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Leadership in Communication
Reference Book
Georgetown University Graduate Studies
Fall 2013
E. Bruce Harrison and Judith A. Muhlberg, Faculty
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Table of Contents
Table of Contents
Preface (Version created June 20, 2013)
2
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Preface: What’s In It For You?
3
Chapter 1 Leadership Is Communication
11
Chapter 2 Communication Leadership
15
Chapter 3 VICTORY: Seven Leadership Traits
20
Chapter 4 How Communicators Lead in the C-suite
32
Chapter 5 Mission Communication: Thought Leadership
36
Chapter 6 Information Flow: Reasserting the Role of Control
39
Chapter 7 Influence: Sharing the Leadership Experience
45
Chapter 8 Listening: Where Communication and Influence Begin
50
Chapter 9 Stakeholder Perception: Listening and Engaging
62
Chapter 10 Culture: Understanding and Influencing
63
Chapter 11 Communicating With the Boss: A ‘No-Spin Zone’
77
Chapter 12 Competence: The Core of Corporate Leadership
79
Chapter 13 Limits: Corporate Governance
85
Chapter 14 Anatomy of Corporate Crisis
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Chapter 15 Crisis Spokesmanship: CEO Analysis
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Chapter 16 Communication Crisis Planning
97
Chapter 17 CCO Crisis Communication Checklist
101
Chapter 18 CCO 7-Point Crisis Discipline Plan
112
Chapter 19 SEC ‘Risk Factors’ and Pre-Crisis Intelligence
116
Chapter 20 Page Principles for Corporate Communicators
124
Appendix: IBM’s Centennial Messaging: A Leadership Communication Model
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References/Leadership in Communication Books
127
Recent Blogs on Leadership Communication
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We are living through historic changes in how people communicate with
each other and with businesses, how they form opinions and ultimately how they
act. From a communicator’s perspective the most demanding feature of today’s
business environment is its extraordinary connectivity. Commenting on this, the
Boston Consulting Group observed, “Digitization has played a part, and so too have
the spectacular advances of engineering, which have bridged the seemingly
unbridgeable. As a result, organizations now need to be connected in the broadest
sense with employees, customers, suppliers, shareholders, and a wide range of
stakeholders.”
To align with, and take advantage of, these transformational shifts, the
Arthur W. Page Society has worked over the past several years to document these
trends and to propose new approaches to corporate communication. The New Model
for corporate communication, as articulated in the Page Society’s report, Building
Belief (2012), aims to capture the changes that leading edge CCOs have created to
help enterprises build and protect brand and reputation in this era of
transformation and transparency. The new model, unveiled by the Page Society
conference of corporate communication officers in April 2012, sets the stage for
communication leaders in all areas of business to help their organizations succeed
in a radically different 21st century environment.
This new model is referenced throughout this book, along with suggestions
for implementing research and performance programs in corporate C-suite settings.
The model was introduced in the Georgetown University advanced studies program
by faculty (authors of this book) as well as by corporate communicator lecturers in
the university’s leadership communication classes. Additional information on this
effort in the transformative development of corporate communication, including
two early research reports, The Authentic Enterprise, 2007, and The Trust Report,
2009, is available on the Arthur W. Page Society website: http://awpagesociety.com.
Preface: What’s In It For You?
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What can you get from this book? Your authors start with two assumptions
about you as a reader. One, you are a leader or a learner or both. Two, you know
that communication is the critical path in leadership. With you in mind, we take it
from there.
Drawing on what we’ve learned, we wrote this book to help you to become,
or to escalate your odds for success as, an expert communicator in a business
enterprise. That expresses rule one for us — and a rule we will encourage you to
adopt in every leadership communication strategy:
Start with the end in mind. Focus on your purpose.
Shared values and purpose are the enablers of corporate vision. If followers
don’t understand and share the leader’s view of the path forward, there will be
limited understanding of, and therefore limited, unfocused action to, get there. If
followers aren’t able to internalize and thereby personally buy into the purpose of
the leader’s vision, there will be little or no enthusiasm for going there.
The purpose of this book is to help you become a force for leadership
communication in a business setting, as chief communication officer or as chief
executive officer — in the corporate C-suite, and beyond. The focus of this book is on
leadership in business communication. We explore how successful companies are
led and how effective communication in corporations operating in free-enterprise
economies, particularly in the United States, supports positive business growth,
positive external reputation, and positive internal workplace cultures.
As former chief communication officers, as counselors to corporate CCOs and
executives, and as faculty in university studies in corporate communication
leadership and crisis, your authors are engaged in the current dynamics and the
new, transformational significance of C-suite communication.
We zero in on two perspectives — the perspective of the person at the top of
the corporation and the perspective of the person in charge of the corporation’s
internal and external communication, which is also called public relations.
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We analyze and offer evidence and expert opinions on two critical questions:
How do leaders communicate? And: How do communicators lead? How do we focus
the combined forces of talent, shared-value dedication and smart work to realize
victory for all who have a stake in the company's condition?
Leadership communication involves strategy, engagement, execution
There is no leadership without communication. Through deeds and words,
corporate leaders and their expert communicators — referred to in this book as
chief communication officers (CCOs) — form, describe and motivate achievement of
strategies that beat the competition and deliver desired value to the company’s
stakeholders.
Leadership communication is the collaborative process of developing
strategic focus or vision (strategy), building productive teams (engagement), and
achieving outcomes (execution). The CCO is most effective when she is in the role
described by Rosabeth Moss Kanter, Harvard Business School, as “the connector” —
a counselor to others in the C-suite in building an enduring culture that enables
change and renewal.1
The CCO is a master of critical communication accountabilities at the highest
levels of the public company. He or she is, with the communication team directed
from the C-suite, a resource to managers and leaders throughout the organization
on their connections with others — whether it’s an in-house group meeting,
external or social media interviews, speeches or other functions that shape effective
understanding.
CCO accountabilities: information, stakeholder view, culture influence
Generalizing, CCOs enable mission achievement and the advancement of
shared values. In the C-suite, the chief communicator’s accountabilities embrace
three critical areas: multi-channel information flow, critical stakeholder perceptions
and the prevailing corporate culture.
CCOs and the communication team are influential at all levels of the company
and especially in the C-suite, where vision is formed and strategies are pursued
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throughout the organization. The goal is always Best Achievable Outcomes — where
each word is a factor in success: “best” means our efforts are on or very close to the
intended target; “achievable” is the reality check, to reach for winnable conditions
and to focus all available energies and talent; “outcomes” reminds that we are
aiming always toward valued results, within competitive conditions and a
timeframe that separates winners and losers.
The company’s expert, master communicators lead the BAO effort in (1) the
accuracy and timeliness of an ongoing, two-way, trust-building flow of information
(which requires a deep knowledge of every channel of communication); (2) an
accurate understanding of key stakeholder perceptions (again, expertly engaging in
the relevant flow of information and opinion in such channels as social media); and (3)
an implementing advocacy of a workplace culture that is informed, motivated,
productive, open to change and, to the extent practicable, autonomous (employees
enable one another to do his or her individual best).
The CCO’s eye is always on values: values shared in the company’s culture,
values delivered to all stakeholders. This is the “two-way street” described by
Gregory Elliott, an executive whose portfolio of responsibility at Navistar included
both communication and human resources. “Encouragement of high-value
performance inside the company,” he told us, “is the start of a circle of influence.” In
-house employees need to believe that their work is valued and that it contributes to
the values of all other stakeholders, beginning with customers who evaluate
company products.”
CEOs and CCOs share the assets of general, context awareness
Everyone who works from C-level has competence vital to reaching BAOs.
The CCO’s competence in communication matters is accomplished with a
perspective that aligns with the chief executive officer. Both have the perspective of
the generalist. Others at C-level have their specialist competence, well-developed
knowledge and current relationships in specific areas — e.g., financial (CFO),
operations (COO), legal (corporate attorney), HR (office and employee matters).
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Each is relied on for his or her experience, grasp of key corporate functions,
and willingness to communicate strategically.
The CEO and the CCO are positioned to look at the big picture, the broad scan
of stakeholders, internal structures (such as the company’s culture), and external
conditions (such as cultural or political unrest).
If the company were a group of C-level executives walking along the road
seeking competitive success, the metaphor could be the various C-suite specialists
as hikers, each interested in some particular aspects of the route — the lay of the
terrain, the flora and perhaps fauna, the pace of the hike, the temperature or the
hours before darkness. The COO, in this hypothesis, might be determining — as Jim
Collins, the author of leadership books, does in the metaphor of the “20-mile march”
— the best per-day mileage target, good weather or bad, to reach the destination
with all hands active, delivering value on time, in an allotted time frame. The CEO
and CCO on the other hand are aware of current or developing contexts that affect
overall success. In a story told by management author Peter Synge, the generalist —
let’s imagine this as the corporate CEO — drops back from the band of followers and
climbs a tree to view the forward horizon. Synge says the leader sees something no
one else has thought of; he halts the hikers and says, “Wrong trail.”2
Contexts are critical in effective communication
In the trio of forces that we have identified as influential in leadership
communication — content of the information, contexts surrounding the
information, and style or tone of delivering the information, contexts are usually
dominant. CEOs and CCOs must constantly understand the contexts in which their
information will be received. External conditions, often uncontrollable, will shape
what you are trying to control. What news, what competitive strategies, what
stakeholder perceptions, what social media contexts have the potential to limit (or,
in happy circumstances, enhance) the company’s drive to succeed?
The CEO may know what’s going on with other companies, with her peers.
Her internal leadership and management perspective, her instincts, may well keep
her vision and strategy in focus. However, the CCO’s front-line accountabilities — a
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current grasp of the flow of information, of stakeholder views, of influential news,
opinions, economic, social and political contexts — give him a critical counseling
role. The CCO’s perspective enables the CEO to compare contextual risks and
rewards — to handicap the odds for maximum intended benefit of decisions and
announcements.
Having learned either directly or from the burns of others the potential of
“misguided action,” corporate management is conditioned to realize they have in the
chief communications officer a risk manager familiar with the spark potential of
stakeholder perception. Which means the CCO needs to keep improving her or his
means of evaluating and managing the stakeholder trust equation.
CCO strategies for online engagement with stakeholders include pre-crisis
intelligence gathering and analysis.3 Tracking stakeholder interests and opinions,
company people are positioned to spot sparks of potential fire. CCOs and their
teams are moving toward organized concepts on risk awareness, not unlike Nassim
Nicholas Taleb’s call in The Black Swan to “imagine the unimaginable”4.
Rise of the function owes tribute to leaders like Arthur W. Page
We talk a lot in this book about transformation. Transformative leadership
means dealing with, and planning to drive, change. Leadership itself is changing, the
relationship between leaders and followers is changing, and the corporate
communication function is undergoing substantial change.
As the Corporate Communicational International group at Baruch
College/CUNY has observed, the corporate communication discipline is in a period
of intense consolidation of internal and external functions — marketing, public
relations, employee relations, financial and investor relations — greater relevance
in the C-suite, supported by greater budgets. Even during difficult economic
downturn, CCI reported in a 2011 study, communication executives were optimistic
that their budgets were not among the earliest targets for reduction, reflecting the
value of the CCO function.5
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Chief communication officers have not always had this high C-level
relationship or respect — and therefore the opportunities of substantial leadership.
We source the breakthrough of the corporate communicator as counselor to senior
management and contributor to best corporate outcomes to the period between
America’s two world wars.
In 1927, Arthur W. Page, the son of a publisher and diplomat, became vice
president of public relations for the American Telephone and Telegraph Company.
He was the first person in a public relations position to serve as an officer and
subsequently as a member of the board of directors of a major public corporation.
Page’s speeches, writings and actions during his years at AT&T6 are the basis
for corporate relationship guidelines (famously including the statement that “all
business in a democratic country begins with public permission and exists by public
approval”) and principles such as those on which the professional corporate
leadership communication group — the Arthur W. Page Society — was founded and
now functions.
The principles — beginning with “tell the truth” — are woven into much of
the communication leadership practice and aspirations that we explore in the
chapters that follow this preface.
The purpose of this book is the same as that which we, your authors, strive to
achieve in our graduate school courses at Georgetown University. We hope to
prepare those who are either working in, interested in, and possibly pursuing a
career in corporate communication. We give our students, and we offer to our
readers here, our best insights, lessons learned directly and through our association
with corporate communication leaders in many companies.
We are both former CCOs, officers of companies, reporting to CEOs and
collaborating with C-level peers. Our bios are provided elsewhere in this volume.
What we’ve learned, no small part as teachers of students with whom we
explore the subject of leadership communication, and what we’ve attempted to keep
in mind in this book, is that it all comes down to very human, personal
considerations. We agree with the summing up that James M. Kouzen and Barry Z.
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Posner put into one of their books7: Leadership is about “[giving] courage,
[spreading] joy, and [caring] about people, product and process all along the way.”
We hope you find some of that kind of personal inspiration along with the
professional instruction contained in this volume.
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Chapter 1
Leadership Is Communication
Leadership communication in the business setting is the process through
which corporate leaders —starting with chief executive officers —connect with,
influence and inspire stakeholders.
A famous public relations leader, Arthur W. Page8 of AT&T, said more than a
half-century ago, that in democratic societies, a company exists only if it has the
permission of what he called “the public” and what we know as “stakeholders.” Page
advanced the idea that “effective information” is required to gain this permission.
What is “effective information” at the corporate business level? We define it
as the flow of strategic interactions that inform and influence corporate-stakeholder
relations. The exchange of information is clear, constant, open, honest, two-way, and
caring.9 Content, context and tone are the structural elements of effective
communication (see illustration, “Leadership Communication: Source Strategies”)
[INSET]
Leadership Communication: Source Strategies
To achieve maximum effectiveness among recipients (followers, stakeholders)
communication originating in the company should pass through three strategic screens.
CONTENT: Ask, “what?”
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This is where the company has maximum control over transmission. What is our news
or information? What is the best (or required) timeframe for making it known?
CONTEXT: Ask, “where, when, why now, what now, what next, who?”
This is where external, ambient factors limit our control of the reception. Where will
this be seen, read and heard? In the communications channels and their respective and
combined followers, what are the conditions surrounding the release of our information?
Is this information expected, required? How will this release relate to or be influenced by
existing information, opinion, conditioning?
TONE: Ask, “how?”
This is where we can control the style or manner in which we connect best. What can
we do with the decided CONTENT of our information, and with a good understanding of
prevailing CONTEXTS, to reach our followers or stakeholders in the best achievable
manner — language, reassurance, optimism, reality, openness? Does our “tone” of writing,
stating and delivering information — or in our conversations with stakeholders — connect
emotionally and intelligently to engender better understanding and support?
In short, we believe the purpose of leadership communication is to create
and sustain stakeholders in the company. We see “stakeholders” as the employees,
investors, customers and others who make some level of commitment to the
company. While each individual or group has its own motivations or drivers,10 they
come to work, they buy stock, they buy services and products, or otherwise enter
into a “deal” with the company and its leaders aiming for a win-win relationship, or,
as we will call it in this book, a specific, value-delivering Best Achievable Outcome.
In some manner or at some level, each of these followers (employee, investor,
customer, community supporter, reputation advocate) assumes a stake in the
company’s success. And, to achieve its own best outcomes — from support to
advocacy, the company has stakes in the satisfaction and followership of one, more
or all of its stakeholders.
We will acknowledge various levels of “followership”11 (a subject vigorously
explored by Barbara Kellerman of Harvard in Followership: How Followers Are
Creating Change and Changing Leaders12) and compare this concept with what we
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see as the advanced level of followers, to believers and advocates (a subject of study
by the Arthur W. Page Society), to our focus on stakeholders.
Followership is neither automatic nor specifically sustainable. That is to say
that followers — groups or individuals who have a stake in the leader’s success —
1) must be attracted, convinced, and in some manner satisfied or rewarded, and 2)
cannot be assumed to stay committed to the company’s “deal” or the values inherent
in the relationship. We will explore reasons for this — for example, the fact that
investors have many reasons to re-evaluate their positions of commitment (see a
representation of this in the accompanying graphic of “all in” and other kinds of
followers) — and we will drill down on the corporate communicator’s challenges in
stakeholder engagement.
One lesson is clear: communication is two-way.
The company is not a commander, not an imperious voice. The company is
less a conveyer of messages than a convener of interests. Your authors discourage
use of the term “audience” in any corporate communication context, because it
tends toward a picture of a company as performer onstage speaking to or
performing in front of a passive set of listeners. A company needs input from its
stakeholders. It is the company’s responsibility — lodged in every level of corporate
control or authority — to engage, to listen and to understand what the company
must deliver to create, sustain and recreate its stakeholder support. We will
examine the vital impact of stakeholder perceptions, affected by leadership
communication, in the rise and the fall of presumptive leaders — and how this has
been changed dramatically by the nature of communicating in the digital decades.13
The bottom line — the money, moral and motive — of publicly owned
companies especially, is that stakeholders are effectively the arbiters of the
company’s — and its leadership’s — level of success.14 We analyze why this is true
and, with our students, provide both evidence and exercises to show how effective
leaders perform and communicate with stakeholders.
Take Away: Leadership is communication.
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To succeed, a business leader must communicate explicitly, engagingly and
persuasively. This is rarely achieved independently. The most capable chief
executive officer benefits from collaboration with an expert communicator who
knows, believes in and can help the CEO move toward execution of missions and
strategies.
[INSET]
Followership: A View for Leadership Communication
In this hierarchical view of followership, it is clear that Leadership Communication
requires different approaches to engage effectively with followers or stakeholders.
ALL IN: For example, this includes the group of C-suite executive leaders, top 100
managers, motivated by money, power, succession...buying heavily into the deal, accessible
to leadership.
PLAYERS: This goes beyond the C-suite to others (investors, analysts, and many of the
company’s employees) who are motivated by income, security, opportunity to substantial
commitment to the company’s deal, but they have options, to leave, to put other deals into
play.
BETTORS: This gets into conditional — call them fair-weather friends — who have a
stake in followership and the company’s deal, but can be swayed to stay with their “bet” or
to get out, if the odds change; business partners, suppliers, customers, even some
government or politician “bets” on the company’s commitment to them.
HOLD ’EMS: These players or bettors are more passive than active. Customers, for
example, buy the brand because they always have long-time investors, hold the stock with
little or no activity (maybe following their parents “clipping coupons”). They trust the deal
— the product does what it’s always done, the company keeps paying dividends, the
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employee is locked into the promise of income. Call them followers by hopeful habit, more
comfortable not changing than changing, more inclined toward staying the course, and not
betting on a competing deal.
Chapter 2
Communication Leadership
In today’s wide-open, interactive democratic societies, corporate executives
understand that (a) their effectiveness requires them to be very good
communicators and (b) they must rely on experts in effective communication —
written, oral, visual, viral, live, video, personal and public.
How do expert communicators, through their position in companies, in close
counsel with the leaders of those companies — in positions responsible for
corporate communication, often now called chief communication officers (CCOs) —
do their jobs and, in best-case circumstances, become leaders in the organization?
How do they become a substantial part of leading a company’s success
through ideas, strategies, counseling and execution of programs engaging
stakeholders and followers?
What are the elements of expert communication performance in the
corporate C-suite? We emphasize these three accountabilities as CCO essentials:
Information flow, stakeholder perception and cultural influence.
Here is a preview of these vital elements:
Information flow. Purpose of information in a corporate setting is to
support positive business growth, positive external reputation and positive
workplace culture. The effective CCO conceives and manages the content and flow of
information, internal and external, to engage and influence the company’s
stakeholders. Ideally, the content of company messages — starting with leadership
communication — will be consistently timely, open and honest. The CCO will
understand and deal with contexts — timing, external factors that compete with or
confuse content, all the often uncontrollable factors that shape the impact and
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acceptance of information, to and from the company. He or she will also be sensitive
to the tone of information — the style, the way information is presented, whether it
is oral (as in a leader’s speech); it is in a news release (as a direct quote from
leadership); it is part of an online conversation (as in a blog, tweet, or other
commentary) or when it is presented by the CEO, CFO or others during a quarterly
phone conversation with financial analysts15. This is the “how” it comes across to an
engaged person or group — and the CCO will edit content, conceive the connection
with the stakeholder, and coach or counsel the company’s spokespersons or
attributed communicators in the appropriate language, words, pace and
presentation, to connect with the specific stakeholders in win-win outcomes.
Let’s not end this preview of information flow accountability without
underscoring the CCO’s control in sourcing what goes out as leadership
communication. “Information,” said the author of Writing Well, “is your sacred
product, and noise is its pollutant. Guard the message with your life.” William
Zinsser, an advocate of clear writing as an editor and teacher, warns against the
“noise” of ambiguity, redundancy, vagueness, jargon, pomposity, and clutter in “the
message.”16 The guidance is well suited to the chief communication officer who
battles to make his company’s information flow understood and persuasive.
Stakeholder perception. “Stakeholders” are followers who have a stake in
the outcome of the corporation’s success or, for example, customers who rely on a
company product to deliver a benefit; at best, followers are believers in and
advocates for the company, its goals, its products or services. This means that
stakeholders are constantly, if at times inconsistently, evaluating some aspect of the
corporation’s performance or delivered value. Misperceptions can be negative
enough to shake or break the stakeholder value deal. The CCO finds ways to
measure stakeholder engagement. He or she is the C-suite’s expert in stakeholder
perception. Knowledge about the impact of company goals, intentions, outcomes —
in short, its leadership and performance — enables CCOs to counsel leaders and
lead communication that influence accurate, positive stakeholder perceptions.
Counseling, and collaboration with the CEO is particularly useful in this
regard. As we observe in this book, the distinctive ability shared by CEO and CCO is
the broad perspective.
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As an illustrative analogy, we use the tale of the three specialists attempting
to describe an elephant by assumptions based on their grasp of a tail, a trunk or a
leg. Each executive in the upper ranks of any organization knows, understands and
in considered an expert in a specific area — finance, law, risk, operations — while
the chief executive and chief communicator are (reaching beyond specialty
strengths) generalists. They must see the big picture.
The generalist pair — CEO and CCO — must look out at the trail ahead, to see
what entanglement and opportunity (enemy in the bush or favorable clearing) will
be encountered. This (“eye of the elephant”) seeing and (“ear of the elephant”)
hearing what critics and stakeholders perceive are a vital element in the impact and
progress of leadership communication.
Cultural influence. Culture, according to the author Fareed Zakaria, is “the
shared historical experience of people that is reflected in institutions and practices.”
In other words, it’s “how we’ve done it and how we do it here.” Positive cultural
traits — openness, teamwork, trust in management, trust in fellow workers, factors
such as safety at all operational levels — can be influenced through counsel,
collaboration and leadership communication. Negative factors and disconnects in
the company’s information flow have a deleterious impact on culture (for example,
operational accidents or faulty financial record-keeping). CCOs are a force for
improvement and, with support from top management and the strength of
leadership communication, can achieve cultural change. Our focus will be on the
CCO’s ability to understand the huge impact of corporate culture and to factor into
leadership communication strategies to lift the internal culture to productive levels
of attitude and performance.
Information. Stakeholders. Culture.
While these seem to us to be the Big Three in the CCO’s mandate (in addition
to day-to-day work managing activities and people, setting standards for
performance, attitude and team strength), there are other, often more nuanced,
ways in which communicators lead in the corporate structure, as counselors,
collaborators, thought leaders.
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Leadership communication must adjust to transformational management,
technology and many other developments. We are aided in this adjustment —
opportunity is the better word — through the work of active CCOs in the Arthur W.
Page Society, such as its description of the “new model” of corporate
communication.
The society’s namesake and inspiration, Arthur W. Page, in charge of public
relations at AT&T during a time of elevated challenge to corporations in the 1930s,
was a thought leader. Counseling management on engaging with stakeholders, he
went on to write a book17 that advanced the right and obligation of companies to
engage their publics (stakeholders) to protect their earned status and reputations.
Thought leadership among today’s CCOs is implicit in the surging new
communication model of the CCO, as advanced by leading CCOs and organizations
such as the Page Society.18 As the value of strategic corporate communication is
better understood among CEOs, other C-suite executives and board members, CCOs
will assume greater responsibility and requirement for leading.
These ideas and principles will be discussed in the light of current reality.
While we study case histories, precedents, thought leaders from the past in the
communication profession (as those in every other profession do), we must deal
with what is and, if we can look ahead and define it, what is likely to be.
Our exploration begins with analysis. We will enable you to examine
companies and their leaders, evaluating communication methods, styles and
effectives, as well as the leadership role that drives or raises communication efforts.
In our classes, student teams analyze assigned companies, following the companies
online especially to “listen” or engage in social comments and conversations that
affect the companies’ strengths, weaknesses and opportunities, as well as to detect
threats (adapting the simplified SWOT examination; see one company’s snapshot of
corporate communication and leadership factors on page -------).
Five Principles of Communicating in Difficult Times
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“Life is difficult.” Which is a good thing. That’s the way M. Scott Peck put it in
his turn-of-the-century book, The Road Less Traveled. If you accept life’s road as
rocky with challenges, the popular psychiatrist wrote, you grow physically,
intellectually and emotionally.
Losing out to “problems,” Peck and others studying emotional intelligence
have counseled, denies you the experience of advancing along the scale of human
and spiritual achievement.
This thought leadership can be applied to C-suite communication leadership.
Corporate leaders understand that their roads to success are not unobstructed. The
process of drawing energy from difficulty and forging ahead requires a special kind
of communication. Communicating in difficult times engages these five principles:
(1) Reality. Leaders who want followers to believe in them and the mission
must tell it like it is. When the road ahead is rocky, they must let
followers know everything that they know about the current situation.
(2) Hope. If the leader is honest about the reality of difficulty, followers will
listen to the options needed to get back on the road to progress, to go
through the difficulty and enjoy the benefit of achieving the mission.
(3) Inspiration. Reality plus hope moves toward trust, which is the primary
inspiration of followership. Followers are inspired by leaders who care
about them and will stay with them to get to where they need to be.
(4) Shared value. Leadership is a deal that works if leaders and followers
believe there is personal and organizational value in the relationship.
Communication is two-way and interactive, reaffirming the leader’s
dedication to the satisfaction of needs — values protected and received.
(5) Shared credit. Leadership communication changes “I” to “we.” While that
applies to the goal of sharing value goals, it also applies to recognition
that leaders don’t do it alone. Leaders enable followers to achieve and
effectively to share the leadership. The CEO and the CCO need to
remember: Of all the messages that you can deliver, as progress is made,
none is more powerful than this: “Thank you, you did it.”
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In successful companies, presumed weaknesses and threats to strategic aims
are treated as solvable difficulties. The “rocky road” of miscalculations and
competition is a call for C-suite management of leadership communication,
connecting with company followers, learning from the difficulty and converting it to
best achievable outcomes.
[INSET]
SWOT Analysis
Example of a Strength-Weakness-Opportunity-Threat (SWOT) analysis, addressing
both Executive Leadership and Communication Leadership of a selected company.
Chapter 3
VICTORY: Seven Leadership Traits
When he was mayor of New York, the adroitly political Ed Koch had the habit
of asking voters and team members, “How’m I doing?” An elected mayor wants to
know where he or she stands on the prospects and values that the city’s voters look
to be delivered.
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The chief executive of your company may very likely pose a similar question
to you and other C-suite leaders. He wants to know “how are we doing?” in
delivering the outcomes — values that will be shared — through the vision and
missions to which he is committed. He knows that leading a company is a constant,
competitive condition. It is a race to perform better than others in your field.
As the company’s chief communication officer, you anticipate the CEO’s check
on the race status, and you're ready to reply with updates and proof points (such as
benchmark data or stakeholder feedback analysis). The daily focus of C-suite leaders
is on the race with competition, where values are the motivation, and where certain
leadership traits tend to enable victory.
Leaders are made, not born. That is generally agreed, but there’s far less
agreement on the question, what “makes” them? What skills, talents, instincts, habits
can be observed in proven leaders, traits that bring people to admire and follow
them?
Wharton study of 25 business leaders
In 2004, the Wharton School at the University of Pennsylvania tackled that
question. They identified influential leaders of the previous quarter century. The list
ranged widely, from Lee Iacocca at Chrysler to Steve Jobs at Apple; from Warren
Buffett, the wizard of Berkshire Hathaway to Oprah Winfrey, the wonder woman
running Harpo. Bill Gates (Microsoft), Sam Walton (Wal-Mart), Andy Grove (Intel),
Herb Kelleher (Southwest Airlines), Jeff Bezos (Amazon), Jack Welch (GE), Alan
Greenspan (Federal Reserve) and more than a dozen others were studied. (See notes
on this analysis and all the leaders. 19)
Here is the study’s summary of identified leader traits: an ability to build a
strong corporate culture, being a truthful person, ability to discover and exploit
underserved markets, being able to identify “invisible” behavior (in other words,
seeing potential winners or trends before competitors discover them), ability to use
price as a competitive advantage, adept at managing organizational brand, being a
fast learner and skillful at managing risk.
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Without arguing with this analysis (in fact, we recommend the study’s resulting
book, Lasting Leadership, produced with National Business Report), at least two
assumptions can be made from this study. The first assumption is that exemplary
leadership traits are studied in business executives who have achieved competitive
success. Each of the leaders in this study engaged his or her leader skills or traits to
envision and realize more business, more profitable outcomes than their rivals.
Each exercised what the Boston Consulting Group calls "the competitive imperative"
to gain access to opportunities for growth and value creation.
The other assumption has to do with communication. We know that
leadership is communication, for better or not. We can confidently assume that all
these 25 leaders communicated well enough to take their companies to victory. But
beyond one of the asserted traits for winning — “being a truthful person” — we
don’t have a direct evaluation of the choice and role of leadership communication in
this, or in any other study of which we are aware.
This book’s focus on leadership communication impels our offering a set of
traits or skills that bind leaders to followers in the C-suite and beyond — meaning
the creative flow that starts at the top of the enterprise, reaches, informs, inspires
and empowers more leaders and attracts more followers.
A former CEO who became an authority on leadership development — Bill
George — describes it as the process of seeking “true north” on the compass of
performance.
Our true north in leadership communication is values.
Focus on values in leadership communication
Is your company a world-leading innovator, or a profit-mongering exploiter
of the poor? Is it progressive, innovative and adjusting to new realities, or is it
abandoning its core values and putting profits ahead of people?
These questions are from a 2007 study based on CEO interviews which
concluded that a company’s values are the fundamental basis for effective
leadership, and a special focus for an effective communications function.
