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Boosting Your Personal Confidence

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“Do something. If it works, do more of it. If it doesn’t, do something else.”

Franklin D. Roosevelt

During this recession employee confidence seemed to hit a low point in the first quarter of 2009. Since then there have been ups and downs but the overall trend has been moving slightly more positively with one notable exception. And that one exception is how people feel about the alternative options being available to them should they want to or be forced to leave their current employer. This sentiment on the part of employees emphasizes the notion that whatever recovery we have experienced so far has been jobless.

The employee confidence model, upon which this research is based1, has been linked to various performance metrics at personal, organizational, and country levels, and consists of two main dimensions:

  1. Personal Confidence
  2. Organizational Confidence

Each of those dimensions has an internal and external component forming a 2×2 matrix. Internal Personal Confidence within the context of the work environment is when you feel you have a meaningful future at your current employer including concepts such as job security. While Internal Personal Confidence has taken a beating during this recession, External Personal Confidence suffered even more. External Personal Confidence within the context of the work environment is confidence in your ability to succeed outside of your current employer, being able to land on your feet elsewhere, to be employable and if internal personal confidence is about job security, external personal confidence is about career security.

In general people’s external confidence levels can decline when they feel trapped due to a lack of options. By taking steps to continuously enhance external personal confidence they can mitigate confidence eroding situations.

What might those be?

  1. Be aware that everyone has options. NO ONE is trapped in hopeless situations. There are paths forward. Sometimes they can be difficult to see – especially when your confidence has been shattered. Look for them they are there.
  2. Actively work towards maximizing your options.
    1. Have wide social networks that you interact with regularly (relatives, friends, co-workers, people at church, etc.). Make use of your network when your confidence suffers a blow. Everyone can relate to that.
    2. Develop a smaller network of trusted confidants that you can talk to openly about your issues.
    3. Realize that regardless of what caused your confidence levels to decline, you are not the first person to go through what you are going through and many others have successfully overcome similar obstacles. You can too.
    4. Continuously improve your skills and knowledge, no matter what you do for a living or your education level look for personal growth, skill and mind development opportunities and take advantage of them.
  3. Develop additional coping mechanisms such as an exercise routine, a hobby, volunteering that can get your mind off your immediate confidence issue. The idea is to build a buffer, to create some space that is more normal, more routine and gives you time to get your emotions under control.
  4. Remember that sometimes blows to your confidence may have nothing to do with you. In the case of office bullying for instance, the person doing the bullying whether it be a boss or co-worker is often insecure or has other issues and exhibiting a lack of confidence in themselves. Unfortunately their way of coping with their own insecurities is by taking it out on others.  In this case the issue lies with others.
  5. Don’t sit back and do nothing. That simply makes things worse.

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1.Saltzman & Brooks, Strategic Surveying in the Global Marketplace and the Role of Vitality Measures, 2010 appearing in Going Global, Jossey Bass.

 

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Employee Attitudes during this Recession

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“When the tide goes out, you can see who’s been swimming naked.”

Warren Buffet on leadership in a recession.

How do employees react during a recessionary period? What happens to their attitudes about work and the work environment? What about their perceptions towards leadership? And most importantly do those attitudes, or shifts in attitudes actually affect organizational performance? The information that has been distributed on this topic over the last couple of years has been somewhat less than clear, or at the very least has been sending mixed interpretive messages. Some of the reported data has indicated that employees on a whole are less positive, less engaged or as some term it actively disengaged. That finding could represent a possible reaction to the somewhat harsh measures that some leaders adopted as they attempted to increase the odds of organizational survival during a deep recession.

Other reported findings strongly affirmed that employees are more positive now than prior to this recessionary period, possibly as a result of realizing how ugly things are on the outside, so the inside is looking pretty good. That would be a result underpinned by both frame of reference comparisons and the notions of cognitive dissonance, the need to resolve conflictual cognitive positions (e.g. even though I used to really hate it here, the place must not be so bad since I am staying). Categorical statements, that something is all one way or the other, black or white, raise my warning antennas and so one is left wondering, is it possible to look across the various reported results, many of them stated in a categorical fashion, and make some sense of it all? Scott Brooks, Walter Reichman and I did just that and here is a summary of some of what we found.

Methodological observations regarding the reviewed reports:

Some of the reports we reviewed1 are based on client data, meaning data that has been collected from clients during the course of a consulting firm running their employee surveys. Client data over the course of a few years can change, depending on which clients the consulting firm happens to have, what survey cycles clients are on etc. One industry for instance that may be well-represented in the norms during normal economic times like retail, and has been hard hit by the recession may cut costs by delaying or canceling their survey, and so their industry may be underrepresented in the data during a recessionary period if the norms are client based. So when examining client data over time you may not be looking at an apples-to-apples comparison even if the data is coming from a single source such as a consulting company.

Additionally, surveys of clients that occur during recessions may represent clients that are weathering the recessionary storm slightly better than most, since the budget for collecting the data has not been axed, or the data may be coming from organizations that are deep adherents (at least more so than others) to the notions of collecting and measuring certain aspects of employee attitudes, employee engagement being one of those. And of course the employees themselves who are being surveyed in client based norms are the survivors, those who have not been laid-off, which may also have an impact on their attitudes, especially when compared to the general population. One approach to correcting some of the issues with client-based research is the use of a standard basket of companies for tracking purposes, similar to the Dow Jones Industrial Average methodology. That could be achieved through a consortium of companies who agree to share their results. That would fix the problem of which companies are included (since it would be standardized) but not who from each company is included (during a recession we would still be surveying only survivors).

