MANAGEMENT
Talking with Employees about Tough Times
Don’t keep employees in the dark. In the absence of
information, employees will make up their own.
HOW DO YOU talk to your employees honestly about company finances
and plans? It’s hard to be a business owner with people counting on
you when you have worries of your own and aren’t sure what is
appropriate to share. As an employee, it is also hard to be in the
dark when it comes to your employer’s plans and wonder if layoffs
are looming or your job is changing.
Good communication is the key. Here are five tips for how to
communicate with your employees when your business is going through
difficult times:
1. Don’t keep employees in the dark — talk to them. In the
absence of information, employees will make up their own. I
guarantee it. In small businesses, especially, employees are much
closer to what’s going on in the business. They will know if sales
are slowing because they are dealing with orders each day. There are
fewer departments and layers of management to obscure the company’s
real condition. They also read the same newspapers, watch the same
TV news, perhaps follow the same industry trade publications as you,
the owner, do. So don’t think no news will be interpreted as good
news.
It’s a fine line to know when is the right time to discuss the
company’s finances with employees. You don’t want to alarm anyone
unnecessarily, but you also don’t want them jumping to the wrong
conclusions because they aren’t getting information from you.
Remember, your employees are adults, not children, and can handle
some bad news.
Bring everyone in, sit them down and lay out a few key points about
the company’s situation. Don’t dwell on bad news and forget the good
news — give a balanced viewpoint. Conveying good news during tough
times is actually more important than conveying negative stuff.
Have a plan of action that you are taking to address the situation.
You don’t have to have all the answers, but you should also not give
the impression that you’re clueless either. Leadership is crucial
during tough times. Leading means you need to be out in front.
2. Allow for back and forth communication. When counseling
managers on how to deliver bad news, I suggest speaking as if you
are telling a family member about bad news. Your humanity — empathy
— comes through. Plus, what happens when you talk with family? They
ask questions. And you try to answer them. It becomes a
back-and-forth discussion.
Business and financial results unfold each day. We live through
profits and losses — and recessionary economies — real-time. That
means you probably won’t have answers for every question, because
you can’t know what will happen in the next three months or a year.
It’s also important not to make promises you can’t keep (like: I
guarantee no one will be laid off).
But letting employees talk and ask questions will make them feel
better. They will feel part of the decision process. They will know
you are listening. Just hearing their questions will tell you a lot
about what your people are thinking. You may, in fact, be able to
quickly dispel false rumors and reassure them.
3. Convey confidence. If you are in a panic, that will be
magnified in your employees 10 times over. One of the toughest
things is to convey bad news and admit you don’t have all the
answers, but still reassure employees that the problems are being
dealt with. If you come across like the sky is falling, employees
sense that and will magnify those feelings of doom and start heading
for the door.
The best way to deal with your own emotions is to know what you plan
to say in advance. Practice it if necessary. Take a deep breath and
put your game face on. You’ll feel calmer and more confident — and
you will convey that. Your behavior goes a long way to how you feel,
and how you feel goes a long way toward how your people will feel.
4. Encourage your people to share ideas and solutions. In one
of my past positions, the company I was with started going through
some tough times during a recession. They announced what came to be
known as the “Coffee Decision.” They eliminated free coffee in the
staff break rooms. Now, I don’t know how much money they saved by
that change, but given the magnitude of all their other losses at
the time, it had to be a drop in the bucket.
Yet, to employees, that one move — charging for coffee — spoke
volumes. We assumed the company was in dire straights. Everybody was
talking: “If they have to cut out the free coffee, the company must
be going down the tubes….” Every time we paid for the watery coffee
that came out of the vending machines that replaced the coffee
makers, we would grumble about all the other ways we thought they
could have saved money aside from coffee.
Of course, we never shared our cost-cutting ideas with anyone in
senior management, because we felt somehow punished by the “Coffee
Decision.” I’m quite sure the company incurred more losses from lost
productivity as employees speculated (mostly incorrectly) on how bad
things must be, than the coffee itself cost. Meanwhile, the real
cost savings were overlooked.
Involve your people in coming up with solutions to cut costs or
increase sales. Ask them if they have ideas to share them and that
you will consider each idea.
5. Be a good fiscal role model yourself. Another war story
from my corporate days: I remember walking to a senior staff meeting
and following the CEO and another senior executive down the hallway.
The CEO was complaining about how he was disappointed by first-class
service on a certain airline. Then he stepped in the room and began
to talk about the need to cut expenses, and how we managers would
each have to cut staff by 5%. This is a man who had a car and driver
pick him up and drop him off very visibly by the company front door.
Do you think he had much credibility?
Double standards destroy your credibility. When you share bad news
and try to reassure people, they’re likely not to believe you unless
they feel you have skin in the game. If you ask people to take pay
cuts or add duties or cut back on benefits, start with yourself.
