3 min read

Reading the anger at Cygnus

A week ago today I wrote the first of two blog posts about the trouble at Cygnus. The reaction -- in the form of comments I published, comments I censored (because they contained anonymous personal attacks), and e-mails I received -- was both shocking and informative. I warned a week ago today that Cygnus' plan to cut wages was ill-advised and that it "isn't going to end well."
If anything, I was probably being too optimistic. It's beginning to look like this could end in disaster.
Take a moment to look at those earlier posts here and here. More importantly, read the comments. Because today I want to talk about those comments and what they mean.

How bad is it?
As you read through the comments you'll see a level of fury and distrust that is nothing short of overwhelming. The staff at Cygnus is furious. In addition to the sheer anger, there are a few other things worth noting in the comments.
Consider that:
1. The staff's outrage at actual events is so intense it may be leading to outrage at imagined events. One comment refers to a company-paid trip earlier this year to Hawaii for "publishers, sales people, and their spouses/significant others." But another comment says no such trip took place.
2. The atmosphere at the company is now so poisonous that even when management is making sense, the staff  doesn't hear it. In one comment, a staff member is angry that the co-CEOs had earlier said that "We anticipate interactive budgets to EQUAL print budgets within 2 years."
The person posting the comments calls that projection "unrealistic" and "nonsense." But it's neither. I don't know if the co-CEOs were talking about their clients' advertising budgets or if they were taking about Cygnus' internal budgets. But either way, interactive budgets already exceed print budgets in much of B2B. But at this point it seems likely that the staff is unable to hear even when senior management is making sense.
3. As things were deteriorating at Cygnus, it appears that senior management continued to give editors new duties (making "on-site reader calls," whatever those are), and then misleading the staff -- suggesting that the new work could lead to pay raises.
4. There are no indications in the comments (or in the emails I've traded with Cygnus workers) to suggest that the company's human resources department has been briefed fully on the salary cuts. Workers say they can't get straight answers even to simple questions. (Note: a staff meeting has been scheduled for this week, and it's likely that many questions will be answered then.)
5. No senior or mid-management people have stepped forward to defend the company's actions. Not one person. Not a single one. That speaks volumes.

Irreconcilable differences?
At Cygnus, the employees and executives are not working together. Rather, they are separated by a monstrous divide of contempt and distrust.
As far as I have heard, no one among the workers or middle management believes that the salary cuts and related actions can work. No one, it seems, has any faith that senior management can pull this off. No one appears to believe that Cygnus will be OK.
Only the workers at Cygnus know for sure just how ugly things have become. Only they know how much less work is being done, how much less effort is being made.
The question is what, if anything, can be done to turn things around.

No doubt the co-CEOs and other top brass at Cygnus arrived at the decision to cut wages because they believed the environment demanded drastic action. Perhaps they were right. Perhaps not. Only those people who have seen the company's books and debt agreements know for sure.
But I have no doubt that as drastic as the situation might have been, it would have been a wiser move to take a different drastic action. Cutting wages for every worker in the company is not a recipe for saving a company. It's an invitation to low morale, sabotage and an exodus of your key players.

If Cygnus' senior management is reading this, allow me to suggest the following:
Now is the time for drastic action. You have to do something to win back your staff and you have to do it quickly.
Because when I read the comments and emails of this past week it is clear to me that Cygnus is slipping away.

(For another take on this, check out this post by Prescott Shibles, the smartest guy who ever worked for me. Prescott talks about how his morale was crushed years ago when the company we both worked for stared cutting wages for execs and freezing salaries for everyone else. That company -- or at least the unit we worked for -- survived and thrived. And Prescott has too. However, it's worth noting that new investors and a very different sort of CEO led the company back from the depths.)

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