Some of the reports that have attempted to shed light on the state of employee attitudes during this recession are based on random sample surveys or stratified random samples (meaning you make sure certain demographic categories, such as senior managers, or females etc. are adequately represented). These data are not client based, but rather are gathered from people who have agreed to complete surveys, usually for some kind of incentive, for instance, a chance to be entered into a lottery for each survey they complete. These surveys include a cross section of people, some employed, some under or unemployed but if sampled correctly are representative of the population as a whole, not necessarily the employed population, or the population from companies that care enough about employee attitudes to be out there measuring it. Depending on how the sample is drawn they may come from private and public sector organizations, government as well as not-for profit. It may include those working full-time as well as part-time. One issue of course here is the motivation that these individuals have for completing the survey. Many of them, we have to assume, are not doing it for the sake of the research, but rather in a fashion to maximize their ability to achieve whatever incentive is being offered. (That is why it is called an incentive.) That creates a question in many minds of just how these people will respond, and will they take the survey seriously.

One conclusion from looking at all of the data that gets put out is that unless it is clearly stated in the report, and often times it is not, and the methodology explicit, you really don’t know who is included in either client-based or in random sample survey reports and hence the conclusions from one report are not all that easily compared against another.

Some broad trends we saw:

  • “Engagement” during this recession has not declined.  With an eyeball meta-analysis, the actual change may be slight improvement, perhaps 2-4 percentage points over the last year.   This “surfs across” potentially meaningful differences in sampling, methodology and varied definitions of how you measure engagement. But those institutions that describe engagement as declining are in the minority.
  • Not all employee opinions act the same way, moving up or down in lockstep.
    • Stress is increasing.
    • Opinions about leaders have fluctuated.
    • US Employee Confidence hit a low 1Q09 and has not returned to the 2Q08 baseline.
    • One conclusion is that “engagement” may not be the best indicator of the strain of the recession on the employee population and hence organizational performance.
    • There is no “overall” recession impact across all survey topics
  • There is evidence of polarization within some organizations. While different across different studies, there seem to be segments (levels, functions, etc.) within the organization showing divergent trends:
    • Perhaps while engagement goes up, there is a growing core of actively disengaged employees.
    • Executives and middle management respond differently, though exactly which layer feels the squeeze most keenly is not clear from the reports (and they likely differ organization-by-organization… as is clear in some cases among our own clients).
  • Increasing frustrations (driven by increasing workload and lowered rewards/benefits) among high performers/high-potentials put them more at-risk for eventual voluntary turnover.

Some More Detail:

One concept created a good number of years ago called Employee Confidence© has been tracked quarterly since June 20083, by asking employees about attitudes towards their company’s internal as well as external performance (organizational performance). Internal covers such areas as business processes and leadership and external covers the attractiveness and value of products and services offered to the market as well as competitive positioning. Also tracked has been people’s perception of their personal situation, again both internally and externally. The internal situation deals with perceptions of job security and future prospects at current employers, and the external with being able to land on their feet elsewhere if necessary by finding another job. (To be part of this tracking study, which cut across the 12 largest economies globally, you needed to be: an over 18, full-time employee in the private sector, in a company with at least 100 employees. Data was collected quarterly on random samples of 5000 in the USA and 1000 in each of the other countries, with the exception of Russia where the number was 500. Incentives were used. The data was compared to known demographic characteristics of the working population in each of those countries.) Taking a step back from all the data, both from this Employee Confidence sample and from client based data, and drawing some insights and overall conclusions, or at least observations what we see as highlights include:

About Employee Engagement:

In 2008/2009 you generally did not see declining employee engagement scores at organizations (there was the occasional exception). The scores were flat at worst but most were actually rising with many hitting heights not seen within the organization prior. This was in spite of the general concern among clients that engagement would decline during the recession. Some of this can be attributed to good management taking action on important issues and some is environmental, a response to the concern that people have about losing their jobs. One notable study had a client with 7 point rise in their employee engagement score across about 25,000 people. A determination was made that 2-3 points of that rise was likely due to management actions and 4-5 points was due to the environment. (Drop me a note if you want to know how that was done jeffreysaltzman@orgvitality.com).

About Employee Satisfaction:

In many cases however, items that were markers of the employee’s current state of satisfaction with their situation declined. By way of explanation, a person can be very unhappy with increased workload and stress, with their 401k losing substantial value, with no company match, no raises, friends being laid off, increased concern about their own job security, perhaps seeing management taking care of themselves before the rank and file, but that person can still be engaged in their work. As an example, a person can be very engaged at their employer making buggy whips as Henry Ford is in the next building figuring out how to mass produce cars. They are engaged, working diligently to produce the best buggy whips in the world, but their level of engagement does not stop the world from changing nor does it assuage increased concern at seeing the world changing with perhaps the employer not changing or not changing fast enough to keep up. A corollary to this is the false notion that employees who complain are not engaged. They in fact may be the most engaged as they are trying to communicate to the organization information to head off a potential disaster as they see it.

While some people/organizations measure satisfaction and engagement with the same items, they are clearly different constructs. (Of course there is no agreed upon set of items in use to measure engagement within the employee survey industry which may account for some of the reported differences).

About Job Prospects and Job Security:

Being able to find other employment if necessary, which is normally very favorably rated, began to decline and has remained at or near the bottom of all the items tracked. Most normal people by nature tend to rate their skill sets highly and see value (beyond what others may see) in what they can do.  This makes them normally very confident in their ability to find another job should the need arise. The precipitous decline in this dimension is a fundamental shift in people’s confidence (it has rocked their world and how they self-perceive) and affects all sorts of behavior including buying patterns and a willingness to tolerate intolerable conditions at an employer. As this score recovers we will see people who had been staying with an employer because of a lack of opportunity elsewhere move on with a corresponding increase in voluntary turnover. This may be starting already as for the last 3 months voluntary quits has surpassed layoffs as why people leave jobs and for the 15 months prior to that layoffs surpassed quits.4 This finding is perhaps giving an inkling of what is to come.

