Richard Edelman’s blog post yesterday is worth a read, and reflects the sentiment of a recent post on this blog. The salient Edelman quotes:
“We’re entering a new era of Mutual Social Responsibility, a virtuous circle in which people consume what they need (not what they want) while companies agree to achieve financial AND societal objectives.”
“...new voices ... must be incorporated into a global governance model based on a stakeholder society. Non-governmental organizations, communities as well as employees and consumers are entitled to a hearing. This is an evolution from the shareholder society which concentrates only on investors and is regulated by government. It calls for an outside in, listening approach by business and government because both of these traditional institutions have lost the mandate to lead unilaterally.”
“It is important that CEO’s use future public speaking opportunities to move from company stewards to private sector statesmen.”
A recent article in the McKinsey Quarterly, Corporate Transformation Under Pressure, starts out reminding us that the success rate of major corporate transformation programs is less than 40 per cent.
That's not new. We know it's extremely hard to change a big organization. What's interesting is that "defensive transformations" -- those initiated to get a company out of trouble -- are less successful than "progressive" ones launched to generate growth or improve already good performance.
So much for the burning platform! It turns out that waiting until you have a crisis doesn't work as well as having a positive vision and seizing an opportunity to change things for the better.
The McKinsey article, based on a recent survey of executives around the world, also found that "companies under pressure do not make use of proven tactics for implementing change. Instead, they tend toward secrecy and may have small groups of troubleshooters plan the transformation rather than involve the whole organization and set clear, widely communicated aspirations and targets."
The good news is that companies that use proven tactics have a far higher success rate of 80 per cent.
The authors lay out those tactics, in all their elegant simplicity:
Set clear aspirations and targets;
Exercise strong leadership from the top;
Create an unambiguous structure for the transformation; and
Maintain energy and involvement throughout the organization.
Are you seeing what I'm seeing?
Every one of those tactics can be executed well, or screwed up badly, based on how well an organization communicates.
Communication makes a difference, especially when the stakes are high. And what's more, as the authors observe in their conclusion, "Taking shortcuts -- for
instance, putting insufficient effort into communicating or focusing on
small, short-term changes -- only deepens the problems."
There has never been a better time to make a business case for better internal communication.
In a recent blog post, techno pundit Robert X. Cringely uses Susan Boyle's stunning performance on Britain's Got Talent (sitting at 37 million views as I'm writing this) to illustrate the power of the Internet to create shared experiences.
"Marshall McLuhan, who seems smarter every day, called it The Global Village. He said communication technology would link us together in
ways we couldn’t imagine and those ways would lead to common
experiences and shared values. McLuhan didn’t know about the Internet
when he wrote that and he sure as Hell didn’t know about Twitter. But
his prediction came true.....[And] every time our Global
Village comes together in this way, it’s because of a shared delight
that makes us feel more alike and less apart. We could all use more of that."
Are today's communicators helping create meaningful shared experiences in the workplace? Or are we too busy shoveling information onto intranets that no one wants to read?
Sadly, the only true shared experience in many big organizations is the frustration of dealing with bureaucracy.
It's time for a change. Time to build the Corporate Village.
The tough times we're in remind me of the old days.
Many years ago, a company I worked for was going through yet another in what seemed like an endless string of "downsizings." The acronym BOHICA was in active use by a jaded workforce.
Back then, our corporate comms team got very good at communicating job losses because we had lots of practice. When the latest round of cuts would come out of HR (which was nicknamed Human Remains) we would produce a printed communication detailing the organizational changes and documenting the staff reductions, and face-to-face meetings with affected groups would be organized. At those meetings company leaders would do a presentation about why the cuts were necessary, what was happening and where the business was going. Then they would take some time to answer employee questions.
At one such meeting, which I happened to attend, the CFO was asked a pointed question by an understandably grouchy employee.
"When will this company start putting people ahead of profits?" he said, with a kind of grim desperation in his quavering, angry voice.
You could have heard a bean drop as the CFO paused before his reply.
"Never," he said.
His needlessly blunt point, of course, was that if the company were to take its eye off the bottom line and give something like preserving jobs a higher priority, there would be no profits...which would mean there would be no money to pay salaries...which would mean that, before long, there would be no people left to put ahead of anything.
Although there's an appealing simplicity to it, we all know that this old-school, one-dimensional business imperative is flawed, and putting profit above all else is not the way to build a healthy, sustainable company. Recent events in the global financial industry remind us that too sharp a focus on profits -- especially short-term profits -- can be bad for business, and for society.
The circumstances related to the current downturn are new, but the massive job losses and severe corporate austerity programs that accompany each trough in the economic cycle are not new at all -- nor is the need to communicate with beleaguered employees.
It's ironic that when times are toughest, our role as communicators is most valued and we experience some of the most meaningful and fulfilling times in our careers.
