The media is full of reports of company acquisitions and divestments, site relocations, mergers and closures, and reorganizations with and without redundancies.
How is it possible to convey the necessity of such steps in a convincing manner? What frequently goes wrong in the communication process? In our blog series Reorganizations and Restructurings, we shine a light on various aspects of these far-reaching structural changes.
In this article, my colleague Martin Hofer gives some insights into his experiences. Martin is a communications specialist who has been assisting companies with reorganization and restructuring processes for many years.
Martin, communicating job cuts isn’t exactly one of the most popular tasks at companies. What do they struggle with in particular?
They think in terms of Excel lists and figures. Their worries are driven by lack of profitability, loss of market share, and falling share prices. Of course there is nothing wrong with that, but when it comes to extensive restructuring measures, the way they communicate has to change – both internally and externally and in terms of their thinking and way of addressing people. It is essential to think and argue from the perspective of the recipients.
If managers talk about “jobs” in relation to a restructuring process, most stakeholders think of “people”. The decision-makers somehow sense that this is the case, so they ask their communications experts to package the bad news as good news.
This then leads to ominous-sounding press releases and internal presentations that talk mainly about visions for the future, renewed strength, and improved efficiency. Somebody gives a strategy talk at the end of which they vaguely hint that job cuts are possible or have been decided.
So figures are less important than words?
Clear words and empathy are important. Employees, the media, and also the local politicians are not interested in the company’s focus on its core business; instead, they empathize with those affected.
Of course the figures provide the foundation. A CEO has to be able to explain why the step being taken is correct and unavoidable. The economic narrative, as it is sometimes called, has to be clear and convincingly justified, including for external stakeholders. It has to go beyond the figures, however. The employees have a right to more than that.
What is more, the head of the canton’s department of economics and the local labor office also need to know how much taxpayer money will be needed to offset the company’s decision and how much tax revenue is likely to be lost.
You referred to the fear that many CEOs have of being upstanding in their communications, i.e. of actively talking about negative things and displaying emotions. How can you convince a CEO to pluck up the courage to take this route?
These concerns are understandable, as management is often partly responsible for the bad figures and therefore fears for its reputation.
I have a saying on the subject of being upstanding: “Crisis communication is a matter for the boss!” The owner or the CEO must be clear about their position as a role model, as the management team and the talented employees they want to keep at the company will be watching their every move. The people who are staying on will notice how the redundancies are handled.
You keep referring to the various stakeholders. They key players alongside the Executive Board are the Communications Department, HR, and Legal. What is your perception of the interaction between these various bodies?
I generally see a lot of potential for improvement in this respect at companies. I have experienced a lot of internal tensions here. Legal holds up the Communications Department, HR is only brought in at the very last moment, or the other way around, management wants to shirk its responsibility and leave the communications work to HR, or the Media Department demands a degree of specificity that hugely overshoots the mark.
That said, people do also pull themselves together in many cases and learn by doing, as it were. This is generally easier at owner-run companies than at global players.
What advice would you give to a company at which job cuts appear imminent?
At the many secret meetings that are required to drive forward a project like that, the responsible people should work not only on what they themselves consider to be correct, important, and worth announcing but also on thinking from the outside in. Specifically, I mean that they should take into account the different perspectives, views, and expectations of the various stakeholders. This isn’t just nice to have; it is essential. Good communications also require a little bit of courage, of course. But this generally pays off for the company, both immediately and in the long term.
If you have any questions or points you would like to raise about support with reorganization and restructuring processes, please do not hesitate to contact us at firstname.lastname@example.org
Tanja Passow is Deputy Head of Change at Farner. She supports companies with change processes, including reorganizations and restructuring measures, cultural changes, and the introduction of new strategies and processes.
Martin Hofer is a Senior Consultant at Farner. He specializes in media relations, media and presence training, and assisting companies during phases of reorganization and restructuring.