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Reflection – David Gui

by on November 26, 2007

Communicate to build trust
In one class we were showed a video case on Novasys Medical, which it had dedicated full resource to develop a product which was anticipated to be high-profitable, but could not get FDA’s approval for market release. The management of Novasys Medical had tried several means, including legal appeal to turn the decision around; however it was told that the success rate of such appeal was only 20%. By knowing the situation, we were assigned to groups and discussed whether or not the CEO of the company should disclose the information to employees and decided what would be the affects following either decision.
To me the video case raised two issues organizations face when in change: communication and trust. For Novasys Medical, the situation was that the research and development of the product was a major achievement for the company, and if the product could get approval for market release, it will certainly significantly move the company forward. Nevertheless, because of the high possibility of denial by FDA, the CEO was hesitated to disclose the information to employees; and I can tell such hesitation was caused by fear of sharing of such information would diminish employee morale and sense of security. However, the CEO shouldn’t forget that, being a small company with less than 100 employees, dissemination of information in Novasys Medical could be as easy and fast as possible; and because of the significance of the product to the company, it could be assumed that people’s eagerness toward information about the product was high, and therefore if they are not given the information they are interested in, they will possibly make up something to fill that void, and the consequence of such possibility could be unwelcome. This dilemma is also faced by lots of other organizations today when in change; people always want to know everything that has impact on them, but management is often afraid of the result of sharing of some information. However, at the same time, organizations can’t don’t communicate; because even if they don’t say or don’t act, that will send a message to people, and that could be misleading. Therefore, to avoid such issue, organizations simply need to communicate.
My experience tells me that when people make up information, they engage in rumoring. I have to admit that rumor is among the fastest and most active communication channels in any organization, based on what I have experienced in my internship. A lot of the times, I first receive organizational information through rumor, then email or bulletin board, or any other communication channel, regardless of if that information is important or trivial, or even really existed. At the same time, rumor is also the most unreliable source of information, as it can contain inaccurate information. However, it is no doubt that rumor can do a lot to affect an organization’s change; just think about this, in the Novasys Medical case, if the CEO decided to hide the information from employees, and employees started to engage in rumoring, what would be the consequence? What if the information gets erroneous but wide spread, for example, instead of 20% success rate for the appeal, it becomes 80%? This wouldn’t be good because it will create illusive optimism among employees but once the truth is discovered it will heavily hit employee morale.
In the end of the video, the CEO mentioned she eventually decided to let employees know the situation. I agreed with her and believed she made a smart decision. This also showed her effort to create trust among employees. Surely by knowing the fact it will be a big disappointment to employees, because nobody will be happy about knowing there is a high chance of years of effort being wasted; but it will also be a great encouragement to know the organization is trying the best to turn things around, which shows its commitment for the product and more importantly, appreciation for employees’ hard work. This would in turn exchange employees’ trust and loyalty, which will positively impact the organization in the long-run. This point can be supported by the result of the vote “If Novasys Medical decides to give up the appeal, would you as an employee stay in the company?” in the end of the class discussion, which a majority of the class voted “No”. Based on such result, I would assume that if the vote was “If Novasys Medical decides to continue the appeal, would you as an employee stay in the company?” most people would vote “Yes”. Although it is very possible that the appeal will not work, but such action will definitely show the company’s commitment, and that will win employees’ trust. Therefore though there will be a loss today; the company will gain in the future.
Today managers shouldn’t be shortsighted and only think about one side of the matter. It is one of the most important principles organization of any size should keep in mind that it must keep its employees informed about anything that has impact on them. Certainly there is risk that the sharing of some information can bring negative affects; but that shouldn’t prevent the organization from disseminating it. More importantly, strategically organization can often communicate to build trust; because it shows the organization’s commitment and responsibility toward its employees.

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