COMMUNICATE FOR COMMITMENT
Carol Kinsey Goman, Ph.D.

Today’s workforce is scared, scarred and skeptical. They are wisely withholding their emotional investment. Before they care about their companies, they want to be sure their companies care about them. This makes open communication crucial.

After interviewing thousands of employees and after being involved with the “compact negotiation” (mutually-beneficial arrangement between employers and employees) process in several organizations, I find many of the same employee needs and demands coming up again and again. While your organization may be unique, there are certain areas that are becoming part of what I call a “culture for commitment” in many companies. One such area is open and honest communication, and it’s worth taking note of what other organizations are doing and using the examples as “benchmarks” for your own corporate culture.

Communicate –no matter what.

When a vice president took over a new department, she made this announcement to her staff: “I can keep you informed in either of two ways. I can let you know what is happening as soon as I know anything definite, or I can keep you informed of everything I learn – but you have to remember, some of this information will be sketchy, half-formed and sometimes not totally accurate.” Unanimously, her staff chose the second option.

Candid communication means sharing knowledge – especially important in challenging times.

While some organizations find it difficult to let employees in on the details of negative decisions, Reell Manufacturing Corporation communicates candidly to employees about what they can expect from the organization during a downturn in business. When new employees join Reell they receive a guidance manual that, among other things, defines the company’s philosophy of employment security. The manual states: “When short-term imbalances occur in our workplace, we could follow the example of some other companies and quickly lay people off or encourage people to leave. We do not think that is a wise choice.” It goes on to explain in simple language how the company will always do its best to provide secure employment for all staff. If market conditions should deteriorate, however, the company promises to consult with employees and get their input before any cuts are made to jobs or salaries.

In the autumn of 1995, this policy was put to the test. Reell’s sales forecasts for the following year were US$14 million. In January, though, that projection suddenly fell to US$11 million when a key customer greatly reduced its order. In line with Reell’s stated philosophy, workers were first asked to reduce non-payroll expenses. The results were substantial, but not sufficient to cover the short-fall, so Reell’s leadership held a company-wide meeting at which employees were given a 30-day notice before implementing an across-the-board pay reduction of 10 percent. At that meeting, employees were given a complete account of the process senior management had gone through in weighing options before arriving at their decision. At the end of the meeting, the employee audience spontaneously applauded. Five months later, loyalty remained high, profits were back up again, and salaries were restored.

Why was the salary cut-back at Reell so successful? Here are the answers according to Steve Wikstrom, the current co-CEO: “We have wired the organization in an open and honest way. Employees didn’t make the decision, but they knew how we did and why we did. One of the benefits of letting the workforce in on the entire process is that it exposes people to the complexity of the situation, they get to see the struggle we go through, and they really understand that there are no easy answers. We succeeded because we gave employees candid and thorough information.”

Candor –not just for crises.

There will always be times when you are not able or at liberty to discuss what you know with staff. When you don’t have all the details yourself, for example, it is best to make this clear. It is also more acceptable to employees to hear that you cannot divulge rather than be told “I don’t know” when they have reason to suspect that you do.

But candor is not just for times of crisis. In order to develop trust, it is absolutely essential that subordinates know they can rely on management for honest, complete information about company matters and about personal performance appraisal. When leaders share their understanding of the organization’s goals, and give candid feedback on job performance as it relates to those goals, employees develop a longer-range view of the company and their place in it.

This article is excerpted from "THIS ISN’T THE COMPANY I JOINED" -- How to Lead in a Business Turned Upside Down by Carol Kinsey Goman, Ph.D. (KCS Publishing, 2004). Carol coaches executives, facilitates management retreats, helps change teams develop strategies, and delivers keynote speeches and seminars to association and business audiences around the world. She can be reached by phone: 510-526-1727, email: CGoman@CKG.com, or through her website: www.CKG.com.