Turnaround Talk

Hewlett-Packard. Starbucks. Best Buy. Research in Motion (Blackberry). RadioShack. And, most recently, JC Penney. Hardly a week goes by without a report that one well-known company or another is in the throes of a turnaround.

Each period of business history has its own representative corporate type. The 1960s were the age of the conglomerate. In more recent decades, the startup has achieved iconic status. But the kind of organization that marks our own historical moment is, arguably, the turnaround company. In almost every sector, there are once-dominant enterprises that find themselves on the wrong side of a shift in customer demand or the emergence of a disruptive technology.

So what does it take for a leader to pull a company out of the doldrums, or indeed out of real or potential bankruptcy? It starts, no doubt, with a sense of urgency. In that respect, a turnaround effort differs from a standard organizational change initiative. Change happens slowly—whereas, in a turnaround situation, time is of the essence. A company that’s going in the wrong direction needs to change, and change fast, or soon it will be past the point of no return. Decide, act, decide, act: That must be the order of the day.

Or so it might seem, anyway. In fact, while the need for speed is undeniable, effective turnaround leaders also keenly appreciate the need to stop—to stop and talk with the people in their company who must do the day-to-day work of moving the organization in a new direction. Such leaders understand that a push to undertake a new strategy or to redirect operational performance depends pivotally on how well they communicate with employees. Equally important, it depends on how well they manage communication throughout their organization.

StarbucksLogo.jpgConsider the example of Starbucks. In 2008, the coffee chain was struggling to maintain its market position and to ward off a growing set of competitive threats. So Howard Schultz, the company’s founder, retook the reins as its CEO and launched a drive to revitalize its operations from the ground up. As reports on that effort demonstrate, Schultz placed communication at the center of his turnaround strategy.

“Schultz’[s] capacity for hands-on communication is impressive,” one writer observes. “He blitzed each core constituency—senior managers, store managers, customers, media, analysts, shareholders, and employees—with various communications concisely presenting the case for change or a particular decision.” Another commenter, drawing upon a published interview with Schultz (subscription required), highlights several principles and practices that Schultz has sought to pursue: “Share the Vision.” “Clearly Lay Out the Plan.” “Let Employees Know How They Can Help.” “Foster Two-Way Communication.”

Yet a focus on enhancing communication isn’t enough. It has to be communication of the right sort. In normal times, leaders can allow ideas and information to move across their organization in a deliberate, structured, layer-by-layer fashion. In a turnaround scenario, however, leaders must do whatever they can to make that process nimbler and smoother—more dynamic and more immediate. “Corporate communication,” as businesspeople have traditionally understood and practiced it, must give way to organizational conversation.

That’s our term for an approach to managing communication that draws upon the immediacy of personal conversation. Our model of organizational conversation features four distinct elements: intimacy, interactivity, inclusion, and intentionality. Here, in the spirit of that model, we present four steps toward powering a turnaround project through conversation. For each step, we’ll cite an example from the case history of notable turnaround efforts.

Talk straight. Conversational intimacy involves efforts by leaders to create and maintain a close connection with employees at every level of their company. And it requires leaders to be honest and authentic, especially when it comes to sharing bad news or addressing difficult topics.

XeroxLogo.jpgIn 2000, when Anne Mulcahy took charge of operations at Xerox, there were plenty of difficult topics to confront. Xerox was deeply in debt, its stock was plummeting, and its core business model showed every sign of being unsustainable. In that role and at that moment, Mulcahy focused on getting out into the field and talking with people. A study of her tenure during this period quotes a colleague of hers as follows: “Anne appealed to employees with missionary zeal, in person and through videos.” According to the study, Mulcahy herself said, “I’m never happier than when I’m milling around with a group of Xerox people, in a town hall meeting, or a Q&A. I don’t like giving speeches, but I love dialogue.”  

It wasn’t all happy talk—far from it. In talking to fellow top executives, in particular, Mulcahy was blunt about reckoning with points of potential conflict. “I knew there would be people who certainly wouldn’t be supportive of me,” she recalled. “So I confronted a couple of them and said, ‘Hey, no games. Let’s just talk.’” She also put forth a more general rule: “When there are tough messages to deliver, it’s important to communicate the good and the bad. Respect people by delivering the truth.”