Perceptions of job security at the beginning of the recession when all the layoffs started were understandably in steep decline. This lasted through the first quarter of 2009 and roughly corresponded to when a massive bulge of layoffs occurred with 3979 mass layoff events occurring in 1Q09, a record high affecting 705,000 people5. This also corresponded to the lowest Employee Confidence scores recorded. However, once that bottom was hit there was a rather sharp rebound later in the year. One possible interpretation is that employees felt that the organizations had cut to the bone and could not cut any more. Employees felt that they had survived so far and so where likely to weather the storm. Exceptions to this pattern of decline and then rebound occurred in industries that were weathering the recessionary storm rather well including healthcare, education, government and food service. They did not see nearly as much of a decline. Females were more positive about job security than males, not because they were females, but because of an over-representation in industries that were doing ok. The gap between males and females disappeared when the rebound occurred, possibly due to the males feeling that all the cutting that was to be done had been carried out.

About Business Process:

During this recession it was pretty clear in the data that the majority of employers were trying to cut their way to profitability, rather than innovating with new attractive offerings or by moving into new markets. They were revamping internal processes, laying off people, cutting budgets and benefits. They were looking inward rather than outward to find solutions to their performance problems. And while it is always healthy to improve internal organizational performance, in this case it is a rather risk adverse approach compared to modifying the products and/or services being offered. It is more of a sure thing to cut back on costs rather than create products that people find attractive, even in a recession, as a way to protect margins in the short term. Not every company took that path however and historically companies that have been started in recessionary periods included: HP, GE, Burger King, Fedex, Microsoft, CNN, Trader Joes, and our own OrgVitality. Each one creating a path to success based on offering attractive and valued products and services to the marketplace that were relevant to the economic time period in which they found themselves. In this recession Autodesk, Nucor, Colgate Palmolive, Apple, Coca Cola, Target, McDonalds, Dunkin Donuts, and Google among others for instance have done quite well by developing new and innovative products and by moving into new markets.2

About Organizational Effectiveness and Leadership:

At the beginning of the recession, the back-half of 2008, management was given the benefit of the doubt and was given stable or slightly increasing scores from the rank and file regarding their job performance. Of course you need to keep in mind that the rank and file during this period are the survivors, those who had not yet lost their jobs. As it appeared that the recession was going to get really ugly in the first quarter of 2009, the rank and file lost a lot of confidence in management and performance ratings on management plummeted. The realization hit that there was no magic bullet that the recession was going to be painful and deep and of a long duration and the blame, at least partially, was laid at management’s feet.

Ratings of leadership over the last year and a half or so have been very volatile with some organizations reporting extremely favorable ratings on leadership while at the same time others are reporting the poorest scores of recent memory. There has also been more divergent trends within organizations, often with vital groups perhaps feeling more stress than others (e.g., VP levels) declining dramatically while other levels are able to maintain or improve. A sharp recovery was noted in the perceptions of the job being done by management, as rated by employees, during the back half of 2009 as many of the programs designed to temper the recession began to have an effect among those still employed and further draconian layoffs were not as prevalent.

About Geographic differences in the USA:

If you compared the attitudes of employees against the unemployment level at the state level a significant relationship was found. In other words, in general those states that were exhibiting higher levels of unemployment were generally those where employees had the lowest levels of confidence. Some interesting patterns and exceptions to that statement emerged.

Those employees in southern states tended to be more positive than their unemployment level suggested they should be. In general, those in the mid-west were less positive than they should have been with the notable exceptions of Nebraska, the most positive single state and the state with the lowest level of unemployment, and Michigan with the highest level of unemployment and the second lowest level of employee confidence. Those states located in the northeast and west had employee attitudes as predicted by their unemployment levels with the exception of Oregon where employee attitudes were less positive than they should have been. The states that were exceptions certainly had the attitudes going in the predicted direction given their unemployment levels, it is just that the corresponding employee attitudes were more exaggerated than expected in either the positive or negative direction.6

Interpretation:

  • The recession has put organizations and employees on edge.  While dealing with the increased stress and load created by aggressive cost-cutting, employees have a heightened sensitivity to leadership messages and missteps and organizational cues regarding the future.  Critically, employees watch how the crisis has revealed the organization’s commitment (or not) to its stated values.
  • As a result of this sensitivity, organizations may experience greater swings in engagement and/or satisfaction through the recession (the two not necessarily being related or moving in the same direction), though the swings may go in either direction and may be concentrated within a specific population. These swings may occur within key segments (e.g., management layers, functional areas or performance levels).
  • But changes in survey results seen across clients lead to a conclusion: the recession isn’t the only cause of changes in employee opinions and engagement in particular; it’s the organization’s response to the recession.
  • In many cases, employees have rallied behind their organizations’ recovery efforts, and are as engaged or more engaged than ever.  In part, they are not simply comparing the “now” to what was.  Clearly they understand that the crisis has demanded dramatic change, and they have hunkered down to help.  To some extent they may compare themselves to other cases of what might be, for example to the failings of other organizations or to their unemployed acquaintances.
  • One way to sum it up is that the recession has become a test of Vitality including strategy, values, behaviors, organizational agility and resiliency.  Organizations are not passive players regarding the degree to which decision-making authority is sucked upwards, open communication is stifled, leadership commitment to values are maintained, or the emphasis on service remains central.  Certainly, it has become harder to invest in employees.  But in many cases, employees understand that and may take even greater pride in how their organizations handle the recession.

1Sources of published findings which were reviewed included: OrgVitality, McKinsey, CLC, Metrus, Valtera, Modern Survey, Kenexa and Towers Perrin among others.

2The Business Week 50, Business Week, March 26, 2009

3The Employee Confidence Framework was developed by Jeffrey M. Saltzman.

4 MSNBC June 9th, 2010

5Bureau of Labor Statistics; http://www.bls.gov/news.release/pdf/mslo.pdf

6Saltzman & Brooks, “Strategic Surveying in the Global Marketplace and the Role of Vitality Measures”, appearing in “Going Global” (Kyle Lundby, editor), 2010 Jossey-Bass

© 2010 by OrgVitality, Jeffrey M. Saltzman. All rights reserved.

