable. If we fail to make this mindset shift, motivation crumbles. This makes intuitive sense. If our outcomes are largely decided by external factors, there is no point in trying. Theory supports this too as our locus of control is understood to be primarily established by the rewards we received for similar past actions.⁸ For our teams, we should demonstrate that projects delivered before the layoffs continue to have value despite the macro external factors. Clearly tying those prior actions to impact can reinforce the message. Another way to highlight control is by speaking to what the team will focus on moving forward and how it builds upon work already done. This shows that prior work will have lasting impacts and provides a set of clear initiatives that the team can work to directly influence.

The goal of establishing these action-reward ties is to jumpstart momentum. By highlighting past wins and how those wins lay the foundation for future work and growth, we can highlight how the team is already demonstrating control over its environment. Keep that top of mind to continue building momentum over the following weeks and months. Effective managers should continually highlight wins of all kinds, but pay particular attention to when it exemplifies the team’s agency over its circumstances.

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Commit to Something Meaningful

And still, having a sense of control may not be enough. Layoffs tend to put the intersection of our work and lives into immediate contrast. As was the case at Google recently, people who had provided impact and put years of time into growing the company were suddenly let go. It begs the question, “What’s the point?”

Kobasa highlights a third characteristic that separates those with high personality hardiness - commitment. The commitment disposition is defined as the proclivity to involve oneself in activities in life and as having a general interest in and curiosity about the surrounding world.² That commitment is not restricted solely to work, but can include commitment to relationships, spirituality, and causes. It can also include commitment to one’s own goals and desire for success. Those with high levels of this disposition are committed to their lives and have compelling reasons to get out of bed each and every morning.⁶

Commitment is broader and more durable than motivation. It extends beyond a single project and can hold firm in both good times and in bad. During layoffs, when the goals and momentum of the company are in flux, it can be helpful to reflect on and recommit to what is most important to us. Managers might recommit to their personal cause of creating the most meaningful team experience that they can. Perhaps they commit to a new cause, like being better about focusing on work-life balance for their team. A manager may even commit to a goal of accelerating their team’s promotion readiness on the tail-end of layoffs and recommit to better documenting individual wins for each of their direct reports.

Individuals or entire teams may shift their goals away from simply delivering high quality work on fast turnarounds. Instead a team could commit to building their collective skill sets and work collaboratively to build new technical strengths, such as data analytics or basic programming. This developmental focus will inevitably pay returns to the team’s work output. But, more importantly, it extends beyond the immediate environment and provides a more durable anchor point onto which team members can latch their motivations.

This style of recommitment can also apply to team’s whose scope has meaningfully changed. In most layoff environments, companies place more conservative bets and often pare back on growth initiatives. This can obviously be demotivating as the team size, available budgets, and simplified scope all shrink from their prior size. Yet, those are questionable KPIs to evaluate meaningfulness. Any team should prefer to do excellent work with a small team over doing sub-par work with a larger team. Managers should then encourage their teams to think about what would make their daily activities most meaningful and aligned with individual career goals. Then, commit to working to deliver against those new KPIs while delivering within the new team scope.

Finally, all managers should be committed to the idea of making the people on their team as successful as possible. In the case where your team gets decimated by layoffs, it can be a genuine struggle to recommit to that cause. Do it nonetheless. Managers should recognize that a smaller team provides opportunity to invest more in those still in their charge. They can double down on development and focus on building leadership practices that will scale as their remaining direct reports succeed and eventually build up their own followership. Also, managers can find additional ways to drive development outside of their immediate team by finding opportunities to engage as mentors to the broader organization or by creating new value streams through novel collaboration with leaders of different teams.

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Not Just Surviving, But Thriving

Resilience shows predictable effects on overall well-being in response to stress and difficulty. Namely, in studies of top executives, those who scored higher on psychological hardiness reported lower stress-related illness.⁹ As individuals, it is important for leaders to develop more resilient mindsets so that they can stay focused and present for their teams when trouble arises. However, survival is not what we want our leaders to strive towards. Leadership is defined when times are difficult, not when they are easy. We want our leaders to have the capacity to be at their best when a situation is at its worst.

In 2008, US General George W. Casey, Jr. asked a simple question to Martin Seligman. Seligman is regarded as the father of positive psychology. Casey asked how positive psychology could help soldiers. Seligman’s response lead to a $145 million investment into a new program called Comprehensive Soldier Fitness.¹⁰

Seligman shared that the human response to stress, as with most things, was distributed. On one end of the distribution were responses that lead to negative outcomes like PTSD. The middle of the distribution is where resilience lives, shown through initial negative reactions to stress that return to normal responses after a few months or years. On the other end of the distribution were those who demonstrated post-traumatic growth. These individuals experienced similar initial depression and anxiety but grew to be more psychologically healthy within the next year. To Seligman, the difference was explainable.

Early in his career Seligman pioneered the research on learned helplessness. Learned helplessness is the behavioral phenomenon where people - after repeated exposure to the same stressful situation - come to believe that they cannot control their situation, even when presented with new opportunities to improve their outcomes.¹¹ Seligman found that while prevalent, helpless responses were not universal. Through questionnaires and speech and writing analysis, Seligman’s teams found one primary factor to explain the difference - optimism.¹⁰

Every leader should have the goal of enabling their teams to perform at their highest level while working towards the actualization of their career goals. In difficult times, creating optimism for the future and maintaining the willingness to fight back against the current situation is one of the most important things we can do to help our teams not just get by, but grow. We know from the warning of the Stockdale Paradox that the end of the fight is never known and we can set ourselves and our teams up badly by trying to promise a finish line.¹² Managers should recognize that their teams are looking to their behavior as an example of how to move forward during difficult times. For leaders, optimism is not just useful; it is necessary.

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References

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Leadership Starts Where Layoffs End - Building Resilience in Teams