Every day it seems there is another headline about layoffs, especially in the tech sector. They are often viewed as unfortunate but necessary events in response to the economic downturn and lagging financial performance. But more often than not, that’s simply not the full story.

This may be an unpopular opinion, but in many cases layoffs – even during a broader downturn – are a failure of leadership to demonstrate a strong belief in the company’s strategy and to position the company for long term success.

During highly volatile environments, business outcomes are amplified. There are big winners and big losers. Companies rise fast or sink faster. The onus is on the CEO, with support from Boards of Directors and the C-suite, to have the conviction to know where to focus efforts in order to emerge successfully on the other side.

But how can leaders ensure success in an otherwise unfortunate situation?

My experience as President and CEO in three public companies has taught me that, during tough times, the big winners are the employers that find ways to preserve jobs, take care of employees, and cut costs elsewhere when seeking to protect their bottom line.

Consider the impact of layoffs on the manufacturing sector at the onset of the pandemic that created a reverberated, global supply chain crisis across all sectors today. At the beginning of COVID, almost every manufacturing company laid off or furloughed employees, especially those who worked in the production facilities, as demand dropped.

As CEO of James Hardie, I took a different approach. We embarked on a journey to adopt LEAN manufacturing principles back in 2018. Very early in the pandemic, we realized that we needed to double down on the investments we had been making, both in terms of our operational evolutions as well as our employees who were now trained in LEAN manufacturing. If we lost their skills and experience, we would be back to square one. So, instead of layoffs, I reallocated more than 20 percent of manufacturing employees to focus on longer-term projects that not only strengthened the foundation of LEAN manufacturing in the company but also accelerated our timeline.

The decision proved successful across the board. Employees were happy and energized. Not only did they still have rewarding jobs, we offered opportunities for growth and development as well. James Hardie benefited from an accelerated shift to LEAN manufacturing that had tangible financial benefits. And when demand quickly started to rebound a few months later, James Hardie was able to transition those manufacturing employees back to production and the plants. The result was a seamless ramp up to serve customers better than competitors.

But that decision was not made in a vacuum. The success started back in 2018 with a well thought out strategy. Knowing where we wanted the company to go and exactly how to do it allowed us to put employees first – even during a pandemic. It meant that investments were strategic, not overly expansive or aggressive. The innovation we focused on was internally focused – how we do business more efficiently – not externally when consumer demand was tumultuous.

One of the industries hit the hardest by recent layoffs is the tech sector, and those companies that made the most drastic cuts are likely going to find it difficult to emerge from today’s economic crisis on top. Why?

Skilled employees are hard – and expensive – to find and replace and then get retrained in the company’s business. It’s only going to get more difficult. Workers who lost their jobs at major social media and technology companies will be snapped up by organizations looking to expand their own internal resources, whether for social media, marketing communications, or even research and development.

Instead of laying off employees, leadership needs to protect, grow, and invest in its people, their skills and build on the purpose-driven culture. Despite the bleak economic outlook, it’s not necessarily the time to diversify and significantly expand an offering. Instead, consider doubling down on the most critical aspects of your business that are consistent with your strategy. When leaders think this way, chances are high that your people are the most critical piece to the puzzle.

The reality is that the speed at which business changes means that what we know today about work will be obsolete or irrelevant tomorrow. Drive a continuously improved mindset into the purpose driven culture to stay relevant and hopefully ahead. Prioritize collaboration among global or cross-functional workforces, particularly in areas of customer driven innovation. People from diverse backgrounds, catering to unique customer needs, think about things differently. But when they come together and share perspectives, they breathe new life into the company.

This is true innovation. The kind of innovation that leads to long-term results in any economic climate.