“Every enterprise must be grounded in a clear sense of itself,” said the
Arthur W. Page Society authors of the study report. “An enterprise that is sure of its
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purpose, mission and values — and that takes those bedrock definitions seriously —
is effectively compelled to behave in ways that are consistent with its core values.”
We envision C-suite leadership as the origin of an ongoing, circular process
that energizes others and regenerates itself. Our leadership VICTORY circle suggests
the traits of the company leaders — with emphasis on the CEO — that enable
winning in the competitive condition of running a successful business long term.
We underscore the role of the CCO, leading and collaborating with other
leaders, especially the chief executive.
As the Page Society study, noted, “(The) communicators’ counsel to the
corporation must encompass its fundamental business model, brand, culture,
policies and, most importantly values.”20
Beginning with the end in mind (purpose: share and deliver value) we
propose that the evergreen goal of leadership is reaching “yes.” For you as a leader
— CEO, CCO or whomever you may be or influence to be — getting to “yes” means
your leadership is being validated by those on whom you and your company
depend.
Victory means stakeholders are saying “yes” to whatever it is that they — as
employee, customer, investor or otherwise — value in their relationship with your
company. Here then is our suggested victory wheel, a reminder of traits that
validate, build and protect values through stakeholder-centered leadership.
VICTORY as the Result of Leadership
In his book, Good to Great, Jim Collins found the one-two winning
combination for building a company’s enduring greatness: a fierce, professional will
and a comfortable, personal humility.
For all leaders, whether or not they meet the Collins “level 5 executive”
model, one outcome that must be pursued is what we can describe simply as
victory: beating the competition, meeting stakeholder expectations, building a
motivated team, and executing strategies that sustain an exemplary, authentic
enterprise.
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Effective leadership communication reinforces deal-binding values shared by
the company and its followers (stakeholders, believers, advocates). The company’s
dedication to win-win outcomes needs to be constantly communicated, proven and
protected.
With the seven letters of the word VICTORY as a mnemonic, we can
recognize seven qualities or personal traits of sustained leadership, with ongoing
involvement of expert, winning communication. These traits typify the way in which
chief executives and chief communication officers are able to collaborate.
Vision. A survey by Charles Farkas and Suzy Wetlaufer21 found relatively few
CEOs describing themselves as the corporation’s chief visionary. However, how else
to describe the leader who looks at the future for the company, and, from where he
or she is standing, points to what is required, possible and achievable? Leader A sees
a path for a company recovering from a slip and rising to a front position. Leader B
points toward product strategies that will engage with developing government
interests. Leader C envisions a trusting and productive sales method that will lift the
company to success. Forward thinking — thought leadership — sets the course for
the company. So, as the company’s expert communicator, our leadership
communication genesis is the leader’s vision; if the vision is successfully
communicated, it is translated into missions, strategies and execution relevant to
the values of the company and its stakeholders.
Amazon put its leadership vision into understandable terms, in its mission
statement: “To be Earth’s most customer-centric company where people can find
and discover anything they want to buy online.”
If the visionary leader does not communicate in a way that is clear and valuerelevant, there can be a lack of focus that causes the business to suffer. After he
moved up to become chairman of Starbucks, former CEO Howard Schultz wrote a
memo to the company’s leadership team, citing what he saw as challenges to
Starbucks’ brand customer experience. His vision of the business was threatened.
Schultz, who returned to his chief executive position basically to keep his vision
alive, said in his book that visions must be steeped in reality—“and that often begins
by facing uncomfortable truths about the present.”
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Mary Parker Follett, one of the earliest authorities in the study of power,
authority and influence in private-sector business, observed in a book published in
1933, that among the essentials of leadership, the greatest importance is “the ability
to grasp a total situation.”22 In today’s C-suite, the CEO and the CCO share that
unique perspective: an overview of the entire company and where it is on the course
toward realizing its vision, and delivering value to those who have a stake in it.
Context can require vision reset
Vision must be the guiding light of corporate communication and
performance. Holding onto a vision too long, however, neglecting or refusing to see
the need for reset, can discourage followers and encourage competitors.
Apple CEO Steve Jobs faced vision reset when competitive contexts caused
the outlook for the iPod to blur. Jobs had convinced followers in the early 2000s
that his vision of a pocket-sized music device would be a winner. That envisioned
goal was achieved. By 2005, the iPod was far outselling the Mac computer.
Jobs looked ahead again, and considered contextual clouds. What if phone
companies figured out a way to play music on phones, what if other companies
could make a quality product that is easy and fun to use? If a lot of people were
carrying cell phones, would they continue to carry iPods?
The visionary executive took his concern to his board of directors. It was
time to adjust the current vision, he told them. Although his profitable, pace-setting
iPod was driving sales, creating value for stakeholders and energizing a culture of
focus and momentum, something new was needed. Jobs' new vision, of course, was
the iPhone, which was developed from concept to hand-held, in two years.
The leader in any field—military, corporate—has to adjust to the reality of
contexts he can't control in order to maintain successful momentum. Something
new—a method, a strategy, a weapon or product—may be required for victory in a
combative environment.
CCOs use communication to light the path for vision achievement, illuminating
the challenges and the inevitable, and sometimes surprising, changes that accompany
all business strategies.
Integrity. A strong, modern influence on leadership, James MacGregor Burns
defines “transforming leadership” as a collaboration with followers in a way that
they “raise one another to higher levels of motivation and morality.” Trust and
ethics (morality) must flow from the top. In successful, sustainable business
relations, in all stakeholder relationships, integrity is a fundamental precept of
modern, increasingly viewable corporate governance. A company’s culture, its
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performance and its leadership all can be said to rise or fall on the fact, as well as the
perception, of its integrity.
The leader’s first personal obligation is to assure that his or her personal
word is a bond. Followers — beginning with those closest to him or her — look to
the leader for direction as to what is acceptable and what is not. Former (Medtronic)
CEO Bill George (see his books on leadership23) says authentic leaders set the model
for others by demonstrating their passion and their purpose, practicing values of
respect and honesty consistently. “They know who they are,” as George puts it, and
others do too.
Personal integrity enables corporate integrity. “The genius of leadership,”
said James MacGregor Burns24, “lies in the manner in which leaders see and act on
their own and their followers’ values and motivations.” Through their decisions,
actions and communication, the CEO as well as other C-suite leaders determine the
public, and especially the stakeholder, perception of the company’s integrity.
CCOs are action agents for integrity, which is the bedrock of authenticity.
Communication. To repeat a verity, there is no leadership without
communication. Even the leader who tries not to communicate, not to show his
hand in some situations, is communicating by that reticent strategy. And yet, while
every leader — and certainly every CEO of a public company — knows this,
communication competence is not automatic; it doesn’t come naturally to some who
move toward leadership; and it can be mishandled or neglected, to the leader’s and
the organization’s loss, especially in times of stress. There is more and more
evidence in this wide-open age of communication that poor executive
communication or gaffes are a significant factor in leadership change. Expert
communication counselors — chief communication officers in modern corporations
— help leaders to lead in the interplay and engagement with stakeholders. This
creates greater demand for expert communicators, close to all leaders. CCOs are
expert in the winning dynamics of content, contexts and tones of the leader’s
communication obligations and opportunities.
[INSET]
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Leadership Victory Circle
Trust. Of all the factors binding leadership to followership, wins to wins,
values to values, trust is paramount. The number one reason followers give for
following an individual is “I trust her (or him)”. The leader must be trusted to act
and deliver, to be as good as his or her word, to be worthy of followership. This
quintessential condition, however, is a two-way street. The other direction is that in
which the leader respects and trusts those he or she wishes to engage. Inside the
company, the trustworthy leader trusts — declines to micromanage — team
members to carry out their jobs related to visions and missions. Stakeholders, from
colleagues to employees...from investors to customers, are bound to leaders, in
whatever their followership capacity, through trust. CEOs, old and new, know this.
Warren Buffett invites full engagement with stockholders at an event in which he is
open to direct questions and conversations. Tony Hsieh builds his Zappos shoe and
clothing business by trusting customers to buy or return products sent to them on
inspection. CCOs keep the flame of trust alive in the C-suite and in the stakeholder
ecosystem through advocacy and the practice of open, two-way, positive and authentic
leadership communication — with a special emphasis on the feedback loop.25
Optimism. This is the emotional driver of confidence. We see optimism as
the handmaiden of reality. The business executive describes current reality and
provides hope or optimism about future achievement. Nobody follows a pessimist.
Colin Powell, with a distinguished military and public-service career, summed it up
in his 2012 book, It Worked for Me.26 “Optimism is a force multiplier,” the former
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general and Secretary of State said; it brings greater energy and power to the force
of followers to achieve goals. When things went wrong with a trusted executive,
Warren Buffett accepted that reality and...he assured followers that one bad actor in
his management team would not spoil the company’s prospects, and he is famous
for saying, “If you lose dollars for the firm by bad decisions, I will be understanding.
If you lose reputation for the firm, I will be ruthless.” Allan Mulally, CEO of Ford,
reinforced statements about the future by consistently coupling them with “proof
points,” and became famous for saying, “The data will set you free.” Followers need
to see in the leader the strength of belief in achievement. There is a caveat. As with
all aspects of communication, optimism must be authentic. A 2011 research study
showed how a CEO’s over-enthusiastic outlook, expressed on a quarterly call with
investment analysts, can backfire. Phony optimism kills trust.
CCOs collaborate with leaders to describe reality and provide an authentic case
for optimistic outcomes.
Resourcefulness. This trait is not talked about much. Maybe it is because
resourcefulness is frequently coupled with another “R” — risk taking. Effective
corporate leaders are transformative leaders (long ago identified as the most
effective kinds of leaders by author, teacher and political leader James MacGregor
Burns.27) Because they drive change, which is always necessary, and because change
always involves risk, transformational leaders take calculated risks. In doing this,
they are resourceful in redefining goals for competitive sustainability. A Harvard
Business Review commentator, John Baldoni, puts resourcefulness at the top of the
skill-set keys to leadership. He says resourcefulness is optimizing what you have to
work with. It’s the ability to stay open to change and to “redefine the possible.” He
gave the example of the co-founder of India’s $2 billion IT service company, who
helped fellow Indians to realize how they could refocus and leverage their talents to
empower themselves to fulfill goals. Resourcefulness is the leader’s ability to act
effectively, even imaginatively, to keep the company on a victory path.
In her early studies of leadership, Follett said that the leader must do more
that see and understand the situation as it is, to “see the evolving situation…not on a
situation that is stationary, but one that is changing all the time.”
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Effective CEOs and CCOs stay close to the business, attuned to conditions and to
stakeholder values and attitudes; to anticipate — or certainly early to recognize —
the need for change, and to strategize and execute transformative communication.
Yes. Harvard professors wrote a negotiation guide entitled, Getting to Yes,
which supports win-win outcomes. “Yes” — reaching equitable, value-based
agreement with all desired stakeholders — needs to be the money shot for business
leaders. Management experts such as Baldoni and Ram Charan remind us that the
leader who steps up and says “yes, we can do this” is one who can push colleagues to
do things that some might consider impractical — or even impossible. While the
management style of Apple’s Steve Jobs may have personified the possible limits of
this leadership trait, there is no doubt that a leader’s persistent drive for results that
excite (or, to use author Guy Kawasaki’s phrase, enchant28) stakeholders, providing
them with the joy of realized values, is a compelling leadership factor.
Getting to yes on the circle of leadership fulfills what an accomplished
industrial leader, Max De Pree, calls the leader’s “debt to the future” — and that is to
provide momentum. “Momentum in a vital company is palpable,” De Pree said in
Leadership is an Art29. “It is the feeling among a group of people that their lives and
work are intertwined and moving toward a recognized and legitimate goal. It begins
with competent leadership and a management team strongly dedicated to
aggressive managerial development and opportunities.” The momentum of yes —
renewed commitment by the company and its stakeholders to the deal of delivered
values — is effectively the proof of the “flywheel” power that Jim Collins identified
in his study of sustainable success by Good to Great companies and their leaders.
Leaders need to keep in mind the truth that the win-win, realized-value deal
is constantly in play. Both companies and stakeholders are always negotiating the
proposition that can be simplified into the question: “What’s in it for me?”
A three-step process for satisfying challenges to whether “yes” exists was
suggested by Kenneth R. Feinberg, who has engaged in stakeholder negotiations in
corporate matters as serious as the BP oil leak crisis in 2010. He recommends to
leaders: “One, know the facts. Two, be dogged (persistent). Three, keep an open
mind. Next, be creative in getting to yes.” This is not a bad recipe for leadership as
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chief executive or connecting with stakeholders as chief communicator. Feinberg
ends his summary with the tell: “Finally, a very important basic proposition: (In
negotiating,) put yourself in the other person’s shoes.”30
Dick Martin, author and former CCO of AT&T, makes the win-win point in the
title of his book, OtherWise. Leaders of companies — executives and communicators
— will be “wise” to engage, understand and respect the “others” who influence and
define the victory of leadership touched on here. CCOs, experts in information flow,
stakeholder perception and culture, will keep leaders aware that the “other” person is
an active agent in the corporate success. The CCO has an ongoing responsibility to ask
the question, how does the deal, as stated and proven, feel to others?
Vision can become the momentum of agreement when leaders conceive it,
direct it, and communicate it in a manner that welcomes collaboration and
accountability.
No leader has all these traits, and certainly not in the same measure. The
lesson reinforced by this mnemonic is that leaders and communicators are enabled
for victory shared with stakeholders when qualities like these are active.
Post-‘game’ note: CEO-CCO listening and learning
We want to make one final point here about leadership, with the spotlight on
the CEO-CCO duo.
In 2003, the bright and successful former head of Medtronic, member of big
corporate boards, instructor and leadership book author, wrote an article that
seemed to slam “public relations.” Bill George’s article in Fortune delivered an ironic
note of appreciation to the companies that created the scandals — Enron,
WorldCom, HealthSouth, Arthur Anderson — that shattered a lot of trust in
corporate leadership. Speaking as a business leader with a good reputation, George
wrote to the flawed and failed leaders: “Thank you…You woke us up. The business
world has run off the rails, mistaking wealth for success and image for leadership.
We’re in danger of wrecking the very concept of the corporation.”
George observed that CEOs may well get into trouble by listening to the
wrong people. Among the “wrong people” were Wall Street analysts, media pundits,
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economists, compensation consultants, hedge funds and — wait for it! — “public
relations staffs” and “fellow CEOs.”
The events George was writing about happened more than a decade earlier.
We don’t know what “public relations staffs” were saying to CEOs then31 that led
George to generalize, but we do know that this C-suite relationship is always
evolving. “Public relations staffs” in vanguard companies have advanced in the
transformative leadership that is all about change, including uncontrollable
changing contexts.
But we end with the rest of the story. In the Fortune article of 2003, George
described corporate leadership conditions as “the game.” He observed that the
wrong way to play the game — root of the downfalls — is any advice that keeps
chief executives from focusing their energies on their company’s customers,
employees and shareholders — “since the game is supposed to be all about them.”
Side by side, CEOs and CCOs know “the game” — groups of CCOs such as the
Arthur W. Page Society are writing the “new model” of it — and are in it together,
moving toward some level of victory that is fair, open and delivers valued benefits
all the stakeholders.
If we could add one letter to the seven that spell victory, it would be a large,
dominating “a” for authenticity. “Authentic” wraps around all these traits. Lack of
authenticity not only undercuts the work, the impact and, yes, the joy of leadership.
It undermines practical actions companies can take to build authentic enterprises
and, as the Page Society describes it, “ultimately, authentic advocates — customers,
employees, investors and neighbors” whose communication power is more potent
than anything that can be devised in the C-suite.
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Chapter 4
How Communicators Lead in the C-suite
Are chief communication officers assumed to be the protectors of
corporate values? Do CCOs own this function or influence it? Tom Martin32, former
CCO, teaching advanced studies at the College of Charleston, led a discussion among
CCOs and college teachers exploring these questions.
Consensus was that everyone in the C-suite, and ultimately the CEO, has a
role defining the company values and behaving in values-based ways that
demonstrate support.
“But most agreed that the CCO has a major stake in influencing this
behavior,” said Martin, “and that we should take this responsibility very seriously. In
this regard, those (of us) who teach, question the degree to which we are teaching
students about the importance of instilling a value system within a corporation and
the role of corporate communications in implementing and managing these values.”
Martin said the distinctive role of the CCO is serving as the voice of
stakeholders not in the room when decisions are made that form or impact cultural
values.
The flaw in this impact is transmission loss: values shaped at the top of a
company may dissipate or change at the outer reaches of operations. BP’s Gulf
disaster in 2010 reinforced the fact that it’s a long way from C-suite to drilling rig.
Expert communicators at the top of the organization shape the values chain. And
when something goes badly wrong in the last links of the value chain, the culture
question snaps back to the top, where the CCO works.
In this book, we are particularly interested in how the success of chief
executive officers and others at the top of the corporate organization — “victory at
C-level” if you will — is achieved in collaboration with chief communication officers.
The CEO of YouSendIt told a New York Times interviewer that transparent,
authentic communication is the key to culture and operational success. “You almost
can’t overcommunicate,” he said. “You can try, and you might think, ‘oh, do I really
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have to say that again?’ And the answer is yes.” Continuous collaboration with the
top-level communication team is essential.33
CCOs must work at that collaboration. In our view (learning from peers, and
having the direct and personal experience of having been chief communication
officers), the following behaviors of CCOs increase their effectiveness and influence
in the C-suite.
• CCOs establish expertise.
CCOs are — and confidently act as — masters of information flow,
stakeholder perceptions, and culture shaping aspects affecting fellow leaders.
• CCOs become the reliable source.
If you are the company’s expert in the constant flow of information relevant
to your company, you are the “go to” C-suite source on current stakeholder
perception, competitor communication, and know-how for media, bloggers and all
other putative stakeholders and influencers who could react to newsworthy actions
and decisions.
• CCOs talk truth to power.
From the earliest years of conceiving corporate management as an art that
could be developed, there has been a drive toward jointly developed or co-active
“power” in leadership. Mary Parker Follett, writing in the 1920s, urged business
leaders to see the advantage of “power-with” rather than “power-over.”34
A leader needs a few special and trusted people around her who will react
privately and honestly to her ideas and actions-in-the-making. Not everyone is
capable of being available, open and honest with the CEO and other C-suite leaders,
to listen, to bring up issues, to address truly tough and confidential questions (e.g.,
CEO standing, compensation, viability) directly, completely and with respect — and
with options for best achievable outcomes.
As counselor, specialist in communication, attuned to stakeholder values and
probable reactions to management decisions that can affect those values, the chief
communication officer is qualified, and must earn and keep the right, to be of
confidential counsel to the CEO, listening, initiating and “telling the truth,” as Arthur
W. Page encouraged.
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• CCOs know the business.
It’s absolutely essential to understand what other leaders in the C-suite
understand about the business “winner or loser” factors — with emphasis on the
performance metrics. An MBA helps substantially, but any well-focused financial
knowledge is a minimum requirement for respect and influence in the C-suite.
Others in the C-suite consider it a given that the CCO is an expert
communicator; they look for evidence that this expert is focused on, and intimately
understands, how the company makes money. A best-practices survey of leading
CCOs concluded that successful communicators in a business are in fact business
leaders. “Our job when we come in every day is, how do we sell more (products and
services) as competitively and at the highest margins possible?”, one CCO said.35
• CCOs become a risk management contributor.
As CCO, you are an expert in the specific values within each stakeholder
group that bind them to the shared-purpose “deal” with the company — whether as
employees, customers or investors — and you can gauge the levels of perceived
risks in these communities.
In your ongoing aim toward a C-suite reputation as a trusted advisor,
understand how risks are evaluated36 by others (CFO, COO, CEO, chief legal counsel)
in the C-suite. Connect with your peers by sharing insights on what your
professional intelligence gathering in the stakeholder ecosystem reveals about
perceptions that can escalate into risks to the corporation.
• CCOs are long-term strategists.
C-suite players focus on the direction and scope of the enterprise over the
long-term. Ok, you help to put out fires, but you’re not just the fire department. Your
expertise, your knowledge of values and expectations of stakeholders, your grasp of
your company’s business and its market competition, and your leadership in
providing resources (skills, facilities) make you a strategic player, a connector and
collaborating leader at the top of the company. Your test of this is that you have a
corporate communication plan that is strategically tied to achieving leadership
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missions that recognizes competitive and other risk contexts, and that you are
qualified to engage in long-range strategies with C-suite peers.
[INSET]
How Communicators Lead:
'Authentic Enterprise' Era Brings New Roles for CCOs
In its Authentic Enterprise study report37, the Arthur W. Page Society drew on the
original research it conducted among CEOs, the experience of society members who work
inside or counsel those who work at high levels inside major corporations, and a broad
range of studies and perspectives to conclude that:
• The converging forces of technology, global integration, multiplying stakeholders and
the resulting greater need for transparency are the most important communications
challenges facing 21st century companies.
• The communications function has evolved over the past three decades, and is
achieving increased stature within the corporation.
• Chief communication officers (CCOs) are no longer in control of their traditional
spheres of professional activity. Indeed, all business functions are at the dawn of an era of
radical de-professionalization.
• Corporate communicators are uniquely positioned to become experts on the new and
changing dynamics (both art and science) that impact organizational trust.
Looking ahead, what does this mean to CCOs?
The Page report identified four areas — priorities and skills — in which chief corporate
communicators are uniquely positioned to assume strong leadership roles:
• Culture: Leadership in defining and instilling company values
• Stakeholders: Leadership in building and managing multi-stakeholder relationships
• Channels: Leadership in enabling the enterprise with “new media” skills and tools
• Trustworthiness: Leadership in building and managing the trust a successful
company must have, in every dimension of that quality
Commenting on the outlook for communication leadership, authors of the Page Society
study said: “We believe that our profession is in a strong position to succeed in the 21st
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century. None of the new roles we have described is currently the responsibility of an
existing department, and our evolution as a function has prepared us well to take them on.
Although success will require new approaches, deeper business knowledge and new skills
and measurements, we are ready for this moment.”
Chapter 5
Mission Communication: Thought Leadership
Winston Churchill, who eased his leadership stress by painting, once said to
the British Parliament during a debate on the status of the war, “It is a good thing to
stand away from the canvas from time to time and take a full view of the picture.”38
The process of leadership and its engine, leadership communication, are
enabled by thinking; as the proverb has it, by looking before leaping. Thought
leadership is a stand-back-and-view perspective. In our study, it refers to concepts
generated by external thinkers as well as those leading inside the organization.
Academics and management consultants are now a common contributor to strategic
communication and successful performance.
We see this as a positive continuum — thought leaders generate
management vision and ideas that drive change and successful corporate action. We
also see this as a considerable influence in the growing effectiveness of leadership
communication.39
Company executives, dedicated to agenda-setting,40 try to motivate followers
through vision and mission statements.
As you will learn in the course, we respect the observation that too often
when the leader talks about vision, followers’ eyes glaze over. (One wag commented
that “visions” without execution — moving toward a desired outcome — are
actually “hallucinations.”)41 The point is to keep an overarching vision alive and
relevant through agreement, communication, focus and reward through specific
achieved missions.
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We will study various companies’ vision statements, and make some
distinction between vision and mission statements, for two reasons relevant to
leadership communication (see illustration, “Leadership Communication: Thoughts
lead to Action” at the end of this chapter).
First, it seems to us that the clarity or precision of mission statements
tend to focus on best achievable outcomes (BAO) current inside the company.
While the overarching vision may be, in effect, “Visualize that far horizon, how great
we will be one day,” a current mission statement may be motivated by a current
BAO: “We plan to take that hill this quarter (year, etc.).” Internal communication, as
well as external guidance, effectively hew to missions, plans and motivational
communication.
The second reason is that missions can be explained by executives and
communicators in terms of value.42 We stress that all leadership communication
is tuned to stakeholder value. It describes, conveys the win-win aspects and sustains
the deal, as perceived by stakeholders.
Stakeholder perception management is a primary responsibility of chief
communication officers. It begins by engaging stakeholders with well-reasoned
information on the mission. Stakeholder communication can convey answers to the
inevitable stakeholder question: “what’s in it for me?” Belief in the deal — to work
for the company, to invest in its stock, to buy its products and services — is built
and sustained through perceived value. Stakeholders are given a way to judge or
measure the potential yields of their individualized deals – as employees, investors,
customers and such — if the mission is achieved.
When the CCO understands stakeholder views — by monitoring and
engaging directly in stakeholder conversation through old-line and online media —
he or she can be a valued professional counselor and collaborator in the C-suite.
Great thoughts can be effectively converted to successful ideas and missions only
with the facility of strategic communication.
Thought leadership, translated by viewing the big picture and converting it
to ideas and action achievable in the current mission is where leaders at the top of
the company — including communicators — shine.
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Prime Minister Churchill, himself a thought leader during the troubled times
of war and recovery in Europe, read Peter Drucker’s first major work, The End of
Economic Man, which was published in 1939. Churchill described Drucker as “one of
those writers to whom almost anything can be forgiven because he not only has a
mind of his own, but has the gift of starting other minds along a stimulating line of
thought.”
The best achievable outcome for CCOs in the C-suite in this regard is to be a
thought leader, seeing the big picture, coming up with the ideal strategy to connect
with stakeholders in good times and bad; and, as a specialist in listening and
connecting, to be able to recognize and encourage thought leadership in others.
[INSET]
Leadership Communication: Thoughts Lead to Action
Situation now (history, what-is)
Situation change (future, what-ifs)
Analysis (why it matters to us/problem)
Application (what we can do/benefit)
Application (how, who, what, when)
Communication (how, who, what, when)
Thought leadership moves through stages toward executing within the context of the
organization. Thought leaders may be inside the organization, but more often they are
outside — academics, social and business analysts and others who take mega-views or
sector views of situations, and communicate their perspectives. Organizations — business
companies and other organizations — draw from these perspectives, analyze them within
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the organizational contexts, and arrive at ideas to solve problems and seek new benefits.
Ideas become products, services, ways of executing, and they become leadership
communication drivers.
Chapter 6
Information Flow: Reasserting the Role of Control
The assumed “secrets” of the Penn State University coaching scandal were
displayed in an investigative report by former FBI Director Louis Freeh and his law
firm in 2012. A Washington Post columnist observed, “Among the most shocking
revelations in the 162-page Freeh report is that there isn’t a shocking revelation to
be found.” The rumors, the facts, the shadings, the things the university thought
were concealed were in fact beyond its control.
Few if any company or organization will confront a situation with painful, if
not criminal ramifications. However, the lesson for us is the reality of leadership
communication: there are ultimately no, or very few, secrets in public company life.
Every leader and communicator in the C-suite would benefit from a cautionary note
in a personal diary: EKE. Everybody Knows Everything. Or thinks they do. Or soon
will. This is the safe assumption.
Anyone who cares to know anything about your organization can get some,
and perhaps a lot of information, right or wrong, correct or incorrect, timely or not,
from some source at some time. Only transparency can trump or prevent the flow of
damaging leaks, speculations, inferences among followers and stakeholders.
Openness, like perception, is reality. The leadership communicator’s hope of
influence is providing stakeholders with as much of the ongoing real story — Arthur
W. Page’s “truth with proof” — as practicable, aware of the waiting whirlwinds of
EKE.
The point is that the chief communicator is information central, but needs to
make it clear that she is not information control. She collaborates with others in the
C-suite to design strategies, shape messages, put comments together with
appropriate sources in the enterprise, prepare the internal source executives for
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response, put together talking points, line up media outlets for special attention —
and in many other ways attempt to assure appropriate control over the vital
communication process. In the flow of information between the company and its
stakeholders, the CCO might well be regarded as the company’s gatekeeper.
However, any assumption of CCO as gatekeeper, implying control — must be
deemed as shaken, especially as information, for better or for worse, correct or
incorrect, breeds and abounds in the social media.
Amazon.com CEO Jeff Bezos, interviewed in 2012 by author and columnist
Tom Friedman, described the current landscape for business and information. “I see
the elimination of gatekeepers everywhere.” Bezos was actually referring to cloud
computing where anyone anywhere can use Amazon’s open portals to do many
things — sell things, get jobs, start a company, self-publish — all without
intermediaries.
The open-access principle holds for enterprise information. Internet portals,
personal communication devices, endless chatter and the ease of leaks: these have
changed the lives of corporate gatekeepers, in no instance more profoundly than
that of the chief communication officers. Companies — and their CCOs — are just
one of many voices reporting, tweeting, tweaking and twisting business news and
views.
So how do CCOs adjust to the incredible shrinking control they once might
have had over information flowing to stakeholders? We suggest two avenues for
adjusting to open-portal realities. They are reliability and relevance.
You go back to the deal — the values that bind leadership to desired
followers: What do stakeholders want to sustain their interest in your
company? They want reliable, trustworthy information. When do they want it?
Now — or, more accurately, as soon as reliable information, from the source, is
relevant to their particular interest.
Reliable information: They Rely On Our Word
Alan Greenspan, who led the Federal Reserve Bank for nearly 20 years, was a
powerful communicator. He was exceptional at connecting with listeners. He used
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two strong devices. One was artful phrasing that provoked a listener to think. The
other communication device was to state a simple fact, a point that required no
thinking; it merely reinforced a truth. An example of the first device was when
Greenspan described a bullish Wall Street view on a matter of national financial
significance as “irrational exuberance.” He stopped the presses, the media delighted
in adding to the financial lexicon an offbeat, quirky, and memorable comment on a
condition that may or may not prove to be realized or true.
As for an example of plain-talk Greenspanism,43 an editorial commentary in
2012, recalled this 1999 comment from the Fed chairman: “In virtually all
transactions we rely on the word of those with whom we do business.”
“Irrational exuberance” is wordsmithing that evokes listener rethinking.
Relying on the other party’s word in a business relationship, stated simply, requires
little thought. It reminds the listener of an essential principle. It is accepted as truth
as soon as it is heard. It is a verity. This is useful to consider as we think about
leadership communication. In effect, it is the reason for corporate communication. It
underscores reliability. The company speaks to the stakeholder in a truthful, plaintalk manner, where source reliability is king.
Relevant information: What’s In It For Me?
The CCO’s ability to “see ourselves as others see us” — that’s to say, the
stakeholders’ perceptions — keeps relevancy as a cardinal principle.
Your ability to have the most reasonable degree of control over information
flow also means intimate knowledge of the channels and people that convey
information. You will score best when your information is relevant to the interactive
and old-line traditional writers, editors, content generators and re-generators.
Bottom line here is you are an agent of relevancy to the scales of value among
those with whom your enterprise needs fair engagement.
