Bob Grote knew what the next morning was going to bring and it was eating him up inside. The recession had taken a toll on business at J.E. Grote Co. Inc. and now he had no choice but to lay off employees.
Or so he thought.
“I went into a restaurant, a little watering hole where I sometimes have a bite to eat,” says Grote, president at the 170-employee food slicing equipment manufacturer. “A guy I kind of half know came up to me and said, ‘Man, you look depressed.’ I said, ‘Yeah, I am. I think I’m going to have to lay some people off.’ He poked me in the chest and said, ‘Come on Bob, you can do better than that. You don’t have to do what everybody else does. Be creative.’”
Grote began to ponder what this casual acquaintance had just said to him and the wheels began to turn in his head.
“A good portion of our staff, be it engineering or in the shop itself, is really dedicated to the manufacturing of new equipment,” Grote says. “So when your equipment dries up, you have nothing for a lot of people to do. I came in and said, ‘What if I force vacation and go down to a four-day workweek for everybody in new equipment?’ You’re going to take vacation in the first half of the year until you run out of vacation. It doesn’t help my cash flow, but it reallocates my resources to later in the year.”
The response from his management team was shock.
“They all kind of looked at me like, ‘What?’” Grote says. “I got challenged by them saying, ‘Are we just wimping out? Are we just afraid to make the right decision because we’re fortunate to have the cash flow to support doing this? Are we just delaying the inevitable?’”
Grote had pondered those same questions. He decided it was worth the risk to try something a little different.
“Leaders truly underestimate the cost of retraining,” Grote says. “In an environment of unemployment, you can hire really quick and you can hire really good people. But at least in my business, because this is very customized work, it’s hard for a guy to contribute in some of these areas for a minimum of six months, sometimes up to a year. As I look at it, I’ve got to hang on to that core muscle.”
One of the land mines Grote had to navigate around was, “How do you do something that only inflicts pain on one segment of your work force?”
“I went to the departments that were going to be affected and spent a lot of time talking to them and trying to get them to complain and be OK with complaining to me,” Grote says. “I was constantly focusing on the future and reminding them that this is what it is. What’s paying our bills right now, guys, is all these parts and all this stuff that these other guys are doing. You want us to pay our bills so we can keep you around, too.”
Grote also spent time with those who weren’t being forced into February vacations.
“I reminded people that you better look busy,” Grote says. “I know you’re busy, but you better look that way.”
So the vacations were taken, and while there were a few nervous moments, business did begin to pick up in the summer, and Grote’s plan ended up working out.
“There was fear every day,” Grote says. “I ultimately have to answer to the shareholders of the company. I look foolish and wasteful if it doesn’t work out. But if you’re truly a leader at that point and you’re in that position to make that decision, if you think about what’s going to happen to you at that point, maybe you shouldn’t be the leader.”
Take time to listen
Bob Grote could have shoved his idea to avoid layoffs at J.E. Grote Co. Inc. down everyone’s throat and ignored the concerns of his management team. But he knew that wouldn’t do much for his stock as their leader.
“If you have a past experience of going back and changing your mind because they have a logical reason why you shouldn’t do your idea and you’re not just being stubborn, they will talk to you and explain their reasoning,” says Grote, president at the food slicing equipment manufacturer.
He wanted to hear their feedback because he himself had fear that maybe it wasn’t the right thing to do.
“I’ll either say, ‘Maybe you’re right, let’s go back and explore this,’ or, ‘I still think I want to do it this way, and I’m going to do it, but I see where you’re coming from,’” Grote says.
Either way, you show yourself to be open-minded when you make the effort to listen.
Unfortunately for Grote, he faced the same dilemma again in early 2010.
“My mantra was, ‘If this keeps up, I can’t do that again guys,’” Grote says. “Fortunately, it turned a lot quicker.”
Grote adds that his confidence in foreseeing the future in today’s world is pretty much gone.
“I don’t believe anything until I’ve got the contract with dripping ink on it and the smell of money in my office before I believe an order is here,” Grote says.
HOW TO REACH: J.E. Grote Co. Inc., (888) 534-7683 or www.grotecompany.com