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Teach Downsizing Survivors How To Thrive

January 1, 1996
Executives from Texaco Trading and Transportation in Denver are grappling with all the painful feelings caused by its downsizing almost two years ago—fear, depression, mistrust and betrayal. These aren't outplaced workers experiencing these wrenching emotions, however. They're employees who survived the layoffs.

"Just when we begin to think our jobs are safe, they change the rules on us," says Brian McMillan (a pseudonym), an analyst with the company. "We don't know who's in charge, who we can trust or what we're supposed to be doing," he says. "The more unsettling it gets around here, the less productive we are."

All across the country, companies such as Texaco Trading that breathed a sigh of relief at having managed their downsizings without mishap now are struggling with the realization that dealing with surviving employees is the real challenge. While companies go to great lengths to take care of outplaced workers through generous severance packages and job-placement assistance, little is being done to help surviving employees cope with the trauma of a downsizing or understand their roles in the new, leaner organization.

Indeed, many executives think surviving employees will be so relieved to still have a job that they'll eagerly get down to business. But nothing is further from the truth. Often, any relief felt by employees soon is overwhelmed by a number of less-pleasant emotions, including pain, guilt, loneliness, depression and job insecurity. "This isn't paranoia on the part of survivors," says Frederick Miller of the Kaleel Jamison Consulting Group Inc., in Cincinnati, Ohio. "Their fears are reality-based."

Believing they once had a job for life, survivors now question whether management can be trusted. They're not sure if they should continue doing their old jobs or if something new is expected of them. Add to all this the physical and mental exhaustion that comes from overwork—because companies are better at downsizing people than they are the workload—and you have an organization in crisis. It's no wonder only half the firms that downsized between 1989 and 1994 increased their operating profits, according to a study by the New York City-based American Management Association. Given these dismal statistics, why are the needs of survivors being overlooked in the overwhelming majority of organizations?

"Because there's very little recognition that survivors have any needs at all," says Harris Sussman, president of Workways, an organizational consulting firm in Cambridge, Massachusetts. Part of the problem is that to say the word survivor is to recognize there has been a slaughter. The word is too loaded. Also, it's part of our culture to canonize survivors—to treat them as heroes. But even if companies do recognize survivors have special needs, there is an ugly Catch-22 involved: Companies downsize for monetary reasons, and programs to help remaining employees cost money.

To put it bluntly, that may be a good excuse, but it's a poor reason. If you don't spend the money to salvage something from the wreckage, your workers will resist any other organizational change effort you attempt. Worse yet, you'll never get the company to where the restructuring was intended to take it in the first place. Survivors need emotional support, extensive communication from management, clear-cut job descriptions and career management assistance for a downsizing to be successful. After all, the remaining employees are the only ones who can turn your company around.

Be proactive.
Like any malady, the survivor syndrome, as it has come to be known, is best cured by preventing it from ever occurring. Compaq Computer in Houston laid off 2,000 people—15% of its work force—in October 1991 to reduce costs and more effectively compete with some of the lower-cost products on the market. Knowing employees would feel shocked and betrayed by the downsizing, the corporate HR department developed a comprehensive communication campaign about the layoff before it occurred. Managers were given responsibility for implementing the campaign, not only because the information would seem more credible, but also because employees could have their questions answered immediately.

"We wanted employees to understand the reason behind the layoff—that it wasn't being done because of any problems now, but to prevent them in the future," says Ryan Robinson, senior consultant in corporate OHRD. Compaq felt if surviving employees understood the strategic reason behind the downsizing, rumors would be squelched and employees would more clearly understand where the company was headed and thus be able to help it get there.

Before the layoff, all managers went through training that not only covered how to outplace people, but perhaps more importantly, helped managers understand how to help survivors. During the four-hour workshops, managers learned the reasons behind the downsizing and how to conduct departmental meetings to explain the move to employees. They were given information about company finances and the competitive environment in which Compaq operated. Managers also were given a packet of sample Q-and-As to prepare them to deal with the questions most likely to be asked by surviving employees. The packet included a list of resources to which managers could refer frustrated employees, including the company's employee assistance program and community mental- health specialists.

"To help employees adapt to the changing realities of the workplace, you must acknowledge their emotional upheaval."