Make talk happen. When a company enters a turnaround crisis, it’s often in part because people in the organization have lost the ability to interact with each other. So conversationally adept leaders find ways to promote interactivity. They deploy communication channels that allow for back-and-forth discussion, and they build a culture that fosters that kind of discussion.

NissanLogo.jpgThat’s what Carlos Ghosn did after he became president and CEO of Nissan in 1999. The Japanese automaker had seen its performance deteriorate over the preceding decade, and a shake-up was clearly in order. Among the first items that Ghosn changed was a protocol that had been in place for meetings of top executives. In a study of Ghosn’s turnaround leadership, a fellow executive offered this observation: “In old Nissan, there was hardly any discussion in most senior management meetings. … Today our meetings are different. We actually debate issues. We openly disagree with one another. It took some time for all of us to get used to it, but our meetings are much more productive.”

Ghosn also initiated practices that enabled greater interactivity throughout Nissan. Instead of relying on memos—or on middle managers—to convey his message, he used a companywide video hookup to present his transformation plan to employees. “This was the first time in the company’s history that the president spoke directly to everyone in the organization,” one Nissan executive explained.

Let everyone talk. Conversation inclusion exists where leaders adopt measures that enable employees to participate fully in the communication process. By including people at all levels of a company in the organizational conversation, leaders can achieve a more intense quality of engagement among those who must carry out a turnaround project.

HCLTechLogo.jpgHCL Technologies wasn’t at a point of crisis in 2005, when Vineet Nayar took on the role of president, but right away Nayar saw the need to initiate a major transformation effort. The company needed to move up the value chain in the technology services industry, and making that shift would require HCL employees to change how they related to each other—and to the company. Toward that end, Nayar and his team launched a internal communication initiative that featured the tagline “Employees First, Customers Second” (EFCS). Nayar, in a study of his early push to transform HCL, explained the EFCS theme: “The idea behind Employee First was that as a services business, the employee interface with the customer was critical. … I wanted value-focused employees who were willing and able to drive an innovative, sophisticated experience for customers.”

Elements of the EFCS project included the launch of a new, “employee-friendly” intranet portal and the creation of an intranet-based service called U&I, which empowered employees to engage directly with Nayar. “Communications at HCL used to be handed down from up high,” a senior manager at HCL noted. “Vineet replaced that with lots of direct contact through video conferencing, online tools, and face-to-face talks.”

Talk strategy—and talk strategically. Only when leaders approach communication with intentionality can they ensure that smart talk will result in sustained action. By carefully building communication efforts around a clear organizational vision, and by taking care to follow an overarching strategy for those efforts, a leader can pursue a turnaround conversation that will keep a company on message and on track.

SASLogo.pngConsider the turnaround push that Jan Carlzon undertook at Scandinavian Airlines Systems (SAS) in the early and mid-1980s. To improve the company’s ability to attract business customers, Carlzon aimed to improve the level of service that frontline employees could offer. The best way to do so, he concluded, was to empower those employees—to give them greater autonomy and flexibility in how they did their job. Yet they could exercise that autonomy fruitfully only if SAS leaders also gave them a big-picture sense of what the company was aiming to achieve. Carlzon, in a study of his early work as CEO, put it this way: “Anyone who is not given information cannot assume responsibility. But anyone who is given information cannot avoid assuming [responsibility].”

According to that study, Carlzon and his team went so far as to create a booklet for employees that used cartoon imagery—a smiling airplane, for example—and “simple, direct language” to tell “the story of the company to date.” Employees came to call it “the little red book,” and it exemplified Carlzon’s theory of turnaround communication: “Rather than merely issuing your message, you have to be certain that every employee has truly understood and absorbed it.”

[Cross-posted, in a slightly different form, at the Harvard Business Review Web site.]

2 Candidates, 2 Communication Models

Did Barack Obama win re-election because he was a better communicator than Mitt Romney? The 2012 race for president was so tight that it’s easy to speculate that this factor or that one made the crucial difference—and just as easy to dismiss all such speculation. But the communication factor merits a keen look. Both candidates, after all, waged this close-fought battle largely with words: Through their communication efforts, they each sought to forge a connection with voters.

Several weeks ago, we surveyed HBR.org readers to gauge their sense of each candidate’s ability to conduct and manage communication with voters. Both candidates, according to respondents, displayed an ability to communicate well. Yet the survey results indicate that Obama and Romney showed their respective strengths as communicators in very distinct ways.

