By Judith E. Glaser | blogs.hbr.org
Published: September 13, 2013
Leaders face enormous public and employee scrutiny when their companies are failing. Many have to measure their success in terms of stock price and market share, and when those slip, everyone sees it happening, reads about it in the business pages, watches it on CNBC. How do the best CEOs confront that challenge? When the heat is on, and pressure intense, how do they rally their troops?
For 10 years, I worked as a consultant to John Emery, CEO of Emery Worldwide, now part of UPS. Every six months, we produced a video to update employees around the world on how the company was doing. At one point, the stock had taken a dive and when John and I shot his usual recording soon after, he stared into the camera, frankly explained what had happened and asked everyone for their help reversing the trend. I wanted to edit what he’d said and do another take, but his response was: “I’m one-take John and I know when telling the truth is vital to our success. We’re all in this together, and I need everyone on board now more than any other time.” When we released the video, I was blown away by the response. There was a buzz across the organization, with everyone talking about what they could do to fix the problem. I’d never seen a leader be so boldly truthful — nor had I ever seen such a positive impact. We weathered that storm, and John’s leadership set the bar for me on how to effectively engage employees to overcome a crisis.
Recently, I watched two CEOs handle similar situations. One followed John’s example; one didn’t. And I think there are lessons in both stories for us all.
This spring, after disappointing first-quarter earnings, IBM’s stock plunged 8.3% in one day, its biggest drop in eight years. This was certainly not what CEO Ginni Rometty wanted or expected to face only one year into her job running one of the largest and best-known technology companies in the world. So she gave a company-wide video address to 434,000 employees in 170 countries, telling her people to “wake up, work faster, work smarter, and work together.” The press described the talk as a “reprimand”, but I saw it differently. I think Rometty’s clear, direct, provocative language was intended to activate her employees, to make them acutely aware of the issues at stake, and to direct their full attention on working together, fast.
“Where we haven’t transformed rapidly enough, we struggled,” she said. “We have to step up … and deal with that, and that is on all levels. We were too slow to understand the value and then engage on the approval and the sign-off process. The result? It didn’t get done.”
Those words and others were designed to create clarity amid confusion and uncertainty, to push employees toward candid, honest conversation and to encouraging them to start looking for — and executing on — new and better ways of doing business. She was reframing, coaching and redirecting.
The second story comes from AOL CEO Tim Armstrong, who last month hosted a meeting and call to address the 1,100 employees of Patch, a unit that had been losing money and was about to face some layoffs. The beginning of the speech was no doubt designed to sound like “tough love” but it came across decidedly more threatening than energizing. Repeatedly Armstrong told his staff that anyone not fully invested in Patch should leave. Then, abruptly, he fired someone standing in the room with him: creative director Abel Lenz.
“Stop shooting”, he said, followed quickly by: “Abel you’re fired. Out of here.”
The backstory, according to press reports, is that Armstrong had been disappointed in Lenz’s performance. When he saw Lenz filming, instead of really listening to, this critical meeting, it was the last straw. But no leader should ever give individual feedback or fire an employee in public. In an already tense and anxiety-filled situation, Armstrong created more fear and distrust by acting impulsively on his emotions. I imagine the other 1,099 employees on that call thinking, “This is what might happen to me!” That sort of response pushes the brain into fight or flight mode, reducing its ability to reason, problem-solve and think creatively. It’s hardly an invitation to work together towards positive change.
As a leader, what you say and how you say it matters — especially when your company is facing challenge or crisis. Your job is to model what is right and good and energize the talent around you. If you don’t, you will shut your employees down.
I tell my clients to consider the following strategies:
- Anchor the organization. Focus people on what they need to do differently and why this is critical. Explain the changes you want to see, and lead people into thinking about how they can play a role.
- Model the right kind of truth-telling. Encourage employees to speak frankly without finger-pointing. Use clear and direct language and monitor your emotions. Never let fear or frustration creep in.
- Focus on the future. Explain that you want to hear ideas from everyone in the organization on how to better collaborate and innovate. Be clear that you’re open to two-way conversations.
Great leaders understand that rallying the troops is not about scaring employees into working harder with threats and blame but inspiring them to want to “do battle” together, unified in purpose and determined to succeed.