Four Employee Behaviors To Watch For During a Financial Crisis — And How To Handle Them

Four Employee Behaviors To Watch For During a Financial Crisis — And How To Handle Them

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Four Employee Behaviors To Watch For During a Financial Crisis — And How To Handle Them >

July 10, 2009 — A corporate training and organizational performance firm’s recent study asserts that leaders who hold candid conversations with employees during financial downturns significantly increase the likelihood that their company will survive and find success in the future.>

VitalSmarts identified four employee behaviors that emerge during financial downturns>

1. Denial. This is one of the most common behaviors exhibited, said David Maxfield, vice president of research for VitalSmarts and co-researcher of its study, “Financial Agility: The Four Crucial Conversations for Uncertain Times.” He says denial is often accompanied by “dithering and debating.” Employees tend to question how severe a crisis is and to resist change, according to VitalSmarts. >

2. Silence. “I’ll call this silent collusion because that’s what it feels like,” he said, noting that during financial crises, teammates may not hold one another accountable for their actions. >

3. Protection of pet projects. Fearing repercussions, people tend to steer clear of suggesting cuts to the boss’s pet projects, even if those cuts make the most sense. >

4. Irrational slashing. This “is sort of the response that leaders have to the first three” behaviors, Maxfield said. When there is debate, dithering and denial, and when “sacred cows” are not confronted, and employees don’t hold one another accountable, leaders often give up on their team’s ability to make cuts, he said. Leaders respond by making across-the-board cuts themselves — without input from the team. >

The study found that leaders who address these behaviors through candid, effective conversations are five times more likely to respond within days and are 10 times more likely to respond in a way that positions their company for success in the future, according to VitalSmarts. “Those are pretty big numbers,” Maxfield said.>

The study also found that teams that engage in crucial conversations related to the four behaviors are 250% more likely to survive than those that don’t, and teams who take months or longer to respond to a financial crisis are at least 360% more likely to miss millions in lost opportunities, Maxfield said. >

HR plays a crucial role in these situations, Maxfield said.? >

“Often, HR is managing or observing the process of conversation — more so than trying to steer the product of conversations.” >

He suggests that human resources be on the lookout for the four behaviors and when identified, push top management to confront them. Maxfield also recommends that senior management teams be trained on — and practice — having “crucial conversations” in the event of a financial crisis. >

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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.