Cognitive Behavioral Therapy Model
CBT Model Explained by My Counselling Site

I used to have this affliction where I would make mountains out of molehills - whether the news was good or bad, I would hyperbolize and dream it into Never Never Land. For instance, someone could approach me after I gave a talk and say, "That was interesting," in that "I question the usefulness of your information" kind of way and I would go from the receipt of potentially banal or at the very most slightly negative feedback to "OMG, I should never speak in public again. I have no idea what I'm talking about" in zero to 30 seconds. Then I'd stay in that awful spiral for hours...sometimes even days.

Similarly, I could take good news and start to spiral upwards. Even the smallest possibility meant that it was a done deal and I could start celebrating. Of course the crash of things falling through threw me in an extreme downward spiral. It was either WAY up or WAY down for me.

Until I found Cognitive Behavioral Therapy. Unlike many other forms of therapy, CBT is incredibly goal-oriented and focused. And there are simple exercises that the recipient performs over and over again to re-wire the way she reacts to events. Over a series of lessons and subsequent practice, I learnt to stop the spiral before it happened. Now I can get truly negative feedback and stop to assess whether I can learn from it and how to respond in a way that isn't defensive or futile. A person approaching me after a talk can even say, "You sucked. I learnt nothing," and I will either engage them in conversation (ie. "You learnt nothing because you already know the material or you learnt nothing because you disagree?") or take the comment in stride with overall feedback (ie. Overall feedback was positive, but this one person didn't like it - can't please everyone). It's been an amazing transformation for me and given me the ability to stop and think realistically and strategically about news, feedback and events.

As I'm hearing the news about thousands and thousands of layoffs in multiple industries everyday due to the economic crisis/downturn/recession/depression/etc we are in, I think: "Wow, this economy sure could use a little CBT. We appear to be in a spiral." And we are. And the spiral that happens on one level affects the next and, like a really powerful hurricane, seems to pick up speed as it moves down the line. What is happening appears to be the best example of what Reagan called 'Trickle Down Economics' I've ever seen...or a really far-reaching version of Systems Theory. Nothing operates in a silo.

I put a call out on Twitter that stated:

"If I were the President of the US, I would put a stop 2 layoffs and tell these companies 2 get more creative w/ their cost cutting."

Many people replied that this was a socialist attitude, but I really don't think so. We got into this mess because of poor short-term thinking and the lack of early government intervention. Nobody wanted to intervene because things were booming - what a buzzkill - unfortunately, they were all warned that this would happen. The truth is...because of corporate structures (nobody is truly accountable when the bill is passed to the shareholders), short-term thinking (really pushed by the corporate structures that hold CEO's accountable on a short-term quarterly basis, so quick win solutions win over long term thinking) and a lack of understanding of systems theory (which is really the basis of community - what we do affects others and vice versa), we are destined to dig ourselves into a deeper hole. The level we are at now and the speed at which we are still spiraling suggests that the Great Depression levels of unemployment and economic crisis aren't ridiculous predictions. I tell you. I'm scared. And something needs to be done to stop the spiral.

There are all sorts of ways to cut costs in organizations. Certainly, employees are expensive. But there are serious downsides to mass layoffs:

  • Reduces 'surviving' employee morale and productivity
  • Customer retention falls off more when their contacts leave, especially after a layoff (and the general feeling of the trustworthiness of a brand drops, so Word of Mouth is bad), losing more sales
  • There are significant indirect costs to laying off people (especially large numbers), which end up wiping out the short term savings.

There is a great article on BNet that links to several studies to back this up.

So, yes, layoffs are a great way to cut costs in the short term, but the long term costs of layoffs are not worth it...not to mention the toll that mass layoffs take on the overall economy when they are all too common. The community around a major company that lays off, say, 5,000 employees suffers too. The local restaurants see a drop in patrons. Theatres, ballet companies, art galleries and other entertainment starts to struggle to make ends meet. Local business, car sales, real estate and just about everyone else who makes a living in the local economy suffers. I was talking to the bar manager from Nova the other day and she told me, "People are still drinking, but tips are way down." Still, she told me, "I'd rather my customers can pay their rent and tip me 5% rather than 15% and get thrown out on the street." I wish everyone had her "we're in it together" attitude.

So, then, what is the alternative? What would the economy learn from CBT? How do we stop the spiral and get more realistic and strategic about our reactions?

Here are some suggestions:

  • Ask your workforce to take a small paycut instead of having to layoff a percentage. FedEx did it. They had the CEO take a 20% paycut, senior staff take a 7.5-10% paycut and the rest of the staff take a 5% paycut. This probably saved them more in the long run and they get to continue to provide good customer service so that sales don't suffer more.
  • Give each department a challenge to cut costs drastically without cutting talent, quality or customer service. Make it a contest where the department who cuts the most creatively (without compromising the quality or service) gets an extra holiday week once things get sunnier. Alternatively, you could say, "C' decide how to cut costs so we can all get through this." and you'd have employees getting creative.
  • Work with your customers to increase sales while helping them balance their budgets. They are feeling the economic squeeze, too. Maybe you drop some prices to return customers as a thanks for their loyalty. Create a referral program and give discount codes for people to offer to their friends and neighbors. This may work better with the ballet company, but you could offer 'Economic Downturn Wednesdays" where you'd sell really inexpensive tickets so ppl could still afford to go out. You'd probably introduce many new people to your business.

There are probably dozens of great management articles out there on multiple ways to cut costs during tough times. What I do know is that we can't keep dumping unemployed people into the abyss like this. Not without some serious ripple effects. We have to stop spiraling and start thinking longterm. And we are all in it together. All of us. If there ever was time for community, it's now. It's time for each of us to stop thinking about ourselves and start thinking about how we can work together to get through this time. It's time to stop the spiral.