A client of mine is a multinational company with a vibrant, fast paced culture has been through the ringer lately. We talked about the talent issues they are dealing with, which were precipitated by losing two big accounts. The hit to income and profits distracted the CEO, and eventually, after months, led to a restructuring of the business to focus on different verticals. Suddenly everyone was tasked with business development, even junior staff. Needless to say, not everyone is comfortable with sales, so it didn’t go very well.
Things got worse. The loss of revenue and shift in focus to new kinds of business meant senior leadership was forced to evaluate employee skills. This forced layoffs, although the company talked a lot about how it was ‘helping’ displaced staff find ‘more exciting’ opportunities. Not surprisingly, people were waiting for the other shoe to drop, and many chose to head for the exits. This led to unplanned employee loss. In the end, what also happened, and what management may not have foreseen, was huge damage to the enterprise’s workforce culture and to employee morale. The vibrant and fun culture was hollowed out; people became wary, political and unpredictable. Today, when the CEO speaks in the language of the old culture, no one listens. CEOs in a crisis situation have to consider finances; they should also, to preserve talent and the culture, look to themselves.
I’ve seen this happen before: even the very best in-your-face, cult-like workforce culture can’t survive a profits meltdown. What drew employees to the thriving company – bragging rights, benefits, big salaries and big personalities – will push them away when the shine is off the company, salaries and benefits are frozen, and career advancement is slowed. And forget about trying to fill those empty seats when business picks up – news of a shaky workplace and broken culture travels fast. (All news about culture travels fast, as this ReadWrite piece by tech leader Matt Asay shows.)
It takes a long time to build a robust workplace culture and almost no time to damage it beyond repair. Thus it’s critically important to have senior managers brainstorm scenarios that pose a culture and business threat, and make plans to preserve both – especially when dealing with talent.
Five Things To Consider About Your Recruiting Strategy:
- Think about geography.Many employees today are geographically distant, which only works if the culture and work systems support remote operations. Do you want a culture that’s steeped in the norms of one physical location – say Cambridge or Palo Alto? Then you have to socialize remote employees early and often, support frequent travel, and make them feel like members of the club. This may not work;Apple, for instance, is a Silicon Valley culture, and has its admirers and detractors; GitHub, on the other hand, was built to be a geographically distributed workplace.
- Think about office environments.Open workplaces are all the rage now, and suit Millennials’ needs to collaborate. But many employees have a hard time sitting at a long table that’s reminiscent of being in elementary school. If you’re going for a ‘we’re in this together’ culture, open workspaces are an interesting choice. If you’re building a culture of power and influence, think about keeping more private offices. See where I’m going with this?
- Think about your customers. If you’re building a service business – and most of us are in service businesses these days – diversify your customer base. Don’t concentrate more than 25% of revenues in more than one vertical. Look for verticals that are complementary to your best clients. If you have a lot of advertising technology clients, think about analytics companies. If you have a lot of software companies, look to the verticals they serve for new prospects.
- Think about your compensation.The more remote your workforce is, the more you may need support systems like employee wellness and employee assistance programs. These seem like big-company trappings but they are useful: wellness programs encourage employees to take care of themselves; employee assistance programs offer a safety net when wellness isn’t enough.
- Think about your management mix.Do you want a tight group? Nurture and promote from within. Reward employees for referring friends and peers. Do you want fresh thinking? Bring in enough outsiders to challenge established thinking but not so many they overpower the culture. Help your HR and Recruiting teams source candidates who come from similar cultures but have slightly different backgrounds.
When financial disaster strikes, workplace culture may be downgraded to a second or third-level concern. It’s natural to want to focus on building revenues back, but consider the contribution a vibrant culture makes to a workplace. You may not be able to put a dollar value on it, but you’ll know – and the bottom line will show – when it’s broken. It’s time to recruit again – a new cycle begins.
A version of this was first posted on Forbes.