Recession Leadership: Don't Kick the Cat

Think of recessions as tests. Companies that fail them die. Companies that survive live to fight another day. But a few companies emerge stronger than ever. How do they do that? This is the second in a series of blogs about how great businesses have used hard times to strengthen their companies.

Although we all seem a little amnesiac these days, the last recession wasn't so long ago. 2000 saw the tech bust, followed by a market slump that found analysts, on September 10, 2001, asking if the market had bottomed out. Then came September 11 and by the end of 2002, the Dow stood at 7,197.

This concatenation of events left tech firms highly exposed, none more so than Mona Eliassen's consulting firm, The Eliassen Group. That business depended on the high tech community concentrated around Boston. In the tech boom, bd been booming, but now no one was hiring and the company was in trouble. What did the CEO, Mona Eliassen, do?

She paid attention to the company's culture. Holding regular staff meetings, she explained what targets the company had to hit to avoid layoffs. As it became clear that those targets wouldn't be met, employees weren't helpless or kept in the dark, but informed enough to make their own decisions. Many opted to take some time out, others for a career change. They were treated like grown ups.

Nor were tough times an excuse for petty savings. As one employee recalls, "We still had fresh fruit in the kitchen. The dry cleaning company came in, and a massage person brought her table in. We had visiting nurses come and give flu shots. Cutting those things wouldn't have saved jobs but keeping them kept us together." Many of Eliassen's competitors closed down but when the recession ended, the Group emerged stronger than ever, with highly motivated and committed employees who remember tough times in nostalgic detail. "For me," says Mona, "Culture is not the only thing. But the more I run a business, besides having a market to sell to, I think it is the most important thing."

Mona understood that, at times like these, culture is more important than ever. People are the shock absorbers of volatility. If you say they are your most treasured asset, treating them well in good times is easy. Tough times prove you mean it.

Last month, I watched the President of a Fortune 100 company publicly chew out a junior executive for a technical glitch in a presentation. It was a classic 'kick the cat' moment: a powerful person taking their anxiety out on someone vulnerable. I'm told that President is being considered for the CEO spot. Anyone witnessing this scene would have put him out of the running. This company had invested deeply in a nurturing culture - the comment of a moment proved it was just lipservice.

In recessions, every employee is scared and stressed. Most of them live with partners, who are scared and stressed too; many have kids graduating college, unable to find work. Cat kickers think their stress gives them an excuse for bad behavior. True leaders appreciate that tough times are opportunities to strengthen the culture and prove their integrity. If you mean what you say about valuing your workforce, now is the time to prove it.

This is the second in a series of posts about how great companies triumph over tough times.
1:Lessons from a Vineyard

Comments

[CindyS]

Margaret, this is your best post yet. We need to have more real life examples like this one to help organizations both large and small put our current economy into perspective. Leaders also need to be continuously reminded that their behavior is under a microscope daily and mimicked by the rest of the organization. It is always fascinating to me when leaders ask why their organizations are dysfunctional and unable to adapt to a changing environment in a positive way and yet their behaviors show that it is they who are unable to adapt. Every leader should read this post. Thank you and can't wait to see your next installment!

[Fremon]

This manager is obviosly very flawed and consideration should be made to keep him from going higher in the corporation. All managers at all levels are flawed in that they are human beings and have the same human frailties of fear, jealosy, greed, happiness, etc. Those who work their way up the line and become managers should strive to control these human frailties. Unfortunately, many do not and hence you have a man resorting to a power trip on the vulnerable. His fear was not looking good in front of his subordinates and possibly higher ups. Anyone, would have known that glitches occur and take pains to avoid them but when they happen look not to immediately blame others and not take out venom in front of those watching. This is obviously a very small man. We see the same sort of personality traits with Bush who can't come to any reflection that his tenure in office was a failure. We knew he was a small man going into office just that we didn't know how small.

[cayuse]

Maslow's Hierarcy of need identifies human motivation as a Triangle of Need. Human Beings first drive is for pysical survival, his family, his community, his self realization and altruism comes only after all off the above. The best places I have worked start discussing this theory as people loss their jobs or become stressed.

Whether you are the boss, the worker or the terrorist, physical survival comes first. We all need to understand human motivation that effects us and the people around us.

[marijam]

No manager should ever chew out an employee in front of other employees for any reason.

[research]

It's a power trip.

I have visited petty tyrants on business, and they always arrange to cuss out an employee in front of me.

I've actually interrupted some of them: "Please do this on your own time" sort of thing.

I try not to do business with such folks.

[DiogenesOfAlaska]

'All that is necessary for the triumph of evil is that good men do nothing.' (E. Burke)

Or, equally fitting would be Robert I. Sutton's 'The no Axxhole rule' (which first appeared in the Harvard Business review, later as a book) in which it is convincingly argued that the strategy you propose is close to optimal.

[cylindar]

Very good point!!!!

[Strywever]

Thanks for this very thoughtful post. As an employee communications consultant, I can tell you that what you say is absolutely true: executives' actions speak far more loudly than their words, and respecting employees as capable adults who can handle ambiguity and bad news pays off. Kudos to Eliassen!