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Imagine this: Your business has grown exponentially for several years, even as competitors have had to lay off staff. And then, one morning, you lose your largest client, wiping out almost one-third of your annual revenue before breakfast.

Our Toronto business faced this reality and, one year later, we know that how you manage employee communication through a company crisis is critical to business recovery.

We didn't panic or lay off a single employee, which was possible only because we are an independent, privately held firm. Instead, we used this setback as an opportunity to revise our business strategy, to take some calculated risks by investing in new and emerging areas within our industry. It's tempting to take a conservative approach in a time like this, but with change comes the opportunity to take risks.

Strong employee communication is critically important in averting the potential "snowball effect" that a crisis can cause. It's only natural for employees to speculate about the future of the business, as well as their own.

Here are three of the strategies that we used to manage our company crisis:

1. Employees are your first 'need to know' audience

As soon as we were advised that we'd be parting ways with our client, we developed an internal communications plan that encompassed the key messages that we wanted to convey to employees, as well as the sequence of the communications rollout. We told the most directly affected individuals first, and then expanded the communications to our wider employee audience. And, we made sure to leverage all of the channels that we regularly use for employee communication, including town hall and in-person meetings, as well as e-mail.

The importance of authenticity cannot be overemphasized here. While the plan and key messages are important, it's equally vital to be real. The town hall in which we informed our office of the loss was characterized by both tears and genuine pride for the work we'd done.

And it's important to note that we did not have all the answers before that first announcement. We went ahead with all the information we had.

2. Ask for employee input

We were honest with employees in acknowledging that we'd need a fresh strategy. Unlike most clients we work for, this one had a large team that was fully dedicated to one account. And because of the nature of the work, that team held specialized skill-sets not common on our other teams. We asked affected employees where they saw opportunities to contribute to our recovery strategy and where they saw a place for themselves. We also sought input from the broader employee base. This helped us determine which areas we wanted to focus on, and proved to be a rewarding process for employees, but also for the business, as we uncovered new areas for investment and growth.

3. View employees as company advocates

Following the initial announcement, we were mindful of keeping employees informed on the state of our progress in rebuilding our business. Constant communication is imperative. The reality is that if employees feel well-informed – particularly during a crisis – they will not only feel reassured about their own situation, but will be determined to defend and advocate for the company, both internally and externally, during a period of turbulence.

Such a significant event could have led to a crisis in confidence both internally and externally. A few distrusting employees start talking to former co-workers and suddenly you're known on the street as a firm in trouble, and a downward spiral begins. Frequent honest communication to your employees is the quickest way to short-circuit any such scenario.

There's no question that the past year was a tough one for our firm. Fortunately, we've not only rebounded, but we've expanded into areas that perhaps we may not have considered had we not been faced with such a significant hit. Inevitably, every business goes through unplanned change. You may not always see upheaval coming, yet how you deal with it – including the effectiveness of your employee communications – will ultimately determine your organization's future.

Lisa Kimmel (@lisakimmel) is general manager of Edelman Toronto (@EdelmanTO). Edelman (@EdelmanPR) is the world's largest public relations firm.