We based our survey in part on a model that we call organizational conversation. In that model, leaders strive to practice and promote a form of communication that resembles personal conversation. Building upon our research on how leaders communicate today, we have identified four elements that make up this model: intimacy, interactivity, inclusion, and intentionality.

In the survey, which was open to HBR.org readers from September 21 to October 14, we asked respondents to rate how well each candidate performed along each of those four dimensions. Then we asked them to rate how well each candidate performed “overall” with respect to “conducting and managing communication with key constituencies.” In addition, we asked respondents to indicate whether they planned to vote for President Obama or Governor Romney.

Not surprisingly, respondents tended to answer our questions about each candidate’s performance in a way that reflected their candidate preference: Pretty much across the board, those who intended to vote for Obama gave their candidate higher marks as a communicator than they gave to Romney, and vice versa.

Nonetheless, we also observed an intriguing pattern that cuts across the line of candidate preference. Both Romney supporters and Obama supporters gave Romney higher scores on his overall communication performance than they did on any of the four areas of performance that we associate with the practice of organizational conversation. What’s more, on that question about “overall” performance, Obama supporters gave Romney essentially the same score that Romney supporters gave to Obama.

Those results, in our view, suggest that both sets of respondents attributed to Romney a talent for communication that differs substantially from the talent that Obama displayed. Obama excelled at pursuing a conversational form of political communication. So we argued previously in this space, and the results of our survey tend to support that conclusion. Romney, meanwhile, excelled at communicating with voters in what we might call a more traditional manner.

To understand what we mean by “traditional” in this context, consider Romney’s performance in the first presidential debate, held in Denver on October 2. In that venue, Romney was clear, cogent, and forceful. He knew what he wanted to say, and he said it systematically, using a tone and a rhetorical approach that he knew would appeal to his target audience. For decades, communicating in this model—communicating in a top-down and tactically efficient way—has been a central part of organizational leadership.

Thus, when respondents awarded Romney a relatively high score as an “overall” communicator, they were effectively recognizing his ability to convey messages in that traditional manner.

In business, as in politics, both of these forms of communication have their place. Leaders today, we believe, do benefit from the pursuit of organizational conversation. Nonetheless, we also appreciate the virtues of the more traditional model. Our model of organizational conversation, in fact, includes the element of intentionality precisely because that element addresses the need for clear, direct messaging. And, notably, both Romney supporters and Obama supporters gave Romney higher scores for that element than for each of the other three elements in our model.

In that first debate, Romney demonstrated an impressive ability to communicate intentionally with voters, and that performance gave his campaign a major boost during the final weeks of the race. (After the debate, interestingly enough, we noted a sharp rise in the number of Romney voters who responded to our survey—and a sharp rise, too, in the scores that Romney received from respondents as a whole.)

Obama, by most accounts, performed quite poorly in the Denver debate. In that setting, he seemed to many observers to be neither intimate nor interactive nor inclusive nor intentional. Over the course of the campaign as a whole, though, he seemed to draw effectively upon all four elements of organizational conversation—much as he and his team did in 2008. The results of our survey bear out that conclusion. Respondents scored Obama particularly high on the questions that pertained to intimacy and inclusion; even Romney supporters gave Obama relatively high scores in those areas.

Again, Obama’s prowess in this area—in conducting and managing communication to, from, and among voters—does not fully account for his victory. Even so, the success of his campaign this year highlights the power of the conversation-based model. Leaders in any kind of organization, we’d argue, are apt to benefit from adopting that model to communicate with key constituencies.

[Cross-posted, in a different version, at the Harvard Business Review Web site.]

Organizational Failure? Look for Communication Failure

A leading mobile-phone maker falls out of step with its market—and struggles to catch up.

An energy-trading company rises high—and then suddenly implodes.

A luxury cruise ship takes a wrong turn—and the parent cruise-line company finds itself on troubled waters.

A mighty oil company presides over an environmental disaster—one that spills over to become a PR disaster as well.

The board of an airline hires a CEO—and then cancels his contract after just three years.

Five big companies. Five big problems. One of these companies is a high-tech manufacturer, two of them are in the energy sector, and two of them are in the consumer transport business. Otherwise, they have almost nothing in common. The problems that each company has faced vary widely, too.

Or so it might seem. In fact, each of these cases of organizational failure involves—right at the crux of the matter—a grievous lapse in communication. Let’s look further at these five companies and their problems.

