"...You can rest assured that you made a decision that enables your company to continue moving forward."

This past September (2009) I was faced with a tough decision, the kind of decision nobody wants to make but the CEO must make: layoffs. To prepare myself for the CEO role I have always told my team that I would make the right decision for the company even if it meant having to let go of people who have become my friends and family at work. Having talked to several other CEO's and former CEO's since we restructured, this decision has been reaffirmed by all as the right decision. In fact many of them have said that if only they had been willing to make that choice in their past they wouldn't have lost their business or their role as CEO.

It is the CEO's job to make the right decision regardless of how tough it is. That job requires assessing risk and weighing the options that mitigate and/or avoid that risk. If you make an investment that doesn't pan out, do you keep going at your current spending rate hoping that the investment will pay off in time and risk running out of money altogether? Or do you scale back and lower your costs before you reach that point?
What my company faced, as I'm sure many are facing now, is rising costs, a stagnation in productivity and investments that have not paid off.

By projecting forward we saw that if we didn't make the tough decision soon the entire company and everyone in it would be placed under an unnecessary level of risk of failure. It turns out that this tough decision immediately restored our profitability and ability to make investments that improve our products, services and company as a whole. On a personal level it is sad that people you care for are out of work and must find new jobs. On a business level a company shouldn't be run on a personal or emotional level without a strong dose of responsibility for the corporate entity.

There is a simple point to all of this: if you don't make the right decision, regardless of how tough it is, the outcome you fear will arrive by default. If you fail to cut back in time your entire company can go under and instead of laying off only some people you may find yourself laying off everyone (not to mention the other ramifications of going under).

Don't forget that there is good that comes from the pain of a tough decision. For one, the employees you keep will know that you are a strong leader who is capable of doing what is right and when they believe that their focus becomes more intense and productivity rises. Assuming you make the decision in time, even the employees you let go will appreciate that you looked far enough ahead to give them time to get out with some severance and opportunity to find a job (i.e. don't wait until December to do lay offs). As for yourself as an efficient CEO, you can rest assured that you made a decision that enables your company to continue moving forward. Our company is now moving more swiftly and with more efficiency, an unexpected effect of having fewer people to manage and perform certain duties.

For those of you who are facing similar tough decisions, trust your instincts and do what is right for your core team, your customers and your company as a whole. Make the tough decision with honor and respect for the trust your team has given you to make these decisions.

Thanks for reading,
Richard Walker