Bad times can bring out the worst in a company’s leaders—or the best. Those who make the most of the opportunity to communicate well with the entire workforce will be in the best position to take advantage when the economy rebounds.
The news-making bad actions of leaders of failed or failing companies—such as AIG, Lehman Bros. or GM—are striking chords of recognition for workers around the country. In a phone survey, 86 percent of 1,002 respondents said they saw similarities between the failed companies and bosses who make poor decisions: no one pays attention to problems until it’s too late. On the larger scale, a company might go under. On the smaller—but still dangerous—scale, customers might be lost or employee morale may fall.
Lynn Taylor, who commissioned the survey, said employees are losing confidence in their bosses because of their poor decision-making skills and lack of communication. The front-line workers are left to deal with the fallout of their bosses’ mistakes, and in a bad economy, that might include losing their jobs.
But it’s not all the bosses’ fault: in her research on workplace dynamics, Taylor has found that because employees fear reprisals if they say something critical of a boss or a boss’s actions, they instead say nothing and cope with the effects of a boss’s bad decision.
“Bosses, most of the time, don’t know that what they do is hurting their employees,” Taylor said.
What You Don’t Know Can Hurt You
Staying silent is one of the behaviors that researchers have found to hinder an organization’s ability to survive a recession. Kerry Patterson, an author and researcher for VitalSmarts, a training company, says that during a crisis, people fail to hold teammates—and bosses—accountable.
“We have to make sure we’re doing what we say we’re doing,” Patterson said. “Line workers are accountable every day, but the upper management isn’t. We have to be dead-on in tough times.”
Managers need to be able to talk professionally with subordinates and supervisors about problems and how to solve them.
“Thank them for expressing their concerns,” Patterson said. “Explain what’s happening without attacking or being upset.”
Other behaviors that can sabotage a company’s recovery are:
Denial. Employees doubt the severity of a financial crisis, and leaders get bogged down in discussions on how to face it. Executives should “speak accurately and factually about the circumstances,” Patterson said. “Don’t sugarcoat the situation or overplay it. Clearly describe” what’s happening.
Protecting pet projects. Bosses must be open to hearing people suggest the elimination of projects close to their hearts. Don’t get defensive or angry, Patterson warned, because someone wants to jettison a favorite project that is unprofitable or not linked to the business’ strategy. “Make it safe for [direct reports] to say these things to you,” he added.
Irrational slashing. Bosses who don’t have open and honest communications with their workers don’t trust them to make cuts to save money. So they make sweeping changes to reduce costs that may not make sense. These companies emerge from recessions in a cynical mood, Patterson said.
Communication is the answer to helping bosses make better decisions and positive impressions on employees. Supervisors and company leaders should be aware of their nonverbal cues—such as shutting the door to their offices, arriving late for meetings or writing curt e-mails—and make sure they are giving employees the right impression.
“Employees look at the boss as [travelers] look at the flight attendant—if they are worried, you should be worried, too,” Taylor said.
New managers will need training to learn how to be better communicators, said Suzanne Bates, an author and consultant on leadership development in communication skills. Whether a company has lost long-tenured managers through buyouts, layoffs or retirement, “organizations have the next layer of people in decision-making positions,” she said.
While these new managers may be “good doers … they may not have other leadership skills, including how to speak and think strategically and communicate the vision and values of the organization. Companies should invest in giving those people the experiences and training they need to be successful,” Bates said.
Organizations may not have funds for training now, Bates added, but they shouldn’t put it off forever.
“Over a few months, there’s nothing lost in putting training on hold. But ultimately it catches up. You have to have well-prepared and trained leaders able to execute” once the economy rebounds, she said.
Now, employees are inspired to work because they want to keep their jobs, Bates said. But as the economy recovers, survival won’t be a motivator anymore. Leaders will have to be able to motivate workers to work for the future success of the company.
“It’s a hard time to be a leader: you’re focused on what’s in front of you and surviving the downturn,” Bates said. “But if all your time and energy are there, when the rebound happens—and it’s beginning—you’re not going to be ready. Your organization isn’t going to be prepared to take advantage. Get out of the day-to-day mind-set and [assess the situation] from the 40,000-foot view.”
Beth Mirza is an editor/manager for SHRM Online.