Visit OV: www.orgvitality.com

Healing Employee Emotional Cracks

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During this recessionary period many employees feel that they have been left holding the short straw, being treated as a readily available commodity or simply as an unnecessary cost by their organization. And while large percentages have been laid off in many organizations, the biggest concern that many organizations now have is how do we re-engage the survivors? How do we make them feel like the organization cares about them and that they should be loyal to the organization, working diligently for its success, when the organization has demonstrated quite recently and vividly that it will cut through them, as a warm knife cuts through butter, in order to insure the survival of the organization as a whole? How can the organization make employees trust them again, how can it turn them once again into loyal employees? Exacerbating the challenge in some organizations are the rewards that certain executives heaped upon themselves as they laid off large components of the workforce.

If you prick an inflated latex rubber balloon with a pin, the popping sound you hear when the balloon bursts is not from the rush of air escaping through the pin-hole in the balloon, rather the pop you hear is from the speedy propagation of cracks in the latex skin of the balloon breaking the sound barrier. The more tightly stretched out the balloon skin is, the more energy it contains and the larger the pop when that energy is finally released. The popping noise is literally the noise of the balloon tearing itself apart.

Employees have been asked to do more and more with less and less, and as salaries have been fixed or reduced, 401k matches canceled, health care benefits evaporated and people laid off, the organizational latex has been stretched almost to the breaking point and it contains an enormous amount of energy waiting to be released. As the economy improves some organizations which are not perceived by their employees as acting at all to preserve jobs, or as looking out for the interests of the average employee have created situations where it will take but the prick of a pin for organizational life-threatening cracks to rapidly propagate throughout the organization.

The popping sound you may hear propagating throughout the organization may take the form of skilled and valuable employees leaving, lower quality in products and services delivered to customers and clients, a lowering in productivity and efficiency, an increase in absenteeism, employees not acting as brand advocates, and an openness to third party representation and other forms of protection from the reoccurrence of the abuses people perceive they received. Employees have been on an emotional roller coaster that have left them bruised and battered these last few years and we may learn something on how to help employees heal from this trauma by taking a closer look at what we know about human emotion.

Emotions evolved and became a survival mechanism in animals long before humans came onto the world stage. As we evolved into humans these pre-existing emotional mechanisms came along with us, and they developed with 2 essential elements. They turn on when the external world demands it, and they turn off when the external world situation changes. Try this experiment (Darwin did). Put your face up near the glass of a poisonous snake exhibition at a zoo. Tell yourself logically that the snake can’t hurt you and you will hold your ground, not moving if the snake lunges at you. When the snake lunges, coming towards your face you will automatically jump back, you will not be able to help yourself as a natural emotional instinct (fear) will take over, attempting to preserve your life. The underlying mechanisms that generate emotions are generally now categorized as fear (imminent threat), sadness (loss of attachment or status), anger (blocked goal pursuit), disgust (exposure to or ingestion of unpleasant substances), and happiness (success in goal pursuit). The neurobiological mechanisms that cause these states to arise are now well understood and can actually be seen by brain imaging techniques as people experience them.

The immediate emotions that employees in organizations during this period have experienced include fear of layoff or from the implications of salary cuts, sadness when their friends have been let go or from having to take lower level reassignments, anger from having career and life goals seemingly further out of reach and if the executives are perceived at having enriched themselves at the expense of others, disgust. There is also a well-document notion of survivor guilt, a type of post-traumatic stress disorder (PTSD), which can come from the happiness of not losing your job, while those around you have fallen, making you feel as though you somehow bear some responsibility.

The humans mind has evolved beyond primitive real-time underlying emotional mechanisms and one part of that evolution is our ability to create mental models which allow us to think emotionally about things in the past and to anticipate the emotions we may experience regarding future events. For instance a feeling of depression or feeling low can be achieved simply by thinking of negative events that we experienced in the past and how many times have you heard the line “imagine yourself in a happier place” as a way to get people beyond the emotions they may be currently experiencing.

Emotional problems and mental illness can occur when our modeling of past or future events are interpreted by our bodies as immediate and real, and our bodies react accordingly, never switching off the emotional thrusters, if you will. Some therapies for treating anxiety or depression focus not only on the emotional state itself, but on the individual mental model which allows those emotions to become all encompassing. If you can control the mental model you will be better able to control the emotions it engenders. As an example one treatment for survivor’s guilt in the workplace involves helping people come to the realization that they are not the reason why others have lost their jobs and that they too are suffering. Once their own suffering is recognized, they can come to grips with it and move on with their lives.

As an aside, because I am writing part of this on Valentine’s Day, in contrast “love” is typically thought about as having 3 separate biochemical processes which act in concert rather than as an underlying emotional state. One part is arousal or the sex drive, which causes you to seek out potential mating partners. Another is the feeling of “love” which has been tied to levels of cortisol, which kick in during stressful situations and possibly to serotonin. Lower levels of serotonin can cause obsessive thinking and both of these hormones together focus your attention on one person at a time. In addition, the hormones oxytocin and vasopressin, are released during orgasm, and can make you feel deeply attached to or responsible for the person you are with. The third component or mechanism attributing to the feeling of love is attachment, and while the underlying hormonal process there is unknown, the mechanism creates an ability to tolerate another person long enough to have offspring and possibly raise them until they can be independent. When a person says they love their job, it would be very interesting to measure their hormone levels at work and see if any similar chemicals are released during the work day.

Emotional distress is not an isolated event which only a few people experience and even though many are uncomfortable talking about it, a new study that aimed to estimate what percent of the population suffered from either depression, anxiety disorders, alcohol dependence or marijuana dependence for at least a brief period, found that 60% of the population, a majority, experienced symptoms that rose to the level of benefiting from treatment by the age of 32. By middle age that number is likely to be even higher. There is no reason to assume that the percentages for people in the workplace would be any different.

It was also found that the most of those sufferers recovered after a brief period either on their own or with professionally administered treatment. Emotional distress and some mental illnesses, rather than commonly thought of as affecting a small portion of the population, stigmatizing them with a life-long affliction, would be more accurately described as a passing cold, at some point in your life you will likely get it, but then are very likely to get over it. The study’s author stated, “Like flu, if you follow a cohort of people born in the same year, as they age almost all of them will sooner or later have a serious bout of depression, anxiety or a substance abuse problem.”

