Preempting the employee rumor mill

A look at how Magellan Health Services tackled employee anxieties with a concise CEO letter

Tami Schmidt is no stranger to the art of communicating during a financial crisis.

Five years ago, her company, Magellan Health Services, found itself in the U.S. District Court of New York, applying for Chapter 11 bankruptcy. Part of a reorganization effort intended to cut in half the approximately $1 billion worth of debt Magellan had accumulated, the strategy ultimately helped the behavioral managed care company stay afloat. (Today, Magellan reports no debt on its books and $379.7 million in unrestricted cash and investments.)

As manager of employee communications, her goal was to get out in front of unsavory news, “so people know you are aware of what’s going on and not just reacting to questions because you’re being pressured,” she says.