By Dan Cable, Professor of Organisational Behaviour, London Business School
There is an old PR adage that "you can’t communicate your way out of a crisis that you behaved your way into." This has never rung so true as when seen in the context of the recent sacking of 800 British workers by one of the UK’s leading ferry companies. Ever since P&O Ferries decided to tell employees, without warning and via video, that March 17 “was their final day of employment”, the company has been fighting a losing battle in the PR stakes. No unions were consulted, the crew was given zero notice, and security staff were employed to escort crew off their ships while cheaper agency staff waited at ports to take up the vacated roles. In the resulting furor, passengers were left stranded, trade unions took to the streets in protest and chief executive Peter Hebblethwaite was hauled over the coals by British politicians for the insensitive way in which the situation had been handled.
Kate Hartley, author of How to Communicate in a Crisis, summed up the PR disaster rather succinctly in the British press when she was quoted as saying, “the plan seemed to be: sack 800 staff with immediate effect by three-minute video message; manhandle those who refuse to leave their posts (using handcuffs if necessary); leave customers stranded in various ports because there’s no one to crew ships; and replace all staff with cheap labor in a few weeks. What could possibly go wrong?”
P&O did, of course, get things badly wrong with its cynical and illegal approach. An employment solicitor told the BBC that while the approach adopted by P&O is not unheard of, it is exceptional to forego appropriate notice and consultation processes. Another legal expert said that P&O’s actions would affect the brand’s reputation due to the “apparently wholly planned approach being taken to such a large proportion of its workforce ignoring some of the basic fundamentals of employee relations.”
That the brand’s reputation, and that of its chief executive Peter Hebblethwaite, has suffered hugely is indisputable. Hebblethwaite – asked at a House of Commons joint committee if he was in this mess because he didn’t know what he was doing, or if he was “just a shameless criminal” – was forced to admit that the company had chosen to act illegally by not consulting with the union in order for the company to survive.
The company has faced a mauling by the British press, with news headlines ranging from "P&O Ferries fires new agency workers for drinking on the job" to "Reform company law to avoid another P&O Ferries scandal, say bosses." The bosses in question hail from a coalition of 1000 businesses, which has urged British politicians to reform company law through a “Better Business Act” to make environmental and social concerns just as important as profit.
There has been a widespread move in recent years towards recognizing the interests of multiple stakeholder groups and a recognition too of the importance of companies being seen to be good citizens, which makes P&O’s seemingly short-term "spreadsheet thinking" approach appear very much out of line. Rabobank, for example, took the long view when it had to make 30% of employees redundant back in 2016. The bank took about a year to work things through, helping to retrain employees and offering redundancy packages to others. Under these conditions, many employees were comfortable finding other employment, and many preferred the changes once they landed.
Treating people fairly helps improve an organization’s reputation, which makes it much easier to hire good people once things improve and companies are in a position to increase headcount. If you have a reputation as a bad employer, it is much harder to recruit, or even to retain staff when they get outside offers. Those employees who survive a cull often experience survivor sickness and are scared that they might be next in line to lose their job, undermining morale and harming productivity.
At the end of the day, it is all about having a sustainable approach to business. Being sustainable is about more than not polluting the planet. It is also about taking a long-term view regarding different stakeholders - including employees - because without trusting relationships with employees, a company risks creating a negative employer brand.
Had P&O Ferries taken more of a long-term approach, the company might not be facing criminal and civil investigations into the circumstances of the redundancies, the company brand might not have suffered so badly, and the company’s bottom line might not have been as damaged as it has by the ship groundings and customer defections that have resulted from the debacle.
Dan Cable is Professor of Organisational Behaviour at London Business School. Dan was selected for the 2018 Thinkers50 Radar List, The Academy of Management has twice honoured Dan with “Best article” awards, and The Academy of Management Perspectives ranked Dan in the “Top 25 most influential management scholars.”
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May 04, 2022 at 08:00AM
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