Business Brains

When the going gets tough, the tough get smarter about management

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I've heard it said that the fastest and most efficient messaging mechanism in any organization is the rumor mill. However, it's far from being an accu...

I've heard it said that the fastest and most efficient messaging mechanism in any organization is the rumor mill. However, it's far from being an accurate communications medium. And in uncertain economic times, it can wreak a lot of havoc.

That's because a natural dynamic tends to rear its ugly head when the chips are down, as explained by Stanford's Bob Sutton, a tireless advocate of people-focused management. That is, if managers perceive their jobs are on the line, they are less likely to look out for the interests of their employees. That makes the managers less communicative, and, in turn, that makes employees more even more nervous about their own situations.

Sutton was recently interviewed by McKinsey & Company on his recent article in Harvard Business Review, "Good Boss, Bad Times," in which he outlines ways to overcome the dynamics that arise within stressed workplaces.

Sutton's says managers under stress tend to fall prey to a syndrome called “toxic tandem,” a psychology term that applies to individual's sense of power, or powerlessness.  "When people are in positions of power, for better or worse, they often become sort of oblivious to the needs and actions of the people who have less power than them." And, as a result, employees in stressful workplaces lack clarity and information, will twist their boss's actions and statements out of proportion.

As a result, the rumor mill grinds away, unabated, at full steam. Employees will "devote immense energy to watching, interpreting, and worrying about even the smallest and most innocent moves their superiors make," Sutton says. Even if a boss's action is relatively innocuous, it's interpreted in a negative light.

Now, having been in stressed organizations at points in my career, nothing is more of a workplace distraction and productivity killer than an atmosphere of fear, uncertainly, and doubt. As Sutton puts it:

"When people down the pecking order feel threatened by their superiors, they become distracted from their work. They redirect their efforts to trying to figure out what is going on and to coping with their fear and anxiety—perhaps searching the web for insight or huddling with their peers to gossip, complain, and exchange emotional support. As a result, performance suffers."

Sutton advocates opening up channels of communication even wider when times are tough to combat this toxic tandem syndrome. People need to be kept in the information loop, to better understand why certain decisions are being made or actions are being taken.

"It’s very well documented that, independently of how stressful things are, human beings need to know why things happen," Sutton says. The challenge is giving them just the right amount of information, he adds:

"If you give them too complicated an explanation, then they just get befuddled and freak out. There is an art to be able to give an explanation that’s complicated but not too complicated, so they can follow it. Part of getting rid of the fear is having people understand it."

Another measure managers need to take to calm a tough situation is provide employees a greater sense of control. Rather than force sudden changes on employees, lay out all the options available to them before necessary actions are taken. Sutton cites the example of a Fortune 500 company that changed its management style and began working closely with its workforce on plant closing decisions. A more participative approach to making hard decisions resulted in greater good will among both employees and customers:

"They learned that when they announce it in advance, tell them why, give people all sorts of exit options and places they can have control, and show compassion, that they would keep more good employees, they would get better press in the community. And the other thing, which was quite important to them, is that sales of the product in the local community would not go down so much."

Managing in good times can be rewarding and even enlightening, but in tough times can be downright stressful for everyone involved. Having a fearful and stressful environment, of course, is a productivity killer, which will only make things worse.

Opening up communication channels and encouraging greater participation in tough decisions is a smart idea because it helps remove the fear, uncertainty and doubt that could create a downward spiral. Ultimately, an engaged and confident workforce will lead an organization to new avenues of growth and market opportunity.

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure