CERNER CORPORATION

DATE: August 27th, 2019

TO: Neal Patterson

FROM: Nishtha Kaushik

SUBJECT: COMMUNICATION STRATEGY MEMO

In light of recent events at Cerner Corporation and their impact on the company’s financial
performance, this memo recommends a communication strategy to address the impropriety of
previous correspondences from the CEO’s desk and employee concerns pertaining to the same.

Since the initial memo from the CEO’s desk surfaced on the internet, the organization has faced
several challenges, both in terms of employee response and stock price.
While the memo may have not directly been the cause of the stock price decline, it did pave way
for speculation among market experts and uncertainty among investors.

 As illustrated in employee response, the contents of the memo, although agreeable to at least
some degree in intent, are misperceived due to the hostile tone and use of threatening
language.

 While Cerner has prided itself and earned accolades for its candid leadership style, a 2013
Harvard Business Study shows that blunt leadership requires trust-building with one’s
employees and may be misrepresented as brash if there is a lack of trust within the
organization.

 Another Harvard Business Study from 2014 points that using empathy instead of candid
criticism is more effective in increasing productivity and addressing issues such as
punctuality and meeting targets.

The implications of the communication used in the memo extend far beyond just the stock price.
They can potentially harm the company’s employee turnover rate and further reduce employee
morale, thereby further reducing productivity. More importantly, it signals to the market that
Cerner Corporation is unable to cope with the speed at which it is scaling up. These internal
issues affect investor trust, employee trust and market trust, driving long term value away from
our business. However, the memo did highlight an underlying problem that needs to be
addressed – employee punctuality and its larger impact on the culture at Cerner. To address that,
we need to accept and correct for the tone of the initial memo and find out if there is a larger
problem that may be driving this shift in the culture.
Actions recommended:

The following recommendations are best suited to address the situation and neutralize the
negative effects internally.

1. Sign the attached letter of apology to employees. The letter specifically apologizes for the
tone and threatening language and clarifies your intent as a leader at Cerner Corporation. It also
explicitly reassures the employees that none of the disciplinary actions stated in the memo will
be carried out.

2. Sign the attached letter of explanation to the investors. Apart from apologizing to the
investors for the memo, this second letter would also control investor panic by explaining
plausible causes for the stock price decline. The letter should be followed up with a discussion
with the company board to discuss internal operations.

3. Conduct a meeting with the department heads in Kansas City. The agenda of the meeting
should be to address internal team operations and plausible causes for the same. The meeting
would be followed by a company-wide survey where employees share their top motivation to
work for Cerner Corporation. The survey responses will then be used to create an employee
engagement program to remedy punctuality and productivity issues.