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The Fear Factor

Fearful executive

Managing workplace fear in a crisis

By Andrea Hill

Fear is highly contagious. Its presence undermines every business initiative, and you must take a constant, active role to mitigate it. In a recession, if you don’t manage workplace fear, creativity and performance will suffer. Fortunately, it’s never too late to nudge fear aside and reclaim your organizational capacity for clear thinking and optimism. By using a combination of prudent management and excellent communication, you can harness energy in your organization and set the stage for success.

In any economic downturn, you may be forced to terminate some employees (let’s face it, from the employees’ perspective, they don’t hear “laid off,” they hear “fired”), you should understand that trust in the organization has been severely damaged. Remaining employees are waiting for the hatchet, even if you have assured them no further terminations are forthcoming. Employees waiting to be fired suffer from a pre-trauma form of post-traumatic stress disorder. Their minds run a gerbil wheel of doubt and suspicion, alternating between planning and anxiety. In this state they cannot offer superior service, discover quality problems, or develop improvements.

This is a difficult problem to solve, but it’s not impossible. First, if you believe more terminations will be necessary, be as candid as possible. You will never recover the trust of those you wish to retain if you lead them to believe the remaining jobs are safe, then terminate more. Even if you have not terminated anyone and don’t intend to, talk about it with your staff. Openly and honestly communicating with employees on a regular basis and eliminating policies that undermine success are two of the most important things you can do to reduce fear and its negative effects.

Talk About It

Maintaining an open dialogue in the workplace is the most undervalued, highly desired management responsibility, and during tough economic times the need for communication increases tenfold. If you have taken drastic management actions and did not communicate directly from the most senior executive to the entire workforce, you must start there. Having face-to-face meetings to offer information, answer questions, and acknowledge responsibility is an essential first step in addressing fear.

If you have conducted that meeting already, good for you. Now do it again. Fear is insidious and will not assuage the stress your employees feel. Until the economy begins a clear recovery, have monthly employee meetings to discuss strategies, review performance, and answer questions. You may be thinking, “That’s fine for companies with 10 to 20 employees, but not for the firms with 100 or more.” It’s not true. If 10 to 20 people are capable of undermining corporate performance due to their high stress and lack of commitment, how much damage can 100 or 300 fearful employees do?

Keep Policies in Check

Face-to-face communication is a good start, but by itself it will not eliminate fear and return innovation to the workplace. The next area of focus should be company policies. Two problems with company policies emerge during frightening times. The first problem is that restrictive policies can be damaging at any time, but during times of economic growth the damage may remain under the radar, only to become a major stumbling block when the economy falters. For instance, a company with a long history of slow pays suddenly finds itself cut off by its most important vendors. When the company points out that it was not paying more slowly than it had in the past, the vendor doesn’t budge. Prior to the recession, the vendors weren’t scared.

The second problem is that business owners tend to implement restrictive policies during fear-based overreaction to recessions. For example, a production environment that previously did not time work cycles may implement rigid cycle times following the loss of a percentage of its workforce. The intended result is to increase the productivity of the remaining workers; the unintended result is to discourage attention to quality problems, leading to substandard products that are quality-controlled by the customer.

In another example, a company recently discovered that customer satisfaction had plummeted due to a new policy in its sales and service area. "Sales per serviceperson” had been monitored in the past, but following the elimination of 10 percent of its workforce, supervisors began reprimanding service people for below- par sales. The result? Tense salespeople were making hard sales pitches to customers who were unaccustomed to such treatment by the company.

When reviewing policy, ask the following question: Do our company policies encourage or discourage information sharing, feedback, exceptional customer service, customer-friendly operations, and vendor collaboration?

Lead Through It

In addition to opening communication lines and monitoring company policies, remember to invest in your employees. Times of excess capacity offer excellent opportunities to educate, cross-train, and introduce new skills. Training prepares your workforce for the return of a strong economy, and, more important, it sends your employees a message of your respect for them and your confidence in the future.

Finally, take a good look at yourself. If you are so fearful that you can’t imagine putting these ideas into play, if your reptilian brain is telling you to just dig into the mud and soothe yourself in the dark coolness of retreat, you are not doing your business any favors. Get the support you need to consider alternative perspectives on the current recession, running a business, and future prospects. Whether you like the role or not, business owners and senior executives are leaders, even in the worst of times.

As my former assistant and dear friend likes to say, “Feel the fear. Do it anyway.” You might as well. The alternative will get you nowhere.

Originally appeared in May 2009 MJSA Journal.

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