CEO Seeks Employee Input, Prevents 450 Layoffs
Posted: April 6, 2009 Filed under: Democratic Principles, Management Innovation | Tags: Beth Israel Deaconess Medical Center, democratic management, layoffs, Management Innovation, Paul Levy, preventing layoffs, shared decision making 4 CommentsLast month Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston, found his organization facing a $20 million budget shortfall caused by the economic crisis. Instead of ordering the layoffs of the 600 workers necessary to cover the $20 million deficit, Levy decided to discuss this problem with his employees and to solicit their feedback on how the medical center should respond.
Levy said the following at a meeting with employees of the medical center: “I want to run an idea by you that I think is important, and I’d like to get your reaction to it,” Levy began. “I’d like to do what we can to protect the lower-wage earners – the transporters, the housekeepers, the food service people. A lot of these people work really hard, and I don’t want to put an additional burden on them. Now, if we protect these workers, it means the rest of us will have to make a bigger sacrifice. It means that others will have to give up more of their salary or benefits.”
What followed was an enormous amount of applause by the medical center employees, the vast majority of whom expressed their willingness to take pay cuts so that none of their coworkers would have to be laid off. Over the next several days, Levy received over 600 emails from employees suggesting various ideas for reducing expenses. These ideas enabled the medical center to find creative ways to trim $16 million in expenses, which saved 450 of the 600 positions that had been originally slated for layoffs. (They are still looking for ways to keep the remaining 150 people in their jobs.)
Two of the pillars of workplace democracy are sharing information among employees and involving them in the decision-making process. Paul Levy’s experiment with these innovative management practices will undoubtedly have a huge impact on the workers’ motivation and loyalty towards the organization. Instead of facing sudden traumatic layoffs, the employees of Beth Israel Deaconess Medical Center were given a unique opportunity to participate in the decision-making process, and the center followed through and implemented the ideas that were generated. The results have proven to be a huge success.
I wonder how many additional layoffs could have been prevented during the past year if executive managers had been more willing to seek out and act on the knowledge of their team members….
Source: Boston Globe
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Ahh…mazing. Simply one of the best stories on the planet right now. Thanks to your friend for tweeting me to your post.
This is a story to broadcast through all media sources, to CEO’s, business leaders, and companies, both large and small. Everyone one of us can learn from this example.
Thank you for covering this important, example-setting, compassionate story that shows the ethical way to manage an economic downturn.
[…] Paul Levy, CEO Beth Israel Deaconess Medical Center, Boston, […]
I may not know this man, but i really thank him for thinking about the hard working people in his company, not too many bosses do that. Were i work, THE LA JOLLA BEACH AND TENNIS CLUB, in california, they dont care about us employees they are just looking for a way to make us quit and or to fire us. The managers, excecutives and owners are still making the same if not more while they are cutting our hours and even days which after three quarters of not working enough hours, we get booted down to part time employees and we loose some of our benefits if not all of them. I just wish that some one will take the hard working people seriously.