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.”

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.

Five reminders for CEO speeches in the recession

I wondered what it must be like these days writing speeches for CEOs of the recently bailed-out banks.  So I dug up a few and they look like something written by a large committee and edited by many, many lawyers.  You could tell when a corporate committee gets creative – speeches get full of BFOs.  If your mind wonders if there is anything obscene in the acronym, looking at the middle letter, it’s not. It just means Blinding Flashes of the Obvious. Some of these speeches are so careful not to offend anybody or touch anything of substance, they define boring.

At the same time, there are a few things to absolutely avoid in your next CEO speech:

#1 It’s not over until it’s over

Unless your CEO’s name is Nouriel Roubini, don’t say the recession is over just because some guy lost his stash of Ritalin, went on TV, and said the recession was over.  Quote the optimists and the pessimists rather than try to make your CEO sound like he or she won the Nobel Prize in economics last year.  Nobody knows and everybody is guessing, big time.

#2 Recession hurts

Please don’t say: “recession is a blessing.” If you think nobody would ever say that, just google it. I couldn’t believe it when I was reading this statement either. You can say that you made a “pretty good return” from the market crash if you are George Soros, have all the money in the world, or don’t care what people think about you. If you want to make your CEO in touch with the real world, quote the unemployment numbers or, if your company is doing well, just say how many number of jobs you’ve saved compared to others in your industry.

#3 Doing more with less

Doing more with less begs a question: have you been doing less with more before the market crash? Avoid such trite statements because they are meaningless.  Offer concrete examples of true creativity that will help your company weather the storm.

#4 Quick fixes

It’s often tempting to come up with one decisive move that will make all the difference. I found a blog post that asked if social media would lead us out of the recession. Now, maximizing social media tools is absolutely essential for any business, especially now. But there is no single solution that will turn this economy around. It’s going to take a concentrated effort by many, using diverse tools to get us out of this mess. Forget quick fixes, there are none.

#5 Don’t try to get funny… about anything to do with the recession

Please don’t let your CEO say: “Some of my best friends are bankers.” Saying “Some of my best friends are Canadian bankers” is a lot better.  With unemployment numbers hitting double digits, there is nothing funny about this recession. Just be extraordinary careful and judicious with anything that tries to be funny these days.

 

As always, if you have any other ideas for speeches dealing with the recession, please let me know.

An Essential List for Corporate PR

If anybody has any illusions that this recession is going to be just like the last two, here is something to change your mind. The U.S. gross domestic product decreased at a seasonally adjusted 6.2% annual rate in the fourth quarter of last year, way more than anybody expected, according to an article in the Wall Street Journal online.  The U.S. Department of Labor reports that 598,000 jobs were lost in January alone. It should not come as a surprise that every big PR agency already stated that 2009 would be tough.  Corporate PR won’t be spared from the wrath of the downturn either. Here’s a list of five critical factors to keep in mind in these demanding times.

#1 – Content

Content in PR, like cash to every business in recession, is king. Your company will still need press releases, your executives still give speeches and presentations, your website still needs new content. And, let’s not forget, social media without content is about as useful as a hole in the head. Content is absolutely essential to your business. Make sure you have people on your staff who can write and edit. You can hire outside help if absolutely necessary, just keep in mind that consultants are less than welcome when your business is suffering. The Financial Times reported last month that Siemens issued a ban on external consultants, hoping to save $386 million.

#2 – Deliver & Report

Deliver results and make sure that your senior executives know what you delivered. We all know that statistics play well, just keep in mind that not everything that can be counted counts, and not everything that counts can be counted. Your CXOs’ speeches are remembered longer than most statistics and speeches are amazingly cost-effective for reaching your customers and other key stakeholders. Produce monthly reports, but keep them short. Anything longer than a page gets far less attention than a well-written summary.

 #3 – Extend Your Reach

We are, above all, communicators and our functional expertise and skills are essential for media relations as much as they are for internal and customer communications. Help your sales and marketing people with RFPs and RFIs. Make them stand out over your competition with clear writing and appealing visuals. Work with your HR department to improve communications with employees. Help your investor relations with better presentations. Offer your board members help with their presentations as well.

#4 – Maximize Your Channels

Maximize social media. As my colleague Mark Evans says, there are a growing number of social media that companies can use to extend their messages in new and different ways. This ranges from blogs and Twitter to video and Facebook. The key is determining the social media tools that meet your strategic needs, and then committing the resources and time to leverage them effectively.

#5 – Downsize Right

Create the worst-case scenario model to find out what is absolutely essential to deliver basic PR to your business if you have to lay people off. Keep in mind that, under Sorbanes-Oxley, companies are required to meet certain communications standards. Consider short and long-term contracts for people you want back when this recession is over. Because like all other downturns this one will end eventually.  

Social Media for Executives

You wouldn’t believe who is on Twitter these days.  According to an article in today’s Economist, members of the US Congress are now twittering happily to each other and their constituents.

Everybody and his neighbour is blogging and one hears complaints about too many professional social networking websites like LinkedIn.  Even the most skeptical naysayers agree, social media are now ubiquitous and an integral part of business communication channels.  Frankly, I’m glad we’re past the acceptance stage when evangelists hyped social media almost as much as they did the Internet in the late 90s.

I recently asked a social media-savvy corporate lawyer, “Would you let your CEO write his own blog?”  “About as much as we would let him write his own speeches and press releases,” she answered.   You may argue that the need for disclosure would make CEOs’ blogs less “personal,” but the same argument may apply to their speeches.  Most CEOs spend time with their speechwriters to make sure that they actually talk their walk.

What is even more critical for businesses is social media monitoring.  Nothing can organize your customers and adversaries as effectively and quickly as social media.  Company boards should be especially advised of any changes in the online chatter because they have been increasingly targeted for perceived transgressions.

By the way, the Economist article also notes that Republicans twitter more than Democrats.  I called my friend in California to get her take: “Twitter can only take 140 characters.  When they expand it to two pages, dems will take over.” Right.