Employees: Our Most Reliable Sources
Harold Burson, dean of enterprise positioning, reminds us that every
employee is the ultimate, presumed reliable source to somebody. The “Trust
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Barometer” findings, an annual survey by Edelman public relations, shows that an
average employee is as much as three times more credible than a CEO as a source of
information about the company. If you are the CCO, here’s where some of your
control has not entirely eroded. Your information flow strategy has to start and be
sustained within the potentially truest circle of believers and authentic
communicators.
However, this is not a shoo-in. Reliance on employees as a credible source of
information — effective truth-tellers and advocates — must be earned by
leadership. Executives and managers must vest genuine trust in them. Trust is a
two-way street. If you want employees to act as public advocates for the company,
helping you strengthen the stream of reliable and relevant information, you need to
exercise openness in internal communication. As Edelman argues (quoted in Talk,
Inc. by Groysberg and Slind, Harvard Business, 2012), “When a leader communicates
with employees, the goal should not be simply to talk at them. It’s allowing them to
‘talk out.’ You talk to them and then you allow them to speak more broadly. And
then you benefit as well.”
When CEO Sam Palmisano took over as IBM’s chief years ago, he let
thousands of employees have a say in what the company ought to be doing to keep
pace with, and drive, change. CCO Jon Iwata served as strategic communication
counsel in IBM’s business transformation, continuing with successor CEO Virginia
M. Rometty in implementation and further development of the C-suite’s employee
engagement strategy.44
Asked by the New York Times’ Corner Office writer what leadership lessons
he’s learned, Chris Barin, head of the IT cloud company, Appirio, said look first to
company employees. “(Transparency) is a huge part of our culture,” he said, “and
what I think makes a company and team really thrive and work.” The reference was
specifically related to negative information, such as cutbacks, certainly the most
relevant matter in any organizational culture. His point was broader: “You should
never surprise an employee.” In fact, the goal is to enable employees to get in on the
best achievable outcome by becoming reliable communicators, inside and outside
the enterprise.
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The CEO of Intertech45 described his leadership communication guidance in a
2012 blog: “From the very beginning,” said Tom Salonek, “we have sought to instill a
culture of openness at Intertech. Our employees are given a copy of communication
guidelines the day they join our company. We so fervently believe in open, two-way
communication that we have gone to the trouble of writing down such principles as:
Engage in direct communication. Venting to a third party doesn’t change any
situation and can disrupt office harmony. Address concerns, criticisms and wants to
the appropriate members of the company.”
Website: Plugging Stakeholders into Your Best Hope for Control
We’ve talked about the what, the when and a potent who component of
information flow. Let’s talk about the where. If you as CCO are “information central”
in the C-suite, where is your reliable, relevant switchboard? Where is the one place
that your “gatekeeper control” has the potential for enduring clout? We believe the
strategic resource has to be the company website. If you are the chief communicator,
accountable for information flow, your job is to make your company’s website the
go-to place for reliable, relevant, trust-building internal and external information.
Content, form and the speed of posting information deliverables (which may
at times become virtually immediate) are factors for victory in this often vital test of
corporate leadership communication.
When your stakeholders are pounded by less-reliable sources or sources that
compete with you for reliability, you need to get them to your website.
Communication strategies begin with content. The corporate site must answer the
question of stakeholders: “What are they (or if you are an employee of the company,
‘we’) saying?” In addition to building the best possible base for information you
control, the question for you as information source is, “if I build it, will they come?”
You know you’re not communicating in a vacuum. As CCO, you are fully
aware that stakeholders (including the company’s employees) and those that
influence the perception of those stakeholders are regularly, sometimes intently,
accessing the interactive media for news and views that have the potential to impact
your company.
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Your communication strategy will assure the easiest, quickest access to
headline, short-form and finally, long-form (company website-housed) information
related to the company. Connection strategies will include popular interactive links
(Twitter, Facebook, LinkedIn, Tumblr, et al), news engagement sources (New York
Times, Huffpost, Wall Street Journal, et al) and search engines — which continue to
be major drivers of online traffic46.
In 2006, among her many perceptive Wall Street Journal columns during the
George W. Bush Presidency, Peggy Noonan described the White House as a place
where sensitive information was carefully contained. After the incident of the
accidental shooting of a fellow hunter by Vice President Cheney, Noonan said that
chief executive communications were assumed to be within “a never permeable
dome of silence.”
There was, of course, no such thing. The shooting story leaked and cascaded
across media channels in the way that all information does when it is newsworthy
— that is to say, interesting and of value, to publics and stakeholders.
In an open and democratic society, information within government, as within
publicly owned companies, is not as containable as perhaps it arguably once was,
when media channels were fewer and iconoclasts rarer.
Noonan learned one never says “never.” Presumptive, controllable domes of
silence have been long and irreparably shattered.
Corporate Communicator New-Reality Principles
The new reality, and it’s not all bad, is that leadership communicators now
play a more significant role in the flow of information between the organization and
its stakeholders, and these principles now prevail:
1.
Assume everybody knows, or soon will know, everything. Our reminder
is EKE!
2.
Understand that everyone (including you) constantly seeks answers to
the question, “What’s in it for me?”
3.
Know that trust is easy when the value is clear.
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4.
Know that stakeholders, when surprised, look for explanation and
reassurance.
5.
Expect, if you surprise, to receive a lot of hits and no free pass.
6.
Understand that we are in a period of hunger for drama that stimulates
the open process of identifying villains and heroes.
7.
Expect analyses — good, bad and irrelevant — from experts and
common folk.
8.
In leadership communication, there are two keys: describe things
constantly and tell the whole story.
9.
Expect that half-truths, fuzzy near-facts and outright inaccuracies will
make their way into public discussion, analysis and judgment, good, bad
and irrelevant.
10. To sustain followers, who create as well as abandon leaders, provide a
plan they will understand and say, “I see what’s in it for me.”
Control has become collaboration. The CCO helps keep the conversation
honest, within the context of changing realities.
Take Away: Information flow is essential, information control is difficult.
Virtually everybody is able to access or express all kinds of information and views
about companies. The CCO’s job is an information flow strategy that takes full
advantage of what he or she can control and to respond as necessary and desirable
to the rest. The website strategy can build support and trust. It involves making your
company both participant and the reliable resource in the constant conversation
going on, essentially without your control, about your company.
Chapter 7
Influence: Sharing the Leadership Experience
What one word would you like people to use when they describe you?
When a Washington news reporter asked this question to a department chief
in the administration of President Obama, she immediately replied: “influential.”
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She said that her job every day as a leader was to influence others in the
agency, as well as external stakeholders, to perform to the maximum of their ability
toward achieving organizational goals.47
Globalization and technology have escalated change in all organizations,
none more dramatically than what has happened in business organizations. Among
the major trends in leading, or vanguard, companies is the need and desire for
circles of influence to replace chains of commands, as Rosabeth Moss Kanter
observes in Supercorp.48
“To focus people on serving customers and society, horizontal relationships
across the organization are the center of action that shapes daily tasks,” says Kanter,
“rather than vertical reporting up a chain of command.”
Kanter underscores the differentiation of control and influence, driving
toward cooperative motivation. Leaders in vanguard companies, she counsels, want
people at all levels to feel motivated, not controlled. As early as the 1920s, before
use of the buzzword “empowerment”, Mary Parker Follett was advancing her
concept of “power-with” rather than “power-over” management. She said the way to
develop power-with is to organize and manage so “you can influence a co-manager
while he is influencing you.” 49
In his book Principle-Centered Leadership,50 Stephen R. Covey acknowledges
that most of us, and certainly organization leaders, want to have influence —
positive influence — with people in our personal and professional lives.
Our motives for effort, belief and achievement are clear to us. If we’re a
leader of a company, these motives are what drive us; we want to win new business,
keep customers, maintain stakeholders, change behaviors. But the question that
Covey raises is about ways to make our motives their motives, and thereby their
mission; it’s about the process of influence.
“How do we powerfully and ethically influence the lives of other people?”
Covey asks that question and explores three routes to influence: to model by
example (followers see what is effective and encouraged), to build relationships that
are caring (the leader cares about the follower at an appropriate personal and
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professional level), and to mentor through instruction (guide followers in ways to
use their capabilities to achieve best outcomes).
Positive influence and another “I” — integrity — are bound together.
The influential leader consistently follows a code of fair and ethical decisions.
She adheres to principles that are clear, sound and respectful. Through her example,
kept promises, and integrity, she wins influence with others.
It’s not a case of “the buck stops here”; influence is collaboration.
Most companies now make major decisions collaboratively, as leadership
analyst Perry Buffett51 confirms in his studies of organizational change. Executives
work in collegial groups — boards, councils, committees — and often arrive at
decisions informally. All the participants know and respect the titles of their fellow
collaborators, but that tends not to be a major factor in the influence-sharing
process.
The CEO — the leader — may make the final decision, but he almost always
relies on the followers, transformed into his colleagues in framing and formulating
it.
Covey advocates the mindset seek first to understand, then to be understood.
Buffett states: “An executive’s ability to influence peers and superiors as they
undertake a broad range of crucial decisions involving such issues as strategy,
budgets, brand positioning and pricing, and capital investments is a valuable skill —
a skill that could be called influential competence.”52
Executives who have developed influential competence seek to understand
the mind-set of all members of the group. There is more than one reason for doing
this. When it comes to fitting leadership motives to those of followers, there is this
heads-up:
“You...have to recognize that not everyone has pure motives,” said Suzanne
Sinclair, director of leadership talent acquisition at Allstate Insurance. “You have to
understand your colleagues’ agendas and how their agendas fit into the issue you
are raising.”53
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Communication — two-way, consistent, open and understandable — is
essential in influential competence.
The role of the chief communication officer in internal positive influence is to
enable the chief executive in her role in activating two vital aspects of motivation
and performance: a reliable, readily accessible exchange of information and a
culture that is as autonomous and self-governing as can be achieved.
At IBM, the leadership works to achieve technological competence so as
many individual employees as practicable can influence the company’s success as a
consultant and partner in the expanding world of big data and advanced technology.
Companies in every business category are opening up to — or being opened
by — access to information that in previous generations were considered privileged,
kept close to the chests of top executives, whether through fear of competitive
prying or through lack of trust within their own organizations. Circles of privacy and
protection had not evolved to circles of inclusion and influence.
New-reality writers — Dov Seidman, Daniel Pink, Guy Kawasaki, Tony Hsieh
and others — have described the current of business understanding that motivates
workers and creates cultures toward sustainable success in an atmosphere of hightech availability to information and input. Motivation means individual satisfaction.
Employees and rising leaders find joy in their own achievement, and sharing the
thrill of achievement with others of like mind. People in companies are able to
access people in other companies online. Crowdsourcing competes with company
sources of information and expectation. Blind-obedience cultures are gone forever.
Informed cultures are growing. The common ground of employee (or, if you wish,
“co-creator”) cultures is defined by levels of self-governing, information-rich,
influence-sharing, teamwork. The requirements and satisfaction of external
stakeholders — customers, investors — are recognized as the dominating control
over what happens inside the company.54
What is the good news for company leaders? They can take competitive
advantage of the new conditions through strategic engagement, starting with open
communication inside the organization.
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A barrier to leadership influence may be the inability of a potential follower
to comprehend. Language, education and other variables need to be dealt with by
the leader and, when it is valuable, with help from his communication expert.
At the personal, internal-company level, Covey has suggested four ways to
communicate influentially when there is not a common level of understanding:
Give more time to the process, be patient, and express non-verbal
communication — how one looks at the other person — in a way that is congruent
with what you are saying. Seek harder to understand, show you care.
Turn the “I” of influence into an empowered “W”
Bill George, a former CEO, has made a specialty of interviewing and writing
about leadership in best-selling books including Authentic Leadership and True
North.55
Authentic leaders, he has said, discard the notion that leadership means
having “legions of supporters following our direction as we ascend to the pinnacles
of power” and realize that it’s all about empowering others.
Jaime Irick, a West Point graduate and executive at General Electric,56 told
George his story:
“We spend our early years trying to be the best. To get into West Point or GE,
you have to be the best. That is defined by what you can do on your own — your
ability to be a phenomenal analyst or consultant or do well on a standardized test.
“When you become a leader,” Irick said, “your challenge is to inspire others,
develop them, and create change through them.”
Rising as a leader in an aggressive company, he realized an important fact.
“If you want to be a leader, you’ve got to flip that switch and understand that
it’s about serving the folks on your team. The sooner people realize this,” Irick told
Bill George, “the faster they will become a leader.”
George puts influence into that context: Leaders set aside personal ego needs
and recognize the unlimited potential of empowering others.
The bottom line on influence within modern, successful companies can be
described most simply as teamwork. CEOs in our experience are now more
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frequently engaged, team leaders than they are isolated bosses. They encourage and
conduct frequent team meetings. They of course brief their teams of leaders on what
they are thinking, what they are committed to achieving, what they fear or question
that could jeopardize their best achievable outcomes. They listen to team players,
they participate in and they support the circles of influence.
Teamwork works; it grows shared values and it builds motivation
In their classic book on teamwork,57 Jon Katzenbach and Douglas Smith,
conclude one of their chapters with an oriental message that sheds light on team
leadership and shared influence.
It’s from the Chinese philosopher, Lao-Tzu:
“As for the best leaders, the people do not notice their existence. The next best,
the people honor and praise. The next, the people fear; and the next, the people hate.
When the best leader’s work is done, the people say ‘We did it ourselves.’” 58
Bill George and his associates interviewed dozens of leaders in preparation
for his books on leadership and his teaching at Harvard.
Nearly all of these leaders had one thing in common, George reported in the
Hesselbein Institute’s Knowledge Center Journal. Each had gone through a
transformative passage that made them recognize that leadership was not about
their success at all. They realized that leadership is not about getting others to
follow them. They came to believe that the essence of their leadership is aligning
their teammates around a shared vision and values and empowering them to step
up and lead.
Leaders create leaders.
Influence becomes inclusion.
Former CEO George calls it the transformation from “I” to “We.”
Chapter 8
Listening: Where Communication and Influence Begin
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“Growth starts here!” proclaimed General Electric CEO Jeffrey R. Immelt, in
his annual letter to shareowners as the company emerged from the worst economy
since the Great Depression.
It was 2010. Time to reset the vision, refocus the business model, and
transform for competitive success. Ways that worked well in the past need to be
reviewed and reworked. If hard times exposed weakness, it was time for leadership
to discard and re-deal. Matching the urgency of the moment, Immelt adjusted GE’s
leadership traits.
Defining the new growth path, he underscored the strategic art of listening.
While “inclusiveness” had long been one of GE’s highly regarded leadership
attributes, often influencing other companies, Immelt now specifically cited
“listening” as vital to leadership development and execution of corporate missions.59
“Leaders must be humble listeners,” he explained to shareowners (and of
course to everyone in the company who reads and respects this yearly message
from the boss). “We will stay open to inputs from all sources. We are here to work
on teams and serve our customers.”
To read Immelt’s annual report message as his followers might have read it,
the chief was telling them: Create stakeholders in our success by understanding what
our stakeholders want and what we need to do to deliver. Let go of any ego notion that
we know it all. Get out there and listen and learn.60
Business-side listening is a management mainstay.
GE’s repositioned principle — business success begins when management
humbly turns it ear to stakeholders — is as true in this over-communicating era, as it
was 50 or more years ago when the dean of management studies, Peter Drucker,
boiled it down in his books on the manager’s job.61
Ask yourself three questions, Drucker told managers, What do my customers
need and expect? What will it take to assure that they get it? What’s my job today?
Following Drucker’s admonishment, focused listening strategies took hold in
corporate management. “Listen, understand, deliver” was for many years the slogan
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by which Navistar, the truck, engine and school bus manufacturer (successor to
International Harvester) inspired employees and built stakeholder trust.
Tom Peters, a McKinsey consultant, advanced Drucker’s management guides
in the 1980s. Interviewing business executives, he began asking, “What’s your
listening strategy?” With that question, delivered in his books, blogs and direct
counsel with executives, Peters pushed that First Business Commandment — “listen
to the customer” — into an element that business leaders (and, we would argue,
communicators) commonly consider as an origin of the plan.62
Listening to customers and other sources of stakeholder influence is
recognized as a strategy for optimum performance in every aspect of business. In
his many articles and books, Harvard’s Michael E. Porter63, put “the bargaining
power of its customers” into the five forces he identified as facing or being available
to any company selling a product or service.64 Porter’s emphasis is on competitive
strategy. In Porter’s construct, it is impossible to consider any strategic move
toward competitive victory that does not involve the power of stakeholder advocacy
stimulated through communication input, feedback — in short, strategic listening.
Consider the following outcomes:
• Listening to the competition discloses ways to defend against or defeat
their competitive moves.
• Listening sparks marketing, sales and customer relations.
• Financial considerations and decisions requires constant input from
markets, government tendencies or actions, financial institutions and many other
influence sources. Physical, actual listening to investors — with the sometimes
dramatic quarterly conversation with analysts — keeps C-suite leaders
informed...and on their toes.
• Listening informs and inspires design and technology; in the process, it can
transform visions not only for the GEs and other major, long-term hitters. It can be
the spark for start-ups.
A modern entrepreneur who listened and got a winning idea was Tony Hsieh.
After listening to friends say that they wouldn’t buy a pair of shoes without trying
them on first. Hsieh decided to try something like marketing jiu-jitsu. If you
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understand what customers don’t think they can get, he reasoned, why not find a
way to give them the desired unexpected. He identified shoe supply sources and
spread his concept online: Order the shoes you want to see, examine them, try them on
and, if you don’t want them, send them back and I’ll pay the postage both ways.
Hsieh’s listening, understanding and delivery strategy led to handsomely profitable
business.65
The chief communicator’s core competencies start with listening.
While “listen to the customer” and get “public permission to operate” remain
the bedrock business public-relations principles that Arthur W. Page advised in his
speeches from the earliest years of the professional function in the 1930s and ’40s,
the expert communicator in the swirling technology and change impacting today’s
C-suite, has to be a listening virtuoso.
Mastery of listening has become a core corporate communication
competence. It is vital in raising the CCO’s odds for high performance in three
essential accountabilities: stakeholder perception management, culture influence
and information flow.
Perception: Listening strategies designed and executed under direction of
the expert communicator bring timely, accurate and actionable gauges of
stakeholder perceptions to the C-suite table.
Corporate culture: Through feedback and other listening means, CCOs
enable management’s ability to detect contexts, tones and reasons for cultural
acceptance of leadership, and to overcome resistance to mission change.
Information flow: Since leadership communication is essentially a strategic
conversation, CCO listening is definitive in the two-way flow of information that
adds inestimable value to management’s efforts to create and sustain stakeholder
engagement.
Listening strategies can perceive seeds of risk, even crises.
Norman R. Augustine, a former CEO of Lockheed Martin who later chaired
the American Red Cross, once said about crisis management: “The bottom line of my
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experience with crises can be summarized in just seven words: Tell the truth and
tell it fast.”66
That remains valid counsel for CCOs and others in corporate leadership who
are in the throes of a crisis.
However, as Georgetown University graduate students are demonstrating, a
cybersphere-conscious, crisis-avoidance update might more usefully advise: Find
ways to systematically listen to the truth as it is perceived by stakeholders and deal
with it fast and continually.
Increasingly, corporate boards are establishing Risk Management
Committees to elevate the risk issues identified within companies that may require
early mitigation attention and resolution. The role of CCOs in this process is likely to
increase in the future, since other corporate officers do not have the same broad
line-of-sight and depth of stakeholder perceptions.
Georgetown students in crisis communication courses (led by the adjunctfaculty authors of this text) have studied how company crisis risks can be mitigated
through listening strategies.
In pre-crisis intelligence research projects, students have set up online
listening stations and monitored social and traditional media over three, 30-day
periods, to detect any trend line of symptoms of possible/probable crisis outcome if
the trend line continued.
What has been learned in the Georgetown exercise? Through online listening
stations, corporate communicators can collect and examine warning signs on levels
of risk and indications that a crisis may occur in the chosen company.
Monitoring and analyses can yield information/data from the specific fields
of stakeholder interest; this can be compared with internally-generated risk
knowledge and relative risk rankings (which may not customarily be updated
frequently).
This added input can, in addition to guiding corporate relations and
communication decisions, enable company leadership to consider actions that
adjust risk-laden contributors, avoid extremes of undesirable probable outcomes,
and avert or mitigate the arrival of crisis disruption.
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Listening is inherent throughout our seven-point VICTORY compass.
The goal, imagined as the ultimate point on our compass, is to listen and to
hear a “Yes” from the stakeholders.
We draw on attributes recognized67 as influential in creating believers,
followers, advocates — stakeholders who can achieve and support company
missions. Each trait is an opportunity for trust-building and collaboration at some
level in the stakeholder ecosystem.
The organization’s chief communication officer understands that listening is
the ongoing, timely, direct and powerful connector to stakeholders. It is also, as we
will examine in the next chapter, an essential factor in the condition of listening up
— to top management.
Listening: Critical Factor in CCO-CEO Connection
A “partnership for high performance”. That’s the central message of
Authentic Leadership, the influential book by Bill George, who took Medtronic to a
strong leadership culture, and went on to teach leadership at Harvard.68
Leadership and followership get to “yes” through organized, collaborative
and strategic listenership. No corporate individual is more responsible for this to
work than the chief communication officer. The CCO at the top of the organization is
positioned to be the “connector,” as Rosabeth Moss Kanter describes the effective Csuite player.69 This means listening out, in and up.
The CCO has accountability for listening out; she’s plugging into the universe
of stakeholders expressing themselves.
She also has to listen in — to keep up with what others in management are
saying, need or want to say (or should consistently convey to sustain mission
support, stakeholder engagement and culture commitment).
And then there is the rare, job-critical opportunity to listen up.
The CCO has to be all ears in her relationship with the CEO. She needs to
know constantly what, when, where and how the chief executive — the ultimate
voice of the company — needs, wants and is able to communicate.
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How does the chief communicator become the listening virtuoso at this level?
CCO-CEO relationship research points to productive listening.
Fortunately for the context of this textbook, the mystery of productive
listening has been examined, specifically related to corporate leadership
communication.
Two communication researchers70 at an Arthur W. Page Society conference
presented their findings on a survey, probing the theory that public relations
success requires mastery of listening.
Listening occupies more time than any other communication activity in all of
business. That was readily accepted. After all, in everybody’s life, we listen as
individuals more than we talk or make hand gestures or otherwise communicate.
Professors Donald Wright and Donald Stacks dug into the theoretical background of
business communication to examine the process of corporate listening at the top of
the enterprise.
CCOs spend at least half their time listening.
With access to CCO opinion of success in the C-suite, the researchers in 2000
confirmed that public relations people fit the common frame of listening as the
dominant communication activity of CCOs. They found that, on average, CCOs were
spending about 50 percent of their time listening, about 15 percent of their time
writing, and the remaining 35 percent doing all the other things, including talking.
This is no surprise to communicators in the upper echelons of corporate
management today. If you are a CCO in a modern corporation, whether you are by
nature voluble or tend to taciturn, talking is a lesser part of your communication. It
may seem that you spend most of your time listening, in meetings, in your office, on
the phone, but we suspect that the actual listening time — and here we are not
talking about actual face-to-face listening — is far less than the other “receivables”
such as reading incoming email, documents (memos, proposals, in-house drafts, on
and on), and the time you spend on writing about this or that.71
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But the mystery that hadn’t then been explored, and in fact still hangs in the
air, is what the professional communicators at that Page conference bore down on is
the connecting rod between top authority and top communicator.
Here’s the destination. We now know, both because of this research and
through hundreds of practical examples the following:
What or to whom the CEO is listening and whether
the CCO listens effectively are two different matters.
Dick Martin, drawing on his experience as CCO at AT&T, got the context right
in OtherWise. “Become wise,” Martin counsels, about the “other” group or the
“other” person if you want to achieve a sustainable relationship, where there is
shared trust. You might say, turn “they” into “we” and get to a mutual “yes.”72
To be successful communicators, or to engage with stakeholders, including
bosses, on any matter of importance to achieving company missions, you need to
think as he or she — the stakeholder, the boss — thinks. How do CEO’s and other
peers (or to use an outmoded term which apparently still had some resonance
during the research in 2000, to “superiors”) listen in the C-suite?
The researchers posed five statements on how the CEO or others in the Csuite listen when the CCO (or, an outside counselor, say from a public relations
consultancy) attempts to talk to them. The research team asked more than 100
corporate communication pros to express agreement or disagreement with these
five statements.
Here are the insightful results of this line of questioning, statements and CCO
levels of agreement:
• Statement one: “This person [which means CEO or any other “superior”] is
more concerned with what I say than with how I say it.” 51% of interviewed CCOs
agreed.
• Statement two: “When this person is listening to me, he/she often responds
before I finish my thought.” CCOs: 50% agreed.
• Statement three: “This person listens for facts, not for central themes or
ideas.” CCOs: 40% agreed.
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• Statement four: “This person often indicates he/she’s listening, but I find
myself having to repeat myself.” CCOs: 23% agreed.
• And the final statement, proposed by the researchers: “This person takes
lots of notes when I’m speaking.” CCOs: only 9% agreed with this.
The research team refined this line of questioning. They asked the CCOs in
the Page Society, to focus only on the chief executive officer, not on other corporate
executives with whom the CCO has dealings in the C-suite.
Now we get to our question, what have we learned? Can we see some clues as
to how to communicate with CEOs, how to make this C-suite partnership for
performance — and of most importance, your side of the deal, stronger? You be the
judge:
Researchers show eye contact, not note-taking, as critical factor.
CEOs differ from other executives, this special research shows, in that they —
CEOs — take fewer notes when you’re talking. We will come back to the take-aways
on this and the rest of the findings, but let’s say here that this is a good thing. If the
boss is not writing it down, it’s not a sign she’s not getting it, not listening to you.
In fact, to go from mouth-and-ear matters to a third and absolutely essential
matter of one-to-one communication, not writing means more eye contact. It’s your
best weapon of worthwhile engagement.
That’s impression one, the CEO takes fewer notes.
Communicators must be prepared to ‘say that again’.
The second research finding is that CEOs are more likely to need things
repeated. The CCOs said that this was true, even though the chief seems to indicate
— eye contact, nods of receipt, or some other signs of openness — that seem to you
to indicate that they are listening. Expect them to ask questions, but if none comes,
A third reaction from surveyed CCOs — it’s easy for the CCO to know when the
boss has stopped listening. Now this may seem obvious. You know when anybody has
stopped listening — whether it’s a friend, a family member, someone in whatever
circle or community you are in (except of course in an online community, but that’s
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an entire other subject for another chapter in this book of learning). If you’re a
speaker at a rostrum or at a conference table, you have a lot of signs, short of getting
up and leaving, to tell you that you have lost useful contact. But the point of this
survey question, conducted among communication professionals in the business
community, is that in the entire survey, this probe revealed the highest ranking in
terms of CCO ability to gauge leadership communication impact.
CCOs also agreed that CEOs are more likely to listen for facts, and not for big
themes or general ideas; and, CCOs said, all in all, the people at the very top of the
organizations, if you can get time with them, are uniformly better listeners than
“other corporate executives.”
Take-aways: Connect. Deal in facts. Resist ‘WIIFM?’
As we listen to what CCOs tell about their experience, we learn:
One, if you are the expert communicator in the C-suite, you know you can
expect the chief executive most likely, among all the chiefs in the C-suite, to pay
attention, at least for a minute or two, to what you have to say. And you will know,
also most quickly among players at the top level, the point at which you’ve lost that
attention.
Two, you know that the CEO is most ready to hear facts, not rumors, not big
themes or ideas, but factual information that’s relevant, and may present some
opportunity to, him or her, as leader of the enterprise.
Three, when you want the CEO to listen, your attitude, your eye contact
matter. You have come into the meeting with top management to bring up a point,
to put forward an idea, to be of service to the purpose of the organization and its
leadership.
This requires turning down your own fear and dialing back on personal, selfcentered focus. It means resisting as much as possible that constant, often useful
interior voice that asks, what’s in it for me?
Before any structured engagement with the CEO, there is an important
“otherwise” oriented question that has the power to increase your potential to spur
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the leadership communication partnership. That question is: What’s in it for the boss
to listen to what I have to say?
Three pre-conversation questions can help you prepare for any meeting or
engagement. These vital, focusing questions are: Why am I here? What do I need to
learn? How do I add value to this engagement? In meetings with the CEO (or, in fact,
with any of your peers at the executive level), be-of-service questions such as these
will encourage useful dialogue and mutual respect: What’s it all about, in your
opinion? What are some of the contexts that others may not be aware of and you
know are important? What do you think can be done better? What kind of resistance
or problems should we look out for? And, the action question: As I look into the
leadership communication options we can pursue, what’s the best achievable outcome
we might focus on with you?
Think through those questions, with the CEO’s interests and the company’s
mission in mind. Research and your authors’ professional experience tell us that the
CCO’s influence in shared-value, autonomy-enhancing, information-sharing culture
begins with these kinds of listening, question-asking and collaborative learning
strategies at the top of the organization.
Coaching the Star Player
“Executive coach” is a common term for an outsider who comes in
periodically for a one-to-one with chiefs of the enterprise. On a less formal basis,
“coaching” others in the C-suite—usually a combination of the kind of listening and
“talking truth to power” we have discussed in this book—is an opportunity for the
CCO to add value at the top of the organization.
In our experience, counseling or coaching the executive leader—
bringing to bear your competence in corporate leadership communication—works
best if (1) the executive already trusts you, (2) you fully understand both the
executive and the contexts currently surrounding the executive, and (3) you do the
coaching at the right time. Here are some guidelines:
Trust trumps all. It always comes back to that. If the executive isn't sure
you are 100% on his side, that you understand who he is and what he is trying to
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achieve, that you are advising him personally and confidentially--in sum, that he
likes you and trusts you as a friend and enabler, you won't be in his head when he is
on the field of play.
Contexts shape content and tone. These are things, events, situations,
realities neither the executive nor you can control. If you are briefing the executive
as a football coach would talk to his star quarterback in the privacy of the locker
room before the game, you review the basic contexts. Here is where we are, here's
the latest on what will probably confront us, here's our best game plan, here's
what's changed, here's what we need to get done. As counselor to the executive, you
can reduce it to answering three questions: What is your purpose? What have we
learned that affects the content and tone of your information? What is the main point
that you can make in some relevant way, at the beginning, somewhere in the middle,
and at the end?
