CRA Inc

Better Ways to Cut Costs

In our current economy, uncertainty seems to be the only thing that’s certain when it comes to organizational finances. As a result, cost cutting is a recurring theme for organizations around the country and across the globe. While there’s no single right way to cut costs, organizations are finding that successful cost-cutting efforts require employees to understand the situation, know leadership’s expectations, and see a need to cut costs if they expect employees to buy in.

Similar to other organizational priorities, cost cutting should follow a typical communication protocol (i.e. communicate consistently and frequently through various vehicles and channels to ensure all employees receive the message). But there’s more. To garner employee support for major cost-cutting efforts, we recommend the following:

1)    Explain financial goals simply.

Enlist senior leaders and managers to translate cost-cutting messages for their teams. Managers know what works for their teams and understand how to make cost cutting a real priority in their department. Employees are more likely to take part in the process if they know how they can make a difference in their daily work.

2)    Walk the talk.
Lead by example – your cost-cutting message will lose credibility if you don’t practice what you preach. If you tell employees to be fiscally conservative and then openly purchase expensive decor for the office, employees will disregard all the hard work that’s gone into the cost-cutting effort. As a leader, everything you do communicates a message, so be sure that your actions illustrate the importance of cost cutting. A recent Wall Street Journal article states:

Before asking others to sacrifice, first volunteer yourself. If there are sacrifices to be made – and there will be – then the leaders should step up and make the greatest sacrifices themselves… Everyone is watching to see what the leaders do. Will they stay true to their values? Will they bow to external pressures, or confront the crisis in a straightforward manner?… (You can read the full article here.)

If you’re open and honest about your spending choices, employees will follow suit.
Achieving employee support for organizational cost cutting is no easy feat and requires dedication from everyone involved, especially leadership. Therefore, following the two points mentioned above will not only position your organization for a better financial situation, it will increase employee support so your workforce is aligned around your cost-cutting priority.

Redefining Priorities: Getting Leadership On Board

“Does the strategic message really matter?”

Simply put, the answer is yes. We know, now more than ever, that a strong strategic message not only reduces uncertainty among employees and provides the context necessary to make sense of initiative-level actions and messages, but it also aligns and guides the leadership team. On the other hand, a poorly designed strategy message can lead to a skeptical workforce and a severely misaligned leadership team.

As a result of the economic downturn and to survive the financial slump, companies are changing how they operate. In doing so, some organizations are going back to the drawing board to revise and refresh their strategic message to align with how they’re now doing business. Others acknowledge the need to update their strategic message, but are hesitant to do so for fear that employees will resist the change and leadership will lose credibility.

If you’re thinking about revisiting your organization’s strategic message, here are a few recommendations for doing so in a way that promotes employee buy-in and builds leadership credibility.

Review recent decisions and messages.
Hold up your current strategy message against the most recent actions and decisions of the leadership team. If one of your current strategic priorities is to ‘invest in innovation” and you’ve recently cut your research and development budget for 2009, then it’s probably time to re-think your business priorities and change your strategy message for the year.

Measure employee understanding.
Research offers a credible, concrete, data-driven way to validate or support your argument, and having a sense of the pulse of the organization often yields access to the leadership team. For example, conducting a strategic alignment survey that assesses the credibility of the message set and the leadership team, as well as the level of employee understanding of and engagement with the current strategy message, may give you just the ammunition you need to gain senior leadership support for a revised strategy.

Get leadership on board.
Brief the leadership team, discuss the importance of a strong strategy message, and address the need to and consequences (positive and negative) of updating the message set. Be prepared to talk candidly about the fact that everything they do as leaders sends a message. Share the findings from your employee research to help shape your argument and support your proposal.

Don’t underestimate the importance of a clear, actionable strategy message—and don’t let your leadership underestimate it either. To read more about why the message really does matter click here.

Managing Leadership Transitions

Watching the Inauguration of our 44th President made me think about the transition Barack Obama has ahead of him, and the transition we, as a nation, have in front of us. When it comes to Presidential transitions, we are lucky—we know it is happening, we expect it, and the media inundates us with information.  But significant leadership changes in organizations are not so cut and dry.

