How to inspire trust after major layoffs?

[Lois Kelly]

A CEO friend has layed off more than half the employees in his company over four different RIFs over 6 months. Now he wonders what is the best way to re-engage his management team and inspire trust? He's a great communicator -- transparent, genuine, clear. What would you do if you were in his shoes? Thanks!

[Larry Underwood]

By this time, after reading all the comments from the previous folks, there's little I can add to your "checklist of things to do" for your friend. The biggest priority, as I see it would be for this man to get out and mingle with the troops. If he hides in his office, even for a day or two, the perception will be negative. Honest, open, spontaneous converstations with all levels of management all the way down to the front line trainees should get him through the ordeal with the most amout of respect gained; not lost. Going forward, he'll have a united team, and possibly better positioned to grow the company again, when the depression ends.

As a footnote of this, I've seen the flipside of the coin where the big corporation shocks thousands of employees, and tries sending out a few memos out of the corporate office, expecting the management teams in the field to take the heat. That plan will usually fail, and it's failing right now for my former employer, (I was lucky enough to have retired eight years ago). In case you were wondering , I'm not a big fan of the way Corporate America has screwed things up so badly in recent years; however, I am a fan of Paul Herr who wrote a great book about what really motivates employees, and if C.A. would listen, this mess would go away a lot sooner. Good luck!

[Stephen J. Gill]

As others have said, if he is "transparent, genuine, clear," then he is already doing the most important things. I've written about this issue on my blog. See http://stephenjgill.typepad.com/performance_improvement_b/employee_...

Communication appears to be the key. Keep the management team and all employees informed, even if the news has not changed, or is worse, or you just don't know. Meet with managers frequently and tell them whatever you know even if it isn't much. Listen to their concerns, even if you don't have answers. One of the biggest barriers to engagement in a time of lay offs is thinking that other people know something that you don't know and then making up stories to fill the information void.

[Lois Kelly]

Stephen: Your last point is huge, people making up stories to fill the information void. This is SO common in so many companies I see today. And always generates "vampire energy." Thanks for your thoughtful repsonse and blog post.

[Ric Trout, EdD, RHU, REBC]

Dear Lois

Remaining employees are stressed out. There are probably very few loyal employees left. If things are not addressed then bad things could happen; i.e. employee turnover, violence, high use of health plan dollars, accidents, theft,etc.

We provide workplace financial literacy education that helps relieve this stress and increase productivity. You can learn more at our web site www.esq-financialeducators.com and please call with any questions.

Ric Trout, EdD
President/CEO
ESQ Financial Educators Group
913-645-0986

[Brian Jones]

The first thing to do is to be sure the layoff is handled correctly. If it is not, restoring trust may not be possible, or will at least be very difficult. Patrick Lencioni had a great article about this in the WSJ:



Brian Jones

[Adam Hibbert]

Assuming Lois has her answer but that others here are either in the same boat, or about to be ... it's probably worth mentioning John Smythe's CEO: Chief Engagement Officer work, based on the research he conducted under McKinsey's wing, where he finds much less damage ensuing if employees themselves are involved in reaching the decision to RIF. Generally, the facts that drive a RIF are irresistible - involving employees in understanding the threat to the organisation, helping them see how limited the options are for solving it, and having them fully involved in selecting the best path to recovery can make a massive difference.

There's a general point here about engagement. As human beings, we inhabit a web of meaning, a fabric that's highly resilient when it has many overlapping points of connection, but very easily torn if it only has sparse connections. Real engagement is about people feeling they've participated in the challenge and in creating the solutions - the web of connections this weaves is infinitely richer than the single point of connection we get when a CEO announces redundancies and tells us why they're good for us. What happens in that latter case is the fabric tears ... people's idea of the world they inhabit and their significance within it is disrupted, it takes work to heal the rip, and you simply have to deal with the fact there's always going to be a certain amount of darning visible there from that day onwards.

So, much better, if you have any time at all to spare, to bring employees in on the challenge much earlier, before decisions are made. The amount of time you'll need will depend on the groundwork you've done, as advisor to your C-Suite, about the necessity and value of being prepared to do that.

[Ben Simonton]

Very well said, Adam.

Your way is not only applicable to the bad times but to all time. In your solution, the CEO acts as though it is "our company" not the "CEO's company". In so doing, the CEO and managers stop treating employees as robots expected to carry out orders from above but as full-fledged and valuable associates who have the right to know everything about the company so that they can decide what needs to be done on a daily basis, Most specifically, employees need to be in charge of their part of the company and what they do, receiving aid, support and coaching from their managers as needed. In this state, they will develop a strong sense of ownership.

Employees who feel a strong sense of ownership are up to 500% more productive than if without that feeling because they will be totally committed to their work. That sense of ownership, you can call it engagement, causes them to unleash all of their creativity, innovation and motivation on their work. For me, this was managerial nirvana having been there and done that in four different turnarounds.

Best regards, Ben

[Stephen J. Gill]

I just listened to an interview with Paul Levy, CEO of Beth Israel Deaconess Medical Center, who appears to do what you are describing. He engaged all employees in solving the problem of a $20 million deficit. Being transparent with employees and Involving them in solving the problem resulted in being able to dramatically reduce the number of layoffs that he had initially anticipated. To listen to the interview, go to: http://blogs.bnet.com/intercom/?p=2115&tag=nl.e713

[Terrence Seamon]

Excellent interview! Thanks for pointing us to it, Stephen.
As Levy says, his approach to "transparent leadership" makes a lot of sense, but is seldom actually practiced.
Terry

[Lois Kelly]

I think Paul Levy is an extraordinary CEO in so many ways. Especially the way he handled this most recent challenge. Check out his blog, which is leadership in action. http://runningahospital.blogspot.com/

[Keith Owen]

I have beed involved in several layoffs activities; some of which seemed to foster the re-birth of trust and some of which did not. I was asked to reflect on the differences between the two and one thing that seemed to differentiate the 'successful' from the 'unsuccessful' layoffs was the genuinie demonstration of caring for both those who got riffed and the survivors. This caring was demonstrated in how the layoff was done, by helping those layed off to get back on their feet and by listening to those who survivied. I know it is trite but genuine caring can heal even the most deep seated wounds to one's sense of self that result from getting fired from one's jobs. By the way - the two organizations that were perceived to be callous and uncaring still have not 'recovered' from the severe loss of trust ewven after several years.

Keith Owen.

[Jason Paul Pitfield]

Hi Lois, my last organisation did some work around 'fair process'. They had some wonderful case studies around this sort of issue. They had three key elements which I though summed up nicely what could be done.
Engage with everyone affected by the change and really listen, Explain the decision demonstrating that you have really listened, expectation clarity - be clear on what the new rules of the game are.
There are HBR case studies on this which do much more justice to this than I ever could but where we applied this we really saw a difference.
I also agree with alot of the comments around communication - receiver orientated, relevant small pieces, stay with messgae for long enough for it to be believed, demonstrate commitment through decisions.
From a very personal point of view I don't believe it is necessarily the decisions that is the problem - alot has to do with people feeling in control.
Hope this helps.
Jason