Restructuring, realignment, cost-cutting programmes: Many managers currently have to communicate unpleasant topics. A few rules help to avoid putting their foot in their mouth
The corona crisis has turned plans upside down in almost all industries – often with downward deviations. Restructuring and cost-cutting programmes have moved up the agenda in many companies, and many corporations are having to cut staff. Nobody likes to talk about such topics, yet the right communication strategy is crucial. There are a few mistakes that companies should avoid, regardless of their industry and individual situation.
Mistake 1: Excuses
Even though the coronavirus pandemic is at least part of the problem in many companies, it should not be misused as an excuse, warns Volker Heck, Senior Partner at communications consultancy Deekeling Arndt/AMO.
In certain industries, such as automotive suppliers, a radical transformation was already on the horizon before Covid-19, and many companies would have faced tough cuts even without Corona. “You can’t use a crisis like this as a cover for restructuring that you had planned anyway,” Heck believes.
Employees, customers and investors are perfectly capable of critically assessing the overall situation. “If a manager wants to shift the responsibility for a difficult situation, for example to the Corona crisis or to the predecessor management, then of course everyone involved notices.”
Mistake 2: Hide and seek
Office space is largely deserted, personal contacts are almost non-existent – it would be easier than ever in the pandemic to simply go into hiding. But especially when you can’t meet interlocutors in person, as in the current situation, executives should adapt their communications, advises Stephanie Verena Prager, Director at Deekeling Arndt/AMO.
This is especially true when the crisis forces a company to adjust its strategy, sell divisions or allocate investments differently. “These issues affect many employees very personally, and that’s how they should be communicated. No one wants to take their professional perspective out of an email without any comment,” Prager says.
If company meetings and gatherings aren’t possible, managers should at least offer video calls to explain and classify decisions – on different dates, if necessary, so that employees on the shop floor or working shifts also have the opportunity to find out. “The decisive factor is the willingness to address the questions of all employee groups and to actively inform all stakeholders,” emphasises Prager.
She adds that the point is not to have a polished answer to every possible detailed question right from the start. “It is better to provide individual answers at a later stage if necessary than not to communicate at all.”
Mistake 3: Downplaying
In the case of a restructuring, management is dependent on the continued support of financiers and employees. But anyone who gives them the feeling that they are not being taken seriously, quickly gambles away their goodwill: “Restructuring is not a fitness programme that automatically leads to growth again after a short phase of austerity. No one believes this narrative anymore,” Heck clarifies. His advice: stay realistic and don’t raise false expectations.
In many cases, Heck sees a need for action in terms of crisis communications, particularly in the SME sector. All too often, he says, attempts are made to talk down a crisis. The public is sometimes not informed at all. This is to a certain point understandable – restructurings cause anxiety and distress, and press reports fuel this anxiety even more.
According to Heck, it is legitimate to address restructuring internally first – but one must be aware that the transition from internal to external communication is fluid nowadays: “As soon as I address a larger circle of employees, I have to expect that parts of the information will find their way into the public.” This makes it all even more important to prepare the messages well and to define fixed milestones and plans for implementing the restructuring measures.
Mistake 4: Zigzag course
Constant strategic back and forth leads to confusion both within the company and among external observers. Especially in restructuring phases, a change in strategy that comes as a surprise to various stakeholder groups can have fatal consequences.
“Management must not act as be driven by the crisis,” warns Prager. Decisions must therefore not be perceived as a sudden or surprising act – especially when it comes to M&A transactions. “Otherwise, the impression of a distress sale is quickly created.”
Particularly when a transaction has been planned for a long time, the communication strategy should focus on future prospects, advises the communications consultant: “This can be, for example, the aspect that a new owner will invest more heavily again in the future and thus also offer corresponding professional opportunities. Such an argument can have a decisive positive influence on employees.”
Mistake 5: Overstimulating
If you want to count on employee engagement, you should think long term about what messages are appropriate and when. Otherwise, conflicts loom when you least need it.
Heck has seen several examples of companies telling employees over the years that they need to forgo salary rounds and bonuses – always citing economic challenges. Over time, that leads to growing resentment among the workforce.
The consequence: “If you argue for years with the supposedly difficult situation, the concession is used up when the crisis really hits,” says Heck.
This is how things work better
In order to be heard even in special situations, Heck says that it’s important to use the right tone of voice: “The debate should be factual, deliberative, and characterized by arguments and expert knowledge. Emotionality and exaggeration are not helpful.”
And as in almost all areas, the same applies to crisis communications: good preparation helps. Because once a company is in crisis mode, time and resources are already scarce. Heck advises: “It’s best to prepare a long-term narrative already in the good economic phase, which you can then fall back on in a crisis.”
The interview was published in German on 21 January 2021.