Communicating corporate culture
Improving corporate culture is one of those holy grails that management on every level talks about, hoping to influence how employees interact with each other and customers. I’m sure many of you lived through mergers and acquisitions and were told how these would produce far better results than either company could achieve on its own. (Yes, the word “synergy” is used a lot.) But based on statistics collected over decades, mergers have experienced dismal failure rates, even worse than marriages.
Corporate culture is often cited as a chief culprit in failed acquisitions. A book by Timothy J. Galpin and Mark Herndon, The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level, described a study of 190 CEOs, CFOs and other top executives with experience in global acquisitions (Watson Wyatt Worldwide 1998a). They found that “cultural incompatibility is consistently rated as the greatest barrier to successful integration but that research on cultural factors is the kind least likely to be conducted as an aspect of due diligence.”
Whether you are going through a merger or not, corporate culture is more than critical to your company’s health. “The thing I have learned at IBM is that culture is everything,” said Louis V. Gerstner Jr., former CEO of IBM. Managing corporate culture well and consistently should come before all else, including, for example, managing your brand. A dysfunctional corporate culture cannot create a trustworthy brand, even if you have a great branding agency. And there is another fallacy some companies pursue, often with a vengeance: the quixotic quest to change culture.
“Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got,” said Peter Drucker. And working with what you got means communicating positive attributes of your culture, and highlighting characteristics that made particular individuals or groups in your organization successful. By creating personal narratives you make your stories real because they stick in people’s minds far longer than artificial, non-personal examples. These narratives can also show instances of corrective actions, when you feel that certain behaviours are inconsistent with the kind of corporate culture you want to maintain.
I have found there is something very personal about communicating corporate culture. You should give serious consideration to using social media to initiate a conversation with your employees and other stakeholders. By having a dialogue about your organizational values, morals and manners, you may find that communicating corporate culture is not about power projected from the executive office. It’s all about influence. (Please see my last post about the difference between power and influence.)
And if you’re still not convinced that communicating the right corporate culture matters, here’s one last piece of proof to consider. John Kotter and James Heskett of Harvard Business School made an interesting observation about the correlation between an organization’s culture and its performance: “We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin.”
Power, influence and leadership
I just read a great article by Elizabeth Haas Edersheim — “A tribute to Peter F. Drucker” — on the website of Peter Drucker Society of Austria. What caught my attention in the Edersheim piece was a quote from Jim Collins, author of Good to Great: “Influence and power are two dimensions by which to consider leadership,” he says. “Zero power and large influence are a fundamental measure of a great leader, whereas power alone only creates management authority, not leadership.”
What differentiates communications in a power-based authority from one based on influence? Influencers listen first and talk later to understand and analyze problems. They have a compelling way of defining the causes of problems and grievances by making them easily understood and digestible. This allows them to start a genuine dialogue rather than advocate their own, self-centered ideas. Influencers’ ideas are defined by opportunities rather than failures, but they don’t ignore or underestimate challenges. Influencers connect in a positive way that “leaders” who rely on power of their position in an enterprise or society can never replicate. Of course, to be true leaders, influencers must also have other attributes that enable them to put their ideas into action, including deep knowledge, self-discipline, perseverance and organizational skills.
Influencers tend to be wise rather than smart. They have a high degree of functional literacy. Have you noticed that functionally illiterate people in the workplace always produce dysfunctional ideas and results? How many times have you seen “change agents” self-destruct because their ideas of change were based on ignorance of real problems? The corporate landscape is littered with people who chose to rely on power rather than influence. Power comes and goes, but influence endures and makes great leaders.
Undercover Boss
Undercover Boss is the first in a series of documentaries about CEOs who want to know what their employees really think about them and their company. In the first segment, a beard and workers’ protective suit allows Stephen Martin, the 43-year-old CEO of the Clugston Group, to live on the front lines for ten days. It was produced by Channel 4 in the UK, a commercially funded public broadcaster.
