When great leaders hit rough times they dig deeper, search for creative solutions and inspire the people around them to achieve great things. They also take time to pause and reflect, to pay attention to what is happening in, and around the organisation. They plan for every eventuality and only after careful consideration and preparation do they act.
Most important of all, they stay True. Here is one leader’s story of leadership when it mattered the most.
Facing the Reality
Dave Rae, Director of Operations at Haemonetics, is flying home from the USA. He has been given the news that the Corporation is considering closing down the Scotland Operation he leads. Whilst he is deeply disappointed, he is not surprised.
When Dave accepted his role he knew that there were huge opportunities for improvement on the site. Since then, under his leadership, the site had been delivering targeted cost savings and continuous operational improvements.
“We had been making good progress shifting our performance from good to great.” he told me. “But whilst we had been training to be world class middle distance runners we suddenly found that we had been entered into the 100m sprint.”
There had been changes in the corporate leadership and global strategy. The growth markets were in Asia rather than Europe and the cost of production in Asia was much lower. The attraction of manufacturing in Malaysia rather than Scotland was obvious.
With a long flight ahead, Dave had time to process his disappointment. He had put huge energy into making a positive impact on the site’s performance. He had successfully instilled greater customer focus and seen the commitment and dedication of the employees rise as they saw the results. Things were improving – but not fast enough to compete with the allure of Asia.
Dave reflected on coming to terms with the future; “As a leader you have to understand why the business makes the decisions it does. It was the right decision from both a cost and market perspective. It did make good business sense. You can argue until you are blue in the face, make life difficult and get yourself into a spin. Or you can choose to put your energy and time into supporting the decision.”
At that moment Dave made an important decision; to focus on performance rather than fighting the inevitable. The site would deliver excellence in every area it could, even if it could not compete on cost. If it was going to close, it would do so with all heads held high.
Over the weeks that followed, it became clear that no final decision had yet been made and it could be some time before it was. Dave could therefore tell no-one about the possibility of closure and carried on leading the site improvement programme.
I asked him why he didn’t leave and find another job. He replied “It would have been the wrong thing to do. I had a personal responsibility to the people and to the process.”
Dave described the leadership choices he made:
• Remember this is about the people, their lives and families
• Be respectful and transparent
• Accept the reality of the situation
• Put energy into making it work rather than resisting change
• Recognise the critical importance of the purpose of the organisation “together we save lives”
• Do the right thing and be true to his values
• Fight the right fights
Having made these choices, Dave committed to seeing the situation through. “There was still a job to do and the site would continue to perform – proudly.”
Building the Leadership Team
Ironically, Dave needed to hire some senior leaders during this period. It was tough to make job offers with the potential of closure hanging over, but he needed the best possible team in place to face the future challenges.
“I needed the right functional skills mix. But more than that, I needed people with the right values. I found leaders I thought would do the right things and bring positive energy.”
One of these new leaders was Andrew Morrow, the Human Resources Manager. Eight weeks after he joined, Dave told him that the site was at risk. Andrew’s remit quickly changed.
The pair agreed that, once the final approval from the Board was confirmed, they would use all of their energy and creativity to execute the change well.
With a period of uncertainty ahead and the need to keep the possibility confidential, it was a huge relief to have someone to talk to.
The two leaders had then to turn attention to building the new leaders into a cohesive and strong team – fast.
Holding the Leadership Space
Dave and Andrew knew that they needed to be ready to act if final approval was confirmed. They began to scenario plan. They considered every possible eventuality and created deep and detailed plans. They considered all the potential individual and organisational reactions to the eventual announcement, and prepared for these mentally, emotionally and practically.
“We had employees with more than 20 years’ service and also a lot of shorter term, temporary staff. We recognised the risk of losing staff, particularly those with shorter service. So it was imperative that we planned for this.” Andrew observed.
Dave added his views “It was really important to me that we created a sense of ‘we’; we are all impacted and all involved. The team had to believe that we (the leadership) were representing them, and not just our own interests. This message had to be communicated early and consistently to everyone. It also had to be demonstrated in our actions and how we conducted the consultation process.”
This was particularly difficult; the business initially wanted to apply statutory terms. With the retention of staff an imperative, it was essential to influence a bigger budget. After several very difficult discussions, this was achieved.
Budget secured, Dave exemplified the importance of “we” by flattening the distribution of the discretionary redundancy payments. “Our intention was to benefit the many, not the few. We respect long service, but needed to ensure everyone got the financial support they needed.”
