In our current economy, uncertainty seems to be the only thing that’s certain when it comes to organizational finances. As a result, cost cutting is a recurring theme for organizations around the country and across the globe. While there’s no single right way to cut costs, organizations are finding that successful cost-cutting efforts require employees to understand the situation, know leadership’s expectations, and see a need to cut costs if they expect employees to buy in.
Similar to other organizational priorities, cost cutting should follow a typical communication protocol (i.e. communicate consistently and frequently through various vehicles and channels to ensure all employees receive the message). But there’s more. To garner employee support for major cost-cutting efforts, we recommend the following:
1) Explain financial goals simply.
Enlist senior leaders and managers to translate cost-cutting messages for their teams. Managers know what works for their teams and understand how to make cost cutting a real priority in their department. Employees are more likely to take part in the process if they know how they can make a difference in their daily work.
2) Walk the talk.
Lead by example – your cost-cutting message will lose credibility if you don’t practice what you preach. If you tell employees to be fiscally conservative and then openly purchase expensive decor for the office, employees will disregard all the hard work that’s gone into the cost-cutting effort. As a leader, everything you do communicates a message, so be sure that your actions illustrate the importance of cost cutting. A recent Wall Street Journal article states:
Before asking others to sacrifice, first volunteer yourself. If there are sacrifices to be made – and there will be – then the leaders should step up and make the greatest sacrifices themselves… Everyone is watching to see what the leaders do. Will they stay true to their values? Will they bow to external pressures, or confront the crisis in a straightforward manner?… (You can read the full article here.)
If you’re open and honest about your spending choices, employees will follow suit.
Achieving employee support for organizational cost cutting is no easy feat and requires dedication from everyone involved, especially leadership. Therefore, following the two points mentioned above will not only position your organization for a better financial situation, it will increase employee support so your workforce is aligned around your cost-cutting priority.
“Does the strategic message really matter?”
Simply put, the answer is yes. We know, now more than ever, that a strong strategic message not only reduces uncertainty among employees and provides the context necessary to make sense of initiative-level actions and messages, but it also aligns and guides the leadership team. On the other hand, a poorly designed strategy message can lead to a skeptical workforce and a severely misaligned leadership team.
As a result of the economic downturn and to survive the financial slump, companies are changing how they operate. In doing so, some organizations are going back to the drawing board to revise and refresh their strategic message to align with how they’re now doing business. Others acknowledge the need to update their strategic message, but are hesitant to do so for fear that employees will resist the change and leadership will lose credibility.
If you’re thinking about revisiting your organization’s strategic message, here are a few recommendations for doing so in a way that promotes employee buy-in and builds leadership credibility.
Review recent decisions and messages.
Hold up your current strategy message against the most recent actions and decisions of the leadership team. If one of your current strategic priorities is to ‘invest in innovation” and you’ve recently cut your research and development budget for 2009, then it’s probably time to re-think your business priorities and change your strategy message for the year.
Measure employee understanding.
Research offers a credible, concrete, data-driven way to validate or support your argument, and having a sense of the pulse of the organization often yields access to the leadership team. For example, conducting a strategic alignment survey that assesses the credibility of the message set and the leadership team, as well as the level of employee understanding of and engagement with the current strategy message, may give you just the ammunition you need to gain senior leadership support for a revised strategy.
Get leadership on board.
Brief the leadership team, discuss the importance of a strong strategy message, and address the need to and consequences (positive and negative) of updating the message set. Be prepared to talk candidly about the fact that everything they do as leaders sends a message. Share the findings from your employee research to help shape your argument and support your proposal.
Don’t underestimate the importance of a clear, actionable strategy message—and don’t let your leadership underestimate it either. To read more about why the message really does matter click here.
