With today's corporate meltdowns there are inevitable consequences.
When we look at many of the current corporate crises, it is easy to conjure up images of the damage they have done -- from dead sea life and blackened shorelines caused by BP to photos of car wrecks and carnage caused by malfunctioning Toyotas. And with the failures of our biggest banking institutions, we have seen the sorrow, fear and anger of investors.
As these companies try to repair their reputations, they must address a number of key issues. Rebuilding consumer confidence is most often portrayed as a first step in the public relations and advertising efforts launched during these harrowing times. The actions of corporate leaders are incredibly relevant during this time, both internally and externally. BP can only hope that Tony Hayward and others on the leadership team handle their business internally, with employees, far better than it has been handled externally.
To this point, Toyota has seemingly taken many of the right steps to getting their feet firmly planted back on the ground. But according to Ed Cohen, co-author of Riding the Tiger: Leading Through Learning in Turbulent Times, they should not declare victory too soon. "In many of these cases, the relationship with employees -- the lifeline of any business -- is not seen a top priority. Leaders often do not care for the wounded employees, communicating as much as needed, leaving them with an uncertainty about their future and that of their colleagues. The result, even when it appears there is stabilization, is often major turnover which can again set a business backward."
Cohen and co-author, Priscilla Nelson, should know. They were the Chief Learning Officer and Global Director for People Leadership, respectively, at Satyam Computer Services, the 4th largest outsourcing firm in India, when it went through a major leadership and financial crisis. Faced with a national disgrace and a catastrophe with worldwide implications, Cohen and Nelson developed a collective strategy between leadership and employees to calm the chaos and help the company recover and rebuild.
"Toyota is on the right track and hopefully they will stand as a modern-day example of how strong leadership and good employee communications can lead to corporate resiliency and a bright future," says Nelson. "BP, AIG, Johnson and Johnson, and others still have a long way to go."