If Your Company Is in Crisis, Escape by Going Forward

Good management often requires that you go against all your instincts because, according to my experience, what we call instincts are often unreliable and even dangerous.



Consider what happens when a company gets into trouble. Managers typically respond by reverting to doing what they feel most comfortable with. In nearly every situation, what they feel comfortable with is cutting costs. Therefore, they'll lay people off, cut benefits, and so on.



They understand that these actions impose harsh penalties on hard-working, willing employees who almost certainly bear no responsibility for the crisis. But, they argue, the company is in crisis mode and everybody needs to take their share of the burden. Besides, what else can they do?



The employees, for their part, fall into a similar trap. They freeze and revert to doing what they know best and feel most comfortable doing — more of the same, in other words.



If you look at almost any company in Greece today, where economic conditions are exceedingly harsh, you will see this dynamic in action.



And yet, if you were to ask people at these same companies, managers and employees alike would almost certainly agree that any solution to the company's problems involves doing something different. In Greek we call it "escape by going forward".



So what might that involve?



At one company I know a salesman managed to close a deal with an upmarket hotel chain in the Aegean that they were supplying with linen by accepting part payment in nights at the hotel. The company then offered the bartered nights to top performers in lieu of bonuses, including the salesman who thought of it. The company made a sale it would otherwise have failed to land, its people got to have an attractive perk, and the hotel got some occupancy.



Another company I worked with, a supplier of electric appliances, invested in retraining. Faced with empty showrooms they decided to get their store salesmen to go door to door with cheap offers in middle class districts. This is well known to be a hard way to land a sale and the sales force needed some coaching. So the company hired three experienced door-to-door salesmen to provide it by going out on the streets with the store salesmen.

The store salesman found it hard to adjust. One of them described to me to me how ashamed he felt when knocking on people's doors. But the coach was there to remind him about the empty showroom and to show how to make a pitch on someone's front doorstep. It took three days before the salesman was able to muster up the courage to go out by himself, and a week before his first solo sale but what a deep satisfaction it was!



Outreach also becomes important in a time of crisis. Another company I know organized an evening cocktail-and-lecture series for employees and their spouses on the economics of crisis in an effort to make people understood that the bad times would eventually come to an end.



Details also matter. Managers at this company would greet their subordinates by saying "better day" instead of "good day." There was a contest for the best joke of the week. Gallows humor, however, was strictly prohibited; the spirit of communication was not around adapting or living with the economic harshness but rather around identifying opportunity and reasons to celebrate. The company wanted to encourage innovation, change and cohesion rather than just survival. It also offered Spanish language lessons and, in a while, people were greeting each other in Spanish.



Obviously not all these gestures worked, and some were even rather silly. But overall, management actions of the kind I'm describing tend to increase solidarity within the organizations. The result is a lot more positive knowledge sharing and innovations that more than justify the relatively small financial commitments involved.