I don’t have all the answers for how to communicate bad news to
employees, because each situation is different. But I do know that
without your employees your company is nothing. So try to put
yourself in their shoes. Be the leader you would want to have during
tough times.
Anita Campbell is CEO of Small Business Trends (www.smallbiztrends.com),
an online community touching over 250,000 small business owners each
month. It is an award-winning site, named to the Forbes Best of the
Web (in 2005 and 2008), and receiving recognition from The Wall
Street Journal and MSNBC television. She also hosts
www.SellingtoSmallBusinesses.com, a resource to vendors and service
providers serving small businesses. (This article was originally
published on OPEN Forum by American Express.)
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T R E N D S
Small biz will turn to Web in bad economy
Hard economic times will force more small businesses to become
smarter marketers. They may even get websites.
Kelsey Group, a Princeton, N.J., local search and directory research
firm, estimates that the percentage of small and midsize home- and
trade-services businesses with websites will increase to 60% by
2010, up from just 33% today.
When the housing market was red-hot there was no incentive for
home-services businesses, such as painters, home-repair shops and
landscapers, to worry about Web marketing, because calls flooded in.
But now these shops are struggling, and need to be more strategic
and seek out cost-effective marketing tools to compete.
Among the Web marketing tools businesses should consider include
local search engines like those connected with Google Maps,
CitySearch or YellowPages.com that produce results when someone
searches for a particular business in their geographic area and
pay-for-performance advertising like affiliate ads or pay-per-click
ads.
Home-services businesses also should pay more attention to reviews
on consumer referral and home-services community sites like Angie’s
List and ServiceMagic, since consumers will likely turn to such
sites to compare notes on businesses before placing a call.
Source: Independent Street, October 28, 2008
‘Golden age of youth’ stretches into mid-30s
Today, people are trying to stay younger for longer. Adults ages 25
to 34 are continuing to consume music, gaming and the Internet, and
are enjoying the pursuits of their younger years. Marketers need to
rethink what “youth” actually means and how to approach this
constantly evolving group of people, according to the “Golden Age of
Youth” study from Viacom Brand Solutions International. The study
identified three distinct stages of youth: “Discovery” (16-19 years
old); “Experimentation” (20-24 years old); and “Golden” (25-34 years
old).
The Golden group is happier and more confident/secure and gravitates
toward premium, understated and luxurious brands and experiences to
affirm their identity. Teenagers are highly focused on material gain
and employ brands to define their identity. More than 80% of all
respondents say that the 20s should be about exploring life and
having fun.
Traditional adult brands need to adopt a more youthful tone to avoid
being seen as irrelevant, the study said. For example, 23% of the
25- to 34-year-old global sample feels that financial institutions
are aimed at those older than they are. Meanwhile, youthful brands
have a new market beyond the core teenage target.
Source: Research Brief, November 7, 2008
Barter exchanges becoming popular again
In recent years, bartering has gained currency as a relatively easy
path for small outfits to attain goods and services without having
to dig into their coffers. It has also become a successful channel
to attract new customers and expand one’s business. According to the
National Association of Trade Exchanges, there are some 400 barter
exchanges in the U.S. and Canada. With banks cutting back on credit
lines, the use of bartering has gained renewed momentum.
Barter exchanges are fee-based membership groups. Typically, barter
dollars are issued when a member performs a service or offers a
product that can then be used to purchase goods or services of
another member within the exchange. The exchange receives a
commission on the “purchase” side of the transaction. Most offer
lines of credit that can be used to snap up a host of items, from
carpet cleaning services to office supplies to large equipment.
“Most people are looking to conserve cash,” said a barter exchange
member. “I’ve saved anywhere from $20,000 to $25,000 a year by
bartering, and I’ve also taken on a lot of new accounts.”
Source: BusinessWeek, November 11, 2008
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N E W S
Is the Internet altering your brain?
Gary Small, a neuroscientist at the University of California, Los
Angeles, claims the Internet is stimulating evolutionary change
within the minds of tech-savvy users.
In a study of 24 adults, Small found that the brains of experienced
‘net users were twice as active as those of Internet beginners —
particularly in the areas that control decision-making and complex
reasoning.
“If you repeat mental tasks over and over, [the brain] will
strengthen certain neural circuits and ignore others,” he observed,
adding that such stimulation compels brains to evolve — making it
likely that the tech-savvy will top off the “new social order.”
But there are setbacks to being so wired. “Digital natives”
habitually scan for new information, which can lead to stress and,
in some cases, damage neural networks. They are also prone to
“[neglect] human contact skills and [lose] the ability to read
emotional expressions and body language,” he said. For techies
suffering such drawbacks, Small suggests finding a balance between
technology and human interaction, “like having a family dinner.”
