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CORPORATE VALUES: How can they survive good times and bad?

“If showing respect is something valued during good times, it becomes particularly important during bad.”CORPORATE VALUES: How can they survive good times and bad?

Restructuring and downsizing can bring out the worst in some companies, but progressive firms maintain their values. Find out which ones have made respect and honesty go a long way.

BY ROBERT SIMPSON

Roger worked for TELUS for 14 years, joining the company soon after completing college. When laid off, he had just completed eight months’ training as a customer service manager and was in the midst of preparing a company-wide best practices manual. Today, he could be bitter about his layoff, but he's not.

"They treated us as professionals," he says. "They assigned a manager to escort me to my office and then allowed me to take my time finishing business before I left. Then they escorted us to a small meeting room

The outplacement orientation was strictly voluntary; ex-employees were free to go home if they preferred. The company arranged transportation for those who normally carpooled or used public transit. They could collect their belongings that day, or return later during working hours, or at night or on a weekend, if they preferred not to face former co-workers.

At that first orientation, the "excessed" workers met with outplacement counsellors to discuss the downsizing and receive guidance on how to break the news to their families. The following day, they returned for a job-search workshop. Arranging simultaneous sessions for all laid-off employees created a logistical nightmare, but was considered absolutely essential.

Roger says he understands the company's decision to downsize and feels that they showed genuine concern for the welfare of employees throughout the process. "Management explained that the employees weren’t responsible for the downsizing;

Extending corporate values and ethics during times of upheaval can test the skills of even the most seasoned human resources professional. When done well, employees like Roger are left with a strong sense of value and dignity with an enduring respect for the company. But for every successful transition that leaves employees feeling empowered lies an equally appalling story.

Poor layoff practices too common

Take Polly, for example. She worked at the same small building-supply company for 26 years. She joined the company after completing college and worked her way into a senior supervisory role. She planned to retire in eight years and start a small, home-based catering business. Last year, on a Monday morning in April, Polly and 30 other employees were summoned to a meeting room. There, the company president, human resource director and company’s legal counsel sat grimfaced at a head table.

“It was all over in 10 minutes,” she remembers. “The company president said it was a sad day and he couldn’t afford to keep us on the payroll. The human resources director handed us each an envelope on the way out, enclosed with a letter that explained our severance options and telephone numbers for the local unemployment office. She told us that we had 15 minutes to clear out our desks and be off the property.”

Polly struggles to hold back tears. “It was like a slap in the face,” she says. “After 26 years of dedication and working side-by-side with these people, they didn’t even have the courage or courtesy to speak to us individually. After all these years, it was like we were completely insignificant and meant nothing to the company. There wasn’t even an opportunity to say goodbye to my friends and colleagues.”

Unfortunately, Polly’s experience is not uncommon. These days, you can’t open a newspaper without reading disturbing news about how companies callously let go of staff. The National Post reports that the unlucky employees of fob Inc., a high-tech company that designs on-line purchasing systems, received a bloodless e-mail informing them of their dismissal. For hospital support staff in Alberta, the news of layoffs came as an election promise. Employees at Times/Warner Digital learned of their fate in their

What’s striking about these examples is how many employers haphazardly and brashly lay off employees without a long-term plan. This leaves the workforce with an overriding sense of instability and distrust in the job market. Many employees are convinced that corporations, driven by technology, freer trade and globalization, will show no mercy and shed jobs at the drop of a hat. The thinking goes, “The new economy is a labour market where jobs are unstable, temporary and ever changing.”

Some observers charge that loyalty on the part of workers and employers is a dead concept -- your best friend will be your Rolodex. To paraphrase philosopher Thomas Hobbes, working life in the new economy will be nasty, brutish and short.

Treat people well in good and bad times

Arlene Keis, former HR director for the Victoria branch of JDS-Uniphase, knows first-hand how crucial good people practices are during times of change. Keis was instrumental in managing the human resources plan that guided this high-tech company, which designs and manufactures optical products for fibre-optic communications, through a corporate takeover. A year later, two rounds of downsizing followed, resulting in the eventual shutdown of the Victoria plant.  

Throughout this process, the company’s HR plan reflected corporate values of honesty, trust and respect. Despite the year-long, painfully slow demise of the Victoria plant, Keis and her plan received high praise from the nearly 600 displaced employees. “Treating people well in the good times and the bad is critical,” says Keis.

She adds: “If employees know they will always be treated with honesty, dignity and respect, they know they can expect the same fair treatment when change happens. If showing respect is something valued during good times, it becomes particularly important during bad.”
It’s tragic to hear stories about how some people are treated when fired or laid off, says Nancy Laughton, CHRP, senior principal of Knightsbridge Career Management. However, drawing on her own experience, she thinks that most organizations want to do the right thing. “I don’t think the majority are cold-hearted employers,” she says. “Most go through tremendous anxiety when downsizing or restructuring. It’s not an easy task for anybody and we find that most employers have the employees as their number-one concern.”

