Home » How We Think » Communication Matters
March 11, 2010 by Scott
Gordon Bethune, the phenomenally successful retired CEO of Continental Airlines, recently told a New York Times interviewer that he was a disciplined and consistent communicator to employees: “I did a weekly voice mail — every week for 10 years, a three- to five-minute message. Every week I’d tell them what was going on. And we had a daily update with our stock price, our on-time performance, who did what to whom in our industry. So the employees always kind of knew what was going on. They had direct access to me, and direct access to the information … And we never lied.”
I love his formula and it’s had to argue with his success. He took over as president as Continental seemed headed for bankruptcy number three and engaged his colleagues in an effort to win over customers. Together they moved the airline from being ranked last in every measurable performance category to winning more JD Power customer satisfaction awards than any other airline. Continental’s stock price rose from $2 to over $50 per share and it began a string of five straight years as Fortune’s most admired airline and six years as one of its top 100 workplaces.
Obviously, they had to do a lot of things right to make that climb. From a communication perspective, information and insight provided via routine outreach helped create a sense of importance, trust and common purpose. It’s a simple approach that clearly helped fuel a powerful culture.
February 15, 2010 by Scott
The other night, I had the opportunity to watch conductor Franz Welser-Most as he watched his Cleveland Orchestra being led by guest conductor Pierre Boulez. Cleveland is generally regarded as one of the world’s greatest orchestras, particularly in its ability to created a blended, unified sound. I’m not discerning enough to hear the difference in its playing under a different conductor but I’m sure Welser-Most is – I’m sure he could tell if the musicians were playing their best and how well they were blending with each other. Since only the conductor was different, that means he could discern Boulez’s vision for the music and his ability to communicate it to the players and attract them to it.
In other words, he could judge how well Boulez did the job that every leader has.
Wouldn’t it be great if it was that easy to tell if your organization was pursuing a clear, accepted vision and working together in a way that allowed them to perform at a level that exceeded what they could do independently? Because that’s the goal of a leader and the purpose of communication within any organization.
Surveys, feedback and observation are the mainstays of determining whether your organization is in tune with your leadership and each other. It would be convenient if another CEO could tell whether it was so just as easily as Welser-Most could by listening, but it doesn’t work that way outside the concert hall. The trick is to combine enough understanding and insight into your organization with sufficient outside perspective to be able to discern that organization as clearly as a maestro.
December 21, 2009 by Scott
A kind and funny client sent me the following. I’ve scrubbed the names to protect the guilty—feel free to plug in the names of your executives.
The Night Before Earnings
(with apologies to Clement Moore)
‘Twas the night before earnings, and all through accounting,
The figures weren’t footing, and pressure was mounting.
The results were all due by the morning trade open,
Or at least by the close, we all were sure hoping.
The release was re-drafted, with changes checked in,
But key figures lacked support, and that’s surely a sin.
And (IRO) in his office, and I up in mine,
Had just settled in for the rest of the grind.
When down on eleven there arose such a clatter,
I phoned (CEO’s assistant) to see what was the matter.
Away to (CFO’s) office we looked in to check,
Peeked in at the door, then yelled, “What the heck?”
The CFO’s office was crowded with guests,
Some sitting, some standing, some up on the desk,
Not investors, not lawyers, not bankers (what luck!),
But Santa and his elves, come to see (CFO) and (CEO).
“We’re here to help finish,” said Santa, “You bet!”
“From Comp NOI to early extinguishment of debt.”
And with HPs and 10-keys, his elves they did hustle,
Down to floor seven, to offer their muscle.
“Now revenue! Now earnings!
Now E-B-D-T!
Now progress on all the debt maturity!
To the balance sheet, pipeline and S-74s!
The 8-K, the call script, Supplemental and more!”
As they went to their work, we all looked on in awe.
Their tables were perfect, their exhibits – no flaw!
They even gave opinions on Reg G compliance,
Reg FD, safe harbor and convertible debt finance.
And then, in a twinkling, as they footed each column,
I heard a low murmur, and the mood it turned solemn.
As I looked down the hall to see what was coming,
It was St. Nick, (CFO) and (CEO), all seventh-floor slumming!
(CEO) dressed in a sweater, and likewise for (CFO),
Not St. Nick, though, he liked to dress up for his job!
Red suit, pants and cap, black boots and a belt,
(The fabric looked regal, but was probably felt!)
A stump of a pencil he held tight in his teeth,
And a green eyeshade encircled his head like a wreath.
He had a sack of work papers and a round little belly,
From too many late-night meals from the deli.
As he strode to the elevator with his CPA elves,
We looked on, still wondering if we should be pinching ourselves,
But I heard him call out before he disappeared from sight,
“Happy earnings to all, and to all a good night!”
