Finsbury 24 Sep 2015 // 2:30PM GMT
Whether a company succeeds or fails in navigating a crisis, completing a merger, avoiding regulatory blunders, or executing everyday operations depends heavily on skillful communication.
CEOs commonly blame “lousy communication” when well-laid plans go awry. Yet, paradoxically, communications is an undervalued, lightly regarded discipline in the theory and practice of corporate leadership.
From my own hands-on experience with over 200 corporations and other organizations, I have a particularly vivid memory of a global company, once seemingly invulnerable but quickly plunging toward near-extinction. Poor communication was instrumental in exacerbating — even creating — problems in execution, controls and culture. Hard truths from the operating front had to grind through layers of bureaucracy, causing sharp messages to soften into a distorted reality before reaching the CEO, if they got there at all. Simultaneously, the CEO lamented that his messages on the challenges the company faced never reached employee ranks beyond the top strata of management. Meanwhile, the employees complained that there was no clear articulation of business strategy or what was expected of them.
In its external communications, the company relied on safe, hollow corporate-speak that conveyed the image of a wounded giant, crouched in a bunker, out of touch with reality. To develop communications plans and tactics for managing the company’s crisis, large groups of people gathered for hours in successive meetings, with little decision-making and only a vague sense of what senior management was actually doing.
In short, weak communication efforts helped fuel the crisis, which led to the CEO’s departure. That opened the path to corporate salvation under a new CEO whose dedication to effective communication was a key strength of his leadership.
An Inability to Interact
I’ve seen numerous other negative examples of corporate miscommunication. In one instance, a CEO’s inability to interact with the press fanned a firestorm that otherwise may not have leveled his company.
Another case in point: The leaders of a venerable financial institution exacerbated their business challenges with vague and complacent communications, both externally and internally. This dismantled their credibility, contributing to their ouster and the company’s losing its independence.
Yet I also have many front-line recollections of the positive role of communications, such as the CEO who morphed almost overnight from a communications neophyte into a superb practitioner of the art, a pivotal factor in saving that leader’s enterprise from an aggressive, communications-savvy organization that was hell-bent on destroying it.
And there was the new CEO who rescued a sprawling global corporation from the transgressions of his predecessor — and near-bankruptcy — largely by communicating honestly, directly and frequently with employees, customers and “The Street”. This strategy was alien to his predecessor.
Despite the obvious importance of communications, there is indeed much enduring truth to the threadbare cliché that the discipline is seldom among the top priorities of CEOs and other leaders. The principal reason for this seems to be that CEOs and others regard communications as too “soft,” lacking well-defined, tangible parameters and outcomes.
To be sure, communications is a unique area of expertise and an outlier among traditional business skills, and clear measurement of its value to organizational performance is at best very difficult. Understanding its significance requires a high tolerance of ambiguity, contradiction and subtlety (i.e., softness). Perhaps that is largely why many senior leaders do not fully embrace communications as an important discipline, even in this social media-propelled world where nearly every word and deed of any entity and its people are increasingly vulnerable to public scrutiny and instant global dissemination.
In fairness, however, I must note that the communications field and its practitioners (including me) are also at fault for being laggards in using sharp analytical tools such as neuroscience, behavioral economics and statistics. These fields of research could help make communications more precise, predictive, sophisticated and demonstrably valuable.
It is also important to emphasize that communication is about much more than words. Constantly, often silently, it is also happening through non-verbal forces such as behavior, attitudes, product quality, design standards, imagery and symbols. Potentially, then, a multitude of people affect the perceptions and reputation of an organization, wittingly or otherwise. CEOs and their management teams, including chief communications officers, tend to recognize this in an abstract way, yet not manage communications in a correspondingly comprehensive manner. They tend to view organizational communication as only a narrowly defined discipline with traditional functions such as media relations, employee communications, etc.
A Strategic Instrument
If a CEO seeks to make communications all it can be — an instrument of strategic and tactical navigation — I believe there are several actions to consider, some rather unconventional:
- Clearly and repeatedly, through both words and actions, send the message that effective communication is essential for business success and career advancement: It’s important for everyone to know that the CEO takes communications very seriously. This is a powerful, indispensable message. But it requires consistent, hard-nosed follow-through, including compensation incentives that promote good communication practices.
- Inject science into your communications strategy: Neuroscience and behavioral economics, in addition to the best polling and statistical techniques, have opened vast new areas of knowledge that communications professionals can use to their advantage to heighten their credibility and increase the effectiveness of their messages. Sophisticated research grounded in science is an excellent tool for developing strategies and messages that move people to desired actions. For instance, it has shown extraordinary results in leading individuals to make wise decisions about their saving and spending habits, building an organizational culture of trust and predicting consumer behavior.
- Mandate a holistic assessment of the communications status quo in your organization: In this assessment, don’t be limited by the traditional definition of “communications.” Review both the verbal and non-verbal ways in which the organization projects an image of itself through its various activities. Include a study of every internal and external constituency that presents exposures and opportunities for the organization. Assess how it creates relationships with those constituencies, from the body language of a customer service agent to the treatment of laid-off employees, to positions on sensitive public-policy matters, to the design of products and services, to the public visibility of the CEO, and so on. Along the way, remember that communication is a two-way street, so it is essential to evaluate the organization’s ability to identify problems and opportunities and then reliably report that information through feedback channels up the hierarchy, all the way to the CEO. Further, the assessment work should be done in an integrated manner, managed strategically from the top, not siloed into different departments. Such an analysis is a critical type of risk management.
- Make sure that any person at any level who has responsibility for some form of communication (verbal or non-verbal) can do it well: The CEO should develop a solid understanding of what constitutes good communication practices and insist on training initiatives to ensure people have the ability to carry out their communications duties effectively. The CEO should lead by example, refining his or her own skills as a communicator.
- Redefine the traditional top communications job, giving it increased breadth, depth and sophistication: CEOs should expect — and allow — senior communications executives to take a truly holistic approach to their jobs, with responsibility for assessing and helping to improve verbal and non-verbal communications throughout their organizations. The lack of such comprehensive strategic oversight of the ways a company communicates results in unseen vulnerabilities, missed opportunities and unfortunate surprises for senior management.
- Use communications to build the organization’s culture with a focus on a small number of clear, sincerely embraced values: Constant investment in sound, well-communicated values is priceless protection against all kinds of potential future losses. Values such as trust and the freedom to challenge authority are prime candidates to form the bedrock of a corporation’s value system. Certainly, both of these values are essential to a healthy communications environment, where people can adapt to continual change, work together and not be fearful of surfacing ethical and other problems they see. If these two values are ignored or betrayed, they can undo an organization, generating cynicism, a survivalist mentality, suppression of hard truths, rationalization of bad behavior and a band of “yes men” around the CEO.
Chief executives need to focus on communications as a management capability much more seriously than they typically do. They should lead a thorough rethinking of what communications does and should do, subsequently transforming it into the constructive force it can be. We live in the 21st century, yet communications still operates within a 20th century mindset. This severely constricts its potential for delivering full value to many areas of corporate endeavor.
By Walter Montgomery, Partner at Finsbury and a co-founder of RLM.