I found this week’s reading selections to be my favorite thus far in the course. I have always been interested in the field of public relations and strategic communication. While I liked reading about strategic ambiguity (especially for the United States as a tactic to combat the nation’s poor global image due to the War on Terror), I particularly enjoyed The Strategic Communication Imperative written by Ugenti, Howell, & Beck (2005). The examples given within the readings were business examples that I could easily apply to my own real world examples with a full understanding.
Ugenti, Howell, & Beck (2005) document the best practices for strategic communication with some major well-known business examples. While some of the strategic communication in the examples was proactive and a result of good planning, there were also examples of reactionary strategic communication that proved to be successful. Though it is always best in any business situation to be proactive and prepared rather than have to be reactionary and change strategy in a situation, businesses can still profit and succeed in the latter situation.
One of the examples cited by Ugenti, Howell, & Beck (2005) was FedEx. Ugenti, Howell, & Beck (2005) quote the president and CEO of FedEx, T. Michael Glenn, when he says, “Communication is at the center of everything. You can’t execute strategy if you can’t communicate about it … The communication philosophy goes back to [founder] Fred [Smith] and his military training. His management philosophy is ‘Shoot, move, communicate.’” (p. 84). This comment held true when FedEx was forced to lay off employees due to the economic downfall (Ugenti, Howell, & Beck, 2005). Though the company was experiencing hard times and forced to do the difficult thing of letting people go, it did so with a particularly savvy communication strategy. “The company not only offered generous voluntary severance packages to its departing employees, but it clearly communicated this both internally and externally using a multifaceted approach across a variety platforms to maintain employees’ loyalty, customers’ trust and the good graces of Wall Street.” (Ugenti, Howell, & Beck, 2005).
This particular example reminded me of an almost identical situation that I experienced at Macy’s in 2009. Similar to FedEx, Macy’s was dealing with the hardship of the difficult economy. To reduce costs, the company was forced to centralize the buying offices, thereby shutting down several corporate locations around the country. The process took about a year as corporate locations in Seattle, Minneapolis, and San Francisco were closed one by one. The closure in San Francisco alone put over 4,000 employees out of work. Similar to FedEx, Macy’s, in order to stay afloat, had to create a strategic communication strategy.
Macy’s delivered the message to the employees affected, the other employees across the company, and, in the same day, alerted the media. This strategy allowed for open communication to both employees and the public. Similar to FedEx, Macy’s offered generous voluntary severance packages (Ugenti, Howell, & Beck, 2005). In addition to the severance packages, Macy’s created a temporary career center to help relocate displaced employees to other jobs both within Macy’s and even to Macy’s vendors and competitors. Hot lines, special websites, and an HR meeting center were all created for employees with questions and concerns about the layoffs and their final three months with Macy’s, a tactic that was also used by FedEx (Ugenti, Howell, & Beck, 2005).
In these more difficult economic times, it is of the utmost importance to have a strategic communication plan in action and one with a long-term goal in mind. Ugenti, Howell, & Beck (2005) quoted Eric Jackson of FedEx when he said, “It’s not about meeting next quarter’s numbers. We have 30 years of history and want 100 more.” (p. 89). This especially rings true for a company like Macy’s, which has been in existence for over 150 years. With the ability to strategize and manuever through the tougher times, there is no reason why both companies will not be able to thrive in the next 100 years.
Reference:
Argenti, P., Howell, R., Beck, K. (2005) The Strategic Communication Imperative, MIT Sloan Management Review, 46 #3, pp. 83-89
Ugenti, Howell, & Beck (2005) document the best practices for strategic communication with some major well-known business examples. While some of the strategic communication in the examples was proactive and a result of good planning, there were also examples of reactionary strategic communication that proved to be successful. Though it is always best in any business situation to be proactive and prepared rather than have to be reactionary and change strategy in a situation, businesses can still profit and succeed in the latter situation.
One of the examples cited by Ugenti, Howell, & Beck (2005) was FedEx. Ugenti, Howell, & Beck (2005) quote the president and CEO of FedEx, T. Michael Glenn, when he says, “Communication is at the center of everything. You can’t execute strategy if you can’t communicate about it … The communication philosophy goes back to [founder] Fred [Smith] and his military training. His management philosophy is ‘Shoot, move, communicate.’” (p. 84). This comment held true when FedEx was forced to lay off employees due to the economic downfall (Ugenti, Howell, & Beck, 2005). Though the company was experiencing hard times and forced to do the difficult thing of letting people go, it did so with a particularly savvy communication strategy. “The company not only offered generous voluntary severance packages to its departing employees, but it clearly communicated this both internally and externally using a multifaceted approach across a variety platforms to maintain employees’ loyalty, customers’ trust and the good graces of Wall Street.” (Ugenti, Howell, & Beck, 2005).
This particular example reminded me of an almost identical situation that I experienced at Macy’s in 2009. Similar to FedEx, Macy’s was dealing with the hardship of the difficult economy. To reduce costs, the company was forced to centralize the buying offices, thereby shutting down several corporate locations around the country. The process took about a year as corporate locations in Seattle, Minneapolis, and San Francisco were closed one by one. The closure in San Francisco alone put over 4,000 employees out of work. Similar to FedEx, Macy’s, in order to stay afloat, had to create a strategic communication strategy.
Macy’s delivered the message to the employees affected, the other employees across the company, and, in the same day, alerted the media. This strategy allowed for open communication to both employees and the public. Similar to FedEx, Macy’s offered generous voluntary severance packages (Ugenti, Howell, & Beck, 2005). In addition to the severance packages, Macy’s created a temporary career center to help relocate displaced employees to other jobs both within Macy’s and even to Macy’s vendors and competitors. Hot lines, special websites, and an HR meeting center were all created for employees with questions and concerns about the layoffs and their final three months with Macy’s, a tactic that was also used by FedEx (Ugenti, Howell, & Beck, 2005).
