There are few words that strike more fear in business owners than recession. But one of those more frightening words, for both employees and compassionate leaders, is layoffs.
Bob Chapman, CEO of the manufacturing company Barry-Wehmiller, faced both of those terrible words daily in 2009 as the financial crisis was beginning to wreak havoc on small business owners.
After orders dropped 40%, he had to cut labor costs by $10 million or face shutting down. His board thought layoffs were the only option, but Bob Chapman innovated a better solution.
He told his employees, “It is better we should all suffer a little than any of us should suffer a lot,” and he refused to lay off a single person. Then he enacted a furlough policy that required every employee, from the newest hire to the CEO, to take a mandatory 4-week unpaid vacation during the coming year.
The company didn’t save $10 million—it saved $20 million—while also drastically increasing morale and posting record profits in 2010. When the recession ended, the company emerged stronger than it had ever been in its 130-year history.
This story led INC. Magazine to name Bob Chapman the 3rd Best CEO in the World.
More importantly, it points to the benefits of putting people first, not just in a vision statement, but in the real world.
Bob Chapman found success in a bad situation by thinking creatively and putting his employees first. He’s a great role model for small business owners.
If you want to create a more people-centric culture in your business, check out Bob Chapman’s book, Everybody Matters: The Extraordinary Power of Caring for Your People Like Family. It’s no wonder Forbes called it one of the best business books of the year.
Adam Lucas holds a Finance degree and an MBA from the University of Kentucky. His work has appeared in many major outlets including AARP.org and GoBankingRates.com.