Just simply brilliant strategies will have little effect if you don't first rebuild employees' confidence by giving them concrete reasons to believe in a brighter day. Speaking from my own experience as a management educator and HRD practitioner, I have observed for organisations in decline, a kind of learned helplessness sets in. The secrecy, blame, isolation, avoidance, passivity, feelings of helplessness combine to perpetuate the poor performance. This “death spiral” typically starts when a company begins to neglect communication.
Time and again I have noticed as communication and the willingness to face problems openly deteriorate, infighting and finger-pointing increase. Employees in different units lose respect for one another and for themselves. Groups start withholding information and support from one another. They look to maximise their own results but not to contribute to the performance of the organisation as a whole. As performance erodes, the support of government and external constituencies as investors, shareholders and customers weaken.
I asked my former Petronas colleague Haji Karim, who's an accomplished entrepreneur in oil and gas business in the Central Asia: how can companies break out of a downward spiral? He said “It starts with confidence - but confidence by itself doesn't produce success. It produces the effort, the persistence. But the belief that your company can overcome its problems has to be supported by structures & disciplines that make it possible for people to count on one another exchange resources, pull together to meet a new challenge,”
Karim explained, “Accountability is the first cornerstone of confidence. It's a function of open dialogue and mutual respect. With those elements in place, people are willing to face up to what's going on and make good on the promises they have made. To turn a culture of decline into one of the success, you've to restore employees' confidence in the system.”
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