Effective Employee Communication in Times of Crisis

By Oliver Schmidt

Crises for a company can take many forms. But whether they are accidental, financial, legal, or otherwise, there is one thing that all affected companies have in common: a critical need for a successful managerial and operational response as well as effective communication with both external and internal stakeholders.

Over the past two decades a growing number of companies have developed and critically improved their customized approaches to communicating with external stakeholders in the event of a crisis. However, far too many companies still either do not realize or fail to act upon the fact that effective employee communication is also crucial to managing business crises.

Regardless of a company's size, reputation or industry, preparing for effective employee communication in times of crisis inevitably calls for putting the proper organizational structure and processes in place before a crisis hits. This includes assigning responsibilities, training employees and establishing instruments which enable seamless vertical (top-down as well as bottom-up) and horizontal employee communication, even in the face of extreme stress.

Only if the systematic planning, implementation and evaluation of a company's internal crisis communication are conducted company-wide and on an ongoing basis, will management be able to rely on this valuable tool for minimizing crisis-related damage as well as seizing any opportunities the crisis itself may present.

Following are practical tips for managers at all levels of the corporate hierarchy to help ensure effective employee communication during a crisis. Their implementation plays an important role in actively preserving and even enhancing the company's reputation and competitiveness.

Recognizing employees as a key stakeholder group with which to communicate
Corporate crises cause immense pressure and uncertainty for any affected company and its employees. In order to prevent rumors, false information and unfounded allegations all external as well as internal stakeholders have to be communicated with. Companies that underestimate the importance of effective employee communication during such a time often suffer significant economic damage as the result of, among other reasons, a lack of trust, low morale, and the subsequent loss of their most valuable asset, well-trained and dedicated employees.

Therefore the following questions should be addressed when a crisis occurs:

The following two questions must be addressed both during the crisis and as part of the post-crisis evaluation and crisis preparedness planning.

Management also must understand (and prepare accordingly) that in a crisis situation it is necessary to increase the internal communication frequency since employees usually have a high demand for updated information as well as the desire to provide continuous feedback.

Conducting open, timely and truthful communication with your employees first
Especially in times of crisis only those employees who are being communicated with in an open, timely and truthful way are both able and willing to represent their company and actively support its goals inside and outside the organization.

Management battling a crisis also has to be aware that whenever possible internal communication should precede external communication. It is of particular importance not to have external information sources report negative crisis-related news previously unknown to the employees, as it may alienate employees and hinder the successful crisis response and recovery.

Engaging in an honest dialogue with as many employees as possible also fosters better understanding and employee support in regard to perhaps unpopular yet necessary steps management may need to take in order to overcome the crisis and secure the company's future. Such was the case when a major U.S. manufacturing company closed plants in several states and Europe. The company won over affected employees by thoroughly explaining why the closings were inevitable and providing comprehensive information regarding alternative employment at other company locations, outplacement services, and severance packages.

Responding to crisis-related employee questions and concerns
Employees' questions and concerns should be anticipated, identified and responded to in an appropriate manner. As the employees' trust in management's ability to handle the crisis is vital, even those questions and concerns that may be of minor importance to management or come at an inconvenient time should be dealt with. This is especially true if employees or their loved ones have suffered any type of physical or other harm due to the company's wrongdoing.

In cases where the company may be responsible for any harm to employees or their loved ones, it is usually beneficial to communicate regret and empathy as well as an explanation of the steps the company is taking to handle the situation.

This communication response, however, should not be based upon the views of management alone, but must take into account the perceptions, opinions and expectations within the different stakeholder groups. Of course, management also has to bear in mind any restrictions (legal or otherwise) on the dissemination of certain information relating to the crisis.

Empowering employees to function as communication allies
Employees have a vested interest in working with management to prevail over the crisis and many are eager to actively promote the company's positions internally as well as externally. Management should therefore guide employees in their effort to speak up for the company. Empowering employees to take charge in times of crisis creates valuable communication allies who not only reinforce core messages internally, but also carry them into the community.

The internal crisis communication should be conducted using established communication channels and venues in addition to those that may have been developed to manage specific crisis scenarios. Whichever method of internal crisis communication a company may choose, the more upfront management is about what is happening, the better informed and more entrusted employees feel.

