A Crisis of Confidence

Winter 2013


A Crisis of Confidence

By Adrian Gostick and Chester Elton

Adrian Gostick and Chester Elton are the founders of global training and consulting firm The Culture Works. From All In: How the Best Managers Create a Culture of Belief and Drive Big Results (Free Press). ©2012

Temporary loss of belief is inevitable in any dynamic, growing organization. The hiring of a new CEO, a merger or acquisition, an evolution from private to public status, or a new competitor in your market all can throw even the most effective culture into a tailspin and shake employee confidence. Or consider what happens in an organization when it suffers from a pubic scandal, bad press, weakening revenues, a sinking stock price, or uncertainty about leadership’s health.

Ironically, it is the very moment of crisis when the organization needs its people to believe the most—and yet their faith is challenged. Put yourself in the shoes of an oil-company employee during a massive spill, a financial-services worker whose company is under siege by regulators, a manufacturing employee whose firm faces an embarrassing product recall, or a drug-company sales rep after a prescription has been pulled off the market. In the moment when the story breaks, your people don’t know whether this is a minor or a major problem, and typically no one from corporate is going to speculate with them.

As the media and online community respond (and perhaps overdramatize), the crisis inflates like a balloon, neighbors even ask about it over the backyard fence, and many of your people wonder whether they can survive the inevitable explosion. It is logical to have doubts and lose belief.

Perhaps you’ve witnessed this process firsthand: Initially during a challenge, employees are distracted by the possibilities of how the change will affect them. If left unaddressed, this builds into a tsunami of worry. Workers become inert, and at that point many managers see the accelerating productivity slump and start to panic, pouring fuel on the fire. Even if these setbacks are temporary, they can have lasting ramifications for a company’s culture and the long-term confidence of employees.

One of the most important things that separate a great company from the pack is the way leaders respond to a loss of internal belief. Great cultures are prepared for these moments of crisis. Though no one can be ready for every disaster, great managers and organizations remain nimble enough to negotiate the treacherous path of reclaiming their reputation externally and the faith of their employees internally.

If they can acknowledge the fears of workers and regain their trust first, the cumulative power can accelerate the return to normalcy for clients, customers, and shareholders. Furthermore, the proper management of an emergency assures employees that their belief in leadership is well founded and often creates a level of trust that is higher than before the crisis. Even dramatic setbacks need not have damaging permanent consequences if leaders acknowledge the problems and openly work to address the slump in morale.


From the Archives

The Conference Board Review is the quarterly magazine of The Conference Board, the world's preeminent business membership and research organization. Founded in 1976, TCB Review is a magazine of ideas and opinion that raises tough questions about leading-edge issues at the intersection of business and society.