Businesses battle fear inside and out

By Ashley Fletcher Frampton
aframpton@scbiznews.com

In many ways, a widespread sense of fear has fueled the recent financial turmoil and compounded its effects.

Fear about cash flow and retirement has led many people to pull their money out of the stock market, driving stock prices down. Fear about job losses and income has led consumers to stop spending money. Fear about the markets has led some banks to curtail loans.

It’s more than enough to keep a CEO up at night.

But the gnawing sense of fear and uncertainty about when the other shoe might drop is not only for managers and executives. Employees at all levels might be fearful of how the economic turmoil will affect their personal finances and their companies — and by extension, their jobs.

If managers leave their employees’ job-related fears unaddressed, morale and productivity in the workplace could suffer, some experts say.

“If people aren’t focused on their work, productivity is likely to drop,” said Margaret Seidler, a Charleston-based business consultant and author of a book on leadership.

Seidler and other management consultants say managers need to address their employees’ concerns head-on, in an honest way. Even if the company’s future isn’t looking bright right now, being straight with employees is better than leaving them to speculate.

Job fears

Brian Wilson, president of Adventure Team Works, a business consulting company, describes the atmosphere at many workplaces these days as the “circle the wagon” mentality. Everyone wants to make sure they are inside the circle, that their job is safe.

“Today, it’s easy to think you are inside, and it turns out you are not,” Wilson said.

Concerns about job security are understandable when the state’s unemployment rate is the highest it’s been in 15 years and companies locally and nationally are cutting staff to reduce expenses.

Fears about layoffs might be limited to occasional watercooler talk, or they could present an ongoing distraction for employees, especially if they are already struggling financially, experts say.

“Don’t assume because people aren’t asking you about what’s going on and how we’re doing that it’s not on their mind,” said Wayne Outlaw, president of the Outlaw Group, a management consulting firm in Charleston.

Outlaw said he recently worked with a company that is prospering but whose employees were still worried about their 401(k) investments.

Experts agree that managers should talk to employees about their concerns, not hide in an office. Closed office doors can start rumors that make employees even more nervous.

Be visible, Seidler advises managers. Employees watch their leaders to see how they respond to a crisis, she said, and they often respond accordingly.

Listen to fears and concerns and acknowledge them instead of downplaying them by saying, “It’s not that bad,” she said.

“Maybe it is just listening or giving them advice on how to handle a financial matter,” Seidler said. “Or maybe it’s referring them to some kind of financial counseling. … It’s really about making sure that you stay connected to your employees during these tough times.”

Outlaw recommends referring personal finance questions to an appropriate source, especially in the case of retirement investments. He also suggests that managers share positive news with employees along with any negatives.

“Be honest, be candid, but find the things that are good for them to hold on to,” he said.

But Wilson cautioned that managers do not necessarily need to tell employees about every financial decision they are facing.

“Everybody knows they can’t expect their supervisor to relinquish everything they know, but as long as they know they are being told everything they can be told, that seems to be what’s working the best,” he said.

Communication strategies

Consultants say that, if there is bad news to share, it’s important that a manager or executive deliver it in person, if possible.

Whether that’s in a companywide meeting or in a one-on-one setting depends on the organization’s culture, Wilson said. The format for delivering economic updates should follow the company’s established meeting style.

“If the leader of the organization tries to change that culture, that may be met with suspicion,” Wilson said.

But providing an opportunity for employees to follow up individually if the discussion is directed to a larger audience can be helpful, he said.

“It takes a very strong leader to be able to put themselves out there, to put themselves in front of the firing squad of their staff,” Wilson said. “But that’s what makes their staff respect them.”

Experts generally agree that discussing the company’s financial situation via e-mail is not the best idea. E-mail is subject to interpretation, Seidler said, and it doesn’t allow for real-time questions or clarification.

Outlaw said it’s important for managers at various levels to have the same message about the company’s financial status.

“The worst thing you can have is managers, one saying the sky is falling and one saying it’s great,” he said. “What happens is they lose confidence in the leadership. If in doubt, they’re going to believe the negative.”

Fear and reality

Outlaw said he worries that fear, fed by “TV talking heads,” recently has become mixed with the reality of what companies and individuals are facing.

“My real concern is that panic somehow manages to creep into reality,” Outlaw said.

Outlaw recommends managers work together to try to navigate financial uncertainty by sitting down with other company leaders and assessing what is reality for the company before sharing anything with employees.

That assessment should ignore economic factors, such as the housing market, if they have little relation to a firm’s operation, he said.

From a psychological perspective, fear is a response to perceived danger, says Stephen McLeod-Bryant, associate professor of adult psychiatry at the Medical University of South Carolina.

McLeod-Bryant says the perception of danger can be intensified when a group of people experiences it together. In other words, fear is contagious.

“When somebody beside you starts to tense up, you begin to tense up,” he said. “It’s a natural phenomenon. We’re not only reading the danger from what our own eyes and ears are telling us, but from people around us.”

McLeod-Bryant said mob psychology is real in financial situations. For example, an expert or CEO might announce bad news on television, and the emotion or fear individuals might feel as a result is heightened when they hear and discuss it with others.

“If you or I were just there looking at this ourselves, we wouldn’t have been moved so much,” he said.

To extricate oneself from that contagious fear or panic, McLeod-Bryant recommends spending time alone in thought without being bombarded by the opinions of others.

“In order to think for yourself,” he said, “you’ve got to have time for yourself to think."

Reach Ashley Fletcher Frampton at 843-849-3129.