Of MBMI’s many clients, one stands out. This client is owned by a top-notch company that is known to all. It employs first tier “name” managers, and boasts volumes of best practices and key performance indices.
This client stands out for another, less favorable, reason: Its employees don’t feel important. That is where we encountered the problem and where your organization can benefit from what we observed.
We frequently have pointed out in our blog posts that employees need to possess a clear understanding of the objectives of any mission. They need to hear and believe that their contributions are necessary and appreciated. In the case of this particular organization, though, the employees suffer from what they think is a lack of appreciation. It isn’t. The employees are greatly appreciated and, for the most part, compensated according to skill levels. These employees suffer from a lack of communication. The inability of this company’s senior staff to communicate to frontline supervisors is as startling as it is remarkable. What makes this situation sadder and more serious is that that senior management doesn’t even communicate within its own ranks. The vacuum of meaningful manager-to-subordinate feedback is obvious, and we have raised warning flags about this issue at every level of the company in the hope of correcting the problem before it is too late.
“Too late?” you ask. Yes. We have seen this movie before and the ending always makes us cry. Off-handed comments by managers take on veracity of biblical proportions in the absence of continuous information. The next thing you know, a manager’s playful joke, “If that keeps happening, we’ll just close the doors,” becomes a rumor that the company is on the verge of shutting down the division. Employees pass that message from one to another to another, and, with each telling of the story, the company has become more and more resolute in its intention to sell. Suddenly, the rumor is a fact and it is widespread in the hallways and bubbling onto the street where the sales department must contend with the rumor that the company has decided to sell the division.
“Why would I do business with a bankrupt company?” clients inquire. As new rumors of upcoming employee layoffs reach every department, a rush to jump ship begins.But the truth is that a few terminations have been planned for months as a controlled rightsizing. However, no manager communicated to the team the pre-planned nature of the reductions, so the rank and file (and the competition) point to whatever limited terminations occur as further evidence of a wholesale company failure. Panic ensues. Panic generates paralysis and the company grinds to a screeching halt. Had employees been informed of the strategy behind the layoffs (cost savings, Improved results and revenues thanks to greater contributions by the remaining more highly skilled, and highly valued, employees), or if the remaining staff had known about the wage increases that would result from more controlled expenses, the escalation in rumors would have been extinguished or controlled. A general fear-based paralysis might not have set in, either.
The period during which managers and employees ‘wait and see’ what will happen is the most damaging. Companies of every size must recognize the signs and prevent losses from fear paralysis. Prevention is communication.
Back to the real world of how communication breakdown affects the business: The management has now frozen up. The latest volume of rumors have grown to such a crescendo that even the supervisors believe that they must be true. The paralysis causes management to fail to approve invoices for key purchases, employee recruitment in unaffected departments is placed on hold to “wait out the soft economy,” the Sales Department gets jittery and passes on personal concerns to customers, and the business grinds to an unexpected halt from which the recovery will be slow and painful. The only sound comes from the click-clack of computer keyboards where resumes are now being prepared on company time.
This client’s senior staff, managers, and employees could have worked together to prevent their self-induced failure. Effective communication of operational plans, changes to strategy, workloads and tasks, and any other information that might affect the business, must be the main focus of any organization. Nature abhors a vacuum, and, in the corporate world, lack of information is the most deadly vacuum of all.