Robinson believes one of the most beneficial aspects of the communications effort was telling surviving employees how the company was treating those who were being laid-off. "We felt if survivors knew we were helping their friends who were leaving the company, they would feel more positive about the downsizing—at least, to the extent possible."

Compaq was so successful in keeping the survivor syndrome at bay that just eight months after the downsizing, the company announced a slew of new products, including several low-end competitors. "We met our goal in less than a year because employees understood, right from the beginning, where we were heading," Robinson says. Even though the company had a second layoff just three months later, employees had received so much information about Compaq's new direction that they knew the layoff was inevitable and were able to gear up for the changes. Since then, there have been no additional work-force cuts, and sales have grown from $4 billion in 1992 to almost $11 billion last year.

In 1992, Patagonia Inc., an outdoor-apparel manufacturer based in Ventura, California, laid off 125 employees—20% of its work force—in an effort to correct inefficiencies created by aggressive and unchecked growth. Terri Wolfe, director of HR, says the extensive communication that surrounded the downsizing helped surviving employees focus their energies on rebuilding the company. They didn't have to wonder why the company laid off certain people or why the company had to be restructured. All this information was clearly communicated at the time.

Acknowledge survivors' emotional needs.
Unlike Compaq and Patagonia, few companies have the foresight or wherewithal to deflect the distressing onslaught of the survivor syndrome. More often, HR people have to quickly implement some type of triage for survivors, a process that starts with recognizing these survivors need emotional support.

According to Al Siebert, a Portland, Oregon-based organizational consultant and author of the book "The Survivor Personality," managers aren't aware a tremendous amount of emotional work needs to take place. This is because most managers have an internal locus of control. That is, they're internally driven, self-motivated and accustomed to change. People in subordinate positions, however, are usually externally driven and comforted by routine. Managers, including those in HR, frequently overlook the fact that these employees aren't naturally good survivors. "They just aren't emotionally prepared to handle major disruptions," Siebert says. To help employees adapt to the changing realities of the workplace, you must acknowledge their emotional upheaval and allow them to express their discontent.

Two years ago, Siebert was hired by the state of Oregon to conduct a series of workshops called How to Be a Survivor and Thrive. More than 1,000 jobs had been eliminated, and the state wanted to help employees grapple with the distress caused by the downsizing. "I was there to uncork all the negative energy that was building in the work force," he says. It wasn't a pleasant task. "By getting people to acknowledge and address their anger and unhappiness, I was given the name Dr. Feel Bad. But people needed the opportunity to vent their frustrations."

If you're dealing with an angry work force, this kind of venting can be very constructive, but employees also have to be given coping strategies. Don't let the newly released anxiety float around unattended. Give employees tips on how to harness it and become changeresilient by developing good coping skills, such as flexibility, curiosity and optimism.

According to Glen Fahs, who was Oregon's state training coordinator at the time of the downsizing, these workshops achieved three things: 1) they encouraged employees to honor and grieve about the past; 2) they helped employees acknowledge the chaos and discomfort caused by change; and 3) they showed employees how to develop skills that would help them think of change as an opportunity for growth.

Participation in the workshops was voluntary, Fahs explains, because "the key was to make employees feel in control of their lives again." Were the workshops successful? Fahs has no hard data, but he says they were filled with 30 people each day for several months. "Furthermore, from what employees have told me, I get the feeling that change is something they now look forward to and believe they can control."

If he were to do it differently, Fahs says he wouldn't rely on the workshops alone to help employees cope. Instead he would arrange for a counselor from the state's employee assistance program to visit individual worksites and be available for drop-in appointments. This way, employees could receive assistance when they needed it most. Also he would arrange for the counselors to conduct group meetings at the departmental level. "Since a downsizing is a shared social experience it should be a shared healing experience," he says. "Grieving losses together isn't only cleansing, it helps connect people."

Communicate after the downsizing.
Perhaps one of the best ways to comfort employees in the wake of a downsizing is to communicate with them—honestly, openly and frequently. In the absence of any information from management, employees have a tendency to fill in the gaps with their own assumptions, which are usually based on worst-case scenarios. This is how paralyzing rumors begin. But opening up to employees through brown-bag lunches, telephone hotlines, newsletters and staff meetings can do wonders in quelling rumors and allaying anxieties. As China Miner Gorman, group vice president with Drake Beam Morin Inc. in Boston, says: "No matter how much you do, you can't communicate too much."

