An “Engaging” Chat

Anna Farmery, an all-around social-media maven (she calls herself a “social business architect”), interviewed me (Mike) a few weeks ago for her Web site, The Engaging Brand. engaging-brand-logo.jpgAt the site, she offers good overview of the topics that we covered during our chat.

In that overview, Anna poses a cleverly worded question about the model presented in Talk, Inc.: “Is it about informalising traditional communication or formalising the grapevine?” The correct answer, of course, is “both.” Organizational conversation is about instituting a more personal, less “corporate” mode of managing communication—and it’s about taking the idle chatter that percolates within an organization and making it not so “idle.”

Today, Anna posted an audio recording of my conversation with her, and you can find it here.

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).

Question Time

Earlier this summer, a writer from the Center for Creative Leadership (CCL) spoke with me (Mike) about the argument that we present in Talk, Inc. I chatted with her about the factors that are driving companies to adopt a conversational model of leadership; about the basic elements of organizational conversation; and about ways that individual managers are incorporating those elements into their leadership practice.

At its Web site, CCL has now posted a write-up based on that conversation. The write-up is available to CCL members only—but you can access a PDF version of the interview here.

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“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.

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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.)

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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.]

People Are Talking (II)

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Further notes on recent media hits related to Talk, Inc.:

  • On its Web site, the magazine Strategy + Business has published an excerpt from the book. Published under the headline “Drucker’s Rule,” it features a brief introduction by Stephen M.R. Covey.
  • Another prominent business journal, The World Financial Review, has also published a book excerpt. It appears both online and in the magazine’s print edition.
  • The magazine Canadian Business has posted a brief review of Talk, Inc., on its Web site.
  • Polly Pearson, whom we interviewed for our chapter on EMC Corp., has posted a review of the book on her blog.
  • Working Knowledge, a newsletter that showcases the work of Harvard Business School faculty members, has published both an article about Talk, Inc., and an excerpt from it.

Voices Carry

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“Smart Conversations About Business and Life.” That’s the tagline of 33Voices, a Web site operated by Moe Abdou. A few weeks ago, I (Mike) had a long and lively chat with Moe, and he’s now published that conversation in podcast form at his site. Moe is an “entrepreneur and visionary,” by his own reckoning—and a great interviewer, by my reckoning. The focus of 33Voices, moreover, clearly resonates with the themes that we explore in Talk, Inc. So I was glad to add my voice to the ongoing conversation that’s unfolding at that 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.]

Radio Talk

Over the past week, we have participated in two audio interviews about Talk, Inc., that listeners can now access online.

Last Saturday, I (Mike) had a brief chat with Stu Taylor, host of “Equity Strategies,” a show that’s syndicated on many radio stations through the Business Talk Radio Network. You’ll find an archived recording to the show here. (The portion of the show that includes my interview begins at the 48.50 mark.)

And this past Monday, I (Mike) appeared on a live podcast show called “Business Reinvention.” The show, hosted by Nancy Lin, is broadcast on the VoiceAmerica Business Channel. Also taking part in the discussion was Polly Pearson, a former executive at EMC Corp. (and a major source for our chapter in the book on EMC). You can listen to the show by going here.

People Are Talking (I)

People are starting to talk about Talk, Inc., now that the book has been out for a couple of weeks. Here are quick notes on three recent media appearances.

  • userpic-550-100x100.pngJulia Kirby, editor-at-large at Harvard Business Review, interviews us for the magazine’s weekly IdeaCast program. It’s an audio podcast, titled “How Effective Leaders Talk (and Listen),” and it’s available for streaming either at the HBR site or through iTunes.
  • For her column in CFO Journal—an offshoot of The Wall Street Journal—Emily Chasan explores one key aspect of the argument that we present in Talk, Inc.: “Execs Need to Shift from Communication to Conversation.” (Note: Subscription required.)
  • In a post on the Smart Business magazine Web site, guest blogger Donna Rae Smith discusses our HBR article, “Leadership Is a Conversation.”
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