Keeping Employees Engaged During Tough Times

I just got back from an HBS Global Leadership Summit where I listened to some great speakers. I found myself thinking about what things we could be doing with our company and employees during these difficult times. Yes, you should plan on cutting back (See Sequoia’s presentation covered on TechCrunch) to be prudent. But what can you do to inspire “shared ownership” (I’m a big fan of Danny Meyer’s book Setting the Table) so that your employee’s continue to be involved during a crisis? Here’s one thing we asked at our company meeting today: What things are going well at Care.com and what things should we do differently given the economy?

What else could we be doing at our companies during these difficult times?

Cheers,

Sheila

Comments

[Rodger Desai]

A great question that's important to be proactive on - esp in times like this. I think leaders like FDR provide a great example. Open, honest, frequent communication - but with passion and decisiveness, not sugar coating. Startups are like wars and the team will fight harder if they are part of creation of the plan and the play by play in the battlefield. Leaders that try to do it all themselves are not doing anyone a favor and will fail. If done well team members feel like "owners" and not employees. For those that don't make the transition, be proactive and get them out of the company.

[Lewis Weinstein]

Hi Sheila - These are difficult times indeed. Not just for employers but for millions of small businesses and entrepreneurs who rely on referrals to generate revenue.

In these tough economic times, now more than ever, small businesses need to leverage their trusted relationships to generate income. For your readers looking to leverage their trusted relationships to grow their business, I'd highly recommend they check out referralkey.com.

The site is a business networking tool that helps small businesses manage their referral relationships more effectively to increase sales and expand their professional network. Unlike other social or business networking sites that are focused on managing a vast number of professional contacts or have an asymmetrical benefit, Referral Key is a platform that encourages referrals to drive revenue and build stronger professional relationships.

[Bettina Hein]

Sheila,
Like many of the readers of this blog, this is not the first recession I'm going through and I'm relatively calm. The recession will be tough but it also gives us opportunities to make our ventures better. We have to remember, though, that for many of our Generation Y staff, this is the first time in their professional lives that they are experiencing an economic crisis and we have make sure they don't lose focus by panicking. From the 2001 crash I learned that you have to be open and frequent in your communication - as Rodger said above. Open Book Management is not just a buzzword. During the last crisis, we opened our books to every employee. Every week, we gave an update on revenue and cash positions and how much runway we had left. That openness resulted in a much more proactive culture in our company and we only lost 1 employee that switched back to big corporate job.

[suzzetteona]

Even the medical and dental sectors in Michigan are suffering from the poor economy. Fortunately 3 years ago we were able to diversify. With the same 3500 dental patient pool we have we were able to add other services in our building: services for an eye doctor, physician, massage therapist. In November we will be adding a hair/nail salon, yoga, karate, weight loss and nutrition programs, in our building. We will be doing external marketing hoping that the different services will attract different customers and then we will improve our internal marketing so that ones the customer is in the building we can refer them to each other. For my employees we recently opened a new business called Healthy Living Associates LLC. We are distributors of herbal, vitamins, nutritional products, medical equipment related to air/water filtration ect. My employees and I, all five of us will split our profits evenly at the end of each month. Not only am I giving them the ability to make extra money during this difficult times but I am also encouraging them to live healthier and encourage my patients to live healthier. The yoga we are all looking forward to as a way to destress during this trying times. Hope this helps. Love Ats

[Erica Scheik]

I think uncertainty and fear are the biggest factors in employee morale. I second one of the other posters who talks about transparency. A reassuring email from leadership that addresses the "elephant in the room"- namely a faltering economy in straight-forward terms can go a long way to building trust and honesty. At the very least it sends a message that whatever we are discussing regarding the fate of company in a tight economy won't just happen behind closed doors -- that you are included in the conversation. I have also found that tangible, short term goals are also helpful, so that people have a degree of control over their circumstances. Simply cutting overhead without putting those cuts into context just puts more fear and uncertainty into the mix. Thank you for posting the question. It has been nice seeing these different perspectives on this.

[TJ Mahony]

I find fear drives necessity, but discourages vision. Therefore we at FlipKey avoid creating any sense of panic (ex. "we must work harder") and instead encourage people to stay focused on the vision (ex. "we must work smarter, not harder"). When everyone realizes they are part of the solution you create an atmosphere of ownership vs. dependence. The yields better decisions across the organization and collective interest and understanding of the challenges that lie ahead...

[Paige Arnof-Fenn]

At times like this I find it is productive to keep a positive attitude, be creative, and plant lots of seeds. There is plenty of bad news in the headlines everyday so focus on areas where there are signs of growth and renewal. Follow the trends such as providing great value and see where companies are being innovative. Hold contests with employees and customers for the best ideas. Help people channel their energy into areas where they can make a positive difference. The groundwork you lay now will pay off for years to come. When you build relationships for the long term the down cycles don't seem quite so scary in my experience. Keep the faith!

