CorpComms Magazine

When vandals recently attacked the Edinburgh home of former Royal Bank of Scotland chief executive Sir Fred Goodwin, there may have been disapproval at the use of violence but likely little surprise among the general public.

Just before he took early retirement, the beleaguered bank had just announced a record-making UK corporate loss of £24.1 billion, which would require a £20 billion government bailout. Rather than suffering the consequences of his seemingly poor guardianship of the bank, however, Sir Fred appeared to be rewarded with a hefty pension payout worth almost £700,000 a year. For those more lowly employees facing a lasting recession and possible redundancy, the saga would appear to sum up everything corrupt in corporate leadership today.

Much criticism has been laid at the doors of the banking sector, where 'fat cats' have been accused of enjoying huge bonuses while their businesses have been mismanaged with dire consequences for the global economy. But failure in one sector has had inevitable shockwaves across the board with few companies now escaping the prospect of cutbacks and/or redundancies. 'I think this current crisis has called into question the competency of leaders,' says Colette Hill, chairman of communications consultancy CHA. John Smythe, partner at Engage Group, agrees. 'Many employees are looking at their bosses and feeling like they haven't been told the truth - they are starting to wonder if their bosses are actually up to the job,' he states.

This increasing sense of unease is also compounded by an underlying change that Hill describes as the 'permanent elimination of the employee/employer psychological contract'.

David Ferrabee, managing director of Able & How, explains further. 'The traditional relationship of employer towards employee has been breaking down for a while. Businesses no longer feel that they have to be loyal and supportive of employees throughout their careers. In contrast, employees have generally retained their sense of loyalty and commitment - although that may now change,' he says.

FACING THE PRESSURE

For business leaders, this is no doubt the toughest of time. 'We're not just talking about the CEOs,' says Caroline Randle, UK director of corporate at Waggener Edstrom. 'Research is showing that there is a growing cynicism towards leadership generally. There is less trust now than ever before.'

In addition, many leaders that enjoyed the years of boom are now facing a severe recession, the likes of which they have never experienced. 'The expression I would use to describe the current environment is shock and shock therapy,' says Patrick Dunne, group communications director at private equity group 3i. 'In responding, everyone is human - people have different levels of tolerance to crisis. Some people will cope brilliantly - in fact, these times will likely reveal some of the best leaders.' Who they might be, however, is less certain. Dunne thinks that a leader who has had previous experience of difficult markets may be at an advantage, although he admits that such times may also be an opportunity for younger and more resilient leaders to come to the fore. What most commentators seem to agree on, though, is that there are some rules of leadership engagement and communication that are now more relevant and important than ever.

'It's all about good behaviours: clarity, openness, integrity, dealing and listening to people, and understanding their knowledge of the situation,' says Sheila Parry, managing director of The Blue Ballroom. 'The worst thing you can do is shut down on people and stop communicating.'

Smythe takes a similar view, although understands how essentially difficult that can be. 'Many leaders have been enjoying a rising tide of success, and not giving much thought to other scenarios. With the crisis, many have faced a sudden and increasing stress - and with it a fight or flight response that shuts down judgemental capability. Leaders need to come out of that so that they can make considered and sensible decisions, however difficult they may be,' he says.

Most of all, leaders cannot afford to hide or procrastinate. 'At times like this, it is tempting to wait and see,' says CHA's Hill. 'But that'll lead to a chasm of silence that creates uncertainties. It's nothing new that leaders need to be open and honest, but right now they have to demonstrate that more than ever and they don't have the luxury of time on their side. They need to make considered and, perhaps, difficult decisions - and they need to be speedy with it.'

Ferrabee supports this view, pointing out that where there is a lack of talking, there is a dangerous lack of information. 'Leaders need to understand that this is a serious point in employees' lives where the perception might be that, if push comes to shove, it'll be them getting the push not the leadership teams. In that environment, employees want and need visibility and empathy from their leaders - it's a time for lots of honest conversations and the sharing of ideas.'

THE HONEST APPROACH

This type of 'authentic leadership' may be essential right now, but achieving it is not so simple. 'The most obvious way of becoming a leader is that you've been great at doing your specific job,' says Ferrabee. 'That doesn't necessarily mean, however, that you'll make a great leader. In fact, a frequent lack of leadership training and development means that many are ill-equipped to deal with difficult situations.'

Hill also sees a related problem in leaders losing touch with themselves. 'There's this view of success, for example, that the best leaders are charismatic. But that can lead to people adopting the preconceived persona of the job title. It's easy to forget and lose touch with yourself - and it becomes increasingly difficult to be honest,' she says.

Ferrabee describes this phenomenon as the 'default leadership style'. 'Leaders find themselves in these senior roles and they don't know how they should behave, so they may end up acting out a parody of the power-crazed individual,' he says. 'They may decide they need to do something bold and imaginative but it goes horribly wrong. It's almost worse than just hiding out in your office. Leaders need to get control of leadership behaviours.'

Smythe, who is currently interviewing chief executives and employees for a book on employee engagement, adds that there is nothing to fear in being open and honest with staff.

