It’s a myth that people don’t like change. What they don’t like is uncertainty. In an article for the Harvard Business Review, excess uncertainty was listed as one of the leading sources of employee resistance to change. “If change feels like walking off a cliff blindfolded,” claimed the article, “then people will reject it.”
Rosabeth Moss Kanter was referring to voluntary change, but change forced from external economic circumstances can be met with the same reluctance, creating a stressed workforce and an atmosphere of tension.
The paradox is that there can be no change without a degree of uncertainty. Employees won’t complain about salary increases in bullish years (presumably a positive change), but there can be no certainty in an uncertain world, and the bears will inevitably rear their heads again at some point. Today the macroeconomic picture shows this clearly. Last July there was no clue that the price of oil was about to drop by half in six months, and none of those paid to make forecasts predicted this dramatic, worldwide change.
This uncertainty is driven home in the forecasts about oil price “recovery”. Yesterday in Davos, BP CEO Bob Dudley explained that his business was working on the premise that oil prices will remain low for another two or three years. Aberdeen Asset Management’s Martin Gilbert, also at the World Economic Forum, suggested perhaps one or two years of low prices. But the fact is that neither they nor we actually know.
And for business leaders, in challenging times such as these, it’s not easy marshaling a workforce, when you’re living on best guesses. Your staff want certainty, and you can’t provide it. And this has several knock on effects. Firstly, in the short term, there’s the impact on employees and how to keep them motivated and secure in their jobs. Secondly, there’s the medium term impact on the company, ensuring that it is competitively positioned for the future. And finally, and perhaps above all, is the reputational impact for business in the marketplace, as poorly handled change can cause significant damage to the brand.
Players in the oil and gas industry, whether operators or service companies can expect to balance these considerations regularly, as the sector’s fortunes are cyclical. The greyer haired among us know well that change is the rule, and that the tough years must be met by minimising the effect of the downturn, whilst believing that things will improve. The business is likely to thrive again, if the leadership holds firm, and makes the difficult decisions, particularly regarding costs and headcount.
But don’t expect sympathy from employees as you wrestle with these challenges; leaders are paid to handle this kind of change. Nonetheless, you need to keep them informed during the tough times, so that they understand the implications of the market circumstances. Tell them the facts as you know them, and leave speculation to others. Tell them what has to change; build their confidence and remove the uncertainty. These are the hallmarks of decisive leaders, as they battle to weather the storm.
As you build that trust, you can ask for support. Flexibility can be a vital employee quality during difficult periods. The UK workforce displayed this after the financial crisis, when we saw a change in employment models, with large numbers opting for part time employment, rather than full time unemployment. Germany’s mini-jobs initiative is an example of it in the extreme. This kind of flexibility speeds up recovery at a macroeconomic level, as recruitment costs aren’t as high.
From an employee’s perspective, leaders can appear reasonable or unreasonable, and open communication is the main factor that influences this. Uncertainty breeds an atmosphere of distrust and ‘us and them’, while leaders who regularly update employees on the state of the company will find their staff more understanding and willing to endure the difficult times as part of a team.
From a leader’s perspective, information is also vital. Having a deep understanding of the market and the company’s prospects enables the best decision-making. But it’s also important to remember that change, and uncertainty, are inevitable.