CASE STUDY NO. 2912: EMPLOYEE COMMUNICATION


DOW CORNING TAPS TWO-WAY COMMUNICATION CHANNELS DURING DIFFICULT CHAPTER Communicating credibly and effectively with employees always is a critical challenge for corporations. When a company enters a well-publicized Chapter 11 proceeding, the stakes are even higher, so that the effectiveness of employee communications can have a direct impact on its survival. Since May 15, 1995, Dow Corning Corp., Midland, Mich., has been operating under Chapter 11 protection, an action it took to protect itself from hundreds of pending lawsuits related to silicone breast implants. The filing occurred after nearly three years of intense public scrutiny and highly publicized encounters with the U.S. Food & Drug Administration and plaintiffs' attorneys, who were seeking damages for clients allegedly injured by breast implants containing silicone manufactured by Dow Corning and others. The Chapter 11 process appears to be nearing a close, with a resolution anticipated in 1997. (Dow Corning officials are prevented by court order from discussing the status). But for most of 1995 and also this year, communicating the impact of the filing has been the major focus for the employee communications department. Anticipating the possibility of a Chapter 11 filing in early 1995, Dow Corning's communications team developed a communications plan that would reach the company's more than 8,000 employees around the world, and especially the nearly 5,000 based in the United States. Jan Botz, then manager of internal communications, led the effort to communicate with and open channels to, employees. Because of the critical and complex nature of the Chapter 11 process, Botz and other managers decided that communications must include a heavy component of direct, interpersonal communication. "Printed communications alone was not going to cut it," said Botz. A principal component of the communications effort was a series of quarterly meetings known as employee forums. Held at various company locations, the sessions principally were an opportunity for employees to ask questions of top management. For those--such as sales executives--unable to attend, many sessions were videotaped for later viewing. Employees unable to attend or who missed an opportunity to ask a question also were able to e-mail questions to the employee communications department, which forwarded them to the appropriate top executive for his or her response. The department kept questions and answers on file. In this way, it was able to monitor which types of questions came up most frequently. Also, when a question already had been answered, the department was able to forward an executive's previous response, to save busy executives' time. Over the first several months of the program, the employee communications department received hundreds of queries from employees through this channel. Another series of meetings, held on a monthly basis, was a "breakfast with the CEO" session. For this, the employee communications department selected 30 employees at random for an informal meal with Dick Hazleton, president and CEO. While discussion at the meetings was not limited to the Chapter 11 situation, it invariably became the major topic. Dow Corning executives also recognized the emotional dimension to the situation. Understandably, employees were worried about their job security. And some wondered if these were things that they should speak about openly, at work or in their personal lives. Early in the Chapter 11 process, the company held a meeting at a local high school near corporate headquarters to address these feelings. "The idea was, we made it OK to talk about it," said Botz. psychologist was on hand to help employees discuss their feelings, and the stress such feelings could cause. Print, Electronic Communication While the "dialogue-based" approaches using face-to-face communications were the centerpiece, Dow Corning made ample use of printed as well as electronic communication. In the first several weeks after the Chapter 11 filing, the employee communications department issued one or more e-mail updates per week. E-mail was used for its speed and efficiency. For example, at the beginning of the Chapter 11 process, all employees received an e-mail 15 minutes after the filing. A printed news sheet, "Update," was issued frequently, on an as-needed basis, to inform employees. One of its major uses was for reprinting of media reports which had appeared on Dow Corning and the Chapter 11 process. The quarterly employee magazine, Dow Corning World, for the most part was not used to communicate about Chapter 11 matters. Its coverage is designed to keep employees informed of ongoing business operations and results. Has Dow Corning been successful with its internal communication effort? Botz said two employee surveys showed that employees' needs for information were being met. In a June 1995 survey, about one month after the Chapter 11 filing, 92 percent of polled employees said their need for information "on the breast implant issue" was being met. That figure dropped slightly, by a statistically insignificant 3 percent, when the survey was repeated in November, 1995. Employees' assessment of their management's performance in delivering information also scored highly: 89 percent positive in June, and 84 percent positive in November. (Dow Corning, 517/496-4000)

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