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Subject:  A 4 point plan for TMF Date:  2/13/2001  2:41 PM
Author:  WonderPup Number:  9278 of 27873

An open letter, and four crucial points, to the top management at TMF.

You are, of course, welcome to take this for what it is worth. For point of context, I am a former executive at a big-5 consultancy and have worked for and with several startups in the time since. As a result, I have seen many companies, some successful, some not. I survived a round of layoffs 3 months ago. I have seen what has happened to us since. What follows is, in my opinion, critical next steps to take in order to ensure that the layoffs were not in vain, and TMF gets back on track.

Once again, you are welcome to take it for whaterver you think it is worth.

1. Time is of the essense
You probably have a 1 year plan in place, especially if you just got funding. I will tell you right now: You do NOT have a year.

You have 3 months to show an impact. Tops. Perhaps as little as 6-8 weeks.

The honeymoon is over. Your employees were willing to give you the benefit of the doubt prior to the layoffs. But following the layoffs, many, if not most, of those same employees will no longer be willing to take your word at face value.

Actions will speak louder than words. You have up to 3 months to show a rousing success to your employees. That doesn't mean the company as a whole has to be an utter success in three months, but it does mean that you have to show positive momentum by showing an individual success. The current perception will be that momentum is negative. If you cannot change this perception in three months, you likely will not change it at all.

Trust me on this one. If it is not clear that the company is shifting in a positive direction, morale will become the cancer that kills the company. I've seen it too vividly. My current employer did layoffs about 3 months ago. They have failed to show a solid plan of action and failed to show a solid success since. Everyone at the water cooler knows that the days are counting down until the next round of layoffs. This isn't information leaking from above--this is observant employees who can see the writing on the wall.

You have 3 months.

Showing a success quickly is important, because...

2. Your people ARE looking for new jobs.
You hired great people, didn't you? Of course you did. Every company tries to do so. You have people who are smart, talented, and work hard.

Guess what? Every other company out there also wants employees who are smart, talented, and work hard. You are now competing against these companies for your own talent pool.

Does this mean that every single employee wants to jump ship? Hardly. In fact, you have certain employees who are loyal and diehard all the way to the end. However, those employees are fewer in number than you think.

You have a small group of extremely loyal employees. You also have a much larger group of employees who are sitting there right now saying "well, I'm not actively looking, but I'm willing to listen to options." This is very dangerous for you. As great as someone's job may be, there is always a better option out there. Maybe your employees will find it by "listening to options" and maybe they won't.

But the fact is, the easiest way to keep an employee is to keep them from listening to other options in the first place.

This ties back to point 1. If you show success quickly, you'll give employees a reason to say, and give them less desire to listen to their options. If no significant change has been noted in three months, open the floodgates.

Because of the doubt and uncertainty...

3. Communication has never been more important.
If there has ever been a time to be active in your employee communications, it is now. Morale will be low. Many employees are likely thinking "now what?"

It is your job to make sure that every single employee understands the next steps for the company. It is important to make sure each and every person understands how their job is contributing to the plan. If someone cannot see how their job ties into the plan, they will have doubt about how important their job is. If they have that doubt, they will "listen to options." The best way to combat point #2 is to be extremely open and honest with each and every employee.

Engage your staff. You now have in the ballpark of 210 employees. Every day, Tom, Dave, and Pat can each meet with two employees, a half hour a piece. At this rate, you'll meet with 6 employees a day, and have met face to face with your staff within 7 weeks. Listen to what the employees have to say, and act upon it. Don't feed them a "rah-rah" speech, they won't buy it. The key thing is to make sure the employees understand how it is they fit into the short- and long-term success of the Fool.

Not only will face to face meetings with all employees help them understand where they fit in, but it will benefit you as well. If most of your information comes from your department heads, you are out of touch. Department heads, in general, often don't pass along a lot of information, or are themselves unaware of information which needs to be passed on. I absolutely guarantee that you will come out of these meetings with at least a couple excellent ideas that never would have trickled through the management chain.

You may think you are running an open and communicative company right now. Well, whatever it is you are doing now, double it. This is the time to err on the side of too much communcation, rather than too little.

Along with communication in general, it is particularly important to...

4. Acknowledge your errors.
You need not fall on your sword, and you need not air every bit of dirty laundry to the community. But your employees need to hear you be open, honest, and direct about your mistakes.

It is not a sin to make an error. It is a sin not to learn from that error.

It is indeed a cop out to blame external forces. By blaming advertisers, you acknowledge that your business plan was destined to be successful if and only if everything went right. Clearly, that doesn't happen, and this time, 115 people paid for that mistake with their jobs. Put it this way: would you invest in a company whose annual statement said "We have a great plan for the next year...as long as all the breaks go our way"?

You have an obligation to hope for the best but plan for the worst. Don't make these same mistakes again. The message is not "Well, the advertising revenue wasn't there, what else can I do? We just caught a bad break." but rather "We staked a lot of this company's success on advertising revenues, and in this case, it happened to be the wrong decision." And the next statement should be "Here's what we've learned from that, and here is how our plan going forward reflects what we have learned."

Don't act helpless in the face of adversity. Stand up, accept responsibility directly and openly with your staff, and show them how you have learned. Communicate this with them (point #3) as well as their role in that plan, so that they have reason to stay (point #2).

And remember, back to my first point: You have 3 months.

Best wishes on a rapid and strong turnaround,
--WonderPup

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