  • Nokia: For more than a decade, Nokia was the world’s largest mobile-phone manufacturer. But when the smartphone became the next big thing within the mobility market, the company lost its competitive edge. According to an in-depth account of why Nokia has “struggle[d] to turn its good ideas into products,” much of the problem stems from habits of communication that favor unfocused discussions about strategy over clear plans to bring new phone models to market.
  • Enron: A scholarly investigation into the problems that led to Enron’s collapse pinpointed several “communication-based leader responsibilities” that senior managers failed to meet—responsibilities such as “communicating appropriate values” and “maintaining openness to signs of problems.”
  • Star Princess Cruise Lines: In April 2012, passengers on the cruise ship Star Princess told members of the ship’s crew that they had spotted a fishing boat that showed signs of being in distress. Yet the ship didn’t stop to provide aid, and two people on the fishing boat later died of dehydration. Later, the cruise-line company issued a statement that cited a “breakdown in communication in relaying the passengers’ concern.”
  • British Petroleum: The blowout of the Deepwater Horizon offshore oil rig, in April 2010, resulted in a massive crisis for BP and its partners. Among the key factors that contributed to the disaster were “poor communications” and a failure “to share important information,” according to a report on the White House commission that studied the incident.
  • Thai Airways: When Piyasvasti Amranand lost his job as CEO of Thai Air, in May 2012, the reason for his dismissal was somewhat elusive. After all, he had held the post for a mere three years, and the company’s board had recently given him a positive annual review. According to one media account, however, the chairman of the airline said that “communication problems between Piyasvasti and the board were hampering the company’s effort to meet [its] profit target.”

We didn’t select these examples entirely at random. But neither did we work very hard to find them. Even a cursory survey of high-profile organizational failures will turn up numerous stories that fit the same pattern. Thumb through the business pages of your daily newspaper. Or browse the virtual pages of a business news Web site. Very often, if you didn’t know better, it would be easy to conclude that you were reading case notes from the field of communication studies.

Every leader keenly understands the consequences of taking a lax approach to financial management. And most leaders today recognize how dangerous it can be to take a lax approach to people management. But how many leaders appreciate the risks that come with taking a lax approach to communication management—with failing to manage the way that ideas and information flows within their organization?

Those leaders who do effectively manage the flow of information within their company tend to share a certain outlook—and a certain set of practices. They adopt communication methods that enable them to get closer to employees. They put in place communication systems that promote dialogue, as opposed to monologue. They engage employees by allowing them to become active participants in the communication process. They rigorously pursue an agenda that aligns their communication efforts with organizational strategy.

In sum, they put a premium on ensuring that people in their organization talk with each other, and not just to each other.

[Cross-posted, in a slightly different form, at the Harvard Business Review site.]

Conversation We Can Believe In

A presidential campaign is many things. It’s a race. It’s a fight. It’s a long-term venture and a high-risk investment. But for a presidential candidate—and for the voters, volunteers, and donors whose support he or she seeks—a campaign is also a conversation. It’s an effort to talk about issues in a way that engages people. It’s a bid to develop a rapport with current and would-be supporters. It’s a process that hinges on a two-way exchange of information: Voters tell the candidate what they care about, and the candidate tells voters what he or she stands for.

In our book, Talk, Inc., we describe how more and more leaders today manage communication within their organizations in a way that calls to mind ordinary, person-to-person talk. Indeed, a new model based on organizational conversation (as we call it) has come to the fore at many companies. Where organizational conversation has taken hold, leaders build engagement and drive strategic alignment by enabling ideas and information to move efficiently across their company. The task of a conversationally adept leader, according to this model, is to ensure that the right messages reach the right people at the right time.

It’s a task, in other words, that resembles the one that a successful presidential candidate must undertake.

In 2008, then-Senator Barack Obama developed and led a campaign for the presidency that not only achieved its main goal—sending Obama to the White House—but also set a new standard for innovation and execution. He did so, we believe, by mounting a campaign that fully leveraged the principles of conversation-based leadership.

Earlier candidates, of course, had excelled at communicating with voters in a conversational manner. (Think of Franklin Roosevelt, who became famous for his radio-based “fireside chats,” or Ronald Reagan, whose easy-going style earned him a reputation as “the Great Communicator.”) Yet the Obama campaign signaled the emergence of a novel framework for managing electoral communication at a national level. From the way that it deployed advanced digital media to the way that it incorporated rank-and-file supporters into its messaging apparatus, the Obama for America operation in 2008 demonstrated the power of conducting a campaign as though it were a conversation.