Timing is important. Executive and coach engage when the executive is
willing. It's up to the coach to figure out when this is. Scheduling a one-to-one
"briefing" session, in private, where trust is highest, is usually tried and is usually a
good idea. The coach's job is to take it at the right pace, drawing on what you the
coach know about the executive's needs, skills, temperament so you keep the
conversation right for the executive. A second, shared-control, short conversation
that bolsters the executive's confidence a day before the information delivery--the
game--is useful if you keep it upbeat: here is the reality, chief, and as we talked
about and you told me, here's our strategic opportunity.
One more thing, on coaching shortly before the executive is to go
public: Consider a possible note to the chief. Call it pre-game fore-arming. If you
were the football coach, you would tape this to your star quarterback's nonthrowing forearm. When the timing is right, when the contexts are analyzed, when
the chief trusts you and knows you are his friend, hand him a 3x5 card with his two
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or three talking points on it. Start with the PURPOSE you’ve agreed on in this
leadership communication. The point is to focus, to begin with the end in mind.
Chapter 9
Stakeholder Perception: Listening and Engaging
Stakeholder perception management is a primary responsibility of chief
communication officers. It begins by engaging stakeholders with well-reasoned
information on the mission. Stakeholders are given a way to judge or measure the
potential yields of their individualized deals — as employees, investors, customers
and such — if the mission is achieved.
“OtherWise” is the watchword, as Dick Martin, a former CCO at AT&T, says in
his book by that name. Relevancy draws on the CCO’s specialized effort to know, for
each stakeholder group, the answer to the question “what’s in it for me?”, and on the
CCO’s ongoing collaboration inside the enterprise, especially within the C-suite.
Your expertise in current stakeholder perception lets you aim company
information toward their scales of value. Others in the C-suite don’t have the
overview you do, since you and your team monitor and, when useful, engage in, all
the channels of incoming and outgoing communication, but each of them does have
a particular set of stakeholders in mind where there is news to be made, or news to
which the company needs to respond. People in finance, led by the Chief Financial
Officer, visualize investors — how they will react when they get this information.
Operational or business section leaders think, how will this be received by my
customers, outlets, suppliers, business partners?
The CEO ideally would want all stakeholders to at least understand the
practical rationale and value of any particular origination — and in almost every
case, she will have a discreet stakeholder in mind, such as those who watch the
stock price and are sensitive to governance issues. You will quickly comprehend
that board members are prime stakeholders in information impact on company
leadership.
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Former CCO Elliot S. Schreiber73 is among leadership communication experts
who assert that sustainable corporate reputations come from producing value that
meets expectations. He expresses this as the best achievable outcome: if leadership
performance produces expected value, the company has reputational respect.74 But
where does this long tail begin?
As communicators, we must reel the leadership communication process back
to the points at which stakeholders — and those who influence stakeholder opinion
(analysts, commentators, the media: online and otherwise) — are given information.
When C-suite missions and strategies are communicated, they will inevitably
become translated into promises and propositions that are the basis of the specific
“deals” or value expectations among stakeholders.
CCOs must understand how content, contexts and tone of presenting
mission-related information — e.g., financial target estimates, announcement of
product, management or operational change — affect stakeholder perception.
The perceived value proposition is prime territory for the corporate
communication team. When the CCO understands stakeholder views through
strategic listening —monitoring and engaging directly in stakeholder conversation
through old-line and on-line media — he or she is enabled to provide professional
counsel, as a strategic collaborator in the C-suite.
Chapter 10
Culture: Understanding and Influencing
“Culture.” What is it? Tevye says it pretty well in “Fiddler on the Roof.” It’s
what we do, it’s how we do it, it’s tradition!
“They always come to my house for Thanksgiving,” a mother in America
might say. “It’s how we’ve always done it in our family.”
“Culture” is the name we give to a group’s behavior over time.
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It’s what people in a group do and don’t do, if they want to be accepted in the
group. It’s what they (or others who’ve gone before them, or those who now lead
them) strengthen or adjust, observe or reject — in effect, the ideas and things they
have in common, they value, and they express through their behavior.
In the corporate context, Intel CEO Andy Grove once described culture as his
company’s “strong immune system” heading off intrusions that disable company
performance.
Shared values create and sustain cultures.
As communicating leaders in a business setting, we want to understand how
planned communication, strategic communication, communication in the hands and
under the direction of professional corporate communicators impact and improve
or, worst case, hamper or confuse the belief, execution and advocacy of shared
values within the company.
Engagement is the key to influencing culture.
Let’s treat with two levels of engagement-influence factors: informal, inculture interaction and strategic, leadership-level interaction.
First of all, group members — let’s say a company’s group of employees75 —
have to engage with each other in order to keep their particular culture going. That
engagement may be highly informal. It is not necessarily organized or strategic. It
could mean conversation at the water cooler (are they still around anywhere?) It
could well mean engagement of sorts through email or Facebook or interest
communities formed and linked on the internet. (These, we need to say, can be the
most egregiously manipulated cultures or sub-cultures, as outsiders — folks in
other cultures trying to sell products and services by plugging into the values of
your — that is to say, in this case, the employees’ — interest-community-culture.)
The chief communication officer’s opportunity — we count it as the third
accountability, alongside strategic information flow and strategic stakeholder
perception engagement — is engagement in (and through engagement, influence in)
the company’s culture.
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This second level of engagement, operating — or not — alongside the
informal and influential employee engagement, is the planned, coordinated,
relevant, useful, strategic, tied-to-vision-and-mission engagement that is achieved
through leadership communication.
Objective of CCO strategies and influence is to motivate employees (and, for
that matter, other leaders and managers) to achieve high performance.
Influential engagement in culture requires an understanding of motivation.
“The problem,” says an expert in cultural motivation, “is that most businesses
haven’t caught up to (the) new understanding of what motivates us. Too many
organizations...still operate from assumptions about human potential and individual
performance that are outdated, unexamined, and rooted more in folklore than in
science.”
His name is Daniel H. Pink. He lectures to corporations and others on
economic transformation and what it takes to succeed with “the new workplace.”
Pink’s book, Drive: The Surprising Truth About What Motivates Us (Riverhead Books,
Penguin Books, New York, 2009), has been endorsed by major corporate people,
including corporate communicators, as a way-shower.
Pink brings science and human behavior studies into play to show — if not to
prove — that carrot-and-stick, reward-and-punish attempts to motivate desired
organizational outcomes are not only outdated but can in fact be counterproductive.
His bottom line is that, if we are communicators, we — as experts — need to
understand that the secret to high performance is engaging the individual drive to
achieve things that satisfy the individual’s needs and interests.
The three elements to motivating performance, as Pink lays it out, are
purpose, mastery and autonomy. Before we dig into that, let’s create a little more
basis for influential cultural engagement through leadership communication by
understanding how corporate cultures have gotten to motivation in “the new
workplace.”
Corporate cultures have moved from “obey” to “self-govern”.
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Visualize three workplaces, all making the same product. Let’s say there is
heavy machinery involved or there’s a risk to life and limb to the workers as well as
to others, as on an offshore drilling platform. The culture in the three workplaces is
what we want to focus on:
Workplace One. Nobody questions the boss. You do what you are told or
face the consequences. Somebody has required them to wear hard hats and blue
shirts and pants. Safety is an order. They vaguely understand the order, but they
don’t care. They do their job, wear the blue outfits, never take off their hard hats and
hardly ever ask any questions. Worker behavior is a matter of blind obedience.
That’s their culture.
Workplace Two. Rules are as clear as the workplace is clean and well
ordered. This is a rules-based culture. It works for management, top-down
directives that sift down through the organization in predictable and controllable
ways. Variables of individual behavior are minimized. Workers are rationally
informed about what’s expected, and they get rewarded when they do it. Workers
accept this. They’ve been informed; communication has reached them. Each
individual wears the hard hat and the blue outfit because he or she knows it’s
expected. Workers acquiesce. They conform to what seems to be rational authority.
Nothing personal, it’s just how we do things.
[INSET]
Seidman: three types of corporate cultures; How they know, use information
(Blind Obedience, Autocratic Leadership)
• Information controlled, hoarding
• Fear of superiors is a factor
(Informed Acquiescence, Power Figure, Rules)
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• Information shared on need-to-know basis
• Rewarded by superiors
(Self-Governance, Inspired for Greater Good)
• Information transparency, part of shared values
• Self, peer satisfaction
Adapted from HOW, Dov Seidman, 2007
Workplace Three. Conditions are clean, efficient, focused on output, but
here there is a difference. Everybody here takes personal responsibility. Everybody
has come to believe that safety is in everybody’s best interests. It is a shared value.
Values speak to their higher self. Each worker feels satisfaction in doing his or her
job, wearing the hard hat, proud to be in the clean blue outfits, and encouraging
others — in the other’s best interest, safety and pride — to do likewise.
This look at workplace cultures was conceived and explained by a socialethical author and counselor to companies, Dov Seidman, the founder and CEO of
LRN.76 In his book, How: Why HOW We Do Anything Means Everything (John Wiley &
Sons, Hoboken, N.J., 2007)
Seidman lays out the three cultures this way:
Workplace One: A culture of blind obedience, which we will shorthand to
OBEY.
While Seidman includes obedience as a performance concept useful in
contrasting workplace styles, your authors find this anachronistic in current
contexts and, in its extreme, abhorrent.77
If “obey” were a company mantra, leadership communication would be in a
sad state. Seidman envisions a factory where virtually everyone fears the “boss”
above them, and “blindly obeys” orders. Information flow is managed to its
detriment. Inside the culture, people in charge and people down the line are stingy
about information, hoarding what they know or think they know, dispensing when
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demanded or when it suits the individual’s interest, not the organization’s and
certainly not the stakeholders’ interests
Communication has in fact been an effective eradicator of blind obedience
and questionable management behavior. Open media contexts, with the
proliferation and the access to and freedom of social media commentary, leave little
if any room for unquestioned workplace bossism.
No company we know of (in fact, no organization, including military where
command is part of the culture) is stuck in this losing management mindset — and
no corporate communicator, certainly not those we follow as leaders (such as those
in the Arthur W. Page Society) could abide, think or lead in, a “blindly obey” culture.
Workplace Two: Culture of informed acquiescence, or, for our convenience,
INFORMED. Again, this is an outmoded, if not disappearing, cultural distinction,
useful best as an example of what to avoid or stamp out when it appears in today’s
leadership communication strategies. However, here we can observe a level of
advancement in leadership communication, en route to the next level in the
Seidman hierarchy of corporate cultures. Seidman says in this “reasonable rules”
culture, information flowed, but in narrow channels, on a need-to-know basis. The
culture was not weaned yet from “carrots” (rewards) nor free of fear of “sticks”
(punishment), so these were implicit in communication and the source of authority.
Workplace Three: Culture of values-based self-governance. As a convenience
toward the goal of a culture of collaborative engagement, we refer to this workplace
designation as one that will SELF-GOVERN, driving toward the engagement factor
that has the potential to release the individual mastery and team collaboration that
has emerged as critical in modern corporate motivation (Pink, Seidman, et al)
oriented to values-based PURPOSE.
Shared purpose: it’s all about the ‘why?’
Cultures in successful companies are able to clearly and concisely articulate
the purpose and value of change for future success, to begin with the end in mind —
and remembering it.
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“It’s all about the ‘why.’” That was the recommendation to CCOs in a best
practices white paper by the Institute for Public Relations.
An in-house communication mantra that succinctly captures the shared
purpose can be helpful. IPR cited a three-word focusing mantra that FedEx
employees have understood throughout the firm’s four-decade history: “People,
Service, Profit.”
‘Best workplace’ guidance
Research from the Hay Group found that highly engaged, productive
employees are 50% more likely to exceed expectations than the least-engaged
workers.78 What does an engaged culture look like?
With emphasis on communication that starts in the C-suite, “best workplace”
guidance now seems to be: It’s the culture where employees believe in the corporate
purpose and know what’s in it for them, information is not suppressed or “spun”
(playing tricks with the truth), the company adds pride and worth to the individual,
the work is rewarding and, to summarize Seidman’s workplace two feature, there
are no stupid rules.
CEO role in shaping culture
The chief executive of NIC Inc., a provider of online services for federal, state
and local governments, told a journalist, “I firmly believe that the No. 1 job I have is
to set the culture of the company.” Harry Herington acknowledged that his behavior
as chief executive drove the level of performance and success, its integrity, its trust
of his leadership. His method of engagement was unusual, if not unique. He bought
and learned to ride a motorcycle, a large Harley Ultra Classic painted lawenforcement blue, which he would ride to various venues where his employees
were gathered and conduct the program he called “Ask the CEO.” Employees
enjoyed the CEO’s courage and candor. “They see me in a different light,” Herington
said. That is where most managers and leaders struggle. How do you get to the point
where (employees) perceive you as human. It goes back to the trust thing. They
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want to understand my thought process, and they want to understand basically the
core of who I am.”
In an intensive, multi-day workshop for new chief executive officers,
involving more than 50 corporations in 2004, the facilitators, led by consultant and
author Michael Porter, summed up lessons the CEOs said they encountered in their
rise to the top. Among these lessons were (1) the CEO doesn’t actually “run the
company,” (2) giving orders is often a costly exercise, (3) it’s hard to know what is
really going on, (4) you are always, intentionally or not, sending a message, (5) you
are not actually the boss, (6) pleasing shareholders is not actually the goal of
corporate performance, and (7) you are, after all, still only human.
One of the CEOs in the workshop told his story associated with lesson (2)
about giving orders. In a previous company, the CEO — let’s call him, Perry — was a
success as a hands-on executive. His habit was to get directly involved in major
programs, apply his energy and personality, and drive to completion.
In his new leadership post, Perry got an early opportunity to show his stuff
when a pending advertising campaign to launch a new product reached his desk. He
had a better idea for the campaign. He called a halt. He would get involved. The
team, who thought they were through after weeks of work, thought they were just
coming in to apprise the new chief of the plan, were sent back to the drawing board.
The impact? A signal to managers: this CEO likes to be hands on, likes to take
charge. Perry was changing the process, and the culture had to adjust.
Here was the lesson of the cost of giving orders, as described in an article by
Porter in the Harvard Business Review: the culture shifted from independence to
dependence, from best effort by each individual to tentative effort in hope of
approval. Perry soon had managers standing in line to bring him their ideas in the
early stages. He had plans to approve or work on. He had problems to solve.
A CEO once told your authors that when one of his fellow C-suite officers
showed up at his office, the CEO would look at them first to determine — is this
person bringing me a problem or is she bringing me the answer to a problem? Our
CEO friend said the ones who helped to lead the company were in the latter
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category. She, or he, would always arrive with at least two possible strategies to
solve the issue under discussion.
In the case of the 50-CEO study reported by Porter, the can-do, got-to-do CEO
did change the immediate culture in the C-suite. He found himself in charge. People
slowed down the performance. The individual who had led the team that came in to
show the boss their work was so discouraged that he took another job at another
company. The CEO was puzzled, shocked into realizing, he told fellow CEOs at the
workshop, the cost of giving orders. He had become not the leader and the facilitator
of leaders. He had become the boss and the bottleneck.
The bike-riding CEO of NIC correctly observed that followers want to
understand “the human” and his thought process. Employees want to see what the
boss values — and whether their respective values work together. Style is an
important indicator of cultural value.
When Brent Saunders became CEO of Bausch & Lomb, brought in by the
board to turn the company around, he was escorted to his Rochester, N.Y. office.
The room was huge, with a magnificent skyline view. “This isn’t going to work,” he
told associates, “If we want to create one company, one culture, one team mentality,
then we should all sit together.” He moved all the executives from its lofty quarters
to the company’s manufacturing plant building a few miles away. It was a symbol, he
said, that everyone was in the turnaround together.
The question is always, “does the culture enable the achievement of missions,
moving toward the rewards of victory?” The point of the Harvard CEO study was
that the CEO will impact the immediate C-suite culture, for better or for worse; and
that giving orders rather than encouraging initiative, disables leadership
communication and the rise of new leaders. Communication — its context, its
content, its style — enables a more autonomous culture, one that produces shared
values.
Role of the CCO in the culture
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Rosabeth Moss Kanter, in her influential book79 examining the traits that
drive vanguard (that means out front, clearly leading) companies, puts a lot of
emphasis on making values and vision a daily part of the C-suite conversation.
Linkage of cultural values to leadership vision needs to be vocalized
constantly at the top of the organization, Kanter holds, “until it is automatic to
include mentions in every message” that flows to stakeholders.
How do you, if you have accountability for information flow and stakeholder
perceptions, get started and raise the impact of values and culture engagement?
Borrowing from engagement theorists Kanter, Dov Seidman, Daniel Pink,
from other counselors and — most importantly — drawing on direct experience as
C-suite communication leaders, we’ve prepared this go-to-it values/culture
engagement kit for new and rising CCOs.
Gut check. Start with what you know about the culture, what goes here,
“how we do things,” what works, what doesn’t...tradition! Use your conversation
leadership skill to probe, gently, not challenging, views of C-suite peers. Affirm or
adjust your gut view of what can be done.
Describe reality. What is the cultural condition? Based on informal review,
place your company on the Seidman scale — informed acquiescence or selfgovernance (if it’s “obedience,” why are you there?) What values/vision guides are
in place that you can work with? If there is a vision/mission statement, evaluate its
relevance. Are current contexts and tone right for what is? What can be shaped,
what can be kept, how do we build on the base? If there is no employee-culturerelevant standard — no creed carved in stone or posted online — what can you
infer from sources, preferably published? For example, in the most recent annual
report to stakeholders, what was the outlook (vision/mission) in the chairman/CEO
message?
Shape authentic themes. Huddle with your communication team. Address
tough questions about engagement and the paths to autonomy and self-governance.
Begin to shape themes that will authentically recognize purpose, vision and shared
values in the company’s stakeholder relationships (we call them win-win deals).
Consider the theme of moving toward “greater good” outcomes. Draft plans to work
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these themes into the managed information flow, and to test them in the
stakeholder ecosystem.
Think networking. Build some belief and advocacy within the leadership. As
Kanter counseled corporate executives on vanguard-ism, be a connector who opens
new possibilities by socializing, assisting and guiding values-based commitments
among others who have goals to achieve. Think how stakeholder (starting with
employee) engagement can join with and help leaders achieve various goals.
Adjust the big portal. What’s your best chance to amplify and to some
extent control progressive engagement? This has to point to your company’s
website content. This is the always-open, 24/7, most frequently used check-in point
for outsiders (and employees and their families and connections) to see what the
company thinks is important. Make the website your big portal for engagement.
Evaluate and tune the access, the content and the tone of this conversation center to
convey, prove and advance authentic vision and shared values.
Simplify, then over-simplify. Communication is a battle for people’s minds,
Al Ries and his co-author Jack Trout said in their classic book on market
positioning.80 Frequent cultural value messages have to be sharpened to cut into
minds already cluttered with ideas, bias and competing communication. Corporate
communicators are operating in societies diagnosed by Ries and Trout as already
infected with the disease of over-communication. They said the only antidote is oversimplified messages. Their counsel: “You have to jettison the ambiguities, simplify
the message, and then simplify it some more.”
Tune in to WIIFM. In all levels of engagement communication — incoming
and outgoing, remember that everybody listens to their What’s In It For Me station.
From the top of the organization to its farthest reaches, from employees to
investors, personal relevance is the key to believing, practicing and advocating
values shared with the company. This is why it’s so important for company leaders
to listen, to understand and to relate to the constant conversation that’s going on in
the stakeholder universe. And that’s why you, as expert examiner of stakeholder
perceptions, are in the best possible position to counsel executives and managers on
authentic and effective engagement.
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Have a plan, work the plan. It may be as open and intensive as the plan IBM
Sam Palmisano put in place when he became CEO. He forced the curve of employee
engagement toward agreement on and participation in the driving purpose of the
company. Shared values and autonomy, which we know as the motivators for high
performance, become the culture with that sort of aggressive, democratized
approach. The plan need not be that grand. IBM communicators were fortunate to
have a leader who saw the need for a cultural adjustment and was willing to throw
open the engagement door. The key is to have a plan that is rational, real and
achievable, even if it’s just one small step at a time.
Keep learning. Besides learning what’s needed and what you can do in
communicating, keep up with the state of this growing art of culture leadership.
People like Dov Seidman and Dan Pink are accessible online. Academic studies —
like those at Georgetown University — are available, along with management guides
and steady streams of books and articles. Google corporate culture and plug in to
see what works for you in your organization.
Bottom line is that information management and stakeholder perception
management — the first two accountabilities of the CCO — are in fact the company’s
strongest potential influence on the company’s character and culture. The core
competences of the CCO become an engagement force in the C-suite. The CCO is (to
be somewhat glib, but to make a real point) also a “CEO” — that is to say, potentially
the chief engagement officer.
CCO as conscience of the C-suite?
How much accountability does the communicator in the C-suite have for
influencing the company’s culture? It varies, company to company, of course, but it’s
safe to observe that the opportunity is growing.
One analyst of corporate leadership, London Evening Standard columnist
Anthony Hilton, suggested81 that a competent company communication officer
might be the right person to assume what’s now the company lawyers’
accountability for deciding how conscientiously the company regards laws and
standards. His argument was that corporate attorneys too often take a legal
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compliance mentality that lets the company slip past the letter of the law, veering
dangerously close to violating the spirit of the law. Lawyers aren’t built to be the
“conscience” of the company, in other words, and Hilton advanced the case that
CCOs, attuned to culture, values and stakeholder perceptions, need to take on the
role of conscientious culture advocate and enabler.
Arthur W. Page Society (AWPS) leaders come close to this view. Its 2012
research and direction report, Building Belief: A New Model for Activating Corporate
Character and Authentic Advocacy, argues that the CCO has a responsibility to work
across the enterprise to define and activate corporate character.
AWPS President Roger Bolton, himself a veteran in corporate culture and
employee engagement in his C-suite job at Aetna, said, “From my perspective,
everyone in senior management — or in the company at large, for that matter — has
an obligation to build and protect brand and reputation by adhering to a strong set
of values and an appropriate mission to create value for customers, employees,
shareholders and society. And in the companies where I was privileged to serve, the
general counsel and corporate attorneys played a highly constructive role in that
regard.
The question of who should weigh in on the level of legal compliance is a
case-by-case matter. There seems to be a decisive factor. Is the company content
with a culture striving to simply comply with requirements, or is it trying to create,
reassure and sustain stakeholders, including employees who see how close the
company gets to legal limits?
Communication leaders like Bolton believe that CCOs are well situated and
conditioned to weigh in on C-suite decisions that affect sustainable business
cultures. “When this is done well,” he said in an online commentary, “companies are
focused on doing the things that are consistent with their espoused character — in
essence earning trust with everything they do every day. In this scenario,
compliance remains important, but doing the right thing is never in doubt.”
‘Giver’ v. ‘taker’ cultures
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What does it mean, that shared values are strengths that create and sustain a
company culture? In a sense, it is a matter of give vs. take. With a culture that
encourages leaders and employees who are “givers” (they help other employees and
their leaders to succeed), and screens out “takers” (they are overly self-centered,
closed-system individuals), companies can achieve lasting benefits. Adam Grant at
the University of Pennsylvania’s Wharton School uses the story of “Ed and Alvy” to
illustrate this idea.
Ed and Alvy were the leaders of a certain Hollywood film company’s creative
division when a new CEO was hired. Under financial pressure, the new chief ordered
layoffs. Ed and Alfy disagreed. Their team was doing a good job, they argued, adding
value that would be lost if jobs were cut. The new boss dug in. “You have to cut at
least two people in your team,” Ed and Alfy were told. He asked for the list of names
to be on his desk by the following morning.
At nine the next day, the CEO found the list on his desk. He opened and read
the list. It contained two names. You guessed it: the names were Ed and Alvy. The
team was needed, they said; and the new boss heard from others in the C-suite that
he couldn’t afford to lose these two leaders.
The CEO relented. He was not ready to slash key personnel. Ed and Alvy kept
their jobs and so did all the members of their team.
Several months later (this was in 1985), an executive from another company
came in.
His name was Steve Jobs and he wanted to buy the creative division of Lucas
Film.
Jobs bought the unit, used it to start a company called Pixar, headed by Ed
Catmull and Alvy Ray Smith.
A quarter of a century later, Pixar had become a leading force in the film
business of Hollywood.
The story prevails. The spirit of dedication and success prevails in the culture
set by leaders who communicated shared-value reality. They, the leaders, would put
their own jobs on the line for the good of a values-adding team. Commenting on this
story in his examination of “taker” cultures versus “giver” cultures, Professor Grant
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observes, “When it comes to giver cultures, the role-modeling lesson here is a
powerful one: if you want it, go and give it.”
Chapter 11 Communicating With the Boss: A ‘No-Spin Zone’
Successful professionals in the public relations business generally abhor
“spin” as a description of preferred communication strategy. We shudder when a
boss or colleague or client, challenged by a condition that requires response, turns
to us and asks, “Okay, how do we spin this?”
Despite some defense of the word as a common method of impacting opinion,
“spin” to most communication professionals smacks of manipulation, hype and
other eroders of trust.82
It was refreshing therefore when a boss was quoted, in a 2012 New York
Times interview, as declaring his office as the place where spin stops.83
“I always tell my staff,” said Shawn H. Wilson, president of Usher’s New Look
Foundation,84 “when you come in my office, you’re in a “no-spin zone.” Just be
respectful.”
In his conversation with Adam Bryant (whose interviews with bosses have
frequently exposed the good and the bad of leadership communication), Wilson
came down hard on the danger of manipulating a message to achieve momentary
advantage.
“I’ve seen the habit in other organizations,” the CEO said, “and I saw it
creeping into our organization, where people tend to make excuses or spin the
truth: ‘Well, this did happen, but it’s because of this...’
“I felt it was important as a leader to say: ‘Listen, I don’t know why this
happened, but we need to get to the core root of why it happened, and it has to be
factual. It can’t be all these other things.’”
Be respectful; be honest. That mantra means the most when it comes from the
boss, because — if the chief communicator and her team take it and apply it — it
takes root in the rest of the organization, helping to fulfill a CCO accountability:
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influence the ongoing transformation of the culture toward shared values and
mission achievement.
As this chief executive told the New York Times reporter, “When we started
that, I definitely saw a difference in the culture.“
A CEO issues an access guide for C-suite collaborators
What communication initiative can a corporate executive take to make sure
he and the executive (or production) team are on the same wavelength?
Typically, the executive or manager knows more about the people working
with him than they know about him. He has access to background and interview
information (if indeed he has not conducted the interview or recruited the
employee).
The obverse — upstream insight — is not so easily available. One executive,
the lead strategist for a firm specializing in feedback management, suggested a
means of achieving more open, two-way communication: give followers a “user
guide” to working with the leader.
In a New York Times interview, Ivar Kroghrud, cofounder and for 13 years
CEO at QuestBack said he provided this kind of information to those he worked with
at the company:

I am patient, even-tempered and easygoing. I appreciate straight, direct
communication. Say what you are thinking, and say it without wrapping your
message.

I am goal-oriented but have a high tolerance for diversity and openness to
different viewpoints. So, again, say what you are thinking and don't be afraid to
challenge the status quo.

I welcome ideas at any time, but I appreciate that you have real ownership of
your idea and that you have thought it through in terms of total business
impact.
Kroghrud said at the end of this information provided to employees, he added
this: The points are not an exhaustive list, but should save you some time figuring
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out how I work and behave. Please make me aware of additional points you think I
should put on a revised version of this “user’s manual.”85 The reaction to his list,
Kroghrud said, was “100 percent positive”— with the benefit of helping employees
“open up” and avoid ingrained conflict, which is based on lack of understanding.
Chapter 12
Competence: The Core of Corporate Leadership
Leadership competence separates winners and losers. Whether it’s in sports
or in business, poor performance or failure to execute a winnable strategy can result
in the leader’s downfall. Quarterbacks get traded. Chief executives get fired or move
on.
Winning, successfully competitive corporate leadership means execution of
core competences at two performance levels — economic and emotional — enabled
at both levels by communication competence.
Economic competence to achieve competitive advantage
In their thought-leading 1990 paper, The Core Competence of the
Corporation,86 C. K. Prahalad and Gary Hamel advanced the idea that a company's
competitiveness is directly related to its core competencies.
An economic competence is “core” or essential to winning corporate
performance if it opens access to a wider variety of markets, if it is unique or difficult
for competitors to imitate, and if it is renewed and sustained, said Prahalad and
Hamel, enabling the company to transform for success over a long term.
Jim Collins, in his book, Good to Great,87 uses an ancient Greek parable to
illustrate uniqueness as a particularly valid marker for corporate economic
performance.
Here is the story:
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Every morning, the fleet, sleek, crafty fox waits to attack the dowdy, waddling
hedgehog. The hedgehog — kind of a cross between an armadillo and a porcupine —
comes into attack range.
“Aha, I’ve got you now!” says the fox, preparing to leap on its prey.
The hedgehog is unfazed. He looks at the fox, he thinks, “Will the fox never learn?” —
and he transforms himself into a ball arrayed with sharp spikes that no foe would dare
engage. The fox stops, admits to being out-foxed, and retreats to try to come up with a new
attack strategy.
Collins likened the hedgehog strategy to corporate economic competence, the
strategy of doing one unique thing exceptionally well, and keeping at it, extending it
sustainably. Companies with a consistent, clarifying advantage tend to outlast and
outperform companies that are scattered, diffused and inconsistent, according to
Collins’ study of leadership success.
In the period between 1975 and 2000, Walgreens’ record of generated
cumulative stock returns beat such great companies as GE, Merck, Coca Cola and
Intel. Collins said a hedgehog concept — Walgreens’ focus on a simplified,
repeatable strategy between 1975 and 2000 — such as, a distinct formula for store
location and one for profit-per-customer beat competitors, including a large
drugstore chain forced to sell out.
The hedgehog analogy suggests focus. The ideal, winning economic/financial
competency will use concepts with which the company can be a world beater. It will
exercise one thing, done well, repeatedly.
Competence must be supported, renewed and sustained.
Prahalad and Hamel studied star performers of the 1980s — such as NEC,
Canon and Honda — companies that focused on cores of strength, enabling
dominance in key product markets, and high-rate profitable growth.
NEC won when competing with GTE, the analysts found, by zeroing in on a
strategy to exploit the convergence of computing and communications. A “C&C
Committee” of top managers was put together. Management adopted a strategic
architecture effort to acquire competencies in semiconductors. The focused
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approach was communicated to the entire organization and to news media, financial
markets and all external stakeholders.
Enormous resources were shifted from areas where NEC was in a group of
competitors to strengthen its position in components and central processors.