Taking employee’s emotional states into consideration, an organization that desires to re-engage its employee population at this time has at a minimum the following options at its disposal:

  1. If the senior management team has lost all credibility with the employee population, this may be a good time for them to retire and for succession plans to kick in.
  2. The distress the employees have gone through should be publically recognized and discussed. At the same time the stress the organization has experienced should be recognized along with the steps taken to improve the resiliency of the organization from a reoccurrence.
  3. Counseling should be given to those employees who would benefit from treatment.
  4. The organization should work to restore employee confidence in its functioning including:
    1. improving internal functioning, changing and modernizing the way the work gets done
    2. create more competitive products that are attractive and in demand within its markets
    3. describe the level of job security the remaining employees have and the conditions that would allow that security to be maintained
    4. describe a compelling vision of employees personal futures creating a model of the future that breaks with the negative emotions that may be swirling
    5. build career security for the employees by providing training and development opportunities that are transferable to other organizations, building self-confidence.
  5. Listen to employees, though feedback mechanisms such as skip-level interviews and employee surveys, open channels of communications that you may have closed during the recession.
  6. Create a social communities within the organization to help bring the employees together, allowing them to support each other.
  7. Provide the employees with the tools, resources, information, training etc. that they need to succeed and thrive within the new organizational environment.

Much of the emotional distress that employees are experiencing will heal fairly rapidly as people tend to be resilient, and if given the right conditions that allow them to behave in a resilient fashion, most will be able to rise to the challenge. Both the organization and the employees have a role to play in assuring organizational success and the best path forward is to transparently discuss the past events as well as the future vision of what the organization can become, and then acting vigorously on that vision.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Visit OV: http://www.orgvitality.com

Written by Jeffrey M. Saltzman

February 14, 2010 at 8:53 pm

Commentary September 21, 2008

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I think we live in a pretty amazing world in pretty amazing times.

This past week has been no exception with all sorts of anxiety being generated about what is going on in our economy. While unemployment rises Wall Street sinks only to rise Phoenix-like at the end of last week with a government intervention that has no historical comparison. The worries floating around Washington DC that we may be heading into another depression period similar to or perhaps much worse than the crisis of 1929 are palpable. The Secretary of the Treasury along with the Chairman of the Federal Reserve are doing their best to head off that eventuality and they seem to be the ones calling the shots at the moment in terms of our economic policy. Articles are appearing this week that our form of US capitalism has been forever changed. These two economic gurus have fundamentally shifted their strategy from attacking the issues on a case-by-case basis, for example the bailout of AIG, and forcing a shot-gun marriage of Bear Sterns to trying to get at the root causes of the instability that we are experiencing. In order to do that they are trying to get congress to approve funds to buy up all the bad mortgages that have been made over the last decade so they can be taken off the books of the banks that made them.

To an average guy like me it sort of feels like the bankers are being rewarded for their folly which was originally driven by the demands of Wall Street itself (other bankers, the investment-types) to continually show growth in their company’s performance so that the bankers can continue to earn the extraordinary incomes they are so used to. I can’t help but wonder if after the bailout all these bankers will pat themselves on the back and go right on earning huge incomes, now at taxpayer expense.  I am not sure we have all that much choice at this point as these free-wheeling types have dug us a hole as a nation that literally puts us all at economic risk. Forget the lack of regulation or oversight of that behavior, how come actions that put the whole of the nation at economic risk, having the potential to destroy hundreds of thousands of lives, throwing perhaps millions out of work, unable to support their families, how come behavior like that is not a crime? I get the feeling that my grandchildren will be paying off the bills we are incurring now for the majority of their lives.

I was up early this morning, went downstairs and flipped on the TV. I wanted to catch up on any overnight news but first I had to make my way through all the early-morning Sunday shows attempting to sell me products and services that I did not need, including some kid who looked to be no more than 25 and certainly younger than 30 years of age, who had found the secret to success in today’s market, but you had to act fast because the window of opportunity is limited and closing fast. I really wanted someone to ask the kid why he was wasting his time on TV, why wasn’t he out there making so much money on the secret that he uncovered that he wouldn’t have to make sleazy TV ads. Maybe he felt he owed it to humanity to spread his knowledge.

I flipped through a few more channels on my way to the news. It really annoys my wife that I just don’t punch in the news channel station but rather flip until I get there. But if I did not flip, I could not linger for a moment on the channel showing the fabulously fit women doing their early morning exercises. I finally made it to the news but it was the kind of news that only gets shown at 5:00am or earlier. You know human interest and interviews of people who are only slightly or less famous. This one clip had a law professor telling his business students to stay in school, go to graduate school was his advice and perhaps by the time you are done the job situation will have improved. Now where did I hear that before? Oh yeah, 1979 I was sitting in class, I think it was a psychology class and the professor was telling us that we should go to graduate school because it was so difficult to get a job out there. I was experiencing déjà vu big time. I think the X-generation, or is it the D-generation, I can’t remember, but the latest generational designation, the one that wants more out of life than just a job (of course none of us older folks wanted more out of life than just a job), the one that hops from place to place in their quest for happiness,  (which was always much more of a fallacy than reality anyway), well that generation has just left the stage, and a new generation, let’s call them the R-generation, for Retro, for they get to worry about all the things that their older parents or perhaps grand-parents worried about, was just created.

There was another interview of a guy who said that based on what was happening to his retirement funds that he was now anticipating that he would have to work longer and spend less in retirement. He said he did not think there was anything wrong about working until you were 80 or so. My mom who just turned 83 and is still working part-time called me this weekend and was asking me questions about what all this turmoil meant to her and her retirement. I had to ask her when she thought she was going to retire. She told me in a few years. I told her not to worry about it. I have not been able to look at my retirement account this week, after all that would mean that I would have to dig up that box I buried in the backyard, and if I opened the box I would be worried that I would find less money in there now then what I put in. There is a lot of anxiety out there.

