The Analysis: The Wisdom of Your Own Employees

More companies should follow DocuSign's example of engaging staff during a crisis, say communications experts Gene Colter and Ted Birkhahn

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Crisis strikes. Senior management hides its head in the sand. Employees become uncertain about the future of the company and start looking for new jobs instead of feeling as if they have any stake or say in improving the situation.

It's an all too common scenario—especially during times of economic downturn—and one the executives at DocuSign were wise to avoid, according to Gene Colter and Ted Birkhahn of New York strategic communications firm Peppercom. A lot of companies overlook employees as a key audience to communicate with during a crisis. They look at investors, they look at customers, and they look at other stakeholders outside the company. But they don't look inside," says managing director Birkhahn.

At the very least, companies who are open and honest with their staff about big changes in the market can hope to prevent loss of morale and the departure of talent. "If you're not talking truthfully about the changes the company is facing, its going to be very hard to motivate smart people," says editorial director Colter.

Don't Wait for a Crisis

Under the guidance of its new chief executive officer, Matthew Schiltz, DocuSign even went beyond this first step of transparency and proactively involved its employees in navigating the bumpy road. Birkhahn applauds this kind of engagement, since rank-and-file employees often know better than anyone where new opportunities lie and adjustments can be made.

But he suggests that the feedback channels they opened—including town-hall meetings and employee subcommittees—should have been there all along. "Why wait until a crisis actually takes place?" he asks. "Companies that have these forms of communication in place during good times are able to respond a lot quicker and a lot more effectively when the bad times hit."

While group get-togethers worked well for the three dozen or so staffers of DocuSign, larger companies have turned to Web 2.0 to engage employees—sometimes on a global scale. "Digital has really changed the game. It helps management respond to a wider group of people," says Birkhahn. For example, IBM (IBM) employees log onto an online forum for an annual, three-day, open brainstorming session about new company initiatives called World Jam. And Tribune (TXA) employees participate in a Digg-style intranet forum called IdeaBank, where the best ideas for new TV shows, newspaper sections, and other media ventures get voted to the top by colleagues and considered by head honcho Sam Zell.

Creating Brand Ambassadors

Colter points out that DocuSign did launch a company blog in March, 2007, to encourage interaction among managers, employees, and customers but stopped updating by the year's end. In the midst of a transition, he says, "Whatever communication you're doing, you have to maintain."

When managers actually listen and implement some of the ideas of their reports in company strategy, they often do much more than avoid turnover. They create "brand ambassadors," employees who will go out into the community and stand as proof that their troubled company is taking care of its workers. That's "much more effective than the CEO standing up there and saying it, it's much more effective than putting a press release out there," says Birkhahn. "If you can create a whole army of brand ambassadors, that's going to really help you get through this and make sure that the right messages are getting into the right hands."

During a company crisis, and particularly during a broader economic downturn, workers need to be reassured that their jobs are secure and that their input matters. By doing both, DocuSign was able to pull itself out of rough water.

Douglas MacMillan is a staff writer for BusinessWeek.com in New York.