ObamaWeb.png

Effective organization conversation, we argue in Talk, Inc., depends on how well leaders are able to promote four key qualities. Four years ago, each of those qualities was very much in evidence in the campaign that culminated in Obama’s victory on Election Night.

Intimacy: Effective leaders treat an opportunity to communicate as an opportunity to close the gap that might otherwise separate them from their followers—whether those followers happen to be employees or voters. From his fabled keynote address at the 2004 Democratic National Convention to his high-pressure speech on race in 2008, Obama proved able to talk about sensitive issues in a way that promised to bring people together.

Interactivity: Taking steps to promote dialogue—real, back-and-forth interaction among people from all parts of an organization—is another hallmark of conversation-based leadership. In 2008, Obama built an operation that used social-media tools (such as Facebook and its own “mybarackobama” platform) to enable two-way communication between campaign operatives and grassroots supporters.

Inclusion: A truly conversational leader engages people by empowering them to become full-fledged conversational participants. A highlight of the Obama campaign in 2008 was its ability, and its willingness, to leverage unsolicited pro-Obama messaging efforts. Notable examples of supporter-generated content included the “Hope” poster created by Shepard Fairey and the “Yes We Can” video produced by the music artist will.i.am.

Intentionality:HopePoster.jpg Enabling open conversation isn’t enough. Leaders also need to pursue a focused agenda that ties together the various strands of conversation—an agenda that clearly ties organizational conversation to organizational strategy. The 2008 Obama campaign, through its “Change We Can Believe Inmessaging strategy, aligned diverse constituencies around a vision that differentiated Obama from his opponents.

There’s more to a successful presidential campaign than building a great communication operation. Other factors, many of them external to the campaign itself—the state of the economy, the demographics of the electorate, the salience of certain policy issues—each play a critical role in rallying voters to one candidate rather than another.

Even so, Barack Obama’s extraordinary rise to the presidency illustrates the value of adopting a conversational approach to engaging with key constituencies. These days, whether you’re leading a private-sector company or a campaign for high political office, it pays to communicate with people in ways that are intimate, interactive, inclusive, and intentional.

[Cross-posted, in a slightly different form, at the Harvard Business Review site.]

This “Dog” Does Hunt

bulldog-reporter-logo.gifBulldog Reporter, an online source of news and insight for public-relations and corporate-communication professionals, has included an excerpt from Talk, Inc., in its Daily Dog news feed.

The excerpt comes from one of the chapters in the book that focus on conversational intentionality—on the art of managing organizational communication in a way that supports organizational strategy. Opening up a conversation within a company isn’t enough, we argue. Leaders also need to adopt practices that will bring the various strands of that conversation into alignment with company objectives. And they need to approach that effort with bulldog tenacity (so to speak).

“Lost” and Found

What causes a company to go astray? Recently published reports on the slips and stumbles of two much-heralded companies provide a close look at some of the internal dynamics that can undermine optimal decision-making and effective execution—even within organizations that have a history of market-leading performance. In the August issue of Vanity Fair magazine, Kurt Eichenwald offers an in-depth chronicle of “Microsoft’s Lost Decade.” And in mid-July, CNet posted a long piece by Greg Sandoval that explores “Netflix’s Lost Year.”

Behind those two headlines, there’s an oft-used metaphor. Organizational leadership, we tend to assume, is akin to spatial navigation: Either leaders know where to take their company, and how to take it there—or they don’t.

That metaphor is fine, as far as it goes. But a lost sense of direction, one that results in a “lost year” or a “lost decade,” is often a sign that leaders have lost something else—something that is arguably more fundamental to long-term organizational success than the ability to set a forward course. What they have lost, in many cases, is the ability to enable organizational conversation. That’s our term for the process by which key ideas and crucial information circulate within a company.

