Nine percent and holding! Unemployment seems to be stuck at record high levels with little prospect of improving any time soon. No one seems to be able or willing to predict what will happen next. Another recession? Continued slow growth? Nothing? And what is the impact of this on our organizations? Is everyone waiting for the other guy to make the first move or are we doing what we can to be ready for a turnaround when it comes? Are our organizational leaders taking this opportunity to make needed changes and improvements in their companies so that we will be more competitive in the future? I don’t pretend to know the answers to these questions. I am certain, however, that these conditions put a lot of stress on leadership and on the workforce.
Much has been written on the costs of stress in the workplace. An article published by the University of Massachusetts at Lowell cites these statistics.
• Job stress is estimated to cost American companies more than $300 billion a year in health costs, absenteeism and poor performance.
• 40% of job turnover is due to stress.
• Healthcare expenditures are nearly 50% greater for workers who report high levels of stress.
• Job stress is the source of more health complaints than financial or family problems.
• Replacing an average employee costs 120-200% of the salary of the position affected.
• The average cost of absenteeism in a large company is more than $3.6 million/year.
• Depression is the largest single predictor of absenteeism and work related performance.
• Depressive illness, a common side effect of job stress, in employees is associated with nearly 10 annual sick days ….
• For every 47 cents spent on treating depression, another 53 cents is indirectly spent on absenteeism, presenteeism, [showing up for work when you are really too sick to work.] and disability.
• Insurance data indicates insurance claims for stress related industrial accidents cost nearly twice as much as non stress related industrial accidents.
These costs are not trivial. But, discouragingly, in my leadership training workshops, I am more likely to hear managers talking about more layoffs, needing employees to do more with less, providing fewer opportunities for creative work, cutting health care benefits, and so on. All of these actions are more likely to increase stress rather than decrease it. It will add to their costs rather than reduce them. Accountants often look at the organization’s metrics with a very short-term point of view. “If we can keep producing at this level with our current workforce or with even fewer employees, that will reduce our cost.” Sure enough, people can produce a great deal for limited periods of time. But lost in this equation is any realistic estimate of how long they can keep it up and what happens when they “tank?” Human beings simply cannot produce at extreme levels indefinitely. A great article from New Zealand addresses the danger. (Healthy Work: Managing Stress in the Workplace.)
Talking with employees working under conditions of high stress and uncertainty, they found all of the typical problems, in addition they learned the workers realized they could not sustain such high levels of production for ever. They were afraid that they could not do what was expected of them. “Most critically, 78% fear they personally lack the capacity to take on any new challenge. While leaders anticipate overcoming current conditions and prevailing over economic
woes, nearly 80% of their workers expect to fail before they begin!
The current stress load on employees is enough to make them sick, literally. A 2007 Milken Institute study4 estimates that lost workdays and lower productivity from chronic diseases costs businesses more than $1.3 trillion annually. Of this
amount, lost productivity totals $1.1 trillion per year, while another $277 billion is spent annually on treatment.”
One of the reasons that this is so serious is that these conditions do not allow employees the time or resources to recover. A certain amount of stress in the workplace is tolerable, even desirable. It can be stimulating and exciting. That is why people compete in sports. But without the proper training, health regimens, and rest, their abilities wither and often result in more serious problems in the future.
In the article, they add that, “When individuals do not properly honor the recovery process, the demands they inevitably face daily become insurmountable. Inadequate emotional recovery breeds negativity, mood swings and irritability. Inadequate mental recovery breeds poor concentration, sloppy thinking and mental mistakes.” This is one of those downward spirals that is hard to break.
Professional athletes understand this. I live in Phoenix, Arizona and follow Suns Basketball. Two of our starters are over 35 years of age – Steve Nash (36) and Grant Hill (38) – ancient for NBA players. Their assistant coach says of them, “They don’t miss a beat, …It’s a testament to how hard they work and all the little things they do to take care of their body. They understand everything that goes into being a professional basketball player, including the things that take place before practice and after practice. They show that age isn’t anything but a number and if you work hard to take care of yourself, you can play for a long time.” Yes, they work hard but they also take care of themselves. They have healthy diets. They take naps before games. They allow themselves time to recover.
In an article on athletic performance, the National Academy of Sports Medicine states, “Many people believe that older athletes automatically need more recovery time between hard workouts, but our observations don’t confirm that. For the vast majority of athletes over 40 we don’t need to schedule any more recovery time than we do for our athletes in their 20s. The biggest reasons for this seem to be the older athletes’ attentiveness to proper recovery habits, post-workout nutrition and sleep [emphasis added]. By extension, if many younger athletes had more of their elder’s good habits, they’d need less recovery than we’re forced to schedule for them. Athletes who allow work to consume their lives struggle to maintain consistency in training, nutrition and recovery habits. Carve out time for yourself and you’ll see your performance improve. Tri athletes of any age who can increase their average nightly sleep to eight or nine hours (as opposed to six or fewer), experience significant improvements in workout quality and race-day performance.”
