As the financial crisis first took hold, people gathered together and supported one another. It seemed that the collective response to an external threat was taking place. "We're being attacked. We're in this together and we can support one another through the difficulty."
So there was more sharing of information and knowledge to ensure everyone was "being kept in the loop". People went out of their way to find out what others are doing and how they can help. They were loyal to one another. They got together more at a social level (although lunches tended to be much shorter and far less expensive, since they weren't being reclaimed on expenses).
That type of behaviour is still the case in many organisations. But in others, a change has occurred. And that point seems to arrive with the first lay-offs. As soon as people start to lose their jobs, the mood of those remaining changes.
People become less sociable – lunches are definitely out, no matter who's paying. At the lower levels, staff start to emphasise (publicly) what they are achieving (sometimes even at the expense of colleagues). They also "spin the truth" to their advantage.
Other staff retreat into themselves and hope "that it will all go away soon". Managers become less visible and remote. They are always in meetings. When asked about "What's happening?", very little of the real story emerges. And there seem to be many things that are "undiscussable"
On the commercial front, organisations are cutting their marketing and training budgets – two of the most important items on any balance sheet. Some have cut their marketing budget by 70%. One wonders how much market share they will have lost by the time the market starts to pick up again.
Marketing brings in the business. Training helps to keep the people motivated and skilled, particularly on how to handle the business in these difficult times.
When dealing with external issues, many organisations are retreating and being negative rather than attacking and attempting to grow their market share. To make matters worse, they communicate with customers, suppliers and other key stakeholders more by email or text rather than phone or face-to-face. This is even more prevalent when they have bad news to give. And that's the worst way to give bad news. And they treat suppliers (and even customers) as somewhat alien rather than as business partners.
This approach hit home to a colleague who has been a trusted supplier to a firm for over 10 years. He even had his own security code to enter the building for meetings. But last week, his code did not work. He was told that "an instruction had gone out to the effect that no external providers be allowed direct access."
As he said, "Having been around for many years, we've now seen the pendulum swing from contractors being considered business partners to then being viewed as recalcitrant, money-hungry, self-interested capitalists. We await with interest to see when the pendulum will start swinging back again!"
The problem is, when the pendulum does start to swing back, will it have any impact? Will people trust what others are saying?
Steven Covey, in his "7 Habits of Highly Effective People" first introduced the notion of trust, not as a soft social virtue, but as a hard edged economic driver that can be deposited and withdrawn from one's emotional bank account. He suggested that it takes a long time to build up the trust balance by way of small deposits and this balance can be quickly depleted with just one withdrawal - as in this example.
Trust is a critical resource at the moment. As Niklas Luhman found in his famous 1979 study: "Trust reduces the feeling of uncertainty. Trust makes a person feel more secure with regard to his or her acting or not acting. With trust, the person has the feeling of knowing what will happen in the future." And finally, "Trust is used to lower the uncertainty regarding other people's behaviour".
So in the current situation, how can organisations maintain trust with their staff and other key stakeholders?
We know that in tough times, people strive to satisfy their basic needs - food, shelter, security. It's been suggested that adults have little awareness of their security needs except in times of emergency or periods of disorganisation. As adults however, we continually look for these needs in our children. Children openly display the signs of insecurity and we readily respond to these.
So when managing staff, perhaps we need a renewed awareness of people's basic needs. That means more socialising, interacting and even physical contact such as hand shaking, hugs etc are needed. Some of you may have seen the news item recently of a man giving out "free hugs" in New York. Many people were sceptical, but you could almost feel the positive energy from the people who were interviewed after experiencing a hug.
As an example of effective socialising, one colleague who works in the construction industry took his four direct reports to the football - a first for him and the firm. The mood and particularly collaboration within his team, has improved dramatically since.
And the same is true for other stakeholders such as customers and suppliers.
Will you do more face-to-face or phone communication rather than email? Cost pressures have led to many face-to-face meetings being replaced with teleconferencing, with varying degrees of success. Teleconferencing can be extremely effective for discussing the key business issues. However, how do you handle the necessary social interaction? How do people build the essential social and emotional bonds required to cement lasting deals? How do you have a virtual meal, drink, tea/coffee together? And what happens after the meeting?
Experience suggests that there are often "meetings after meetings" where small local groups gather (generally over tea or coffee) to discuss what was really said or meant in the meeting and by whom.
How will your product or service (or perhaps the way you deliver these) help satisfy your key stakeholders basic needs for safety and security? You may recall my earlier story of how Hyundai has dramatically increased their market share in the US by applying this basic principle of catering to people's need for security rather than thinking of their own drive to increase sales.
The message? As a manager working with staff and other stakeholders:
- Look for ways to increase social contact
- Search for options that will satisfy people's need for safety and security
- Be prepared to spend more face-to-face time with key people
- Be prepared to discuss the "undiscussable" (if you don't, others certainly will, and often negatively)
People can only do their best work when their basic needs are acknowledged and met. Customers and suppliers can only be true business partners when they feel safe and secure working with you.
In these times, it's important to stress security, food, and shelter before talking about business performance. It's important to build your trust deposits with the people that are so important to your success.