Overall, users that manage to “take control” of how the Internet
affects their brains will be the best-off. Ideally, they’ll be able
to glide between tech and face-to-face interactions with ease.
Source: MarketingVox, October 29, 2008
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T I P S
- Use the power of “3” in your advertising. The number 3 has a
mystical power for humans. Think of some of the most powerful
advertising messages ever: “Just Do It,” “We Try Harder,” or even “I
Like Ike.” Call-to-action lines often use the power of 3, as in “Buy It
Now” and “One Day Left.” If you can distill your tagline or call to
action down to three words, so much the better. But, don’t just use a
three-word phrase because it is a three-word phrase. It must fit your
offer, product or circumstance.
Source: www.wdfm.com
- You’ve made a sales contact with the decision-maker and
the only response you get is “Talk to my underling.” Regardless of
why someone would do this, your goal is to keep the executive in the
loop. To do this, say “Thanks for your help. I will give him a call.
Just out of curiosity…” And then ask the following questions: “What
can you tell me about him?” “What do you think are his priorities in
this area?” “What are some of your priorities in this area?” You may
also want to ask if it’s possible to have an initial conversation
with the executive before working out the details with the
underling.
Source: www.bnet.com
- Need keyword suggestions for search engine marketing? Try
Google’s new Search-based Keyword Tool (www.google.com/sktool). With
this new tool you can get a better sense of what your potential
customers are searching for and which keywords you should advertise
on. It looks at your Web pages and identifies keywords that
potential customers are searching on to find your products or
services. The new tool gives you keywords that are highly relevant
to your site but may not be part of your ad campaigns.
Source: adwords.blogspot.com
- Keep employees focused on goals by requesting a simple weekly
report. Before leaving work on Friday, require all staff members
to summarize the following: a list of what they achieved during the
week and how those items related to their professional goals; any
obstacles they faced and how they cleared them; upcoming assignments
that would benefit from your help of direction; and their top three
priorities for the coming week.
Source: www.productivitycafe.com
- Need a business loan? Consider smaller community banks
and credit unions. Many are more open to offer financing because
they didn’t get caught up in the sub-prime lending fiasco. Also,
while credit scores are important to both large and small financial
institutions, community banks are more likely to take a closer look
at each business plan and presentation. Even so, the one metric that
trumps all others is cash flow because it’s a key indicator of a
borrower’s ability to pay back a loan.
Source: www.wsj.com
- If you still can’t qualify for a business loan, consider
a factoring firm. Traditionally used as a kind of short-term cash
bridge, factoring has been avoided by some businesses in the past
because it can cost more than traditional bank financing. But these
days more firms that need funding are selling their bills to
factoring companies. Factoring allows companies to get money they’re
owed faster than they otherwise would. Factoring companies generally
work one of two ways: Some pay upfront, giving the vendor the amount
owed minus a fee that at many companies is 5% to 6%. Others pay a
percentage upfront — say 50% — and then the rest, minus a fee, when
the bill is settled. Be careful and take into consideration the
added costs of funding into your financial plans.
Source: www.washingtonpost.com
- Are two of your employees having a conflict? Ask the
disagreeing parties to paraphrase one another’s comments and
position. This will help them better understand one another.
Source: www.briefings.com
- Get prospects to warm up to you by handing them a warm cup of
coffee. A new study shows that people may trust others more when
they experience physical warmth. Lawrence E. Williams, an assistant
professor at the University of Colorado-Boulder, says simply
handling a hot cup of coffee can change one’s attitude toward a
stranger. His research found a link between the way unsuspecting
subjects rated a hypothetical person’s personality and whether or
not they had held a warm or cold beverage just prior to the test.
This idea can be extended to include other sensations of warmth such
as a warm cookie or a warm handshake.
Source: www.sciencedaily.com
- Intrigue prospects to open your next direct mail package,
by doing something different with the envelope — leave it blank. For
years, experts suggested placing your offer on the envelope;
however, in more than 25 tests for six b2b companies, veteran
marketer Russell Kern found plain letters and envelopes pulled more
responses than creative packages that put the offer on the outer
envelope. Why? When prospects can’t predetermine what is inside, and
they feel that they might miss something, they’ll open the package —
especially when the sender is a familiar company.
Source: www.marketingsherpa.com
- You probably already know that client testimonials are a
great way to build trust with prospects; but did you know that
requesting testimonials is a great way to build loyalty with
existing clients? People who have used your product or services
become more committed to you when they’ve signed their name to
praise they’ve written. Moreover, a testimonial letter often
distills their thoughts into clearer reasons for liking you than
they had before. A good way to get a powerful testimonial is to ask,
“What would you tell others who were thinking of working with me?”
Source: www.yudkin.com
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