Closing a site with grace
The ashen faced look of my colleague told me something was wrong. “The media are outside,” she said, “with a camera crew.” Our hope of protecting our colleagues from the ignominy of being door-stepped minutes after being told of the planned closure of their workplace was in tatters. Clearly, we’d had a leak and given the precise knowledge of our timings, a fairly major one at that.
Closing a site, reducing a workforce, saying goodbye to colleagues is painful, it hurts. Anyone who doesn’t feel immense sadness by the prospect of this needs to question their humanity. Sadly, as the impact of C19 bites it is something many firms around the globe will face.
It is essential not to underestimate the many negative impacts of a closure on the surviving business - it leaves a scar. It may make hiring more difficult. Customers and suppliers that feel let down may retaliate against the rest of the company by diverting business to competitors. Politicians may be less willing to support you. Regulators might take a closer look at you for months or even years to come. The remaining communities within which you operate will view you with suspicion and wonder if they might be next.
However, these and other risks can all be mitigated with open, clear, proactive and most important of all authentic communication and engagement.
The aim of any such regrettable process must be to do it in such a way that people will someday say, “I used to work for XXX. I didn’t like them making my role redundant, but they treated me well. I still think it’s a good company.”
History, and my own faltering experience, tells us there is both a right and a wrong way to do this. Your firm can leave with its dignity intact. Regrettably, I’ve been involved in one too many such processes over the years. Here are some things I have learnt along the way:
1. Treat employees with dignity, fairness, and respect. They should be told why their role is no longer required (is it a change in technology or customer needs, perhaps there are quality issues or have there been fundamental economic changes), how the closure will affect them (in terms of timing and redundancy payments), what you will do to help them find new opportunities, and what help you will need from them to support customers through the process. Those remaining behind will learn of how you do this. A lack of empathy, of fairness, will ultimately affect their morale and productivity.
2. Communicate until you’re hoarse and your fingers ache. Studies have shown that when people hear bad news they stop listening – it’s referred to as an Amygdala hijack. The shock of the initial announcement causes a tiny hormone gland in the brain to kick into overdrive and it can, quite literally, turn your hearing off. Even after that initial shock it is known that people need to hear or see something several times before they begin to properly process. So, in addition to formal written and oral communications keep people constantly informed along the way. Counter the rumour mill (internally and externally) with frequent town halls. Show some vulnerability – it will demonstrate your appreciation of the very real human consequences and trauma the closure will cause. Be honest when you don’t know all the answers. Don’t stop until everyone has had a chance to speak. Assume extreme cynicism from your audience and be pleasantly surprised when it doesn’t surface.
3. Make your senior leaders as visible and accessible as possible. Invite people to email them directly and ensure they respond promptly. Help your managers communicate - odds are they won’t have done this before and because of that don’t assume they will always cascade all of the information correctly. (This is rarely deliberate but because of inexperience and not a little fear themselves.)
4. Be radically honest. Tell people what is going on as soon as you can, not when you have to. Explain that the decision is being made for the sake of the overall business, not because the people who are leaving have done a bad job. And make it clear that those who remain in their jobs owe it to those who are leaving to build on their legacy. The recent announcement from the founder of Airbnb is one of the finest examples out there.
5. Help your workers line up new jobs by holding in-house jobs fairs, CV writing classes and coaching on how to conduct yourself in an interview. In many countries there is significant government support available. Make use of this.
6. Don’t have key customers, partners or suppliers learning second-hand of your plans to close. You can actually strengthen such relationships by treating them as valued partners during the process. So, in your business case evaluate the value of such relationships and the risks of them unilaterally deciding how they will make do. The higher cost of putting off a closure by a week or even several months may be more than offset by the future support your company gains from an appreciative partner.
7. Depending on location you may have a legal obligation to engage with the Unions first. The key to this working well is to have developed a close relationship before you get to the site closure stage. Like planting a tree, the best time is always 25 years ago, the second-best time, today. So make them a priority.
8. Engage with other external influencers as soon as possible especially local politicians and regulators if appropriate. Expect disappointment from them, even anger. But, they can help. They may even want to help. Either way, the public will want to see them “..doing something.” That can be throwing rocks or something more helpful. The extent and timing of your engagement will influence which it is.
9. Appoint a project manager. Actually, get a project management team. They are worth their weight in gold as they keep you focussed on the priorities. But limit those involved as too many will slow down the speed with which you can make decisions – and sometimes you will need to move at lightening speed. To this end ensure you have the appropriate amount of delegated authority from the Executive.
10. Carefully plan the choreography of the moments you announce decisions. Always tell your people first. Not the media. Not shareholders. Your people. You owe them that. Plan for leaks – they happen! As my experience bears out, the fallout was unpleasant for all concerned. Also, plan for unexpected guests turning up and causing mischief, especially politicians. Plan for your carefully constructed plan to have to change immediately!
11. Think about leaving a legacy, a thank you to the community. Perhaps an endowment to support a local community facility or funding to help local children go to college or University. If you are closing an industrial site, you may have rectification obligations, but could you go further? Such activities, coupled with your support for colleagues who are leaving, will enable you to leave with your head held high.
Hopefully this will help you avoid some of the mistakes I have made in the past. You will make your own, conscious or unconscious. What is important is that you keep trying to do the right thing and learn from them. People will recognise this. Don’t rush it. Be considered. Breathe.
Andrew Brown, Partner, Apella Advisors