I had the opportunity recently to informally address a group of leaders from a leading IT services provider. Here are thoughts shared with them on recession proofing communication during a downturn and the role of leaders.
Much has been written about the slowdown and its impact on our lives. Though there are few suggestions for organizations to cope and help them understand what employees seek. As an internal communications practitioner, I think there are trends which organizations and communicators need to recognize, ideas for ‘recession proofing’ your communication and best practices from the industries which one can practice.
What is a recession? According to Wipipedia, a recession is a general slowdown in economic activity in a country over a sustained period of time, or a business cycle contraction. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes and business profits all fall during recessions. The bottom-line is that citizens are insecure and organizations don’t have too much of an insight as to when the tide will turn. This in effect means that we need to revisit Maslow’s hierarchy. The focus needs to come back to the basic factors – food, water and security, corroborated by Watson Wyatt’s survey where employees seek information about job security. During a recession, organizations make knee jerk reactions based on how they see the markets panning out which can detrimental to employee morale and customer engagement. Organizations go after support functions and resize and reduce budgets, freeze benefits, curtailing training and avoiding engaging with employees. Very often, in their quest to get ‘leaner’ and ‘sharper’, organizations lose the ‘human’ touch’. Employees have good memories and these actions are always held against the business.
I am aware of organizations cutting down on something as basic as toilet paper but allowing off sites at external venues to continue. Not surprisingly, trust is eroding for senior leadership (according to Edelman’s Trust Barometer) and organizational communication tools. James K. Harter, Ph.D., Gallup’s Chief Scientist of Workplace Management and Well-Being and an author recently stated “ in good times and bad, low engagement reduces performance and profit and under the current circumstances, many companies can’t afford to let those drop”. A Watson Wyatt’s report indicates that job security is top of mind for most employees while what the organizations continue to communicate is around solvency, performance and other issues; a clear disconnect. According to a Towers Perrin study, more and more employees are asking for the truth – about the future of their company, pay, benefits and job. There seems to be a disconnect with So what does ‘recession proofing’ mean? In my opinion, it involves reducing uncertainty, improving confidence and focusing on outcomes. It also means supporting the organization stay on course to be successful. As Timothy P. Flynn, Chairman, KPMG International points out “the economic crisis gives organizations an opportunity to examine every aspect of their business model and lay the foundation for sustainable growth and improved competitive advantage.” Organizations need to reinforce the mission and values even more. This is also a time to involve and keep the employee at the forefront of all your communication.
I personally believe all is not gloomy. India and China are with growing economies and the global market hopes to ride on their success. The recent Tata Nano launch had the market in raptures. Even the steel market is looking up. A leading consulting and interactive firm created a campaign to focus on its 10th year of operations and rally its employees around this key milestone. By focusing on the positive, employees were engaged in driving the organization’s goals and strategic vision. Numerous best practices involving ‘zero budget’ ideas make overcoming this recession easier than thought. For example, a leading global IT major has its top 50 business leaders go online everyday and engage on social media networks. Similarly, a well known audit brand leverages Facebook to encourage college graduates to join them. An established consulting and outsourcing giant has robust systems and templates which reduce turnaround time and delivery of communication collateral. Investing in internal ‘ready to use’ tools and resources can make life easier and less cumbersome for communicators. A global personal hygiene organization now generates over 50% of its product ideas by ‘crowdsourcing’ a huge shift in thinking from the earlier insular perspective. A leading global IT services conglomerate created its blogging policy with the support of its employees. It also has them blog on their website. A simple idea such as where leaders are encouraged to meet with one employee per day face to face ensures zero cost engagement. The ruler of UAE and the Vatican are also using social media tool to reach out to their stakeholders even more. Consistent communication is the key among best employers according to the Outlook Business – Hewitt Associates study – 2009, a relevant aspect for organizations to recognize. Understanding risks such as e-crime, espionage and privacy before leveraging these social media tools and ideas will ensure success in a recession proof world.
To summarize, the global downturn has posed numerous challenges for organizations and employees alike. That said, downturns may not last, but organizations that communicate effectively will. It is important to focus on the positives, craft consistent messages, reinforce often, communicate directly, focus on the positives while involving employees. And last but not least, it is vital for organizations to revisit the core of their existence and the core values that will sustain them in the long run.
Thoughts?
I fully agree with your post and enjoy reading your blog! I would be grateful if you could elaborate a bit more on how one should communicate with employees to keep them engaged in times of a global downturn. No doubt you have to focus on positive messages and events to keep the workforce motivated. That’s quite clear and is suggested by many internal comms experts. The ‘how ‘ is what really interests me. In our company too, many employees are approaching management with questions on the company’s future and new product launches which we often cannot answer due to confidentiality issues and strategical constraints. However, it’s these details employees want to know about. Also, they want to know about things that you can hardly predict (will the recession end soon? will there be an upturn in sales in the second half of the year?). When you try to give a vague answer to these questions or even admit that it is difficult to predict the future, they are usually very disappointed. What would be your view on these issues?
Hi, thanks for dropping by and sharing your thoughts.
These are excellent questions and let me try answering them here….
a) How should one communicate with employees to keep them engaged in times of a global downturn?
I think the key to communicating is to be sensitive and transparent with your employees. That said, I admit it is tough sharing ‘bad news’ messages. Like I pointed out in my post, ‘more and more employees are asking for the truth – about the future of their company, pay, benefits and job’ and we demonstrate leadership by being honest about how we are doing. Research also points to employees having more trust among their peers and immediate leadership and they must be empowered with the messages to communicate.
In today’s world, containing information – even though confidential is tougher than before and employees always get to know ( by behavior and actions of leaders) on what is taking place around. Hiding information which is relevant will not be of any use. Rather, involve them and make them partners in our communication. Some ideas – you may want to have your key employee ‘ambassadors’ to blog on your intranet or have them conduct informal brown bag lunch sessions on the downturn and initiatives that employees can own.
b) Employees want to know about things that you can hardly predict. Do you be vague or tell them the truth?
Let us be honest, can any one of us predict the future? I really can’t! So, my take is that we must be upfront and admit we don’t have all the answers but will keep them updated as things shape up. Employees will appreciate it rather than take a vague answer at face value. The other option is to give indicators of how certain client wins or product enhancements may help to improve the company’s standing but also provide tips on how they can contribute to the progress – for instance, request their support in driving some programs, volunteering to take up extra work, adding value to cross functional teams, innovating on projects etc…You can also give them a background on what is coming in the next month or so – which is a fair enough window for an organization to share information on.
Does this help?
Already European markets are bouyant . Real mettle is tested during difficult times. People have unnecessarily panicked . One should learn from businessmen to keep cool in difficult times. On a daily basis we go through ups and downs in business but it doesn’t alter our cool.
I dont agree with neelam tikka is saying. All of them cannot be like him.
Very basic question Aniisu… isn’t creating recession proof communication almost like thinking of a cure rather than prevention? Why be in a position to take such steps?
And I would imagine that the organizations wont really learn from this phase either. The moment the going is good, they will forget everything this phase would have taught them and lead to same situation all over again.
Great point Samir. The fact is that we are currently in this position….and it is not that organizations have not had enough notice of it nor are they unaware of previous downturns and how to deal with them!
Keeping that in mind, organizations might as well look at how to overcome this period and emerge stronger.
If you really look at research and companies which have stood the test of time like Intel, IBM, Microsoft, Coca Cola, Nokia – they have responded to the situation ahead and pre-empted the issues which they might face thereby preventing a collapse.