Starting off in a hospital bed was not how Catherine Monson envisioned her first day as CEO of Fastsigns International Inc.
Monson was supposed to start in January 2009 to help lead the company through an economy that had battered the worldwide sign and graphics franchise system. When she was finally able to make it into the office in February, sales were down and layoffs were inevitable. The challenge was how to rally the remaining employees while finding a way for the company to grow when the only signs a lot of customers were interested in read: “Going out of business sale.”
Compounding her difficulties was the fact that she was replacing the founder of the company.
“My concern was, is the outgoing founder and CEO going to truly step back and give me the reins? How will the franchisees and corporate employees respond, and then layer on the extra complication of a comparable store sales decline in a very tough economic climate and (there being) a lot of angst and concern on the part of the franchisees because of that,” Monson says. “Even if I was not a new CEO, that would have been a challenging time.”
Address the immediate concerns
From the start, Monson wasn’t the fan favorite because she had to eliminate positions.
She communicated to those individuals that their position had been eliminated, and immediately following those conversations, she had a company meeting that same afternoon.
“I talked about the changes, the reasons for the changes, that I could not promise that there would be no additional changes, but that I was going to be working very hard to get the business turned around,” she says.
She provided monthly updates after that, addressing what was happening with same-center sales, revenue, what the company was doing and how people could make a difference.
Whenever you’re facing tough times like this, she says you absolutely have to communicate with your employees about what’s going on internally.
“Given an information vacuum, people will always assume the worst,” she says. “If we don’t share what’s going on, our employees are listening to the news, they’re watching the headlines, they’re picking up a newspaper, they’re talking to their friends who have been, perhaps, laid off, and in the vacuum of honest information and direct information, they’ll just assume the worst.”
Despite her best efforts, the problem wouldn’t go away. Anytime her door was closed for prolonged periods of time, layoff rumors started to fly. She knew there was lost productivity because of worry, but she understood their concerns. Instead of focusing on the productivity loss, she tried to be positive but honest.
“People want leaders, need leaders, who are positive,” she says. “You can be positive realistic. Positive doesn’t mean Polyanna and not seeing the reality, but your people need to believe that you see a way to get to the end result, and you have to portray that in a positive way.”
In early summer, she had more bad news but again was honest with employees. In lieu of more layoffs, she decided to have a pay freeze and eliminate the 401(k) match, profit-sharing, and Christmas and executive bonuses. She explained what kind of savings those choices would bring to the company and why that made more sense than a further head count reduction.
“There will be tough times, but you can still be very open and honest, and you can talk about the realities, but do it in a way that it’s not negative — ‘We’re doing this for the betterment of the company. We’re doing this to support our franchisees. We’re doing this to get through these tough times. I believe in this company; I believe in this industry,’” Monson says.