'Employees seem to be saying that they know their organisation needs to change; they also understand that this may require some pain. But they want to be treated like adults and they want the truth as and when decisions are taken. They want candour and directness - and they don't just want to see their leaders taking a defensive position, but also demonstrating a proactive strategy for the long term,' he says.

COMMUNICATION AS PART OF A BIGGER PLAN

Perhaps this is the source from which all other communication directives flow. Communicating openly and honestly is one thing - but without an underlying plan or vision, the message will lack all sense of meaning or purpose. 'In organisations, a major failing in communication lies in lack of consistency,' says Hill. 'At board level, each member may have their own idea of what the organisation is about. This leads to a silo approach with no clear plan of action. Management boards need to be united - all members need to share the same vision for the business and understand what the organisation is for, what its purpose is and how it's going to operate. Only then can the message to employees and the wider world be articulated clearly.'

Hollie Boughton, head of communications at Tileywoodman, particularly warns against losing sight of the vision when times get tough. 'When budgets are tight, we'd always advise that communicators first ensure their core message - the business vision - is being effectively communicated before undertaking other work. Visions exist for a reason and when the chips are down, it's useful for everyone to have a common point of focus especially when living it can be positioned as a way out of a difficult situation. I do think that there's a real temptation to focus on saying the words without considering the context in which they are said,' she says.

Part of this process in a recession might include a review of the business plan in the wake of economic pressure. 'Right now, are you taking a defensive leadership posture or a highly opportunistic offensive, while others are staring into the headlights? And what kind of outlook do you think you're tacitly transmitting to your people? Do your employees think you're defensive or on the attack, or both? You might be thinking that you are saying the right things, but employees might be picking up a different message,' suggests Smythe.

INVOLVING EMPLOYEES

One way of conveying the right message to employees is to actually involve them in the process. Lorne Armstrong, partner at Involve UK, works with companies to bring leadership/management teams and their employees closer together. A recent programme, devised for insurance provider AXA, involved a three-stage process. The first helped the leadership team define the essence of what it stands for. In AXA's case, it was agreed that the vision should revolve around 'trust' and delivering a trusted service. In the second stage, the leadership team was supported to communicate the trust message to employees through conferences and workshops. The final stage involved around 20,000 employees, who were then brought into the experience of what the trust message should mean in practice. Apart from workshops, this included acting out a scenario in which the whole range of AXA customers (played by actors) were brought together by a fictional gas explosion. This then required employees to deal effectively with these customers over a six month period delivering on the message of trust to keep them happy.

'This is about getting back to basics,' says Armstrong. 'It's about understanding what your purpose is, the nature of the leadership role and involving employees in a very real way.' Dunne also sees the importance of having a two-way streak in leadership communication, particularly when there are difficult messages to convey. 'Good internal communication is about having an open forum for productive discussion. Everyone needs to be clear on the business and to understand what their roles are and what they are accountable for. But then leaders should be encouraging a culture where people can speak freely,' he says.

NO MAN IS AN ISLAND

But putting the bigger business-planning picture aside for a moment, what personal advice is there for the leader currently sitting in an office feeling somewhat shell-shocked by the economic turn of events?

For Parry at The Blue Ballroom, it is to remember to be realistic. 'You may have been a leader in a growth market for a long time, with very tangible success and steadily rising salaries and/or bonuses. Now you need to reassess the situation so that your expectations are realistic,' she says. 'It's a flat market. If you can ensure your business stands still, you're not doing a bad job.'

Boughton also reiterates the importance of getting out and taking decisions. 'In my experience, the leaders who succeed in engaging and motivating their people are those that are seen,' she says. 'It's that simple. They work directly with their internal communicators rather than delegating and aren't afraid to address tricky issues instead of remaining silent until there's something positive to say.'

In such times, it's also important to remember that the communications professional can play a vital role. 'Corporate communication/HR people are vital business connectors,' says Parry. 'They often sit at board level and so can have conversations with the leadership, while providing feedback to leaders as the eyes and ears of the broader business. They can also help leaders listen to their employees more effectively.'

LEADERS PUT TO THE TEST

Nobody knows how long this recession will last or how much worse it might get in the meantime. What is probably certain is that this will be the biggest test of many a leader's career as they struggle to make the right decisions, communicate them successfully, and keep employees on side. The key to getting it right seems to start with the business vision or plan.

In difficult times, it can be easy to retreat, resorting to short-termism or simple strategies to get out of the here and now. But by taking a reactive approach, leaders not only risk setting their businesses on a dangerously uncertain path, they will convey to their employees an enduring sense of chaos, with an inevitably negative impact on clients' and employees' morale. Those that have a clear plan will not only find their communication strategies easier to manage but will have the means to involve employees in the process, thereby helping to ensure the survival and future growth of the business.

On a more personal level, it also seems important to remember that a recession can be very isolating. Leaders feel the pressure to be great and decisive communicators, when there seems nothing to tell employees but more bad news. The urge to hide away until something more positive emerges may be greater than ever.

But no leader in a modern company faces the leadership task alone. Certainly, leaders need to be seen to be communicating openly, honestly and decisively. But they also need to be using the many resources around them to help them do that job. And, in a world where communication skills are taken more seriously than ever, finding the right support should be the least of a leader's many recession concerns. 

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