3 All hands on deck

‘My experience being a CEO for ten years is that you’re much better off being transparent and communicating frequently with your employees as to what you’re doing and why you’re doing it.’

Mark P. Frissora, Hertz, Chairman and CEO

The art of letter writing

Every week George Halvorson writes a letter to over 160,000 people. The chairman and CEO of Kaiser Permanente writes a note celebrating something someone in the organisation has done. ‘Usually the letters are about us as people, the people at Kaiser Permanente; these are the kinds of things that we do; these are our values; these are our accomplishments. They’re typically things that are illustrative of a collective effort’, he explains.

Halvorson has been in the letter writing habit throughout his career. His weekly letter has become a fixture over the last two or three years. Previously it was a 10- or 12-page quarterly letter, something he has been writing for 20 or so years since he ran a plant in Minnesota.

Named CEO and chairman in March 2002, Halvorson has over 30 years of healthcare management experience. Kaiser Permanente, founded 1945, is the US’s largest non-profit integrated health plan, serving more than 8.6 million members in nine states and the District of Columbia.

The letters work. When we talked Halvorson had just come back from a reception in Richmond where two different people came up to him, said they were Kaiser employees and that they both read the letter every week and looked forward to it. ‘They really appreciate getting a sense of what we’re up to and what we’ve just done. We have won a number of diversity awards in the last month so my letter last week celebrated our diversity and celebrated the fact that we have been winning awards in that area. People get a sense of what our values are, who we are.’

Adding up the responses, George Halvorson calculates that he receives around 10,000 to 15,000 responses to his letters a year. ‘People will tell me things that I don’t pick up any other way. People will say, we’re having a problem with our supervisor because she’s doing XYZ. I get a sense of flavour and tone from what’s going on in the organisation, and people feel very free to communicate directly with me on a very wide range of topics. I just had a letter from one of our employees who had an idea for how we could use the Wii machine to do health education. He sent it as a response to my weekly letter and it was a very nice set of thoughts. And so I’m passing it onto our product and health people; and I will tell him I’ve passed it on, so people know it doesn’t just come in and disappear. People have a sense of free communication.’

Halvorson ranges widely. He wrote about a programme to prevent premature births and brought in his own experiences after his grandson was born weighing just 2.5 pounds (1.1 kilos). He wrote about Kaiser’s hospice programme and his dying uncle. He wrote about joint transplants, pointing out that a failed hip transplant is a significant event in a person’s life rather than a statistic. Next day, Halvorson received two letters. One was from a surgeon who said the letter had reminded him that his work touched people’s lives. The other came from someone who had had their hip replaced and then had to have a new one put in. Halvorson sent the second letter to the surgeon to further reinforce the point.

There are broader points at work in George Halvorson’s letter writing. First, it is a very personal form of communication. ‘What I try to do in the letters is just communicate a sense that we’re about people and we’re about taking care of folks and that we’re inherently a culture of caregivers’, he says.

Halvorson regards communication as being at the heart of changing Kaiser’s culture to one which is transparent. ‘You start with one culture. Then you say: Where do we need to go? and then to get to that culture what are the intermediate steps? Because you usually can’t just go from culture A to culture B if they’re radically different; you have to go through intermediate steps to get people to understand the value and to buy into the value of the ultimate culture.’

As part of this process, Kaiser put together a cultural development chart. This was basically a five-year agenda to get to the end culture it wanted. It identified which things needed to change in year one, which things in year two, what sequence things had to work in, and how the various cultural attributes interacted. This was then synchronised with the operational plans for the company.

The culture of transparency is credited by Halvorson as a major factor in Kaiser being able to put in a $4 billion computer system – the biggest computer system implementation of any private company in the world. Instead of this massive new system change being imposed from the outside, before Kaiser started the programme Halvorson took 90 physicians and spent time going through the possible outcomes, forging a sense of shared vision, and then selecting which vendors could deliver which parts of that vision.

‘By the time we started this $4 billion project, we had a whole bunch of really key, well placed people within the organisation who had a sense of what it was about, where it was going, why it was happening, and what the tool kits were’, Halvorson says. ‘And then we sat down, brought them all together again, we picked the vendors, picked the team, and we sat down together and did a collaborative build and then spent a couple more months with another set of people – some of the same people but some additional people – to do a collaborative build for how are we going to put these tools in place, what’s it going to look like, how’s it going to affect the hospitals, laboratories, whatever? And so we had this collective agenda, and then we went forward and set up the track and laid it out and delivered.’

