In a recent article - HR heads look to control costs without layoffs (2 May 2009) - it was reported that Wipro had implemented an innovative program where employees could work for 10 days a month and still receive 50% of their salary.

This idea of a "virtual bench" is certainly an effective strategy to reduce costs during tough economic conditions without having to lay off employees. And, in my opinion, this “HR innovation” goes far beyond controlling costs during a recession.

Let me explain why.

In my view all organizations consist of three infrastructures — physical, intellectual, and emotional.

Physical infrastructure refers to a company's buildings, equipment, etc. Intellectual infrastructure refers to its competencies - key processes, its people, and their expertise in their particular knowledge domains. Emotions, though, are different from intellect. I got the idea for emotional infrastructure by observing the behavior of family units. Families, after all, are founded on an emotional infrastructure. And if there is one institution that has survived over the centuries, it is the family. Therefore, my logic went, if organizations have to learn how to build an enduring institution they could learn a lot by observing how families build and sustain emotional bonds.

Here are a few observations. A company's physical infrastructure costs money to build. It's also transparent to the competition, and therefore easily copied.

Emotional infrastructure, on the other hand, is not transparent and therefore much more difficult to imitate. You don't have to incur major capital outlays to build emotional infrastructure. (Does Southwest Airlines ring a bell?)

I've observed that families build emotional infrastructure using eight explicit factors. One of these factors is adversity. It is during times of adversity that families come together and bond emotionally. What Wipro has done during these times of adversity will build an enduring competitive advantage by strengthening the company’s emotional infrastructure.

Unfortunately, most American companies destroy emotional infrastructure through re-engineering and reducing costs through layoffs.

For more details on the concept of emotional infrastructure, and a description of the eight factors that build it, download our article “Emotionally Bonded Organization: What is emotional infrastructure and how organizations can build it” (with Subroto Bagchi).