March 26, 2009

The Downward Spiral - As Companies Slow, So Do Their People

Yesterday, IBM said they were laying off 5,000 people. Today, Google said they were laying off another 200. Unemployment in Silicon Valley is easily above 10 percent, and for the remaining job owners, many have seen salary cuts, forced furloughs and mandatory vacation. Companies have cut estimates and forecasts, or reduced spending. And even as the stock market has had some up days of late, the feeling out there is still not good - a lot more AIG than IPO, for example. But in many offices and cubicles around the Valley and beyond, workers are exercising their own slowdowns, their spirits dulled, as they gradually get less and less productive, waiting for more bad news, and being numb to it when it finally arrives.

For many, while the dire times should drive a newfound sense of urgency, it never comes. Instead of putting in extra hours, these desk zombies float through their business days, murmuring in the hallways about how they heard rumors even more cuts might come, and refreshing the company sales dashboard to see if anything has changed since when they last looked at it twenty minutes ago. It hasn't. They might come in just a bit later than they used to. They might take longer lunches - spending less, but they'll be out of the office. And by three o'clock, they're either thinking about shutting down for the day, or in some cases, finally getting up the energy to clear their to-do list, having killed more than half their time filing e-mail and browsing the Web.

The office, once a bustling energy-filled environment interrupted by phone calls, fast-paced strategic discussions and the occasional peal of laughter, instead resembles an unpopular library, with the most activity being the frequent visits to the printer or copy machine, and the creaks of the restroom doors opening and closing. If there are ringing phones, they are either from vendors demanding to be paid, or employees' personal cell phones, as they take the call and then rush out to the back, or to a conference room.

These companies are dying. Not necessarily IBM or Google, of course - but there are companies strewn throughout the Valley and beyond that were set up to capitalize on momentum that disappeared and then reversed over the last 18 months. Dreams were blasted away as the public markets closed, acquisition offers never appeared, and customers started to say no in a big way. And inside, many employees gave up. They're still coming to work. They even might put on a game face when in meetings or talking with their boss. But their will and drive to be a success and make things happen is all but gone.

I speak to this because I've seen it and I've heard it - not just in this recession, but in those before as well. One friend of mine confided to me by phone a few weeks ago that he probably works a solid 2-3 hours a day in his software engineering job, frittering the rest of the day away. He doesn't believe his company has a chance, and he doesn't care - citing their move to cut staff and move other jobs to India. But he isn't doing anything to change it, and the putrid job market has him just barely treading water, let alone seeking other options.

Yet another friend of mine talked to me yesterday about how his company is winding down, trying to convince two potential acquirers to find something of value in the little that's left.

In a previous company where I worked during the dotcom bust, I distinctly remember seeing one of the business development management team members spending more time playing video games and updating his resume than trying to close deals - as I gnashed my teeth, wondering why I was working so hard at something that meant so little to others.

If you read many of the tomes that were written about the Silicon Valley's successes, from the earliest days of semiconductors and the Internet, to Sarah Lacy's "Once You're Lucky, Twice You're Good", you can be regaled with stories of people who didn't give up, who didn't take no for an answer, and who put in twelve-plus hour shifts, putting the company ahead of themselves. But you're not hearing the stories of those who went the other way - as frequent as they no doubt are.

A recent satirical post blamed Twitter for the down economy, noting a correlation between Twitter's popularity and the Dow's plummet. And as silly as that is, many of these frustrated desk zombies are likely turning to social networking sites to kill time, to feel busy, and to chat with others around the world about their shared annoyances. Amidst calls for ways to deliver a social media ROI, the fatigued masses are sucking the ROI out of their companies, as their productivity drops down to almost nothing.

Now, don't get me wrong. Every company has its heroes, even those that aren't doing well. Even the biggest failures of companies that are roundly mocked starred impressive people with aggressive work ethics, and success amid despair. As I once asked a potential job candidate during an interview, "With your record showing a string of failed company after failed company, how can we be certain you won't bring that failure here as well?" Luckily for this gentleman, he had a good answer. But for some, the culture of failure around them becomes so internalized that they push it forward and it becomes self-fulfilling.

There's a reason that turn-around stories are so rare. Once momentum is going in a certain direction, a troubled company's best assets, the best employees, find a way out. And the ones that remain, those who couldn't attract another offer, are the ones who just might be plodding through and praying they get a severance package, or that the next round of cuts spares them as they muddle along. You know these people. They're the ones not making the headlines. But in reality, they are. They just don't know it - and maybe, their company doesn't know it either.