KEEP COMMUNICATION LINE OPEN
Getting employees aligned with cause is difficult if they are without all the facts
FINANCIAL and strategic woes are often made worse by the company keeping information secret from their employees and the public.
Problem solving and aligning themselves with the cause is difficult when people do not have all the facts.
In the two successful company turnarounds I was involved in, we had quarterly townhalls where clear results, targets, what the company needs to do and how every employee can contribute to those targets were communicated.
I remember, as the senior director for Asia in this American company, I would do my “selling” to 6,000 employees in three sessions — with four big screens clearly depicting information employees needed to know to be aligned with the company. We were all very passionate about putting our faith in our own hands by working towards taking the company out of the red.
In addition, there was constant communication to employees through the intranet, small group dialogues, continuous messages at employee common areas and many other communication channels.
We communicated the information on the company and our aspiration whenever we got a chance. As a result, employees were all aware of the state that the company was in and what they needed to do to move the company forward.
Restore confidence and collaboration Despite differences in strategies and tactics, all turnaround leaders share the overarching task of restoring confidence through empowerment — replacing denial with dialogue, blame with respect, isolation with collaboration, and helplessness with opportunities for initiative. Each leader must manage the tricky task of creating a winner’s attitude in people, even before the victories.
That means performing a series of balancing acts. Troubled organisations are generally in financial distress, and cutting expenses is a characteristic turnaround move. But how this is done has a big impact on whether the turnaround is a temporary fix or a path to sustainability.
The leader needs to encourage people to take initiative and feel that they can make a difference — which is hard to achieve when an organisation is in slash-and-burn mode. Effective leaders consider the kinds of cuts they’re making as well as the number, emphasising reductions in bureaucracy that stifles initiative, thus creating conditions for change.
While there was a brutal costcutting exercise in the company I was in — 10 per cent per quarter in the first year, if I recall — we did not stop programmes for employees. Instead, we came up with creative ways to reduce cost for the programmes and yet continue with them.
A calendar of events for employees, with two events per month, was displayed to get them excited about the recreational, sport and social events planned for them in the company. These events involved the leader and management whenever possible. There were a few occasions where the leader and key management served food to thousands of employees in the cafeteria.
As a result, employees’ minds were put off from the unnecessary worry about the state of the company and instead were looking forward to events involving them organised by the company. This created better togetherness among them, which is important for good collaboration at work.
Inspiring initiative
Once a turnaround leader establishes the structures that allow people to collaborate, they need to empower employees to initiate actions that will improve the company’s financial or strategic position.
In one company I was in, we initiated a programme called the Boards of Excellence. It set up active committees looking at different areas of the company’s performance and employees’ well-being.
Each committee comprised members from different work groups and levels. The Boards of Excellence initiative was successful in coming up with ideas and programmes to be implemented.
Since many of these ideas came from committee members who represented the work groups that needed to implement the initiatives, getting support from the respective employees to implement the ideas was easier.
Find a meaningful unifying purpose Companies with poor performance are characterised by fragmentation. Territories get hardened, and people seem to be out for themselves. It is too easy to lose sight of the larger purpose of being together.
Why does this company/team/relationship matter? What is a common definition of success?
For the turnaround FMCG company I was in, it was about Just in Time (JIT) delivery of products and passion of stealing market share from the major competitor. In another successful turnaround company, it was about delivering products with bigger capacity at half the price, on time. Everything that everyone did was with the objective of achieving these common purposes.
In conclusion, despite the common psychological dynamics at work, leading a corporate turnaround isn’t a one-size-fitsall process, but having a leader who has gone through a successful turnaround will increase the likelihood of a successful future turnaround.
It’s critical that a turnaround leader has the right approach in getting the people who will execute the business strategies motivated, aligned and empowered.
The people must be led to accept many unpopular decisions required to turn around the company. They would only accept the bitter pill when they are aligned and know that those unpopular decisions are for a greater good of the company and for themselves.
These lessons work in companies, communities, countries, and even sports teams. The key is to spot symptoms of decline before they accumulate, and then shift towards the actions that build positive momentum of turning around.
Turnarounds are when leadership matters most. Leaders can stem losses with a few bold actions, such as slashing budgets or selling off assets. But putting an organisation on a positive path towards future success also requires that leaders energise their entire workforce.
And this is the true test of leadership — the ability to take employees out of the defeatism of decline towards gaining the confidence that produces victories.
All turnaround leaders share the overarching task of restoring confidence through empowerment — replacing denial with dialogue, blame with respect, isolation with collaboration, and helplessness with opportunities for initiative.
The writer was senior director for Asia human resource at Western Digital, human resource director at PepsiCo bottler and Proton. He has more than 30 years experience in human resource, organisation support and customer service.