By Kevin Meyer
The last couple years have been tough for many organizations, and for some the downturn is continuing. How you treat your knowledge assets will be critical when business picks up.
Restructurings, consolidation, salary freezes, a shifting health-care cost burden, furloughs, 401(k) match eliminations...this list, as you know, goes on and on. Did your company cancel this year's Christmas party? These are common responses to our changing corporate landscape. And they can be necessary. Businesses that don't step up and react to reality are unlikely to survive over the long term.
That's one side of the equation - the immediate issue. But a long-term perspective is critical as well.
My concern is that, cumulatively, these negative actions are tugging at and fraying the delicate bonds of loyalty that tie employees to their employers. I believe it will be the companies that manage to deftly balance the necessary tough competitive actions with genuine compassion for their employees that will win big in the future.
People have long memories. What they don't have right now are a whole lot of career options. And they will judge their employer by how equitably they feel they were treated during the down market. So how exactly do you steer your company through this in a way that won't drive your people into the arms of the first headhunter who calls? Just as vital: How to take the tough steps while energizing your workforce instead of paralyzing them?
One common tactic is "share the pain."
As counterintuitive as it may sound, consider going deeper than you might on staff reductions, rather than nibbling around the edges hoping for a quick market turnaround. Some companies believe in "share the pain" scenarios, where everyone gets to sacrifice equally at the corporate altar. I'm not a fan of such strategies unless they address a short-term crisis in which a company expects to be reducing forces and hiring within the same year. In my view, these practices ensure that 100% of your workforce is demoralized, vs. the 10% to 20% whom you really can't afford in the current climate.
Based on multiple experiences, unfortunately, I agree. Forcing everyone to reduce hours works for one to three months. After that morale issues, coupled with the fact that high performers can almost always find a new job even in the worst of economies, begin to take their toll.
And how should leaders act?
There's a strong tendency for executives in tight spots to simply clam up, fearing they don't have the answers people want to hear. To avoid appearing inadequate, they'll issue the occasional all-employee e-mail or canned Webcast. But you'll find that you don't need to have all the answers. You'll discover that the rumor mill has painted the most pessimistic picture imaginable, and you will quickly be able to dispel numerous falsehoods and present a clearer and more optimistic view. These times call for a personal touch. Employees who get to see and hear their leaders are far more likely to buy into a future beyond the crisis.
Another power of a real gemba walk. Get out and touch the process, challenge the process, teach your team... and talk to them. Information - solid, open, true information - creates confidence. And confidence in leadership will help create the high-performing team that is so critical to weather a downturn.