Drastic changes can’t be sugarcoated
When layoffs happen and internal cultures change at a company, it must be clearly enunciated
When you join a company, you have an expectation of what it will be like to work there. Signing that offer letter is the equivalent of shaking hands on a promise about the environment you are joining.
Our preferences vary, but as long as the reality of the work environment matches your expectations — in a sense, lives up to the implicit promise the company made when it recruited you — chances are you’ll be happily engaged in the work there.
But, if the reality doesn’t match your expectations, or if it changes abruptly, your sense of commitment is likely to plummet. My research on employee engagement shows that it’s the match between what we thought we were being promised, and what we actually experience, that makes all the difference.
The sense of a broken promise is what frequently happens during times of layoff and can lead to a significant, debilitating loss of engagement and productivity — far out of proportion to the number of people directly affected.
Two recent examples illustrate the challenge of the implicit promise.
Just five days after Co-Founder Jack Dorsey returned to Twitter as CEO, Twitter announced plans to lay off 8 per cent of its workforce.
Similarly, the National Geographic Society has said it will lay off about 180 of its 2,000 employees in a cost-cutting move that follows the sale of its famous magazine and other assets to a company controlled by Rupert Murdoch.
I don’t personally know the inner workings of either of these organisations, so what I’m about it say is speculation, based on having worked with other companies going through similar periods of change.
For Twitter, although the layoff itself is fairly modest, the number of people directly affected is not the central issue. It signals the company is maturing and shifting priorities and is likely to come as an unexpected dash of cold water for many. It calls out that the promise has been broken.
The National Geographic Society is a very mission-driven organisation. I doubt anyone ever joined with the primary goal of making a profit. I expect most were deeply committed to the goals of the Society, with the magazine being simply one of the means of achieving the desired ends. To be sold to Murdoch would, I imagine, feel like a very dramatic break from what had been promised.
Once again, the layoff itself is modest, but the change it conveys is clear.
Few attributes are inherently good or bad, better or worse in terms of creating successful companies. There are examples of very successful companies that excel in every dimension. Again, the key is the fit between what the work environment is like and what the people who have chosen to join care about.
What does this mean management practices?
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1. Your practices must create a cohesive employee experience. Everything from recruiting messages to compensation practices, management philosophies, workflow design, and other aspects of the day-to-day experience of your employees must feel aligned and reinforcing.
2. Talent management practices that help people choose you are essential, as much — or more so — than ones that help you choose them. Candidates who wouldn’t enjoy the environment you offer will opt out voluntarily, if you make it clear what it is like to work in your organisation.
Cmployee experience
3. When the reality of your employee experience shifts — either from external pressure or internal strategy — you must address the change explicitly.
As Twitter and National Geographic show, over time, for various reasons, the work environments within a company do change. Industry pressures may make it impossible to offer the same degree of long-term career security that was a hallmark of decades past. New management may decide to “shake up” a family-oriented culture, placing high value on short-term performance.
Shifting customer requirements may necessitate more teamwork among employees, forcing a shift from individually based performance metrics.
The key is to address the shift in what is promised head on, with messaging that acknowledges what is no longer possible and makes clear what is: “I know many of you joined this company because you appreciated ... We can no longer offer that to employees, but working here does provide ...”
Changing the promise cannot be ignored.
The writer is a McKinsey Award-winning author and has been named four times as one of the 50 most influential living management thinkers in the world by Thinkers50. Erickson is an Adjunct Professor, Organisational Behaviour at London Business School, where she has designed and co-directs the school’s premier leadership programme for seniormost executives, Leading Businesses into the Future.