Why Employees Should Be at the Heart of Your Crisis Plan
When is the best time to focus on building a great workplace? It might seem easier when business is booming, but times of crisis build a deep energy for change among all parts of an organization. By capitalizing on this opportunity, leaders can build trust with employees--the cornerstone of a great workplace and the key to positioning a company for better results.
Crisis can come in many forms. For ACUITY, a regional property and casualty insurance company, it was the loss of a third of its market share. For human resource software firm Ultimate Software, it was $9 million in lost revenue. And for women's fashion retailer EILEEN FISHER, it meant navigating the worst recession since the 1930s. Yet, when these challenges arose, these leaders kept employees at the center of their plans to overcome these struggles. The following practices illustrate how the leaders at ACUITY, Ultimate, and EILEEN FISHER were able to build and leverage trust during their times of crisis:
Create and share a positive vision of the future. A shared vision can unify teams and create a sense of stability and focus during rough times. In late 2000, Ultimate Software found itself turning from a highly, profitable successful organization to one with climbing operating losses and falling revenues. Ultimate's CEO, Scott Scherr, kept employees motivated by clearly defining the company's end-goal, when he referred to as its "Championship." That goal: by 2006, reach $100 million in annual revenue, be acknowledged as the best product in the marketplace and reach 95 percent client retention. It was an audacious goal for a company just having lost $9 million in revenue, but it allowed employees to rally around a long-term goal. Scherr continued to keep this goal top of mind in numerous ways, including beginning every quarterly newsletter with the phrase, "We are stronger than we've ever been…"
Practice active, positive, and honest communication. Strong trust-building communication involves both keeping employees informed about important issues, changes and expectations, and also ensuring leaders and managers are seen as accessible for questions and willing to give straight answers. When Ben Salzman became the CEO of ACUITY, he made this a key priority to help reverse the company's market loss and financials. Salzman encouraged leaders to spend more face time with employees, added town hall meetings and small group lunches, and introduced "Ben's Gossip Line," a two- to three-minute voicemail sent to all employees that covered company and industry news.
Cultivate a sense of ownership among employees by giving them a voice. By giving employees opportunities to influence their company's response, leaders will strike a rich source of ideas and solutions while also providing employees a sense of ownership and allaying their fear and stress. Facing dramatically reduced profits during the recesssion of 2008 and 2009, EILEEN FISHER's leaders polled employees for ideas through new channels and existing ones like employee committes and their online suggestion system. In all, leaders collected more than 250 ideas ranging from costs reductions, technology improvements, ways of liquadating inventory, and most suprisingly of all, suggestions on reductions in salaries and benefits that would avoid or reduce potential layoffs.
Build a sense employees can rely on leaders. To follow leaders, particularly through challenging times, people must believe they can rely on them to deliver on promises and match actions to words. During its economic challenges in 2000, one of Ultimate's core commitments to employees, 100 percent paid health benefits, was put to the test. Scherr had founded the company with a belief it should pay 100 percent of the health premium for employees' health benefits. Although Ultimate recorded losses for five straight years, the company never flinched from this belief and continued to pay 100 percent of premiums for both employees and their families. Ultimate employees knew their leaders would not quit on them, and in turn, they did not quit on the company.
The leaders of these three companies took an employee-focused approach when faced with tremendous challenges. In all cases, the efforts have paid handsomely. ACUITY is now profitable and growing with more than $2 billion in assets, and has also been recognized for 10 consecutive years as a best-run company by the Ward Group. EILEEN FISHER reduced expenses by 27 percent and experienced one of its most profitable years ever, so much so that the company was able to distribute year-end profit-sharing checks to its employees. Ultimate Software reached its Championship in 2006, and has been ranked by Forrester Research as the leading provider of human resource management solutions to United States companies.