Thank you Sir, may I have another?

Layoffs are all over the news lately. Just when you thought you had dodged (or survived!) outsourcing, along comes a recession. It seems like nothing is sacred.

I have been through boom and bust cycles a few times already, and I'm only 39. Its part of the way our economy works; there's some sort of Hakuna Matata comfort in this "circle of economy". But that's cold comfort when uncontrollable forces seem to be having their way with your life.

During the last big one, a cycle known as The Internet Bubble, I was managing a group of over 150 people. Our products were mature and profitable; our people were experienced and expensive. Our customers were satisfied and stable. But the advent of a new wave of web technology froze all software markets, just like the credit crunch we're in now has frozen purchases in general.

IT managers the world over demanded mature web-based solutions even though that was a contradiction in terms. Overnight we had to transform ourselves from a confident market leader into a lean, nimble startup. We could not afford all of our people. We had to maintain old solutions and invest in new ones even as budgets shrunk under the crushing silence of nobody buying anything.

It was no fun to be a software development manager then but it was a powerful time to galvanize leadership skills. I would not trade that experience for anything. It made me realize that when push came to shove, I could clearly distinguish between the contributions of any two given people if I dug in deep enough. That's what you have to do when the difference is that one stays employed and the other does not. I could also get leaders working for me to make that distinction, and I could work through the process with them to the point that I believed we were making objective decisions.

There were some key moments like when I was asked to choose between providing raises as the company had promised, or keeping everyone employed. It was clear for me then and now: the company had to get into a healthy, sustainable position which meant that we had to have motivated, well compensated people even if it meant having fewer of them. That would be the most rational decision for the most people.

I also learned that it hurts a lot more to tell someone they are laid off than to tell them they are fired. Either way, the relationship is over but when you fire someone, the net effect on the team is always an improvement. When you lay someone off, you feel like its your own fault and the team takes a big hit. Later on, nothing made me think as seriously about job offers and recruiting as the memory of those layoffs. I never wanted to hire someone that I would ever have to lay off again. So far, so good.

Many developers considering leadership are probably glad they are not making the move right now. There's no doubt that existing software managers are facing tough decisions that they never anticipated. But if you are an objective leader with no hidden agenda, now is when people need you the most. There may not be big product launches or new VP promotions but you can figure out what you're capable of achieving under the current miserable economy faster than you will ever be able to later when the music starts playing again.

Thanks for reading this Management Use Case. I'm the co-author of a new book on software development leadership entitled You.next() that features dozens of other use cases for leadership. Please see more at www.youdotnext.com.