If the Sky is Falling, Say So 0

(Note: I posted this earlier on Small Business Trends. I’m reposting here for the convenience of my readers at Entrepreneur.com. Tim)

A couple of weeks ago a well-known local restaurant with 40-some employees closed its doors on a Monday morning without telling anybody in advance. Employees arrived Monday to a sign saying the business had closed.

Last week a printing company with 85 employees did the same thing. The people arrived Monday morning to read signs that the company had closed.

That’s what everybody fears these days. Is it going to happen to me?

Nobody wants to be told not to worry when things are bad. If you are in charge, they want you to share your worry with them, treating them like adults.  If you do, they’re likely to feel part of the team, and pitch in and help.

And if you don’t, you have anger and resentment to deal with, as well as disappointment and worry. People who lose their job from one day to the next, without any advance notice, are very angry.

I learned this the only way there is to learn this, running a company during a recession. I laid off five of 33 people in one day in 2001. Our sales fell hard when the dotcom bubble burst. We were slow to react. When we finally did react, our people were relieved to see us taking steps. Everybody pitched in.

And it also seemed easier to lay off five people the same day than that hardest of all things an owner does, fire somebody who’s been trying but failing. At least when it’s five at once, which was about 15 percent of our work force back then, people understand that it’s a larger cause, not a personal failure.

This whatever-it-is (recession, depression or whatever) is a lot worse than 2001, but the principle still applies. If you’re running a company right now, your people want to know how you’re doing. Don’t tell them not to worry their pretty heads. They want to be part of the solution. It’s normal human nature: People naturally want to be included in things. When times are tough, they want to know.

I’ll bet every one of the 40-some employees in that closed-down restaurant situation wishes the eatery had seen the problem coming, cut costs, maybe laid off some employees but stayed in business. And I’ll bet every one of the 85 employees in the printing business wishes it had cut it to 60 or 50 or 40 employees but stayed in business.

And I’ll bet they are all angry at the surprise. Several were quoted in the newspaper. “Why weren’t we told?” they asked.

If you’re an owner, don’t think you’re doing anybody a favor by not sharing your worries.

About the Author Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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