In order to enable effective internal crisis communication between senior management and large numbers of employees, who may be located in different countries, today's leading corporations employ sophisticated communication channels, including customized Intranets, advanced Video Conferencing Technology and professionally produced Business TV. However, studies have repeatedly shown that face-to-face communication between supervisors and their direct subordinates remains a decisive tool in facilitating effective employee communication during a crisis and should thus not be ignored.

Ensuring message consistency and simultaneous communication
Effective external and internal crisis communication also depends upon the consistency of messages conveyed by the company and its employees. With the goal of coherent messages and simultaneous communication in mind, more and more companies implement a 'One-Voice-Policy' that only permits qualified employees who are electronically linked with senior management and with one another to function as company spokespersons.

Provided the company employs a functioning 'Message Development Process', the existence of a 'One-Voice-Policy' can be very beneficial in a crisis situation. A lot of companies are however having a difficult time making certain their 'One-Voice-Policy' is followed. One challenge to the 'One-Voice-Policy' is the natural tendency of employees to talk about stressful, work-related events with family and friends, perhaps expressing criticism of management's handling of the situation.

However, a much greater risk to the 'One-Voice-Policy' is the possibility that an employee, perhaps frustrated by a lack of information and rising concerns over job security, might voice a complaint to the news media. This move would not only sabotage the company's 'One-Voice-Policy', but may in fact jeopardize the entire crisis response. Hence management must remain sensitive to employees' needs and remember that there are investigative journalists who gladly interview disgruntled employees in order to produce a more sellable story.

Enabling employee feedback through two-way communication
Successful management of a crisis depends on communication as a means of (incident) notification as well as two-way crisis communication aimed at seeking feedback and engaging in a constructive dialogue.

In times of crisis employees appreciate and increasingly demand feedback options such as face-to-face communication and Intranet-based two-way communication. Providing feedback options is worth little, however, if the feedback is not taken seriously by management and incorporated into the decision-making.

The following three arguments convinced senior managers of a leading pharmaceutical corporation that engaging in an active dialogue with as many employees as possible during a crisis is worthwhile even though it may utilize scarce resources. As a result, the company's crisis management plan now includes detailed information as to how employee feedback will be generated should a crisis occur:

First, employee feedback allows management to track whether messages have reached the intended groups of employees and resulted in the desired behavior.
Second, employee feedback enables management to not only track employees' opinions, perceptions, and expectations, but also reveals what messages external stakeholders communicate to employees concerning the crisis.
Third, and most importantly, employee feedback in times of crisis often contains valuable information and important suggestions for minimizing damage, seizing opportunities and preventing future crises.

Providing vital resources for maximizing crisis preparedness
Ideally all company locations, levels of corporate hierarchy, business divisions and departments are involved in the systematic planning, implementation and evaluation of the company's crisis management. In this context complex tasks including the integration of external and internal crisis communication into the overall crisis management process and the implementation of a company-wide issues management system have to be performed. These and other essential crisis management-related assignments require resources of which a relatively small yet critically important portion should be dedicated to ensuring effective employee communication.

Because corporate crises are part of the organizational life cycle, they can sooner or later happen to any company no matter how much emphasis management places on indispensable crisis prevention. Hence the key to organizational survival lies in maximizing the company's crisis preparedness. If management does not possess sufficient theoretical knowledge and crisis communication experience, it is advisable to recruit external consultants, whose involvement helps to increase the company's crisis readiness as well as its ability to effectively respond to a crisis and recover from it quickly.

Only if management acknowledges the critical importance of maximizing crisis preparedness and actively promotes the corresponding mindset throughout the company, will it be possible to minimize crisis-induced damage and convert resulting organizational change into competitive advantages. As many corporations, unfortunately, have had to learn the hard way, effective employee communication plays an essential role in the successful management of crises and facilitates the necessary organizational change.

About the Author
Oliver S. Schmidt is the Managing Partner of C4CS™, a leading consulting firm based in Pittsburgh, Pennsylvania, USA, which specializes in strategic communication and crisis management.

A multilingual native of Berlin, Germany, Schmidt has lived and worked in North America, Europe, and Asia. He regularly advises senior managers concerning high stakes communication issues, provides executive coaching and management training, and makes presentations to audiences around the world.

Mr. Schmidt combines extensive international work experience with a solid academic education, holding a Master's degree in Communication Science and Business Management. He has been a guest lecturer at universities in several European countries and in the USA. He can be reached at: schmidt@c4cs.com and his company website is: www.c4cs.com