Morale is a particularly frustrating thing to work on because, unlike solving cash flow or profit problems, it is much more nebulous. What are employees really thinking? Are they all thinking about leaving? Are they really negative on this company? Do they believe what I say?

Most Entrepreneurs Ignore Morale Until It Becomes a Crisis

Even when things are going well, most entrepreneurs hate to spend time specifically trying to improve morale. For example, in my first decade of running businesses I would have thought, “Spend time on employee morale? Are you kidding? I need to be growing sales, building new products, focusing on customers, and improving my marketing! I’m already paying my employees plenty, why should I spend time on morale?”

Even When Things Are Going Well, Employee Morale Is Extremely Important

But what I didn’t see was that even in a company where morale is more or less “okay,” spending time on the issue is very important; if you can take it from okay to great, people will perform their work better than you could ever imagine and your turnover will be less. You will be also in a much better situation if times get difficult, when morale can often plummet. When I finally focused on morale was when my company was in a crisis, and boy do I wish I had focused on it earlier!

In the book that I published at Adams Media titled Small Business Turnaround, Marc Kramer offers some excellent insight into this often-difficult topic. Kramer says that professional managers tend to have a point in their career where nothing they do seems to work. They can’t understand why this is happening to them. At first they believe things will begin to turn themselves around, but eventually they start to lose confidence in themselves. Before long, they think they are failures.

This is what happens in organizations that are mismanaged. People throughout the organization begin to doubt themselves and those around them. They feel inadequate. Instead of getting in early and staying late, people do just the opposite. Friends who are interested in joining the organization are told to stay away. Everyone begins to think and view the company as the Titanic of their industry.

Kramer then offers 10 steps, successfully used by one of his clients to rebuild employees’ confidence in themselves and the organization:

  1. Hold a company-wide meeting where different employees are singled out for their successes. This demonstrates to other employees that successful people surround them.
  2. Admit to management’s past mistakes and talk about how management and employees are going to fix them together. People join small companies because they like to know they are having an impact, that what they say and how they feel matters. Leaders need to acknowledge that.
  3. Meet with each employee individually to find out what they think needs to be done to get the company back on track and how management can help them with their job.
  4. Send notices about new sales and post compliments received from clients. This allows employees to be proud of their accomplishments without having to tell everyone themselves what a good job they are doing.
  5. Learn your employees’ strengths and weaknesses and set them up to succeed. All too often, management gives employees directives that are beyond their abilities, and when the employees drown in the failure, management wonders why.
  6. Compliment employees regarding their work in front of their clients. Nothing makes someone feel better than being complimented by his or her boss in front of a client.
  7. Promote from within. Nothing demonstrates the quality of talent better than promoting existing employees. It makes a statement that management believes the talent already exists within the organization.
  8. Let go of people who aren’t pulling their weight or aren’t team players. Handling employees is like raising children. If one child sees another child getting away with something, they won’t respect their parents—and then management has chaos. Admittedly, that isn’t always possible. In many technology companies, the company might have someone who has a specialty that is hard to find, and management needs to keep that person until a replacement can be found.
  9. Let employees know when management has taken and implemented a suggestion from the ranks. It shows that management values employee input.
  10. Encourage risk and reward innovation. If risk takers make a mistake, remind them of all the chances other managers took that failed. Tell them that if management didn’t have confidence in their judgment, they wouldn’t have let them take the risk at all.

Rebuilding morale takes time and patience. People don’t lose their confidence overnight. It slowly erodes.

Takeaways You Can Use

  • Don’t wait for a crisis to build morale.
  • Rebuilding morale takes time and patience.
  • Having great morale can really drive an organization ahead.