I was at a conference and found myself seated next to Louise de Grandpre, who I hadn’t met before, for lunch. She’s the COO and co-owner of Merit Travel Group. I was fascinated to hear about what life is like for a travel agency today with the prevalence of Expedia, Trivago and AirBnB. She assured me that the company is doing great with its focus on specific niches within the travel industry. She also shared that they went through a very difficult period following 9/11. The economy slowed down across the board and personal and business travel plummeted.

Then she said something I will never forget. She explained that through the economic downturn following 9/11, when their business results took a hit, they chose not to lay anyone off. It was very difficult at times but they chose to stick to their strategy and they ultimately persevered.  

What? How can this be? I mean, I had read about people like her in books and HBR case studies. I had watched inspiring TedTalks that spoke of this strategy. I mean, just about every company says their staff are their most valuable resource. But I was sitting next to a living, breathing person who walked the talk about treating her team as one of her most valuable assets, during one of the most challenging economic periods in recent history. I may as well have been sitting next to a leprechaun or a unicorn. I never believed people like her existed in real life.  

I grew up in an industry where layoffs are seen as a reliable cure for poor financial results. Layoffs are like Buckley’s. It tastes awful, and it works. Or at least that’s the common belief. It demonstrates prudence and the ability to make difficult decisions when it counts for the good of the larger organization and the shareholders. Happy shareholders means solid long term growth strategy, right?

As the owner of a private company who is focused on the profitable growth and longevity of her business, Louise has a different opinion. To her, laying off loyal, talented, dedicated team members is the last thing she would do in pursuit of long term growth. She genuinely sees her team as a competitive advantage and treats them that way, even when its financially inconvenient in the short term.

Most companies describe their staff as their most valuable asset. It’s on their website. It’s in their mission statement. They profess their commitment to and pride in these valuable resources in the annual statement. It’s regularly referenced in town halls and fireside chats.

The challenge is that for many of these organizations, their commitment to their employees is as strong as my commitment to dieting. It’s something I will absolutely do when I’m sitting at home trying out the latest ketogenic recipe I found on Pinterest. But don’t expect me to maintain my diet at my cousin’s wedding at midnight when the dessert buffet is announced. I’ll do it when it’s easy, not when its hard. But the hard times are the defining moments.

As much as my lunch conversation with Louise felt like an out-of-body experience for me, Louise’s perspective is shared by an impressive roster of strong leaders. Consider Starbucks back in 2008 when they struggled to regain their footing in a changing industry. Their CEO, Howard Schultz, was strongly urged by team members and shareholders to cut the $300 million annual expenditure on health care benefits. Any reasonable person would understand that when faced with a dire financial reality, one has to make these tough decisions.

But Howard refused to pursue that option. It was more important for him to preserve his integrity and the trust he had built with his employees based on a sincere commitment to invest in them. He maintained this core value in word and deed through what was likely one of the most challenging periods in his leadership tenure. He wasn’t going to get in line at the midnight buffet with everyone else, because he had made a commitment not to do so.

Sadly, the examples above are the exception, not the rule. I often meet dedicated, talented employees who are jaded and distrustful of their organizations.

They have witnessed colleagues who went over and above for the organization—working late, checking emails on vacation and participating in conference calls during their kids’ soccer matches. Despite this dedication, when the business cycle shifted and financial performance declined, these same dedicated employees can often get restructured or laid off agnostic of their performance. For some people, this was their own story. They were left feeling like a number on a spreadsheet. They felt like the pride and energy they brought to their role each day was unappreciated.

This experience, whether witnessed or experienced personally, leaves employees cautious about putting themselves out there and risking the chance of being hurt again. If they believe they are no more than a number to the organization, then they treat the organization primarily as a means to an income, rather that a place where they can grow and do their best work.

They’ll work hard, but not too hard. They’ll stay late, but not too often. They’ll NEVER take a call during their kids’ soccer match. This is not about achieving work-life balance. This is about people intentionally holding back on activities to avoid feeling resentful later on—the same activities that they happily engaged in at a time when they felt appreciated.

It would be such a happy ending to this story to declare that in order to be successful as a business, one must simply value employees in thought, word, and deed. We all know this isn’t easy. We have probably worked for a company at one time where we felt valued in word only. I know we have all been on the phone with the customer service agent who clearly hated their job and did the bare minimum to complete the call then asked, “did I satisfy your request today?” No, you didn’t. But I want to get off this call as much as you do.

The challenge is that the symptoms of disengaged employees are not easily identified on a balance sheet. There’s no line item showing the cost of vacant positions. There is no customer service metric that shows client-facing staff who will blindly quote policy and never go the extra mile to solve a client’s problem. We can’t track lost revenue due to staff being more interested in keeping their jobs than creating innovative solutions to grow the business.  

Fortunately there are leaders who understand that whether or not this cost is visible, it exists, and in some cases is quite high. They choose to pursue the financial and competitive advantage that comes with having a strong, engaged team. One thing is true for both Louise and Howard—beyond the financials, they choose to invest in their teams in good times and bad, for richer and for poorer, because they believe it’s the right thing to do, and represents their core values. And their engaged employees are thanking them.