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3/27/2003
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Secret CIO: This Layoff Pays For Everyone Involved

Sometimes, the cost is worth it and the payback immeasurable

Sometimes, events conspire to offer you a golden opportunity to do something good and simultaneously save money. These moments are few and far between in business, so they should be acted upon immediately and savored fully.

Mildred was a competent and loyal employee. She had joined the firm as a clerk back in the days when our profession was known as data processing. For thirty-five years, she had toiled for the company. Always dependable, she did her job and anything else you might ask of her to the best of her ability. Managers might come and go, but Mildred was a stabilizing force and the institutional memory of our IT shop.

When Mildred asked to see me about a personal matter, I knew I would help her if I could. Entering my office, she closed the door deliberately and sat in front of my desk, waving off with a slight shake of her head my suggestion that we sit at my conference table.

"I've been doing our internal billing now for nearly 15 years, and I'm proud that I contribute to our department, but I think I need to make a change."

At first I thought she wanted a different assignment. Setting up the internal billing and answering unending questions from multiple groups about our charges always struck me as a mind-numbing task. However, as she continued to speak, I realized I had misunderstood. Mildred lived with her elderly mother, and working full time while taking care of her parent had gotten too difficult. She wanted to retire and enjoy more of life with her mother while she could. She concluded by saying that I had always been fair to her and since no one else knew the system, she was troubled about "walking out on her responsibilities."

I was touched by her concern. I asked her to keep our conversation private and said I'd get back to her.

The next morning, I went to see Phil, our CEO. I was there, I said, about his latest letter on cost containment and wanted to run an idea by him before I spoke to Sid Gornish, our CFO. "The management team needs to keep on top of our IT costs and the ROI of our projects. Our charge-back system encourages everyone to go their own way."

The more I spoke, the more he nodded. I concluded with, "By eliminating charge-backs, I can reduce staff by one person." He was sold.

Surprisingly, Gornish, who is a tough and analytical creature, had no problem with my proposal. "I'm tired of people telling me these wasteful projects are their own money. It's not; it's the company's. If you guarantee that I still have access to a project's cost details, I'll support you."

Since almost everything we do is integrated across the company, we would stop wasting time trying to figure out who should be charged for what. Because of Mildred's situation, I was about to get rid of a function that was being done quite well but added no real value to the enterprise. We would make improved decisions because systems projects would reflect the priorities of the whole company, not just one division. My life would change, but for the better.

It took me less than a day to work out the severance package with HR. When I told Mildred I was eliminating her job, and she would get extended pay to go along with her early retirement, she smiled broadly and gave me a hug. Sometimes, things do work out so that everyone wins, even in a big corporation.

Herbert W. Lovelace shares his experiences (changing most names, including his own, to protect the guilty) as CIO of a multibillion-dollar international company. Send him E-mail at lovelace@comcast.net.

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