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In our recent article The road ahead: Now is the time to seek counsel we highlighted the first of the Seven Cs of Business Recovery: seeking Counsel. Here, we look at the second step: Communication. When the economy goes from a position of strength to one of uncertainty in a relatively short time, the pressure on your business is real and overwhelming, explain Royce Prude, Cary Mailandt, Frank Walker from Baker Tilly in the US.
Business recovery: Combatting crisis with co-operation
In our previous insight looking into the Seven Cs of Business Recovery framework, we looked at the value of open and honest communications with the people to who you are indebted to. Here, we look at another group of people who play a crucial role in your recovery plan: your co-workers and staff.
Many owners and managers often see themselves as the most important people in the organisation. However, it is the hard work and support of their employees that is an integral part of helping a business through times of change and disruption, explains Neil Hughes, Managing Partner at Baker Tilly in Ireland who developed the Seven Cs of Business Recovery framework.
"Address, at a human level, the challenges employees battle both internally and externally. Employees should hear from the business continuity taskforce frequently, understand policies and feel that their safety is their organisation’s top priority. Facilitate messages from the CEO or key leaders on updates to ease employee anxiety and keep people connected." – Baker Tilly USA
"It is crucial not to take employees for granted. Generally, and in my experience, being completely honest with your team and communicating how serious the company's problems are, will instil loyalty. They are likely to rally around and redouble their efforts in order to protect the company and their jobs."
People are your most valuable asset, your operating core, explains Alexander Pochkun, Managing Partner at Baker Tilly in Ukraine.
"[During a period of crisis] It is important to maintain regular contact with employees, even more so than usual. Preferably, this dialogue should exist at all management levels. The CEO’s task is to unite the team, motivate them to accomplish the tasks and achieve the new goals that the company is now facing.
"The current situation with COVID-19 is a perfect example. It is true that many companies have suspended their operations, but at the same time, a large number of businesses continue to operate. The sense of their work has not changed, but the tools and approaches are changing. It’s important for everyone to learn to work in a different way. And there are some things that are important to do as a leader in a new reality to unite and support your team."
Rewarding employee performance
During a crisis, businesses sometimes find it difficult to reward the exceptional performance and co-operation of staff due to cash flow difficulties. However, there are many ways to show your appreciation.
"Immediately drawing attention to their achievements at staff meetings, taking an active role in their training and development (in-house training conducted by senior members of the organisation will be seen as an investment in the employees' careers), introducing profit sharing and rewarding additional holidays and offering flexible working practices and hours", says Hughes.
Whilst there is certainly a need to manage cash and spend carefully at a time of crisis within your business, extreme caution should be applied when considering cuts to training and development programmes explains Dearbhla Gallagher, Ireland's Learning & Development Manager.
"While there may be a short-term benefit for a business in taking such a step, the longer-term consequences may be to the detriment of the business. It is widely accepted that investing in training leads to more highly skilled employees, increased motivation and more engaged and stronger performers.
"Now is the time to re-assess your training methods and the delivery approach. Make greater use of your in-house experts for learning and development purposes to deliver practical and relevant content. Technology is essential in helping us stay connected. Online communication tools are an excellent way of delivering learning and development initiatives to remote working staff."
Fostering creativity and imagination will ensure the co-operation of everyone in your organisation is rewarded during challenging times.
Co-operation is key
So why exactly is fostering the co-operation of your employees particularly significant in times of crisis? Hughes considers a restructuring case he led recently where the co-operation of staff was fundamental to business recovery.
"The story begins with a scene I witnessed between management and staff, which clearly demonstrated that relations had hit rock bottom. Employees had not been paid for some weeks and, not only had they ceased to do any work, they were now openly hostile in meetings towards management. Matters were looking bleak.
"Human nature leads people to jump to false conclusions in the absence of information and fear of the future unknown. In times of crisis, it is important for leaders of businesses to communicate to employees and other stakeholders 1) What you know 2) What you don’t know 3) When you intend to get back to them with new information." - Gary A. Plaster, Principal, MBA, Baker Tilly USA
"I immediately called a full meeting of all staff of the company which itself presented obstacles, as some employees wanted to make a payment of all outstanding wages a condition of even talking. Eventually, when it became apparent that the cash wasn’t available, all parties met.
"The bitterness between management and staff was so palpable, I asked management to leave the room. Just like that, the atmosphere changed. Staff explained they were frustrated that management were not open and honest about the situation. Their upset was completely justified.
"I briefed them about the business's recovery plan and when we went through the scheduled work, it was clear the company could be saved with everyone back working. Still, I could not make any promises about when they would be paid next and told them as much. Eventually, the most senior member of staff encouraged everyone to get back to work and the recovery of the business began to gather pace.
"The employees' decision to co-operate by continuing to work even without pay during their crisis was the catalyst for the rescue of the business. Fast forward three months, and the Company successfully emerged from the restructuring process with the majority of the team’s livelihoods intact."
Your staff play a central role in the turn-around of your business. Levelling with them, securing their co-operation and making them feel part of the recovery plan is instrumental to your business’s survival.
The article "Business Recovery: Combatting Crisis with Co-operation" was first published on www.bakertilly.ie on 18 May 2020 and has been reproduced with the approval of the author.
Meet the experts
|Neil Hughes||Alexander Pochkun||Dearbhla Gallagher||Gary A. Plaster|
|Managing Partner||Managing Partner||Learning & Development Manager||Principal|