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December 16, 2013

Cost-Cutting Company Gives Its Employees The Cold Shoulder

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This post is part of our Hit or Miss’ive column, where we analyze real-life situations that show what effective leadership communication looks like—or in some cases (like this one), what it doesn’t look like.

Many companies are looking to cut their costs in order to maintain or increase profit margins.  But while keeping an eye on costs is a sound business practice, cutting them without thinking through the consequences can backfire, as a large global company located in a wintry climate recently learned.

Not long ago, employees at this company received an email telling them that, as a cost-saving measure, the thermostat in their work areas would be turned down to 65 degrees.  Employees were outraged that they would be expected to work in such an uncomfortable environment.  (Does Ebenezer Scrooge’s refusal to allow Bob Cratchit to add another coal to the fire come to mind?) 

The employees wanted their feelings about this decision to be known. In response, they worked all day in the office dressed in coats and ear muffs. The employees who needed to type used gloves with the fingers cut out.

Some employees took more practical action. They contacted the local authorities to find out whether there were rules about the temperature in the workplace.  There are indeed.  In this township, the temperature in work spaces must be set at 72 degrees, higher than the thermostat had been set before.

This clumsy attempt to save money was a lose-lose for the company.  The decision and the way it was communicated angered employees who not only made the company look silly, but also did some research that company leaders should have done themselves.  Armed with the information about thermostat requirements, employees forced the company to reverse their decision and spend even more on heating costs.

The lessons in this incident?  Business leaders should do their research before making decisions. And they should consider how those affected by the decision will react.  Often a smart communication strategy can mitigate bad feelings about a company’s actions.  But when the decision is a dumb one, the communicator would serve the company better by asking some hard questions about the decision before it is implemented.

Have a story about a failure in leadership communication? Share it in the comments so we can learn from it.


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