Employees ultimately determine the success of a business transition, but, too often, companies fail to take into account the angst of surviving workforce.
As they struggle to adjust to the current economic and business environments, many companies are undergoing transitions, whether through mergers, acquisitions, downsizing, or layoffs.
Familiar corporate names like Citigroup, Delta Airlines, Ford, and Yahoo have recently announced redesigns of the way they are going to do business, and most of these plans involve reducing workforces. And, high-tech stalwart Google just this week announced its first ever downsizing saying it will lay off 300 employees from recent acquisition Double Click.
These are apprehensive times for employees. They wonder if they will continue to have jobs, continue in the same kind of job, or lose wages and benefits.
Companies in transition say they are making changes to cut costs and adapting to changing business processes that will steer them out of their downturns.
Unfortunately, many will fail in their efforts to become better.
A 2005 study by British researchers Susan Cartwright and Simon McCarthy found that 83% of all mergers and acquisitions do not increase shareholder value and that 53% will actually destroy value.
A 2005 WorkTrends study of 10,000 employees representing 4,000 organizations found those from firms that had been engaged in a merger or acquisition reported significantly less favorable results than those who worked at companies not involved in a transition.
What these failed transition efforts did not take into consideration was the people who work at these organizations, says Mitchell Marks of San Francisco State University and Kenneth De Muese of Lominger International, a Minneapolis-based consulting firm, both of whom have considerable experience working with companies undergoing transitions.
They will take part in a symposium on retaining and engaging employees during organizational transitions at the SIOP conference on Thursday, April 10 in San Francisco.
Any organizational "change" or "transition" is an emotional experience, yet management often tends to downplay this side of the process because they are focusing on issues like performance, behavior, and results. “If they only understood that it was the emotional side of the equation that drives the other side,” says De Meuse.
Marks adds that many of the problems stemming from a failed transition start in the boardroom where the mentality is “let’s do this quickly rather than carefully. The mindset among those engineering change is getting the pain over quickly and moving on. They seem to deny the normal human reaction to change.”
There are a number of consequences harmful to the organization that can result from a poorly implemented transition. Employees can become distracted from their work and spend valuable work time venting their feelings about the changes and become less committed and loyal to the organization, even, in some cases, sabotaging the company by not sharing information, being less collaborative, and treating customers badly.
They can also become risk aversive by not wanting to be involved in something for which they may be held accountable.
“Actually,” says Marks, “when an organization is struggling that is an opportune time to think out-of-the box instead of retreating back into the box.”
Employees also experience anger, usually directed at leadership, fear of losing their job in the next wave of downsizing, sadness for losing friends and colleagues, and heightened stress caused by increased workloads that can lead to excessive drinking and problems at home.
Nevertheless, employees must learn to adapt to the new reality of their workplace. “They have to let go of the old and accept the new and understand that change is on-going, not a one-time occurrence and things will never be the same.” says De Meuse.
Marks and De Meuse say that many of the negatives of transitions can be reversed if management acknowledges the very real human emotions and reactions to planned changes.
First of all, employees need to be alerted to the changes being planned. Studies have shown that people are less resistant to change if they are informed at the beginning of the process what to expect.
Management must communicate honestly and directly, which will lessen the distress employees are experiencing, and provide a clear vision of where the changes will lead. “Employees need to know the strategy and how the goals are going to be achieved and what their role will be in the process,” said Marks.
It’s a good idea for management to hear what their employees have to say about the transition, so managers should hold “vent” meetings where employees can talk about their concerns, fears, and thoughts about the transition. “There’s going to be considerable conversation about something that is big in their work lives, so give them an opportunity to do so,” he advises.
One way to relieve employee anxiety, says De Meuse, is for organizations to provide stress management programs. “Not enough organizations offer these programs, yet stress is a natural emotion that people experience when having to adapt to a new situation, and it is the enlightened company that recognizes this,” he says.
A stress program can help employees look at the workplace differently and adapt to the transitions. “The fact is companies have to be more agile, nimble, and flexible to meet a very competitive business climate,” De Meuse points out.
But no matter what happens, Marks and De Meuse tell employees not to personalize it and get down on themselves. “It is not your fault,” they say.
And don’t do anything drastic like jumping ship. But recognize the possibilities and develop a contingency plan in case you are laid off, update your resumé and activate your business network.
Also, when companies are transitioning, employees should take the opportunity to become more engaged and develop their skills as they adapt to the changes.”
For more information, contact Marks at 415-436-9066 or De Meuse at 952-345-3129.
Marks and De Meuse will be participating in a panel discussion at 10:30 a.m., Thursday, April 10 entitled “Multiple Perspectives on Retaining and Engaging Employees During Organizational Transitions” at the annual conference of the Society for Industrial and Organizational Psychology (SIOP) April 10-12 at the Hilton Hotel in San Francisco. More than 600 presentations research and trends on a variety of workplace topics and issues will be offered during the three-day conference. For more information about the conference, including the program of presentations, go to www.siop.org and click on San Francisco Conference 2008.
The Society for Industrial and Organizational Psychology (SIOP) is an international group of more than 7,000 industrial-organizational (I-O) psychologists whose member’s study and apply scientific principles concerning workplace productivity, motivation, leadership and engagement. SIOP’s mission is to enhance human well-being and performance in organizational and work settings by promoting the science, practice and teaching of industrial-organizational psychology. For more information about SIOP, including Media Resources, which lists nearly 2,000 experts in more than 100 topic areas, visit the SIOP Web site at www.siop.org.