Like most Americans, Plantronics Inc. CFO Barbara Scherer watched the events of September 11 on her television set, feeling helpless as the horrific scenes unfolded. And, like many finance executives, she was suddenly thrust into a new type of leadership role, one requiring emotional as well as strategic savvy.

“We were concerned about the impact of grief and stress on our employees,” says Scherer, who immediately began tracking down traveling employees and sending E-mails regarding their safety. The Santa Cruz, California-based telephone-headset maker has no offices in New York or Washington, D.C., but in the immediate aftermath, she says, “we wanted to let managers know that it wasn’t a sign of poor job performance if people were forgetful or emotional.”

Indeed, those are normal signs, say crisis-management experts, and the more coddling and communication a company can provide at the moment of trauma, the more likely employees are to heal quickly. But given the many tentacles of the terrorist attacks, the real test may come as the drama fades but fear and grief persist.

“Very often, managers want to do business as usual as quickly as possible,” says Dan Tuft, president of ResponseWorks Inc., an employee-assistance program based in Lambertville, New Jersey. But often “that creates anger and resentment in employees.” To keep morale up in the months after a trauma, he says, it’s crucial for senior managers to be visible and willing to address employees’ needs individually. “They need to hear that you want to hear how they’re doing, even if it’s just one walk-through.”

Sadly, Many Models

That’s a lesson Kerr-McGee Corp. executives took to heart when the 1995 Oklahoma City bombing knocked some of the windows out of the $10+ billion oil and gas concern’s headquarters and claimed the lives of 12 employees’ immediate-family members. From the day of the blast until the location reopened, a team of executives and managers called each of the 750 local employees daily and visited those who needed extra attention, says CEO (then-COO) Luke Corbett. When the building reopened a week later, all of the top executives were stationed by the door, passing out information about the recovery effort, along with ribbons and hugs. For months afterward, the attendance policy remained flexible and counselors were available. “Most people were functioning very well within two or three months of the tragedy, and actually wanted to get back to work,” says Corbett, “but they needed to see we were taking care of the human side of the equation.”

Dealing with the human side is an issue facing an unprecedented number of finance executives this time around. And many, like David Scanlan, vice president of finance at Sodexho’s corporate services division, are struggling to balance employee grief with the need to be productive. “It’s back to business,” he says, “but certainly not business as usual.”

Sodexho, which had 46 employees in the World Trade Center and was reporting 2 missing at press time, experienced “about a week’s worth of distraction” related to the incident. But that distraction was magnified for some employees, says Scanlan. For example, some were still “skittish” about flying in early October, so he bent the mandatory attendance rule for his annual fall finance meeting in Denver, and allowed at least 3 employees to participate via video- and Web-conferencing as well as videotape. “We’ve never bent the mandatory-attendance rule before, but this year we’ll be flexible,” says Scanlan.

How long such flexibility can last without affecting business isn’t yet known. “Three months from now,” he says, “if someone still doesn’t want to fly, I might sit down with them and see if they need extra help, or want a different job [at Sodexho].” Experts like Tuft warn that insisting employees “get over it” too soon may backfire “from a productivity standpoint.”

Hidden Tolls

At firms not directly affected, grief may be more subtle, but business psychologist Ian Anderson, deputy chairman of The Global Consulting Partnership, cautions against dismissing it. Research on survivors of the Blitzkrieg, Germany’s bombing of London during World War II, showed that those who were never actually bombed suffered longer-lasting effects than those who survived the attacks.

At Plantronics, Scherer is actively guarding against residual effects. In the immediate aftermath, she recognized “it was difficult for people to just watch and do nothing,” so she helped set up a fund to match employee donations, and approved the donation of more than 7,000 headsets to relief workers. And though work seems to be progressing normally, she was still planning to arrange stress counselor-led workshops in October. “You don’t know when the connection is going to get made — someone might find out about a friend of a friend who passed away, or fly over the area and have a reaction,” she says.

The good news is that a company’s response to tragedy can actually build morale. At BigLots Inc., for example, the top 300 managers were at a conference in Newark, Ohio, when the news broke. After giving everyone an hour to check on family and friends, the group reconvened and voted to disband for the day out of respect for the victims.

“It was a galvanizing event,” says CFO Jeff Naylor, who notes that no BigLots property or employees were directly affected. Meanwhile, back at headquarters, in Columbus, Ohio, the 20-person payroll department worked until 3 a.m. on September 12 to crank out paychecks two days early to accommodate the inevitable logistics delays. “This group had incredible esprit de corps,” says Naylor, who no doubt boosted morale with his own contribution: buying pizza and stuffing envelopes.

Responding to Disaster

The American Institute of Certified Public Accountants recommends that finance executives take a four-phase approach to disaster response:

• Phase I. Identify and locate all employees. Assess needs of employees’ families and provide support. Stay in contact with employees and key business partners such as vendors, insurance companies, and customers. Assess security requirements for employees, facilities, and IT. Assess transportation and temporary-housing needs.
• Phase II. Assess benefits and human resources issues. For example, are alternative means of payroll delivery needed? Do employees need cash loans or advances? Personal leave? Grief counseling? Assess business status, including impending deadlines/due dates and customer/supplier needs. Assess state of IT and other systems. Identify a company spokesperson. Assess such immediate needs as office space, communication needs, and skill sets, and redeploy staff as necessary. Create a list of all constituencies with which you must communicate.
• Phase III. Assess operational risks (for example, work in progress, cancellations, refunds, undeliverables). Determine assistance available (for example, credit lines, disaster loans or grants, trade association help). Contact competitors and explore outsourcing options to meet customer needs. Assess cash position, including burn rate, immediate needs, ease of access. Assess full extent of insurance coverage. Determine availability of records.
• Phase IV. Assess whether your company has skills or equipment that could assist others if disaster is widespread. Evaluate current business plan in light of disaster, and revise where needed.

Alix Nyberg is a staff writer for CFO.