What more difficult situation can a CEO face than having to decide between laying off staff members and reducing everyone’s compensation to keep the company financially viable? On January 30th, 2009, I was struggling to make that exact choice. I had just finished reviewing the January’s financial statements which were quite honestly frightening. We had lost more money in the month of January than we’d ever lost in a single month during our 10 year history. I was devastated and did not see any hope for Q1. We were on track to lose more in the first quarter 2009 than our entire net income in 2008.
I had some tough decisions to make and I didn’t want to do it without consulting my business partner, Bret, and Sitewire’s Leadership Team. Collectively, we scrubbed every dollar of expense out of the budget besides salaries, rent and insurance. We knew that in order to survive the quarter we needed to cut our largest expense – salaries. The Leadership Team unanimously agreed that they would prefer everyone take a pay cut to prevent the company from having to layoff a single employee. I was relieved and grateful for their generosity and wisdom in making the best decision for Sitewire and our employees.
That night I went to bed and sleeplessly thought about the message I was going to deliver the next day about the pay cuts. While lying in bed, I prayed that my employees would understand. I prayed that they wouldn’t lynch me or walk out. I prayed that they would accept that this outcome was better for all of them than the alternative. I had no idea what their response would be.
The following day I met with each team individually and explained that it was necessary for everyone in the company to take a pay cut in order to prevent us from having to resort to layoffs. Their response to my message was simply overwhelming. Not only did they not lynch me, many hugged me and offered to work overtime and to take on additional responsibilities to help us survive the economic downturn. Quite honestly, I was stunned, humbled and thankful beyond words by their compassion and commitment to Sitewire’s success.
Their kindness and support was demonstrated on a daily basis throughout the remainder of the quarter. Each person and team went above and beyond their normally outstanding performance and did whatever they could to contribute to our financial turnaround. Many of them worked well in excess of their already 50+ average work weeks. They scrimped and sacrificed. They gave up their training budgets, spot bonuses, and all discretionary spending with grace. Everyone in the company became a salesperson. Ideas for new products and services were bubbled up like never before. The cross team collaboration and camaraderie were beyond compare. I have never before witnessed a team of people that possessed more power and passion around a common goal. They performed better as teammates than any professional sports team in history.
The Sitewire team performed a miracle during Q1. They took the worst forecasted loss in our history and turned it into a profit that exceeded our original plan. We had a 600% swing in our profitability. I was awestruck by our results. I’ve never felt more pride in being part of the Sitewire Team.
On April 3rd, I had the distinct honor of returning to our employees, via bonuses, all of the pay that was taken away in Q1. I’m honored to lead our company and blessed to play on the Sitewire team. Thanks to all of them, we are well on our way to a highly successful 2009!
{ 8 comments… read them below or add one }
Margie you rock! I learned so much from the way you handled this situation. Your ability to maintain company moral and loyalty during a rough financial time was phenomenal. The fact that Sitewire had a profitable quarter while many of our competitors were laying off half of their employees speaks volumes to your leadership and the Sitewire team.
Congratulations! A very moving post. Sitewire is an awesome company and you are a great CEO.
Margie, That was simply inspiring. I admire how you handled this situation and the company you have built with your partner. Obviously you have learned so much and generously share what you believe and know to be true, right and just. I am glad your prayers were answered so generously. Perhaps that is the power of prayer that more people could learn about!
Kathy
Margie,
I cannot begin to tell you how incredible of a leader and executive you are even in this trying economy. Not only have you resorted to a win-win situation that may not have seemed so positive for all, you have, in the mist of the economic pressures, managed to pull ahead and take care of the talent that has understood/supported your every decision.
It is an extremely rare quality to see in a real executive leader today — taking a holistic approach to the economic pressures. This is the first I have heard of such actions and it speaks volumes of you. If I was a team member of your company, I would be honored to serve for you – heck I am honored to have read about your most trying time as a leader.
Continue to inspire so that one day, we all may eventually reach the heights and caliber of a leader such as you.
Margie, your story is so touching and inspirational that more business leaders should see it. I hope that your readership will increase because of this sterling example of what servant leadership is all about.
Many good wishes for Sitewire’s continued success.
Margie: I loved this story! You and Bret are inspiring leaders … I remember your leadership many years ago at MicroAge.
My friend, this brings me back to why I liked you so much when we were teammates at ECadvantage 12 years ago. You were ALWAYS concerned about the people and I’m so glad to see that this passion is still with you. You’re a leader worthy of following, even when the way is hard.
Thanks to all of you for your kind feedback and encouragement. It has been a very challenging time for businesses both small and large. I feel particularly blessed to be surrounded by an amazing group of talented, passionate and committed co-workers and my business partner Bret. I’ve seen the true character of this team and know that together we can overcome any hurdle that we might face. I’m also encouraged and inspired by the support of my peers, like you, who have cheered us on and been there by our side facing this economic meltdown together. Thank you!