In Good Boss, Bad Times, in May’s McKinsey Quarterly, Robert Sutton from Stanford’s Graduate School of Engineering provides the recipe for bosses that have to deliver the bad news of layoffs and pay cuts, and face anxious employees.
To set up his recipe, Sutton first describes the hazards of the “toxic tandem,” when the boss is oblivious to the needs and actions of subordinates, at the same time that subordinates are hyper vigilant – alert to every signal from the executive suite and the boardroom to figure out what’s going on, and likely to assume the worst. “Tiny signals get magnified,” explains Sutton.
Sutton’s recipe for leadership and organizational success is: prediction – letting people know when they are safe to the extent possible; understanding – providing people with an explanation; control – giving people some control over the way it happens (cutbacks, layoffs, etc.); and compassion.
Sutton’s mention of the hyper vigilance reminds me of Ken Chenault’s advice when I met him in April. He underscored the importance of leaders communicating and being present, especially in times of economic stress. “Don’t assume that people are seeing what you are seeing. And, you’ve got to act. Never let events freeze you up.”
Looking ahead, Sutton reminds leaders that they will be remembered for how they handled these tough times. Regarding the employees who remain, he says that “when they see that it’s fair, they are more likely to stay loyal, suffer less psychological damage, and also feel more guilty and work even harder to help you… whether people lose their jobs or not—has an effect on the whole system.”