While communication is overwhelmingly ranked as the most important leadership principle during a time of change (43 percent), corporate leadership teams are reluctant to update employees during crises (25.6 percent), according to a recent Deloitte webcast poll.

"Executive leadership can significantly improve outcomes during corporate turnarounds by openly communicating with employees," says Michael Epstein, principal and chief operating officer of the Deloitte Corporate Restructuring Group (Deloitte CRG). "While it's common for corporate leaders to make initial knee-jerk decisions and withhold information out of fear, that approach can cause undue alarm among personnel.  Often, the most successful restructurings involve a commitment, where practical, to transparency by company leadership."

Two-thirds (66.3 percent) of respondents believe company culture and financial performance are directly correlated.

"Returning troubled companies to solvent entities is a high-stress effort for everyone involved," says Sheila T. Smith, Deloitte CRG co-leader.  "Mobilizing employees toward a clearly articulated vision, encouraging consensus through participation and building trust-based relationships are some of the best practices for creating a productive culture during a turnaround." 

More than 1,200 professionals from industries including financial services; consumer and industrial products; and technology, media and telecommunications responded to poll questions during a recent webcast, titled "Getting Unstuck: Confronting the Emotions of Change in Turnaround Management."

Deloitte Corporate Restructuring Group (Deloitte CRG) is a leading provider of financial and operational restructuring services, turnaround and performance management, trustee services and bankruptcy support services to underperforming companies and their advisors, lenders, investors, courts and other stakeholders.