I found out about the series through a great article by Stefan Stern in Financial Times. Mr. Stern describes a key dilemma faced by many chief executives: “Employee attitude surveys, brown bag lunches, focus groups, informal chats: managers try quite hard to find out what their staff are thinking. But the results are mixed at best. What are your staff thinking? Admit it – you don’t really know.”
You can add town hall meetings where questions are often planted and staging is more reminiscent of a rock-star spectacle than a genuine dialogue. And let’s not forget emails from the CEO. The readership of those decreases as you move down the organization. Yes, the rate of opening the email may be 96 percent but that statistic is as meaningless as the number of hits on your website. Remember when MBWA (Management By Walking Around) was all the rage? Nice, but they often look like a royal family walkabout. A walkabout also happens to be a purported Australian aboriginal ritual of manhood. You may argue that all of these attempts at a dialogue are better than nothing and I would have agreed with you three years ago. Today, they remind me more of a definition of insanity – doing the same stuff over and over, expecting different results.
Mr. Martin, the undercover boss, learned a few interesting things. According to Personneltoday.com, “Martin said he was able to get an ‘unfiltered view’ of how his staff saw the company and the issues they were concerned about, identifying real problems with communication and skills.” And it gets better, or worse, if you’re doing executive communications for Mr. Martin. One of the biggest problems he identified was “his regular e-mail communication and notices to staff about developments within the business were not getting through to many of those working on the construction sites.”
“I thought I was getting my message out there about what we were doing, but it became clear that workers on site were not getting that message because we were not talking to them in a format or language they wanted,” Mr. Martin said.
According to Personneltoday.com, Martin is trying to overcome these problems by setting up teams consisting of labourers, supervisors and managers who meet frequently to discuss developments in the workplace.
The solution, by mixing different layers of organization, is bound to improve the exchange of ideas. But it’s tough. Mr. Martin and other CEOs are trying to overcome barriers to communications erected by a command-and-control management and communications structure we’ve had for 150 years, originally patterned on the old Prussian army. The attempt may get rid of some of the filters that exist between each layer, but will not provide that “unfiltered view” acquired by going undercover. Mr. Martin may also want to consider adding another tool – social media. This would be a more interactive and personal way to communicate with his organization compared to traditional broadcast tools like email.
Channel 4 will broadcast Undercover Boss in two weeks. CBS is planning to broadcast “the new reality series” later this year.
What Deming can teach us about social media
Economist.com has a wonderful article about W. Edwards Deming, “a physicist/statistician with a PhD from Yale who applied the ideas of a little-known American mathematician, Walter Shewhart, to business processes. Deming later said later that Shewhart had an ‘uncanny ability to make things difficult’. There was always a need for an interpreter of his findings.”
It’s time for a Deming equivalent to make social media less difficult to understand and, while he or she is at it, to apply a few of Deming’s quality standards. If it worked for Toyota, why not social media? I got the idea when I read results of a Heyman Associates survey, Communicators Split on Digital Implementation, Impact, published in MarketingVOX. Heyman Associates is an executive search firm based in New York, specializing in corporate communications and public affairs.
The survey results are rather astonishing, considering where we are at the digital media adoption curve. “When respondents were asked about impediments and challenges to the broader adoption of digital initiatives, the survey found that the biggest issue facing communicators is a lack of sufficient talent with strong knowledge of the subject matter. Some 42% of respondents cite this as their number-one concern,” according to MarketingVOX. As one of my friends in the social media consulting business says, everybody is a social media expert these days and most of them talk language laced with gibberish, making everything difficult.
Mark Evans had a great post on his blog Social media is going to disappear: “By ‘disappear’, I mean that sooner rather than later, social media as a hyperbole-driven, standalone, new-kid-on-the-block entity is going to evolve into a communications, marketing and sales strategy and distribution vehicle that happens to rely on a variety of valuable and useful online services. For now, however, social media is being sold as something revolutionary. And there’s no lack of people positioning themselves as strategists and consultants when, in fact, they’re really “enthusiasts” who love using the tools but have little or no experience actually applying them to achieve business objectives.”
So let’s keep in mind a few rules from Dr. Deming. First, there is no substitute for knowledge. Second, the most important things cannot be measured. And third (taken from a list of problems to avoid in Deming’s Lesser Category of Obstacles), don’t rely on technology to solve problems.