But all of this Wall Street action and economic concern is pulling our attention away from other notable events in the news. Did you know that 12 pristine parcels have just gone up for sale in the Adirondacks? They range in size from 30 acres to about 1000 acres. Apparently a wood-products company needs to raise some cash and is selling off the land. An acre in the Adirondacks these days is going for about $1000 if it is not on a desirable lake, about $350,000 or more if it is. I have to admit that the one tract on the Saranac River looks very interesting as does the one on Wolf Pond – but that is the hermit in me coming out. Did you know that Hooters is looking for active or passive participants in the restaurant’s rollout across the UK? You know where I live there is a Hooters on every corner, you can’t cross the street without running into one, they are just so fabulously successful. Here is a chance to get in on the ground floor on their UK unveiling. The new Super-collider at CERN needs to shut down for a few weeks for repairs, one week after it was first turned on. (So I guess we don’t have to worry about a black hole eating the earth for a few more weeks – that would be one way to end the Wall Street crisis). One of the super-cooled magnets shorted out and it lost a lot of helium that was at something like 4 degrees Kelvin, just above absolute zero. I guess you can’t run down to True-Value Hardware and pick up some helium that is at close to absolute zero so they are going to have to special order it from the frigid helium store.

We went to a crafts show on the grounds of the Lyndhurst estate yesterday afternoon. Lyndhurst is a mansion on the banks of the Hudson River, built by a traditional-type robber baron, Jay Gould, who made his fortune in the railroad business. The mansion is built out of wood, but all of the wood was painted to look like stone. Jay could certainly afford to build his house out of stone if he wanted, but at the time the really wealthy (instead of buying houses in Vail or the Bitterroot Valley or perhaps anchoring a yacht off of Manhattan) would build a house out of wood and then hire very skilled artists to make it look like stone. The better the artist the more you had to pay them and the more your wood house looked like stone. If people had a hard time telling that your wood house was not actually stone you must have been really wealthy. The things we do sometimes! Call me a contrarian, but I think I would have just built it out of stone, tell everyone it was wood and dare them to tell the difference. Anyway, I had a number of conversations with the artisans at the show, some of whom I have talked to a number of times over the years, about how business was. In general these fiercely independent people, some of whom represent the best of their respective crafts in the nation, told me that business was good. The weather was spectacular, but more than good weather simply bringing out crowds, almost all of them told me that people were buying, a sign of economic hope from the folks in the trenches.

The really big news of the week though was, no not the presidential election or whether Sarah Palin could eat a moose before actually killing it (as the author of “A Moose in the Distance” that is something I take offense to), but rather the big news was something equally regal, my colonoscopy. After putting it off for about a year beyond when I was supposed to, I headed to my doctors office for my second ever colonoscopy exam. I don’t know if the worst part is the stuff you have to drink beforehand to get ready, or the exam itself. But there I was being prepped in the outpatient examination room. A really nice nurse was getting me ready for the exam (I have to say that I am a terrible patient). It took a few tries to get the I.V. in me and then the anesthesiologist came in and ran through a game of 40 questions with me, asking me about my medical conditions. The day before I was reading about a surgeon who had operated on the wrong knee of a patient and I was worried about what would happen if the proctologist became confused and examined the wrong…wait a minute contrary to what some people think I only have one of those. The proctologist came in and we exchanged some pleasantries. And then in a matter of fact tone, he said “role on your side, bend your knees and stick your rear-end out towards me.” As I assumed the “position” I paused and said to the proctologist, “Oren, is this the point where I can call you Oren?” Since you don’t have any dignity during a colonoscopy you might as well have a sense of humor.  Just before drifting off, as the anesthesiologist was injecting something that knocked me out, I asked the proctologist “how’s business, is the end of the economic crisis in sight?” He said, “I think I can see the end now.”

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Written by Jeffrey M. Saltzman

December 19, 2009 at 7:46 am

Creating Confidence & The Long Island Murder

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On Long Island, in a neighborhood not all that far from NYC, there was a murder this month. In fact it was not so much of a murder as it was an old style lynching carried out by those with a mob mentality, a gang of high school boys who took sport in torturing their fellow human beings, viewing it as a pleasurable activity. They routinely hunted Latinos, shooting them with BB guns, jumping them and punching them as they drove around. This time, their sport led to the fatal stabbing and the death of an Ecuadorian immigrant, Marcelo Lucero, simply because he was Latino and easy prey. NYC that bastion of liberalism, where we are supposed to be more tolerant of people’s differences, where we take pride in our live-and-let-live attitude regarding how people live their lives, how could something like this happen here? It could happen anywhere. But that is not an excuse as much as it is a warning. As terrible as that crime was, another crime is now being committed and that crime is a failure of leadership in a time of crisis.    

Nothing tests leadership more than crisis. Crisis represents an opportunity for leadership to shine or for it to fail miserably. Sometimes, but not always, leaders can simply muddle through, surviving the crisis simply because the severity of the issues lessen and not because of any direct actions they take. Suffolk County, where this crime took place, is run by a form of government that has a country executive, Steve Levy. Mr. Levy is of the opinion that the blame for the crime rests partly with the family, friends and acquaintances of the gang members for allowing them to pursue their sport. For him, blame rests with others and not with those in authority. But what created the atmosphere whereby this pastime was viewed as an acceptable sport?  Mr. Levy has a record of immigration enforcement, and in fact tried to use the local police to enforce federal immigration laws. The effect on the immigrants both legal and illegal was to turn them into victims with no options of redress. They could not go to the police, for they would immediately be suspected of being criminals themselves. They became victims without a voice. The evidence for this is clear, as now that the murder has been committed, a tidal wave of unreported crimes against the immigrant community is now being reported.

