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September 7, 2006
How to Communicate Difficult Business Developments to Employees
Outsourcing, off-shoring, downsizing, mergers, acquisitions, restated earnings, options backdating - companies have entire staffs dedicated to communicating the implications of these situations to Wall Street and shareholders. And yet few companies take the time and effort to engage in discussions about these issues with internal audiences. They should. Employees' reaction to news not only plays a critical role in the organization's ability to manage difficult change scenarios, but also shapes external opinion about the company. According to a 2002 survey by Watson Wyatt, only 43 percent of employees said their companies effectively managed business changes, and organizations that managed change poorly had a -5 percent return on shareholder value over a three-year period.
Based on our research and experience with clients, here are 10 suggestions for more effectively communicating sensitive news to employees:
1. Transparency is the key to credibility - Companies should tell employees as much as they know, as soon as they know it. If decisions have not been made or investigations are still underway, at least let employees know when further updates will be given. Transparency does not mean all employees have a role in determining business strategy, only that the rationale behind that strategy is shared with the wider organizational team.
2. Don't give power to the grapevine - One of the biggest mistakes companies make is assuming that if they say nothing or very little about a looming issue, no one will talk about it. Employees are consumers like the rest of us; they talk and seek out information about things that concern them. Absent credible information from the company, employees will turn to colleagues, friends, family and the media to fill the void.
3. Limit the Wall Street speak - All communications must be understandable to a person of reasonable intelligence. When dealing with large numbers, consider drawing comparisons to the amount of products or services sold that would equal that total.
4. Give managers and supervisors the resources they need - Direct reports play a critical role in the communications landscape, but they need information that helps them speak knowledgably to their teams. Often, a manager-only town hall meeting is a viable alternative to an all-employee meeting. Managers can be provided with "tool kits" to communicate information to staff and time can be set aside afterward for department-level discussions.
5. Use a variety of existing communications channels - This ensures that information will reach a broad base of employees quickly and accounts for both an unwired or mobile workforce. This strategy also builds in an element of repetition and consistency to the communication, which will aid comprehension.
6. Ensure internal audiences are informed before (or at least at the same time) as external audiences - Few things damage morale more than when employees learn of major news from external sources. Not only can this lead to disengaged employees, negative media coverage can result when workers who are ambushed by reporters offer comments along the lines of "They don't tell us anything; I found out about it in the paper." Issuing press releases after the stock market closes, or coordinating with financial relations staff are ways to provide more time to notify internal audiences.
7. Make customer-contact employees a priority audience - Special attention should be given to internal audiences that are most likely to get inquiries or comments from customers or the general public, including receptionists, security officers, call center employees, and sales force staff. Make it clear to these audiences what can and cannot be communicated to what external groups. By educating these employees and encouraging them to share some level of information, you combat a feeling of helplessness and engender trust from workers and customers.
8. Retirees are an important audience to keep in mind - Depending on how mature an organization is, a sizeable (and usually highly vocal) group of retirees may exist who will shape community opinion about a negative crisis or issue. If communications vehicles do not exist to engage retirees alongside active employee audiences, consider developing information specifically aimed at former workers.
9. Anticipate and respond to employee concerns - While communication with external audiences will likely focus on the financial strength of the company, internal communications must also address more personal and specific issues such as job security, benefits adjustments and day-to-day operations. Before communicating, ask yourself, what questions will this raise among employees? Consider publishing a question and answer document along with information from executives.
10. Develop leak scenarios and dark communication tools - Having a plan to communicate sensitive material to employees will help reduce leaks and rumors; however, some slips may be inevitable. "Dark" communication tools such as memos, Web sites or blogs that can be activated at a moment's notice are effective tools to respond before inaccurate information spreads. Furthermore, employees should know who to turn to for reliable information and who is empowered to speak publicly.
Communicating about sensitive information is not about spin or painting a rosy picture. According to a 2004 study by Towers Perrin, more than 93 percent of employees are ready to hear the truth about the future of their company, pay, benefits and job. In today's economic environment business change is inevitable; employees understand this. Organizations should not hope employees ignore difficult situations, as this is neither realistic nor constructive. Rather, companies should develop internal communications strategies for business change in order to build a more informed and engaged workforce.
What works for your company? Share your tips and best practices by posting a comment below...we look forward to hearing from you.
Posted by Christopher at September 7, 2006 11:48 AM
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