As a parallel, the UK’s National Health Service is attempting to introduce a mammoth medical record programme. This started at the same time as Kaiser’s programme, has so far cost twice as much, and still doesn’t work.

Elevator pitch

If leadership is the job, making change happen demands communication. Communication is an ongoing and huge challenge in any organisation and particularly when change is happening. ‘During restructuring I took it upon myself to do daily recordings so people could call in and I’d do phone calls to the entire company on a regular basis. We’d send out updates on everything that was going on and it was never enough. You just cannot over-communicate’, says Peter Sharpe, CEO of Cadillac Fairview.

One of the most open, frank and plain invigorating of the people we encountered was Tim Flynn, chairman of KPMG. His openness was disarming. First, he talked about whether he was the right man for the job. ‘I’m not the only person in my firm that can do this job. I’m the only person that can do it the way that I do it, because everyone is unique in how they carry out these responsibilities. But there are other people who can do it. I think there are people who are right for certain times in an organisation and the key is how do you manage the right person with the right skill set at the right time in organisations. How do you match with the need of the organisation at that point in time?’

Tim argues that the higher you progress up the leadership hierarchy, the broader your span of accountability. Simply, there are many more things for you to get involved in. The question this poses is how good are you at delegating and what do you arrange your time to become involved with?

One thing Tim doesn’t delegate is something he patently enjoys: reaching out directly to people in the organisation. ‘The time I enjoy the most is out in front of our people’, he says. ‘I get the chance to talk to 1000 new hires at our orientation. I talk to my partners at the annual partners’ meeting, meet with people one-on-one. I’ll go to an office and walk around the halls and stick my head in people’s office and say, hi, ask them what they’re doing. And it’s amazing, I’ll get all these emails afterwards that’ll say, gees, no-one ever did that before. The impact you have on people and the ability to bring faith to an organisation is powerful.’

At KPMG’s New York HQ on Park Avenue the firm has a number of floors. This means there’s a high probability that anyone in the elevator is from KPMG. If he’s in the elevator, Tim Flynn keeps his eyes open. If someone pushes the number for one of KPMG’s floors, he will ask if they’re with KPMG and then introduce himself. ‘They look at me and say, hi, and think, who’s he . . . oh, my God! I’ll say, what do you do, what’s your role, and all this kind of stuff and, and have great conversations. That sort of thing buzzes around the organisation and you can see the impact.’ Indeed, think of the impact: a chairman who is passionate about engaging with people and who takes every opportunity to do so.

This abiding passion for communication was probably the most powerful recurring theme among those we interviewed. Take Jim Skinner, vice chairman and CEO of McDonald’s since 2004. He served nearly 10 years in the US Navy before beginning his career with McDonald’s in 1971 as a restaurant manager trainee in Carpentersville, Illinois. Through his career he has held numerous top jobs. For Jim Skinner it doesn’t matter whether you’re running a restaurant or a corporation, it boils down to communication. ‘I think the important thing, in the best of times and in the worst of times, is communicating a clear vision for the organisation’, he told us. ‘This leads to strategic intent, tactics and all those other kinds of things, but most importantly it is about who we are and what we stand for. We’re in the food business, we’re a restaurant company. We’re focused on the customer. It all revolves around doing a better job today at what we have always done. We don’t do anything else that can impact the interface with our customer, that makes money, anywhere in the world, except at the front counter and drive-through. Fifty-five million times a day this is critical. It is about staying the course. We’re a brand that deserves to be trusted. And the good news is the communication doesn’t change whether we’re good times, or we’re under heavy scrutiny, or there are issues.’

Jim Skinner’s communication mantra is that less is more. ‘I do use a BlackBerry, but that’s because I don’t want to carry a laptop. I use it just to stay in communication relative to emails and information, and sales, not necessarily to communicate, on important issues with people. But you have to be accessible, and I am accessible. People can reach out for me.’

Habit forming

Communication for Sam DiPiazza of PwC had to cover the 150 countries the firm operates in, 8000 partners, and a total of 150,000 people speaking 80 different languages.

