Strategy

How to arm, not alarm, your staff in crisis

Nokia CEO's already infamous memo may have rallied the work force — toward the exits.

Do your memos to the troops come with a health warning for those with weak tickers? The recent fire-and-brimstone missive by newly minted Nokia CEO Stephen Elop certainly caused some palpitations, both inside and outside the troubled Finnish phone maker.

Dubbed the “burning platform memo,” it starts with a story about an oil worker trapped on a flaming rig and forced to jump into the freezing waters. Elop likens Nokia’s situation to that of the seemingly doomed man and vividly diagnoses the causes of the predicament: “We fell behind, we missed big trends, and we lost time???.We haven’t been delivering innovation fast enough.” You get the idea. At the end, Elop raises a flicker of hope about an upcoming corporate strategy, which he describes as an opportunity for escape.

The Nokia memo is pretty much guaranteed immortality, but is such shock therapy an effective way to rally worried staff? “I can summarize his memo in two words: ‘We’re fucked,'” says Toronto executive coach Michael Stern. “It has two parts: the first is doom, and the second is gloom.” That’s a dangerous message to send, says Stern, a former recruiter, in part because it makes employees ripe for poaching. “I think it is going to be fairly easy pickings” for headhunters, he says. “If I was [at Nokia], I would think, ‘We’re screwed, and we have got no leadership.'”

Executive memos can do wonders for motivating the rank and file, Stern argues, but top brass often have a flawed idea of what they should communicate. Managers typically think pay is the No. 1 staff motivator. Surveys show, however, that employees put more value on respect and being part of a winning team. To motivate rather than irritate, a memo needs to be inclusive, letting everyone know that they’re in the same boat, right alongside the management. “This [Nokia memo] is certainly not the kind of thing that would galvanize employees to say, ‘Yes, we can pull together,'” says Stern.

Instead, he points to the early-2009 memo penned by Starbucks founder and CEO Howard Schultz. Taking back the reins of the company amid a recession and a restructuring, Schultz announced hundreds of store closures and layoffs, and vowed to turn the company around. Stern gives Schultz high marks for thanking all staff — those who were staying and those being laid off — for their “sacrifices, discipline and effort,” and for promising to put more money into employee profit sharing.

The Nokia leader’s dispiriting missive also contrasts starkly with the “we will survive” mantra that Maple Leaf Foods CEO — and weekly memo-to-all writer — Michael McCain adopted when steering through the tainted-meat crisis.

Rob Sobey, president of the East Coast Lawtons Drug chain that a few years ago successfully weathered a Shoppers Drug Mart incursion onto its home turf, says memos aren’t sufficient to boost morale during emergencies. “A memo never motivates,” he says. “A memo can thank and compliment, but you need the town hall meeting [in a true crisis]. You have to put yourself out there in the flesh.”

Still, memos like Elop’s have to be judged in light of a company’s situation, argues Queen’s School of Business professor Ken Wong. “Everybody at Nokia had to know that their share was dissipating. It can be refreshing for the CEO to say it [publicly]. The question is, what does he say next?”

Nokia’s next step was to announce an alliance with Elop’s former employer, Microsoft. It remains unclear whether the company has escaped the fire, or now has company among the flames.