Social media: coming to a boardroom near you…
You may (or not) agree with me, but social media could be reaching the tipping point in becoming the major influencer in the way decisions are made in corporate boardrooms. What I mean by tipping point is similar to reaching critical mass in technology adoption: the point at which adoption becomes self-reinforcing. I tipped to this point, so to speak, after I read The Importance of Compensation post on The Baseline Scenario. The post and its responses are brilliant in dissecting what went wrong with the way boards handled compensation, resulting in excessive risk-taking by company executives. And when it comes to compensation, the spotlight is on boards, because that’s where compensation is set.
Many surveys confirm that businesses, especially in non-tech sectors, have been slow to engage in social media. It’s hard to give up the old broadcast media paradigm, which was tailor-made for the command-and-control style of management. As Anthony Goodman writes in Financial Times, “Every chief executive and board member will say that ‘tone at the top’ is critical to a business, particularly in turbulent times.” The stentorian approach does not lend itself well to the new media. The voice at the bottom, multiplied by social media, counts in times of crisis too.
I have a theory why social media had such a hard time in the executive office and it has something to do with names. “Social media” is unlikely to fire up executive testosterone the way that “deadly force media” would make them pay attention. Just think of how many corporations have “war rooms,” where the deadliest weapon is a whiteboard with markers. Twitter, one of the most powerful tools in the social media arsenal, comes with a bird on its home page. Viral networks sound a lot more serious than social networks, especially considering the recent attention on the swine flu virus. I’m absolutely excited about Google’s Wave possibilities. Again, “Wave” is not something that the war-room crowd can envision without taking a tranquilizer or two.
Despite the initial resistance, social media have already changed the way businesses communicate. Some may even argue that new media will impact corporate structures, because social media are changing relationships with customers, shareholders and communities where businesses operate. Just think for a moment of shareholders as a special interest group. Now imagine the special interest group forming an online community capable of interacting with senior executives and board members in a way it never did before. Instead of waiting for an annual meeting, they will engage the head of compensation committee in a conversation that doesn’t allow the chairperson to shut it down as easily as he or she could during a once-a-year meeting. So this begs a question: does your board have a social media strategy? Because if it doesn’t, the one elected after the next annual meeting will…
Social media and blowing smoke at Starbucks
Adam Broitman’s piece in iMedia Connection – “Social media: whose job is it anyway? – asked six thought leaders to define social media.
Here are their responses:
1. Social Media is the creation, sharing, and commenting on digital content.
2. The sharing of information between people.
3. Any form of media that alows for immediate, public consumer response that’s incorporated into the content produced.
4. Social media is media in any form for any platform created by, for, and with consumers.
5. Social media is simply talking *with* — not at — your constituencies (customers, friends, partners, prospects, etc.) & engaging them online.
6. Tools and processes used to connect, share, and to organize and collaborate with others.
Twitter rules were followed, so each answer had to be 140 characters or less. If Twitter had more characters, perhaps they may have expanded their answers to include social activism, but answer #5 covers it best from my perspective, with one caveat: without the right message (content) and strategy, you’re not going get results with social media.
PR Week Breakfast Briefing had an interesting item about a social media campaign reported by Los Angeles Times this morning. Starbucks Chief Executive Howard Schultz was targeted as anti-union, with his company exploiting workers. The campaign – launched last week by Brave New Films of Culver City – has its own website, stopstarbucks.com, and a video called “What do Starbucks and Wal-Mart have in common?” The video should be watched by every corporate and executive communications department.
It starts with Mr. Schultz’s interview on 60 Minutes, which goes downhill for him in a blink of an eye, thanks to Scott Pelley, the 60 Minutes correspondent.
While the interview was generally favorable to Starbucks, Mr. Pelley zeroed in on a Starbucks’ message that had come back to haunt them:
“One of our colleagues coined a phrase a long time ago and said, ‘We’re not in the business of filling bellies.
We’re in the business of filling souls,’” says Schultz.
