Daily Lesson from Life 14 November 2008

"Minister slams DBS Bank
This weakened the trust between the bank's management and union. -->Fri, Nov 14, 2008 The Straits Times

LABOUR chief Lim Swee Say (who is also the Minister without Portfolio in the Prime Minsiter Office) on Friday slammed DBS Bank (a government-linked bank that is the largest bank by assets in South East Asia) for failing to consult its staff union on retrenching its workers or exploring other cost-cutting measures first.

'We are disappointed by the sudden decision,' he told The Straits Times when asked for his views on the DBS layoffs.

'There was no prior consultation with the DBS Staff Union. There was no exploration with the union on other cost reduction alternatives,' he said in an email reply on Friday."

It is the first time a ministerial level official in the government expressed disappointment with the actions taken by DBS Bank to streamline it's operation regionally resulting in axing of 900 staffs, most of them in Hong Kong and Singapore while China is still growing.

It is clear that there are divided views on if a commercial enterprise, though invested by the governmental bodies like Temasek or GIC (Government Investment Corporation), should act purely based on good commercial considerations or should taking it's social responsibility a bit further as a Senior Minister of State commented that enterprises should conduct their business without the government telling them what to do.

Anyway, the key lessons I like to reflect on are；

1. in time of difficulties, have the leaders demonstrated they have considered all alternatives and options before cutting headcount? If they have, how have they communicated the inevitability of the decision that will affect many lives? Will they appeared credible or that the actions are so consistently with the corporate culture that none will bat an eyelid or even question if it is the right thing to do or not?;

2. in Japan and some corporation elsewhere, the leaders actually consider 'sharing equal pains since the company shared the gains as well'. E.g. the Japan Airline Limited Managing Director took pay cut, eat at the staffs' cafeteria, ride train to work, no special perks, etc during bad time. He gained a lot of respect and, most importantly, trust from his staffs that he really meant 'equal pains and equal gains'! His actions and consistent behaviors inspired his staffs to pull together and work out issues and challenges through the bad times. Such are the leadership behaviors we want to see;

3. in the America and certain corporations, the culture is one of 'you are in with your eyes wide open. We reward results and we fire non-performers with no fear nor favour!'. It is strictly business. Nothing personal. Well, if this is indeed the understanding each staff that comes on board has, then no one is going to be shocked at such 'cut and slash and burn' tactics. The question is: which type of culture do you want to have and which type of corporation do you want to work in. Most importantly, as leaders, which one do you want to be leading!

Bad time is coming. More bad news will come at us like a tidal wave. The waves that follow the first will be stronger and stronger until the source of the waves quiet down. It will be a tough 18-24 months ahead.

Let's brace ourselves for the impact and hope that leaders in corporations do the right thing the best they could!