We missed the Fourth of July fireworks on Bailey Island last weekend for the first time in a long time. It was just too damp and foggy – it didn’t seem like mid-summer in Maine – and they faked us out a bit by scheduling it on the Third.

However, the Ice Cream Social at the bunting-bedecked Library Hall on Saturday afternoon brought us back up to patriotic speed, particularly as we arrived early enough to join the local Kazoo Band in a stirring rendition of the National Anthem. That allowed us to polish off our dish of brownies, ice cream, fudge sauce, whipped cream, and nuts – topped by a cherry and an American flag – before dodging the raindrops of yet another late afternoon thunderstorm on the walk home.

So it was a decidedly quiet and tame Fourth until one of our number proposed a history lesson steeped in Americana, and off we all went to see ” Public Enemies ,” the Johnny Depp interpretation of the last chapters of the career of legendary Depression-era bank robber John Dillinger. Though the ending was ordained by the historical record – the “good guys” exemplified by the early J. Edgar Hoover, won – the hero clearly was Dillinger.

As the Robin Hood of Chicago, Dillinger captured the imagination of legions of the unemployed. Even as the walls closed in on him and his margin of error was ultimately eliminated, he exuded confidence. Failure seemed not to be an alternative for him, despite the increasingly rapid attrition in the ranks of the Dillinger Gang, a mortality rate which ultimately left him as a sole practitioner in his trade, a contract consultant, hoping for a share of one final score with a new team whose loyalties lay elsewhere.

So it has been with the adaptations of a number of smaller businesses in recent months. Confronted by a revenue shortfall, they came out with guns blazing, ready to attack the market, only to discover a shortage of receptive targets. Shifting gears, they then pursued the profitability problem from the other side. As reported by the Harvard Business Review (July-August 2009), they limited travel expenses (64%), laid off staff (43%), deferred new hires (41%), reengineered processes (34%), and changed terms with suppliers (29%), among other actions surveyed.

But the gauntlet looks ever more daunting. The same survey of more than a thousand readers indicated that less than one-third think that the U.S. will emerge from the current downturn before mid-2010. And even as the U.S. unemployment rate climbs past 9%, the less-reported “underemployment” rate hit 16%. To the latter total this past month were added 14 of 28 surviving employees of one of my more historically successful clients, each of whom opted to accept WorkSharing as an alternative to a full layoff in the face of a 50% decline in revenue.

Offered by Massachusetts’ Division of Unemployment Assistance (DUA), as well as by a number of other states in differing forms, WorkSharing allows employees to draw unemployment compensation on a pro-rata basis determined by the percentage drop in their work hours. A reduction of 20% for one work group (a day a week) qualifies for 20% of the standard weekly unemployment compensation stipend. When coupled with the 80% payroll continuation, the additional income might carry a person through an employer’s temporary downturn, keeping the employee involved pending a resumption of the company’s prior level of revenue.

My client, a well-established Greater Boston-based business services company, anticipates that its business will come back. Timing is the question. WorkShare seems to provide at least part of the answer. Key considerations in the Company’s decision to pursue WorkShare were these:

• Fairness – Half the staff went on WorkShare, ranging from 20% to 50% work reduction. Of the remaining employees, all but four took straight pay cuts, including partners’ reductions of more than 50%.

• Optimism – The Company has initiated an aggressive and far-reaching approach to business development, which has identified promising new corporate prospects.

• Competence – The few employees generally considered less productive were identified and furloughed early this year. The loss of any remaining staff members will create a competence void.

• Equity – By law, reductions in hours must apply equally to all members of a clearly-defined work group, although individuals in the work group can have different roles in the company. As business improves and the work load increases, the goal is to decrease and ultimately eliminate the WorkSharing program with everyone back to 100%.

• Risk – The Company anticipates (regrettably) that at least some of those on WorkShare soon will need to seek alternative full-time employment, with the best performers being most marketable. The result may be attrition by self-selection/out: e.g. should a work group of three on 60% time lose a member to another job, it’s likely that the two survivors would have their time increased to the 90-100 level.

• Resources – The WorkShare option is available to employers with unemployment insurance reserves established with the Department of Unemployment Assistance. Once those funds are exhausted, the program becomes self-funding (by the employer).

• Duration – Up to 26 weeks; benefits are paid starting with week two.

• Scope – The reduction in hours may range from 10 percent to 60 percent. The employer must provide a continuation of health insurance benefits and retirement benefits to the employees in the affected units – no change due to reduced work hours.

• Flexibility – For workers who are working a second part-time job, the DUA has a “generous disregard” of part-time earnings before any deductions are made from the WorkSharing benefits.

• Consistency – Though one might hope that an ambitious employee will contribute outside of his or her WorkShare box, there can be no expectation expressed that people will work beyond their normal WorkShare hours.

For Chicago’s banksin 1934, John Dillinger was the Problem, the Feds were the Solution. Seventy-five years later, for Massachusetts businesses, the Feds and the banks may be neither the problem nor the solution. But at least the State seems to have something that keeps the team alive.

Alligator Bites

[In] another look at this much-chronicled past, ‘Dillinger’s Wild Ride,’ by Elliott J. Gorn… you learn that ordinary law-abiding Americans even wrote letters to newspapers and politicians defending Dillinger’s assault on Banks. ‘Dillinger did not rob poor people,’ wrote one correspondent to The Indianapolis Star. ‘He robbed those who became rich by robbing the poor.’

“Gorn writes that the current economic crisis helped him understand better why Americans could root for a homicidal bank robber: ‘As our own day’s story of stupid policies and lax regulations, of greedy moneymen, free-market hucksters, white-collar thieves, and self-serving politicians unfolds, and as banks foreclose on millions of families’ homes, workers lose their jobs, and life savings disappear, it becomes clear why Dillinger’s wild ride so fascinated America during the 1930s.’ An outlaw could channel a people’s ‘sense of rage at the system that had failed them.'”

– Frank Rich, The New York Times, July 5, 2009

Draining the Swamp

Which of these opportunities, if any, is your company seizing as a result of the economy? Click here to tell me .

• Creating new products or services: 35%

• Improving current products, services, or customer support: 37%

• Negotiating better terms with suppliers: 38%

• Encouraging employees to think entrepreneurially: 46%

• Targeting new customer segments or groups: 47%

• Restructuring to create a more efficient organization: 47%

– Harvard Business Review, July-August, 2009 from its March 26 – April 10 survey of 1,213 readers