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Managing in an Environment of Fear, Uncertainty, and Doubt (FUD)

It’s the spring of 2009 and the economy is in the dumper. The average American family’s wealth has dropped by 18% and California’s unemployment rate has topped 10%. Just about everyone in Silicon Valley knows someone who has been laid off from, what were once, promising economic high flying companies and employees are feeling insecure about the future. Leaders have to be very careful about how they define and communicate goals and expectations with this frightening economic backdrop. Unfortunately, some leaders believe that economic crisis is an opportunity to increase motivation because workers are afraid of losing their jobs. Despite the limited job market, companies can always find room for top tier performers. Managing by “Fear, Uncertainty, and Doubt” (FUD) is a surefire way to lose your top performers once the economy turns around.

During economically troubled times everyone needs to step up their game. Companies have to fight for every sale and come up with greater innovation for even a minimal return to ensure company growth. Every team member has to play their “A” game by either increasing sales or decreasing operational expenses. It’s a fine balance for leaders to set the appropriate level of urgency without creating an environment of fear. If groups become fearful productivity falls and workers spend much of their time trading rumors about who’s next on the “chopping block” and which groups are likely to be laid off first. If there are multiple rounds of layoffs, organizations come to a standstill as workers spend their time thinking about if they’re next.

Both leaders and workers have to understand the gravity of our current economic situation. Workers in larger corporations sometimes feel removed from influence on the company’s overall performance because their role is more compartmentalized than it would be in a smaller organization. When this attitude becomes dominant in a group it’s soon labeled a “bureaucracy” and becomes a target for cost cutting because the organizational value is not articulated well enough for workers to see their direct contribution to the company. This cultural attitude can also become a leader’s frustration which can lead to FUD when the organizational attitude, and perceived value, is to slow to change.

I’ve been close to a number of organizational change efforts over the last couple of years. As the economy declined the transformations have become even more important to the businesses and to the organizations. Groups have to find a way to realize their value quickly by either demonstrating how they increase revenue or decrease cost. Leaders are obliged to define the future organizational vision and help their people understand what is required to get to that vision. The partnership requires a great deal of effort for both leaders and their employees. Change is mandatory in tough economic times and folks have to accept that business as usual won’t succeed. Leaders, however, have to understand that they must crisply communicate what is needed and create an environment that encourages success by focusing on defined goals. If this partnership is executed well there doesn’t have to be fear, uncertainty, and doubt.

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