Contingent Loyalty is a Two-Way Street

Tuesday, August 12, 2014 - 09:52

By Dr Malcolm Johnson FAIM

When the media reports large numbers of employees being shed from an organisation it triggers a tectonic shift in employees’ understanding of the psychological contract.

The terms used to announce, explain, and justify the shedding of staff, such as “rightsizing”, “restoring organisational agility” and “ensuring economic viability” potentially masks a deeper organisational malaise.

That such a major decision has to be taken urgently suggests that an organisation has failed to adapt as its operating environment has continued to evolve. Ongoing recalibration is preferable to less frequent but more disruptive tectonic shifts.

What of those who remain in such organisations? Are they safe from further change? Unlikely. Can trust ever be restored? Again, unlikely. With a market potentially swamped with technical specialists, such a disruption is career breaking. Generalist-type employees may fare better but the transition will likely be outside the industry with new engagements at lower positions and in locations that further disrupt family.

No one should abrogate responsibility for their personal well-being to the organisation’s “vision splendid”.

Loyalty is necessarily contingent on evidence of trust that works both ways. When organisations don’t respond to changes in their eco-system, some may be deceived by the industry leader “making the market” attitude. Such arrogance serves to dull the senses of employees. “Too big to fail” is a belief totally debunked by events in the GFC.

At a personal level, I believe people prefer not to think about such possibilities and probabilities. Trust enters into the decision space with inferences made at a personal level to make sense of disparate and often conflicting signals within the organisation or market more broadly.

For those with a financial mind, deconstructing annual reports is not likely to reveal sufficient specificity to make a judgement of personal impacts.

Where does this leave the individual? It should trigger a review by all of their personal and career balance sheet encompassing commitments, financial buffers and mobility of skill set. It should also trigger consideration of how they frame success and contributors to personal well-being beyond the personal identity created through their current work role.

Change is not easy. Being alert to and constantly mindful of a contingency plan could be a distraction to the work at hand. More positively, it can give personal confidence and a pathway to agile action when circumstances change unexpectedly. It is also part of planning for positive eventualities; how to constructively shape personal progress as events or opportunities arise.

Whether or not a career transition is thrust upon a person or they reach a turning point in their career, self-employment may offer a better alignment of personal values and doing work they love to do.

Making the transition to full-time or part-time consulting is a popular path to capitalise on knowledge and skill gained. Whatever the trigger, exploring the scope and scale of the consulting opportunity is essential before committing substantial time and resources.


Dr Malcolm Johnson FAIM is National Director, Research and Thought Leadership at the Australian Institute of Management. Malcolm’s contribution to enhanced management practices has been recognised through coverage in publications ranging from BRW, Asset, InFinance and Money Management to the Australian Financial Review and The Australian.

AIM conducts a program called Crafting a Consulting Career, running next in Brisbane on 10-12 September 2014.