Running into troubled times? Talk to your employees (Guest commentary)

Helping employees understand the risks of the business will prepare them for inevitable rough patches

Take a look at any mission statement. They’re full of words and phrases like: vibrant, entrepreneurial, collective skills, superior, innovative, most efficient, enhance sales, trust, commitment, confidence, secure, cost-effective, affordable, excellence, creativity, teamwork, advancement, value-driven, dynamic, free will, do good, customer-focused and management-driven, healthier people, cleaner air, human rights and stronger economy.

Most mission statements are just broad enough to dilute their meanings. Yet no harm is done since new employees, flush with enthusiasm, gain more by getting at least a general sense of direction from the mission statement.

While companies focus on communicating mission and vision statements to employees, they often fail in communicating the risks of the business. This kind of communication is no fun, negative and less inspirational. Less inspirational, that is, until the economy or the organization runs into trouble. And troubled times are when employee confidence matters the most and when employee communication can make the biggest difference.

While it may seem overly simplistic, there are really only five ways businesses can get into trouble. These are:

•they try to outgrow losses;

•they assume too much debt;

•their controls are loose;

•the mission isn’t clear; or

•their market changes.

Nortel proved how loose controls can cripple a business. In the United States, telecom giant AT&T borrowed big to acquire cable businesses and, while that name survives, it was taken over by SBC, a previous spinoff from AT&T that didn’t borrow as much.

Kodak is suffering from an incurable market shift. Xerox confused its image in a growth market and never recovered. Remember when Xerox became “The Document Company?” What was that? A law firm? A giant file cabinet?

There are opportunities in each of these five negative situations for employees. And while many workers will choose not to pursue the opportunities a downturn presents, they’ll be more productive, and less traumatized, if they simply understand what’s going on. Reducing stress is not only the right thing to do for workers, it also helps boost productivity at a time the organization needs it the most.

HR can help in tough times by opening up communications. The tendency to clam up when the going gets tough can foster paranoia. Instead of the happy, upbeat articles in the company newsletter, try a no-nonsense discussion of the difficulties. Describe how management is attempting to fix things. If layoffs are possible, say so, expressing regret.

This can be one of HR’s lonelier moments, but it presents an opportunity for it to shine. HR should tactfully mention to the CEO that nobody remembers the peacetime generals and tough times can be an opportunity to rally the troops and demonstrate real leadership while under fire.

Draft a statement for the CEO, explaining the situation and strategy as best as possible.

In this process, HR can demonstrate leadership and do employees a supreme service. Sometimes the effort will be resented. But give it a try and find out.

Educating employees on a general understanding of business principles — through things like college courses and textbooks — simply doesn’t fit into most HR budgets. But most HR budgets can handle Saturday morning meetings in the cafeteria, with local business or non-profit leaders invited to speak on issues that affect the organization.

The local speakers will become friendlier with the business, which can’t hurt. Employees will feel like their employer cares and will understand more and fear less. For that, HR ought to find enough room in the budget for a few biscuits and coffee.

Gary Sutton is a retired turnaround CEO. He sits on seven boards and is author of “Corporate Canaries ... Avoid Business Disasters with a Coalminer’s Secrets.”

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