A spate of layoffs among big tech firms and Wall Street giants are breaking the news all over, amid rapid interest rate hikes and weak consumer demand. Companies like Amazon, Walt Disney, Facebook-owner Meta and American banks are forced to trim their workforce to control costs. More than 150,000 workers from tech firms were laid off in 2022 alone.
In 2022, we also witnessed a great number of corporate scandals that included bribery, fraud, stock manipulation, and even non-criminal charges, such as negligent and strict liability torts. This was led by the collapse of FTX, apart from stock market plunges from Credit Suisse, Ericsson, and 3M, according to the report of Yahoo! Finance.
These companies have gone through crises, resulting from bad management decisions. The leaders of such organizations, being looked up to by employees, become the object of anger, ridicule or distrust by organization members. These lead to a breakdown in employee morale, increased conflict, a lack of teamwork, restricted communication and negative politics. The result is to further stir up an already crisis-stricken organization.
In the first place, business leaders often face all sorts of organizational crises, involving themselves or their employees, and with far-reaching effects on their organizations. Such crises can often cloud leaders’ judgment, resulting in lapses, which can make the situation worse and throw their leadership into question. In times of crisis, business leaders become the star witnesses in the court of employee and public opinion.
Although organizational trauma is hard on members, high member expectations from leaders can aggravate the negative sentiments. This is because organization members expect leaders to “lead without mistakes,” says Walter Wright, author of Relational Leadership. “Organizations want leaders whom they can place before them to bear the burden of decision without error,” Wright further avers.
When the organization leaders err, employees openly or covertly express ill feelings of disapproval. This can happen even if the chief executive expresses his or her apologies. According to Jeffrey Yergler, principal of redemptive leadership consulting, this is because a culture of forgiveness is not evident in organizations like these. “It is a rare thing to either witness or experience forgiveness in the context of organizational life,” he observes.
Yergler operationally defines forgiveness in two parts. It is “the act of releasing another from the guilt, shame or deserved retribution they have merited through their own intentional or unintentional actions directed at another which have resulted in hurt, anger, animosity and relational polarization.” It is also an act of accountability which, while releasing and liberating, also requires change and invites maturity from the person in error.
How can a culture of forgiveness be developed in organizations? The answer lies in how the leader himself competently demonstrates forgiveness to his followers.
Senior leadership must model forgiveness as a core value. In other words, the leader must learn to forgive those who have wronged him or the organization.
How can the practice of forgiveness change the organization? According to Yergler, leaders utilizing forgiveness impact organizations and their structures in the three ways. “First, forgiveness connects the organization’s vision and mission with the people who serve in the organization. Practicing forgiveness within the organization implies that people matter, their growth matters and their role as trustees of the public sector [social brokers of forgiveness] matters as well.”
Second, “forgiveness creates just and fair structures and processes. Because forgiveness places a high value on the inherent worth and well-being of people, it leads to the establishment of internal processes and policies which recognize and honor that worth and well-being.”
Third, “contextually speaking, if forgiveness is practiced within an organization whose workforce comes from the indigenous population, it is highly likely that the practice of forgiveness, in some measure, would be extended into the local communities and cultures of the employees.”
One great challenge facing business leaders during and after a crisis is to help the organization heal and recover as well as to rejuvenate members in order to bring forth positive energy and resiliency. “Fostering forgiveness is one effective mechanism for achieving those outcomes,” according to Kim Cameron, a pioneer in research on organizational forgiveness.
Organizational forgiveness is a competency that needs to be developed and exercised by business leaders. Leaders can nurture a culture of forgiveness within an organization which can help it heal and recover in times of crisis. The practice of forgiveness in organizations can extend to local communities and perhaps the country as a whole, so that we as a nation can likewise heal and recover faster during troubled times.
The author is the Founder and CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is a Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at firstname.lastname@example.org