Shifts in corporate leadership are far more unpredictable, and we can see additional implications when announcing leadership changes. That said, it’s essential to prepare internal audiences for the transition if you want leadership to maintain credibility. Here are three coaching points to keep in mind when announcing leadership changes at the management and director levels:

Communicate early and often. You need to communicate leadership changes to your employees before the media gets hold of the information. Though timing of these kinds of communications is critical and often difficult—particularly for publicly traded organizations— treat employees as a privileged audience. Be proactive and frame the conversation for your organization before an outside or informal network does, using a variety of channels (i.e. newsletters, department meetings, town halls). Cascade the initial leadership change throughout the organization so each employee hears it from his or her direct manager. Leaders should subsequently update employees to keep them in the loop, using both formal channels (intranets, memos) and informal channels (conversations at lunch, walking through your department).

Manage meaning around the transition. Situational context gives meaning to the message, so be strategic in creating it. Since employees are more likely to believe informal communication than formal, find out what people are saying and thinking before creating the message. Learn how people really view the change in leadership and the departure of the present leader by walking around and listening to the water-cooler talk. Ask employees and leaders who are well-connected—those who know the rumors but don’t spread them—to update you, and then address the crucial issues that arise. While you’ll never stop all the rumors, you can control some by reaching out to employees in informal conversations and offering the truth.

Keep the message future-focused. Acknowledge the previous leader’s positive contributions, but focus the message, both formal and informal, on the opportunities ahead. Don’t talk about the “big shoes” the new leader has to fill. If the previous leader is leaving on unfavorable terms, communicate it as an example of what will not be tolerated going forward.

Leadership transitions can be a tremendous opportunity for organizations to set the tone and expectations for future activities. The organizations who’ve handled these situations best are those that put forethought into what they want employees to know, feel, do, and believe—communicating strategically and in a way that’s tailored to each employee audience. Take a note from those who do it well, asking yourself what sets them apart, and you will see that these organizations thoughtfully use communication.

Executive Leadership Visibility: Who me? Yes, you!

Executive leadership visibility is a necessary component of any great strategic internal communication plan. The executives who are usually in the plan, however, do not always believe that they’re a necessary component. As a result, we’re often asked to provide benchmarking information or other rationale for why we include a visibility mix along side a vehicle portfolio. While there are academic studies we could site, I typically use the more approachable list of reasons below.

Why should executives be visible?

• Employees expect it. Fortunately for communicators, and unfortunately for shy executives, employees have come to expect visible communication from all levels of leadership. (You can thank all of the former CEOs who have published books in the last five years.)
• The most listened to message is the one from executives. When the CEO, SVP, or other leaders with a C, V, or P in their title speak, employees listen. They want to hear about the direction of the organization and they want to hear about it from those who are steering.
• It’s a sign of respect. Without the employees, there would be no organization. Acknowledge this and give them the courtesy of seeing or hearing from their leaders.
• It’s a sign of strength. In the absence of information, employees will create their own—and most often, this information is worse than reality. When there is little information flowing from the executive team, employees believe something is wrong—even if it’s just because the CIO is uncomfortable in front of people. On the other hand, when information is flowing from the executive team, employees believe the organization is thriving. Visible executives signal to employees that either (1) the organization is doing well or (2) executives are confident in the organization’s direction.
• More visible executives are more credible executives. When employees believe their leaders—executive or otherwise—are competent in their role and have character, then employees believe they’re credible. Because of executive leadership’s positional authority, they often receive a pass on competence—but not on character. Getting out in front of employees will help to establish perceptions of character; multiplying the visibility events will improve these perceptions.

The list above pertains to any point in time–good or bad. During bad times, though, it’s even more important that employees see their leaders. If you haven’t already, consider increasing the frequency of leadership visibility in your organization–you won’t regret it.

A Partial List of Readings on Leadership Communicaiton

I recently taught a week-long elective on Leadership Communication for the current Executive MBA Class at Notre Dame. As part of my curricula I offered the students recommended, non-academic readings (beyond the assigned work) that embellished many of our core topics. I thought this list might be of wider interest, so I’m posting it below (along with excerpts where I could find them).

• The Management Myth: A nice article on the pop-culture (and intellectually questionable) nature of much management theory.

  “Why does every new management theorist seem to want to outdo Chairman Mao in calling for perpetual havoc on the old order? Very simply, because all economic organizations involve at least some degree of power, and power always pisses people off. That is the human condition. At the end of the day, it isn’t a new world order that the management theorists are after; it’s the sensation of the revolutionary moment. They long for that exhilarating instant when they’re fighting the good fight and imagining a future utopia. What happens after the revolution—civil war and Stalinism being good bets—could not be of less concern.”

• Change or Die: An interesting Fast Company article that describes the challenges to bringing about personal behavioral change, many of which have neuro-cognitive roots.

