by William C. Gillis
E-Mail is a tremendous tool that has revolutionized business intercourse. It is not, however, the ideal medium for every type of communication. Neal Patterson, CEO of Kansas City, MO-based healthcare software development company Cerner Corporation, learned the hard way.
In March, Patterson fired off an angry e-mail to about 400 company managers, accusing them of fostering a poor work ethic. “We are getting less than 40 hours of work from a large number of our K.C.-based EMPLOYEES,” the e-mail read. “The parking lot is sparsely used at 8 a.m.; likewise at 5 p.m…. You have created expectations on the work effort which allowed this to happen inside Cerner, creating a very unhealthy environment. In either case, you have a problem and you will fix it or I will replace you.”
Patterson went on to threaten staff reductions, promotion freezes, mandatory weekend meetings, and time clocks. He then dictated a timetable for managers to turn things around. “You have two weeks,” he wrote. “Tick tock.”
Dramatic changes took place within the two-week timetable, but they weren’t what Patterson had in mind. A few days after the e-mail was sent, employees posted it on a Yahoo message board frequented by investors. Cerner investors interpreted Patterson’s memo as a sign that all was not well with the company. In three days, the company’s valuation dropped 22 percent, as investors dumped Cerner stock.
Cerner, founded by Patterson in 1979, is a rapidly growing business that has consistently met its earning projections over the last two years. And it’s certainly not considered a sweatshop — in 1998 and 2000, Fortune magazine named Cerner one of the 100 best companies to work for in America. In one keystroke, Patterson severely damaged his company’s finances and its credibility.
Businesspeople can take away a few lessons from Patterson’s lapse in judgement. For one, e-mail is not a private medium. Sensitive and potentially embarrassing issues should not be discussed in an e-mail message. Management experts also take issue with the fact that Patterson used e-mail as a problem-solving tool, and chose such a threatening and aggressive tone.
William Evan, professor of management at the Wharton School of the University of Pennsylvania, says that Patterson violated basic management principles. “If he took any course in management, even Management 101, he would know that’s no way to treat employees in the 21st century,” Evan says. “It’s bizarre behavior.”
Amy Newman, principal and co-owner of Organization Blueprint Inc., a training and development organization company based in Floral Park, N.Y., explains that e-mail is not an effective way to promote a dialogue or solve a problem. “You owe it to others to allow them to provide some feedback,” Newman says. “It goes back to the old adage of praise in public, punish in private.”
Newman also believes that Patterson acted impulsively on limited data, such as the capacity of the company parking lot. Both Newman and Evan say that regular meetings, employee surveys, and focus groups would have allowed both Patterson and his employees the opportunity to discuss morale and determine employee commitment and loyalty.
Patterson apologized in a second e-mail sent to employees a few days after Cerner’s stock plummeted. Ironically, Patterson’s original e-mail did promote the type of discussion that management experts encourage — he received more than 300 e-mail responses from employees.