When your company is in dire straits, what should you say to employees?
Some leaders respond by laying out their company’s strengths and weaknesses, then confidently assuring employees that their company will overcome its obstacles and rise again. (Think of the approach taken in recent years by AOL’s Tim Armstrong and Yahoo’s Carol Bartz. Although it may have temporarily raised hopes and confidence, it inevitably led to a big let-down.)
Nokia’s new CEO Stephane Elop has taken a different approach. Call it “shock treatment.”
He recently sent a memo to all employees, in which he likened the company to a “burning oil platform:” Those who remain on deck will perish.
The only chance the cell phone maker has to save itself is to behave wildly different than it has in the past—to jump off the edge of the platform into the frigid waters of the North Sea.
It may have rattled employees and scared suppliers temporarily. But the memo accomplishes three things:
1. It buys him instant credibility with everyone—from employees to customers to suppliers to journalists. People can be confident that Elop isn’t sugarcoating the issues. No one follows a leader he or she doesn’t trust.
2. It allows him to act with urgency. Now his entire team can understand that the only choices are “death by doing nothing” and “small chance of survival by doing something that seems crazy.”
3. It paves the way for him to slay sacred cows or make unpopular decisions. So whether he fires popular obstructionist managers or gives orders that might have formerly inspired mutiny, Elop’s decisions will be seen in the context of trying to save the company.
Bottom line: People can handle the truth, so follow Elop’s example.
— Adapted from “Nokia’s CEO Demonstrates True,” Henry Blodget, Business Insider.