  “”If you look at people after coronary-artery bypass grafting two years later, 90% of them have not changed their lifestyle,” Miller said. “And that’s been studied over and over and over again. And so we’re missing some link in there. Even though they know they have a very bad disease and they know they should change their lifestyle, for whatever reason, they can’t.”"

• The Brain That Changes Itself: A book on neuroplasticity which expands greatly on the ideas in Change or Die. It turns out you CAN teach an old dog new tricks — the trick just has to be relevant, the dog needs multiple attempts, and there must be treat after each successful try.

  “Neuro is for “neuron,” the nerve cells in our brains and nervous systems. Plastic is for “changeable, malleable, modifiable.” At first many of the scientists didn’t dare use the word “neuroplasticity” in their publications, and their peers belittled them for promoting a fanciful notion. Yet they persisted, slowly overturning the doctrine of the unchanging brain. They showed that children are not always stuck with the mental abilities they are born with; that the damaged brain can often reorganize itself so that when one part fails, another can often substitute; that if brain cells die, they can at times be replaced; that many “circuits” and even basic reflexes that we think are hardwired are not. One of these scientists even showed that thinking, learning, and acting can turn our genes on or off, thus shaping our brain anatomy and our behavior—surely one of the most extraordinary discoveries of the twentieth century.”

• Words that Work, framing and the use of language from the conservative point of view, and Don’t Think of an Elephant, framing and the use of language from the liberal point of view.
• Love is the Killer App: One of the best books on relationship management I’ve read. The chapter on how to read books is worth its weight in gold alone.
• The Tipping Point: A modern science-journalism classic about how ideas spread, this book is an excellent summation of a large amount of communication theory–about persuasion, relationship development, communication networks, the role of context in interpretation–I consider essential for leaders to know.

  “Consider, for example, the following puzzle. I give you a large piece of paper, 1/100th of a inch thick. (That’s a typical thickness). I want you to fold it over once, and then take that folded paper and fold it over again, and then again, and again, until you have refolded the original paper 50 times. How tall do you think the final stack is going to be? … [T]he real answer is that the height of the stack would approximate the distance to the sun. And if you folded it over one more time, the stack would be as high as the distance to the sun and back. This is an example of what in mathematics is called a geometric progression … As human beings we have a hard time with this kind of progression, because the end result–the effect–seems far out of proportion to the cause. To appreciate the power of epidemics, we have to abandon this expectation about proportionality. We need to prepare ourselves for the possibility that sometimes big changes follow from small events, and that sometimes these changes can happen very quickly.”

• Worst to First: Most CEO “how I did it” books are ego gratification in print. This one is not, and is rich in examples of the symbolic nature of leadership communication, and the effective communication of strategic direction, in particular.
• Influence: An academic classic that’s entirely accessible in the main stream. Read this book and you’ll never look at a car salesman or cult the same. On my “Top Books All Leaders Should Read” list.
• Three resources on design: Universal Principles of Design, which is a fantastic book on design generally (and a great coffee table book to boot), Slide:ology, which covers everything you should know about how to, and how not to, design an effective presentation, and finally, everything by Ed Tufte, who’s a modern guru of information design (and who also writes books suitable for any well-appointed coffee table). (And while your at it, read this Bruce Nussbaum speech on how CEOs must be designers, not just hire them.)
• On Speaking Well: Peggy Noonan’s slim tome on writing, preparing for, and delivering speeches. A great little book, although expect Ms. Noonan’s conservative affections to shine through (pleasing some of you and slightly annoying others).
• Beowulf (the Seamus Heaney translation): I think there’s much to learn about leadership from reading the classics. After all, the nuances of the human condition and the challenge of leading others were part of the human conversation long before Peter Druker put pen to paper. Beowulf is one of my favorite non-leadership-book leadership books, and has one of my favorite lines about leadership in print: “He went about things like the leader he was.” (Which also means that if you want to change the leader you are, you must change how you go about things.) If you want a real treat, download and listen to the audio book read by Heaney in his native brogue.
• Once an Eagle: I’m still reading this book from the Marine Commandant’s reading list, but it’s already among my favorite novels. Truly wonderful prose, Myrer’s talent for simile is remarkable, and great imagery and lines shine from nearly every page. What would Sam Damon do?
• Management of the Absurd: Another great management book most leaders have never seen, Richard Farson’s view into organizational paradoxes (e.g., “Technology creates the opposite of its intended purpose”) is worth reading and reviewing every few years.

