Bad news is inevitable, but you can use either a good approach or a not-so-good one when it’s your turn to share it, explained Syndine Imholte, president of Capstone Communications, Inc., and the speaker at a recent teleweb seminar on how to communicate bad news, which was sponsored by the International Foundation of Employee Benefit Plans (FEBP). Imholte said a bad approach is like stepping on a rake-it will only hit you in the face-while a good approach is like opening a door to connection, acceptance, alignment, and support.
Plan participants are bound to hear bad news about their benefits at some point, Imholte explained, in light of skyrocketing health care costs, the squeamish stock market, managed care limitation, and 401(k) losses. Adding to the difficulty of communicating such bad news is the existence of "stubborn paradigms," she said. One of these is plan participants may have been told the benefits are part of their compensation, and, thus, they see it as a pay cut when their benefits change. In addition, there may be an entitlement attitude toward benefits. Finally, there may be an overall belief that change is something to be feared. To combat all of this, Imholte suggested a good approach includes the following:
- Cultivate a communication culture. Imholte said open and honest communication needs to be a way of life in your organization, and such a culture doesn’t happen overnight. You need to have a communication strategy in place that takes into account your objective, audience, culture, hot buttons, messages, delivery system, and media. Imholte said to target your effort toward everyone who has a stake in the objective, and use media that work for your population.
- Determine the status of news. There’s a fine line between bad news and a real crisis, Imholte said. Thus, the next step is to determine the status of your news. A crisis interferes with normal operations, damages reputation or bottom line, and results in government or marketplace scrutiny. So, it may be a "crisis" if your executive management team were being indicted for insider trading violations, while "bad news" is that your employees’ 401(k) accounts are losing money.
- Establish an action plan. If you determine you’re dealing with bad news rather than a crisis, Imholte said the next step is to establish an action plan that fits into the overall communication strategy, allows you to be proactive (in control), and is timely.
- Define your audience. The internal audience includes managers, supervisors, those directly affected, and those indirectly affected, according to Imholte. The external audience includes retirees, clients/customers, prospective clients/customers, shareholders, consultants/other service providers, and business partners/affiliates.
- Decide on the media for disseminating the bad news. Imholte suggested a face-to-face approach whenever possible. She also said you can use a multi-media approach, such as a Webcast, e-mail, and letters sent to homes. In addition, be sure to provide a forum for feedback.
The last step is to get the message out there before changes take place. Don’t let employees find out about the news from a competitor or by reading it in the newspaper. Imholdt suggested using focus groups to test reaction to the message. Also, have the information come from the top. Finally, give people time to think and adjust to the information.
A longer-term approach to benefit changes is to make sure they fit into your total compensation package and meet employee needs. It may keep you from having these kinds of problems in the future. IBI