While it can be quite motivating when you are making changes in a business and driving them through your organisation, remember what the change guru Rosabeth Moss Kanter always says: ‘…change is only a problem when it is done to you’.
The first step in staff engagement during turnaround situations is recognising that there will be feelings of resentment, and indeed fear, when these potentially highly stressful new ways of working are thrust onto an individual.
In my experience the historic strategy to deal with problems in a business was as follows:
- Deal with the creditors – probably through some form of insolvency
- Make some cuts to your cost base – probably redundancies
- Try to attract some new finance
The people were forgotten.
Even in today’s new sophisticated world of fantastic management theories, the people aspect of company turnaround strategies is not great.
I believe we are really missing a trick here because, in your darkest hour, or when you need to make changes of any kind, you really need everyone on your side. Handled well, these situations can be an opportunity to create an entirely new, highly motivated culture that the whole future of the business can be built on.
There is a significant irony here as how many times do you hear business leaders say in tough times:
‘We have to give thanks to our people’
‘Our most valuable asset is our people’
‘Where would we be without our people?’
The thing about all these statements is that the managers who say them are often the same managers who:
- Go walkabout during the day leaving their people to take the flack…
- Leave the office at 4.30 for “an important meeting”…
- Haven’t given anyone a rise in the last three years…
- Regard their staff as fixed assets that can be bought and sold…
Staff engagement in the 21st century
Fortunately the new world of employee relations is very different from when I started work; time and motion studies are a thing of the past. Just think of some of the terminology we use today:
- “Personnel” has become “Human Resources”
- We have the ‘Investors in People’ programme
- Employees are stakeholders
- Employee engagement is constantly pursued
- Empowerment of employees is seen as a key source of motivation
- We even have Duvet days!
Well how is this new world of employee relations, where people are regarded as the biggest asset to be nurtured and developed, integrated into company turnaround and /or change management programmes?
NOT VERY WELL, in my opinion.
There is still a good deal of the old “Command and Control” and a general lack of communication.
A typical turnaround scenario
Let’s just paint a picture of what happens during a traditional turnaround situation.
- The story starts with the directors slowly acknowledging there is a problem, often a cash flow issue, and invariably this is going to hit sooner rather than later.
- There then starts a series of Emergency Board meetings
- Then a raft of Crisis meetings
- Then Professional advice
- Then more hastily organised meetings by the directors to decide what to do
- This process is invariably a massive drain on the whole organisation. And the turnaround hasn’t even started yet!
The staff knows there are problems; they can sense it without anything being said. In any case, creditors are screaming, products are out of stock and some customers have gone elsewhere. They talk to each other and the problem, to them, becomes bigger than perhaps it really is. They are worried for their jobs, their futures, their families, never mind the fact that there is a terrible atmosphere and it really isn’t a very nice place to work! Not very motivating.
Then the turnaround strategy starts: three members of staff are made redundant, an office closes and a number of other cuts are made. Not exactly a cutting edge strategy, but a plan nonetheless. Motivation levels go from low to virtually non-existent!
Let’s not forget the directors in this, they have also gone through hell. There is probably financial pressure, family pressure and creditor pressure – notwithstanding the fact that they are at risk of losing all their value in the company, and probably more! Often their motivation becomes survival at any cost. Not a great place to be!
I’m sure you can see where this is going. Everyone in the business is completely demoralised – just when they need to be at their very best to face probably the biggest challenge of their life.
The Solution
There is another way. The first step (as in many problem situations) is to recognise the issues. Then, rather than letting events take their natural, de-motivating course, be proactive and use the situation as an opportunity to create a more inclusive and engaged environment from which you can build a sustainable future for your business. Include your people as much as possible in the planning process and give them a voice in how changes are implemented. Bring your employees along with you. Make sure they feel you understand their concerns and value their commitment at such a critical time.
We’ll be looking at specific ways to keep employees engaged and motivated during turnaround and other difficult business situations in other blogs. I would be very interested to hear any of your experiences, good or bad, in a turnaround or change situation.
If you have any comments on this article or would like to discuss any aspect of it please contact me at john.thompson@transcapital.co.uk or on 0845 689 8750.
John Thompson is Managing Director and founder of Trans Capital Associates
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