Communicating in a Downturn

by Paula Santonocito

Experts at global consulting firm Watson Wyatt recommend that leaders consistently and openly communicate with their workforce before, during, and after layoff announcements are made in order to keep employees engaged.

Watson Wyatt and others encourage ongoing employee communication during difficult times, even if it seems like over-communication.

It's great advice, and a case can be made for over-communicating with an even wider audience; corporate leaders should consistently and openly communicate with all stakeholders.

However, an organization has to first identify this audience.

Public companies generally view stakeholders as shareholders (people who own stock in the company), employees, and customers. But stakeholders are also members of the community.

Depending on your business, this community might be very large indeed, as in the world.

Why communicate with your community at large, however large or small it might be? Because these people may be future stakeholders: shareholders, customers, and, yes, employees.

Some companies continue to communicate in difficult times. Best practice companies share bad news, and those messages come from the chief executive.

Why is the messenger important? A CEO who openly speaks about job cuts and similar initiatives exhibits leadership.

Take Garmin, a top maker of GPS systems, which for the first time in its history will reduce staff, as an example.

The Kansas City Star quotes Cliff Pemble, president of Garmin, who says, "While these cuts are painful to make, we still feel strongly that Garmin has the associates necessary to continue our innovation, support our business, and serve our customer base."

But, just as there are best practices, there are also companies that get it wrong.

Some organizations don't feel compelled to acknowledge job cuts and other cost-reduction decisions. Corporate leaders haven't been forthcoming about the reasons behind the cuts or the impact of the decisions; in fact, management hasn't said anything--at all.

In the current business climate, silence is not golden. People are listening, and when you say nothing, well, you've said something, whether you've intended to or not.

Today, technology facilitates communication with all stakeholders.

A corporate website is an ideal place to speak to issues, all issues, including and especially those related to staff cuts and other cost-reduction initiatives that affect the workforce--like salary freezes, pay reductions, and suspending 401(k) contributions.

At the very least, companies should communicate with the media about significant changes via press releases. Smart organizations know the media can be a valuable resource, especially in these troubled times when maintaining a positive corporate image can be challenging.

Is your organization adequately communicating with all stakeholders? Are you effectively using technology and other resources to do so?