Are values more PR gesture than reality?

Despite such common-sense approaches, most Fortune 500 companies do not want to discuss publicly how well they maintained corporate values during times of transition. Locally, a number of people contacted for this article denied requests for interviews and scoffed at requests to speak to recently downsized employees. Even public sector union representatives refused comment. One such union employee, who asked to remain anonymous, said: “This subject doesn’t apply to us because our employer has no values or ethics.”

The shroud of secrecy surrounding companies’ treatment of employees during downsizing is not surprising. During periods of flux, it’s difficult to maintain the lofty, ethical values that companies love to share in good times. In some cases, stated corporate values were never developed with the intention of extending them to employees.

“For many corporations, the statement of values and ethics is more a public relations and marketing tool than a reflection of the corporate reality,” according to Michael Tushman, a Harvard professor of organizational behaviour and author of  Two-Handed Approach to Change. He goes on to say that in bad times, corporate values like  honest communication, fairness and “Employees first” often lose out to the bottom line.

Sadly, a 2001 survey conducted by the American Management Association, which polled 175 blue-chip company executives, reinforces Tushman’s view. Eighty-six per cent (151 members) said their companies specifically write and state their corporate values, but when it comes to employees, 32 per cent (56 members) admitted that their public statements sometimes conflicted with internal messages and realities. Another 36 per cent said they would always follow legal procedures, but not always ones perceived as ethical. A resounding 64 per cent of executives surveyed said that when it came to downsizing an reorganization, they would be prepared to turn a blind eye when the company’s ethical or stated values were not met.
[subhead] Involve HR professionals early in downsizing

Involuntary job loss produces a number of psychological, social, and financial effects, not only on terminated employees but on their families. Furthermore, downsizing has a major impact on surviving employees as well as on the organization itself, both strategically and operationally.

Research data supports the assumption that "doing the right thing" has a positive impact on stakeholders. A 2002 DePaul University study of 300 large companies found that firms committed to an ethics code in both good times and bad provided more than twice the value to shareholders than companies that did not, according to Business for Social Responsibility, a not-for-profit organization.

During downsizing and layoffs, the key to successful people planning is to involve human resource professionals at the earliest planning stages and ensure that people’s dignity and the company corporate values are considered from a long-term perspective.

“It was important to be involved in the decision and planning process at the senior level,” says Keis. “Otherwise, the care and management of the people, as well as the values and ethics of the organization, may take a backseat to managing the bottom line and implementing change.”

Downsizing and reorganization should be part of a larger, long-term strategy for the organization. Laughton says: “Sometimes downsizing or restructuring can be a knee-jerk reaction and it doesn’t always get the attention it deserves for long-term strategies. It’s important that companies be reminded that this can have a lasting impact on an organization.

She adds: “Attention to what that is, how employees perceive what’s being done and whether there is thought behind it can have a huge long-term impact.”

Without a long-term plan, restructuring or downsizing can result in lower morale for the employees staying, distrust for the organization and lack of employee loyalty. Fallout often means that good employees leave the organization because of the change or they feel it’s not the place they joined and they don’t fit there anymore. Employees can harbour the sense that they could be laid off next; they would rather take the future into their own hands and leave before the boom is lowered.

The key message for JDS-Uniphase was that the best practices valued during good times also applied during the bad. “We worked really hard to attract the best and brightest from all over the world,” says Keis, “and wanted to make sure that we treated them well and the transition was the best possible, yet still affordable for the company.”

[subhead] Communication a key factor in success

Of primary concern for Keis was establishing a communication plan that would explain the reason for layoffs and the company’s long-term plans. “Sometimes communication isn’t something that the management team puts on the agenda. In fact, they often withhold information with the right intentions because they don’t want to alarm people, but the literature in best practices says: ‘Communicate, communicate, communicate.’ Even if you don’t know anything—communicate that.”

Laughton agrees. “Communication both internally and externally is one of the most important factors. How the message is delivered to the employees and the stakeholders is critical to the success of the whole progress.”

Communication plans at TELUS ensured that employees and stakeholders knew what motivated the organization’s need to change. They learned that it was not just a reaction to a low stock price, but resulted from a fundamental shift in the telecommunications industry.

Management also assured employees there was a long-term plan behind the reorganization, which gave the employees left behind a deeper sense of trust in the organization and its leadership. “They made us feel like the leadership knew what it was doing and while there are unpleasant decisions to be made, they had the long-term health of the organization in mind,” says Roger.

