Organisations change all the time. Whether it’s becoming more technologically advanced, moving into new markets or offering new products – the most successful organisations are flexible, adaptable and able to respond to market challenges.
But not all organisational changes are welcomed by employees. Some changes might disrupt their day-to-day work, or entail wage cuts or even layoffs for staff, and these changes, of course, are never likely to be well-received by those who are affected.
Even employees who feel strongly aligned with their company’s goals can become disillusioned and cynical in such situations. In spite of previously having had faith in their organisation, these cynical workers can completely lose trust in the business because of changes that have been made – and the way in which they have been made and communicated.
Cynicism in employees can have other strong negative effects for an organisation. Employees are likely to reduce their commitment to work, which will diminish overall productivity for the company. Or they may even resign from their roles, causing further harm to the business, which now has to recruit replacements while simultaneously implementing organisational change.
Cynical employees can also affect other workers. Once one employee disagrees with your decision making as an organisation, it could cause other personnel to become disillusioned or unhappy with the changes, and maybe even result in widespread resistance. When a significant number of employees are sceptical with the decision making at the top, and feel unheard, attempts at a reconciliation between company managers and employees is made incredibly difficult, since the latter are instinctively going to distrust the intentions of senior management.
So, how can organisations actually make changes that may not be the most popular among employees, without causing mass revolts and increased discontent among employees and increased resignations?
This is exactly what myself, and colleagues from Aalto School of Business, Católica-Lisbon School of Business and Economics, and University of Waterloo, have looked into. We conducted three separate studies that focused on organisations undergoing significant organisational changes. One study looked at more than 1,750 employees experiencing a major restructuring, while another looked at 174 employees undergoing wage cuts or layoffs.
In all of these restructurings, we found that effective communication was key. When an employee has their wage cut or is laid off from their role, it is to be expected that they will not be happy. However, if the rationale behind the decision making is effectively communicated to them and to the rest of the company (as opposed to being blindsided by it), then they are much less likely to become cynical of the organisation or revolt against the management.
It is vital that all employees are informed early on, in a very clear and timely manner. Employees should receive a detailed and reasonable explanation as to why these changes have been made to the business, to minimise the potential damage to morale.
When employees do not receive clear and transparent explanations for why changes have been made, they are much more likely to become cynical and leave the organisation. When employees receive clear explanations for change, they are much more likely to feel valued and perceive lower levels of uncertainty. Managers must be as transparent and as truthful as possible in their interactions with employees. In this way, they create an atmosphere in which cynicism is unlikely to prosper.
Detailed explanations will ensure that employees who strongly identify with the business, in particular, will see changes as necessary and perhaps unavoidable. To a greater extent than colleagues who align less with the organisation, those who identify strongly with it are especially sensitive to receiving honest and informative explanations of decisions from management.
Unfortunately, even in the face of detailed explanations, employees who do not strongly identify with the organisation may still become cynical and leave. However, providing detailed explanations will reduce the risk that the other, more loyal and committed employees will become distrustful of the decision making, thereby stopping cynicism from spreading. In this way, effective communication really is an exercise in reducing risks to the organisation.
Organisational change is always going to be met with some resistance. However, managers should be doing all they can to reduce the risk of it becoming widespread across the business and to minimise its impact on productivity, company ethos and potential resignations. The most effective way to do so is by providing clear, honest and transparent explanations – people value the truth.
David Patient is a full professor of leadership at Vlerick Business School, Belgium