By Claire Logan and Rhonda James of PA Consulting Group and Jacky Simmonds of TUI Travel
Uncertainty is now the only constant. The current economic climate has made us all acutely aware that we are living in rapidly changing times. Change that's so frequent and unpredictable that a different approach to managing the ambiguities of everyday working life is essential.
Before a merger, downsize or implementation of a large change programme, there is a natural period of uncertainty; change is imminent but it is not clear what this means. Leaders roll out the mantra that it's 'business as usual until more information is known', but in reality it is anything but.
The skills that are required to manage your organisation and employees through this period are unique: with no vision of an end goal and no certainty about timescales, this can test the emotional intelligence and communication skills of any tried and tested leader.
Symptoms of uncertainty
The impact of uncertainty can be pervasive throughout an organisation. Without clear direction, even senior leaders become distracted by their changing environment. This can take the shape of altruistic behaviour such as focusing on pet projects; insufficient attention to performance as it is no longer deemed as important; or poor (or a lack of) decision-making. "It is during this phase that the psychological contract between employees and employer is at its most fragile."
Employees also re-evaluate their priorities. Discretionary effort that employees typically put in can account for an additional 25% of activity, but in times of uncertainty, this becomes focused on personal rather than on business issues. It is during this phase that the psychological contract between employees and their employer is at its most fragile.
While staff want continuing career development opportunities and other softer benefits, employers often negate these. Combining this with the rumour mill, employees are driven to make ill-informed decisions to resign.
Operations are also impacted. Productivity drops as priorities are focused elsewhere and capability decreases as people leave. External stakeholders suffer a loss in confidence and this in turn affects the bottom line, as customers seek better service from competitors and suppliers offer less than competitive terms.
Is there a cure?
Truth is, the enforced focus on business as usual doesn't work when things feel different. In reality, during periods of uncertainty, the focus has to be on delivery as usual. This approach was successfully adopted by the then First Choice Holidays, prior to its merger with Thomson. They continued to actively apply this thinking even after the merger was confirmed, and throughout the integration period as TUI Travel. Here we elaborate on the practical activities that TUI undertook to manage uncertainty successfully.
Delivery throughout uncertainty
Maintain organisational performance and profitability
Ensure that each function is identifying activities to stop, start and continue based on logical analysis and not possible/potential scenarios. TUI continued the investment and development of key talent, which meant after the merger, there was a readily-available pool of talent for promotion.
Devise more manageable short-term strategic plans so that there is a vision of how delivery should be focused. This should be communicated to teams so the performance bar remains high while enabling your functional managers to control stakeholder expectations.
Coach your top leaders
Leaders are integral to the success of managing uncertainty. They need to fully understand the situation so they can communicate accurate messages. Coach and support your leaders so that they are able to make decisions based on factual information. Even the most senior managers may need development to feel comfortable evolving their personal communication style and using their emotional intelligence when communicating difficult messages.
Establish clear communication frameworks
Create a strategy to actively manage press, customers and suppliers. Develop and encourage two-way communication channels that your employees can rely on throughout the period. For example, regular employee briefings were conducted by TUI managers but with the flexibility to be delivered in their preferred personal style e.g. team briefings, coffee and donut sessions or large departmental discussions.
Engage your employees
Rebalance the psychological contract. Whilst confirmation of job security may not be possible, by increasing the focus on development, training and active performance management, you can mitigate the loss of focus. Promote open and honest communication early and don't wait until the formal stages of consultation to start having a dialogue.
Prepare and upskill the HR team
During periods of change, HR is often seen as the change expert and needs to be duly prepared. To meet this expectation, Jacky Simmonds, TUI's HR director, put her HR team first to ensure they had the right skills to offer the organisation appropriate support. To facilitate this process, she kept the current HR structure but shifted HR activities to practical interventions to assist in managing the uncertainty and preparing for change. The HR teams re-contracted with their businesses so they understood HR's role and that managing change was a partnership.
The active management of uncertainty proved invaluable to TUI in forming the foundation for a successful merger. This proactive approach created trust in the leadership team, who were able to create an environment where labour turnover was significantly reduced; synergy savings were produced in the first year, and employee engagement remained high.
Claire Logan specialises in change management and restructuring, working with organisations to translate strategic business plans into reality by identifying and managing the HR aspects of major change initiatives. This includes the design and delivery of employee consultation frameworks, redundancy programmes and outsourcing projects - with a particular specialism in TUPE requirements.
Rhonda James has a diverse experience developed from working with blue chip and public sector organisations. Specialising in change management, recent projects have included, restructuring in the financial services, organisational capability assessment and managing the people related impact of mergers and acquisitions, including TUPE, outsourcing and redundancy.
Jacky Simmonds joined the then First Choice Holidays in 2000. In 2007, Jacky was one of the key people responsible for successfully integrating the Tourism Division of TUI AG and First Choice Holidays PLC to create TUI Travel PLC. Jacky is the HR Director of the newly formed organisation.