Leading through the Recession - 5 Strategies for Success
If the skilled labour shortage in the oil patch isn’t enough of a leadership challenge, we’ve now been blindsided by $40 oil that no one seemed to predict. Capital spending has been rolled back and cost cutting abounds as leaders focus on revised earnings targets. Now the human cost appears as layoffs are announced. Downturns have always affected the people working in the oil and gas industry, but this one dives in on top of a growing talent crisis locally and globally. What should leaders focus on for the people side of their business in order to reduce the risks of both these issues?
Here are five workforce strategies to help you pilot your company through the turbulence.
No. 1: Clarify your double vision
Double vision means maintaining a long-term, strategic view while providing short-term clarity for the changed economic conditions. This will place the current challenges in the context of the big picture. A long-term view informs us time and again that a drop in the price of oil is part of an ongoing cycle, not a unique episode. We’ve all seen these highs and lows before. So let’s treat this as a process, not an event, by thinking and acting strategically. If you’re leading people through a crisis, the spotlight on you gets brighter as they look for reassurance and clear guidance from management. So keep a positive and future focus balanced with clear priorities for the short term.
First, reinforce your vision. If strategic thinking is big picture and long-term, does this downturn change it at all? Probably not. So let everyone know. If your purpose and vision is clear and motivating, reinforce it and share how your organization will not veer from this path no matter what obstacles you come across in the near term. This dual perspective will also show that your reaction to the new economic realities is not an uncontrollable knee jerk, but a thoughtful and strategic set of decisions that align with your picture of future achievement.
Second, reset your 2015 plans, projects, goals and priorities collaboratively with your senior leaders. This will help you make higher-quality decisions, and their involvement creates critical buy-in to communicating and implementing tough choices. Getting everyone on board is a fundamental goal of effective change management. It is critical for senior leadership to be on the same page. This consistency in the words and actions of senior leaders is important for employees to observe in order to buy into the new reality for your company.
Third, be clear and decisive with your 2015 targets. A wait-and-see approach cloaks your strategy with assumptions and uncertainty, especially if other organizations around you are acting decisively. This leads you away from clarity when you need it most. Don’t hesitate. Be as specific as possible with your decisions and what they mean to plans, projects, goals and priorities. Avoid generalizations and ambiguity. Aim for clarity with detail. And remember that deciding not to change anything is also a decision—as long as you communicate it. When times are tough, both employees and managers perform better when there is clear and specific direction.
No. 2: Over-communicate the plan.
This leadership strategy is simple. It is well-described in Patrick Lencioni’s book, The Four Obsessions of an Extraordinary Executive. During times of change, your people crave certainty and clarity. Clarity is created by repeatedly communicating new decisions and what they mean to plans, projects, goals and priorities. This is why gaining buy-in and a cohesive approach from senior leaders is so critical.
Communicating the changes cascades down through management layers to front-line supervisors and employees and needs to be as consistent as possible. The final connection, from front-line supervisors to employees, is a critical one. Only by being decisive and clear with details, and being aligned on the message from above, will it be heard and understood on the front lines.
Communicate your long-term vision with your new short-term plan many times.
Communicate it in different ways using different media if you can. Tailor it to different generations and different layers and divisions. Underestimate your success and over perform on this strategy. Even small companies have far corners where rumours and whispers triumph over your best-laid executive plans unless you over-communicate them. When people feel clear about what is expected of them, what is going to happen and how they can contribute, they feel a sense of purpose that guides them through the changing conditions. This reassures them, increases their engagement and productivity and helps them avoid confusion, anxiety and false assumptions.
No. 3: Tune in to mood
Corporate culture and employee engagement manifest themselves in the overall mood of the people in your company. During tough times or change, emotions may shift to include fear, uncertainty and doubt. Your workforce becomes more sensitive and unsure during change. Employees also may be more inclined to check the job market to keep their options open. A recent survey showed that two-thirds of software engineers believed they could find a better job within 60 days if they tried to find one. So be clear about job security for your employees as soon as you can. If you do need to let people go, do it decisively. Do it with dignity and compassion. Then get on with your new priorities.
Whether or not you have to let people go, it’s important to pay attention to the pulse of your organization. Employee and manager engagement and happiness drive motivation and performance—or lack thereof. If you ignore how your staff is coping, you may see departures, especially of your mission-critical people. By tuning into the mood, you can gauge the response to the new decisions and plans. Encourage your leaders and managers to spend time connecting with people. Take a coach approach to management. This means a focus on asking more than telling. It means invoking dialogue (not management monologues) and listening intently to others’ views, feelings and the frame of mind of employees. Be proactive in addressing their fears and concerns, any lack of clarity or confusion about priorities and expectations. Positive, big picture reassurance and what’s in it for them will show you care how they cope with a challenging time.
No. 4: Make sure you keep your key players
Maintain a focus on retention. Your entire workforce is more vulnerable during uncertain times, and it’s important to prevent the loss of essential people. This means mission-critical roles, experienced staff, key executives and managers, high potentials and future leaders. The current situation may actually reduce the risk of people quitting as the job market slows because hiring is stalled for many companies. Some baby boomers may delay retirement a little longer because their savings have taken another hit. However, this does not mean that the demographic shifts of the global talent crisis have vanished. Managing retention is vital to the success of your long-term strategy.
Traditional retention methods no longer seem adequate. A report by the Human Resources Institute of Alberta last year found that the most common practices for trying to reduce resignations were better onboarding (how employees are acclimated to a business and the way they gain the skills to do their jobs), flexible work arrangements, improved wages and benefits and more team building events. However, several surveys show that many executives admit that their retention plans do not impact turnover. We believe that there are four retention strategies at your fingertips—strategies that are largely overlooked but very impactful in the new world order of the talent crisis and $40 oil. See our previous column to learn what they are: oilweek.com/index.php/columnists
No. 5: Focus on succession planning and knowledge capture
The unstoppable demographic trends of the labour shortage are well underway. The latest oil price plummet and its economic consequences have our full attention and underscore the same people problems that the talent crisis already delivers.
If your workforce is changing or turning over, either intentionally (layoffs) or not (people quit for better opportunities or to retire), proactive succession planning and knowledge capture is essential risk mitigation and protects the future of your business. Surprisingly, many organizations still do little about either, and the need to put good plans in place is long overdue. For example, as your experienced managers and professionals continue to retire in greater numbers, who are you developing to replace them, and are they ready?
When you lose retiring baby boomers, employees get poached, good people move to different roles or staff is let go, you also lose a huge amount of critical business knowledge. What are you doing about this loss? How can you ensure continuity for your business?
We encourage you to start considering this question as both issues are growing into a real problem for many companies. These are two vital areas that need the full attention of senior leadership. They are key pieces to consider as you lead your organization strategically through the current oil price crash as well as the escalating skilled labour shortage.
In our next article we will explore succession planning and knowledge capture more deeply and suggest strategies to ensure the continuity of your business.
This article was first published in Oilweek online magazine January 27, 2015.