Neither the Eichenwald piece nor the Sandoval piece focuses on communication per se. Yet each article contains clues that point to the pivotal role that dysfunctional communication has played at Microsoft and Netflix, respectively. The recent history of both companies, in fact, illustrates the problems that ensue when leaders lose the thread of organizational conversation—when they fail to promote open and honest discussion, internally as well as externally.

microsoft-corp-logo.jpg

At Microsoft, Eichenwald argues, leaders established “a corporate culture that by 2001 was heading down the path of self-immolating chaos.” Central to that culture were practices that effectively obstructed the free flow of information. The company’s stacked-ranking system, for example, required managers to rate employees according to a bell-curve pattern. As a result, engineers and developers had a greater incentive to compete with each other than they did to collaborate with each other. Eichenwald quotes one former Microsoft engineer as follows:

[P]eople do everything they can to stay out of the bottom bucket. People responsible for [software] features will openly sabotage other people’s efforts. One of the most valuable things I learned was to give the appearance of being courteous while withholding just enough information from colleagues to ensure they didn’t get ahead of me on the rankings.

Another effect of Microsoft’s stacked-ranking system was to reinforce a rigid, top-down form of communication. Under that system, managers shared responsibility for rating employee performance, and employees therefore went out of their way to curry favor with all of the managers in their group. “Whenever I had a question for some other team, instead of going to the developer who had the answer, I would first touch base with that developer’s manager, so that he knew what I was working on,” one former Microsoft engineer told Eichenwald.

Where organizational conversation flourishes, leaders and employees alike are able to talk among themselves in ways that are interactive and inclusive: Ideas move back and forth between people of all ranks, and leaders empower employees to participate fully in cross-organizational collaboration. Microsoft, Eichenwald suggests, has fallen short on both of those counts. (In our book, Talk, Inc., we identify an array of practices that will enable leaders to become more interactive and more inclusive.)

netflix_logo.gif

In the case of Netflix, the failure of organizational conversation appears to have occurred primarily at the executive level. By early 2011, CEO Reed Hastings had concluded that maintaining the company’s existing product and pricing options wasn’t a viable long-term strategy. It was an eminently reasonable view, and it spurred Hastings to develop a plan that would reconfigure the video-streaming and DVD-rental services that Netflix offers to customers. But in shifting to a new strategy, he lost sight of a crucial principle of leadership: It’s not enough to make the right decision; a leader also needs to talk about that decision with the right people, and in the right way.

Led by Hastings, Netflix decided to alter its basic product offering—and it did so with a minimum of internal deliberation. Here is how Sandoval tells the story:

Around March 2011, [Hastings] took his plan to his executive team and then to the company’s vice presidents. Some of the execs who heard Hastings talk about spinning off Netflix’s DVD operations into a new company … left the meeting thinking Hastings was only considering the idea. That impression was quickly corrected. … Hastings, it appeared, wasn’t looking for debate.

Hastings and his colleagues also faltered in their rollout of new product and pricing options. “When customers and the press pushed back, the Netflix response was haphazard,” Sandoval explains. A wave of harsh comments and subscription cancellations hit the company by surprise, and Hastings made the matter worse by communicating with subscribers in a way that seemed awkward and dismissive. He later acknowledged that point by writing in a blog post:

I messed up. … In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication. … But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members.

In each instance, leaders at Netflix behaved in ways that hindered the flow of organizational conversation. The company’s decision-making process reflected a lack of conversational intentionality, as we call it—an inability to foster strategic alignment through rich discussion and brisk debate. In the way that he communicated (or didn’t communicate) with external stakeholders, meanwhile, Hastings displayed a lack of conversational intimacy. Instead of interacting with customers in an open and accessible manner, he came across to them as aloof, and he seemed to be indifferent to their concerns. “Reed Hastings stopped listening, and that’s when the trouble started,” Sandoval writes. (Talk, Inc., also presents ideas and examples that will help leaders achieve greater intimacy and improved intentionality.)

The factors that have led Microsoft and Netflix to lose their way are numerous and complex. Both companies face truly daunting competitive challenges, and we don’t claim that better communication alone can make those challenges go away. That said, all signs indicate that leaders at each company have lost their flair for organizational conversation—and that loss has made it difficult, if not impossible, for them to mount a nimble response to strategic problems and opportunities.

[Cross-posted, in a slightly different form, at the Harvard Business Review site.]

Five Easy Pieces

Want a simple, easy way to absorb some of the key ideas that we present in Talk, Inc.? In a sequence of five short pieces that we’ve posted here—and also at the Harvard Business Review site—we offer an alternative entry point for the content of our book.

In the first piece, “Changing the Conversation in Your Company,” we provide a broad overview of what “organizational conversation” means and why it matters.

Then, in the remaining four pieces, we touch on each of the four elements of organizational conversation. The purpose of each piece is to serve as a “conversation starter”—as a tool to help leaders begin a discussion about the way that they and their colleagues approach communication within their company.