In these more difficult economic times, it is of the utmost importance to have a strategic communication plan in action and one with a long-term goal in mind. Ugenti, Howell, & Beck (2005) quoted Eric Jackson of FedEx when he said, “It’s not about meeting next quarter’s numbers. We have 30 years of history and want 100 more.” (p. 89). This especially rings true for a company like Macy’s, which has been in existence for over 150 years. With the ability to strategize and manuever through the tougher times, there is no reason why both companies will not be able to thrive in the next 100 years.
Reference:
Argenti, P., Howell, R., Beck, K. (2005) The Strategic Communication Imperative, MIT Sloan Management Review, 46 #3, pp. 83-89
Hi Cathryn,
ReplyDeleteIt sounds like Macy's demonstrated in 2009, why they have over 100 years of longevity in retail. As a professional that is involved with the on-line sales of the firm, I would think the communication strategy must be somewhat detailed to insure the right message is projected to the public through every aspect of the company's on-line presence.
In what ways are the five lessons described on pages 88-89 of the Argenti article implemented to insure proper messaging on-line, or is there more of an approach of strategic ambiguity, as the internet is a dynamic ever-changing vehicle?
Lauren
Hi Lauren,
DeleteLet's see...Lesson 1: The top top level executives were involved highly in the level of communication and had orchestrated the entire day from beginning to end.
Lesson 2: Communication for the most part was integrated. At the time, I worked in store management and though the layoffs did not directly affect me, we were all brought into our boss's office and read an announcement from our CEO directly before the media was contacted with the same message.
Lesson 3: Informal relationships are always key in my position with Macys.com...I don't that doesn't specifically have to do with the layoff situation, but I definitely see it through out the company.
Lesson 4: The communications definitely had a long-term orientation. The goal of the layoffs was also to restructure the company and it created the (then new) MyMacy's initiative (still alive and strong today). The company did not burn bridges with any of the former employees and in my offices at Macys.com, I work with several former Macy's West employees (people who were laid off in SF corporate).
Lesson 5: Our top communicator within the company is our CEO, Terry Lundgren. He really does do a fabulous job of encompassing the broad management skills, knowing the business, communicating the strategies, maintaining a clear message, and just leading in general.
I'm glad you enjoyed the readings for this week! It's very interesting to hear how Macy's handled large scale layoffs. Do you think Macy's provides an exemplary example of how to handle such a situation? Can you think of any recommendations for improvement? Has Macy's has developed an equally effective strategy for less "crisis-oriented" communication? Do you feel like there is a long term orientation to the company's communiation strategy, which Argenti et al cite as being so important?
ReplyDeleteHi Jessica,
DeleteYes! More like those please. :) I think Macy's did do the best job that they could in a tough situation. I think that what they did a fabulous job of (as mentioned in my comment above) is that they didn't burn bridges. Macy's maintained a good relationship with its employees and several returned to the company to work with me at macys.com. The way that they communicated the changes were all effective in not scaring away vendors, and more importantly, customers. My recommendation for improvement would be waiting just a little longer to tell the media. I know that it is important to inform the media quickly before it becomes a game of telephone and the wrong message is delivered. However, the media was informed almost immediately after those who lost their jobs were told. The wound was still pretty fresh and then they had to go home and see it all over the news. I would also say that Macy's really took lemons and turned them into lemonade. From the layoffs, they created and implemented a new customer-centric MyMacys initiative that has been quite a success. There was long term orientation with this strategy as it is still going strong 3 years later and looks like it will continue for quite awhile.
Nice job drawing the correlation between FedEx and Macy's in the way that they both developed efficient strategic communication plans during a difficult time of structural change. It's good to know that large organizations learn from one another in situations like these, as Macy's applied protocol from FedEx's school of thought.
ReplyDeleteHi Cathryn,
ReplyDeleteThanks for posting. You know that flash activity we did where we chose the email to send out? How did Macy's prepare the employees for the downsizing? Did they communicate it directly and early? Did any of the top executives hold townhall-type meetings before the changes (layoffs, etc) went into effect? I'm curious as to whether the rumor mill was highly active preceding any official communication. Having been through this with a few companies, I find that morale drops tremendously once the rumors start flowing and the sooner management responds, the better.
Hi Megan,
DeleteI think this is one of the ways that they could have improved. What they did was they had a townhall type meeting (announced on office door posters when people got into work on Monday morning). The meeting was in a hotel ballroom across the street (not a usual meeting spot) and when people arrived there were security guards and no furniture. Talk about a scary and depressing environment. The media was then alerted to the lay offs and a press release hit the Macy's intranet for other employees to read. However, I think the generous severance packages and relocation services helped ease the pain after that rough announcement.
Cathryn,
ReplyDeleteIt was great how you used the example of the downturn in the economy and Macy's subsequent handling of the situation to discuss strategic communication. With discretionary spending slowing because of the difficult economy, it was interesting to see how a company like Macy's handled the situation. Obviously, reductions in the workforce were necessary. But, it was the handling of the layoffs that I was most impressed to read about.
It appears management carefully thought out their strategic communication message. You were right about their strategy being long-term. Instead of alienating employees, management was smart about consolidating operations and a providing compensation packages and relocation assistance. This no doubt build up a lot of goodwill amongst current employees.
I was wondering if you knew if any other retail corporations were following Macy's strategy?
Recently, I know that Sears has been downsizing. I have heard through the grapevine that they are doing it little by little (so that it doesn't leak to the press) and they aren't offering any of the job relocation help and HR services that Macy's offered during their layoff period. Kind of rough...
Delete