In dark times, let light shine

When a company faces crisis, its best strategy is to be as direct and honest as possible with workers.

November 30, 2005|By HANAH CHO | HANAH CHO,SUN REPORTER

Bad news is hitting all sorts of workplaces lately, forcing employers and workers to deal with the lingering consequences.

Pharmaceutical giant Merck announced this week that it would cut 7,000 jobs during the next three years and close five manufacturing plants. General Motors, struggling to turn around its ailing business, plans to close nine plants and cut 30,000 jobs over the next three years. Meanwhile, several airlines are operating in bankruptcy, while jobs and pensions have been cut.

Everything from layoffs to disappointing earnings to company restructuring can disrupt routines and create anxiety and uncertainty among managers and employees. Handled poorly, rumors and "what if" talk can linger, sinking morale and reducing productivity, according to workplace experts and business consultants. Workers can become distracted, while managers can lose the confidence of their staff. Many times, companies lose their best people to competitors.

Experts say there are ways bosses and employees can manage bad news without letting it affect the workplace too much. Damage control and keeping workers informed are important in any work setting that faces turmoil, they say.

For managers, letting their employees in on the bad news as early as possible is the best move, said Rhonda Reger, an associate professor of strategy at the Robert H. Smith School of Business at the University of Maryland, College Park. Otherwise, gossip and misinformation travel fast, she said.

"Bad news does not get better with time," Reger said. "Being proactive absolutely helps. It helps with both the stock market and with employees. What both groups are looking for is they want management to understand why they have bad news and they want to see a plan on how they're going to turn the situation around."

Even if management does not know what's coming next, workers want to hear that, too, said Dr. David Whitehouse, chief medical officer at United Behavioral Health, who counsels employers and employees on workplace issues.

"People should be as direct and honest as possible, even to the extent of saying what they don't know and when information may be available," Whitehouse said.

Take layoffs, for instance.

Managers "need to know how best to approach the termination meeting, and the organization should spend some time planning communication to the rest of the organization on what has happened," said Steve Harvey, chairman of OI Partners, a global career management consulting group.

Some companies have set up a hot line for rumors and published question-and-answer memos during transitions and reorganizations, he said.

The manner in which managers handle tough situations such as layoffs and reorganization also can say a lot about the company, Harvey said.

"It's important how you treat people who go out the door," he said. "The survivors are watching how the company treats their friends. ... If the company is seen doing whatever it can to assist those people whose jobs no longer exist, it reduces the threat and builds more credibility in the minds of the survivors."

A series of setbacks hit Advancis Pharmaceutical Corp. of Germantown during the past year, including disappointing late-stage clinical trial results, two rounds of layoffs, the loss of two lucrative partnerships and its falling stock price.

Company founder and Chief Executive Officer Edward M. Rudnic was forced to evaluate everyone's job duties as well as deciding on the company's next move.

While keeping employees in the loop, the company worked to regroup within a two-month window during late summer, Rudnic said. After announcing that it would conduct revamped trials for its drug technology, Rudnic held a series of get-togethers with four to five employees to answer questions and concerns about the company's direction.

"A lot of managers and executives make a mistake of hiding bad news," he said. "If you're straight with people and forthright with people, they'll respond with trust when you say, `We're going to be OK.' People tend to trust you more because you didn't lie to them or shield them from anything."

Rudnic said that helped keep his workers focused on their jobs. The company now has about 55 employees, down from a peak of 120 late last year. Besides layoffs, some workers chose to leave on their own, he said.

"The people who are leaving, or who have left, I think they decided for themselves that they rather not go through the stress of the next nine months," Rudnic said, referring to the company's retrials.

Tanya Broadbent, assistant director of clinical research at Advancis, said it was a tough time for employees and that the smaller meetings helped boost morale.

It's easy for employees to get to a place where all they think and talk about is the bad news or the unknown, experts say.

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