The time came to make the announcement; starting with the leadership team. Dave and Andrew prepared carefully for that. Together they talked through how each would be likely to react, what was important to each individual, what role they would each want and need to play and how best to communicate and support them.
“Dave and I had had time to process the news and deal with our own reactions. The rest of the team would need time to do the same before supporting their own people through.”
Andrew explained. “We had to demonstrate that we understood their individual reactions and disappointment. Then try to coach them all to a place where they could set aside temporarily their personal needs. To stand up in front of the employees and show a united support for the decision. Then to be there for our people.” A big ask.
Dave and Andrew had rehearsed the announcement over and over. They had agreed that it had to be honest and transparent and delivered with respect and empathy. The EVP of Global Manufacturing Operations wanted to be there. He recognised that the staff needed to understand that this was a corporate decision.
In the end the announcement went as well as could be expected. Afterwards the leadership team held structured one-to-ones as well as team sessions. All of questions and answers were pooled and documented and communicated to all staff on an ongoing basis. They offered opportunities for confidential conversations and walked the floor regularly. Employees were kept constantly informed of the next steps of the process, how it affected them and were given optimal opportunities to have their voices heard.
But the leadership had also planned a return very quickly to the normal momentum of work. Performance pressure was high and there was still lots of improvement work to be done. If the people were busy and achieving good results, they would be in a more positive mind-set for the future. There was even a ramp up in the production plan in response to market demand. This resulted in the need to recruit additional people; sending mixed messages. So constant communication was imperative.
Dave was unequivocal “I explained to our people; I understand you are upset and angry, we all are. But that is no excuse for poor performance and it is essential that we maintain the right attitude and behaviours as our performance is a reflection on us all. We all work for the patients who use our products. We still have the choice to put the customer first - let’s not take this out on patients and donors. They knew how much I cared, but I was black and white about behaviour and standards of performance.”
Dave set similar clear expectation with the leadership team. The team would meet daily in the aftermath and Dave and Andrew monitored the team dynamic closely to respond to needs for support and opportunities to leverage their skills.
Balancing Corporate Citizen and Employee Advocate
The 45 day statutory consultation period began. Relationships between the Dave’s team and the employees had always been good and they were keen to maintain this. In the early meetings the principles of openness and honesty in communication were established and the consultation actually closed with no conflict.
Shortly after the statutory 45 day consultation period expired, the demand for product soared. Subsequent demand resulted in delays to the site closure; albeit with a much smaller workforce. So, more than 2 years after the announcement, Dave and Andrew and the team are still leading the site and expect to be around until Spring 2017.
“Whatever happens, we will walk away with pride and our heads up.” Dave tells me. “This has been so important to the outplacement of the employees who have left so far. They go into the employment market with a sense of success and confidence rather than failure.”
It has been more than ‘business as usual’ at the site too. Absenteeism is less than 2%, Turnover near zero and the site won awards last year for ‘Best Site Performance’ and ‘Safest Site’. Andrew tells me “We significantly improved our Employee Engagement scores to over 80%. Our robust and detailed Outplacement Support Programme resulted in 91% of those who have left us being in new employment or further education. That programme played a very key role in maintaining engagement, motivation, performance and retention.”
Dave said at the time “We know how this story ends, but there are a few chapters yet. If we stay focused on the corporate objectives and continually driving improvement, we are also in a better position to support our other objective – supporting 300 people into new jobs.” Dave has chosen to walk a straight line between being a good corporate citizen and employee advocate. He chose his fights carefully; the redundancy payments budget, the investment in outplacement support and delivering his promises about clear and open communication.
In return, the employees have shown great loyalty, trust and commitment and have delivered record performances. There has been no negative publicity generated by employees and all of the leadership team are still in place. In last years’ pay review, everyone got the same increase to emphasise the importance of one-site.
Dave’s final words to me “It’s at a time like this that you absolutely have to have the right leadership team. More than anything else, it’s about who you are and your values. It’s really tough to keep going, but I made my commitment and will see it through. I am proud of the whole team.”
Haemonetics supplies blood management solutions to the global healthcare sector. It employed nearly 300 employees in Bothwell. Production finally stopped in February 201. The site did not miss a single target since the closure was announced in 2014.
My sincere thanks go to the leadership team for the privilege of having worked with them. More especially to Dave Rae and Andrew Morrow, who gave their time to the writing of this article and inspired me with their leadership, values, resilience and genuine care for people and their futures.