Corporate Culture: Leadership (Part I of II)

Companies are under enormous stress given the pandemic and the social unrest.  Employees are looking to companies to provide some sense of stability and ultimately leadership.  Corporate leaders are being tested and it is clear that in this defining moment, some will rise and some will fail.  It is pretty obvious whether a CEO can meet this challenge.

Perfunctory and happy-talk emails or positive messaging is not what is needed.  To the contrary, leadership in these difficult time requires a CEO to communicate with honesty. 

With the pandemic spreading across the country, economic certainty and social strife, employees are raising significant questions concerning their jobs, their safety and health, and their ability to support themselves and their families.  Employees have lost any sense of stability and these fears are only exacerbated by the social unrest and the need to address long-standing inequalities and law enforcement misconduct.  We have never faced such a confluence of tragedy, suffering and need for justice.

Corporate leaders have to bring reassurance to their employees and stakeholders.  To do so, there are several basic but critical requirements:

Acknowledgement and Empathy:  Perhaps the most important test for a leader is the ability to acknowledge employee concerns and express empathy.  A CEO needs to view the employee concerns by asking the simple but powerful question — Can the CEO see and empathize with employee concerns by “seeing” the issues from behind the employee’s eyes?  This is a corny formulation but it can be used powerfully to enable a CEO’s perspective and ability to communicate effectively with employees. An effective CEO has to demonstrate his/her ability to empathize with employees and other key stakeholders.

Transparency and Disclosure:  Honesty requires a CEO to explain carefully the company’s perspective – strengths, challenges and difficulties.  A CEO who is honest about the company’s situation – the impact of COVID-19, the disruption to the business operations, the commitment to reopen operations while ensuring employee safety and health.  Such a discussion has to include a general discussion of alternatives, strategies and relevant concerns.

Plans and Strategy:  In the face of the economic challenges, a CEO has to reassure employees of a plan to move forward.  If there are significant risks, the CEO has to acknowledge these risks.  If staff cuts may be required, a full explanation of the cuts, the need for such cuts, and a robust severance package should be included to soften an otherwise difficult outcome.  Some CEOs have refused payment of their salaries as a way to demonstrate their recognition of the impact to the company.  A company has to be careful to communicate clearly, present alternatives and consideration of alternatives to support an eventual decision.

Decisions and Updates:  To be clear, communication does not mean exhaustive and information dumps. A CEO has to communicate clearly with general considerations, strategic issues and eventual plans and decisions.  When a CEO communicates in an open and honest fashion, employees and other stakeholders will welcome, reward and appreciate such transparency.  Such disclosures should be done carefully with accuracy and general explanations for eventual strategic decisions.

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