How do I address low employee morale?

Written by Technically Media CEO Chris Wink, Technical.ly’s Culture Builder newsletter features tips on growing powerful teams and dynamic workplaces. Below is the latest edition we published. Sign up here to get the next one this Friday.

Every Friday at 12 p.m. PST in 2014, Vladik Rikhter took questions about what wasn’t working at his company.

The cofounder and CEO of Zenput, a 150-person company that sells software to multi-location food service businesses, says he’s had a great last year. But following their seed round in 2014, the company lacked an identity and culture was thin. They suffered turnover and changing focus. In 10 years of operation, that was their most difficult. Then they got to work. They started that weekly all-staff open discussion. They learned and built a more resilient team.

Then in 2020, the first months of the pandemic were frightening for all, especially for a food service business like Zenput. Rikhter said that the pain and work of years before made it possible to get where they are now. This summer, his San Francisco-founded company doubled revenue, headcount and announced a $27 million Series C. Business Insider listed him as one of 33 people changing the restaurant industry.

Work comes with complexity.

Even companies with peerless growth trajectories will have stumbles. In 2020, 27 of the country’s biggest companies did rounds of layoffs, amounting to 100,000 staff, despite it proving an exceedingly profitable year. Surging startups did too. Ugly incidents take place even at companies with a reputation for professionalism.

That means every company has highs and lows in employee morale. This is the “jaggedness” of “The Messy Middle,” as tech executive and entrepreneur Scott Belsky put it in his 2018 book by the same name. Yet only two stages of private companies are most visible: the noble origin story, and some finish line — a chest-thumping acquisition, an enlightened closure or well-timed transfer from founder to custodial executive.

Forget about the peaks, what about the valleys?

Rikhter says it starts with the foundation: Build a resilient leadership team, keep transparency consistent even as it gets tougher and invest in team identity.

Build a resilient leadership team

To survive both peaks and valleys, you need a central core that works at your company not just for the highest compensation, but for what your company represents. To do this, Rikhter says he hires for three attributes in his leadership team: work ethic, flexibility and collaboration.

When things get tough — whether it be an external or internal threat to morale — the work changes. Leaders must put in the hours and adapt their roles so the rest of the team sees all are making sacrifices. Show the work ethic. To do that well, your leaders need to be as adept at speaking in detail to individual contributors as they are to board members of major clients.

That’s humility and flexibility. Self-promoters don’t work in this model, he said. The top work priority has to be to elevate the company’s brand, which in turn will help elevate the professional status of everyone involved. The wrong leaders instead focus on their own brand first.

Keep the transparency up

It’s easier to show your team the company bank balance when it’s full than when it’s empty. Likewise, in your company peaks, transparency is easier. It gets a lot harder during challenging valleys.

That’s why Rikhter said he highly prizes employees who value transparency, authenticity and “enjoying the journey.” When employee morale is low — controversy, crisis or scandal — leaders must be more present, not less. Add the weekly all-staff meeting. Disclose anything you can. Default to being open. If you’ve built a team and a culture that prizes being upfront, then you have a chance to rally.

“Try to laugh even during the tough times,” he said.

Invest in team identity

Get loud about your company’s mission, vision and values. Then stick to them. Tell your employer brand story. Leaders make the mistake of retreating when it’s hard. But work culture can get stronger when a team goes through a difficult time together.

Reevaluate frequently just what that identity is by remaining connected to your team. Recently a different CEO of a fast-growing 50-person company told me he still strove to speak to each employee every quarter. At the least, ensure employees have direct access to a manager with real insight, so everyone feels informed of the direction.

“Managers need to invest time to know how their reports are feeling,” Rikhter said. That may be easier to skip when a team is entirely remote, but you can’t.

As Rikhter said: “Company culture is the only defensible part of a company over time.”