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Instead of layoffs

While I haven't studied the economic stimulus plan before Congress (shocking!), I have to wonder whether there's something tucked in for a unique approach to unemployment that's worked before in the US and in other countries: flexible business networks, which we covered in detail in The TeamNet Factor. Let me save you time (and money). Click to download the chapter, "Instead of Layoffs: Saving, Improving, and Creating Jobs" (Download Instead of Layoffs).

The idea is simple: instead of going it alone, small firms link up to do things together that they can't do alone. It's worked before in the US, notably in the late '80s and early '90s when layoffs also were front-page news; and it's worked to turn around the economies of regions and countries, e.g. Northern Italy (beginning in the mid-70s) and Denmark in the late '80s.

In all cases, government has had to drop a dime or two. But not much. Very small grants, for example, in Denmark the amount was $10,000, go to small networks of at least three companies. The grants buy time for the firms to put their heads together and come up with a plan. With the plan in place, the "small giants" (our original title for The TeamNet Factor) can co-market, co-brand, and co-buy, just to name a few cooperative activities.

If it's too expensive to buy sophisticated equipment or, more modernly, software, the companies can together afford it. If it's too costly to hire a top-notch web designer, they can chip in and put up one coordinated site together. Insurance, legal services, office space, manufacturing facilities -- just about anything can be less expensive when shared.

EBC Industries (nee Erie Bolt Company), under the leadership of its innovative then-CEO Harry Brown, was the US star in promoting this idea, near-single-handedly saving the small manufacturing industry in the Erie, PA, area. By teaming up, lots of small manufacturers could compete against the big guys -- and win. Innovation soared and so did the economy, not to mention many jobs saved and new ones created.

Time to revisit this idea, no?