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(originally published by Booz & Company)


Saving a Crisis-Ridden Company

Leaders must talk with employees even when they don’t believe there is much to say. Lacking hard information, people usually tend to make up their own stories or rely on public media. When they fabricate tales, they tend to assume the worst. And from the press they often hear half-truths or distortions. For example, Indian publications reported that Satyam had no cash and would be unable to cover its payroll. But the company’s executives knew that Satyam would have sufficient money to cover expenses if customers sped up payment, and they had already taken steps to make that happen. Rumors must be faced and addressed.

• Admit ignorance. When you have nothing new to say and no answers to give, it is best to tell employees so, and instead listen to employees’ concerns and address their questions with candid responses. Leaders typically want to appear knowledgeable, but crises have many known and unknown variables. When circumstances are fluid, managers must become comfortable saying, “I don’t know.” Honesty can be a powerful antidote to fear.

• Respond to the raw emotions that inevitably arise among employees by not denying your own. During a crisis, employees will often feel extremely vulnerable and express this with words like hurt, worried, cheated, afraid, and shocked. Leaders frequently are struggling with the same emotions and should not be afraid to say so. Speaking about and openly listening to fears can help reduce them. And managers who can acknowledge those feelings in themselves have a much better chance of being able to understand them in others and to respond empathetically.

The Satyam story does not have a fairy-tale ending. Although management was diligent about protecting its employees, the company’s reputation and financial situation were compromised savagely. And in April 2009, some three months after Satyam’s fraud was revealed, the company was acquired for US$580 million by Tech Mahindra, a joint venture of British communications giant BT Group and the Indian IT outsourcer Mahindra & Mahindra. Soon after, thousands of Satyam’s employees were let go or chose to leave.

Satyam has many legacies, most of them troubling. But the company’s leaders can hold their heads high for one significant achievement: They left behind a slew of thoughtful ideas about saving a crisis-ridden company by making employees’ best interests the centerpiece of the response. And in the end, because of that, some 25,000 people still had jobs — and many of these workers were looking forward to a bright future at a company that had once disappointed them.


Author Profiles:

  • Priscilla Nelson is president and CEO of Nelson Cohen Global Consulting and coauthor, with Ed Cohen, of Riding the Tiger: Leading through Learning in Turbulent Times (American Society for Training & Development Press, 2010). She has more than 30 years’ experience in leadership development with an emphasis on diversity and executive coaching.
  • Ed Cohen is executive vice president of Nelson Cohen Global Consulting and coauthor, with Priscilla Nelson, of Riding the Tiger: Leading through Learning in Turbulent Times. Formerly the strategic leader for Booz Allen Hamilton’s award-winning corporate university, he focuses on change and culture change and talent development.
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