Tuesday, July 21, 2009

Triage in a Bad Economy

In a war zone or natural disaster, triage is a means of prioritizing critically injured people for appropriate treatment based on their relative need for care. It’s a supply-and-demand challenge: too many patients and too few doctors. Triage efficiently rations patient care in the context of insufficient resources to assure the best possible outcomes, though that does not necessarily mean optimal medical treatment for all.

Various inter-related considerations go into deciding who gets treatment. The number of patients versus the number of available medical personnel and equipment is the first consideration. Those with a chance of survival if treated immediately are given priority. Those least likely to survive are usually given enough attention to assure a modicum of comfort, but little more. Less severe cases are put on hold until the more endangered patients are stabilized.

Many businesses today are practicing their own version of triage, as they continue to bleed cash and customers in this difficult economy. For instance, many retail chains are shuttering under-performing franchises that have become an over-extension of their ability to serve now scarce customers; outlets unlikely to see a near-term reversal of fortune, while they continue to deplete precious cash flow. They must be pared from the system.

Internally, countless other triage-like decisions are made that impact all facets of the operation. Early on, when the revenue drop first becomes apparent, decisions focus on cutting back on or not doing things deemed superfluous or luxuries, such as regional sales conferences, corporate jets, certain training activities, and some travel.

Of course, when those kinds of cutbacks are found to be insufficient to staunch the bleeding, other interim steps are taken, such as cutting back on the use of some outside consultants, reducing or eliminating overtime, followed by asking people to take pay cuts. The last resort is to lay off full-time employees, akin to a medical amputation.

Amputation is not hyperbole. After having invested in hiring, training, and cultivating employees, cutting them loose represents a repudiation of that outlay. And, when business picks up again – as it always does – those investments will need to be made all over again.

While it’s certainly understandable to offset corporate losses by cutting back on expenses, it’s unwise to make generalizations about where, what and how to cut, especially when it comes to outside consultants, and that includes those who provide counsel on employee communications.

Certainly in the context of triage style layoffs, the retention of outsiders doesn’t play well among the remaining employees. People may ask, “Why is the company still spending money on consultants after it laid off long-time employees?”

It’s a valid question, but communications consultants can help managers deal with the chaos and uncertainty spawned by cutbacks and layoffs. Further, unlike full-time employees, the cost of consultants is a short-term investment and does not require additional overhead costs, such as benefits and office space.

Communications counsel can help managers in their quest to engage employees, and sustain employee relationships and trust through good times and bad – but especially during bad times. As noted in Weathering the Tough Economy, layoffs and wage and hiring freezes result in nervous and insecure employees everywhere, not always able to do their best work – which is the last thing a stressed organization needs. Businesses need their people to be at their best to surmount today’s complex challenges, and can’t afford disaffected or disconnected employees.

Managers and leaders must take some simple actions to counteract the unavoidable negative climate of fear that can set in and afflict even the best businesses under the cloud of budget cuts or a recent or potential layoff.

Re-engage the workforce in the business at hand by restating business goals and the strategies that will get you there. Remind them why you're in business. Bring the outside world in to re-emphasize the climate of uncertainty you’re operating under, including the challenges your customers, suppliers and competitors are facing.

Leadership should keep managers in the loop so there is a common understanding of the marketplace realities, the company's business strategy going forward, and the responsibilities of the employees to drive results.

In Keeping People Plugged In, I wrote that difficult times demand the best from everyone to help minimize the damage that this economy might visit upon an organization. Companies cannot afford to have employees distracted by fear of job loss.

Successful companies are those that keep employees engaged in the challenges at hand by communicating with them often and keeping them apprised of the evolving situation. Conversely, when employees are kept in the dark, left to read the tealeaves and draw their own conclusions, they usually infer the worst and operate accordingly.

Good communications go a long way toward keeping key people engaged in the tasks at hand, facing challenges head-on with their best talents. Companies that truly engage their people in the business challenges are those that will emerge from this current economy the strongest.

Monday, July 13, 2009

Counsel Sometimes Falls on Deaf Ears

An online public relations and communications forum I occasionally follow recently kicked around the question of why CEOs don’t always follow our advice. Good one. But the answer is not simple, and none of the responses was brief. Let me answer here by way of a first-hand experience.

The CEO of a multi-site manufacturing firm asked for our help regarding an evolving internal situation. This union environment was facing stiff offshore competition, a new and increasingly difficult threat that was stealing long-time customers. But the employees didn’t appear to be responding with appropriate urgency. The CEO wanted us to assess the internal environment and make recommendations to achieve desired behavior changes.

During our first visit, we spoke with the senior leaders one at a time to get a sense of the story behind the story, and the messages they had been trying to get out to the employee audience. I was struck by something the CEO said. With complete confidence, he told us that his messages were well understood across the organization. When we asked how he knew that, he replied that he was the CEO. As the CEO, he had said what he said, so it was heard and understood. (See my earlier blog entry, I Speak, You Listen.)

Ignoring his overt arrogance, we sought and received permission to conduct informal discussions with groups of employees at several locations to determine whether the key messages were in fact getting through to the intended audience and, more important, whether those messages were understood.

As we learned, the CEO was wrong. What he thought he was communicating achieved the opposite effect of what he had sought. There was a disconnect somewhere along the lines of communication, a barrier to the full import of leadership messages reaching their target audience with their intended effect. In the end, the urgent messages about the changing competitive environment were being met with skepticism and, in some quarters, open ridicule.


After a thorough analysis, we presented our findings to the CEO, along with recommendations for implementing an aggressive new internal communications strategy intended to address the credibility problem head-on. He thanked us for our work, promised to study our recommendations, and said he would get back to us.

Fast-forward 12 months. We hadn’t heard from the CEO so we assumed he and his team had implemented our recommendations without our assistance – which was certainly their prerogative.

So imagine our surprise when he called us in a panic one day. Union negotiators had walked out of contract negotiations and threatened to strike if their terms were not met. How could we help?

Long story short, our recommendations had not been implemented and management’s lack of credibility had continued to fester, until it reached a flash point around contract talks when they sought to inject marketplace realities for a new, less restrictive contract.

The union opposed what it saw as “give-backs” and was arguing its case in the local media. Meanwhile, the company remained silent publicly, refusing comment when the media sought it. The result was a one-sided story, with the company portrayed as the bad guy.

After completing our quick assessment, management enacted our recommendations to go public with the full story, countering the union’s case point-by-point through a series of full-page “advertorials” in local newspapers, as well as face-to-face meetings between the CEO, his negotiators and the local press.

The tide quickly turned and the company got control of the public dialogue. Ultimately, the new contract was approved with the necessary changes. But the original internal credibility problem still existed.

When the dust settled, we reintroduced our original recommendations to address the inherent problem of credibility. This time, lesson learned, they were enacted.

So the short answer to the forum topic is that, as outside consultants, we certainly hope and expect the CEO to enact our recommendations. But in the end, the CEO will do what he or she thinks best in the larger context in which the company operates. Sometimes, however, it takes a dose of the real world to bring our counsel into sharp focus for our client to act on it.