In Talk, Inc., the primary unit of analysis is the organization: We focus on offering ideas and examples that point the way toward improving communication at a company-wide level. In these five blog posts, by contrast, we aim to provide insight on how individual leaders can become more conversational in their management style and management practice.

Conversation Starter: How Intentional Are You?

If you ask top business leaders today to name the chief impediment to the success and growth of their company, many of them will name “uncertainty”—market uncertainty, regulatory uncertainty—as a prime culprit. No doubt there’s a lot of truth in that point of view. Yet those who hold it often suffer from a kind of blind spot. They assume that uncertainty is a problem that emanates from outside their organization. Arguably, though, it’s the uncertainty that exists within a company that takes the biggest, longest-lasting toll on that company’s performance.

If your employees aren’t sure about where you stand, or about where your company is heading, then their lack of certainty in that area will hinder their ability to help move the company forward. More than ever before, people at all levels of an organization need to understand the strategic aims that their leaders are pursuing. Equally important, they need to have a firm grasp of how their own work relates to those aims. No longer is it enough for employees just to “do their jobs.” And no longer is it enough for executives simply to issue orders. Instead, leaders must explain to their people the strategy—the sense of organizational direction—that underlies every operational directive.

On the whole, people within organizations enjoy a lower degree of strategic awareness than you might think. In any event, their level of strategic awareness is lower than it should be. A couple of months ago, we surveyed several dozen participants in an Executive Education program at Harvard Business School. (The program in question, Driving Performance Through Talent Management, gathers executives from every part of the globe, and from companies large and small.) The vast majority of these organizational leaders said that it was “not true” (30 percent) or only “somewhat true” (38 percent) that “employees at every level understand, and are able to discuss, the big-picture strategy” of their company.

Again and again in our research, we’ve observed variations on that finding. In 2007, for example, we surveyed roughly 1,000 employees at Fortune 500 companies about issues related to motivation and engagement. In that survey, we asked respondents to rate the degree to which their “manager communicates a clear strategic direction” to them, and the average score for that question was notably lower than the score for many other questions that we posed. (Note that this survey took place before the 2008 financial crisis, and thus before the current moment of “uncertainty.” Clearly, the kind of uncertainty that bedevils organizations internally is a longstanding problem.)

To raise the level of strategic understanding within their company, leaders must learn to be intentional about the way that they communicate with employees. In other words, they must work to align what they say—and how they talk—with a clear pattern of strategic intent. The practice of communicating with intentionality is one element of a new leadership model that we call organizational conversation. In the more traditional model, leaders treat employee communication as a matter that’s essentially distinct from company strategy. Intentional leaders, by contrast, put a premium on integrating those two components of leadership responsibility.

Here are four ideas that will help you become a more intentional leader.

1. Think ahead. Before they can cultivate a strategic conversation within their company, leaders need to develop a conversational strategy. Typically, that process begins with top-to-bottom assessment of current communication practices, and it results in the adoption of a long-range communication plan—a full-fledged agenda for organizational conversation.

2. Paint a picture. Ideally, people throughout an organization will be able to talk about top-level company strategy. But different people learn in different ways. To help employees become strategically conversant, therefore, smart leaders get creative about how they communicate this kind of information. They tell a story, for instance. Or they use visual imagery to capture the challenges and opportunities that their company faces.

3. Ask for help. One way to ensure that people have a clear view of their company’s strategic priorities is to give them a role in setting those priorities. Ultimate responsibility for that process rests with senior leaders, of course. More and more leaders, however, find that by soliciting input from mid-level and frontline employees, they can bring useful new ideas to the fore—and increase companywide strategic engagement as well.

4. Watch what you say. In talking with employees, effective leaders use consistent, well-thought-out language—language that aims to keep everyone’s “eyes on the prize”—to describe company operations and company objectives. By doing so, they turn communication into a vehicle for driving strategic alignment.

Organizational conversation, like personal conversation, thrives when its participants know where the conversation is going. That’s why intentional leaders strive to make sure that employees are able to speak—in no uncertain terms—about the strategic direction of their company.

[Cross-posted, in a slightly different form, at the Harvard Business Review site.]

