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(originally published by Booz & Company)


Saving a Crisis-Ridden Company

After massive fraud was discovered there, Satyam Computer Services survived by helping its employees focus on their emotional trauma.

A senior executive of a scandal-rocked multinational computer services company broke down in tears during a session with his leadership coach, devastated that he had given more than 10 years of his life to a company whose CEO had been caught in massive fraud. With just a year to go until reaching mandatory retirement, he had invested most of his savings in the company’s stock, which was now worth next to nothing. Another of the company’s managers, 50 years old, received a call from his father urging him to leave the company before his own reputation was further tarnished. A young supervisor realized his impending wedding was at risk when it appeared he might lose his job because of the scandal. “The rug was pulled out from underneath us all,” one of the executives said. “We felt forced to heal rapidly so we could help others to heal. I broke down and wept; not once, but several times.”

The company was India’s Satyam Computer Services Inc. Founded in 1987, Satyam grew to be the fourth-largest IT services firm in India, with more than 53,000 employees in 60 countries. In January 2009, Satyam’s founder and CEO admitted to falsifying and overstating the company’s financial position. Arrests followed, and news accounts referred to Satyam, once a respected brand, as tainted, disgraced, beleaguered, fraudulent, and crisis-ridden. It became common to refer to Satyam as “India’s Enron.” The CEO was featured in Business Week with the headline, “From Icon to I Con.”

Executives faced with a legal and public relations disaster of this magnitude are likely to think in terms of damage control and rebuilding the brand. But those responses are focused on merely repairing the company’s reputation and perhaps addressing the internal problems that caused the debacle (although, unfortunately, in many cases that is a secondary concern). In thinking this way, leaders neglect the aspects of company life that may well determine whether and to what degree the business will emerge from the crisis: healing the pain of the organization’s people, who undoubtedly feel betrayed, fearful, and uncertain about the company’s survival — and motivating them to take on the task of making the business whole.

We had already been at Satyam for four years when the crisis hit. Priscilla Nelson was global director of people leadership and Ed Cohen was chief learning officer. But our roles changed overnight. Immediately, we were asked to take significant responsibility for creating and managing new strategies to heal the deep wounds in the organization.

Fortunately, the leaders who remained at Satyam were determined to produce the best outcome they could. Although saving the company would be difficult, they developed a rigorous plan to help leaders deal with employee fears, concerns, and disruptions so that productivity would remain as high as possible while the company explored its postcrisis options. As part of this process, Satyam turned to a pool of professionally trained coaches to work with the company’s managers to make sure that these executives did not allow a single employee to withdraw or lose hope without having tried hard to engage him or her. From this unforgettable team effort, all of us came away with a lifetime of ideas about dealing with disaster primarily by focusing on employee well-being. The key lessons are summarized here.

• Communicate broadly. Too often, managers assume that a single written communication — an e-mail or a bulletin — about a facet of the crisis is enough. But in reality, high visibility, though it takes courage, is essential. Nothing beats face-to-face communication. Employees are hungry for information when a company is under siege, and leaders must not assume that because they said something once, they have communicated it clearly and to everyone who ought to hear it. A lack of information feeds the sense that things are out of control, and elevates system-wide fear.

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