‘An old mentor of mine used to say that good habits in good times means good habits in bad times. The good habits that we’ve built are that we’ve got clear lines of communication and we’ve got structures and processes in place that can motivate the line of management that needs to be informed and can then touch the rest of the organisation. It doesn’t feel the same in Russia as it does in Kansas. Kansas doesn’t feel good, but Russia feels worse. Dubai feels nasty and so you’ve got to make sure that you’re adaptable to different parts of the world that have different cycles or a different intensity.’

Communication PwC-style is a true trickle-down model. A group of very senior managers around the world – perhaps 200 in total – are incessantly communicating to the 8000 partners, and the 8000 partners feel a high level of ownership to about 10 or 20 people each. ‘It’s consistent, it’s process driven through structures that are in place, and you ratchet it up to a higher level when things get difficult’, summarises DiPiazza.

To give a sense of the levels of communication DiPiazza is in the habit of, when we spoke he had just come off a five-hour video conference which had begun at 7am. It featured participants from six countries throughout the world. ‘People have to see that you’re human, they have to see that you understand that’s something changed, and that you acknowledge it, and then that you’re listening to their input on how to deal with it. What we try to do in this time is to say to our people, we understand how you feel, because we feel the same way and this is what we’re trying to do about it. Then you get feedback from your people through town hall meetings or telephone calls or webcasts and your people will give you their reactions. Some of it’s pretty aggressive or nasty, but more often than not, if you include them, you can work your way through this.’

Communicating in turbulent times

Communication in turbulent times must follow a number of straightforward rules.

It begins with listening

Alexey Mordashov took his top team at Severstal away from the workplace to think about communication issues. It proved powerful and illuminating. The lessons, he told us, were clear: ‘If goals are very simple and clear, we are able to communicate to each other, and to interact and to support each other and demonstrate enough trust to achieve goals very, very effectively. This showed us that what was missing for effective team performance was a shared vision about our goals. And also what appeared very clearly was that a lack of listening, was a major cause of tension. We just didn’t listen to each other. It was very important guidance for us, to understand that we could act as a team, and a major area for improvement for us was just listening to each other. Listening has helped us better understand ourselves and what to do.’

At Heidrick & Struggles we produced a book of parables called Listen. There is one page which many consultants have framed on their office walls. It reads: ‘As a partner and consultant you should follow your biological set up. Two ears and one mouth means listen twice as much as you talk.’ That’s a pretty good maxim for any leader.

The reality is that the more anxious people are, the less good they are at listening. The leader has, therefore, to find all sorts of ways to try to hold their interest and hold their attention.

It can be difficult, partly because people tend to keep quiet around their leaders. Listening tunes you into the audience, but there are often residual barriers. A Western executive working in Japan told us a story of how he went to a distant part of the country to sign an agreement with a banking group. He could speak Japanese but encountered a confused response. The Japanese banker had never dealt with a foreigner in his working life and was very nervous. Because the banker believed the foreigner was going to be different and difficult to communicate with, this was what happened despite the Western executive’s endeavours to put him at his ease.

Similarly, when Bijan Khosrowshahi was CEO at Fuji he put listening centre stage – really listening. Historically, at Fuji meetings an executive would typically present a report by simply reading it out loud. The junior person would read the report word by word. Half an hour of the meeting was given over to reading a 3-page report. There would be a ten minute discussion and that was the end of the meeting. Khosrowshahi decreed that there was to be no more reading at meetings. ‘Everyone does their reading before and we’re just going to talk’, he says. ‘This was a huge, huge culture shift. People would come to the meeting with papers in their hand and I would literally tell them to put their papers down. I don’t want you to read your papers. Tell me what the issue is. Tell me what’s going on.’

Straight talk from the start

‘The message is very clear, and you take the message down the organisation to every single employee’, summarises K.V. Kamath of India’s ICICI Bank. Sam DiPiazza of PwC struck a common theme when he was talking about communication. His message was that actually telling people the truth, being upfront and giving it to people straight, was the only way forward. Says DiPiazza: ‘We basically said to our people, you see the reality, we see the reality, we’re going to do our best to stay the course with you, but you’re going to have to step up your game. Over the next 12 to 24 months, salary adjustments are going to be lower, bonuses are going to be lower, promotions are going to be slower, or the alternative is that we fire 6000 people.’

Hard messages. The obvious next question for us to pose was what happened? How did PwC’s 150,000 plus people take it? DiPiazza explains. ‘Our people basically said, OK, we’ll work with you. When it becomes obvious to all your people that the business has shifted, you have to be open with them. You know, the business has shifted, we are moving from 8 or 9 per cent growth to 2 or 3 per cent growth. Most of our businesses are either growing 2 per cent or shrinking 2 per cent around the world. We told our people that while that’s better than almost any other sector in the world – it is different. They are going to have to work in an environment that’s a bit more stressful. In some of our units around the world, we told them, next summer, when we have salary adjustments, it’s probably going to be flat, no salary increases, unless you’re promoted. So our people know it’s coming, and that takes all the edge out of it, you know, when there’s no surprise.’

Tough times call for straight talking. If you take over a company in a muddle – or worse – there is little to be said for politeness and understatement. Talk straight and act in accordance with what you say.

‘We have certainly started communicating internally in a very different way’, says Ed Dolman of Christie’s, ‘with regular communications directed from me to the whole organisation about what’s going on and how we’re going to react to it. There is much more direct communication than we did before. We’ve done a lot of staff meetings, communication meetings, town hall type meetings, because rumour and fear are running rampant.’

The truth is that if leaders are upfront and honest then people tend to respond in kind. If things are tough, people tend to know that. ‘Strangely enough, if people understand that you’re in trouble, and that you’re having to make tough decisions and this is what’s driving these tough decisions, and this is likely to be happening in the next month or so, once people have heard it and got comfortable with the rationale and the way the decisions are being made and that sort of thing, hopefully it makes things more understandable to them, and there’s less fear and there are less rumours as a result’, says Ed Dolman. ‘I think communication is absolutely key. But it is difficult to communicate in the world we’re in now, where any form of digital messaging, whether it’s rumour or video or anything, can go straight out to the public domain.’

At the British retailer Marks & Spencer, CEO Stuart Rose set about restructuring the company, concentrating on making cost savings of some £260 million. Six hundred and fifty of the 3500 corporate employees left. He felt it was important that his deeds matched his words from the very start. ‘What I felt was that you had to talk the talk and say it as it was. And remember, we were fighting a bid at the time – so we needed to say it as it is, not only to the press whom we were trying to win over and get our point across to, but also internally. Because if you were saying it to the press you couldn’t then not do something internally, so that again was an advantage because it gave me a double strength.’

It must be simple

‘You need to ensure that everyone understands what it is they’re working towards and what part they have to play in it. As a CEO, you need to be able to articulate a simple idea of where you’re taking everyone and why. If you can do this, you will have a high chance of creating the kind of engagement that produces a cohesive team that delivers to the organisation’s objectives’, says Talal Al Zain of Bahrain Mumtalakat Holding Company.

‘Whatever the message is, it is important to make it simple. Complex messages are never understood. The only things that are going to be effective are things that are simple. Then people around you can understand and act on them’, says Carlos Ghosn. ‘At Renault and Nissan, we have three- to four-year business plans with a maximum of three commitments that the company sets to achieve in order to keep the focus and to enable limited and concrete milestones and objectives.’

Complicated messages are harder to decipher. If you can say something simply, then do. This includes eradicating management speak and jargon. The legendary US investment guru Warren Buffett once opined that if he doesn’t understand something, he assumes that someone is trying to fool him.

Plain speaking is not easy. Many organisations are steeped in a culture of management speak. Failure to communicate simply can be costly, however. In 1983, computer manufacturer Coleco wiped $35 million off its balance sheet in one quarter. The reason: customers found the manuals for a new product line unreadable and swamped the company with product returns. In 1984 the firm went bust.

It must travel the world

Communication is now global and with this comes further capacity for confusion.

You can never assume that your audience is on the same wavelength. One of us went to a friend’s 40th birthday dinner in the United States. His daughter was asked to set the table. It was explained that the forks needed to be on the left and the knives on the right with their sharp sides pointed towards the plate. She got the forks right, but the knives were carefully placed at right angles to the plate. The girl had been helpful and had listened, but the final detail of communicating wasn’t thought through. Imagine the room for misunderstanding in a global organisation where there are, metaphorically at least, knives and forks everywhere.

Global communication demands ever greater precision. Confusion is often the product of ambiguity. Don’t say: ‘I want the project tomorrow.’ Specify what project, where you want it, and at what time. Then there is much less margin for error. This way if you actually wanted the project on your desk in the morning, you won’t spend the day stressed out because the person delivering it thinks they have until midnight to email it to you.

Bijan Khosrowshahi, formerly CEO of Fuji Fire and Marine, brings a unique perspective as one of the very few foreign CEOs who has led a Japanese company. Indeed, at Fuji he was the only foreigner among 6000 employees. ‘English is my third language so I was often communicating in a language that is not my mother tongue to someone for whom English is also not their mother tongue and maybe I’m doing it through a translator whose mother tongue is also not English. You simplify your message’, he says. ‘When I gave a speech, whether it was a five minute talk, a big meeting, or 10 people, the translators want to have the outline and they want me to read it. That’s one of the things I changed. I said no, I’m going to give you topics that I’m going to talk about, so they can be prepared but I’m going to look at people, I’m going to get a feeling what they think or where their mind is, and I’m going to adjust what I say based on that. It took some time but they understood that that is how I communicate and that was very effective.’

It needs to be personal

‘I do a lot of little things that in my mind I think of as kind of cheesy. But they aren’t cheesy and people actually appreciate it’, Nick Stephan of Phoenix Partners told us as we discussed his communications style. ‘Every day I probably spend at least an hour of my day wandering around the broking floor chit-chatting with some of the guys, how’re they doing, how’s their month going, how are things. I could pull up the dashboard and see how it’s going, but I go out and give them the personal touch.’

Says Mark Frisorra of Hertz: ‘I believe in times that are really tough actually touching and feeling and being with people, that personal touch, that experience of bonding and sharing information, and doing collaboration, provides energy when you need it the most.’

In the information age we have a huge choice of communication media – email, telephone, video conferencing, etc. But, evidence suggests that none are as effective as face-to-face interaction. About 80 per cent of human communication is non-verbal. Facial expressions, body language, eye contact – these are key conduits.

We read body language to pick up the atmosphere. We walk into a meeting and pick up the feel of what other people are thinking. We watch how Y reacts to what X is saying. You can’t do that by video conference. Body language speaks volumes. Ignore it at your peril.

‘I believe a word from my mouth, or from anyone, has a strong soul. If you talk directly instead of through email and as long as you have a strong will, you can convey your will. This is right, let’s get things done,’ says Takeshi Niinami, CEO of Lawson in Japan. In the early days in his job, Takeshi estimates that he spent almost 70 per cent of his time talking and listening to people face to face.

Takeshi especially made use of team meetings. ‘You can have direct communication with 30 or 40 people, rather than using email. Actually I didn’t use email at all – I just spoke on my own with the people. And I was always there at our training programmes at the Lawson University to talk to managers directly. Even now, for probably three months of the year, I’m not in the office at all. I’m out of town and don’t come back to Tokyo.’

Change and leadership begin with conversation. Bold decision making has to be backed by consistent and committed personal communication. Always. To sustain that time commitment to providing straight, clear information and to listen as openly as possible to your audience’s concerns and reactions is harder than it may sound. It requires a leader to be able to draw on a deep well of self-esteem in order to remain balanced and be neither evasive nor defensive.

Flatter management structures mean that executives can no longer rely on hierarchical power to get things done. Instead, managers must increasingly rely on persuasion – and inspiration. This requires a more sophisticated style of communication directed at the individual and imbued with emotional context as well as content.

One survey of 60 executives found that the messages that get attention are those where the message is personalised, evokes an emotional response, comes from a trustworthy or respected sender, and is concise.

Great leaders have long been aware of this. Jack Welch of GE habitually sent handwritten notes to workers at all levels, from part-time staff to senior executives. Some even framed his notes, as a tangible proof of their leader’s appreciation.

Seung-Yu Kim of Hana Financial Group told us about the amazing efforts he puts into establishing personal rapport with all the bank’s employees. After Hana merged with several banks, Seung-Yu set out to memorise the names of as many people as possible. He memorised almost 1000.

‘I had their photographs and their names, a CD in my car, and something on my desk, and even beside my bed. I tried to remember their names and their background, which province they came from, which school they graduated from. I tried to memorise them all. I also pop into branch offices whenever I can.’

It needs to be authentic

Your communication style not only needs to be personal, it needs to be authentic too. It needs to be your voice.

