Communicate the need to change
Olivia made stops at three organizations in need of major changes before arriving at West Penn Allegheny in March 2008. One thing he learned along the way is that a successful turnaround starts with a foundation of openness and honesty.
In an effort to communicate throughout the entire organization, Olivia stood in front of his board of directors, he stood in front of his direct reports, and he stood in front of his employees in town-hall meetings. He presented the facts and then explained that, as an organization, together, they would move forward.
“You have to engage them in creating the future of the organization, you have to get them to see why what they’re doing now is not working,” Olivia says. “That means talking to them directly.”
If you need employees — or an entire organization — to change the way things are being done, you must show them that the current business path isn’t sustainable and certainly won’t lead to success. If employees don’t understand why change needs to happen, then why would they buy in to what you’re asking of them?
In distressed organizations, employees often don’t understand the company’s financial stance or strategic direction. When you’re communicating to each group, be clear with facts and point out the problem areas. Those could be how the organization is structured, a dead-end direction or, maybe, the budget.
“It’s surprising how often organizations will not face reality because it’s painful,” Olivia says. “That reality may mean you have to close certain things, it may be necessary to lay people off, it may be necessary to move the business or relocate it or change the way that a business is operated. All of those things have consequences to them, so, oftentimes, people don’t like to face those consequences.”
The truth isn’t always pretty, but neither is what could happen if it continues to be masked.
“You have to start by showing them the basic facts about the business: Here is what is not working. Here is what is working. Here is why we need to change; here is what we need to change to,” Olivia says. “You have to tell them the reality of what is there today, and then you have to help them envision the future. Then you’ve got to get people to move to that future collectively that you’ve just envisioned.”
The most important part of the conversation is that it must be a collaborative effort — you’re telling them you’ll be asking for their help. It’s not Olivia’s plan for the future. It’s not the employees’ plan for the future. It’s the organization’s plan for the future.
“Be open and honest in your communication about what has to be done,” he says. “People can handle things if they know the truth. I have found that people have remarkable abilities to adapt if they know the truth. But they’re not going to follow you if you don’t tell the truth.”