Through obtained, developed and applied core competence, NEC in a single decade
overtook its far larger competitor, GTE, and became a best-in-the-world leader in its
clearly targeted categories.
“By using collaborative arrangements to multiply internal resources,”
Prahalad and Hamel observed, “NEC was able to accumulate [and engage] a broad
array of core competences.”
They urged management to engage in “collective learning” on competence,
with emphasis on the company’s capacity and skill to coordinate diverse production
strategies and to take full advantage of growing technology.
Bottom line is that the proven route to competitive victory is for leadership
to focus on unique core competencies, competency-based strategies and
collaborative, collective learning to sustain success and result in winning, vanguard
companies.
Emotional competence: heart and soul of leadership success88
In the fall of 2008, some of the people who run Starbucks were urging CEO
Howard Shultz to cancel the company’s biennial leadership conference. The event
involving some 10,000 Starbucks managers would occur at an awkward time, one
month after Wall Street’s big meltdown, a few weeks before Starbucks would
announce shockingly reduced fourth quarter profits. Shouldn’t we cancel the
meeting? Or maybe do it online?
The boss said no. The conference was held, in New Orleans, a city recovering
from the ravages of Hurricane Katrina. It was a great success. It raised emotional
commitment to and collaboration to regain and sustain Starbuck’s business success.
“Reigniting people’s hearts and minds, had to be done in person,” Shultz says
in his book, Onward: How Starbucks Fought for Its Life Without Losing Its Soul
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(2011). “I believe that the most sincere, lasting powers of human connection come
from looking directly into someone else’s eyes, with no screen in between...
“(B)ecause of everything we experienced in New Orleans, it was apparent to
all of us what it meant to love something, and the responsibility that goes with it.”
Love? Emotional commitment? Is this simply softer-side, new age
communication? Did Lee Iacocca at Chrysler communicate this way? Did Jack Welch
at General Electric think this way?89
Let’s hear from a hard-nose manufacturing company leader.
Larry Bossidy, early in his corporate career, was Jack Welch’s right-hand man
at GE, a Six Sigma advocate. He went on to serve as CEO at both Honeywell and at
AlliedSignal. Listen to Bossidy in his best selling business book, Execution: The
Discipline of Getting Things Done, published in 2002:
“An organization can execute only if the leader’s heart and soul are immersed
in the company. The leader has to be engaged personally and deeply in the business.”
Love. Heart. Soul. We are into the realm of emotional intelligence, a term that
has moved from organizational psychology to application in business leadership and
communication competence.
How emotional intelligence can impact economic performance
At Johnson & Johnson, a study entitled Emotional Competence and Leadership
Excellence, connected higher leadership performance with higher levels of
individual self-awareness and communication skills such as effective listening,
talking and presenting ideas or directions.
At American Express, managers who completed an emotional competence
training program grew their business operations larger and faster than those who
didn’t get the training.
In a manufacturing company (details available through the Center for
Creative Leadership) supervisors at a plant were divided into two groups. Group
one supervisors received training in emotional competence — in effect, social skills
that can be learned and applied in the workplace: skills like listening, talking, giving
directions, presenting ideas and options. Group two supervisors received no such
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organized training. They were left to themselves to use whatever levels of social
skills they came to work with every day and to convey to employees whatever they
could or cared to convey.
You can no doubt guess the result.
Group one, led by the emotionally competent supervisors, skilled
communicators, ended the year having reduced lost-time accidents by 50 percent.
Grievances — formal filings from workers contending wrongs by the company
against them — dropped from the previous plant-wide average of 15 per year down
to only three cases.
The trained group boosted the critical outcome, productivity translated into
income, by more than a quarter of a million dollars over what was set as the year’s
goal. In the group led by matched supervisors who received no emotional
competence training, there was no economic performance increase.
Small wonder then that corporate leaders embrace emotional intelligence —
collective learning — as a valuable competency, exercised in the C-suite, and at the
levels of production, marketing, sales and customer relations.
The bottom line here is that competence — economic and emotional —
underscores the leadership test. As former CEO Bossidy says in his book, the failure
of a corporate leader to exercise the vision of success and stakeholder expectations
— in short, to execute competitive strategy, is the number one reason he or she is
replaced.
Execution means focusing every competence in the company — from C-suite
to all the levels of internal stakeholder interface — on working the plan to win.
CCO role is vital in the company focus on competence.
Collaborating with C-suite leaders, the successful chief communication officer
is a reliable source of counsel, coaching, contexts, concepts, content and
connections.
To activate all those c-words, the chief communicator must understand and
support economic intelligence and serve as company specialist in the learning
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process and applications of emotional intelligence. Both competencies are heavily
dependent on leadership communication.
It is vital for corporate leaders — importantly including communication
counselors — to probe, and provide answers to, “hedgehog” questions such as these:
What are the best drivers of our economic engine? What achievable outcomes
are we most passionate about? How unique are our core competencies? At what do our
stakeholders expect us to be the best in the world?
With the best view of and access to stakeholder perceptions, CCOs can
continually help management address the game-changing question: How do we form,
communicate and execute strategies to engage internal and external stakeholders in
realizing the best achievable return on our unique core competencies?
_____________________________
Click HERE to listen to an interview with Peter Salovey, John Mayer and
David Caruso about the ability-based model of emotional intelligence and its
implications for leadership and the workplace.
[INSET]
The Five Components of Emotional Intelligence at Work
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Chapter 13
Limits: Corporate Governance
The communicator in a public company C-Suite operates within strict and
continuous limits. There are the internal leadership limits: ground rules set by
management, approval processes, agreement on handling and releasing
information. And there are influences and controls from outside the C-suite that
define the terms under which everyone in the company — not only CCOs, but other
executives up to and including the CEO — do their jobs.
In a public company, corporate governance is a shared deal. The CEO and
senior executive team are responsible for the way in which day-to-day decisions are
made and executed. But three other control forces are constantly in play. Two are
direct and constant actors — the company’s board of directors and its shareholders
or investors. The third force hangs over the entire system: government itself,
engaged through legislators, regulators and other government officials.
Here are highlights of the complicated, influential process of corporate
governance about which every top-level corporate communicator must understand.
Board influence. The board provides oversight on management’s
performance. Elected by shareholders (or confirmed by them), board members are
charged to act in the best interests of its shareholders. Board committees, such as
audit and compensation, look in on management decisions, operations and plans,
Shareholder influence. Shareholders and investors (from stock-holders to
bond-holders) elect the board, which may include any company executive (e.g., CEO
or other) and any employee representation (e.g., union member).
Shareholders are influential because they provide money through the
purchase of an equity interest (e.g., shares of common stock) and, as bond-holders.
Controls are in the form of votes approving not only directors but also items that are
proposed by management and the directors — or, another channel of limits or
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allowance on corporate behavior and management, resolutions (e.g., on
environmental, economic or social matters) proposed by stockholders.90
Government influence. Corporate communication took on new importance in
the 1930s, when public company performance came under federal government
scrutiny through creation of the U.S. Securities and Exchange Commission (SEC). Set
up to protect investors, maintain orderly markets, and spur capital formation, the
SEC influences — in fact requires — information flow on plans, risks, performance
and other aspects of the company that investors and other stakeholders now have
the right to know.
Muscle was added over the years to SEC overview/control power in 2002
when Congress — reacting to corporate failures and scandals (see the leadership
failures of Enron, WorldCom, Adelphia, Tyco, Global Crossing and the accounting
firm Arthur Anderson) — approved the Sarbanes-Oxley Act. Known in public
corporate suites as SOX, the law established the Public Company Accounting
Oversight Board to look in on and regulate the auditing profession in its role
reviewing corporate financial statements and issues opinions on the reliability of
company’s books.
Control burdens on company leadership are substantial as the result of SOX.
CEOs and chief financial officers (CFOs) must, for the first time in history, attest to
the accuracy of the company’s financial statements. Board audit committees must
now have members that are independent and they most say whether some member
of the committee is in fact a financial expert. The company’s external auditors must
rotate their lead partners every five years and cannot do certain consulting jobs for
companies where they are an auditor.
Can the make-up of the C-suite be questioned by SOX? No, but the 2002 law
does say that a specific audit firm cannot audit a company if anyone in a senior
management position at the company worked for the audit firm in the past year.
In 2010, the SEC increased its interaction with companies under authority of
the Dodd–Frank Wall Street Reform and Consumer Protection Act. Enacted by
Congress in response to the late-2000s recession, it brought more changes to U.S.
financial regulation, affecting almost every part of the nation’s financial services
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industry. Among requirements: public companies have to disclose their leadership
structure (getting into the matter of whether the company’s CEO is also board
chair), whether there is a lead independent director on the board — among other
influences on C-suite decisions and information.
Big Board influence. Companies listed on the New York Stock Exchange and
other stock exchanges must meet specific governance standards required by NYSE
(known as “the big board”). These influence company decisions on the
independence of directors, regularly scheduling meetings of non-management
directors, and the establishment and authority by the company of a
nominating/corporate governance committee composed entirely of independent
directors.91 Beginning in 2010, and updated in 2012, the Business Roundtable has
published guidelines for best practices in corporate governance.92
Other factors related to communication. Among changes under discussion in
the governance arena are so-called “say-on-pay” rules, which would empower
shareholders to express their views on their approval or level of satisfaction with
the public company CEO’s pay and overall executive compensation program.
And, while it’s not a corporate communication matter, CCOs are interested in
the fact that there is, at least in government, a legal definition for “whistle-blowing”
— that is, somebody who works for the government and tells what they believe is
unfair/unlawful behavior. Under the Whistleblower Protection Act of 1989, it’s
against the law for federal agencies to threaten or to take retaliatory action against
any employee (or job applicant) because of disclosure of information by that
employee or applicant. Whistleblowers may file complaints that they believe
reasonably evidences a violation of a law, rule or regulation; gross mismanagement;
gross waste of funds; an abuse of authority; or a substantial and specific danger to
public health or safety.
Guidelines for company communication
Public companies communicate frequently with investors and other key
constituencies. Those who have a stake in the company are informed through proxy
statements, annual and other (e.g., corporate social responsibility, sustainability and
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philanthropy) reports, and shareholder meetings. Corporations report financial
performance through annual and quarterly reports, earnings news releases,
concurrent investor and media conference calls, and in annual stockholder
meetings. While much of this is to follow required government rules — especially to
make clear the company’s financial performance and results — companies are
steadily increasing information flow to communicate positions on issues of
importance to their investor-owners and to the analysts who follow the company.
Public companies typically construct and keep up-to-date website sections with
investor relations information. Posts feature company news and video
presentations, information on industry conferences, leadership statements and
speeches, as well as relevant financial indicators tracked by investors and analysts.
Companies use social media outlets such as Facebook and Twitter to disclose
key information (e.g., the current quarterly earnings) in compliance with the SEC's
Regulation Fair Disclosure (Reg FD). But the company needs to communicate to
investors in advance. Investors must be alerted as to which social media channel the
company will regularly use to send out this kind of information. Reg FD applies to
social media the same way that it applies to corporate websites, where companies
can disclose possibly market-moving information.
The general guideline is that this type of communication can be on a
company’s open access platform, only if they tell investors to look for it there. If a
company does not alert investors to its use of the social media channels, its
communication could constitute “selected disclosure” and thereby violate Reg FD
rules requiring companies to distribute material information broadly and not
exclusively. The SEC did not specify which social media channels would be
acceptable platforms for communication.
Now more than ever, companies need to be sure they follow social media and
communication policies. An internet privacy attorney, Jeremy Mishkin of
Montgomery McCracken, gave some advice to CFOs in May 2013 that was a headsup for CCOs: “If I’m a CFO, I need to know not just what’s on my company’s Facebook
page or Twitter feeds, but also what my executives’ pages look like, so I don’t have a
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situation in which a person associated with the company issues a statement that the
SEC might view as a material announcement.”93
For example, General Electric includes the following notification on its
investor relations website to inform investors of the social media sources it
employs:
In addition to our Investor Relations website, GE’s corporate blog, Facebook,
and Twitter accounts contain a significant amount of information about GE, including
financial and other information for investors. GE encourages investors to visit these
websites from time to time, as information is updated and new information is posted.94
Increasingly, management teams and corporate boards are recognizing the
importance of holding a substantive dialogue with their largest 10–15 shareholders,
and this increase in company-shareholder engagement has involved investor
outreach and a willingness to listen to investor input and expectations.
Witness the careful and well-thought-out approach JPMorgan Chase took
during 2013 in defending Jamie Dimon’s combined Chairman/CEO leadership
model. Reportedly, board members and senior executives conducted robust
outreach with key shareholders, and in the end, it paid off: The vote for splitting the
top roles at the bank fell to 32.2 percent from 40 percent in 2012.
The outcome favoring the combined CEO-chairman seat was considered by
some analysts an endorsement of JPMorgan Chase’s financial performance under
Dimon’s leadership, which reported record revenues in 2012, as well as his
communication skill — which included a winning communication appearance as
witness in a congressional hearing.
CCO’s emerging corporate governance agenda
A well-developed shareholder communications and engagement plan can
help management teams and boards prepare for increasing the dialogue with
investors.
So what does this mean for Corporate Communications Officers?
We know from the seminal work of the Arthur W. Page Society that a new
emerging model is guiding building advocacy at scale:
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The new model is a powerful way to think about the emerging engagement
role for the CCO in defining corporate character through the integrated management
of reputation and corporate culture, and managing the narrative through a rigorous
process, activated across the enterprise’s operations, to ensure it expresses
faithfully the company’s values and purpose — effectively, all of the key issues a
public company’s board is focused on.
How exactly does this involve the role of the CCO in assisting with the
company’s efforts in driving corporate governance and, more specifically in the
CCO’s relationships with the board, management team and investors? And what are
the best practices CCOs should plan to employ?
A communication agenda for CCOs

Understand your company board of directors’ oversight role and its
fiduciary responsibility to operate in the best interests of all shareholders —
and focus on areas where communication may add value.

Understand the specific shareholder value propositions for the largest 10–15
shareholders and how ownership in your company may give rise to various
shareholder resolutions and proxy positions

Review and embrace the corporate governance principles of your company

Understand and be an expert in the best practices among all corporations

Follow the “hot button” issues at other companies and the trends emerging
in the energetic debate about corporate governance. “Listen” with a Google
alert on “corporate governance.”

Engage in the company’s risk management process, especially involving any
issue that may have reputation and/or stakeholder risks (and including
what management reports in the SEC-required annual risk factors report (in
the SEC 10-K).
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
Become a “chief collaboration officer” within the C-Suite on emerging issues
that may require escalation to the board’s attention. Bring the “outside
view” in to other C-Suite members.

Find ways, working with others in the C-suite, to be of service to, and
interact with, board members on an ongoing basis through relevant
committee work/focus (i.e., corporate governance, risk management, legal
affairs, public policy, public responsibility committees)

Bring “early warning” intelligence to the CEO, CFO related to the board’s
deliberations — not waiting for a crisis to develop.

Establish a process (together with investor relations) for shareholder
outreach involving the board (e.g., voicemail, email and corporate address).
Monitor the feedback and be ready to advise board members on the
frequently asked questions and proposed responses to shareholders.

Determine which of the company’s “owned” channels (starting with the
website) can best be activated to reach stakeholders on a 1:1 or a 1:many
bases.
Chapter -Crisis: ‘Topic A Bad News’ and the CCO
In the first class of our Corporate Crisis Communication course, we engage
our students in developing a working definition of “corporate crisis” that can be
tested and applied to the case studies we examine during the semester. In the
Spring 2013 semester, the students arrived at this definition: “A corporate crisis is
an event or condition that could pose a threat to stakeholder perceptions, disrupt
normal business operations and affect the future sustainability and integrity of the
company.”
How do you know when you’re in a crisis? We put that question to one of our
speakers, Steve Harris, a veteran corporate communicator who had served at the
executive level in General Motors. His answer was, “When it is topic ‘A’ bad news at
the top of the organization.”
Crisis always shakes the wheelhouse of the CCO. As Harris and others in
charge have indicated, the impact of a crisis takes over the context, content and tone
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of leadership communication in the C-Suite. In this chapter, we attempt to prepare
you, if you are the enterprise’s chief communicator, to understand where you are or
might be when the progressive routine ends and the shaking (or the apprehension
of critical change) begins, and how you can become significantly influential in best
achievable outcomes.
Factors contributing to crisis vary widely, but they fall within two categories:
those beyond the reasonable control of the organization or anyone it it, and those
that could—and in retrospect, probably should—have been controlled, perhaps
averting crisis impact. The factors beyond reasonable power to control are wide
ranging—from context in market conditions, to the content and tone of a negative
(perhaps totally inaccurate or rigged) YouTube video that has gone viral.
Similarly, controllable (perhaps neglected) factors can range widely—from
consumer discontent that was expressed but was not picked up or engaged, to
corporate values or communication (related, for example, to safety in
manufacturing) that were misdirected, poorly executed or otherwise failed to
influence employees.
A crisis can develop suddenly—death, disaster, public exposure of highly
sensitive enterprise news events, to name but a few causes—or it might be the
irresistible cresting of a slow development. Andrew S. Grove, the long-time leader
of Intel, whose computer technology company survived a slow-moving business
phenomenon that became a crisis. Grove draws from mathematical studies to
identify the “strategic inflection point” when the path of a routine condition shifts
directions. At this point in a business, wthe enterprise can continue to succeed at a
higher level, or it can be cast into a failing crisis. “An inflection point,” Grove
explained, “occurs when the old strategic picture dissolves and gives way to the
new, allowing the business to ascend to new heights. However, if you don’t navigate
your way through an inflection point, you go through a peak and after the peak the
business declines…It is a point where the curve has subtly but profoundly changed,
never to change back again.” Grove’s company and competitors in the computer
industry went through such a point, and some (but certainly not Intel) succumbed to
a crushing crisis.95
No matter the cause, the timing or the corporate segment in which the
company is situated, two points are clear: The firm cannot ignore the crisis. And
corporate communication is at the center, if not at the front lines, leading the
communication response, aiming toward regained control, trust, shared values and
competitive victory.
Anatomy of a crisis
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Routine
Business is proceeding as usual. Company operations — production,
providing services — are proceeding in a normal, planned and expected manner.
Executives are performing to plan. Sales, customer relations, employee engagement
are on track.
Rumblings
Signals of problems are detected. Potential negatives could become
obvious inside the company (e.g., a production or supply interruption, a delay, a
safety issue arises). There could be rumblings in the external stakeholder ecosystem
(product or customer dissatisfaction, threat of a lawsuit that could become serious,
unpredicted competition move). Some are controllable, some are not. In the
extreme, the problem — controllable or not — could disrupt positive outcomes and
perceptions.
Disruptive Events
Something happens. It may or may not be a total surprise. It may or may not
have been predictable. The circumstance could arise or peak from within or outside
the organization. An ongoing, acknowledged problem — similar to situations that
have in the past been addressed and controlled — rises to an uncontrollable level.
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For example, a production problem becomes unsolvable. A deadline is missed.
Expected income fails to materialize; a financial matter escalates to a critical state.
Or an external event, outside the control of the organization, abruptly changes the
rules. For example, new government regulations (or executive fiat, in the case of BP,
for example) impose stringent new requirements that affect the company’s standard
operating model, threaten its margins or very existence, and/or disadvantage the
company in the competitive arena. Foreign competitors gain competitive advantage
by “cheating” or abusing trade rule norms.
Or, an “out of nowhere” event occurs. There is an explosion, a fire, a
natural disaster. A neglected, internal danger erupts. Competition changes a vital
success option. There is a very serious episode of management or board
mishandling. There is sudden death or disablement of one or more key executives.
This is, as former congressman Joe Scarborough once described it on his Morning
Joe television show, “the freight train out of the mist” that you didn’t see coming. In
the C-suite, and at all the points in the company where this turn of events has an
impact, normal and routine process and execution are slowed, skewed or stopped.
Corporate leaders assess the situation. Is this a problem that can be handled? Has
the company entered crisis conditions? Corporate communicators prepare for the
first phases of crisis communication.
Escalation
The event disruption grows. The crisis has begun. Stakeholder and media
reaction put the company in a defensive, stressful mode, cast in one or more
negative perceptions, ranging from incompetence to villainy. While
production/sales continue, executing strategies and plans, these are shadowed by
concern about the ability of the management to fix or deal with the condition. Csuite attention focuses on crisis management, with corporate communicators at the
forefront.
Reaction
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The company becomes a target. This is the “hot” top half of the crisis,
where stakeholder reaction challenges the company. External stakeholders —
investors, customers, stores/dealers/distributors/service centers et al — are
stirred. Bonds of trust are shaken. They worry about the impact on them. They think
about (or actually engage in) withholding purchases, stopping or shifting
investments, switching to competitors. A barrage of stories, blogs, tweets, and social
media agitate concern. Politicians, office-holders, government regulators may get
into the “blame game” and seek protection or restitution among their constituents.
Corporate communicators are on defense. As Dezenhall observes, it is less a case
now of making them “like you” and more of making them “stop attacking you.”
Response
Company acts to control the damage. Energy is directed to explain, defend,
and determine ways to regain traction on the slope of the crisis. Senior management
and the board scramble to determine moves to correct, contain and fix the negative
situation. Corporate communicators activate internal and external communication
programs, responding to questions, focusing on stakeholders directly or through
public and social media, making executives available as spokespersons. This may be
the period for earnest, transactional apology,remembering (as Eric Dezenhall put it
in his book) that “damage control means more than having to say you’re sorry.” The
communicator’s purpose now is to generate accurate, honest communication, from
both the company side and from those affected by the crisis. The values of
transparency are now a mixture of defense and offense, doing the media’s job with
(and at times, for) them, and using collaborative processes such as linking to
principles understood by stakeholders.
Climax
The company is positioned for offense. Dramatic theater places characters
in conflict until the point of no return, where the conflict is fixed, a situation is
frozen to develop no further, a character achieves purpose or will not ever do so.
This is the play’s climax. In the real-world drama of a crisis, with the company in
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conflict with other forces, the climax is the turning point at which the company can
begin to regain lost ground, lost trust and lost stature. Whatever the root problem,
however intense and costly the crisis, the company now has the opportunity for
greater control. Andy Grove, who was part of Intel’s leadership team for half a
century, calls this “the strategic inflection point.” Senior management is able to
commit to demonstrable, measurable correction, restitution (if needed) and
repositioning with stakeholders. For example: faulty, damaging or unprofitable
operations may have been shut down; damage may have been curtailed or entirely
stopped; critical financial conditions may have been enhanced or settled. Corporate
communication has the chance to get ahead of negativity, and provide open, honest,
positive, caring information, collaborating with authorities and stakeholders on
resolutions and recovery.
Resolution
The company re-enters the trust agreement. The crisis having crested,
effectively ended with the climax, the company and those affected enter into the
phase of resolution that can extend over an unknowable period of time. During this
period, company leaders must reassert values than can be usefully shared by
stakeholders. The shared-values promise will require a sustained level of
commitments, delivery on expectations, possible financial commitments, possibly
legal cases and settlements. Sustainable communication at a level of openness and
honesty is required, based on management’s serious engagement in mutually
beneficial, long-term relationships and benefits to stakeholders. Communication will
say, in effect, “don’t trust us, track us” — evaluate us from this point forward,
determine what’s in it for you to believe, follow and affirm us.
Aftermath
As company leaders strive to reassert “normal” conditions — seeking the
return to productive routine, affirmative relationships with all who have a stake in
the company’s success, and execution of profitable strategies — they face a hard
reality: “there is no over” when a company has wrestled with a serious, highly
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challenging, well-publicized crisis. The story may never completely die. Impact can
linger both inside and outside the company. A new perspective of the company may
have taken root among employees — changes reflected in the company’s culture, for
good or bad — and among external stakeholders, as well as observers,
commentators, bloggers, enabled by an internet where content, the “history of the
crisis” and views live forever. The external aftermath — with, for example, lawsuits,
government action, and market moves by competitors — can recall the upside and
downside of the crisis. Corporate communicators will need plans to deal with these
bubbles of memory. The best lesson may be that which is captured in the title of the
book by Intel’s Andy Grove: Only the Paranoid Survive96.
Repositioning
Corporate leadership will need the strength of strategic communication to
achieve the “new normal” of successful operations. Chief communication officers
will usefully drive a factual, caring, collaborative, shared-values flow among
stakeholders. Repositioning will move toward one sustainable goal: earned
trustworthiness.
Chapter
Crisis: Applying Communications
“Thank goodness, we were lucky that somebody knew what to do.”
That — a veteran chief communications officer of a company that had been
through its share of crises told us — was without doubt the best compliment he ever
got from a C-suite colleague. The certain crisis situation was cooling, moving from
damage control to resolution, and luck — an achieved outcome — was once again in
the air.
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“Luck” does happen, of course. But, as the saying goes, luck has the curious
habit of happening at the intersection of preparation and opportunity.
This chapter is about raising the odds for lucky outcome through methodical,
persistent preparation within the function of corporate crisis communication.
We focus on the CCO’s essential role through the typical stages of a corporate
crisis: from rumblings and red flags of trouble to the turning point of climax, toward
the winning prospect of resolution and a successful aftermath.
Preparation’s starting point is purpose.
CCO purpose: enable effective corporate crisis management
What specifically is the CCO’s values-driven objective? We believe it is to
apply the three strengths of corporate communication — mastery of information
flow, intimacy and influence within the company’s culture, and active interaction
with stakeholders and media — to enable effective corporate crisis management.
We differentiate corporate crisis management and corporate crisis
communication to underscore that comprehensive crisis management typically
involves a lot of people, up to and including the chief executive and other senior
people.
Corporate crisis management: benefit from corporate risk management
The theoretical origin of crisis management is in risk management.
Risk management is a company-wide function commonly conducted through
a top-level risk management committee (typically involving the CEO, a chief risk
officer, the chief financial officer, the head of legal and other C-suite leaders) that
may well engage on this with the board of directors. In fact, a board-level risk
management committee is becoming an increasingly important governance tool —
involving board members in the corporate process.
Guiding principles for improving board oversight of risk were defined by the
National Association of Corporate Directors in the October 2009 Blue Ribbon
Commission report, Risk Governance: Balancing Risk and Rewards. According to the
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NACD report, every board should find ways to implement risk oversight principles
such as these (our emphasis added):
— There is recognition that management of risk is essential to the
successful execution of the company’s strategy. The risk appetite implicit in the
company’s business model, strategy, and execution is appropriate to the business.
— Management implements a system to manage, monitor, and mitigate
risk in the company’s business model and strategy.
— The risk management system informs the board of the major risks
facing the company.
— Expected risks are generally commensurate with expected rewards.
— An appropriate culture of risk-awareness exists throughout the
organization.
Our observation: corporate communication has a collaborative opportunity
in working with others in the C-suite (and possibly, directly with board members)
on objectives such as these; and, the CCO may be directly accountable for influencing
a “culture of risk awareness.” This will require clear understanding of board and
management commitment — what can and should constitute internal
communication — and a strategy to achieve leadership and worker engagement.
Public companies registered on U.S. stock exchanges are required by
government rules to warn investors about circumstances or events that could
forestall or make irrelevant the company’s plans for financial and operational
performance.
Company annual reports to the Securities and Exchange Commission (known
as 10-K reports) list the presumed “risks”: statements about developments that
could negatively affect the company’s strategies or plans to succeed.97
Risk factor identification is a benefit not only to investors who can see what
management conceives as possible problems. It also encourages management
toward a continuous pre-crisis focus.
If a crisis develops (which may or may not have been anticipated in the risk
factors identified in the annual report), company management leaders have
accountability to determine the cause of the event or culmination of circumstances.
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They must assess the physical, financial, legal and operational effects of the
disruption. And they must decide — with operational/production/sales interaction
— when, how and what actions (for example, at plant or sales levels) to control the
damage and move toward climax and resolution.
When a financial crisis disrupts a company’s reputation and business
strategy, corporate crisis management conducts the internal inquiry to get to the
root of the problem, takes whatever action is need to ameliorate or stop it, and deals
directly with board and other external parties who have an immediate connection to
the outcome of the crisis. When an accident, a contamination or another disruptive
condition threatens not only the company but the lives and interests — perhaps the
physical well-being — of others, corporate crisis management attacks the problem,
tries to stop further damage, assigns people away from other tasks to focus on the
situation.
This is a general and simplified summary of leadership accountability for
corporate crisis management.
CCO engagement: crisis communication
Chief communication officers are part of the management team, applying
their special competencies. Through continuous engagement with stakeholders to
assess current attitudes or perceptions in the stakeholder ecosystem, CCOs can be
among the first leaders in the C-suite to detect potential risks and disruptions.
Through their influence on corporate culture, CCOs can boost employee and
leadership commitment to intended outcomes as well as potential readiness to deal
with imposed disruptions. And, through virtuoso performance in information flow,
CCOs are hugely influential in the ability of the company to create accurate, open
and trustworthy engagement with media and stakeholders.
The expert communication team — comprising the chief communication
officer, staffs and public relations consultants — puts into play the crisis
communication plan, with full attention both to in-house communication up to and
including those in the C-suite and those who may be in the field at the site of the
disruption. The CCO moves into a position of high responsibility as counsel to
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management and as the director of dialogue with stakeholders, media and others
with a stake in the situation.
In sum, CCOs are engaged with other company leaders in the overall effort of
corporate crisis management by planning and driving a crisis communication process
that supports or enables high-level assessments, action and best achievable
outcome.
That process begins with pre-crisis preparation and is implemented
throughout the stages (the anatomy) of a typical crisis.
Chapter
Crisis Communication Checklist
Consider this bad- if not worst-case scenario. You are the chief
communicator at headquarters of a fast-food retail company. A YouTube video
appears. It shows—or even seems to show—an employee of your fast-food service
engaged in some unsanitary—imagine the worst—food handling. By the time you
find out about it, thousands of viewers have seen it; twitternet and blogs have made
it viral; TV and radio have picked up on…and company headquarters, your
wheelhouse, is at least astir. Social media’s potential to turn an incident into a
raging crisis requires the urgency and effectiveness of fire-fighting.
As we have tried to establish in this book, the best effort to avoid crisis, as
in avoiding or effectively dealing with fires, is in preparation and, if possible,
prevention.
Looking for fire risks involves practice drills, equipment, skills, inspection
of sites to remove hazards. As chief communication officer in the business sector,
you can readily grasp the analogy and understand the value of looking ahead and, as
a pre-crisis intelligence method, listening and engaging in social conversations
affecting the company. Asking questions, listening, learning: these are solid bases
for pre-crisis detection and true crisis management.
