Building Equity in Relationships
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I was once a member of the leadership team of an organization that reduced staff in response to difficult business conditions. Company profits had declined significantly as a result of an economic recession. In an organizational leadership staff meeting, the executive who led the organization expressed a great deal of concern about the morale of employees who were retained. The criteria for making the decisions on which employees would be terminated that was communicated by the organizational leadership team was not viewed by a large portion of the retained employees as the criteria that were actually applied. The criteria were objective and based on sound business judgment. It included individual performance and the importance of skills and positions to the execution of company strategies. The criteria were overshadowed by rumors and speculation. This included singling out employees who had expressed concerns or suggestions to management, favoritism and politics. To many employees, rumors and speculation had become facts.
As I sat in my office after the staff meeting, I contemplated about the morale of the organization. My thoughts drifted to parallels between the difficult times the company was experiencing and the personal difficulties a friend of mine encountered. My friend, to who I will refer as Jim, was steady, hardworking and very frugal. He was quite a penny pincher. Jim squeezed every drop of juice from his financial lemons before discarding them. This included all aspects of his finances except investment in his home. His kitchen was a home designer's marvel. He replaced his appliances with upgrades long before experiencing any mechanical or operating problems. His landscaping was breathtaking. His home appreciated at a rate higher than the average rate of appreciation in his community. Jim even allocated a portion of his annual performance bonus to reduce his mortgage principle. As a result, his equity in his home grew significantly.
Jim encountered a difficult time. A close relative was diagnosed with a serious medical condition. Treating the condition would require funds far beyond the medical insurance coverage of his relative and his financial reserves. Jim's family decided to contribute to the relative's medical treatment. Jim's share of the contribution was quite significant. However, Jim was able to borrow his share of the contribution by leveraging the large equity that he had in his home. The loan conditions were very favorable. Jim's monthly loan payments were well within his financial capacity. Jim built equity during good times so that he could draw on the equity during challenging times.
As my thoughts returned to my organization, I thought of the relationship between the management team and employees during times prior to the challenging business conditions, a time when profits were growing and the organization was expanding employment. During the good times, the management team did what we thought were the right things. We rewarded good individual performance with raises and bonuses. We communicated the good earning news to our employees. We even had earnings celebrations. Unknowingly, we were attempting to buy relationships. We were not investing in relationships. The simple thank you notes to individuals who went beyond their day-to-day job responsibilities to solve a problem or respond to a situation were rare. The management team, especially the organizational leader, had minimal interaction with employees. Many employees could not recognize him if they passed him in the building or parking lot. The leader knew only a handful of employees by name beyond the leadership team or the 5% of employees who were designated as top or emerging talent.
The management team had no equity upon which they could draw when the difficult times came. Our actions, which were required to ensure the financial viability of the company, cut into the principle. The principle was the trusting relationship that would have thwarted the rumors and speculation that were turned into facts in the views of employees. Our relationship with employees was heading toward the territory of bankruptcy.
I realized that the management team could not undo nor reverse the past. However, I believed that we could learn from our experiences and avoid repeating our mistakes. I sent an email message to the organizational leader that suggested the following equity builders.
- Be visible. Walk around the organization. Let employees know who you are. Become familiar with employees.
- Learn the names of as many people in the organization as you can and greet them by name. (Greeting individuals by name is powerful. It says "You are important".)
- Send personal thank you notes or notes of appreciation when individuals or teams go beyond the call of duty.
- Express support and empathy when an individual experiences a difficult situation such as the death of a parent or other close relative. (You can get a lot of mileage out of a card or personalized email note.)
- Attend staff meetings for departments within the organization. Attend to listen and understand rather than to tell. (Seek to understand before trying to be understood.)
- Allocate more time for employee comments and suggestions during organizational meetings. Send personal follow-up notes to individuals who provide insightful and useful comments.
- And, speak to every individual in your organization as you pass them in the building and parking lot or see them in public places such as restaurants or community events. (This communicates "You belong".) These are difficult times.
Relationships have undergone stress. However, good times will return. Will your relationships be stronger and capable of enduring the stress that will evolve the next time difficult times arrive?
Relationships: Invest today so that you can collect tomorrow.
Linwood Bailey
Principal
Fields of Success
Career Management Partners
