Martin Salas


Organizational Effectiveness

Published originally in LinkedIn on 04/22/2020

One of the aspects that surprised me a lot during my visits to various Latin American countries in the middle of the first decade of this century, was the change in the way managers used to refer to company personnel. They were no longer called employees but teammates.

This trend coincided with the wave of satisfaction or engagement surveys. Companies were fighting to appear in those rankings, the words engagement, culture, diversity, principles began to be part of the CEOS agendas and not just HR’s. The phrase ‘people first’ became part of the speeches of the professional and business communities.

Of course, it is easier to practice these concepts in abundance than in scarcity, in success than in hard times. It is in hard times that principles, values, and purpose are really put to the test.

The question today is, how many companies in those coveted rankings of the best places to work until a month ago can do a survey now where their employees may recognize the efforts and support from the company: in times where layoffs or rumors might be in the ears of many.

It is clear that you cannot be the most beloved broken company in the world. Without company everyone loses. Not all companies in the world can make a statement like the CEO of Chubb committing to no layoffs during 2019. Its employees will appreciate its meaning emotionally and financially when the balance is made: ‘you were there when I needed you’ even if profits aren’t that high this year.

How then to keep that partnership spirit in a circumstance like the current one where the survival of the company might be put on the table and how to maintain the reputation and image with the least possible damage. Here I share some thoughts:

1. Communicate and tell the truth

People are not naive. It is clear to them that the circumstance is exceptional and that it affects the business context and that, depending on the industry, the company may be fighting for its survival. Commenting on it is the right thing to do. Communication is expected. In the absence of communication, the rumors are the kings; and the conversations in the hallways (or now zoom, Skype or mobile) are what will determine the message in people and what they believe. If one does not define the message, others will.

2. Strategic, financial and organizational review

This aspect is probably the one that has already been done. How much cash is available to assume the operation (including staff salaries) with zero or highly diminished revenue for some time? Can you find financing lines, at what cost? Determine to what extent the situation is irreversible and whether additional capital contribution from shareholders is required. And the million dollar question: Can we and/or are we willing to extend the employment of the personnel affecting the profits (not the survival) of the company? The critical factor may not be purely financial but without a clear vision of what resources are available this solidarity analysis cannot really be made.

3. Be supportive

After the financial analysis, the review of the strategic plan or the business model is made, companies should have a clear picture of the impact on the workforce. Here comes the moment of truth: is there a way / resources to support employees by giving up short term results, future profits or even past profits to provide income, wages, leave of absence bonus to those who accompanied us in the good times? Each company (and more specifically, each shareholder, member of the board or owner) must make this reflection knowing that their actions and messages will define the internal and external image of the company.

It is not that people should leave with benefits that the company cannot afford or pay, but rather with a message that the company gives them everything that they really can. It is not a typical lay off where a position becomes redundant (lay off by M&A, for example), it is a termination (or lay off) where there are very few job options in the labor market or very few in the following months.

4. Communicate to the ones staying

The employees staying may think that they got lucky and be thankful or that they will be the next to leave, but the important thing is that they feel that they will be the basis for the resurgence of the company. How they feel, how they respond today -and more importantly tomorrow- will depend on the actions they see from the company: on the messages received; the effort to help those who were fired and the consistency between one and the other. If they are aligned, everyone wins, otherwise the company loses in the medium term.

5. Review your values and purpose (and fast forward in 5 years)

Values and purposes have something in common: they are established to transcend time, circumstances and, as has already been said, they are tested in difficult times. When they become just words on a poster, the company loses credibility and the culture as well as the engagement level will start a downward spiral.

One of the most widespread practices among companies when conducting their engagement surveys is not to do it when there are obvious problems. Many do not want to look bad. However, others prefer to do it in those circumstances just to have the real parameter of what they should improve.

What would it be the result if the survey were done today? That must be the mantra in decision making. Another option is to focus on actually managing the blind spots that crisis management or corporate image consultants identify. If only makeup is done, we will know that we have a problem in the future.

So then, do a consistency analysis. Blind spots are not obvious for companies and their managers but they are well identified by employees / collaborators and stakeholder outside.

In short, it is not so important if you call your staff teammates or employees, but how you treat them in times of crisis. It is up to you to decide.