Loss of trust - when management lies
1322
Dear Joan:
Repeatedly over the last 6 months my former employer said that the R&D function was not in jeopardy because R&D was needed for the company to thrive. And we were specifically told in two meetings within the last month - one with the CEO and one with the head of R&D - that we were reorganizing R&D, however, not to worry, no one would lose his/her job.
Just recently 15 R&D employees were severed due to restructuring, about 5% of the R&D function. What is your take about the CEO and the head of R&D making these statements prior to recent events? Does that signify anything that could be contested in court? What about ethics? Also, just prior to the restructure, many promotions-- about 5%-- went forward within R&D, which gave us all a false sense of security, as well. Please let us all know your take on this.
Answer:
It’s hard to believe the CEO didn’t know this was coming a month ago, when he spoke with the group. Typically, when a RIF (reduction in force) is going to be made, there are high level meetings occurring more than a month in advance, to determine the depth of the cuts. The R&D manager would have been included in those meetings, since, presumably, he was the one deciding how and who to cut.
If I give these two the benefit of the doubt (which is tough to do in this case), I can only assume something drastic happened in the last thirty days. For example, perhaps the parent company dictated the action, due to the loss of a major contract, or results unexpectedly tanked. But why not just come clean and admit what is happening?
What may be more likely, is that as they were in the process of reorganizing, they didn’t want to lose some key talent. Often, when rumors of a reorganization make their way through a company, the most employable employees start looking for jobs. The R&D manager may have wanted to put a lid on potential defections; until he could make offers to people he wanted to keep.
Ironically, this plan doesn’t work. Do the CEO and head of R&D really think people won’t be cynical and bitter about the way this was handled? How could they think the people who have kept their jobs won’t be looking as soon as the economy rebounds? People aren’t like sheep, who will accept whatever happens to them. They may keep their heads down and their mouths shut for now, but their loyalty has been shaken.
The biggest mistake the CEO made was not sharing the truth. Painful as that can be, it is the best course of action in times like these. Adults would rather hear about the real state of affairs, so they can make decisions that are in the best interests of their families.
The most successful companies—with the most committed employees—practice a more open style of leadership. They have ongoing employee meetings, where the marketplace dynamics are discussed. In fact, one company I know told their employees they would have to resort to lay offs if revenues didn’t improve. The employees volunteered to take staggered furloughs (so service wouldn’t suffer); they thought of creative ways to cut costs, and even started a calling campaign to existing customers, to make sure they were satisfied. When some cuts had to be made, the employees understood the reasons.
Leading employees to believe one thing and doing something else entirely destroys credibility. Nothing else they say will be taken as the truth. A lack of integrity won’t give you grounds for winning a court case, but as far as winning the hearts and minds of employees, the case is closed—they lose.
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