UPS recently announced it was laying off 20,000 employees and shutting down an estimated 73 leased and owned buildings, citing changes in the global trade policy and new or increased tariffs under the Trump administration.
Bull.
The truth of the matter is that UPS made an unsustainable deal with Amazon because they wanted all of the shipping volume and later realized they were unable to continue due to the low profit margins – the tariffs may have been just the final nail in the coffin and a convenient excuse, but they were not the sole reason.
Additionally, UPS purportedly made a bad deal with the Teamsters Union that is locking them into keeping those jobs, preventing them from cutting workers. In an article on their website, the Teamsters said, “Our union contract requires UPS to create 30,000 full-time jobs.” It continues to say that UPS will be in for a “hell of a fight” if they attempt to reduce or cut Teamsters’ jobs.
Gather around, kiddos, and listen up…
If you’re running a business, it’s inevitable that you’re going to make bad deals from time to time, finding yourself between a rock and a very hard place. The chances are doubled if you’re trying to grow fast. The unexpected happens or something comes to light you didn’t anticipate and a contract you signed is no longer sustainable, fair or reasonable, forcing you to absorb a big loss or negative hit. That’s part of the risk you take when running a business.
But the right response is not to point fingers and assign blame. The correct response is to OWN IT and figure out an alternative. Pivot, renegotiate and FIGURE IT OUT. Regardless, you should have mitigation strategies in place in the event the worst-case scenario happens.
When Covid shut down our events, we did NOT have a contingency plan in place for a global pandemic that would lock down everyone and shut down all public events. That event forced us to pay back OUT OF POCKET nearly $1 million in cash because we couldn’t fulfill due to the covid shutdowns. Further, all of our insurance policies were null and void due to it being a pandemic.
It was OUR fault for not having some type of buffer in our contract to allow for a payback schedule, moving the event, substituting with virtual if an unexpected catastrophe prevented us from holding the event, etc.
We made a bad deal, but we made good on it. I was able to do that because I keep at least 3 months’ operating capital in a corporate emergency fund I can access if needed – that was our contingency plan for an unforeseen train wreck we didn’t anticipate. But I didn’t waste a minute crying. I immediately started renegotiating deals and selling a different plan, allowing us to save nearly $1 million in sales. We came up with a plan B fast and executed on it, pulling off a massive virtual event that we had never done before.
But what I didn’t do was whine and complain and point fingers like a giant crybaby. I didn’t panic and lay people off. I didn’t threaten my vendors that I made the deal with that I wasn’t going to give the money back. That’s what a leader should do in a crisis – LEAD. Do the RIGHT thing.
Behind closed doors, you can scramble and pivot while cursing, spitting and kicking the desk, shaking your fist at the sky or whatever little tantrum you want to have…but don’t let the PUBLIC and your TEAM see that.
When bad things happen, put a message of determination, hope, grit and get-’er-done out there so your employees and your customers can feel confident in staying and trusting your leadership.GET CREATIVE. Figure it out. And always share good news in public and bad news ONLY in private with a trusted team of MATURE executives who can handle the stress.
I live by the mantra that you should never let a bad decision burn you twice. UPS is going to do just that if they don’t button up the messaging to their employees, clients and shareholders. Nobody wants to follow a giant crybaby who doesn’t own their mistakes.
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