Following the terrorist attack on the World Trade Center in New York in
2001, a leading public relations counselor wrote a Manager’s Journal column in the
Wall Street Journal with solid counsel on crisis management. “Preparedness,” said
Howard Paster, then CEO of Hill and Knowlton public relations, “is a business
imperative.” While much has changed since 9/11 impacting communication (it’s not
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the satellite-TV truck pulling into the corporate parking lot that you first fear; it’s
the YouTube that’s landed in a million emails), Paster’s counsel prevails: “Be
prepared” is the primary conditioner of crisis management. Preparation starts with
self-examination.
CRISIS QUESTIONS: A CCO Checklist
Pre-crisis and in-crisis related questions that you and your communication
team can consider are provided here--questions you can scan to see what’s relevant
and what you and your team need to understand, know and do. Remember that
crisis is chaos only if it gets an irresitible advantage.
(Caveat: These are thought starters to help you lead crisis communication
response and management. While we have tried to put these in some logical order, it is
unlikely that you would use them in this exact order. We do urge you to always ask, in
any engagement, the first question — what’s it all about? — and to listen, learn and
adjust to the reality of each situation, including the reality of the other individual’s
perception of it.)
• What’s it all about?
• What’s the source of what we hear or know?
• Is there any harm to any person?
• When can we, when do we have to, be ready to go public with a statement?
• What’s our level of risk in this situation?
• Who’s manning our listening station?
• What's out there — who knows what, when, where, why?
• What’s on the internet?
• Who do we need to call?
• Where do we meet, what’s our war room?
• Who tells the CEO?
• How does the CEO want to communicate, with the board of directors and
others?
• What are the contexts — other news about us, industry competitor news,
events in which we’re participating, upcoming analyst call, board meeting, product
or news announcements (positive or negative) — that surround and influence what
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we will experience in communications on this situation? What are the contexts that
affect our ability to control our information flow, and to influence the accuracy of
two-way communication?
• Who are the tentative candidates for spokesperson, early on and in the case
the situation escalates?
• What are we doing to become and to assure that we remain the reliable, upto-date source of information and perspective on this situation?
• Who activates our situation (dark) site, and who manages it once it goes
public?
• What are our rules in this case on blogging, tweeting, Facebook; who
follows, who prepares entries for our site?
• Who is responsible for attracting or driving news and other interested
people (especially stakeholders) to our site...involving search engine optimization
and management?
• Who watches the clock and reminds the team (up to and including the CCO)
of deadlines and targets?
• Who keeps the log/record of what happens, what we do, who is identified
as the spokesperson, as we do it?
•
• What expert/legal/technical advice/source/validator do we need?
• So far, are we victim, villain or something else?
• Do we need to explain why or “apologize” for anything?
• How do we show FACE — fast, accurate, consistent and caring engagement
— with all our stakeholders?
• Who on our staff is assigned to think strategically about the perceptions of
us by each stakeholder group? ARE we perceived as accountable, responsible,
engaged, available, transparent, thoughtful, possibly heroic (inferred by others not
us), dedicated to the best achievable outcome for all concerned, not just ourselves?
• What is our company’s BAO in this situation?
• What is our one huge, authentic and unassailable fact or asset?
• What experiences or crises of other companies are relevant?
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• What is our biggest vulnerability, now and ultimately?
• What's the worst-case outcome, in detail, impacting what and whom?
• To what extent is communications the problem, by us or by others?
• How do we make sure that our communication is part of the solution?
• What are our main message points...how do we break this down for
relevance for each stakeholder group, each of our business/operating units?
• What are the possible “climax” scenarios...when the greatest level of tension
is likely to be reduced? (Climax is not necessarily what we can control or predict
precisely, but it is a possible turning point; so, let’s think through some candidate
climaxes, because after that, our communication strength and strategies shift.)
• Who on the communications team is in charge of monitoring and keeping
the rest of the team informed, 24/7 — meaning a posted schedule to rotate this.
Checklist for the Prepared CCO
Before any serious, disruptive condition or crisis occurs, let’s assume that
you, as chief communication officer, and your company have the following
necessities for the prepared CCO:
Crisis Contact Directory
This directory includes names, email addresses, phone numbers (home and
business wherever practicable) possibly fax numbers, and any other contact
enablers you need in a crisis condition, and they are up to date.
• Your communications team
• C-suite leaders, CEO, CFO, chief legal officer, and others
• Heads of business units, IT, HR and everyone else in risk management
• Assistants who support, serve or schedule each of these leaders
• Any other useful contact information specific to your company
Crisis Communication Website(s)
In addition to your corporate sites or sections within the main site, you have
set up a standby (or “dark” — meaning not accessible to anybody but you and your
responsible staff and IT partner) website that you can activate and promote to
stakeholders and the public as soon as practicable when you are in a crisis.
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This standby site contains accurate, supportable basic facts, data, key
information about the company — everything you might need (and you won’t want
to have to scramble to assemble) when the crisis occurs. Someone on your
communications team is assigned to keep it current, adding or revising information
for accuracy and timeliness, to test it DAILY, and be prepared to manage or go public
with it, at your direction.
While not (yet) open to the internet public, the standby site must be put
together and maintained as though it is already public. This assures you will not
have to vet the information later, when you’re under pressure. And, it assures that,
although you may think of it as not available, nothing is foolproof; all things are
knowable and there could be a slip that makes the site open to anyone.
Companies are constantly preparing for crisis. Paul Flaningan of Southwest
Airlines described his company’s pre-crisis work: “We’re busier when there’s
nothing going on because we are constantly preparing and altering our contingency
plans to address things that could happen. Communicators meet up every month to
update those plans. Pre-approved statements for various scenarios each have an
executive spokesperson attached. We’re getting all the buy-in right at the
beginning.”98
Crisis Communication Generic Templates
You have a set of standby, hypothetical, generic and in some ways specific,
drafts of releases or statements that will give you a head start on knocking out
what’s needed when crisis crunches your time and focus.
Templates give you an instant supply of newsworthy statements, excerpts
from corporate position statements or quotes already made that can be inserted
adapted or referenced as relevant.
Basis of the templates are previous news releases, fact sheets, financial,
social responsibility, culture, values statements; what, who, when, where facts on
the company, people, locations, operations, business partners, and other current
information, regularly updated.
Templates of news releases are drafted and kept in your (and other team
members’) documents files, ready to cut, paste and shape for use. You and others on
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the team know how to get these templates quickly. Just reviewing them is a thought
starter for you.
Crisis Communication Center
You have designated an office, conference room, assembly room, preferably
one accessible quickly by your crisis team. This room has, or can quickly be
equipped with, private and speaker phones (you have assured that cellphones work
in it), a lot of electrical outlets, PC, extra cords for charging communication
equipment (cellphones, laptops, iPads, etc.), video equipment, TV set, a large and
accurate clock, calendar, whiteboards, flipcharts...and water, coffee, fruit juice, soft
drink, and energy bar accessibility. A staff member has put on the board or flipchart
your “rules of the road”, the FACE (Fast, Accurate, Caring Engagement) reminder,
possibly the Arthur W. Page Society principles of corporate communication (see
awpagesociety.com), and your company’s culture, leadership or values statement.
You have arranged after-hours access, parking, and building entrance. And you have
let everyone know you are reachable 24/7 by phone to the war room or to your cell.
Attitude
The CCO and communications team are the example of confidence and
communication leadership suited to disrupted situations such as this. Does
everyone on the communications team understand that we must be active, able to
listen, assist and carry out our role with a substantial degree of displayed confidence
and calm?
Speakers such as Nicholas Ashooh of Alcoa and Gary Sheffer of General
Electric have told our class at Georgetown University that the chief communicator’s
imperative asset during a period of disruption, and possible impending dismay,
must be to listen, to adjust to ongoing concern, while continuing to focus on the
realities of dealing with the situation.
Describing reality and maintaining optimism — that is, a realistic route to a
best achievable outcome — remain the attitude of a winner.
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You, the CCO at the top of the organization, may need to be the most
confident, as well as the highly competent, member of the corporate management
process.
As Arthur W. Page advised in his communication principles: Remain calm,
patient and good-humored.99
Counseling the CEO away from ‘causing’ a crisis?
Can consultants to leaders, including chief communication officers engaging
with CEOs, keep others at the top of the enterprise from decisions that have the
potential to create a crisis?
CCOs with earned respect for protecting the chief’s plans, programs and
reputation can and should provide counsel, based on solid information and welldeveloped instincts, to avoid or modify decisions that are apt to draw serious,
perhaps crisis-raising, backfire from key stakeholders.
Talking truth to power and proving it with evidence is part of the CCO’s job.
Providing proof points — stakeholder perceptions, prevailing contexts
including moods and emotions and especially timing — enables reception and
influence.
You don’t hear much about crises averted. Nor do you hear much about
respected counselors whose insights are rebutted by other insiders, resulting in
decisions and leadership communication that fail to drive followership and
advocacy.
In 2011, President Barack Obama was preparing for a public announcement
on a health-care law mandate to provide contraceptives to those covered by the
federal program. It was a touchy subject at a difficult time. The President conferred
with his chief counselors—Chief of Staff Bill Daley and Vice President Joe Biden.
They told the President that the federal agency’s proposed approval on
contraceptives could stir serious political trouble that would handicap White House
efforts to move health-care forward. Approving the mandate, his counselors said,
would alienate key supporters of the overall health-care movement; seen, for
example, by even moderate Catholic voters, as an intrusion on religious
institutions.
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The President thought about it, chose to ignore the counsel. The predicted
blow-back of public, political and religious opinion was overwhelming. The
communicated decision was judged not to be sustainable. The President once again
conferred with his White House counselors (which, coincidentally no longer
included Bill Daley, who had departed for other interests) and walked back the
previous decision. Crisis conditions had erupted. The perceived values of strong
stakeholders had to be recognized. Crisis damage control was necessary.
Lesson for CCOs? Top-level specialists who consistently plug into
stakeholder perceptions, who are able to define contexts, content and tones that
make or break communicated positions can and need to provide calculated
stakeholder values in pre-critical time frames. The CCO may or may not prevail, but
if it does, crisis damage control becomes the condition you never hear about: crisis
avoidance.
Chapter
Case Study: CEO as Crisis Spokesperson
ABC Company is surprised. An operational disruption has reached crisis
proportion. In the C-suite, routine turns into red alert. Questions abound: What’s it
all about? Who’s working on it? What’s the status now?
And the chief communication officer thinks: What do we say and when can
we say it? She goes to work, connecting the dots, collecting information,
collaborating with C-level peers, enabling her team to do their professional best.
It is a crisis: a disruption that threatens stakeholder relations, the company’s
reputation and its performance targets. Now, the CCO and her team know, the chief
executive officer will need to be a spokesperson.
What do stakeholders expect from the chief executive when the company is
at the center of a crisis?
BP Oil Spill 2010: A CEO’s View
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In this chapter, we present a modified case-study. We zero in on a company
in an extreme, life-taking, environment-spoiling crisis: British Petroleum and the
disaster in the 2010 Gulf of Mexico. We have the benefit of an analysis of crisis
communication from the top of an organization.
A year after the BP crisis, the CEO told students at a management seminar
that he and his leadership team learned the requirements of crisis response: a
serious and realistic recovery plan, optimism that the plan can be achieved, and a
thick skin to bear relentless criticism. Following is this report.
Robert Dudley, an American who grew up in the Gulf area, took the reins to
lead the international petroleum giant, after the previous CEO, a Briton, failed to
score as on-the-ground leader and spokesperson during the crisis. During one
televised interview, the executive, who appeared harried and distracted, replied to a
question about the time the cleanup was taking, with the comment that he knew it
was taking a lot of time, and (he said in an apparent attempt to identify personally
with those afflicted by the crisis) that he too would “like his life back”.
Observers and media analysts speculated that this executive, while diligently
working, though out of his customary element, was ready to return to England and
his regular management responsibilities.
The company’s board gave him that option and put another executive officer,
Dudley, in charge.
One: Collaborative action plan
At the Thunderbird School of Global Management seminar in Arizona in
November 2011 to discuss the Gulf case, Dudley said his leadership team learned a
lot about the qualities needed to go through such a challenging event and ongoing
circumstance.
Move number one is a focusing action plan, one that’s understood by
stakeholders and achievable. “You need absolute determination and focus,” Dudley
said, “the ability to make a plan and stick to it. The way we organized the response
across four states was an example of that.”
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First moves by BP under Dudley’s direction including conversations and an
evaluation of stakes and expectations in Louisiana, Alabama, Georgia and
Mississippi.
BP’s corporate communicators organized meetings and press events
involving political, civic and environmental leaders.
While the crisis communication was open, and Dudley proved to be an
accomplished spokesperson, it was certainly not all sweetness and light.
Dudley acknowledged, in the Thunderbird seminar, that BP understandably
came in for considerable heat. “While you need to be sensitive to the feelings that
such a crisis engenders, and these feelings will be strong, (so) you need to have a
thick skin,” said the BP chief executive. “You have to ignore the noise and you can’t
dwell on the constant public criticism that occurs in such a crisis.”
Two: Reality plus optimism
Even under fire, Dudley said, “You need a quiet sense of optimism, especially
as a leader. That comes from having a clear direction and knowing that you are
doing the right thing. As for to relationships, on a personal level, you need to accept
and appreciate the fact that...crisis such as this becomes personal and affects
everyone. And in dealing with people in the organization, you have to recognize that
everyone is under pressure, especially those managing risk at the frontline.”
Dudley made the point that the person at the top of the company can set the
tone for the company and its intentions, but he can’t do it alone. He said, “It is vital
to surround yourself with a committed, positive team — people with diverse
experience and viewpoints who aren’t afraid to speak up.”
The right kind of communication is vital, this executive leader emphasized,
whether it is planned or unplanned (perhaps remembering the faux pax
communication of his on-the-scene predecessor). The leader has to be careful,
caring and especially truthful.
The leader in a crisis has to face facts. Dudley said, “Denial is the worst
enemy of effective crisis management.”
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A leader has to constantly reach out to others, like the state leaders on the
frontline of the disaster’s impact, as well as federal officials who arrive at the scene
to evaluate the scope of government help.
In one very high level of crisis spokesmanship, BP’s Dudley was in a joint
news conference on the Gulf Coast with President Barack Obama, who came in to
show his concern and attention to the needs created by the explosion and oil spill.
Three: Values such as respect
Time pressure is always an issue, Dudley told the students. “You have to find
ways to make decisions in the available time — which never feels like enough. You
have to prioritize constantly and identify the most important decisions.
“Timeless qualities count in these moments: treating people with respect —
even under stress, working as a team, aiming to do the job as well as it can be done,
whatever it might be.”
Values such as treating people with respect is a spokesperson necessity,
Dudley said, because when you’re in a crisis, your values must be instinctive.
He said, “You have to communicate constantly with employees, shareholders
and the public. In the absence of information, imagination runs wild.”
Spokesperson: context, content, tone
BP’s Dudley has, by all evidence in a very sensitive, high-risk situation,
grasped and is willing to talk with others about the essentials of spokesmanship.
Corporate communication leaders, however, know well that the CEO is not
always the best spokesperson for the company, especially in an ongoing crisis
response period. The fact that the CEO is the ultimate authority means that he or she
cannot be easily corrected or nuanced if facts are misstated, promises are
inappropriate or there is the case of the harried or impatient executive whose
comment is a stakeholder turn-off.
But when the chief executive is skilled, caring and on his or her game —
understanding context, believing in the message content, and mastering the tone of
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caring and confidence — the chief communication officer has a powerful channel
through which to help the company re-connect with shaken stakeholders.
Guide: Dealing With an Angry Public
(Adapted from MIT-Harvard Public Disputes Program)
Some crises produce angry reactions, or disputes, that alienate affected
stakeholders as well as external critics, advocacy organizations, political groups and
others.
A public disputes resolution program conducted by MIT and Harvard
Business School is aimed at corporate and organizational leaders. Here are edited
highlights of this well-regarded, effective leadership course, adapted by your
authors to be considered in crisis communication:
1. Acknowledge the concerns of the other side.
2. Encourage joint fact finding.
3. (Consider) contingent commitments to minimize impacts (such as
compensation).
4. Accept responsibility, admit mistakes, share power.
5. Act in a trustworthy fashion at all times.
6. Focus on building (or sustaining) long-term relationships.
Chapter 18
CCO 7-Point Crisis Discipline Plan
Crisis management is “a rare corporate discipline,” observed a notable crisis
expert.100 Are corporate communicators disciplined? When critical disruption
occurs, when “damage control” is needed, who must deal with a surge of significance
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regarding information flow, stakeholder perception and cultural conditions?
Following is our seven-point CCO crisis-ready discipline plan.
1. Prepare a ‘dark’ website.
A company’s website is arguably the most controllable factor, the most relied
upon and most reliable source, in the panoply of corporate communication. A dark
site — that is to say, a private, stand-by facility that can be opened at your option for
general access (available especially in the ‘war room’ where you can frequently test
its technical and access qualities) — is your ready repository of information,
opinion, photographs, data, fact sheets and the like that can be useful in the event of
a crisis.
It is your ace in the hole that you hope you never have to play.
On this site, with continuous deliberate attention, you put accurate, wellsupported information that you’ll want stakeholders to see if negative conditions
surround the company. Look in on it privately, frequently. Put someone in charge of
keeping this utility-in-waiting up to date.
Keep asking, “what if?,” and post your trust-sustaining positives.
2. Create stakeholder list.
The purpose of corporate communication is to create and sustain
stakeholders in the company’s plans and delivered values. Especially during a crisis,
the aim, care and trustworthy feeding of information to stakeholders are essential.
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Disruption in a company’s plans and value-driving routine — a definition of
corporate crisis — can well touch off a relationship crisis, threatening the bonds
that connect company and stakeholders.
It would be unsettling to others in the C-suite for the communication team to
be scrambling for names and numbers when contexts, time and information content
are shifting.
Pre-crisis preparation requires maintenance of a current, complete,
categorized list of stakeholders and how to reach them: personal, email, telephone
and other connection data.
3. Identify key media/bloggers.
Your active, standby list of print, broadcast and online journalists — media,
bloggers, tweeters — is another asset in your mastery of crisis communication.
Find, make a list and follow those who follow your company.
If and when any of those followers, friends or critics, have good things to say
about your company and leaders, capture it and keep it. Put it in a safe place (maybe
a corner of your dark site, if it’s easy to delete when and if it is not ready for
sunlight) for possible use later.
4. Assure ‘situation room’ tools.
Your crisis communications center is the situation room where your
communication team can meet, work, contact, interview, respond to or initiate
interviews (with appropriate spokespersons — see point 5 which follows), and stay
engaged purposefully during a crisis.
This “situation room” is most often a conference room, in use normally as a
meeting room, that is outfitted with first-rate communication utilities — phones
(speaker/personal), whiteboards, TV, computers and/or ample (multiple, abundant,
high-load) electrical and online connections.
An ongoing responsibility for someone on the communication team is the
availability, testing and functioning of the technical tools that corporate
communicators and the C-suite will rely on.
Arrange outfitting and crisis-priority use of the room with the office
administration and technical support people. And, this is important; it is a room that
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is taken off the available list for any other use during the high-stress period of focus on
the crisis.101
5. Train spokespersons.
A communication team member will be the day-to-day information source
for the news media. In addition, almost always, you will need someone at a
responsible management level to deliver authoritative messages.
Depending on the nature of the crisis, this may be someone at corporate
headquarters or at a production, research, sales or other facility.
You will need to identify the candidates during non-crisis, routine times, and
provide spokesperson training.
Talking point development, presentation skills, styles of communicating
consistent with stakeholder/public interests will be part of the training.
Corporate communicators customarily engage outside experts to provide the
training; it’s a good idea for the CCO and her team to go through the exercise first,
before exposing your people to this important exercise.
6. Assign team roles.
Keep crisis consciousness alive within your team. Assign someone to each of
the accountabilities in this guide, and put this on your agenda. Review the plan
regularly, certainly quarterly, with touch-ups whenever you feel it’s useful — and
especially when there are changes in your team.
7. Integrate with crisis management plans.
The crisis communication plan, your responsibility, is the enabler of
information flow, stakeholder engagement and supportive culture. This must tie
into the overall plan of management to deal with the physical, financial, legal and
other related accountabilities.
Your focus — or that of your team — must be on assuring that
communication planning is directly related to all aspects of the corporate crisis
management plans.
This will require interaction by you, as CCO, and by those who work with the
business units, investor relations and others responsible for mission performance,
with an eye on any adjustments needed in the communication plan — for example,
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stakeholder lists — as an adjunct of change and transformative management
leadership.
Chapter 19
SEC ‘Risk Factors’ and Pre-Crisis Intelligence
As chief communication officer in a publicly traded company, your
wheelhouse of influence includes information flow and stakeholder perception.
Your continuous emphasis is on describing current reality and providing evidence of
progress toward best achievable outcomes.
Mindful that shareowner value is your management’s and board’s constant
focus, you provide current and compelling information on the company’s ongoing
mission to deliver that value.
Meanwhile, your company’s investors — and competitors and anyone else
interested — have online access to an annual report detailing all the ways in which
your company’s mission could fail, putting shareowner value at risk.
It’s called Annual Report 10-K, and it is provided by your company to comply
with a federal law.
Required by the Securities and Exchange Commission (SEC), Item 1.A of this
report is labeled Risk Factors. Over several pages, it describes every imaginable
event or situation that could slow down, stop or possibly reverse your company’s
best achievable outcomes and the ability to deliver a return on the investor’s dollar.
So, while you’re doing your day-to-day job to maintain positive interest and
protect stakeholder value, an annual report sits there, available to all online,
accentuating the negatives.
In this chapter, we wrestle with this seeming anomaly. We explain the
purpose of the 10-K, discuss what you as CCO can learn from the listed risk factors,
provide 10-K excerpts and suggest a path toward using this information in your precrisis intelligence gathering process.102
What’s the point of the 10-K report for public companies?
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After the American stock market crash of 1929, Wall Street reform became a
federal function. Under a law passed by Congress in 1934, the federal government’s
objective, by guidance and force of the SEC, was to regulate the commerce in stocks,
bonds, and other securities. Controls were placed on the issuing and trading of
securities. Sunshine was let into the previous condition of unreported concentration
of controlling stock interests in a very few hands.
High among the SEC’s responsibilities was, and is today, the enforcement of
corporate transparency to protect people from abuse of power, fraud and secrecy.103
In the course of defining transparency, SEC requires regulated companies to
provide shareowners with an annual report (known as Form 10-K) containing a
comprehensive overview of the company's business and financial condition,
including audited financial statements as well as the specific “risk factors” that
accompany an individual’s or group’s investment in the company.
Issued by the company a few months following the close of the company’s
fiscal (not necessarily calendar) year,104 its Form 10-K report is publicly available in
the SEC's EDGAR database.105 This “annual report” is distinct from the annual report
which a company publishes, with photographs, leaders’ messages and other
material.
The more popularized version may be combined with the Form 10-K to fulfill
what the SEC calls the “annual report to shareholders” which a company must send
to its shareholders when it holds an annual meeting to elect directors.106
What can CCOs learn from 10-K’s — yours and other companies’?
We believe chief communicators should be part of — or at least engaged
with — the company’s risk management team, with involvement in the 10-K
process. This is, after all, an influential aspect of leadership communication.
There are important lessons for the CCO in the company’s preparation of the
10-K.
One lesson is evaluation: how do C-suite officers identify and rank the
potential of risks?
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Another is communication: how is the information written so that it is easy to
understand and it substantiates — and certainly does not undermine — the reader’s
trust in the company’s leadership?
As you dig into risk analysis and reporting, you gain perspective. At first, you
may find that the downside detail in a company’s typical 10-K is so relentless that
you wonder how an investor can rationalize investment and belief in the company’s
success.
Is the risk recitation in the SEC report the same as the drug warnings — dire
risks up to and including death that follow the TV ads for a drug that is meant to
heal and relieve? How can the corporate communicator remain positive and
proactive in stakeholder communication if at least some of the stakeholders are
reading, every year, this SEC warning list of countless ways that the benefit of stock
ownership can be reduced or blown away?
Two learning points here:
One is that the disclosure and in fact discussion of risk shows management
competence. The prospective or active investor can see that the company is fully
aware that no free enterprise is a free ride exempt from risk. Leadership is, in fact,
about taking risk and navigating through them — ideally, better than the
competition does.
As management experts such as Peter Drucker and James MacGregor Burns
have proven, transformative leadership means change, and change means risk. The
10-K filing and the Risk Factors section of that filing are a display of the company’s
management strength in identifying and anticipating risks and dealing with them to
avoid as much possible the damages of disruption and crisis.
The second learning point, especially for communicators, is the realization
that the required SEC process of laying out the specifics of risk is not only a rational,
reasonable management practice. It is also an orderly exercise of transparency, the
truth that can engender trust among followers and, through sustained leadership
communication, result in higher belief in and advocacy of the company, its products
or services.
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We will conclude this chapter with a suggestion for turning the public
identification of risks into an asset in the CCO’s interaction with stakeholders and
their specific fears.
First, however, let us examine the communication contexts, content and tone
or style that are common in the annual report filed with the SEC.
Excerpts from company Form 10-K filings
Following is a random grab into the 10-K bag for a small sample of the
millions of words fed to the SEC by thousands of investor-owned companies in past
years.107
Apple. Among the risk factors in Apple’s 10-K108 in 201l, the company
delivered this warning about depending on the people running the company:
Much of the Company’s future success depends on the continued availability and
service of key personnel, including its CEO, its executive team and highly skilled
employees. Experienced personnel in the technology industry are in high demand and
competition for their talents is intense, especially in the Silicon Valley, where most of the
Company’s key personnel are located.
Procter & Gamble’s 10-K109 for the year ended in June 2012 identified risks
inherent in global manufacturing which could negatively impact P&G’s business
results:
In the manufacturing and general overhead areas, we need to maintain key
manufacturing and supply arrangements, including any key sole supplier and sole
manufacturing plant arrangements, to achieve our targets on cost. While we have business
continuity and contingency plans for key manufacturing sites and the supply of raw
materials, significant disruption of manufacturing, such as labor disputes, loss or
impairment of key manufacturing sites, natural disasters, acts of war or terrorism, and
other external factors over which we have no control, could interrupt product supply and,
if not remedied, have an adverse impact on our business.
Ford Motor’s FY2011 10-K110 contemplated the risk of lower-thananticipated market acceptance of new or existing products:
Although we conduct extensive market research before launching new or refreshed
vehicles, many factors both within and outside of our control affect the success of new or
existing products in the marketplace. Offering highly desirable vehicles that customers
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want and value can mitigate the risks of increasing price competition and declining
demand, but vehicles that are perceived to be less desirable (whether in terms of price,
quality, styling, safety, overall value, fuel efficiency, or other attributes) can exacerbate
these risks. For example, if a new model were to experience quality issues at the time of
launch, the vehicle's perceived quality could be affected even after the issues had been
corrected, resulting in lower sales volumes, market share, and profitability.
Wal-Mart Stores, Inc. In its fiscal year 2006 report to the SEC, Wal-Mart was
warning investors through its 10-K111 that “we may face impediments to our
expansion in the United States, including conversions of Discount Stores into
Supercenters, which could adversely affect our financial performance.” Details on
this risk followed:
The growth in the net sales and operating net income of our Wal-Mart Stores segment
and our SAM’S CLUB segment depends to a substantial degree on our expansion programs.
Our expansion strategy depends upon our ability to execute our retail concepts
successfully in new markets within the United States and upon our ability to increase the
number of stores in markets in which we currently have operations. Our ability to open
additional Supercenters, Discount Stores, Neighborhood Markets and SAM’S CLUBs and to
convert existing Discount Stores into Supercenters depends in large measure upon our
ability to locate, hire and retain qualified personnel and to acquire new store sites on
acceptable terms. Local land use and other regulations restricting the construction of
buildings of the type in which we operate our various formats, as well as local community
action opposed to the location of specific stores at specific sites, may affect our ability to
open new stores and clubs, to convert Discount Stores into Supercenters or to relocate or
expand existing units. Increased real estate, construction and development costs could
limit our growth opportunities and our ability to convert our Discount Stores into
Supercenters. If we are unable to open new Supercenters, Discount Stores, Neighborhood
Markets or SAM’S CLUBs or continue to convert Discount Stores into Supercenters, our
financial performance could be adversely affected. In addition, if consumers in the markets
into which we expand are not receptive to our retail concepts, our financial performance
could be adversely affected.
Using the risk disclosure as a communication asset
Stakeholders — the company’s investors, employees, customers and others
— as well as competitors, and prospective stakeholders — can glean information of
value from the company’s professionally designed, often colorful annual report,
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containing the chairman’s letter, descriptions and photographs of operations and
leaders, products, services.
Corporate communicators participate, and are commonly responsible for,
this report’s content and production. It is a leadership communication staple,
visionary and controllable.
This chapter has focused on the annual report required (along with other
reports, e.g., the quarterly 10-Q112) by the SEC. How can this CCOs use the 10-K Risk
Factors report as a communication asset tool? Following is a suggested path to an
aid in executing the CCO’s role in stakeholder perception management.
Step one: Create a Risk Factors Checklist.
Purpose is provide the CCO and team members with a short-form reminder
of the vulnerabilities that management has reported.
Prepare as brief as practicable a numbered risk factors list based on the
company’s “risk factors” paragraphs. This could be signals or key words (e.g.,
environmental, labor relations, defects, supply shortages, global) taken from each of
the Item 1.A Risk Factors paragraphs. More simply, the checklist could be the
summary sentence that many companies use as the heading for each of the riskfactor descriptions. The checklist can be a reference in forming corporate
communication strategies, and it will be particularly useful in stakeholder
perception intelligence: how and where to aim your listening channels, and how to
better review and evaluate feedback intelligence.
Step two: Identify Vulnerable Stakeholders.
Purpose is to help communication focus on stakeholders and its
accountability in stakeholder perception management.
Think through the categories of stakeholders most vulnerable in each of the
risk exposure categories of risk exposure identified in the 10-K. Add these to each of
the numbered items on your Crisis Factors Checklist. If practicable, rank the
stakeholder groups by order of direct impact by the identified risk.
Step three: Specify Vulnerability Values.
Purpose is to align the risks identified by the company with the fear values of
identified vulnerable stakeholders.