That along with other policies gave the gang a green light and set the stage for a lack of confidence within the immigrant community that officials would be there to protect rather than harm. It made officials including the police force assume roles similar to those that officials and police took as Europe lurched toward WWII, herding up the “undesirables”. In that kind of environment everyone is guilty rather than innocent and with unnecessary mass edicts, induced fear is the order of the day. Suffolk County under the leadership of Mr. Levy has an opportunity to break with the past and to create confidence in the system from the perspective of community members, create confidence in leadership, and create confidence that the future will be better than the past. How might they go about this?      

John F. Kennedy in a cold war speech in Berlin proclaimed, “…All free men, wherever they may live, are citizens of Berlin, and, therefore, as a free man, I take pride in the words ‘Ich bin ein Berliner!’” Kennedy’s proclamation, “I am a Berliner” demonstrated his solidarity and empathy with the people of Berlin who were being isolated by the Soviet blockade of the city. His speech was aimed at both the Soviets to demonstrate his resolve but also at the citizens of Berlin to increase their confidence that they would not simply be left to their own devices, but rather that we all stood together with them. But words are words, and action is action, Kennedy followed up his words with concrete actions that demonstrated to the people of Berlin that he meant what he said and that the confidence that he asked them to have was justified. Latinos who are hunted for sport in Suffolk County, New York? What is wrong with us? What is wrong with the system that we have let evolve to the point where such a thing could happen? Is it not too much to ask all of us to join with the Latino community and proclaim “Soy un Latino”? But now we need to follow up those words with deeds. The confidence of the Latino community and of every other minority community in Suffolk County has been shredded. How can it be put back together?

(There is an urban legend that says that due to a coincidence of terms, that Kennedy when addressing the crowd in Berlin actually said, “I am a jelly donut”, as a Berliner was the name of a popular breakfast pastry. Upon verification and with some closer inspection, given the context, this does not seem accurate, but rather some in the media at the time simply having fun with a play on words. Even in the face of extreme anxiety and worry over the Soviet blockade there was humor.)

Creating Confidence, is a process that looks at how entities and individuals, (e.g. public, private, governmental, community, NGO’s, teachers, physicians, etc.) can create confidence within the populations with which they interact. Creating Confidence also provides a framework whereby crises of confidence can be addressed and remedied. Creating Confidence is strongly linked to the notions regarding how to increase the perception that individuals have regarding their efficacy, doing away with responses that arise from a learned helplessness response and increasing feelings of empowerment, and an internal locus of control among people. Creating Confidence requires change at both the institutional level, creating well regarded processes and products that are aligned with stated intentions and those that are aligned with the issues of the day, and change at the personal level, creating a sense of ability on the part of the individual to be able to deal with the situation and an avenue for redress should the existing system be felt to be inadequate.

On a generic level, the Creating Confidence framework:

 

Internal External
Institutional/Organizational Improving internal processes and procedures, building a track record of success, having checks and balances in place, being well-run and effective Reflecting current issues and needs, being seen in a  positive frame, having products and/or services that are needed/helpful, being better than the alternatives
Personal Enabling individuals to thrive and prosper within the system/institution/organization, educating them on how to use the available resources, providing enabling structure and processes, creating a sense of fairness and equality   Providing alternative pathways, should institution/system path be seen as failing, an ombudsman or escalation process, transparency to the individual but also to the larger public enabling media and watchdog scrutiny

The impact of Creating Confidence is enhanced by thinking of what actions should be taken within this structured framework. In the case of the county executive, confidence can be thought of as having 2 dimensions, an institutional or systemic dimension and a personal dimension, each of those having an internal and external component.

 Issues to be addressed potentially within Suffolk County within this framework include:    

Organizational Internal – eliminate bureaucracy, do away with any non-responsive legacy systems, create an empathetic system one that does away with as much of the power inequality between the groups as possibly, ensure that disciplinary actions are taken on staff who violate agreed upon standards and regulation, create a well-run efficient system and establish a track record of fairness, proper treatment and protection for all community members. Leaders must demonstrate:

  • Competence – being clear about the mission of the organization, setting direction, being seen as a leader, being viewed as competent and completing what needs to be done
  • Compassion – an empathic response, displaying a genuine concern for people and what they are going through
  • Collaboration – seeking and obtaining the cooperation of all relevant parties in order to help each other and the organization, this is enabled by equalizing power relationships between the groups
  • Communication – disseminating relevant and accurate information, even if it means admitting that some things are unknown, you cannot over-communicate
  • Contribution Recognition – giving credit to those who help, sacrifice and contribute

(The 5 C’s first appeared in Saltzman, Reichman and Hyland, Leading the Organization in Times of Catastrophe, October, 2001)

Organizational External – assure that they processes and procedures in place are reflective of the current challenges facing the community, involve the community, make them part of the solution, listen.

Personal Internal – educate people on how the system works and how to make use of the normal administrative processes within the system, establish strong communications with the individuals within the community, and explain how the system will operate in a fair and equitable manner at the individual level.

Personal External – create alternatives for the individual, an escalation or ombudsman process, outside of the normal channels for use when people feel that the system is failing them.

Case Study: If you examine the arguments being made on how to fix the current economic crisis in a speech made by Barak Obama, the following pattern emerges:

Premise: “The economic crisis we face is the worst since the Great Depression… …millions of Americans will open up their 401(k) statements this week and see that so much of their hard-earned savings have disappeared.  …The credit crisis has left businesses large and small unable to get loans, which means they can’t buy new equipment, or hire new workers, or even make payroll for the workers they have…760,000 workers have lost their jobs this year…”

Obama Speech on Fixing the Economy Internal External
Institutional/Organizational “…it will take a new direction. It will take new leadership in Washington. It will take a real change in the policies and politics of the last eight years.”

 

“..I realize you’re cynical and fed up with politics. I understand that you’re disappointed and even angry with your leaders.”

 

“We need to pass an economic rescue plan for the middle-class and we need to do it now. Today I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities, and help struggling homeowners.”

“We’re still home to innovation and technology, colleges and universities that are the envy of the world. Some of the biggest ideas in history have come from our small businesses and our research facilities.”

 

“…create the jobs of tomorrow by unlocking the drive, and ingenuity, and innovation of the American people.”