“Oh now, come on,” says Pelley. “No wait a minute. That’s too … this is a company. This is a corporation. Come on.”
“OK, it is a corporation,” Schultz acknowledges.
“You’re blowing smoke now,” Pelley replies.
Now, the Vatican may get away with saying it’s in the business of filling souls, with a little smoke as a part of the ritual, but Starbucks? Ten years ago, the interview would have been sitting in the archives. But thanks to new media, it became an opening line in the union organizing effort, exploited brilliantly by the smart people at Brave New Films. By using social media, including Twitter, to hijack Starbucks’ own campaign, the union-organizing effort may or may not succeed. But consider this: the video was watched by nearly 40,000 people and an online petition demanding that Schultz “quit following Wal-Mart’s anti-union example” was signed by 12,000 people. And the damage to Starbucks reputation? Now that’s something to think about before you write the next, hopefully not a nebulous, message for your CEO without a proof point.
The value paradox
I’m absolutely fascinated by the debate to re-brand the GOP. Not that I have any vested interest in either political party. It’s the process and ideas that are eerily reminiscent of similar debates going on in many companies. Now, here’s a political party that was all about values… social values, family values, core values… and more values. You’d think that any value-rich party like that would be in power now and forever. Jack Burkman of Politico.com nailed the GOP value problem in his article just prior to last year’s presidential elections: “The GOP is crumbling. With no leadership and no discernible values, principles or direction, congressional Republicans seem all but certain to be steamrolled by President Barack Obama, whose early approval numbers top 75 percent.” (Italics are mine.)
Let me tackle the value paradox first. Many companies talk about values as in “we don’t discriminate in the workplace.” Sorry, but that’s not a value, at least not in Canada. It’s the law. It’s like saying “we don’t shoot our employees for poor performance.” These are clearly not discernible values. I found a better definition of value on a website ranked #1 by Google called (I’m not kidding) “believes and values:” Values are about how we have learnt to think things ought to be or people ought to behave, especially in terms of qualities such as honesty, integrity and openness.
Now, let me take this a little further. I suspect that somewhere, somehow, over time, the whole concept of “value” got de-valued. It may have something to do with our perverse quest to assign quantitative values to qualitative attributes because, in business, we have to measure everything. Honesty, integrity and openness are priceless but hard to quantify in the same way as your daily widget output. In fact, these attributes have more to do with morality than the (now) wishy-washy concept of values. It’s unfortunate that “morality” has almost a pejorative meaning, perhaps helped by a few ministers from moral majority circles cavorting with sexual workers.
Morality is defined as principles concerning the distinction between right and wrong or good and bad behavior. Morality is also defined by behavior or qualities judged to be good. And here’s the rub. Morality in the workplace forces us to take a stand, to judge all people by the same yardstick as they are going to judge us. Morality is moral excellence based on the code of ethical conduct and it starts at the executive suite.
The code of ethical conduct, practiced, is something that may have saved us from the housing bubble, or prevented senior executives from spending $10 million on office renovations while taxpayers were trying to save their company. And, let us not forget these values, written in 2001: “We work with customers and prospects openly, honestly and sincerely.” Yes, that’s Enron.
Does Mr. Smith ever go to Washington?
I’m not sure I would have seen this amazing movie if I had not gone to film school. Back then, there were days I would see four movies a day and there are only a few I can still remember. But there is one movie from my American Film course that has been on my mind a lot lately: Mr. Smith goes to Washington.
If you have not seen that movie, let me take you to Wikipedia to introduce its impact: “When it was first released – the film premiered in Constitution Hall in Washington, D.C., on October 17, 1939, sponsored by the National Press Club, an event to which 4000 guests were invited, including 45 senators – Mr. Smith Goes to Washington was attacked by the Washington press, and politicians in the U.S. Congress, as anti-American and pro-Communist for its portrayal of corruption in the American government.”
It gets worse: “It is known that Alben W. Barkley, the Senate Majority Leader, called the film “silly and stupid,’ and said it “makes the Senate look like a bunch of crooks.” He also remarked that the film was “a grotesque distortion” of the Senate, “as grotesque as anything ever seen! Imagine the Vice President of the United States winking at a pretty girl in the gallery in order to encourage a filibuster!” Barkley thought the film “…showed the Senate as the biggest aggregation of nincompoops on record!”