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The 10-K risks viewed by the company (for example, product quality failure)
may be predominantly risks to the company’s investor values (for example, loss of
sales and revenue, resulting in lower financial results). The same risk areas may be
perceived differently by non-investor stakeholders (for example, product owners or
users, who are adversely impacted at a personal health, safety, job or choice level).
Using risk research findings on how individuals perceive threat at a personal level,
CCOs will benefit by effort toward matching up risk and all stakeholder
vulnerabilities.
We underscore this point: adding to your checklist of “risk factors” your best
estimation of stakeholder (including non-investor) “fear factors” should be an asset
in strategies for informed pre-crisis perception, as well as the content and tone of
proactive, ongoing leadership communication.
Bringing possible “risk factors” into the reality of “fear factors”
Corporate involvement in risk and crisis communication starts with
understanding stakeholder perception of risks and their specific fears.
In a Georgetown University lecture on crisis communication, Honeywell Vice
President Thomas Buckmaster urged corporate communicators to bring the
company response to crises down to the level of personal perceived threats. “Crises
are human-oriented,” Buckmaster said. “The corporate or communication
specialist’s ability to identify the specific core values that are threatened in a crisis
can improve the nature of the response and the communication needed.”
Studies by the Richard Wirthlin research firm in the 1980s113 identified 10
American core-value areas: health, money, relationship to God, family relations,
retirement, leisure opportunity, job satisfaction, college education for children,
home ownership and the ability to travel.
Citing the “hazard and outrage” research of Dr. Peter M. Sandman, Rutgers
University, Buckmaster said the level of hazard perceived (and the response or level
of “outrage” felt) by people who may be affected by a crisis will determine by their
judgment of the risk — and therefore affect the impact of crisis communication.
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Sandman suggests evaluating risk on criteria such as: origin of the hazard
(natural or man-made, the individual’s volition choice (voluntary or involuntary),
immediacy (now or later), familiarity (it’s known or it’s new; for example, the storm
that hits a certain coastal area periodically), assumed exposure to the hazard
(continuous? occasional?) and the necessity perceived to take action (necessary? a
luxury?)
The 10-K risk-warning responsibility for American companies, dating back to
the 1930s, continues. For corporate communicators like Buckmaster of Honeywell,
it becomes one of the contexts that must be accommodated within the scopes of
instant 24/7 accessibility and the rising intensity of risk and crisis perception
among corporate stakeholders.
SEC rules on social media/investor communication
CCOs need to be aware of — and if needed help the CFO and investor
relations people follow — social media and communication policies.
Companies can use social media outlets such as Facebook and Twitter to
disclose key information (e.g., the company’s current quarterly earnings) in
compliance with the SEC's Regulation Fair Disclosure (Reg FD). But the company
needs to communicate its intentions to investors in advance.
Reg FD applies to social media the same way that it applies to corporate
websites, where companies can disclose possibly market-moving information.
Investors must be alerted as to which social media channel the company will
regularly use to send out this kind of information.
The general guideline is that this kind of communication can be on a
company open access platform only if they tell investors to look for it there. If a
company does not alert investors to its use of the social media channels, its
communication could constitute “selected disclosure” and thereby violate Reg FD
rules requiring companies to distribute material.
Information broadly and not exclusively.
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The SEC did not specify which social media channels would be acceptable
platforms for communication.
SEC interest and awareness in this area indicate the need for collaboration
among corporate communication and investor relations teams. An internet private
attorney, Jeremy Mishkin of Montgomery McCracken, gave some advice to CFOs in
2013 that was a heads-up for CCOs. “If I'm a CFO,” said Mishkin, “I need to know not
just what's on my company’s Facebook page or Twitter feeds, but also what my
executives’ pages look like, so I don’t have a situation in which a person associated
with the company issues a statement that the SEC might view as a material
announcement.”114
APPENDIX
Page Principles for Corporate Communicators
Arthur W. Page (AT&T chief of communication, 1927–1946) practiced seven
principles of public relations management as a means of implementing the idea of
effective engagement with stakeholders and the media:
Tell the truth.
Let the public know what’s happening and provide an accurate picture of the
company’s character, ideals and practices.
Prove it with action.
Public perception of an organization is determined 90 percent by what it
does and 10 percent by what it says.
Listen to the customer.
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To serve the company well, understand what the public wants and needs.
Keep top decision makers and other employees informed about public reaction to
company products, policies and practices.
Manage for tomorrow.
Anticipate public reaction and eliminate practices that create difficulties.
Generate goodwill.
Conduct public relations as if the whole company depends on it.
Corporate relations is a management function. No corporate strategy should
be implemented without considering its impact on the public. The public relations
professional is a policymaker capable of handling a wide range of corporate
communications activities.
Realize a company’s true character is expressed by its people.
The strongest opinions — good or bad — about a company are shaped by the
words and deeds of its employees. As a result, every employee — active or retired
— is involved with public relations. It is the responsibility of corporate
communications to support each employee’s capability and desire to be an honest,
knowledgeable ambassador to customers, friends, shareowners and public officials.
Remain calm, patient and good-humored.
Lay the groundwork for public relations miracles with consistent and
reasoned attention to information and contacts. This may be difficult with today’s
contentious 24-hour news cycles and endless number of watchdog organizations.
But when a crisis arises, remember, cool heads communicate best.
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Appendix
IBMLeadership Communication Model
In 2011, IBM turned 100. Marking the occasion, the company produced a
centennial book115 and placed four-page inserts in major newspapers.
Jon Iwata, IBM’s senior vice president, marketing and communications,
provided your authors (in our roles in the Georgetown University faculty) the
reasoning and work involved in this leadership communication achievement.
Iwata said, “We wanted to do something beyond a familiar anniversary
celebratory ad. We didn’t want simply to say, ‘We’re here, and we’re proud!’ or even
‘Look at IBM’s storied history of innovation!!’ Rather, we wanted to distill key
learnings from our 100 years.”
The newspaper insert wasn’t only “advertising,” Iwata pointed out. “Yes, we
paid for the space,” he said, but instead of selling “we are defining IBM...as much for
internal as for external stakeholders.”
Iwata made an interesting point: how a message posted publicly — which
honestly, directly admits mistakes as well as citing accomplishments — can impact
impressions and perhaps attitudes inside the company.
“It’s one thing to have this kind of honest dialogue internally,” said the IBM
CCO. “It’s another thing to initiate this kind of dialogue outside the firewall. When
you do that, you’re implicitly committing to remain in the public sphere. You’re
putting all your chips down on particular squares — of policy, of values, of brand
definition. You’re committing not just to continue looking like IBM...and sounding
like IBM...even thinking like IBM...but to being IBM henceforth.”
Producing the piece took cooperation and, to quote Iwata, “considerable
courage by our senior executive team — from legal, to HR, to finance, to our CEO. As
challenging as the thinking, research, writing and design were for this insert, the
most important work was to engage the company’s management in its purpose.”
Iwata’s Lessons
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Iwata, an advocate of the CCO’s emerging role as a “collaboration officer” in
the C-suite, said the company’s centennial communication effort required dialogue
and engagement with many leaders in the company to assure the effort confirmed
and advance corporate goals, strategy and values.
He drew these lessons relevant to leadership communication:
• The key issue in any communication isn’t the how, it’s the what. You
can’t turn a piece of promotion into an authentic expression through technique, no
matter how artful. And craft is never a substitute for credible facts, data, evidence.
• The most effective way to reach internal stakeholders can sometimes
be in external venues, and vice-versa. We hear ourselves differently when we
speak in public — and the public experiences us differently when it hears us talking
to others.
• Defining corporate character is very, very hard. It’s not enough to be
eloquent. You have to be right. Abraham Lincoln once said, “Character is like a tree
and reputation like a shadow. The shadow is what we think of it; the tree is the real
thing.” This work is about the tree.
• If you’re going to market the entire organization, the entire
organization has to believe what you are saying. Corporate communications
worked collaboratively with other leaders to assure the presentations were
accurate, in practice and supported.
We consider the strategic intent of IBM’s special effort — to position the
company as an authentic enterprise open and valuable to observers and followers
— and the execution of an extraordinary outcome a model for study, not only for
observing special events but for orienting a continuous process of leadership
communication. You can view the insert and interact with highlights of the book
through the company’s website.
References/Leadership in Communication Books
Compiled by Faculty 2012
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Arthur W. Page Center, Pennsylvania State University.
Furthering the Legacies of Arthur W. Page and Robert Wood Johnson.
University Park, PA: Pennsylvania State University.
Arthur W. Page Society.
Building Trust, Leading CEOs Speak Out, How They Create It, Strengthen It, and
Sustain It.
New York: Arthur W. Page Society, 2004
Badaracco, Jr., Joseph L.
Leading Quietly — An Unorthodox Guide to Doing the Right Thing.
Boston: Harvard Business School Press, 2002
Barnett, D.
Leadership Communication.
New York: McGraw Hill, 2010
Bennis, Warren.
An Invented Life — Reflections on Leadership and Change.
Reading: Addison-Wesley Publishing Company, 1993
Budd Jr., John F. with The Chief Executives’ Council.
CEO Credibility — The Management of Reputation.
Lakeville: Turtle Publishing Company, 1993
Center for Army Leadership.
The U.S. Army Leadership Field Manual — Be, Know, Do.
New York: McGraw-Hill, 2004
Collins, J.
Good to Great.
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New York: HarperCollins, 2001
Cox, Danny with Hoover, John.
Leadership When the Heat’s On.
New York: McGraw-Hill, Inc, 1992
Denning, S.
The Leader’s Guide to Storytelling.
San Francisco: Jossey-Bass, 2005
DePree, M.
Leadership is an Art.
New York: Dell Publishing Group, 1989
Drucker, Peter.
Management Challenges for the 21st Century.
New York: Harper Business, 1999
Drucker, Peter.
Managing the Non-Profit Organization — Principles and Practices.
New York: HarperCollins Publishers, 1990
Charles M. Farkas and Suzy Wetlaufer.
The Ways Chief Executive Officers Lead.
Boston: Harvard Business Review, 1996
George, Bill.
Authentic Leadership — Rediscovering the Secrets to Creating Lasting Value.
San Francisco: Jossey-Bass, 2003
George, Bill.
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7 Lessons for Leading in Crisis.
San Francisco: Jossey-Bass, 2009
George, Bill with Sims, Peter.
True North — Discover your Authentic Leadership.
San Francisco: Jossey-Bass, 2007
Greene, R.
The 48 Laws of Power.
New York: Penguin Books, 2000
Griese, Noel.
Arthur W. Page — Publisher, Public Relations Pioneer, Patriot.
Tucker: Anvil Publishers, Inc., 2001
Grint, K.
The Arts of Leadership.
New York: Oxford University Press, 2001
Hackman, M. & Johnson, C.
Leadership: A Communication Perspective.
Long Grove, Illinois: Waveland Press, Inc.
Halpern, Belle Linda and Lubar, Kathy.
Leadership Presence — Dramatic Techniques to Reach Out, Motivate, and
Inspire.
New York: Gotham Books, 2004
Harrison, E.
Corporate Greening 2.0: Create and Communicate Your Company’s
Sustainability Leadership Strategies.
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Exeter, NH, Publishing Works, 2008
Iacocca, Lee with Novak, William.
Iacocca — An Autobiography.
Toronto: Bantam Books, 1984
Iacocca, Lee with Whitney, Catherine.
Where Have All the Leaders Gone?
New York:Scribner, 2007
Israel, S.
Twitterville: How Businesses Can Thrive in the New Global Neighborhoods.
New York: Penguin Group Publishing: 2009
Kawasaki, G.
Enchantment: The Art of Changing Hearts, Minds, and Actions.
New York: Penguin Publishing Group, 2011
Kellermam, Barbara.
Followership — How Followers are Creating Change and Changing Leaders.
Boston: Harvard Business Press, 2008
Kanter, Rosabeth Moss.
Supercorp — How Vanguard Companies Create Innovation, Profits, Growth,
and Social Good.
New York: Crown Publishing Group, 2009
Kurtzman, Joel.
Thought Leaders — Insights on the Future of Business.
San Francisco: Jossey-Bass Publishers, 1998
Page 132 of 154
Marriott, Jr., J.W. with Brown, K.A.
The Spirit to Serve: Marriott's Way.
New York: HarperCollins, 1997
Martinuzzi, B.
The Leader as a Mensch: Become the Kind of Person Others Want to Follow.
New York: Wolfeboro Press, 2009
Pink, D.
Drive: The Surprising Truth about What Motivates Us.
New York: Penguin Group Publishing, 2009
Powell, Colin, with Koltz, Tony.
It Worked for Me: In Life and Leadership.
New York: HarperCollins, 2012
Schultz, H. Onward,
How Starbucks Fought for Its Life without Losing Its Soul.
New York: Rodale, 2011
Recent Blogs on Leadership Communication
by E. Bruce Harrison
bruceharrison@ceoexpress.com
You may also be interested in more blogs related to PR and communication
by Professor Harrison, going back several years. These are available at
envirocomm.com
For other commentaries on this and related communication and PR subjects,
go to awpagesociety.com/blog/
Page 133 of 154
Members of the Arthur W. Page Society, from all over the world, including
your Georgetown faculty members, comment regularly on news and developments
related to the role of the Chief Communication Officer.
For guidance of PR jobs and connections to other PR-related sites, go to
culpwrit.com
Ron Culp, who has served as public relations director at some of the most
innovative corporations, and been political adviser and press secretary in some of
the nation's most rigorous campaigns, blogs about insights and direction for
individuals pursuing careers in corporate and environmental public relations. On
Culp’s website, other sites related to the PR field are listed as favorite sites,
accessible through clicks.
A CEO issues a user manual
March 31, 2013
What communication initiative can a corporate executive take to make sure
he and the executive (or production) team areon the same wave length?
Typically, the executive or manager knows more about the people working
with him than they know about him. He has access to background and interview
information (if indeed he has not conducted the interview or recruited the
employee).
The obverse — upstream insight — is not so easily available. One executive,
the lead strategist for a firm specializing in feedback management, suggested a
means of achieving more open, two-way communication: give followers a “user
guide” to working with the leader.
In a New York Times Sunday Business Interview, Ivar Kroghrud, cofounder
and for 13 years CEO at QuestBack said he provided this kind of information to
those he worked with at the company:
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I am patient, even-tempered and easygoing. I appreciate straight, direct
communication. Say what you are thinking, and say it without wrapping your
message.
I am goal-oriented but have a high tolerance for diversity and openness to
different viewpoints. So, again, say what you are thinking and don't be afraid to
challenge the status quo.
I welcome ideas at any time, but I appreciate that you have real ownership of
your idea and that you have thought it through in terms of total business impact.
Kroghrud said at the end of this information provided to employees, he
added this: The points are not an exhaustive list, but should save you some time
figuring out how I work and behave. Please make me aware of additional points you
think I should put on a revised version of this “user's manual.”116
The reaction to his list, Kroghrud said, was “100 percent positive” — with the
benefit of helping employees “open up” and avoid ingrained conflict which is based
on lack of understanding.
Change — the one key word in your future corporate job Inbox
October 2, 2012
For the student in business-related studies: So you want a job in corporate
communications? What’s that going to be like?
Let’s start with a little instructive history. This is from a column by Geoff
Colvin in Fortune magazine in 2006, and it’s worth reading now, six years later,
because it underscores what amounts to an eternal truth in corporate behavior and
leadership: It’s all about change and transformative leadership. It’s something for
you to think about as you analyze the companies in your teams. Here is the quote I
cut from Colvin’s column:
“Time was when a company could turn the crank on a good business model
for decades; think of Kodak, Sears, Xerox, or any other icon of 20th-century
commerce. No more. Former Xerox CEO Paul Allaire spoke for millions of managers
in 2000 when he famously told a conference call of Wall Street analysts: ‘We have an
unsustainable business model.’
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“That’s a sentence every CEO should put on a laminated card and carry in his
pocket. In an information-based economy, untethered to physical assets, business
models can and will change continually. Yet for most companies, changing them is
almost unbearably difficult — think again of Kodak, Sears, and Xerox.
“Arguably the champ at adaptation is Intel. Its recent shift away from PC
chips is at least its fifth major change in business model. Those kinds of changes
terrify most executives, but if Intel hadn’t made them, CEO Paul Otellini would today
be in one of our 10 toughest jobs — or more likely, the company would be dead...”
Our point now, here at Georgetown, in a class on leadership communication,
as potential communicators in a potential future corporate job, is that not only to
expect change but also, and this is important to your personal and professional
health, to try to hook up with a leadership that is expecting and is driving change.
Thank transformational leadership communication. Be with the one sustainable
business idea (and deliver sustainable communication guidance to support it), and
that is a business that is anticipating and adapting to take advantage of that one key
word, that inevitability that gives you opportunity as well as pain: Change.
Vision: Perceiving the Train in the Mist
September 24, 2012
“You should be able to see the freight train coming out of the mist!” Joe
Scarborough says that was the one lesson his college torts professor drilled into
him.
Aiming that lesson on his Morning Joe talk show (MSNBC, September 17,
2012) toward political leaders who are blindsided by disruptive events during an
election campaign, the former congressman said:
“When you put together your argument to win a case, you’ve always got to
ask, what if…? You’ve got to think ahead! What’s your plan B?”
In a corporate setting, forward thinking is called vision.
It’s the prospect, if not the promise, of blue sky ahead. It’s how the leader gets
everybody focused on winning performance. It’s clear, it’s actionable, and it’s
achievable.
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That is, of course, unless unanticipated clouds move in to negate the view.
What if the leader’s view is compromised by uncontrollable forces? What if
corporate vision veers off-course? What is plan B?
In his books on disciplined leadership, Peter Synge tells the story of the band
of explorers hacking their way through jungle brush, following the leader who’s
showing the way to reach a favored destination. His vision of a route to reward
comes into challenge. The trail he’s on is blocked by trees or entangled by vines he
had not anticipated.
The leader calls a rest. He takes responsibility, as leaders do in the interest of
followers. He climbs the tallest tree, reaching the highest point to enable him to look
above and beyond the canopy that hovers above his route. He studies the situation,
slides down from the tree and gathers his troops around him. “Wrong trail,” he tells
them. “I thought we were headed right. But we need to make an adjustment.”
Vision reset is the standby part of leadership.
Steve Jobs faced vision reset when his outlook for the iPod began to blur. The
Apple leader had told followers in the early 2000s, a pocket-size music device would
be a winner. He was right. Apple’s product moved from concept to remarkable
reality. By 2005, the iPod was far outselling Apple's Mac computer as its top revenue
source.
According to the biography by Walter Isaacson, Jobs looked again into the
future and saw a what-if: What if phone companies figured out a way to play music
on phones, to make it easy, good quality and fun to do? While a lot of people were
carrying iPods, even more people were or increasingly would be carrying cell
phones. Would they want to carry iPods as well as cell phones?
Jobs thought not. He told his board that if phone companies got smart or got
lucky or both, the iPod would be rendered unnecessary. It was time to leap frog
competitive thinkers. And so Jobs came down from his high/long-view station and
met with his followers.
The result was a revolutionizing plan B. The pace-setting iPod, still young and
strong, still driving sales, keeping employees focused and customers happy, would
be replaced…with…something…to be determined.
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You know the outcome. The replacement trail led to the iPhone, unveiled and
into the market, moved from vision to hand-held, in 2007.
What is the corporate communicator role in all this?
Vision is the starting place for the leadership communication process. The
corporate leader's view — there is the goal we can achieve — must move along the
execution trail — these are the strategies and steps by which we will achieve —
with the help of communication strategies.
Communication connects vision to mission to ideas to action
Energizing, collaborating conversation inside the organization and with
external stakeholders will result in clear information, mutual understanding of
what's needed, what's being delivered and — when the circumstances merit —
what must be adjusted to the reality of new contexts.
And there could well be a vital vision role accessible to the chief
communication officer. Through her team's ongoing listening to and engaging in
conversations with stakeholders, she could be among the first in the C-suite to
detect what Scarborough's college torts teacher told him to watch out for: the
freight train coming out of the mist.
Beyond Followers: Scaling up to Stakeholder Advocacy
September 3, 2012
Research and studies by the Arthur W. Page Society indicate that corporate
chief communication officers (CCOs) are building toward accountability for
improving advocacy within the company’s stakeholder universe. CCOs are:
•
Designing information, messages and assets so that they are found via
search and shareable via social media.
•
Creating web tools — such as expertise location systems — that
automate the insertion of knowledge and individual experts into situations where
they will be of value.
•
Working with peers in industry, government, NGOs and elsewhere to
establish independent institutions that pool resources and drive advocacy.
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Ultimately, says the Page Society, CCOs enabling advocacy among followers
and believers will require chief communicators to go beyond the development of
messages, positioning and policy, to actively engage in day-to-day management of
the enterprise.
Such an expanded accountability, Page suggests, means chief communicators
must take on new roles as integrators, system designers, masters of data analytics,
publishers and developers, students of behavioral science, and curators of corporate
character.
It is a challenge in new and changing territories. What does each of these role
categories contain and require? Here are current (2012) Page Society findings and
insights:
Integrators
The CCO must integrate skills and responsibilities across the C-suite to make
a company think and perform like its corporate character. The CCO can help
formulate formulation, develop management systems, identify opportunities and
implement insights.
System designers
A social media strategy, for example, is inherently cross-enterprise and
systemic. It must be designed and optimized like any complex system.
Masters of data analytics
CCOs will need to build the capabilities to understand a broad range of their
enterprise’s data, as well as the growing mountain of information produced in social
networks — and they will need to be able to do so in real time.
Publishers and developers
CCOs can provide facts and evidence, create opportunities for stakeholders to
have a personal experience, produce applications that show “how to” and present
role models of desired behavior. This can be done through a combination of paid,
owned and earned media.
Students of behavioral science
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Now that the CCO job has expanded to include shaping cultures, attitudes and
beliefs, CCOs must be skilled in how those dimensions of organizations, societies
and individuals are formed and evolve today.
Curators of corporate character
The CCO must lead the company in establishing and implementing
management systems to define and activate corporate character.
(Source: for further study on this concept and the CCO path ahead, see the
Arthur W. Page Society’s 2012 report, Building Belief: A New Model for Activating
Corporate Character and Authentic Advocacy)
Volunteering in the Constant Conversation (J&J August 2012)
August 16, 2012
An outstanding example of corporate leadership communication appeared
on the first page of the New York Times business section on August 16, 2012. The
story was about Johnson & Johnson’s decision to remove “questionable chemicals”
from baby shampoo, acne cream, anti-wrinkle lotion and other personal care
products.
Here is the significant quote from the spokesperson: “There’s a very lively
public discussion going on about the safety of ingredients in personal care
products,” said Susan Nettesheim, vice president for product stewardship and
toxicology for (Johnson & Johnson) consumer health brands. “It was really
important that we had a voice in that.”
In my view, this is very near the epitome of leadership communication
because:
1.
The context: It plugs strongly into stakeholder (and generally held)
values; it gains weight because it’s about an initiative not required by government; it
is from a company that has had its share of hard knocks about products, but this
particular issue was not escalated; Johnson & Johnson was not in the spotlight,
testifying before a government committee or in any other “defensive” position.
Doing “good” and telling about it thereby gains a greater ring of truth and a boost to
trust.
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2.
The content: The communication is clear about what removing the
chemical(s) will be, what it means, the time frame. Enabled by the voluntary nature
(the context) of the announcement, the reporter — Katie Thomas — was able to
seek reaction and quotes from environmental/consumer group, all of which was
positive and evinced a bit of favorable surprise.
3.
The tone: All around — the spokesperson, consumer advocates and
the Times’ reporter — conveyed a tone of responsibility, caring (about people, with
emphasis on babies; about the environment; about sustainability) and leadership.
CEOs and chief communicators are getting comfortable with the
transforming reality that credibility and trustworthiness mean strategic
participation in the constant conversation that’s growing stronger and more
influential about public companies, their products and performance.
As J&J’s spokesperson said in this instance, it was “really important that we
had a voice”.
‘Public Relations’? ‘Communications’? Shall We Straddle?
May 28, 2012
Paul Holmes, the Brit who came to the US to edit a PR publication and stayed
to become a major force for successful public relations performance, goes to court in
a recent commentary, with his case for reaffirming “public relations” as the proper
description of the field.
Paul makes the case that:
“Public relations” describes the highest-value deliverable for corporate
clients. Firms help companies “build strong, authentic, mutually beneficial relations
between themselves and the public.”
“PR” avoids confusion of firms as part of another industry. Paul underscores
the possible confusion with a “communications” (or, information technology?)
industry. And (tongue-in-check, as I read this blog), he says that very few companies
are actually looking for “a perception management agency”.
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Surrendering “PR” sells short the ability of professionals to grow the
profession. “If we are truly skilled at managing the relationships between
organizations and their stakeholders, at changing perceptions, at positioning brands
and managing reputations,” Paul reasons, “then the challenge of changing the
relationship between the PR industry and its clients should not be beyond us.”
In support of his case, Paul summons Arthur W. Page.
“Public relations firms,” Paul says, “have to be prepared to advise companies
on policy and behavior, not just communications. Substituting just two words in
Page’s dictum, they need to remember that ‘the relationships of an organization are
determined 90 percent by what it does and 10 percent by what it says’.”
In short, Paul contends: What we do is about doing (counseling, creating and
sustaining stakeholders) and not just about telling (communicating the truth).
Is this a matter for Page turning? I know. Paul is talking to agencies. But
agencies anticipate and respond to (and at best, in useful ways lead) leaders on the
client side, who manifest the Page Society. Can anyone witness for
“communication”?
Paul’s right. Communication is nowhere near the whole story. But we had to
get with the program. The terms “PR” and “public relations” became so diminished
(dare I say, demonized) by reporters and editorial writers and bloggers and other
scoffers that serious practitioners and professionals had to change the subject.
The Page Society a few years ago switched from chief public relations officers
(CPROs) to CCOs, and peers in the C-suite seem to respect it.
And we respect our roots. Public relations principles of Page and other
forebears are interpreted and applied by corporate communicators.
I like Paul Holmes. Paul encourages best practices, been here for decades and
now spells behavior without a “u.” I very much respect Paul’s pounding away at the
point that the goal is to achieve results, envisioned by management and enabled by
stakeholders.
Fact is, in the corporate (and thereby the agency) vernacular, as far as PR v.
Communication is concerned, none of us is above a little straddling.
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Many of us belong to or support the Public Relations Society of America. I do
some teaching at Georgetown University. GU’s department does a magnificent
straddle, offering courses leading to an MPPR — Master of Professional Studies in
Public Relations and Corporate Communications; our department was delighted to
get one of Paul Holmes’ SABRE awards this year.
Ready for this? Is it real —
or is it P.R.?
March 13, 2012
“I’ve always seen that more as P.R. than reality.”
Well, there you go again, business news reporter?
Here’s a story that made the banner position at the top of the New York
Times business page quoting an investor’s view of Pepsico CEO Indra Nooyi’s
management appointments, as a smart move away from the company’s “nutritional
products” message.
The investor, Donald Yackman indicated that he never liked Ms. Nooyi’s
conviction that the company’s future is tied to health and sustainability. He likened
it to “the tail wagging the dog.”
So, while efforts in the professional communications community to define
and redefine “public relations” seem eternal (a notable, professional inside-crowdsourcing effort now under way within PRSA), the dissing endures.
My personal pang is doubled. Every time we in the chemical industry years
ago made any progress in explaining visionary efforts to go green, our wave of
public-opinion analysts poured on the kind of cold water Mr. Yackman dumped on
Pepsico’s vision as unreal P.R. They called me greenwasher. Pang.
The other half of my pang is I was, and in my heart of heart remain, a
journalist. So I know how hard it is to resist pushing a pungent quote into the lede. It
worked! The copy desk bought it! A byline under the banner!
So, well, there they — antagonists and journalists — go again.
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What are you gonna do? So, tell me, what do you, fellow P.R. — I mean,
communications — pros? Curse the journalist? Say we bring it on ourselves? Say,
one day, they will see? And, today, explain it to the boss or client? Proceed,
Panglossian?
What Do CEOs Admire?
Jeffrey Immelt, GE, on CSR and Ecomagination
March 1, 2012
In the March 1, 2012, online takeouts from Fortune magazine’s annual “most
admired” issue, here is Jeffrey Immelt, CEO of GE, on CSR and the company’s
Ecomagination program:
Q: In the wake of the Citizens United decision, with the Supreme Court
suggesting that corporations are people, what kind of person do you want your
company to be?
A: I think we’ve always been a good and generous company when it's come to
corporate social responsibility around education and things like that. But
personally, I think one of the things that this cycle is proving is that without
competitiveness, nothing else really matters. I think in the end, GE is a competitive
company, and in the end that might be the best source of CSR. It doesn’t matter how
much you’re giving; if you're not able to create jobs, it’s tough to be a good citizen
today. And that’s not a bad perspective to have.
Havas CEO David Jones, in his book, Who Cares Wins, credits GE's
Ecomagination program as a beacon of good CSR...
You know, the essence of Ecomagination was that competitiveness and
innovation are at the heart, and it’s not really CSR-driven. It’s more about
innovation, and I think the more we can think about it that way, there are less tradeoffs and more positive thinking.
So it sounds like Ecomagination’s reputation as a responsible, admirable
program is just a happy side effect.
That’s exactly right.
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What Do CEOs Admire?
Ursula Burns, CEO, Xerox, on being a good corporate citizen
March 1, 2012
In Fortune magazine’s March 1, 2012 online take-outs from its annual “most
admired’ issue, Ursula Burns answered several questions, including this one about
CSR and reputation:
Do philanthropic and social responsibility initiatives really help burnish a
company’s reputation among customers and partners? What company stands out as
a role model?
Ms. Burns reply:
Can I pat Xerox on the back for this one? In our industry, we stand out as the
company that has long acted on the belief that doing good is good business. I
inherited this value system and it continues to be one of the points of pride for our
people and very much for me. I certainly spend a lot of time and dedicate a fair share
of resources to understanding the greater good our company is doing for our
society.
And I do business with my heart as much as I do with my head, both
personally and professionally. Frankly, those companies that dismiss citizenship as
a necessary evil don't get my time, attention, or business — unless they're looking to
benchmark us as an example of decades-long, values-based leadership.
Procter & Gamble (PG) gets it. And, I really respect their purpose-driven
approach to running their business. It permeates their entire operation. For
example, we recently worked with P&G (No. 9) to manage their global fleet of
printers, multifunction systems, etc. We saved them a lot of money, but P&G was just
as focused on reducing their own carbon footprint — and gave us clear marching
orders on the need to digitize their business. But they were also quite collaborative
in the approach. Eight million fewer pages later and a 30% energy reduction really
prove the business case of social responsibility.
