Trustworthy Insurance:
Information Timing and Telling the Truth

Penny Hirsch
Barbara Shwom
Judith Messick

Northwestern University

Contents

     Assignments

     Sample responses

     Comments on student samples

     Teaching notes

     Potential difficulties

Assignments

Assignments

Assignment 1: Memo to Carl

Assume the role of Ann and write a follow-up memo to Carl explaining your position.

Assignment 2: Formulate a Communication Plan for Carl

You are senior managers at Trustworthy. Carl has asked you to prepare a plan for informing employees about the move. Once you've prepared the plan, determine how best to present it to Carl (e.g. written memo, presentation, discussion). Then, actually communicate it to Carl.

Sample Responses

Assignment 1 - Memorandum Sample A: Memo to Carl from Ann

Carl,
I apologize for my outburst yesterday. I firmly believe that the news you drafted yesterday would have had negative consequences.

The employees are aware that relocating is a strong possibility and suggesting that both options have equal weight might be misleading.

We can be honest and not jeopardize our negotiations. We should state that we have two options and are currently in the process of negotiating our preferred option. We are not in a position to disclose any additional info.

Carl, I understand that you are in a tough position trying to balance needs and shareholder interest. Please let me know when we can inform our employees further.

Assignment 1 - Memorandum Sample B: Memo to Carl from Ann

(This draft assumes that Ann has written a separate cover note, like a post-it note-or had a one-on-one meeting with Carl-smoothing over the previous day's blowup.)

I agree with your goal of providing information to the employees about our upcoming move. There are many questions about the move circulating around the office. This is a good opportunity to build credibility and good will with our employees in this uncertain time. Therefore I would suggest:

• A personal employee meeting
• A summary of the current status
• A review of timing
• A review of the confidential nature of the negotiations and the reasons more information cannot be disclosed

If you agree, I would be happy to draft an outline of the topics for a meeting or a memo if you prefer. I am available to discuss.

Assignment 1 - Memorandum Sample C: Memo to Carl from Ann

I want to let you know my concerns about the article and give you my thoughts about how we can better meet your goals.

First, I'm glad we are taking steps to reduce the harmful rumors. I know our employees will appreciate the information. However, I would recommend a change to the HQ location discussion.

Since we are heavily leaning toward the Wayland location, we should not give the impression that we may be staying in Ferndale. Of course we can not reveal our intentions while the negotiations are under way.Telling the employees that we can't disclose information now is O.K.; we can let them know we expect a better working environment. Please see my draft letter attached.

DRAFT LETTER

Dear Employees:

I am writing to address some of the rumors which are circulating regarding the company. My goal is to give you as much information as I can today.

First I want to discuss the status of the firm. Although the past two years have been very difficult, the actions we've taken have resulted in a stronger, leaner firm. We are well-positioned for success, and I don't envision any further structural changes or job losses.

The restructuring we have undertaken has left us with less need for office space, and we have been examining alternatives. At this time it would be inappropriate to reveal details of the negotiations in progress, but I will let you know as soon as possible.

Comments on Student Samples

Comments on Assignment 1 - Sample A: Memo to Carl from Ann

In Sample A, Ann begins the memo with an apology. This approach is direct and straightforward, and the apology itself is stated very simply. In addition, Ann presents Carl with positive suggestions, which is a good idea, and closes effectively by demonstrating an understanding of Carl's difficult position. This is a much more appropriate approach than the uncontrolled emotion in her original outburst.

However, Sample A would be more likely to appease Carl if it were revised. Ann's opening, though direct, is choppy and the sentences are not clearly connected to each other. As a result, Carl could interpret the second sentence as an accusation, which nullifies the apology of the opening. After the apology, Ann might go on to say that she may have over-reacted, but that she firmly believes that the "newsletter" (not "the news you drafted") will have negative consequences if it goes out in its current form. She should continue to be tactful, perhaps referring to the "problem" that might result from the current article. Similarly, Ann should avoid loaded language. Saying that "we can be honest" uggests that Carl is dishonest and thus also undercuts the initial apology. Ann could use more factual, neutral language (e.g. "We can disclose more information and still not jeopardize our negotiations.")

Comments on Assignment 1 - Sample B: Memo to Carl from Ann

In Sample B, Ann is repairing her credibility by using a thoughtful, helpful, and controlled response. As in Sample A, here Ann uses a strategy that begins with an apology, but she separates the apology >from the business advice by attaching a post-it, covering note to the memo. The memo itself is both conciliatory and helpful. It begins positively, focusing on the goal she and Carl share, and then reminding Carl why communicating to employees is important. Finally, the memo recommends a course of action. The specific recommendations are presented in a readable list (in parallel form) and in a logical order, although they would be more effective if they were more fully developed.

The weakest part of the Sample B memo is its ending. Carl might consider Ann's offer to draft the outline as presumptuous. Also, the last sentence includes a vague clichò rather than a specific, emphatic recommendation or restatement of the key point.

Comments on Assignment 1 - Sample C: Memo to Carl from Ann

Sample C takes an approach that may be effective in some companies. In this sample, Ann depersonalizes the issue: she ignores the whole incident of the outburst and concentrates solely on suggestions for solving the problem. The effectiveness of this approach depends on personalities, preferences, and company culture involved. For some people and in some companies, talking about a problem just magnifies it; the best "apology" may be simply to move ahead with the work.

The opening paragraph is direct but nonconfrontational. By using "we," she begins to establish a collaborative tone, which continues into the second paragraph. In the second paragraph she also uses a skillful argument-by-concession to show her understanding of Carl's position: she concedes that "of course we can not reveal our intentions," but then goes on to say what management can do instead.