Fulfilling, sometimes even exciting, but often not very much fun. One of the hardest things I've found about communicating at times like this is the big disconnect between the negative impact of job cuts on employees and the positive effect they have on a company's share price. We spend so much time and effort preparing to give employees the bad news with all the sensitivity and respect they deserve. The same information, packaged in a media release, invariably ends up being excellent news to the market, which rewards the ugly short-term actions with a proportionately beautiful spike in the share price.
Some of us have been around long enough to know that the short term gain of downsizing is often followed by long-term suffering, especially when it is accompanied by poor leadership. The lack of trust, bad morale, high turnaround, low engagement and poor attitude to customers that characterize todays' workplace can be traced back to the short-sighted brutality of the downsizings and reorganizations that have ravaged much of the corporate world over the past 20 years.
This is not to say the impact of that brutality goes unnoticed when it occurs. As one of my favorite bloggers, Dr. Leslie Gaines-Ross, pointed out in a recent post, the elimination of 40,000 jobs at AT&T in 1996 led to an huge and instant increase in the company's market capitalization, but it also sparked widespread public fury and even prompted the U.S. Secretary of Labor Robert Reich to leap onto the dogpile:
“Does a company have obligations and responsibilities beyond the bottom line? Does a company owe anything to its workers, its workers’ families, the communities in which it does business? Managers who balk at executing the judgments of the market may fear with some reason that they will quickly face their own day of reckoning. And yet, I want to suggest to you that this restricted vision of stewardship may be ultimately disastrous for this country. And it may ultimately harm American business.”
Prophetic words, and we're all living with the outcome today.
The big question is, will the current crisis be resolved in a way that will lead to permanent and positive changes in the way leaders lead and companies operate? Will our society find a way to return some balance and humanity to the business imperative?
I believe these changing times will change business for good. And business communicators have an opportunity to play a strategic role as we go through this once-in-a-lifetime paradigm shift.
On April 20th I'll be delivering a luncheon talk at Vancouver's Steamworks Brewing Company on Communicating With Employees in Hard Times. It's part of the Vancouver Sun/IABC Speaker Series and the idea is to share some lessons I've learned from past downturns and "show how old-school tactics can be paired with new age tools to help organizations get through the recession and emerge with a workforce that's stronger and more committed than ever."
I've got my own war stories, at least one of which I'll be telling in an upcoming blog post, but I invite you to share yours in the comments below.
I'm also looking for examples of how companies are using social media tools to help employees participate in cost-cutting and efficiency improvement efforts -- or simply to help maintain morale as we go through the big downturn. What are internal communicators doing these days other than fighting for their own survival?
I love the Canadian Broadcasting Corporation, Canada's national radio and TV broadcaster. The CBC's iconic Hockey Night in Canada, world-class news machine, generous arts and entertainment programming, regular weather reports and updates on hog prices provide Canadians with much of the shared experience that makes us a viable country. I know that sounds like hyperbole, but if you're a Canuck you'll know it's true. The CBC defines who we are as a nation. (By the way, the best thing to ever come out of the CBC is The Great Eastern, a brilliantly obscure satirical program that only a Mother Country could love.)
Yesterday the Corpse, as it's called by those who love to hate it, announced across-the-board job cuts that will eliminate 800 positions as the broadcaster tries to cope with a huge shortfall in TV advertising. The crisis is partly due to the current recession, and partly due to the decline of traditional media that's being precipitated by the mass exodus of ad money to the World Wide Web.
For some, this decline is a good thing because it signals the ascendancy of a new paradigm. Information consumers are relying less on conventional sources of content and more on the blossoming world of Web 2.0, where the "user community" generates and shares information for its own benefit, thereby reducing the need for traditional gatekeepers and content producers like the CBC.
As the broken media model spins out of control, journalists are being thrown out of their jobs faster than buggy whip testers.
The corporate world may end up being one of the biggest beneficiaries of this trend because, unlike decaying traditional news media, big companies are on the edge of a renaissance of sophisticated internal communication. It's a revolution being driven by the introduction of Web 2.0 tools into the workplace. Blogs, wikis, social networks and audio and video podcasts are on the edge of full-blown adoption, about to supplant the rusty, dusty intranets of old with an interactive new model that allows for extremely sophisticated communication at an affordable price.
The technology is ready. Management is almost ready to embrace it. Communication managers are seeing the first signs of a Golden Age of employee communication. The fun is finally coming back to our field.
There's one thing lacking, though, and that's writers and editors and producers and camera people who have the skills needed to tell great stories with sound and pictures.
If I were working in a broadcast medium today, I would be keeping my eye out for a career change. If I were a big corporation, I would be looking to hire great broadcasters to bring their valuable skills and experience into my world.
If they play their cards right, the folks getting kicked out of the CBC (and
other electronic media) should be able to walk out of a dying business
model and into the opportunity of a lifetime.
I've had a chance to reflect on my recent speaking (and cooking) engagements in Houston and Toronto and thought I'd share some of my observations with FYA readers:
IABC members are kind, hospitable, intelligent folks who treat me like a member of their family wherever I go. Which was particularly satisfying in Houston, considering that I staged an unusual barbecue demonstration for a group of TEXANS. Yikes! I'm lucky I made it out of there with my tongs intact. (See the photos here and the local coverage here.)