I’m less concerned about whether being a good corporate citizen burnishes a
company’s reputation. That’s just an added benefit. I believe it’s a responsibility, and
there is no negotiating on responsibilities.
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What Do CEOs Admire?
John Donahoe, CEO, eBay, on sustainable performance and social
accountability
March 1, 2012
How do leaders communicate on sustainable business and social
responsibility? Here are two of the questions and answers that John Donahoe, CEO
of eBay, handled in the March 1, 2012 version of the 2012 “most admired” issue of
Fortune magazine:
Q. Which company (or companies) do you most admire, and why?
A. I admire companies that successfully make the transition from “hot” to
great, enduring businesses. While I won’t single out one, enduring companies
understand how to face adversity, which is inevitable in any business, and emerge
stronger, more focused and more competitive. And they do it each time adversity
hits. Almost every company has hot moments. But only great companies achieve
strong, sustainable performance over time. While it’s fun to be hot, it’s far more
gratifying to create an enduring, sustainable business.
Q. Do philanthropic and social responsibility initiatives really help burnish a
company's reputation among customers and partners?
A. We believe strongly that social responsibility is an important part of a
company’s character and reputation. Consumers, employees and stakeholders pay
attention to a company’s values, actions and behaviors. But it’s not just about
reputation. We believe social responsibility and social innovation can create
business value and drive customer, employee and stakeholder engagement.
Ultimately, your reputation is not what you say, but what you do. And people expect
companies to be leaders in this area.
Risk Perception: Communicator’s Role?
February 2, 2012
Who is neglected in this article from Industry Week about ‘risk champions’ in
the C-suite?
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Roots of risk are exposed as perceptions in the stakeholder communities.
They appear as conversations, posted comments, competitive
communication.
They may be misinformed or miscreant but the effect is to raise doubt (or, in
the extreme, red warning flags) about company financial health, employee and
customer trust and follower advocacy.
Is there not a vital C-suite role for chief corporate communicators, who keep
a finger on the pulse of stakeholders, sensing their perceptions?
Are we, the connectors to followers and advocates, not minding the potting
soil for risk?
Who else is more aware that the risk endgame is disruptive crisis?
BP Crisis 2010: Update 2012, “BP Makes Amends”
January 10, 2012
A halo headline in the New York Times for an oil company is not something
you expect to see very often. It is especially rare for a company blamed, condemned,
excoriated and sued for its role in a disaster that inflicts severe damage, death,
economic and environmental pain and suffering. That’s what makes the op-ed,
entitled BP Makes Amends, important reading in analyzing the 2010 crisis centering
on BP’s role in the Deepwater Horizon accident and Gulf Coast oil spill.
The climax of the crisis itself was stopping the underwater leakage of oil into
the water. The dirty bubbling — available for view on any person’s computer,
continuously, day and night for weeks on end — reminded the world, stakeholders
and critics, of BP’s culpability. When the bubbles turned clear, the crisis condition
changed from cause to effect. The climax aftermath question put to the oil company,
and its associates in the Gulf, such as Deepwater Horizon, was no longer “when will
you stop the damage?”
The longer running questions were about repairing and restoring and
compensating for loss. People, critics, government and lawyers — back to that
shortly, since that’s the nub on the Nocera column — were pressing BP, especially
BP, which had the high profile and the deep pockets in this crisis, for answers to
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highly complex question. How would BP prevent further harm to fish and wildlife,
how would they address the human impact, the loss of jobs, revenue and good-will
of people who rely on the Gulf, its waters and its shores for their income and wellbeing? How would BP make amends?
Nocera, a veteran writer on business who graduated from the Times’
business section to the editorial section a year or so ago, delves into the back story:
the resistance of trial lawyers to what is basically an orderly, widely approved
process that involves BP spending many billions of dollars in compensating people
and businesses whose claims of damage have been considered and qualified.
Read this commentary to understand the ramifications of this particular,
highly significant and still current crisis case. And think through the corporate
communication challenge. Start with the chief communication officer's handy
opening question — what’s it all about? (who, what, when, where, how?) — and
consider how this company is handling its response to the crisis in this post-climax
phase, and how this piece by Nocera factors in. What is the reaction in the ongoing,
open, worldwide and unfettered social conversation in the highly interactive media?
1
See her several books on leadership and “vanguard” company performance; reference here is from Supercorp,
Rosabeth Moss Kanter, Crown Books, division of Random House, New York, 2009
2
Peter M. Synge introduced the “learning organization” concept in The Fifth Discipline, Doubleday Currency,
New York, 1990; we especially recommend chapter nine, which deals with fostering “personal mastery in the
organization.”
3
Pre-crisis intelligence projects, developed by the authors in teaching the advanced studies course on corporate
crisis communication at Georgetown, have proven useful as a teaching tool for C-level leadership
communication, with cooperation from more than a dozen major corporations.
4
Available from Random House Digital, Inc. For Taleb, “black swans” underlie almost everything about our
world, from the rise of religions to events in our own personal lives. He says a “highly improbable event” has
three characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an
explanation that makes it appear less random, and more predictable, than it was. Examples: the astonishing
success of Google; the events of 9/11/01. CCOs may be inspired to look for “black swans” by reading this book
and thinking “improbable event” that risks corporate success and may lead to crisis.
5
Corporate communication practices and trends study, U.S., September 2011, conducted by Corporate
Communication International; Goodman, Genest. www.corporatecomm.org.
6
Page left the company in 1946 and became counselor to national government leaders including Presidential
cabinet member Henry L. Stimson; he is credited with writing, at Stimson’s request, President Harry S.
Truman’s announcement of the dropping of the atomic bomb on Japan, effectively ending World War II.
Page 148 of 154
In The Leadership Challenge, Kouzen and Posner say that a leader’s value is not only determined by a set of
guiding beliefs (vision), but also by his or her ability to act on these beliefs. Embedded in these, they say, are
behaviors, which they call these “ten commitments of leadership”:
7
Find your voice by clarifying your personal values
Set the example by aligning actions with shared values
Envision the Future by Imagining Exciting and Ennobling Possibilities
Enlist Others in a Common Vision by Appealing to Shared Aspirations
Search for Opportunities by Seeking Innovative Ways to Change, Grow, and Improve
Experiment and Take Risks by Constantly Generating Small Wins and Learning from Mistakes
Foster Collaboration by Promoting Cooperative Goals and Building Trust
Strengthen Others by Sharing Power and Discretion
Recognize Contributions by Showing Appreciation for Individual Excellence
Celebrate the Values and Victories
http://bookreviewsummaries.wordpress.com/2008/03/24/the-leadership-challenge-by-james-m-kouzen-andbarry-z-posner/
Page was AT&T vice president, 1926–1941, acknowledged as one of the earliest, highly placed executives in a
corporate public relations role; his principles are the basis for the Arthur W. Page Society.
8
9
These themes are used throughout the course, and a chapter on Content, Context and Tone will provide
examples and study targets.
10
11
Drive: The Surprising Truth About What Motivates Us, by Daniel H. Pink, Riverhead Books, Penquin, New York,
2009, is a recommended source for understanding employee, customer and other stakeholder motivations. An
interview with the author, by Maril MacDonald, is available at www.letgoandlead.com.
See illustration, “Followership: A View for Leadership Communication” on page ---------
12
Harvard Business Press, Boston, 2008. Also see Kellerman’s book Leadership: Essential Selections on Power,
Authority, and Influence (McGraw-Hill, 2010), for its guide to leaders from all walks of life — from Lao Tsu and
Confucius to Sigmund Freud and Nelson Mandela.
13
Our book is cast, as our classes are taught, in the context of modern social media and digital communication;
to emphasize change as well as to benefit from lessons learned, we will examine pre-digital conditions that are
especially particularly useful in analyzing effective CEO/CCO communication now.
14
Followers and followership are significant themes of the book, to which we will refer throughout, drawing on
a great many resources, including notable research such as that done by Barbara Kellerman of Harvard, as
well as the work of Joel Kurtzman whose interviews of thought leaders in the 1990s are contained in the BoozAllen & Hamilton book, Thought Leaders: Insights on the Future of Business.
15
Here is the transcript of a 2012 earnings call involving investment analysts and General Motors executives:
http://seekingalpha.com/article/775021-general-motors-management-discusses-q2-2012-results-earningscall-transcript
16
Writing to Learn, by William Zinsser, Harper & Rowe, 1988. Zinsser was a newspaper editor, magazine
writer and book author who taught writing at Yale and the New School in New York. You might also
benefit from and enjoy, if you’re a writer, some of his other highly engaging books, including On Writing
Well and Writing with a Word Processor.
17
Bell Telephone System, a book by Page, was published in 1941 by Harper and Brothers. It dealt with the
government investigation of AT&T and the Bell System, which ended in 1939 with a watered-down report to
Congress that basically cleared the companies of unethical or illegal behavior.
18
The Page Society’s qualification for membership in the non-profit or government member category, is that the
prospect “be considered a thought leader in communications, supported by published articles, speaking
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engagements and spheres of influence.” A similar evaluation is used in selecting recipients of the Society’s
Distinguished Service Award.
19
Lasting Leadership: Lessons from the 25 Most Influential Business People of Our Times. See
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1054; the book was published in collaboration
with Nightly Business Report (NBR, Public Broadcasting System). The winners were chosen by six Wharton
judges from more than 700 names submitted by NBR viewers. They include, in alphabetical order: Mary Kay
Ash, founder of Mary Kay Inc.; Jeff Bezos, CEO of Amazon.com; John Bogle, founder of The Vanguard Group;
Richard Branson, CEO of Virgin Group; Warren Buffett, CEO of Berkshire Hathaway; James Burke, former CEO
of Johnson & Johnson; Michael Dell, CEO of Dell Computers; Peter Drucker, the educator and author; William
Gates, chairman of Microsoft; William George, former CEO of Medtronics; Louis Gerstner, former CEO of IBM;
Alan Greenspan, Chairman, U.S. Federal Reserve; Andrew Grove, chairman of Intel; Lee Iacocca, former CEO of
Chrysler; Steven Jobs, CEO of Apple Computer; Herbert Kelleher, chairman of Southwest Airlines; Peter Lynch,
former manager of Fidelity's Magellan Fund; Charles Schwab, founder of The Charles Schwab Corp.; Frederick
Smith, CEO of Federal Express; George Soros, founder and chairman of The Open Society Institute; Ted Turner,
founder of CNN; Sam Walton, founder of Wal-Mart; Jack Welch, former CEO of General Electric; Oprah
Winfrey, chairman of the Harpo group of companies; and Muhammad Yunus, founder of Grameen Bank. Intel’s
Grove headed the NBR/Wharton list, earning the title of most influential business leader of the previous 25
years.
20
The Authentic Enterprise, Arthur W. Page Society, 2007.
21
The Ways Chief Executive Officers Lead, in Harvard Business Review on Leadership, Harvard Business School
Press, page 115.
22
See Mary Parker Follett: Prophet of Management, with introductory commentaries by Rosabeth Moss Kanter
and Peter F. Drucker; Harvard Business School Press, Boston, 1995.
23
Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value, Jossey-Bass, ; George served as CEO
of Medtronic.
24
Leadership, HarperCollins, 1978
25
In a 2003 report of a coalition of major public relations organizations, entitled Restoring Trust in Business:
Models for Action, recommended that CCOs report to CEOs on trustworthiness in behavior and
communication, and have access to boards of directors “to provide the broad perspective needed to balance
conflicting interests.”
26
See reading list
27
In 1971, Burns won the Pulitzer Prize and the National Book Award for his biography, Roosevelt: Soldier of
Freedom (1970). His book, Leadership, published in 1978, is considered the seminal work in the field of
leadership studies. His theory of transactional and transformational leadership has been the basis of more
than 400 doctoral dissertations.
28
Kawasaki, Guy, Enchantment: The Art of Changing Hearts, Minds, and Actions. New York: Penguin Publishing
Group, 2011
29
De Pree, Leadership is an Art, Dell Publishing, NY, 2010.
30
Feinberg, Kenneth R., How to Settle a Dispute, as told to Spencer Bailey, The New York Times Magazine, p.9,
July 29, 2012
31
The book about Enron’s collapse — Conspiracy of Fools by Kurt Eichenwald — does provide an extraordinary
look, presumably true, at the role of the “public relations staff” chief (now he would be the CCO), as the
company crumbled around him. Read chapter 18 of that book to get a sense of the dilemma of Mark Palmer,
Enron’s public relations chief. The book was published by Broadway Books, Random House, in 2005, two
years after Bill George’s Fortune article.
32
Martin, executive in residence, Department of Communication, The College of Charleston, Charleston, S.C.,
served as an officer of ITT. This discussion was at an Arthur W. Page Society conference.
33
Three Quick Rules: Be In, Be Real and Be Bold, interview by Adam Bryant, New York Times Business, May 24,
2013
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34
Mary Parker Follett: Prophet of Management, A Celebration of Writings from the 1920s, edited by Pauline
Graham, Harvard Business Books Press, 1955.
35
Best-in-Class Practices in Employee Communication Through the Lens of 10 Global Leaders, Institute for Public
Relations, April 2013; lead researchers were from Brunswick Group, N.Y.; W20 Group, N.Y.; and KRC Research,
Washington, D.C.
36
For risk management information on any public corporation you are studying, obtain the annual report 10-K,
submitted annually to the Securities & Exchange Commission, and communicated to stakeholders. Risks to
intended results are explained, often in detail.
37
Authentic Enterprise: Relationships, Values and the Evolution of Corporate Communications, an Arthur W. Page
Society Report, June 22, 2007, a task force research project on the evolving role of the senior communications
executive in 21st century business.
38
Quoted in “Churchill on Leadership: Executive Success in the Face of Adversity” by Steven F. Hayward, Prima
Publishing, Rocklin, CA, 1997. We will reference Churchill on both leadership and communication success.
39
In a subsequent chapter, we will get into vision statements and mission statements, with examples of “gauzy
visions” and eagle eye missions as well as misplaced mission leadership (‘Bridge on the River Kwai’)
40
A preeminent management thinker of the 1990s, Dr. Michael Hammer, former MIT professor, spurred
business leaders to set The Agenda (Crown Business Books, 2001) to “dominate the decade”.
41
In her book Supercorp, Rosabeth Moss Kanter (Crown Business, 2009) describes the way in which corporate
leaders — in companies such as IBM — engage employees in bringing visions down to earth, putting them to
work as missions.
42
Vision is converted to mission at least once year in the first several pages of many companies’ annual reports.
In evaluating a company’s leadership communication, its content and tone, its explanation of the win-win
value deal with stakeholders, its language of leadership, an analysis should include study of the “chairman’s
letter” in the annual report.
43
“Bankers Gone Wild,” in New Yorker magazine (July 30, 2012), by James Surowiecki
44
(See [INSERT CHAPTER NUMBER HERE] for Iwata’s lessons, drawn from IBM’s 100th anniversary
communication; and note the emphasis on the company website ibm.com as the sustained reliable source.)
45
Salonek’s INC 500 firm is a seven-time ‘Best Places To Work’ winner. See:
http://www.intertech.com/Winning-Business/Articles/Tom-Salonek-Big-Biz-Show.aspx.
46
A June 2012 Pew study found search (e.g., Google) the second-largest source of website traffic coming from
the population as a whole, far ahead of social media.
47
In a Washington Post interview (July 17, 2012), Lisa Jackson, Administrator, Environmental Protection Agency,
was asked, “What’s one word you wish people would use to describe you?” She answered: “Influential.” The
Federal Page, A13, Washington Post, July 17, 2012.
48
Supercorp: How Vanguard Companies Create Innovation, Profits, Growth and Social Good, published 2009,
Crown Publishing, a division of Random House, N.Y.
49
Quoted in Mary Parker Follett: Prophet of Management, edited by Pauline Graham, Harvard Business School
Press, 1995.
50
Principle-Centered Leadership, Stephen R. Covey, 1990, Simon and Shuster, N.Y.
51
Perry Buffett, senior associate with Booz & Company, Chicago, specializes in leadership alignment and
organizational change.
52
Buffett, Using Influence to Get Things Done, Strategy + Business, Booz & Co., February 22, 2011
http://www.strategy-business.com/article/11104?pg=2 - authors
53
ibid.
54
The books — Seidman’s How: Why HOW We Do Anything Means Everything (2007), Pink’s Drive: The Surprising
Truth About What Motivates Us (2009) and Kawasaki’s Enchantment: The Art of Changing Hearts, Minds, and
Actions (2011) — typified a vast outflow of commentary in print and online attesting to the change of
influence and the challenge of communication.
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55
http://usatoday30.usatoday.com/money/books/2007-04-22-true-north-usat_N.htm
56
In 2012, Irick was President & CEO of GE Lighting Solutions
57
The Wisdom of Teams, by Jon R. Katzenbach and Douglas K. Smith, was first published by Harvard Business
School Press in 1993, and a copy was given that year to one of your authors (Harrison) by a leader in AT&T
and in American public relations, Marilyn Laurie.
58
For other Lao-Tzu quotes, go to:
http://www.goodreads.com/author/quotes/2622245.Lao_Tzu?auto_login_attempted=true
59
GE was voted #1 in Developing Leaders in the 2010 Hay Group/BusinessWeek poll. Visit
http://www.haygroup.com/ww/press/details.aspx?id=24434 to see how companies are rated. See
http://www.ge.com/ar2010/ with CEO Immelt’s “Growth Starts Here” letter. It is worth reviewing as a
leadership communication guide and annual report model.
60
We can assume that “humble” is used by Immelt in the same sense that Jim Collins (author of Good to Great
and Built to Last) used it in describing leaders that build companies that last. Such “Level 5” leaders, Collins
said, combine humility with a fierce passion to achieve missions and sustain a vision of success.
61
http://www.druckerinstitute.com/link/about-peter-drucker/Drucker wrote dozens of books on management
between 1939 and the early 2000s (he died in 2005). One of your authors (Harrison) favored Drucker’s 1973
classic, Management: Tasks, Responsibilities, Practices (New York: Harper & Row) to learn how to apply
Drucker guidelines to business communication. Tom Peters (see next footnote) called Drucker "the dean of
this country's business and management philosophers."
62
http://www.tompeters.com/ In Search of Excellence: Lessons from America’s Best-Run Companies (1982) by
Peters and Robert Waterman, McKinsey consultants, advocated management ideas gleaned from winning
companies, including the value of aggressive learning from people served by the business.
63
http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532 Porter’s book, Competitive Strategy: Techniques
for Analyzing Industries and Competitors. New York: Free Press (1980) quickly became the bestselling
business book up to that time.
64
The four additional forces identified by Porter in Competitive Strategy are the competitors the company
currently faces, the threat of new competitors, the threat of substitutes for the company’s products or
services, and the bargaining power of its suppliers.
65
For a useful context of Hsieh’s success in achieving market trustworthiness, read Chapter 3 of Guy Kawasaki’s
Enchantment (e.g., customer experience as unexpected pleasure): The Art of Changing Hearts, Minds, and
Actions. Portfolio/Penquin, New York, 2011. Postscript: After a few years of rocketing success, Hsieh sold
Zappos to Amazon for $1.2 billion and continued to lead the company.
66
Augustine, Norman R. (2000), Harvard Business Review on Crisis Management, Harvard Business School
Publishing, Boston, p. 31
67
Recognized by corporate leaders (e.g., Immelt, GE; George, Medtronic; Palmisano, IBM; et al) as well as
leadership teachers and researchers (e.g., Collins, Good to Great; Kanter, Supercorp; Peters, In Search of
Excellence; et al. See course reading list.)
68
In addition to Authentic Leadership, Bill George, former Medtronic CEO, is the author of True North: Discover
Your Authentic Leadership (with Peter Sims). Learn more at www.truenorthleaders.com.
69
“Connectors are those people who serve as bridges…assembling resources and mobilizing action,” Kanter says
in Supercorp. Kanter expresses the reality that personal contact and relationships are often as important as
technical talent, adding “she who has the best network wins.” Your authors and other CCOs can attest that this
is as true in the C-suite as in any slice of collaborative life.
70
Both professors in communication and public relations studies: Donald K. Wright, then at the University of
South Alabama, and Don W. Stacks, University of Miami. Their paper on CEO-CCI listening was presented at
the 2000 Arthur W. Page Society Annual Conference, and each of them has continued to research, report and
help students as well as communication professionals understand and improve in critical skill areas such as
listening.
71
Listening here is entirely focused on two-way, person-to-person, vocalized communication. Online
communication, though absolutely essential in corporate communication (and may in fact be dominating all
communication, both transactional and transformational) does not endow a full, precise listening analysis. We
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may have “listening stations” and we may usefully eavesdrop or participate in online “conversation” —
especially to perceive at least online perceptions of stakeholders — but we lack the vital ingredients in
listening: tone, signals, facial expressions, common time and place, and so on. (More on this later in the book,
and see leaderscommunicate2012.posterous.com for the authors’ and Georgetown students’ blog on
communication.)
72
Getting to Yes, the book by Fisher and Ury (and now, Patton), a product of the Harvard negotiation program,
still popular after all these years, is a mainstay of this book’s authors, one of whom (Harrison) took the
Harvard course in its early days. As shown in this book’s early chapter, the ultimate destination of our
VICTORY wheel of leadership traits is a direct lesson from the Harvard instructors, updated somewhat by our
experiences, so the “Y” in our success wheel is “Yes,” a mutual, shared-value, win-win agreement.
73
Elliot S. Schreiber, Ph.D., Clinical Professor & Executive Director, Center for Corporate Reputation
Management, Drexel University, LeBow College of Business. He has served as counselor to corporate
leadership, including his role as Senior Vice President and Chief Communications Officer, Bayer Corporation.
See his blogs, including “Not Building Reputation Squanders Shareholder Value” in the Arthur W. Page Society
blog, Page Turner; he argues for effort to leverage “reputation capital.”
74
More on this when we study the highly salutary impact of financial performance on corporate reputation,
drawing on the book by Phil Rosenzweig, The Halo Effect (Free Press, 2007).
75 We
use the term “employees” since its meaning is clear. We do, however, clearly recognize the value of terms
used by companies to encourage “employees” to be partners in achieving business missions. As management
guru Gary Hamel said in a McKinsey interview in 2013: “In most organizations, we don’t call people
employees anymore...we call them team members or associates...(They) are in fact “business partners” in a
company’s “co-creation with...customers.”
76
Since 1994, LRN has help companies navigate complex legal and regulatory environments and foster ethical
cultures. Fortune magazine called him “the hottest advisor on the corporate virtue circuit.”
77
Seidman actually talks about four “factory” cultures; however, the first — which he describes as a culture of
“anarchy and lawlessness” — is so antithetical to anything you are likely to encounter in the U.S. and other
advanced industrial nations that it is hardly worth our study of modern leadership communication. To read
the results of a disturbing 1963 study conducted by Yale University psychologist Stanley Milgram on the ugly,
even inhumane, result of obedience as a forced determinant of human behavior, see Obedience to Authority: an
Experiemental View, HarperCollins, 1974.
78
Creating the Best Workplace on Earth, by Rob Goffee, emeritus professor, London Business School, and Gareth
Jones, visiting professor, IE Business School, Madrid; in Harvard Business Review, May 2073 [2073?]
79
Supercorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good; New York: Crown
Publishing Group, 2009
80
Positioning: The Battle for Your Mind, by Al Ries and Jack Trout
81
Writing in PRWeek UK in 2012
82
For two perspectives on “spin” that do not entirely agree with ours, see PR! A Social History of Spin by Stuart
Ewen, chair, department of communications, Hunter College (1996); and Spin Cycle: Inside the Clinton
Propaganda Machine by Howard Kurtz, media reporter, Washington Post (1998).
83
See the interview at http://www.nytimes.com/2012/06/17/business/shawn-wilson-of-ushers-new-lookfoundation-on-leadership.html
84
Usher's New Look Foundation is a 501(c)(3) group established in 1999 to certify young people in four
leadership pillars: talent, education, career and service. More at http://www.ushersnewlook.org/
85
From an interview by Adam Bryant, “Want to Know Me? Just Read My User Manual,” which appeared in the
New York Times on Sunday, March 31, 2013; http://www.nytimes.com/2013/03/31/business/questbackslead-strategist-on-his-user-manual.html?ref=todayspaper&pagewanted=print.
86
Published in Harvard Business Review on March 1, 1990. See: http://hbr.org/product/core-competence-ofthe-corporation/an/90311-PDF-ENG
87
Good to Great, by James Charles Collins (HarperCollins, 2001) and his team studied 28 companies looking for
reasons “why some companies make the leap and some don’t.” The hedgehog concept is one of several they
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found in winning companies. His first book, also highly relevant to leadership and leadership communication,
was Built to Last, with Jerry I. Porras. Collins has kept a useful website available to students, journalists and
business at http://www.jimcollins.com/
88
Daniel Goleman first brought the term “emotional intelligence” to a wide audience with his 1995 book of that
name, applying the concept to business with his 1998 HBR article What Makes a Leader? — Harvard Business
Review. In his research at nearly 200 large, global companies, Goleman found that while the qualities
traditionally associated with leadership — such as intelligence, toughness, determination, and vision — are
required for success, they are insufficient. Truly effective leaders are also distinguished by a high degree of
emotional intelligence, which includes self-awareness, self-regulation, motivation, empathy, and social skills.
89
Both Iacocca and Welch exemplified “commanding” styles — closed and distancing rather than open and
inclusive — in their leadership time-frames, both facing intense transforming situations and each moved
toward more “visionary” and democratic leadership styles following turnaround executions. Welch’s post-GE
presentations and writing (with his wife) have advanced thinking on personal, interactive (emotional)
competence as enabling economic competence.
90
To be clear, there is a distinction between the power and influence of investors and shareholders. Investors
include both shareholders, who have an equity stake in the company, typically through share ownership, and
bondholders. Holders of bonds do not have the authority to vote at general meetings, nor to vote or nominate
members of the board of directors.
91
http://nysemanual.nyse.com/LCM/Search/default.asp
92
http://businessroundtable.org/uploads/studies
reports/downloads/BRT_Principles_of_Corporate_Governance_-2012_Formatted_Final.pdf
93
Article by Taylor Provost, in CFO magazine, May 2013
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http://www.ge.com/investor-relations
Intel, under the leadership of Grove (named by Time magazine as its Man of the Year), survived the strategic
inflection point challenge, to become the world’s largest chip maker and one of the world’s most admired
companies. Grove’s books are useful in understanding business and communication, especially in navigating in
the Internet revolutionary age of business. Our quote is from Grove’s 1996 book, Only the Paranoid Survive:
How to Exploit the Crisis Points That Challenge Every Company, which has been widely read by corporate
executives and CCOs. The 1999 paperback version (Doubleday Publishing, a division of Random House, New
York) includes a new chapter on “the impact of strategic inflection points on your career”.
96 Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, Andrew S. Grove,
Doubleday (Random House), New York, paperback version,1999
95
97
Risk factors for a SEC-regulated company can be found at http://www.edgr.com
98
http://www.prdaily.com/crisiscommunications/Articles/13906.aspx accessed 2/24/13
99
awpagesociety.com
A Business Week reviewer of Dezenhall’s book Damage Control: The Essential Lessons of Crisis Management
(2011 edition) called it “a mandatory read for any corporate person who is facing a gut-wrenching crisis right
now or is likely to one day — which of course means just about everyone.” (review by Stanley Bing; see his
incisive and entertaining books on corporate management behavior.)
100
The room we have called “situation room” or “crisis communication center” has often been referred to
colloquially as “the war room.” While this short-hand does convey a sense of urgency, it seems to us also to
convey some heat, bordering on belligerence. The purpose of corporate management, after all, is a return to
mutual values and productive peace. One of the three accountabilities of expert corporate communicators is to
positively influence the organization’s culture. CCOs’ use of language — the most common factor of leadership
— drives that influence. CCOs are advised by veterans (going all the way back to Arthur W. Page at AT&T in
pre-World War II days) to try to be something of a model of cool competence during a crisis. Bottom line: shy
away from talking about “war” which conjures up images of victims and villains, and us vs. them.
101
102
About the reports required by the SEC http://www.sec.gov/answers/form10k.htm
103
More on the history of regulation http://www.history.com/topics/securities-and-exchange-commission
Page 154 of 154
Historically, Form 10-K had to be filed with the SEC within 90 days after the end of the company's fiscal year.
However, in September 2002, the SEC approved a Final Rule that changed the deadlines for Form 10-K and
Form 10-Q for “accelerated filers” — meaning issuers that have a public float of at least $75 million, that have
been subject to the Exchange Act’s reporting requirements for at least 12 calendar months, that previously
have filed at least one annual report, and that are not eligible to file their quarterly and annual reports on
Forms 10-QSB and 10-KSB. These shortened deadlines will be phased in over time.
104
105
SEC’s EDGAR database http://www.sec.gov/edgar/searchedgar/companysearch.html
106
Understand this distinction better by consulting the SEC website http://www.sec.gov/answers/annrep.htm
The authors wish to emphasize that these samples are arbitrary and do not present any weight of significance
that the company itself places on the selected sentences. A.1 sections typically comprise many pages in the 10K filings, with companies covering 20 or more specific risk areas. For complete information on these and other
companies, interested readers are urged to go to the SEC sources.
107
Click for Apple Inc.’s 10-K http://investor.apple.com/secfiling.cfm?filingID=1193125-11282113&CIK=320193
108
Click for Procter & Gamble’s 10-K
http://www.sec.gov/Archives/edgar/data/80424/000008042412000063/fy2012financialstatementsf.htm
109
Click for Ford Motor Company’s 10-K
http://www.sec.gov/Archives/edgar/data/37996/000115752311001210/a6622311.htm
110
Click for Walmart Stores’ 10-K
http://www.sec.gov/Archives/edgar/data/104169/000119312506066792/d10k.htm
111
112
To find out about other SEC forms and reporting requirements, see http://www.sec.gov/edgar.shtml
113
This firm was acquired in 2004 by Harris Interactive.
114
Article by Taylor Provost, in CFO Magazine, May 2013
Making the World Work Better: The Ideas that Shaped a Century and a Company with an initial print run of
more than 500,000 copies.
115
From an interview by Adam Bryant, “Want to Know Me? Just Read My User Manual,” which appeared in the
New York Times on Sunday, March 31, 2013; http://www.nytimes.com/2013/03/31/business/questbackslead-strategist-on-his-user-manual.html?ref=todayspaper&pagewanted=print
116