[Cally R]

Agree with many of the posts above.
1. Communication: we have frequent, transparent and timely communication with staff in the form of small division meetings and larger departmental "town meetings". For example we have had extensive discussions about the impact of national and state economic downturns on health care. In these forums staff have been reassured and told that the external pressures provide an excellent opportunity for generating major, constructive data driven internal changes that produce increased efficiency given the limited resources.
2. Leadership: we are working on decentralizing, diversifying and strengthening leadership by promoting modality driven managerial level leaders with increased responsibility and accountability. This provides a tremendous sense of affirmation to these leaders and the people they manage.
3. Change: this is necessary and good! This is a whole new mindset for the health care sector who tend to be comfortable with leaving things the way they have been for the past 20 years.
4. Training: Staff in leadership roles have been sent to courses run by HMS and the Harvard School of Business which provide excellent training and perspective.

[Todd C. Bida]

The first day of my first job out of college (as a Wall Street broker in NYC) was literally Black Monday: The Crash of '87. Battled scarred and tested by this and other experiences, I am of course still troubled by the times we find ourselves in. But, with age and history I have a quicker eye to what's next and a quicker temperamental bias to building a way out than I find our employees in their 20's and 30's do.

They en masse lack the age-based visceral context that these times shall also pass. They've either not been through or were only marginally impacted by the Crash of '87, the 2000 Tech implosion, and other debacles.

The gift I think that we can give these employees is Context.

To that point, one of the best high-impact context-setting articles I've read recently is attached below. I had this article on the great fires at Yellowstone sent to me and found it a heartening quick read.

CLIENT'S CORNER PERSPECTIVE
http://www.theterrillgroup.com/
Of Fires That Burn Out

On October 17, those who can even remember it will mark the twentieth anniversary of the day the great Yellowstone fire was contained.

The summer of 1988 would turn out to be Yellowstone National Park's driest in recorded history. But there was no way of knowing that in advance, as seasonal, lightning-sparked fires broke out in May, and burned into June. More storms in July brought more lightning; the fires spread and intensified.

Still, it wasn't until late July - when some four thousand people had to be evacuated from Grant Village, a collection of lodges, restaurants and a visitor center - that the nation's attention became riveted on Yellowstone. Hundreds of reporters descended on the park, as more than 25,000 firefighters fought the spreading blazes.

On August 20, which came to be known as Black Saturday, winds of up to eighty miles per hour doubled the size of the fire to 750 square miles, and on September 7 the historic Old Faithful Inn had to be evacuated. (It was saved essentially by a sprinkler system installed just the prior year.) Four days later the rains came, and by October 17, the fires were under control. In all, 1,875 square miles burned out - something like a third of the park -- in what was universally regarded as an ecological disaster of epic proportions, perhaps the greatest in American history.

No fewer than three separate Congressional hearings were held to review fire management policies at Yellowstone and on other public lands, and the National Park Service was pilloried for an alleged "let it burn" strategy - a policy it had in fact never maintained.

Today, as the leaves begin to turn again in Yellowstone, you will find it a renewed paradise. Trees have taken root everywhere among the burnt logs that litter the forest floor. The fires, it seems, cleared out the overgrown forest canopies, allowing new plants to bloom. Bird and animal life flourishes. And people who know and love the park say that it's greener than they've ever seen it. The fires weren't an ecological disaster at all; they were nature's way of cleaning out and renewing one of the most beautiful places in America.

This autumn, we find ourselves in the later stages of a great credit conflagration. Hordes of catastrophists on cable and the Internet decry an unprecedented disaster burning out of control and engulfing one great financial institution after another. In their view, the fire is beyond the capacity of nature and man, is constantly getting worse, and will surely end in the long-term destruction of the financial system.

It will do nothing of the kind, any more than the Yellowstone fire of 1988 did. Nothing that is occurring today is unprecedented - though it may be happening on a larger scale - and nothing is unnatural. This is nature's way of cleaning out the rot. And it will lead to a healthy renewal of the global financial system in ways that today's doomsayers cannot even imagine.

Between 2000 and 2002, the world unwound the greatest equity market bubble of all time. Last year and this, we have been unwinding the greatest credit bubble of all time. These are horrific processes as one goes through them, but it is useful to remember that they burn out - that the rains do come again, even after the driest summer, and that, as John Kennedy said, no human problem is beyond the capacity of human beings.

While waiting for the rains, it will be useful to ask oneself: if this is an unprecedented long-term destruction of the financial system, why does the equity market refuse to burn down?

From its false dawn last October, the broad equity market declined about 24% peak-to-trough through the close on September 15, 2008. A 24% decline over nearly a year is hardly a walk in the (national) park, but neither is it an indicator of Armageddon. Indeed, the October before the great Yellowstone conflagration, the equity market went down nearly that much between a sunup and a sunset. (This event, too, sparked any number of equally spurious Congressional investigations, to equally negligible effect.) But as the leaves turn yet again - even in this season of despair - the equity market stands nearly five times higher than it did that evening.

Perhaps it's time to turn the television off, and to make a weekend of it in Yellowstone. At the very least, this exercise might restore some very important long-term perspective.

But be sure to pack your slicker and boots. The rains are coming.