 

“…America needs to end our dependence on foreign oil.”

Personal “…We’ll ensure every child can compete in the global economy by recruiting an army of new teachers and making college affordable for anyone who wants to go.”

 

“…extend and expand unemployment benefits to those Americans who have lost their jobs and are having a harder time finding new ones in this weak economy.”

“We’ll create five million new, high-wage jobs by investing in the renewable sources of energy that will eliminate the oil we currently import from the Middle East in ten years, and we’ll create two million jobs by rebuilding our crumbling roads, schools and bridges.”

Obama’s Conclusion: “…We can do this if we come together, if we have confidence in ourselves and each other, if we look beyond the darkness of the day to the bright light of hope that lies ahead…”

While I did not sort the whole speech due to space limitations, you can certainly see that he covered the Creating Confidence bases.

Confidence can be created or restored, by working through in a systematic fashion and addressing those issues that created the crisis of confidence. Leadership has a critical role to play in this respect for they are the ones who are supposed to have their gaze to the horizon, seeing issues and challenges before the boat of confidence hits the shoals. Institutions and organizations in general can thrive or fail depending on the confidence levels that their citizens, customers, investors, employees, suppliers, members and others have in their ability to provide and the perception of the need for the services or products for which they came into existence.

Downstream Wash & Dry

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There is an old fable that goes something like this: A father was giving his son some advice. The father asked the son what skills he would like to learn; how he would like to earn a living. The son said that he would like to learn to wash clothes in the river. Washing clothes being a good honest trade, he sent his son down to the river to learn and told him “Become the best clothes washer you could possibly be”. The son worked very hard and opened a small clothes washing business called “Downstream Wash & Dry”, and soon his work became known for producing the cleanest clothes possible and he prospered. People stood in line in for hours to get their clothes washed by the agreeable washerman. A few years later a paper mill opened upstream from the son’s business, fouling the river water. No one wanted their clothes washed downstream of the paper mill. What was the son to do? He checked the village records and found that the paper mill was operating legitimately and had all the necessary permits. He then checked with the landowners above the paper mill to see if he could purchase any land close enough to the village so he could successfully relocate his business and found that all the nearby land had been bought up by a company called “Upstream Wash & Dry”, which had just opened a franchise in town. The competition, upon seeing the success of Downstream, had been paying close attention to the changing environment, waiting for an opportunity to clean up and grab market share. The moral of the story: Simply being very good at something can become irrelevant if your operating assumptions don’t keep up with the times. This fable has a happy ending (as fables should), for the father was watching over his son’s business and had already invested in “Downstream Water Filters”, whose products allowed the son’s business to continue.    

If the first time you are thinking about how to manage your business or your employees through a down business cycle is when you have already entered a down business cycle, do yourself a favor—turn off the lights, lock the door and go home. The time to think about these things, like so many other things in life, is prior to when you actually need them. No one, at least not many, would think about retirement for the first time on the very day they were to retire, and no one should be thinking about how to manage in a down cycle for the first time upon the realization that they are in a down cycle. “Now let’s see, where did I put that magic button?” Having said that, if we assume that some prudent steps were taken prior to the down cycle, there are some things that can help ease an organization through a downturn.

How do you motivate employees to do their best at work during a downturn, especially when the future is uncertain and layoffs are possible?


I would answer that question with another. How did you motivate employees prior to the downturn? While there may be some nuances to operating in a downturn, good business practices are still good business practices. If you have built a reputation for open and honest communication, that will stand you in good stead with your employees and during a down cycle you want to increase the frequency and amount of communication even when the news is bad. During times of turmoil people’s desire for communication increases exponentially, so while the natural tendency may be to withhold bad news, it is better to increase the information flow. A lack of information will cause people to fill in the blanks—and they will generally fill in the blanks with an imagination that creates worse scenarios than the reality.

But communications is simply process. What should you be communicating about? Message. Now is the time to unveil the plans you had developed during the good times and let people know how you will cope with the bad. What are the timeless principles by which the company will continue to operate regardless of the environment? What will you do? How will you treat people? How will you cope with lower business volumes and potentially shrinking market share? Performance. What will the organization do to enable people to get their jobs done and done well? What new strategies will be put into place, what new products that are more attractive in a down market? Future. What are the compelling reasons why someone should stick around and help the organization make it through a down cycle? What is in it for the individual? 

What can an organization do to show its top talent how crucial they are and prevent them from jumping ship?

If all your talent is not crucial to your success that means you have not been dealing with issues that you should have dealt with prior to the downturn. Using the downturn as an excuse to deal with performance issues, under the banner of “downsizing”, will be transparently seen through and is potentially alienating to other employees. In other words, the organization was looking for an excuse rather than dealing with issues on an ongoing basis. People who are able to help reinvent the organization, its products and services and its ways of operating will be crucial to the long-term success of the organization and should be rewarded appropriately. The traditional rewards such as money and opportunity are traditional because they have been found to work.  

If your company is forced to lay off people, how do you then reassure and engage those that are left?

Alternatives to the layoff should be considered first. Can other operating costs be cut? Will some take an early retirement if it is offered? Can an across-the-board pay cut be implemented so that everyone can stay employed? Are some willing to go to a part-time schedule? One of the privileges of being in management is that they should take the lead in suffering during a down cycle. They should be the first to take a pay cut and they should be cut the deepest. If a layoff does happen management should also be laid off in equal percent to the non-management employees, rather than being viewed as a protected group.  Those companies that can retain their talent though, assuming that they have been dealing with performance issues on an ongoing basis, will be better positioned to flourish in the recovery. If a layoff happens, it happens as a last resort, not a first choice. It should happen all at once and not in a slow drip kind of fashion. Once completed, the staff should be told that the downsizing is finished as long as market conditions are stable. Based on this approach people will recognize that the company operates in a manner that tries to protect their employment to the extent possible and that when pain is to be suffered it is suffered in a fair and equitable fashion and that will provide reassurance.

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