Do (and communicate) the right thing at
the right time
A few
months ago, Novartis, one of the biggest pharmaceutical companies in the world,
aroused people’s attention by announcing a cutback on more than 1000 jobs in
their Swiss headquarters and a local production facility, while at the same
time reporting on a profit in excess of USD 10 billion for the first nine
months of 2011. Unsurprisingly, such a controversial announcement wouldn’t make
sense for the general public and especially not for the company’s soon-to-be
ex-employees.
However,
after a certain period of considerable protest on the part of the employees and
their unions and the usual stubbornness and secrecy of multinational
corporations in such situations, yesterday’s newspaper reported on a wondrous U-turn
that seem to have occurred in the management of Novartis. Whereas nobody has to
leave the outdated production facility (that even receives a substantial
makeover) anymore, also the job cuts in the headquarters could have been
reduced by over two third.
After
digging deeper into the triggers that caused Novartis to act this way, it
appears that a fruitful dialogue between the involved stakeholders from the
economic, political and social sphere has taken place in order to mutually find
a better solution for the company’s planned restructuring in Switzerland.
Apparently, managers from the US had a great influence on the overhasty
communication regarding the mass layoff and were afterwards surprised by Swiss
people’s intense reaction on the announcement.
What tells
us this story? In my opinion, the case vividly illustrates two important
aspects of stakeholder management and the idea behind “people-for-people”. On
the positive side, the case confirms that bringing together the involved people
in the form of a multi-stakeholder dialogue, clearly has the potential to yield
most favorable solutions for all involved parties in situations like this -
given the dialogue is set up correctly and all parties are willing to
constructively contribute to the solution.
However,
on the negative side, the right timing and corporate communication in the
context of such stakeholder round-tables as a problem-finding an -solving
approach is also decisive and – as shown in this case – can go terribly wrong.
Why Novartis risked reputational damage and didn’t first try to involve the
concerned stakeholders, search for common ground and this way actively seek a mutually
beneficial solution that might even put them in a favorable light from a
best-practices perspective remains their secret.
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