I wrote in my last article about the distinct differences in how an organization can choose to respond or react in times of change, crisis or shifts in the market place. I made the point that there is a correlation between the respond – react behaviors to the Attract, Retain, Repel to increase ROI of recruitment and retention formula.

We are finding in our research, in media coverage of current events, and in our client engagements, that employees watch with a wary eye, not only what the leadership is saying or doing in times of crisis, but how the external world is reacting to that behavior. This really struck early this month as I finished an executive Board presentation for a client.

Case study: post-merger cultural assessment
This client had merged three competing hospitals into one system two years ago. At that time, they established a “base line” cultural assessment. This summer they redeployed the Cultural Health Indicator to track progress, measure the ROI of some of the HR and OD interventions, and reexamine the level of cultural health in the organization.

One of the areas of concern from the first assessment was lack of trust in leadership. The employees felt that they were not being told the truth as it related to the merger. Not enough details were being shared, the WIFM (what’s in it for me) paranoia was alive and well. The premise of the lack of trust in the leadership team to “do the right thing” was paramount again in my presentation of results from the 2007 cultural assessment. These same issues and challenges that they were facing post merger 2005 were still quite evident in 2007.

One theme we continue to see around the whole issue of trust is that if employees trust what the leadership is saying – or more importantly, doing – employees will walk across hot coals to support the mission, vision, values. If they don’t trust the leadership, they will completely turn their back on it and the organization itself. We have found this to be a critical component to retention challenges and ultimately return on investment of the deal itself. In this M&A example, millions of dollars were spent to integrate the financial systems, processes and procedures, IT systems and functionality, customer service offerings, and purchasing and distribution areas. But what was sorely lacking was the integration of the people – the human systems. When leadership chooses to ignore this key system, they are essentially reacting in a negative way to what the employees desire and are looking for. They could have chosen to respond – by simply addressing and allowing the employees to be “in” on the fact that leadership knows the people issues are important, hear their concerns and create a plan to address them. The reactionary behavior can cause deep seeded resentment which can then lead to an increase in turn over, lack of engagement, productivity and ultimately customer care.

“Respond or React” given media spotlight
“Respond or react,” a favorite mantra of mine, was given more spot light by some very recent media coverage situations. Mattel Corporation has really stepped up to the plate and taken responsibility for recent situations in their organization. On August 2nd, there was an announcement from the leadership at the Mattel Corporation in the form of an apology and recall. The Fisher-Price division of the nation’s largest toy manufacturer recalled 976,000 toys that will cut pre-tax operating income by $30 million. And that was just the beginning. The recall affects toys in question that were manufactured in China and found to contain excessive amounts of lead. The CEO of Mattel, Robert A. Eckert, said in a, “Our goal is to correct this problem, improve our systems and maintain the trust of families that have allowed us to be part of their lives by acting responsibly and quickly to address their concerns.” Well, if that is not respond versus react, then I don’t know what is. I give kudos to Mattel for taking this high road and immediately addressing the issue, even if the shares did fall $ .40 or a 1.7% decline.

On Tuesday September 4th, the day after Labor Day, United Air Lines pilots published a full page ad in USA Today with their perception of United’s leaderships’ demonstrated behaviors. The piece was titled, “We’re Not Interested,” and opened with some very frank dialog. “Since our airline exited bankruptcy 18 months ago, United’s senior managers have enriched themselves through stock options and, in some cases, pay raises. These windfalls were made possible by the sacrifices and sweat of labor.” Interesting that much of what is covered in the full page dialog can be confirmed in other media sources and articles. They continue, saying, “the level of management compensation is a clear indication that United senior executives are intent on building a kingdom of wealth for themselves while ignoring the struggles of their employees who continue to live with bankruptcy-induced wages and working conditions.” You get the picture. This kind of a message does not come from employees who trust their leadership to do the right thing. I would not expect to find many United employees who are interested in walking across hot coals, but I would hope they are focused enough on their job to keep their customers safe. This is a sad situation to watch and to see it played out on a very public front. While this ad was paid for by the “dedicated pilots of United Airlines,” the final call to action speaks volumes. “Mr. Tilton, it’s time you started listening to our needs for a change. United Airlines is not about you. It’s about all of us.” And I for one, hope that us includes the consumers who choose to fly this airline.

In the end, organizations that are able to admit fault and learn from their mistakes are able to regain consumer, employee and stake holder confidence much quicker than those that do not. Admitting short comings, and then steadying the course of the organization, is much more responsible and honorable diverting or redirecting issues. Trust is what continued relationships are built on. In the context of “attract, retain, repel,” trust is paramount to healthy and productive employee relationships.