“Leadership Is a Conversation”

HBR June2012 cover.jpgWe’ve written a feature article, titled “Leadership Is a Conversation,” for the latest issue of Harvard Business Review. It’s part of the magazine’s Spotlight package on leadership, and it offers a useful distillation of some of the key ideas that we present in Talk, Inc. In addition, it includes a great chart (“Elements of Organizational Conversation”) that we put together with help from the staff at HBR. To read the full piece, you need to be an HBR subscriber. But you can get a taste of the article at the above link.

At that linked page, you’ll also see the discussion thread that unspooled after the article went online last week. The number and range of comments generated by the piece clearly signals that the idea of conversation-based leadership resonates with a lot of business professionals. And because many of those comments resonated with us, we posted several reply comments of our own.

Here’s a taste of a taste, as it were—the first paragraph of the HBR piece:

The command-and-control approach to management has in recent years become less and less viable. Globalization, new technologies, and changes in how companies create value and interact with customers have sharply reduced the efficacy of a purely directive, top-down model of leadership. What will take the place of that model? Part of the answer lies in how leaders manage communication within their organizations—that is, how they handle the flow of information to, from, and among their employees. Traditional corporate communication must give way to a process that is more dynamic and more sophisticated. Most important, that process must be conversational.

Changing the Conversation in Your Company

In our experience, it’s rare for a diverse group of headstrong Executive Education participants from around the globe to agree on anything. Yet earlier this month, when we surveyed a group of leaders who attended the Driving Performance Through Talent Management program at Harvard Business School, 92% agreed that the practice of internal communication “has undergone a lot of change” at their companies “in recent years.”

While the sample size in this case isn’t large — about three-dozen leaders took part in the survey — these participants make up a highly representative group. They hail from every part of the globe, and from organizations small and large (with head counts that range from about 200 to more than 100,000). They occupy senior positions in fields that include sales and talent management, and they work in industries that range from manufacturing to health care to financial services.

That survey result reinforces a finding that we’ve observed elsewhere in our research: In company after company, the patterns and processes by which people communicate with each other are unmistakably in flux. The old “corporate communication” is giving way to a model that we call “organizational conversation.” That shift is, for many people, a disorienting process. But it also offers a great leadership opportunity.

Our research has shown that more and more leaders — from organizations that range from computer-networking giant Cisco Systems to Hindustan Petroleum, a large India-based oil supplier — are using the power of organizational conversation to drive their company forward. For these leaders, internal communication isn’t just an HR function. It’s an engine of value that boosts employee engagement and improves strategic alignment.

Broadly speaking, there are four steps that you can take to make your approach to leadership more conversational. (In future posts, we will address each of these points at greater length.)

1. Close the gap between you and your employees. In our survey, we also asked respondents to name the biggest employee communication challenge at their company. In response, one participant cited the need to “move away from top-down communication.” Another highlighted a “disparity between the senior management team and middle management due to low transparency.” Trusted and effective leaders overcome such challenges by speaking with employees in ways that are direct, personal, open, and authentic.

2. Promote two-way dialogue within your company. One survey respondent lamented “a lack of understanding in management of the need for communication,” adding that “the traditional practice” of communication at his or her company “has been one-way.” Leaders can show that they appreciate the value of real communication by adopting channels that allow ideas to move in multiple directions across their organization, and by working to create a truly conversational culture within that organization.

3. Engage employees in the work of telling the company story. The need “to get more participation from employees,” according to one respondent, is a pressing challenge at his or her company. People in that company “tend to shy away from speaking openly.” The practice of organizational conversation alters that dynamic. Where that practice has taken hold, leaders encourage broad-based employee involvement in a wide array of communication efforts.

4. Pursue a clear agenda. One participant expressed concern about a “lack of consistency” in communication. Another mentioned a tendency among top leaders to generate “too much communication.” Yet another voiced this complaint: “The strategy is only discussed at the management level and is never cascaded to all staff.” To deal with such challenges — to prevent the communication process from becoming diffuse and ad hoc — effective leaders take steps to ensure that their conversation with employees unfolds according to a clear strategic plan. They also seek to align that conversation with organizational objectives.

Underlying these four elements of organizational conversation is a deeper emerging truth: Leadership is conversation. So start that conversation now.

[Cross-posted on the Harvard Business Review site. Quite a few readers of that post offered comments on it—and we, in turn, posted several comments in reply. Note, by the way, that we'll follow up this post with items that give HBR.org readers a bit more insight into each of the four elements of organizational conversation.]

Follow

Get every new post delivered to your Inbox.