Shyamal Majumdar: Defusing the fear factor

How top management can deal with 'psychological' recession

Captain Chesley “Sully” Sullenberger is probably the world’s most famous living pilot. The hero of what is known as the “Miracle on the Hudson” is now a much sought after speaker in business schools, particularly at a time when the world is going through a turbulent economic phase.

The “miracle” story is as follows: In January 2009, a US Airways Airbus A320 struck a flock of birds just after take-off from New York’s LaGuardia airport. With both engines out, the cool-headed pilot manoeuvred the aircraft over New York City and ditched it in the Hudson River. All 155 on board were pulled to safety.

That’s heroic enough, but what was striking was the way the aircraft’s passengers behaved during those tense moments. They were no doubt scared, but what saved them was the absence of panic and willingness to follow the pilot’s instructions.

Most of the passengers later said this was because the pilot told them the problem straight out and instructed them how to deal with it. It was clear that the pilot and his team recognised the danger of the situation, assessed what their limited options were and then acted in a way that gave the best possible chance for minimising casualties. That’s leadership lesson number one at a time when slowdown signals are getting clearer by the day: leaders can defuse a lot of fear just by communicating clearly about the situation.

It’s not a surprise, therefore, that Sullenberger is again being pursued with renewed vigour by B-schools and companies. Everyone agrees that the fear of uncertainty has come back and wants to know how to deal with it. Management experts have a name for it: psychological recession — a feeling of economic and psychological vulnerability and a growing sense that your employer gives a damn about you.

The reason employees are already going through a psychological recession is simple: a recent Harvard Business Review study said the first thing companies do just before a perceived slowdown is to stop hiring, start issuing pink slips, cut promotion budgets and freeze expansion plans. This is despite the fact that such knee-jerk reactions have often boomeranged.

To be sure, unlike in 2009, no Indian company is yet talking about pink slips or curtailing of operations, but that’s small consolation as whispers about the uncertainty ahead have already started in office canteens and near the water-coolers. People have started fearing losing jobs, salary cuts, increment freeze — all telltale signs of a psychological recession. Unless managements read the tea leaves and start taking action now, it can cost them dearly — just when you need people to focus and engage, they lose focus and disengage.

The cost of such fears can be heavy since even in normal times, distractions consume as much as a third of the average worker’s day and sap productivity.

HR experts say now is the time when top managements should engage employees more through frequent town-hall meetings, direct mailers, personalised meetings and so on, especially with the talent you need. HR heads of enlightened companies treat these town-hall meetings as diagnostic centres so that the doctor knows the exact nature of the ailment.

The root of psychological recession is the sense that people have no control over what happens to them. But winning organisations help people break through that hopelessness and channel their employees’ anxieties into results.

In their book – Predictable results in unpredictable times – authors Stephen R Covey and Bob Whitman say the paradigm at the root of psychological helplessness is the widespread belief that people have no control over what happens to them. Martin Seligman has called it “learned helplessness” — a condition in which people act helpless, even when they have the power to change the unpleasant or even harmful circumstance.

Covey and Whitman have suggested three ways to face the problem.

• Be transparent: Don’t assume everybody already knows how the turbulence is affecting the organisation. All they hear are rumours about downturns and layoffs, so they need to hear exactly where they stand and they need to hear that often. Winning companies would have simple goals repeatedly revisited, together with clear targets and strong follow-through, including the measurement of results 
   
• Talk about what’s next: if you have a strategy, lay it out in clear terms. Give people the chance to share their feelings concerns and, most of all, their ideas. 
   
• Focus on clarity: This reduces fear even if what is made clear isn’t very positive. A first guideline for leaders is to talk straight and listen with empathy to the concerns of the team. By not communicating, you are asking people to walk straight into the storm. It will crush them — privately, silently, but inevitably.

Sullenberger followed these three principles and came out a winner — saving not only himself but all the 155 passengers on board. What about you?