December 16, 2009 by Scott
I had lunch with one of the most naturally positive CEOs I know yesterday, and he was anything but. I had a similar experience about a week ago with another normally optimistic CEO. 2009 has presented leaders with a host of tall challenges from falling sales and written-off receivables to lack of credit and cash flow. These two conversations highlighted another challenge: most CEOs are tired and discouraged and expecting economic progress to remain slow for months to come. That makes it hard for them to provide the kind of energizing leadership and positive outlook their organizations want and need from them.
The earlier days of the recession involved the kind of call to action most companies know how to respond to – “our environment has changed and we have to change with it.” Employees may not like the reasons or the remedy, but they know how to summon the energy in the expectation that it will add up to improvement. For a lot of firms that’s given way to waiting for a tailwind and persistent worrying about further pain. Those organizations need positive, hopeful leadership.
What’s a CEO to do (or what advice can you give your CEO)?
• Do more of what you love to keep up your own energy.
• Spend time with co-workers who are doing the most exciting, energizing work.
• Remind yourself and your team of the proud things they’ve accomplished in spite of the financial challenges. At a time like this, financial metrics get more attention but they tell an incomplete and distorted story that has to be counterbalanced.
• Celebrate successes. Most companies have fewer people working harder; accomplishments in the face of adversity deserve recognition more than ever.
• Share stories that remind people of the reasons they’re attracted to your culture and the ways their company is distinctive.
• Keep refreshing the longer-term picture for your staffs. You may not know when it will get easier, but all of them want to be reminded of why they’re working so hard.
October 20, 2009 by Scott
The Corporate Executive Board, an outfit that does considerable research and analysis on business strategy, recently identified the six main enemies of post-recovery performance and the top two had major communication implications.
The first is sharply lower sales and marketing productivity due to changed customer needs. Many companies are thinking about the ongoing relevance of their value propositions and weighing changes to how they position themselves in the marketplace – but are they working as hard to understand that fast-moving target: the evolving needs and wants of their customers? Powerful communications, the kind that have a real impact on performance, are always two-way and the most successful marketing efforts in this environment are going to be listening-intensive.
The second enemy is productivity losses due to top talent disengagement and flight, estimated by CEB at seven percent on average. With a general lack of stability, pressure on salaries and incentive compensation and the difficulty many organizations have painting a clear picture of the future, leaders face a difficult challenge managing relationships with their most valuable employees. When we lack clear, concrete understanding and expectations, human nature demands information, insight and context. And we want to get close enough to our leaders to read how they feel about things. This is a critical time for leaders to be visible and to share updates and insights more frequently.
Think about these issues from your own perspective. Have your needs and wants as a customer changed and do you feel like your “suppliers” are working hard to understand the changes? Do you feel like you’re getting enough insight at work? Communication isn’t going to pull companies out of the recession, but as customers reassess buying habits and the high-talent job market loosens up, it will help determine who wins the competition for both.
October 13, 2009 by Scott
I’ve had three recent conversations with client CEOs that have me wondering about what kind of role the psychology of leaders is playing in the recession.
The first client told me that he wanted to ramp up marketing ahead of the recovery but he didn’t know what kind of a trigger to look for; he didn’t want to risk upping his spend only to fall flat in a still-stagnant market. The second wanted to know how our other client CEOs viewed near-term prospects and whether they’d resumed spending again, viewing us as a leading indicator. The third was highly pessimistic about the likely pace and trajectory of the turnaround and wanted to know what our other clients were thinking; he thought the few optimistic perspectives I passed along were naive.
They all know the time is going to come for more hiring, investing and marketing. Not only are they unsure about when that’s going to be, they’re not even sure how to tell. And they are not going to go first. Until they’re more comfortable, they’re going to play it safe, because the punishment for risk-taking is one of the major lessons of the recession.
If those CEOs – and many others I’ve talked to – are representative, that hesitance is going to slow the recovery, as leaders around the world wait for a sign or for someone else to show that it’s safe to invest in growth again.
How is your leadership thinking about the “when to step on the gas” question? What has to happen before they’ll go for it?
September 10, 2009 by Scott
Blogging about Forrester’s newest survey of US consumers, CEO George Colony says, “Technology is changing your customer, and your customer will change your company.” He cites a litany of ways consumer behavior has and continues to change and follows by pointing out “what it means” in terms of the ways companies market. The implications go well beyond marketing, though.
The findings generally confirm what most people think but do shed light on the pace and breadth of change: consumers are moving from off- to on-line channels, in all age groups; America’s media habits aren’t just shifting from old to new but have now reached 50/50; 88% under the age of 40 are regular internet users, which means our future customers are changing fastest; half of Americans research products on-line before buying and half of US adults play video games.
Colony covers the implications for marketing to consumers, but the changes highlighted by Forrester also suggest that marketing to employees, investors and others has to change, too. Those groups also increasingly rely on digital resources and are changing their media habits, researching employment and investment opportunities on-line and moving their social interaction to the web. And they are doing it far faster than the companies they’re studying, working for or investing in.
