Eight Tips for Handling Shutdowns

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If the employees of shutting down organizations are like other layoff survivors  – and I think they are – they are dealing with some pretty productivity-hindering emotions such as anger, fear, and anxiety.  They may not express these feelings directly but they are there and taking a toll on their self-esteem, productivity and ability to focus on customer service.  So the first tip is to find ways to get them to externalize these debilitating emotions.  Things like facilitated venting sessions, one-on-one sessions with the boss, small group planning sessions really help and the boss does not have to be a shrink to facilitate them.  She or he may need some coaching or actual help from a qualified outsider.  These kinds of sessions really work and bosses are always surprised at the power of these kinds of sessions.

 Another process that I have seen work well in these kinds of situations is an honest, down and dirty, visioning session.  Visions don’t have to be grandiose or even overly positive.  The vision may be to simply keep the shop open for a few months.  The power of engaging employees in articulating a shared vision of the future is that it allows them to participate and gives them a sense of control. Participation and control are exceptionally important in times of crisis.

 A third “tip” is honest straight talk one-on-one with each employee.  Straight talk involves clarity on what the boss knows and what the boss does not know.  If it is clear that the person will eventually loose his or her job, they need to know this.  There is no evidence that prior notice results in sabotage and unproductive behavior. There is strong evidence that prior notice gives the employee control and most are appreciative of knowing and actually work hard. 

 In closings, future shutdowns, or when the prognosis for survival is unclear, I have found moving toward a contractual relationship with severance pay, performance standards, and the period of advance notice of possible termination clearly spelled out works exceptionally well.   

 pecial effort hast to be made to re-recruit and retain key players.  The best employees, those with options, will leave first unless they are handled very carefully.  Mechanisms such as retention bonuses, telling them that they will be the last to go if worse comes to worse, and involving them in planning and decision making work well.   

 Continual communication by the boss is essential.  This means being visible, managing by walking around, directly sharing what the boss knows and what the boss does not know, and any future plans.  Communication also means listening, being empathetic, and engaging in a helping, not a controlling relationships with employees.   “Sucking it up” and remaining emotionally detached is a very bad strategy for both employee retention and the bosses own survivor symptoms.   Engaging employees and soliciting their ideas as to how to generate new business and keep the dealership afloat creates a double win.  Employees feel involved and valued, and they often generate good ideas.

 Lastly, the boss himself needs to look in the mirror.  He needs to deal with his own anger and anxiety before he can be of help to his employees.  They will see right through him if he is faking it.  Cynicism, sarcasm – even veiled in humor – and apathy coming from the leader is toxic to organizational survival.  When I work with small businesses, I make very certain that the boss has taken sufficient time and is able to externalize her or his own survivor symptoms.  If they don’t there is not much hope for the employees.

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