Executives appear to understand this. In fact, in a recent change-management survey conducted by Wilton, Connecticut-based Deloitte & Touche, 75% of respondents ranked employee communication as "very important." Unfortunately, only 23% said they've been very successful at their communication efforts, and often, it's the survivors who suffer.

"Explain how each employee's job has changed, if at all, and relate how each individually contributes to the bottom line."

Take the case of Robert Gardner (a pseudonym), a middle manager at American Express Travel-Related Services who oversees 70 employees and who has started to feel the effects of restructuring in his division. Not only has he had to lay off several employees, but two other middle managers with more experience were recently and unexpectedly handed their walking papers. "Nothing has been clearly communicated about the changes," he says. "I only know what I hear through the grapevine. My staff wants to know what's going on, but I can't tell them because I don't know. I hate to say it, but it's making me less tolerant."

What does Gardner think would help the situation? "More communication about the big picture," he says, "and having the ability to ask questions and get immediate answers."

Robert Levering, a consultant with New York City-based Arthur D. Little, and co-author of the book "The 100 Best Companies to Work for in America," agrees. He believes the fundamental problem of most companies is that they don't have ways for people to get answers to their questions. "HR should be screaming for more two-way communication," he says. "The good companies figure out mechanisms where-by people can ask tough and even embarrassing questions and it's OK. Pitney Bowes in Stamford, Connecticut, for example, hosts regular jobholders' meetings at which they give employees $50 for the toughest question asked."

Immediately after Patagonia's downsizing, the company implemented a monthly open forum during which employees could meet with the CEO during work hours to have their questions answered and hear about the company's progress. The forums have been so well attended, they're now held twice every month.

Along with the open forum, the downsizing caused the HR department to launch an intensive effort to educate employees about the financial goals of the business and the competitive environment in which Patagonia operates. Employees were taught to read financial statements and understand the strategic-planning process. "Giving people access to information helps allay their greatest fears," Wolfe says. "Before, no one wanted financial information. Now, everyone does. We've all grown up."

Even with this intensive communication effort, Wolfe admits it took approximately 18 months for morale to improve to the level at which it was before the downsizing. Could anything have been done to speed that up? "You can reduce the amount of time it takes to turn morale around by acknowledging the difficulties related to the downsizing, but you can't eliminate it entirely," she says. As a footnote, proof of Patagonia's successful communication strategy came in the form of record corporate profits at the end of fiscal year 1994.

Clarify new roles.
As you strive to help employees understand the big picture—which includes not only the reason behind a downsizing, but also an explanation of the company's new direction—be sure to communicate the little picture. That is, it's equally important to explain how each employee's job has changed, if at all, and relate how each individually contributes to the bottom line.

"Frequently, the most long-lasting problem after a downsizing—longer even than the lack of trust—is role ambiguity," explains Stan Silverman, managing partner with Human Resource Decisions Inc. in Akron, Ohio, and co-author of the book "Working Scared." "People are uneasy because they're not sure what they're supposed to be doing, who they should be accountable to, or if they're doing a good job," he says.

In the absence of any concrete guidelines, employees tend to be very cautious and focus only on the work they enjoy, and not necessarily the work that's most important to the organization. If employees aren't clear on their own goals, how can you possibly expect them to help the company reach its goals?

In the wake of a downsizing, Silverman suggests companies develop performance management systems in which managers sit down with each employee to help clarify his or her new role. Employees need to know what expectations have changed and how those changes may have an impact on their daily work. They must also know what their major job responsibilities are—in order of priority. It's important to be as clear-cut about these new job descriptions as you possible can be. Most employees find great comfort in knowing exactly what they're working toward and exactly what's expected of them.

The state of Oregon is launching its performance management process with a five-day management training program. During this program, managers are told about the state's overall mission, values and performance expectations. The managers are then expected to take this information back to their individual worksites and translate the organizational goals into specific departmental goals.

If you sense employees don't know what they're supposed to be doing, it's probably a good idea to follow Oregon's example and spend some time educating your managers about the new organization.

In the end, the task of managing survivors doesn't have to be all that difficult. It all boils down to recognizing that survivors have special needs, giving them the emotional support they deserve and communicating with them like adults. As an HR professional, you can help ease the pain and shorten the recovery time.

Personnel Journal, January 1996, Vol. 75. No. 1, pp. 38-48.