Actions Speak Symbolically

The events of the current economic condition remind me of the importance of the fundamental communication principle: communication is highly symbolic. This guiding rule proves to be true for leaders in all types of organizations, and as you’ve most likely seen, an example of this principle recently appeared in the news:

•    The CEOs of the Big Three automakers traveled from Detroit to Washington D.C. to negotiate governmental funding to help “bail out” their failing businesses. Instead of driving to Capitol Hill, each CEO elected to fly in his corporate jet. Congress responded to the automakers’ financial requests with frustration, in part because the use of a corporate jet doesn’t symbolize a financial crisis. Senators were also surprised by the CEOs’ decision to fly and not to drive in support of their own business – the automobile industry. After feeling the pressure of public scrutiny, each CEO drove a hybrid manufactured by his company to the next bailout hearing.

This example illustrates the symbolic nature of communication. It’s easy to forget that every action sends a message, regardless of whether you intend to send one or not. While an oversight of this principle can quickly diminish the quality of your reputation, the opposite is also true; deliberate, well-thought-out actions can quickly build your credibility and character. Successful leaders know the importance of good, strategic choices that are in line with their personal brand.

Ultimately, the above example exhibits that while you might not have control of the economy, you do have the ability to control how you communicate during difficult economic conditions. During these uncertain times, your actions speak even louder than before. In this economy, what do your actions symbolize?

The Financial Crisis: Communication Advice for Leaders

What will all of this mean for me? It’s the question of the day as employees watch the stock market plummet, retirement savings shrink, and global currencies fluctuate. The financial crisis brings many questions to mind, and the role of senior leaders is to answer those questions and keep people focused on the right things.

We’ve learned a few lessons about communicating during uncertain times, and offer six quick tips here as you consider your communication approach.

• Get out there. A lot. If you think people are panicking now, closing your office door and saying nothing is the last thing that will help. During times of uncertainty, people want to hear from their leaders, and overcommunication is the strategy of choice.
• Set the right expectations and communicate using “probabilities.” You don’t know exactly what this will mean for your organization, but you do have some ideas. How will the end of the year wrap up? What does 2009 look like? Set expectations that are realistic and share your personal view. Regularly invoke probabilities (e.g., what will happen, what probably will happen, what we don’t know, what won’t happen) to set expectations for the upcoming months.
• Have a consistent elevator speech that you and your leadership team use. Leadership needs to communicate a consistent front during all times—especially during times of uncertainty. Get your leadership team clear on what to say and how to say it.
• Understand the questions that are on peoples’ minds. Walk in the shoes of your employees to better understand the concerns of the day. Speaking directly to these concerns will give you more credibility and relevance.
• Recognize it’s what you do more than what you say. Actions speak louder than words. The 440K spa trip? Probably not the right time.
• Lead with courage. Employees smell fear, and fear paralyzes. Leaders must set realistic expectations about the future while concentrating on moving people forward with confidence. Hopefully, the strategy hasn’t changed. Remind people, and help employees to understand what they can do and why.

Filling The Vacuum At Grand Central Station

We work very hard to teach leaders that human beings are sense-making creatures: We try, at every opportunity, to make sense of what we see, hear, and experience. A consequence is that when a vacuum of information exists, we try to fill it by creating meaning of our own, which may or may not be close to the reality a leader is trying to convey.

Thanks to an email forward by my wife Kate, this morning I saw a wonderful example of this: Over two hundred people deciding to freeze in place, simultaneously, on the main concourse of Grand Central Station in New York. Watch the video, and watch folks try to create meaning out of the event. Acting class? Protest? What in the world IS this? Everybody there has a different interpretation, but they all HAVE an interpretation, and it’s one they’ve crafted out of their past experiences and the overall context at hand. They fill the vacuum.

So the question is: What vacuums of information are your employees filling with meaning? You may not know, but you can count on the people you lead to create meaning for your every decision and action. Your job as a leader is to frame those decisions and actions, adding context so their interpretation is as close as possible to your intention. In times of uncertainty or change, when what you can communicate may be limited, this can be difficult. But there are things you can do to help:

• Refuse to allow vacuums. If there is information you’re not able to share because the facts aren’t settled or HR, your superior, or legal won’t permit it, frame the context by communicating probabilities: What’s certain, likely, unknown (or what you can’t say), unlikely, and impossible. Doing so at the very least contextualizes and constrains the meaning employees (or your peers, or your kids) can create.
• Refuse to let silence be a message. NOT communicating when employees know something is afoot sends a message, and it’s a relational one that employees will interpret as ranging from “I don’t care” to “I don’t respect you.” The act of communicating in the face of uncertainty, be it by sharing probabilities, or even saying “I don’t know” or “I can’t tell you and here’s why,” sends a message about your identity and the relationship. It says “I care” and “I respect you,” both of which are essential to maintaining relational capital during uncertain times.
• Aggressively challenge incorrect conclusions. If you find that employees (or the Board, or your kids) have filled the vacuum with incorrect meaning, challenge and correct those assumptions. Provide the facts, or if you can’t, the probabilities or even the “I can’t say,” but don’t allow the wrong meaning to exist. Not only does it keep bad information in the system, it can brand a leader as passive. In the face of very disruptive change or very bad news, an audience can easily interpret this passivity as cowardice.

Managing meaning during difficult or changing times isn’t easy, but it’s a leader’s burden. The point is to get folks through it with as much relational capital and loyalty as possible–and silence is antithetical to both.

Speaking Their Language

If you’ve been living under a rock in recent years, we’ve got news: High schoolers are increasingly relying on on-line tools to express themselves and communicate with friends. See Pew Internet study with alarming statistics here. (e.g., Thirty-five percent of all teenage girls “blog.”)

Between text messages, Facebook pages, and personal blogs, it appears children need not leave their homes for any reason whatsoever any more. Before I digress about the demise of Kick the Can, a question we get from our clients: How am I, a Baby Boomer, and my company, [insert appropriate descriptor here], to reach the new generation?

If you can’t beat them, join them, right? Perhaps. But three quick tips to observe:

1. Use communication channels that are most appropriate for the communicator and your company’s culture. Authenticity is far more important than anything else. You don’t want the CEO who can’t turn his computer on starting his own blog.
2. Use particular on-line tools because they are helping to accomplish particular objectives. Start with your objective, the message you want to send, and then match these with the appropriate media, understanding that different media are appropriate for different messages. See more about media richness here.
3. Never use new media as a substitute for face-to-face communication. Remember the old-fashioned conversation? It is still the most effective means for communication.

As a new generation enters the workforce, we must get smarter about new media choices, and we may even need to adapt our approach. But, we should do it because it makes sense—not because that’s what the cool kids are doing.

Making Green More Than the New Black

It’s everywhere you turn. Fortune names General Electric the most admired company, citing GE’s Ecomagination campaign. Arnold Schwarzenegger graces a recent Newsweek cover, touting California’s leadership in new environmental policy. And lest we forget Al Gore’s star turn in An Inconvenient Truth—the film that may have started it all—seeking to dispel misconceptions about global warming while chronicling the former vice president’s crusade for the environment.

More and more companies are getting on the greenwagon and the emerging discourse goes beyond corporate responsibility and box checking. No longer is “going green” just the right thing to do—some are saying it’s the smart thing to do, too. Thomas Friedman argues in a recent New York Times article that going green should be the centerpiece of U.S. foreign and economic policy, and GE says their efforts are “as economically advantageous as they are ecologically sound.”

Your firm could be next. We offer a few guidelines to consider as you contemplate your company’s efforts to go green and your approach to communication:

1. Don’t call your company’s efforts a “program” or “project.” Programs and projects tend to have ends. Green is “in” and some might say it will be “out” before we know it. To avoid the “flavor of 2007” label, communicate permanence, not temporality.
2. On that note, have a simple message that explains what your company is doing and why, and situate the message in a pre-existing, larger strategic context. Why and how will going green help your company achieve its strategic objectives? A compelling why will persuade the skeptics and eliminate any lingering “tree hugger” associations.
3. Don’t spend an enormous amount of time with branding and flashy promotion. We can’t tell you how many efforts we’ve seen make a name for themselves, only to fail as a result of heightened employee expectations about the new thing from corporate that’s taking up so much space (and so many resources).
4. Show that your efforts are real in leadership decisions and behavior. Is your CEO “serious about this,” yet still driving a gas guzzler? What investments can your company make in cleaning up operations or exploring environmentally friendly innovation? If there’s nothing that symbolically communicates leadership’s commitment other than the newly formed employee committee, then it’s all just talk.
5. Hold employees accountable for their greenability. Yes, we’re serious. And if you’re serious, too, you’ll align your environmental strategy with your performance management and reward and recognition systems. Our experience tells us that most people will do what’s expected when they know what’s expected and the right type of consequences are following their performance (or non-performance).