Address your issues quickly
Throughout 2008, Farrell was finding that the Q&As and brown-bag lunches were increasingly focused on the economic downturn
“We reported a sales decline for the first time in many years, (along with) a fairly substantial operating loss, and that’s something that’s been very difficult both on a personal level and for a culture that has known nothing but success for 13 years,” he says.
So, like pulling a Band-Aid, THQ took a look at the issue and dealt with it quickly.
“We saw that growth was not going to take place (in this economy), so we cut back,” Farrell says. “We cut back quickly and aggressively, and, again, it goes back to the tenets we talked about — we communicated directly to the employees, very honestly, here’s what’s going on, here’s what we’re doing about it, it will affect jobs, you will be notified in a certain way.”
That began with Farrell being the one to address the issues. As soon as senior leaders realized that cuts had to be made, he got out in front of the company and told them that cutbacks and job losses were coming. To keep the process quick, though, the senior leaders set a date by which all cuts would be made and communicated it to employees.
“Again you do it in front of them at company meetings,” Farrell says. “I’ve done more all-employee e-mails in the last three or four months and been very clear: ‘Here’s what the issues are, here’s what our plan to attack it is, and here’s the effect on you. Yes, there will be jobs lost, and by March whatever, you will be advised.’ It was no spin and everything’s cool. It was, ‘We have to take some very direct and very deep cuts, but here’s what we’re doing and here’s why we’re doing it, and by this date, it will be done.’”
While some employees will appreciate that honesty and that approach and even though it will make things better for you long term, don’t expect it to improve morale during the hardest stretches.
“I did get a couple of e-mails back from employees saying, ‘Brian, really appreciate the honesty and directness,’ which actually kind of blew me away, but I think we have to be realistic,” he says. “When the world is running down, house values are down, people’s stock portfolios are down, the companies they are working for are struggling, [and] to have expectations people aren’t struggling with that would be unrealistic. I didn’t do it to keep morale high; I did it because that’s how you’re going to keep people believing in the vision of what can happen. Say, ‘It’s not happening now, don’t feel good, but we’re doing it fast, and here’s how we’re going to do it.’ So things aren’t good, but here’s how we’re going to get there from here quickly.”
