As a turnaround CEO, parachuting into troubled companies, encountering low morale is not new to me. It is always one of the consequences of whatever necessitated the need for a “fix-it” CEO.
In larger companies, employees are often unaware that a turnaround CEO is coming until they arrive, and they definitely don’t know what the new CEO’s plans are. The one thing they do know with certainty is that they don’t know how they will be impacted. Will their job responsibilities change? Will their pay and benefits change? Will they even have a job? There is an abundance of uncertainty fueled by a lack of trust.
The first step to rebuilding trust and improving morale is by communicating with transparency. Communication and transparency are two buzz words that are frequently part of corporate speak – buzz words that mean nothing if you don’t commit to putting them into practice every day. The second step is remembering that communication is a two-way street. In addition to communicating information out, you must listen to feedback. Which brings us to step three – follow through and follow up. Whatever you tell employees that you and the company are going to do, do it. And remember to follow up on employee feedback: receive it, review it, acknowledge it, and act on it.
The effort will be worth it because the benefits of employee engagement have been proven to be significant – engaged employees experience 41% less absenteeism, a 17% rise in productivity, and a 66% increase in wellbeing, all of which impact the bottom line.
Leaders are best served if they establish and maintain trust from the start, because rebuilding trust is 10x harder. One CEO who exemplifies turning low morale around by rebuilding trust is Zak Brown, CEO of McLaren Racing. In the six years prior to Zak taking the helm, the role of CEO had been a revolving door on an almost annual basis. That constant change in leadership bred a lack of transparency and communication. As a result, employees’ trust in the company had sunk to an all-time low, and along with it, their morale.
Zak recounts how he handled that: The first thing I needed to do to restore trust was to build a new leadership team, one with executives who were committed to being excellent, transparent communicators. The new team and I communicated the truth consistently, even when that truth was hard for employees to hear. We over communicated in the beginning, because people take things in differently and at different times and we needed to make sure that every member of the team knew where we were, where we were going, and how we were going to get there.
With 1,000 employees to communicate information to and allow them to communicate back, a multi-level approach was required. In addition to communicating to the group as a whole, Zak established more intimate group settings like their Chatham House Rules. Once a week, up to 20 people in the organization could sign up to participate in the meeting with Zak where he encourages them to freely discuss concerns or suggestions.
And to drill down to a more personal level, Zak encouraged people to email or call him, or simply knock on his door if there was something they wanted to talk about. Those discussions included Zak asking the employee for suggestions on ways to solve a problem or resolve a concern they had. Sometimes it was the simple fixes that had the biggest impact, like improving employee travel accommodations, or keeping the company gym open 24/7 so that the night shift could take advantage of it just before or after their shift. Simple oversights that leadership would not have been aware of if the lines of communication had remained closed.
Zak and his leadership team’s commitment to intentional and transparent communication paid off.
Gradually, I could see trust re-established. People began communicating back to me. Now when I went into a room and spoke to a group, and I asked if there were any questions, hands started to be raised. People began emailing me and my door started getting knocked on. That’s when the shift in culture really gathered momentum.
Leadership is a powerful tool to not only get stuff done, but to do it in a way that supports and empowers people to be the best they can be. Respect your people enough to keep them informed and engaged about where the company is going, how it’s going to get there, and their role in reaching that goal.
Remember that figure of 66% increase in wellbeing I shared? Well, it gets even better. So strong is the impact of employee engagement on wellbeing that changes in engagement levels predicted changes in cholesterol and triglycerides levels. Now that’s powerful stuff.
How will you choose to use your leadership power?