A more technical discussion can be found in Body Building literature. “Bodybuilding often appears counter-intuitive until you learn the science behind the bulk. Generally most people assume that the more time spent lifting weights and the more often you do it, the more muscle growth they will see. This is a widely held belief amongst those outside of bodybuilding. Damaged muscle fibers require time to recover after each workout, else they cannot repair and re-build in numbers, which equates to more strength and size. Providing sufficient recovery time is incorporated in to your program and your diet is feeding the nutrients your body requires, then muscle growth will happen. People need to understand that they will be doing their bodies a favour by leaving their muscles alone and reading a book, playing www.Poker.de or relaxing in a park once in a while. Training every day will not get the results you desire. Alternating between workouts and rest days will.”
Farmers understand that fields need to lie fallow for a while before they can be productive again. Trying to harvest repeatedly from the same field without time for recovery will inevitably lead to poor crops. The same is true for team members and organizations. The notion that relentless effort will get the results you want is very short sighted. It is a seductive idea. When leaders push their people, they get immediate results. Things happen. The numbers get better. It is not hard to understand why they think that more of the same will keep getting them what they want. Even if they believe that their people are expendable (lots of good people looking for work), they cannot sustain those kinds of efforts forever. There will be a reckoning. The smart money is on those leaders who have a plan for resiliency. So, how do you become more resilient? What can you do during the hard times that will prepare your organization to be more competitive when the economy improves?
• Don’t become so lean that you have no time to examine the needs of your organization. Don’t layoff so many people that you have no excess capacity. Capacity is an asset. Use it. If orders are down and business is slow, rather than laying off more people, put some of them to work finding ways to improve your processes.
• Amp up your training. Now is the time to work on those skills. Conduct that leadership training class that you have been putting off. When there is lots of business, it is hard to find the time to do those things you know need to be done. It is hard to find time to organize my office when I have lots of clients making demands on my time. When it slows down, I have a chance to take a breath and do those little but important things that have been nagging at me for a long time. Try to view the difficult time as an opportunity to invest in your people and your organization.
• Delegate. I mean really delegate. The more autonomous and independent your people become, the less supervision you need. Be sure to delegate the authority with the responsibility. Otherwise, delegation just becomes another stressor.
• Be flexible. Rethink your work/life balance policies. Maybe it is time to authorize a few more work-from-home requests, temporary leaves, family leave, etc. The last thing you need during tough economic times are team members who can’t handle their non-work responsibilities.
• Keep hiring. If your organization has a need for an important set of skills, that need doesn’t change just because you are under more pressure. Important teams may be able to work-around, or absorb the work of a specialist temporarily, but it is almost certain that the deficit will show up in your product or service eventually.
• Listen. Learn to listen, not only to your customers and your managers, but also to your team members. Give them an opportunity to “sound off.” One of the most consistent complaints I hear during team building interviews is, “My boss doesn’t listen to me.” Effective listening, by itself, can help people reduce their level of stress. It is not only good for them, but it helps your organization deal more effectively with the overall climate during downturns. It is not unusual that managers are not very effective listeners. If that is so, make sure listening skills are included as a primary component of your leadership training. Even the worst listener can learn to improve.
• Tell the truth. Don’t hide bad news. Treat your team members like adults. Tell them what is going on. What your problems are. What your plans are, etc. The more valid information people have, the more likely it is that they can respond effectively during emergencies.
• Communicate. In addition to responding truthfully to team member concerns, also volunteer lots of information about the company. Solicit input from team members about their ideas for improvement and about how to deal with the company’s challenges. Make sure you respond fully to every issue that comes up. That doesn’t mean you say yes to every request or implement every suggestion. It means that you take it seriously. Do something about it if you can or give the reasons if you can’t. Increase the amount of face-to-face communication. Don’t hide in your office. The more people have a chance to see you and talk to you, the more likely it is that they will feel they are part of the team and help when needed.
• Trust your people. Don’t make the mistake of instituting new, harsher, rules or more scrutiny during the tough times. You don’t want to make your team members the enemy. You will need them. Let your people know that you care about them.
Much of this may seem counterintuitive. The impulse for many managers is to withdraw, hunker down, and avoid risks when there is a threat. But, that is exactly the time that you need the strongest organizational culture. That is when it is most important to have a team that trusts you and is willing to make extra effort for the organization. That is the time to really practice what you learned during your leadership training. Even if you feel somewhat vulnerable, taking a few risks may be the right thing to do. Organizational resiliency comes from having a culture that values its employees and from team members who have become stronger over the years. That can’t happen if you have used them up.