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Investing in times of crisis

The last few weeks, the stock markets have been recovering. Many investors have already anticipated the fourth quarter’s figures overrunning us right now. More and more people believe in the economic recovery again. Many companies can’t wait any longer to postpone investments although lots of middle-sized enterprises still suffer from the crisis; these are enterprises employing too much people now because of their disappointing order book. Regularly, both situations even happen within the same company. This apparent paradox requires practical leadership by the direction.

After all, how do you communicate that the business portfolio needs to be adjusted in order to guarantee the enterprise’s continuity and profit or that investments are made although people have to leave at the same time? First of all, the management should speak the truth in no uncertain terms. Therefore, it is important for the top management to always speak unanimously, to communicate a lot and to be visible on the work floor. If necessary, it should repeat the same message several times, which implies that messages will have to be ‘scripted’ sometimes. The Board of Directors should make sure to communicate its message to all stakeholders. Perhaps, this doesn’t always look spontaneous, but it is advisable however. Employees should be informed about the reason why investments and reorganizations happen at the same time. My personal experience is that employees generally do understand this as long as it happens fairly and they don’t feel fooled.

Employees should always be royally dismissed and, if possible, benefit from an outplacement program. Managers should always speak with respect about employees who are leaving! Maybe they won’t hear your remarks personally, but by adopting this attitude, you will show your current employees that they are working in an environment which respects and will keep respecting the people who have ever been linked to the organization. This has always been a matter of decency but now, it has also become a condition to guarantee the company’s continuity. In the past few years, the world has become much more transparent, especially by means of the Internet. The management will have to bear this in mind if it wants to keep attracting and employing the best people.

Paul

By Paul Donkers

"my purpose is to help improve strategy execution, to create high performing teams and coach for effective business leaders"

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