Everybody in our profession is thinking and talking about the exciting and anxiety-inducing world of social media -- and lots are also diving in, too. A show of hands revealed that at least 80 or 90 per cent of the big crowd who turned up to see my IABC Toronto talk are twittering. Which is a good sign, even if twitter may not turn out to be The Next Big Thing, because ...
Exactly NONE of the 40 or so very smart HR people I talked to the next morning at a Conference Board of Canada HR conference are trading tweets. That spells opportunity for the more Web 2.0-savvy communicators, who can use their hands-on experience to help bring their HR colleagues and senior executives on board.
Or maybe the IABC group's twitter mania is an indication of just how desperate employee communicators are to get on the latest technological bandwagon so they can escape their nightmarish day-to-day existence maintaining outdated, clunky intranets and dealing with skittish, change-averse leaders who drive them crazy with their old-school ideas. Just kidding!
Which brings me to a final anecdote. It's from the last day of my Toronto trip, at a half-day in-house workshop I delivered to the communications team of a big insurance company. Thisstinging observation came from the intranet manager: "The kids coming into our workplace today can do more on their cell phones than on our intranet." That statement alone should be a wake-up call for communicators and business leaders everywhere.
[Special thanks to my many generous hosts, and to Toronto's William Smith and Houston's Chris Salvo for the great photos!]
This recent Q&A with British Telecom's Richard Dennison on Steve and Cindy Crescenzo's Creative Communications website is a must-read for communicators interested in finding out about the best internal applications of social media. I particularly liked this advice from Dennison:
"Start small, experiment, don't say you are trying to change the world,
don't necessarily wait for permission. If you don't spend much you can
do quite a lot before people start asking questions—and by then, it
will probably be too late! Proceed until apprehended!"
Fellow blogger David Murray saw my Tuesday blog post and posted his own interesting take on the whole concept of using "employee ambassadors" to get company messages to external audiences -- the most recent example being Citigroup's 'leaked' internal memo that sparked a bull run on the market.
There's an important angle on the story that I didn't mention in my initial post. One of the many things that struck me about that BNN panel discussion is that no one seemed to be too concerned about the "material disclosure" issue. For those who might not know, companies with publicly traded shares are required to fully and broadly disclose any information that could have a material effect on the company's share price, which means issuing a public news release. If you don't do this you can get in deep trouble for withholding or selectively disclosing the information. Citi's CEO talking about unexpectedly strong results for the first two months of the year in the middle of a huge financial downturn would certainly qualify as a "material" event, and, indeed, the company's share price skyrocketed when the news came out.
As soon as I finished watching the TV clips I went to Citibank's website and, sure enough, the most recent news release, issued the day the internal memo went out, was "Citi Files 8-K Regarding Update to Employees." So the company avoided the wrath of the SEC by quickly disseminating the information through normal public channels.
But there's a big unanswered question here. Was this a clinically planned thing, where the company chose to deliver the material information in the CEO memo and purposely disclose it to the market at the moment it was communicated internally?
Or was it a hair-pulling nightmare in which, half an hour after the employee memo went out, the Wall Street Journal got a copy of it from an insider, called the media relations or IR contact to verify the information, and suddenly there was a scramble at Citi to file with the regulator and get a news release out?
If it's the former, I think it's a pretty cynical move that, if replicated often, would just further erode trust and blacken the already charred reputation of CEOs, companies and their PR advisors.
If it's the latter, it's a terrible gaff that exposes serious internal barriers to effective communication at the bank.
I'm inclined to believe the latter. Too often a public company's internal communicators are not closely tied in with the IR folks and stuff like this happens, or comes dangerously close to happening.
Does anyone know someone at Citi who would be able to shed light on this, or saw something reported on it?
Yesterday I blogged about the perception that internal communications can be more credible and trustworthy than external PR. Does that mean CEOs can salvage their damaged reputations by communicating better with employees? That's what Weber Shandwick's Chief Reputation Strategist Dr. Leslie Gaines-Ross says today on ReputationXchange.com in an excellent post that gives advice for "reputation repairers looking to mend the good names of companies and CEOs."
companies continue to announce layoffs, reputations will be built and
destroyed on how well job losses are communicated and how fairly the
process is handled. In recent years, corporate responsibility had come
to mean how workers in emerging markets are treated in the production
of company goods and services. In the months ahead, reputations will be
built on how transparent and fair leaders are in treating their
employees and particularly now, in communicating workforce reductions."
Pointing to evidence that word-of-mouth is the primary shaper of corporate reputations, she also predicts that "companies that listen to and engage employees and customers online will be tomorrow's reputation kings and queens" and states the painfully obvious fact that CEOs are "woefully stuck at the Web 1.0 leve and need to embrace Web 2.0 social media tools to spread their company's merits far and wide."
Her conclusion: "Reputation experts like me have their work cut out for them."
The same goes for internal communicators.
Can you believe what a giant opportunity is sitting in front of us?