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The company was under performing. There were recent layoffs, and rumors of more.
The office of the CEO scheduled a town hall meeting for June; hundreds of employees would be in attendance with likely hundreds more watching the video feed streamed into conference rooms across the corporate campus and field offices.
In his town hall comments, the CEO addressed the recent layoffs and the rumors of likely future reductions. He spoke of soft sales and margin pressure that necessitated the cost reduction actions.
He also announced the implementation of some employee-friendly actions; I recall summer hours being one of the more prominent.
He, it seemed to me, was being transparent, genuine, even courageous. He had a tough message to deliver, and he was straight up in delivering it. It was, it seemed to me, a good-faith effort to connect, and explain. He was reaching me; I was with him.
Until, just like that, I wasn’t.
I witnessed it … there was no mistaking it … he was visibly underwhelmed and disappointed when the employees in the room were unresponsive. He quite clearly found the lack of response … well … baffling.
To his credit, his umbrage wasn’t overt — he didn’t chide, or admonish — but he clearly was taken aback by the utter lack of positive response.
* * * * *
Let’s imagine the executive discussions that explored the effect of the layoffs and led to the summer hours decision and the town hall event.
I imagine meetings where an executive or two spoke of their concern for the morale of their teams. I imagine that the brainstorming on actions to take to improve morale were framed by a question like what can we do to improve morale that is expense-neutral?
I imagine they soon coalesced on the summer hours idea as a relatively easy and painless way to give something back, to show consideration. It was a low-cost way to create a positive feeling.
I further imagine that the CEO was not entirely on board, unconvinced that the summer hours plan wouldn’t be a productivity loss that would further exacerbate company performance … yet he agreed that something needed to be done to boost morale, and he couldn’t disregard this reasonable effort by his executive team to address the problem while respecting the challenge to the bottom line.
And I imagine that as he decided to take that risk, he also saw it as self-sacrificing to address his employees directly, as that surely would be uncomfortable. That, I imagine he reasoned, was his price to pay for the position he held; surely his sacrifice and good faith effort on behalf of his employees would be recognized and affirmed.
And when in the town hall it wasn’t, he took umbrage.
* * * * *
His reaction in that town hall was a clear and present indication for me that he was simply not up to the cultural challenge he was facing.
Implementing temporary employee perks in an attempt to enhance morale is about as effective as rolling out a new advertisement for a inferior product. If there is positive effect, it doesn’t last. Customers are smart; they quickly catch on.
As do employees.
Summer hours and the like will not even prove minimally effective when people are worried about being on the next layoff list. Isn’t it baffling that very smart organizational leaders continue to think that that’s a people strategy worth pursuing?
And, before I close, I can’t help but note that one of the strategic statements of that CEO’s organization was build lifetime relationships with customers.
What do you think the chances of that are when they reinforce with regularity a very tenuous relationship with employees and rely on unserious superficial management action to mitigate the disengagement?
Baffling.
johnponders 
A common theme of “lets imagine” what happened in the executive suite permeates this post John.
I can only imagine the choices he had to choose from and he chose the one that helped the employees, albeit for a short period.
Sometimes a sip of “unserious superficial” water is just the temporary solution needed, before the next round of serious work is to be tackled.
Dan
Yep, Dan, I wasn’t in the room. But I definitely was in the vicinity …
I’m pretty sure that your scenario is accurate. I don’t mean to minimize the executive dilemma.
As for the sip of unserious superficial water before the next round of serious work, I’d buy that if there were any evidence whatsoever of serious work in this domain. There wasn’t. There certainly was work, but it was all about how they could placate their people and mitigate the people risk without making any meaningful investment in them.
I’m looking forward to seeing what I get from past colleagues who were and may yet be close enough to sniff out the real deal.
PS: And Dan, doesn’t that middle pic look like Paul stressin’ in the old days?
PPS: I wonder what thoughts are provoked when you look at this post — and our commentary — in connection with this August post …
Yes, “let’s imagine”. The principle works in every area of our lives (work and play).
For example:
Situation: Your car broke down.
Now the choices:
1. Buy a new engine, $6400
2. Buy a used car: $17,400
3. Buy a new car : $32,600
4. Ride the bus: $127 /week
5. Fix the bicycle ($?)
6. Walk ($?)
Resources:
Bank Account: $360
Mattress: $600
Credit rating: Shaky
Now, if we simply “select” #1, and tell the “people” what we did, we can expect to be told how stupid we are for throwing good money into a bad car.
If we simply “select” #2, then announce what we did, we’ll probably be told how stupid we are for buying somebody else’s problems.
If we simply “select” #3, and announce what we did, we can probably expect to be railed at for having blown such an incredible amount of money that will take years to pay back!
And so forth. See where I’m heading? It’s all about choices. If the leader simply “selects” an option, then tries to tell everyone how GREAT the decision was, then he/she will get exactly what they’ve got coming (see above).
The CEO in your example was guilty of horrendous preparation. He should have known in advance what his people thought of his “summer hours” and other programs (Where was the grapevine? H.R.?). A good lawyer never asks a question unless he already knows the answer. Or makes a statement without knowing the response. The CEO simply “assumed” the people would love what he had to say! He expected applause.
In such a case as described above (i.e. people fearing for their jobs), the CEO should have jumped down into the trenches and explained:
1. Where are we?
2. Where do we need to be?
3. How do we get there?
Quite a simple formula actually. It’s never failed me. And it’s #3 that is most important, of course. It should include items like “here are/were our choices” and here’s how much we agonized over the decisions, etc. Once the people see that there is/was no really “good” option (see numbers 1 through 6 above), but faced with the fact that a choice (of some sort) MUST be made, they’ll be more likely to understand that management selected the “lesser of the evils” for everyone’s sake (consult Spock).
This concept has worked for me almost like magic. I’ve stepped into several operations filled with disgruntled employees who thought management was simply stupid and incompetent. But a closer look showed that management was indeed making the best (least evil) decisions! Their only real violation was the failure to effectively communicate. The decisions (selecting the lesser evils) were so agonizing, that management was in total despair because they had no GOOD options to choose from. They knew that it was impossible to keep everyone happy, so they just went about their jobs in a daze while hoping the “people” would just “understand”. The result was employee push-back and other grave complications.
People don’t “just” understand the decision without seeing the context. The above CEO was clearly operating in a daze.
(yes, I’m agreeing with you guys, just in my own words!)
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