Billionaire entrepreneur Mark Cuban, the owner of the Dallas Mavericks and investor on "Shark Tank," says now is the time for companies to be "brutally honest" with employees and customers about the state of their business due to the COVID-19 pandemic.
"[You've] got to be cognizant of the reality that what do you do as a company today is how you will be branded for the next decade if not more," Cuban told Yahoo Finance in a wide-ranging interview this week.
As businesses lay off and furlough millions of workers because of the economic damages from the virus, this is a moment where companies will be "defined" by how they treat people and whether or not folks will do business with them in the long haul.
Cuban, who has a pulse on small businesses as well as corporate America, emphasized the importance of communication between all parties. He's heard stories of people being informed of a layoff or furlough via email.
“You can't do that," he said. “That is the biggest mistake you can make. You can't fire people by email in this period. You've got to communicate. Even if you have a thousand employees you have to work through HR and touch each one of them personally.”
He suggested that employees of small and medium-sized companies who might be concerned about their job proactively talk to their boss, CEO, or owner. As for the managers, he advised that they reach out to the folks on the frontlines as they have a handle on sentiment on the ground. He added that these employees might even have the next great idea for the business.
“Everybody is terrified. This is not unique just to employees and it’s not unique just to small business owners, but communication has to be involved,” he said. "Communication is key. Transparency is key. You can't B.S. people. 'Oh, the business will be fine,' then all of a sudden you're laying people off. No, be brutally honest. And, also, carry that over to your customers."
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He added that opening those lines of communication among bosses, partners, and employees might provide a chance to “mitigate” some of the impacts.
“If we don’t, if we just look at the bottom line and say, ‘I have to cut this number of people’ or ‘I don’t want to deal with giving people the bad news,’ then that’s where things really start to cascade. And it’s not just any individual company. It’s not just any individual community. It cascades throughout the country and then throughout the world. Small business has such an impact on this country. If you are the CEO or even a line employee, speak up, communicate, share your ideas, because this is where we need the greatest ideas, and you never know where they’re going to come from.”
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.