Question

One thing that’s always hard for managers/­executives to do is deliver bad news to employees.60 However, that’s all the more reason to be sure to think through those decisions. And not every CEO or executive has done that! Here are some recent examples. See what you think! Choose your CHANNEL wisely! IBM CEO Ginni Rometty, after a disappointing earnings report, publicly reprimanded all the company’s 434,000 employees through a five-minute internal video message. She specifically pointed to the sales staff for missing out on several large deals. When the press heard about it, many referred to it as a public spanking.61 AOL’s CEO, Tim Armstrong, broke the news about the company’s decision to cut employee 401k benefits on television network CNBC. Only after informing Wall Street did Armstrong hold a companywide conference call with employees to discuss the announcement and explain the rationale. Employees complained about “secret” cuts on Twitter and other social media sites. And Armstrong only added fuel to the fire after he tried to blame the change on the new federal health-care law and medical expenses associated with two “distressed babies” of AOL employees. After a week of bad publicity, Armstrong informed employees through e-mail that he was reversing his decision and apologized for his controversial comments.62 Some 90 workers at Ford Motor Company’s Chicago assembly plant got an automated phone message announcing they had just been laid off.63 Although each of the managers involved in these communications probably thought they were doing the right thing, the choices they made led to an outcome they weren’t expecting.

What’s your impression of what took place in these scenarios? Did the managers in each of these scenarios communicate effectively? Why or why not?

For each of the scenarios, discuss what might have been a better way to communicate the message.

Answer 1

1. IBM CEO Ginni Rometty in her pre-recorded video message reprimanded the entire company staff on poor earnings. She specifically singled out sales staff for missing out on several large deals.

Although the CEO had good intentions to sensitize her work force about the poor financial results, the method used was far from satisfactory. Her pre-recorded message served little as it was just her opinion/message with no follow up questions or discussions. In particular her admonition of sales staff for missing out on large deals lacked compassion and objectivity. The message served no purpose other than demoralize the staff without any silver lining.

The CEO ideally should have conveyed her message of poor financial results with a commitment to bring out improvement in future with the assistance of all staff members. She should have also conducted separate video conference call with sales staff to understand their problems and the way forward.

2. AOL CEO Armstrong should have discussed and conveyed cut on employee benefits internally before going public on CNBC TV. By going public even before putting it across internally, the issue was open for criticism and unwanted debate in public domain.

CEO Armstrong should have debated the issue internally and taken the employees into confidence before publicly announcing the cuts.

3. The method used by Ford company to announce lay off to workers through an automated phone message was most insensitive and perhaps inhuman.

Losing one's job is a very painful experience for most employees and more so when it is announced without any pre-information or discussion.

The Ford company management should have found a better way to lay off workers for whatever reasons they deemed necessary. One of the ways could have been to issue individual letters praising their services and explaining the compulsions of company to take this decision. This may have been a more humane way to deal with layoffs.