Abbott Shows How NOT to Communicate

Professional communicators stress the importance of sharing as much information as possible with employees--it makes them feel more engaged, empowered and builds organizational trust. Abbott Laboratories recently showed just how damaging the alternative can be.

On July 13, the North Chicago, Ill.-based health care products maker shed about 5 percent of its Lake County, Ill. workforce to boost profit margins that recently were below Wall Street expectations. Keep in mind that Abbott posted a 38 percent gain in second-quarter profits Wednesday, Wall Street wanted more.

How Abbott responded can be a case study for botched corporate communications. It's time to revise Abbott's portion of the book, "Good to Great," with the subtitle, "Great to Stupid." Here are observations made by two long-term Abbott employees--one who was there on "Black Wednesday," and the other who returned from vacation just after.

I came to work that day and opened the outer door to enter my building. A man was walking toward me, carrying a box, so I held the door for him. He didn't say anything to me, but I didn't think much about it. Until I saw a lady behind him, also carrying a box. It became a parade of people, each carrying a box. It was then that I put two and two together, realizing why there was extra security in the parking lot.

These people--most of them long-term employees--were told to give up their badges, that they were terminated effective immediately, and that they could fill that one box with their personal items and leave!

The reactions of the people as they walked by me were different. Some looked resigned to it--I don't know if that was how they felt inside. Others clearly had been crying, and looked scared.

Another Abbott employee who returned just after Black Wednesday, was incredulous when he heard about the lack of communication and compassion during the process. He spoke to many people in the days to follow, as colleagues continued to check on whether he was one of the survivors.

People said that the only thing they were told was, "Don't go to any meetings and stay by the phone at your cube." That was so that they could find you if you were on the list. One person I know, a single mom with twins, was called at home and told that she had to come in so that she could be terminated.

The managers who did the terminations had been told to read from a script and to not deviate from it. So the process was very cold. At 3 pm, managers called their remaining people together and told them it was over. One meeting turned into a grip session, and the manager said, 'This isn't your father's Abbott.'

Obviously. That calculated process of moving quickly and providing scripted information is advice that appeals to legal-minded people. Don't take a chance that you will say something that will let someone sue. Don't get into emotional conflicts.

That is crap, if you care about your employees. The people who worked for decades at Abbott and then were escorted out like criminals, and the people who worked for decades at Abbott and watched their friends escorted out like criminals now have one common enemy: Abbott. The anger and betrayal they are feeling will not be glossed over by next quarter's analyst reports. The rumor mill--always in fine form at Abbott--will be actively engaged; Abbott employees will not be. Don't expect productivity to soar anytime soon at Abbott.

And how did Abbott's stock price (the bottom-line reason for this heavy-handed event) fare afterward? Shares in Abbott dropped $2.06, or 4.1 percent, to close at $47.65 Wednesday on the New York Stock Exchange, one day after they closed at $49.99 to match a three-year high. That probably caused Abbott's board and management to lose more sleep than did their handling of employee terminations.