“The film was banned in Nazi Germany, Fascist Italy, Soviet Russia and Falangist Spain. According to Capra, the film was altered in certain European countries to make it conform with official ideology.”
“When a ban on American films was imposed in German-occupied France in 1942, some theaters chose to show Mr. Smith Goes to Washington as the last movie before the ban went into effect. One theater owner in Paris reportedly screened the film nonstop for 30 days after the ban was announced.”
What I remember and love about the film is its affirmation of decency, (even) in politics, way back when Mr. Smith was the embodiment of his constituents’ interests and needs. Politics back then may not have been as civilized as portrayed by Mr. Smith, but decency mattered. I watched last White House Correspondents Dinner on the C-SPAN website and a few things registered high on my PR Richter scale. Was it really necessary to make all those ad hominem attacks from Mother’s Day to kidney failure?
Now, you must be wondering what this has to do with executive communications. The same thing as in politics: decency matters.
Executive profile database – the ready part
Ready-Aim-Fire is the essential mantra that should be playing in your head every time you’re preparing your executive for a media interview or a presentation. This post is about the “ready” part of the mantra, because without being ready your aim will be off and you may get fired.
An executive profile database should assemble everything each key executive has ever presented, including every interview, blog, twitter, audio and video. When it comes to interviews, make sure you have both – your records as well as the published/broadcast results. Include media training videos in the database to remind you of their strengths and weaknesses. The next step is to integrate all files and ensure that you have capabilities to generate reports by subject, type of media, interviewer and audience.
The database should be an integral part of your dynamic executive communications plan. In this case, the “dynamic” means that you keep on updating absolutely everything all the time. If you’re doing it right, these updates will trigger subtle and not so subtle changes in your plan for each executive. For example, if investors’ posts start tracking negative for any part of your business, it’s time to generate responses that may include your CFO or CEO when it gets serious.
The executive profile database will allow you to generate briefing material instantly and you can access it from anywhere, anytime. One more thing: make sure each executive has access to his/her own database.
If you need help setting up your executive profile database, please contact me at http://alfadogpr.com/contact/.
PS For those of you in the financial sector, please check Simon Johnson’s post and comments.
Strong brand = “what-the-hell” decision
Don’t know if you feel the same way, but it seems the word “brand” has now been used for just about everything under the sun. And I’m getting sick of it. For example, Gawker’s piece on Desire Rogers, Obama’s Socialite-in-Chief (SIC) Determined to Ruin His Image, quotes her interview with the WSJ: “We have the best brand on earth – the Obama brand. Our possibilities are endless,” she tells WSJ’s Amy Chozick. She likens her approach to that of Dove in expanding beyond a bar of soap. I find it hard to think of President Obama as a bar of soap, but if his SIC thinks so, maybe we had been too harsh on Hillary back in the primaries. Ms. Rogers has an MBA from the same university as the previous president. And, as it happens, she donated $2,000 to Mr. Bush in 2004, according to Gawker.
I Googled “what is brand” and some pretty strange definitions came back. Most authors describe what brand is not. OK, let’s start there. Brand recognition on its own doesn’t mean you have a strong brand. Most people in North America recognize GM, but that alone means next to nothing as far as consumers’ preferences go. Let me give you an example from my own family. Sam, my father-in-law, who is now 86 years old, said three years ago that he was going to trade his Buick, the brand he’s been loyal to for 30 years, for a used (!) Mercedes. That’s when I knew GM was toast: if its old, loyal customers felt this way, this company was bound to disappear. RIP Buick.
I’m writing this post on my MacBook and I’m not dumb enough to think I couldn’t have done it on my Dell laptop. But I like the feel of my Mac, the same way I like my iPod. My Dell costs about half what I paid for my Mac, but it’s one of those “what-the-hell” decisions. Could this be the definition of a real brand? Something that gets you to make an irrational buying decision even though it makes no economic sense?