There’s a great Dilbert cartoon. In it, the boss approaches the long-suffering technical writer and announces that he has decided to write a daily blog. ‘Every day I will record my personal thoughts about our business’, he declares, before adding: ‘I need you to write the first one by noon. I can’t wait to see what I’m thinking!’

We can all share the writer’s dismay. Communication – whether it is by blog or more traditional means – is not something a leader can delegate. Of course, leaders need help with communication, but the sentiments communicated – be it good news or bad – should always be their own.

Regularity breeds contentment

‘I’ve increased the pace and the depth of communication, making sure our staff know clearly what’s the strategy and why we’re not managing week to week and yo-yoing projects. That’s probably the biggest change in my time’, says Tom Glocer of Thomson Reuters.

The reality is that better communications could – and perhaps should – sort out most of the day-to-day problems in organisations. Poor communication is the consistent downfall of organisations – now and tomorrow. Effective leaders constantly communicate. Indeed, they often communicate exactly the same message but to different audiences. An appetite for repetition is part of any top job description. And the repetition needs to be consistent, for there is danger in varying the message, even slightly, for different audiences. If we send a message to our employees in one region, the global grapevine immediately kicks in and soon it is all over the company: the message must be the same for all.

‘I’ve learnt that people don’t get the message until you hear it back from them. Once they’re starting to repeat the message, then you know, okay, they’re on the team’, says Sesame Workshop’s Gary Knell.

Bruno Lafont, chairman and CEO of Lafarge told us he reads only direct emails but maintains constant communication in other ways. ‘I meet with my executive committee team for three hours every week, and meet with each of them individually once a month for one hour, and when needed. Together, every month, we review the advancement on the Group’s few strategic and operational priorities. We now have quarterly business reviews and I attend many of them. I keep travelling a lot and try to meet informally as many local employees as possible, which ensures that I have a good understanding of what is going on in the business.’

Leaders who are good communicators know it is essential to maintain a frequent dialogue with their executive team. It is no use hauling an executive in to give them a roasting if you haven’t spoken to them for the previous month. Regular dialogue should have removed the need for the dressing down. And remember that communication is a two-way activity. Key to this interaction is listening. Always.

‘The best advice I was given is you’ve got to work hard at being a good listener. The higher you go, the more important that is’, says Caterpillar’s Jim Owens. ‘Most people who are highly successful are a bit of a bull in a china shop at some parts of their career. I had senior managers sit down with me, reviewing my performance and saying, here’s an area that you ought to really work on. I did try to take that to heart and now I work very hard at creating a culture where people can feel very comfortable disagreeing with me. I want to engage in the fray and the debate. I want to get all their best ideas on the table, particularly my direct report team.’

One of the most striking examples of communication we have come across comes from Seung-Yu Kim of Korea’s Hana Financial Group. His willingness to open up communication channels with employees is deeply impressive. ‘My people can send me emails at any time, even very early in the morning, two or three o’clock. They really appreciate it and that’s why they try to listen to me.’ At the company’s training centre, training finishes at 9 or 10 o’clock in the evening. Seung-Yu Kim makes a point of taking the opportunity to talk to the groups of 30 or 40 people. ‘I talk with them personally and meet face to face with the people. And then I accompany them to one of the nearby small bars and drink Korean liquor, soju. Actually I don’t drink at all, so sometimes I drink water because the colour is the same! It is about hugging them one by one.’

When any of Hana’s people are hospitalised, Seung-Yu Kim always visits them in hospital. As the bank has 12,000 employees this is no mean feat. He also always attends the funerals of the parents of employees. ‘Our people are like my family’, he explains. ‘If they have some trouble, they call me up first.’

Be positive when you can

‘Unfortunately, in a crisis most people focus on the negative. There is a group of people in any company – sometimes it may even be the majority – who just want to hear negative news. They want to lick their wounds. I refuse to do that’, says Henry Fernandez of MSCI Barra. ‘As soon as the downturn was apparent, I went out on the offensive telling people that a crisis is a terrible thing to waste. I kept telling everyone, look, this crisis presents huge opportunities, we want to take advantage of those opportunities. We went around the various departments – we have about 800 people in 15 countries. We would email and call people and say, okay, what are you going to do for the business today that is going to be positive? Are we going to take market share away from competitors? Are we going to serve clients better? Are we going to come up with more innovative products to help people do risk management? We’re going to keep the same level of investment, the company, but can we do more?

