Rex Gatto
Rex Gatto
Mickey Gatto
Mickey Gatto

Surviving the Economic Layoff

Why today’s economic recession is like a forest fire and what type of leadership skills you need to fight it.

July 27, 2009
by Rex Gatto, PhD and Mickey Gatto, MEd

Many twists, turns, greed and gratuitous corporate spending have caused the massive layoffs of 2008/2009. As a result, leaders have made and will continue to make organizational changes because of the economic downturn. This crisis has several resultant aspects: destruction and rebirth of business as we now know it, the emergence of a new type of leader and the new strategies HR departments must now develop to deal with not only those being laid off, but also those surviving the layoffs.

This economic recession is like a forest fire. Forest fires are devastating, with death, tremendous destruction, exceptional pain and massive costs. But a forest fire also clears away all the land’s old overgrown brush and debris. After a period of time, new growth begins to emerge from the cleared land. Similarly, people right now are caught in an emotional upheaval but what will result through all of the consolidation? How many jobs will be lost and business landmarks sold? The banking, financial, housing and automotive industries are failed industries in the midst of their metaphorical forest fires. This economic forest fire has brought tremendous emotional pain, through this rebirth process; however, in two, three, or four years, we will see leaders emerge who are capable of dealing with the newly created business configurations. The consolidation of these organizations will give people the opportunity to look at business in a fresh way, creating novel enterprises and innovative entrepreneurial possibilities and through which people will be able to find and realign themselves with positions that will help them to grow and develop.

Effective Leader Skills

In order to be a beacon through the forest fire, to be effective, new leaders will need to be leaders of hope. You must be visible and explain how to get through this crisis. You will have:

  • To be frank, transparent in their dealings and creative. It is essential to help people understand that, while this is devastating, there is still a direction and a strategy of hope to survive.
  • To be communicators, be able to over-share information, to go up and down through various levels within their organizations and communicate a message of direction, economic success and business success.
  • To help all levels of employees understand what the goals are for the next three-to-six months, what the possibilities are within a year and what people will be doing, by product and service.
  • To help people know who will be involved, how the organization will be altered, how people will work together and how consolidated jobs will be created and measured.
  • Build an organizational strategy for approximately six months, beginning today and continuing next week and the week after, repeating the cycle every week. It is practical and realist to focus on a six-month period of time, indicating that these are the kind of things that have to be done today and for the next six months. If accomplished, success will ensue.
  • To show people how they will be evaluated and how success is measured.
  • To communicate the what, who, when and how of doing and that the successes will be continually measured. People should put “SMART” (Specific, Measured, Action, Realistic, Time-bound) goals in place, making very specific measureable actions so that it will be evident as to whether they are on the track to success or not. Goals should be practical, realistic and put in a time frame. Leaders must have the leeway to go back and rethink in a very practical perspective what must be done now and how it must be accomplished.

True leaders can be identified through their behaviors of listening, communicating, taking action, understanding the economic drivers and creating organizational passion. They understand the passion of people, they instill passion in people and they help organizations to identify what there greatest strengths are. Leaders have a great opportunity and find out what their greatest strengths are, communicate them daily, instill the confidence of strength in people and lead people to utilize those organizational strengths to success. If you do that, you will be able to get through this chaotic forest fire. You need to understand where your firm presently is and the capabilities needed to move forward.


Leaders cannot afford to take the easy way out: they need to refocus on those great strengths within an organization. The right questions need to be asked, such as what causes the success in an organization. Once identified, those causes should be communicated and driven through the entire organization. If leaders do that, employees will rally around them.

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Rex Gatto, PhD, is an internationally known speaker and author whose insights and breakthrough research on the characteristics of U.S. management have helped organizations enhance their productivity and individuals enrich their lives. Gatto has been featured in The New York Times, The Accounting Web, Polaris International Quarterly, The Aspen Law and among others. He has authored the highly acclaimed Smart Manager's FAQ, in addition to books on stress, presentation, work/life balance and mentoring. Mickey Fitzgibbons Gatto, Med, is a professor in international education for over 20 years at Point Park College. She has helped businesses effectively cross cultures and expand their horizons.