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Qualification: Keith has successfully built a company from $5,000 to 44 million. Keith is now spending a wonderul time with his family and building another great business.
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Keith's Weekly Insights

Tip #6--Be Transparent
February 10, 2008

A friend of mine who owns a service company had to lay off eight employees last week. He said it absolutely sucked. He also said, if his employees had not been aware of the company having lost money 4 out of the last 6 months the collateral damage (ie morale, the rumor mill, etc) could have been much worse. For the last 3 years, my friend has run an "open book" company. Once a month he, as CEO, gathers the employees together and shares the previous month's financial statements, for better or for worse. The employees have a chance to ask questions about anything. The various department heads will discuss and show why their department made or lost money. The employees can see clearly how much money the company made or lost. Employees leave the meeting knowing "it is what it is".

In a situation where you may have to some employees off, you always come out a little better, when people can see the train coming. In my friend's situation, he had one hundred plus other employees and their families to think about as well, in addition to the employees that were let go. By being transparent with the companies financial statements and having these monthly meetings, as well as daily huddles, quarterly Town Halls, weekly 1 on 1s with managers, employees are not completely caught off guard by such a decision. His reputation as a stand up CEO is still intact as well as the culture of the company. I'm not saying that going into the office is a walk in the park right now for my friend right now. Any time you have to lay off employees, there will be a certain "reset' period where trust will have to be reestablished between management and staff. As the CEO his focus must now be on the remaining 110+ employees in his organization and getting them to do the things that need to be done in order to remain a profitable business. Oh by the way, the employees that were let go, their seniority dates ranged from being with the company from 6 months to 8 years. At the end of the day, the managers were responsible for ultimately deciding who needed to be let go(via metrics that measured anything from behaviors to productivity). I mention this last part because these decisions should never be based on emotion, but always on data.

Keith Frein is the former Co-CEO and Co-Founder of PPR Travel. During Keith's tenure as Co-Founder, the company was ranked as the 5th, 7th and 8th best Small Company to work for in the United States by the Great Places to Work Institute. Keith has recently retired and is working on bringing a new nutritional beverage to market through relationship marketing. Please send comments or questions to keith081@gmail.com.

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