Think about whether your organization has digested and acted on the implications. For example, does your company emphasize interactive, online training, perhaps even using game-simulation? Research your company via its website as if you were a potential investor. Does the experience impress you and give you a sense of the organization’s personality and special qualities or is it more of a templated collection of facts and filings? Google the company. Do you get meaningful content from the kinds of sources your web-savvy prospective employee or investor will recognize and respect?
The debate within your organization shouldn’t be whether or not to tweet or blog. It should be what it has always been: are you reaching your “customers” (including employees and investors) where they are and making an effective case for yourselves in a way and place that matches their decision-making style? Or, as your stakeholders move deeper into digital realms, is there a widening gap?
July 28, 2009 by Scott
In recent conversations with two very senior, big-company executives, I heard this from one:
“Retention isn’t something I’m thinking much about. Where are our people going to go?”
And this from another:
“The thing I’m most concerned about is staff morale and giving them a vision of what we’ll look like after the recovery.”
I’ve heard so many versions of the first – and I don’t get the thinking—it was a relief to hear the second. Eventually, as it always does, employment will switch from an employers’ to an employees’ market. Which company is most likely to lose good people?
Already, one-third of the workers in one survey said they planned to change jobs once the recession is over. The post-recession re-staffing is also going to coincide with a large wave of retirements as baby-boomers come of age. And, according to BusinessWeek, even in the midst of the worst economy in a generation there are about 3 million jobs that employers are actively recruiting for but haven’t been able to fill.
So what do you do when you can’t promise security or big financial rewards?
• Give a clear vision of the future. Most people are working harder with fewer rewards; they want to know what they’re working towards and that you know what you’re all working towards.
• Help people understand the plan to get there and why it’s likely to succeed. They also want to know whether the bet they’re making is a good one.
• Recognize effort and small wins. In a stiff headwind, it takes more energy to accomplish less.
• Your “A” players (shouldn’t they all be at this point?) may be under-challenged. Find ways they can make important contributions. It’s what drives them.
• Communicate more often. People want to know what’s happening and how things are going. It’s dangerous to let anxiety run free in an information vacuum.
How leaders behave toward employees during the recession is going to influence their ability to field a strong team afterward. Which kind of company is yours? One people will flock from or to when the job market turns? What do you think it takes to be one of the magnets?
July 16, 2009 by Scott
We recently hosted a small-group discussion with several corporate execs and Jon Katzenbach, author of the longtime bestseller “The Wisdom of Teams.” In teeing up the conversation, Jon talked about the importance of the “informal organization” in today’s environment. You couldn’t listen without thinking about the opportunity these organizations represent within their companies.
Among other things, informal organizations are characterized by innovation, motivation and collaboration. Their power lies in their ability to influence others, to identify and fix things that aren’t working and to make things work better. They also have the ability to stymie change efforts if they’re ignored.
According to Jon, informal organizations feature:
• Interactions between loosely defined groupings of people
• Frequent connections because of perceived common interests
• Desire to share or accomplish something they feel strongly about
• Emotional outcomes that can affect their behavior or the behaviors of others they work with
Informal managers also typically outnumber formal managers four to one. In other words, there is a vast corps of unofficial leaders in every organization and they wield great influence. They represent an active and powerful network that can be a great source of insight and can amplify or undermine management’s message. Without calling them “informal organizations,” our clients have used them in internal branding efforts with great success. Unfortunately, most corporate communication infrastructures are designed to rely on formal channels.
To tap into the informal organization you have to find it, though. Look for the go-to people who know how to get things done, who connect with colleagues on an emotional level and are sought out for advice, people who spend meaningful portions of their time supervising tasks outside of reporting lines and who want to make people around them feel good about the work they do. Engaging these people in vigorous two-way conversation could raise the impact of any company’s internal dialogue.
July 09, 2009 by Scott
What have consumers learned from the recession? More importantly, how is it going to change their buying behavior and what changes will last?
One thing seems clear: we’ve come to see our former appetite for debt as gluttony. The Fed says that this is the first time in the last 10 recessions that U.S. household debt has declined.
Will it last? According to Trajectory, which forecasts consumer behavior patterns, “the cohort of consumers coming of age in this recession will, like their great-grandparents who lived through the Great Depression, carry the attitudes and behaviors they learn now throughout their lives.”
Trajectory has identified three trends that are being accelerated by the recession and are likely to last beyond it: a demand for simplicity, discretionary thrift (the opposite of conspicuous consumption?) and mercurial consumption, where shoppers empowered by technology and social media quickly change the brands and stores they patronize. Also, though green consumerism has slowed, it’s expected to regain momentum after the recovery.
These predictions are fairly intuitive and aren’t unique to Trajectory. Companies updating their marketing strategies – and shouldn’t that be everybody—should factor them into their thinking.
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