We are living through one of the most, if not the most challenging, uncertain economic times of our lives. The US economy has been on rocky ground for a number of years and the Euro is under threat as major countries in Europe face potential insolvency. Even the Far East is facing numerous economic challenges in previously stable environments. Newspapers headlines seem to repeat themselves as the problems do not seem to go away – slumping housing prices, the European market crises, unemployment rates and, of course, the occasional offers to buy gold.

Executives have responded by implementing tight austerity measures to keep their organizations and employees on a tight financial leash. Some of the measures include severe cuts on all travel, hiring freezes, a focus on cost reduction and an emphasis on achieving the “numbers” at any price. But four years of economic and job uncertainty did not elapse without leaving scars. This “survival mode” of operation has created a pervasive and severe consequence. This can be defined in one word: cynicism.

You know it when you see it. It creeps into the organization in the form of no clear future and little hope combined with helplessness. It is expressed by employees in the form of jokes about management and their initiatives or the conviction that EVERYONE else in your market is better than you. It is an overall sense of “Why bother? It will never change anyway”.

Through our work with leading organizations around the world we have witnessed the increase in employees’ cynicism towards their employers and the products and services that they represent. Employees are developing a markedly cynical attitude that reflects the survival mode they operate in and their lack of hope in the future.

Although many executives treat cynicism with dismissal, the financial consequences of cynicism are serious and quantifiable. Cynical employees do not engage with customers. Instead they offer deeper discounts. Cynical employees are less inclined to cross-sell and up-sell. Instead of charging for services, they are more likely to give them away. Cynical employees do not own the problem; instead they waive fees and provide a greater number of freebies to customers.

The lack of hope, the helplessness, sense of disappointment and frustration that leads to cynicism manifests itself in a negative impact on the organization’s bottom line results. In my book Excellence Every Day, I described cynicism as a cancer in the organization. It spreads and transforms every healthy aspect of the organization into a paralysis that bears negative impact on productivity and results.

This attitude of defeatism spreads among employees and paralyzes the organization’s ability to move forward. Innovation, initiatives, exceptional experiences, employee engagement and creativity are some of the typical victims of organizational cynicism. Stop innovating and you might as well write your organizational ticket to demise. Stop creating exceptional customer experiences and you might as well declare your business a commodity open for price negotiation.

Employees who have lost their belief in your products and services convey that message to their customers. They speak in a certain language and often slip their cynicism into their customer interactions. They might as well wear a t-shirts that says: “we suck,” because that is pretty much the attitude they exude to the customers. In a consumer environment that is more demanding than ever before, these messages of defeatism do not fall on deaf ears. Consumers listen and translate the cynicism into lower prices and more free value for the money.

Organizational cynicism must be on the corporate agenda. Cynicism will not correct itself. It will also not disappear on its own. It took years to create cynicism and a quick memo will not eradicate it. Dismissing its impact is a grave mistake. Cynicism kills innovation, brand pride, customer experience, employee engagement and profits. It is the fast track to losing your differentiation and competitive advantage. Four years of economic uncertainty have left its mark on our employees. We can either let the ongoing uncertainty shape our employee mindset and, ultimately, our own organization’s future or we can take charge of it. The first step the organization needs to take to resolve the problem is to recognize it, raise executive awareness and put it on the corporate agenda.

Chapter 1 in a series Cynicism Kills

Lior Arussy is the president of Strativity Group a global customer experience research and consulting firm. Arussy is the author of five books including Customer Experience Strategy – The Complete Guide From Innovation o Execution (4i, 2010).
Follow Lior on Twitter @LiorStrativity