Ann's proposed letter to the employees also takes a collaborative approach. It positions management and employees as partners working toward a common goal. This assumes that everyone wants the firm to be strong and successful (e.g. If employees understand how confidentiality will help achieve that goal, they will most likely respect Carl's decision to withhold crucial negotiating information).

Despite its strengths, the memo and draft letter in Sample C may be too sketchy to be effective. Ann could expand her memo's first paragraph to articulate Carl's goals; he may be more receptive to her arguments if he knows she understands his point of view. The draft letter to employees could also be fleshed out. If Ann does not have enough information to do that, she could present her ideas as a strategic outline that Carl could use to develop his own response.

Teaching Notes

Teaching Objectives

The Trustworthy Case is useful for helping students do the following:

1. Explore complex communication issues involved in internal communication between upper management and employees, including channel choice, message timing, and amount of disclosure during a time of change.
2. Explore the ethical and pragmatic implications of "lying" in business communication.
3. Discuss the most effective strategies for giving and receiving critical feedback.

Communication Problem

Both Carl and Ann have complex communication decisions to make, each with different goals and priorities. Carl needs to decide how much information he should disclose to employees during a period of change: specifically, how and when he should tell employees about his decision to move the company's office to Wayland, what channels he should use, and how he should time the announcement. Carl's dilemma revolves around how he can announce the move in a way that will address both the need for confidentiality and the desire for complete honesty. In other words, how can he meet the needs of all the stakeholders? What is the best ethical position he can come to in this communication situation?

Ann needs to decide how to help Carl communicate more straightforwardly with employees without offending him. Through what channel and in what form should she express her criticisms of his communication strategy? What strategy should she use to persuade him to reconsider his decision to publish the article he drafted?

Topics for Discussion

The following topics and questions can be used to discuss the Trustworthy Case:

1. Analyze Carl's communication decisions. In other words, what issues are on his mind? What are his priorities? Therefore, what are his communication goals? How does he conceive of his purpose and his audience? How effective or limited is his conception? How did he determine what "message" to send in his newsletter? Was that message likely to alleviate or exacerbate employee fears? Respondents usually identify several goals: Carl initially wants to dispel rumors that interfere with productivity. He wants room to complete his negotiations. His quarrel with Ann demonstrates the idea of cascading consequences. After the quarrel he has some new goals--to reconsider his action in the light of her criticism and to maintain his authority.
2. Analyze Ann's communication decisions. In other words, what issues are on her mind? What are her priorities? What are her communication goals? How does she conceive of her purpose and her audience? How effective or limited is her conception? Respondents suggest several goals for Ann: to convince Carl not to undermine company morale by lying, to repair the relationship with Carl, to regain her professional image.
3. What do you think the outcome will be if Carl publishes the article as it stands? What will happen to Carl's relationship with Ann if he ignores her criticism?
4. How well do Ann and Carl understand each other's motivations and decisions? What stands in the way of complete understanding? Consider the effect of their roles, their abilities to listen, their differing priorities. Sometimes respondents suggest that both Ann and Carl are looking at two different, but essential aspects of effective management: Ann is looking at people; Carl is looking at the bottom line.
5. Can you think of specific examples of the ways companies have handled major moves or dislocations. Did they use any strategies that Carl might have considered?
6. What are the ethical issues in this case? Is Ann right? Was Carl lying? Even though Carl is looking out for a different constituency than Ann is, is he misleading his readers? His statement makes it seem as if the company is at an earlier stage of negotiations when, in fact, they are not. Why does Carl believe such a statement is justified? Why does Ann not? Who are the stakeholders who will be affected by Carl's announcement? As it stands, will the announcement hurt anyone?
7. Does gender play a role in the Trustworthy situation? Is Ann too aggressive about expressing her opinions? Was it effective for Ann to lose her temper? What were the results of her losing her temper? Could her outburst direct Carl's attention away from the most critical issues? Might Carl be likely to dismiss her temper-tantrum as "women's emotionalism"? How might she be assertive, but more controlled and strategic, in the future?

Potential Difficulties

The Trustworthy Case raises complexities in the areas of channel choice and feedback, as described below:

Channel Choice

Is a general announcement the best way to address employee concern in the Trustworthy situation? Is the newsletter the appropriate channel for announcing the company move? What communication channel would be most effective? Should Carl have used voice mail or a memo from the office of the president? What message would be most effective? Would it have been better to say nothing until the move was made?

Similarly, is a memo the best channel for Ann to use in responding to Carl? If so, what should she say in the memo? If not, how should she respond? Respondents generally decide that it is in Ann's best interest to write something: she owes Carl an apology, she has to restore her professionalism and repair the relationship, and since she has been so critical she owes him an alternative suggestion.

As respondents talk about strategy, they generally wonder whether the apology should be included in the memo. Usually a number of alternative strategies emerge. Should Ann merely deliver the memo the next day, or should she call Carl first to apologize, so that he might be more receptive to her ideas? Should she take him out to breakfast, apologize and explain her position in person, and then simply leave him with a written summary of her suggestions?

Feedback

The Trustworthy Case also presents an example of ineffective feedback. Respondents generally talk about how Ann should display an understanding of the company's goals--the big picture. They suggest that she should use collaborative language and suggest collaborative solutions rather than being so self-righteous and confrontational. Ann should realize that by losing her temper and accusing Carl of lying, she has inadvertently focused his attention on her and not on the main issue: her concern about employee morale and the image of senior management that this follow-up to the rumors might create.