In Laughton’s view: “We always tell managers to communicate ten times more than you think you have to and you might be getting closer to the target.” She admits that the major downfall with corporate reorganization is the lack of clear communication plans.

The key message developed at JDS-Uniphase was simple: it valued employees’ contributions. The organization was prepared to help and support them in relocating to the California head office, where possible, or assist with career transition inside and outside the organization. “We provided employees with professional and respectful communication about what and why the changes were occurring,” says Keis. “This was done by providing clear explanations of how the restructuring would work each step of the way.”

The difficulty at JDS-Uniphase was not knowing the long-term outcome. The company had undergone a takeover, followed by voluntary layoffs, then two further sets of layoffs and an eventual complete closure. “Employees want to know,” says Keis. “It’s not a question of if I am losing or keeping my job, it’s the not knowing that is the worst.

“Once employees knew the outcome, they knew what to focus on. Human resources can play a critical role in making sure that communications are at the forefront of the company’s agenda. Once decisions are made, employees can expect their needs to be met in a respectful and professional manner.”
[subhead] Creative support helps laid-off workers find new jobs
Once a company announces that it is downsizing or restructuring, the true test of its values is how it treats both the employees leaving and those who remain. The human side of downsizing, no doubt, is the most difficult step in the process.

In recent years, the high-tech sector has provided some creative examples of how companies can extend corporate values to employees during times of change. Companies often communicated with other high-tech organizations, particularly those in a growth mode, to set up career fairs for departing employees, provide connections with others in the sector and establish ways to exchange resumes.

JDS-Uniphase created a bio-book, complete with a profile of employees, their resumes and background, and sent the book to hundreds of BC employers, employer associations, the media and to other high-tech companies. “This turned out to be a huge success,” says Keis. “The employees loved it. They were very grateful that the company was trying to help them find alternative employment. We were successful at helping several find new employment.”

At 360 Networks, the company designed a Web page so that employees and former employees could link into it and stay in contact. This provided an update about how everyone was doing. If someone got a new job, it was posted. If companies were looking for employees, they could tap into this resource.

 Outplacement counselling effective and pragmatic

Instead of bringing out the axe right away, some companies started reducing staff by offering special benefits to those who voluntarily retire or resign. Both JDS-Uniphase and TELUS offered incentives for voluntary layoffs to long-term employees. Almost 160 people opted for voluntary layoffs at JDS-Uniphase. At TELUS, the call for voluntary layoffs produced overwhelming results – almost 7,000 applied. 

A 2001 outplacement survey of Canadian firms reported that of 693 Canadian firms contacted, outplacement services were offered to 83.9 per cent of executives, 63.5 per cent of management/supervisory employees, 44.2 per cent of professional/technical staff, and 30.6 per cent of other salaried employees. The higher the level of the employee terminated, the more comprehensive the components and duration of the assistance program.

When outplacement counselling began in the 1960s, it was offered sparingly to only the highest-level executives. In recent years, the outplacement business has grown significantly, spurred by the large number of mergers and acquisitions and the desire for leaner, more productive staff. This offering has now filtered down to include middle-management and lower-level employees as well.

For the terminated employee, outplacement can provide everything from hand-holding emotional support to hard-nosed business advice. “Outplacement is not a form of psychotherapy, but it can help people develop the appropriate attitude and emotional base to make an effective career transition,” explains Laughton.

From a company's point of view, outplacement counselling is not only humanistic, but pragmatic. Outplacement is also good public relations for the workers who remain. "People like to work for a company that cares," says Keis. In the words of more than one industry executive, outplacement is usually a win-win situation for both the person who receives, and the company that delivers, the bad news.

Robert Simpson is a Vancouver-based freelance writer and corporate communications consultant. Contact: simpsonr@direct.ca

[photo captions]
Nancy Laughton, CHRP, of Knightsbridge Career Management, shares her office with four-month-old Daisy, her King Charles spaniel.

Nancy Laughton, CHRP, senior principal, and Peter Saulnier, principal of Knightsbridge Career Management, review their company’s home page on Peter’s laptop.

Sidebar
[heading] Never too late to put your values to work
Building a values-based culture is critical during a crisis. Here are some tips:
· Ask yourself: What is the current corporate culture? How far is it from where we want it to be? What are your values? What steps can you take to close that gap?
· Every company has a culture and values. Have they been articulated? Have your employees been asked to participate in articulating the behaviors that reflect those values? It is essential to get employee buy-in.
· Spell out how you're going to achieve your strategic goals. What is expected from all stakeholders to reach those goals?

Reprinted from PeopleTalk Magazine Fall 2003 (V6, N3)

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