‘If you look at the very macro picture of the global economy, the global equity markets, the global this, you will say there is no money to be made anywhere because everything is bad. But a lot of our business, like every other business, is made one client at a time, one purchase at a time, one investor at a time and therefore I will say, yes, there are a lot of people out there who are suffering and they don’t have budgets and their assets have come down, but there are also a lot of people out there that have budgets to spend, so we’re going to focus on that.’

It is tempting to slide into negativity. There is a lot wrong in any organisation – and that includes your own. No one you encounter is perfect – and nor are you. So, accentuate the positive and use positive reinforcement to back your strategies. This was brought home to us talking to Lawson’s Takeshi Niinami.

One of his strategies was to make the company’s local branches receptive to local needs rather than standardised by central dictates. ‘We are everywhere in Japan and Japan has a very diverse culture and lifestyle. So we have to understand local customs and to match up with local customs. We can’t decentralise customer needs’, he says.

When the first stores started matching local needs, there was an expectation that the CEO would issue a reprimand. Standardisation had been the policy. Instead, Takeshi Niinami praised the efforts of the stores in front of as many people as he could. ‘These kinds of things easily fly all over Japan’, he says. ‘Some products, local products or local rated products, were failures. But I didn’t give them bad feedback. Basically, before I arrived people didn’t want to challenge the status quo, they just listened to management. They never thought on their own. I just pushed people to think on their own.’

Negativity is corrosive. To stand any chance in the job, a leader has to quickly identify positive messages and continually emphasise them. Repetition of key positive messages is the hard graft of leadership.

Says Stuart Rose: ‘We tried, often via some very simple things, to give people their confidence back because the morale of the business was very damaged. There was a feeling of inevitability about the fact that we were a mid-market retailer either going to be undermined by cheaper competitors, like Matalan and Primark, or be completely swamped by competitors with mass appeal like Tesco. We reminded people that this was not a new problem. We had had competition through the preceding 110 years of our history in different forms and different shapes and different places. This was just another manifestation of the same problem, but this time we just weren’t dealing with it. So we used to go back and remind them what were the best things about Marks & Spencer. I still use that a lot. Quality, value, service, innovation and trust are the five words we always use, and the three most important things we need to do are to have better products, to have better shops and to have better service. I still use those five words almost every day in this business and I’m pretty certain now most people can remember them and say, actually he’s got a point.’

Communicate up

Communication needs also to be channelled up the organisation. Even for CEOs this is an issue. The channel of communication between the CEO and the boardroom needs to be constantly open. In too many cases CEOs seek to communicate with their boards when problems are mounting. On the other side, boards are often tempted to spring issues on unsuspecting CEOs at board meetings. Gamesmanship helps neither side win the game.

The best CEOs spend time between the board meetings in touch with the board members, managing expectations, seeking advice, taking soundings.

Clear and regular communications can turn around problems. One Fortune 100 company’s fortunes had declined over ten years. By the time its board looked for help it was in effect a turnaround. A new board with broader advisory skills took over, but within three years it became apparent that the new CEO, while effective at improving operations was not able to reposition the company’s strategy. Eventually, another CEO was brought in. He created a weekly communication plan with the board to keep them abreast of the major strategic shifts and allowed an open forum in board meetings so that board members could witness first hand the executive team in action. In this case, open and consistent communication helped the nimbleness of the company’s decision making.

Use technology, don’t let it use you

We were talking to an executive and he told us about getting into bed one night with his BlackBerry – his wife turned to him, looked his BlackBerry and said, ‘Only one of us is staying in this bed tonight.’ Who says romance is dead?

Communication and technology are now intertwined. This cannot be ignored. Most of the effective leaders we encounter use technology sensibly and comfortably. ‘At Hertz I issue a monthly email newsletter to all employees and host a quarterly global webcast. We’re talking about what we’re doing and why we’re doing it. I also have a special email address so employees can communicate directly with me so I can answer their questions and act on their suggestions in real time’ says Hertz CEO Mark Frissora. ‘We cut the employee base from 40,000 people down to 24,000 people in a period of two years here. And I can tell you our morale on a lot of our locations is better than it was, so we feel good about that. But it’s all due to just telling people what you’re doing and why you’re doing it, it’s that simple. But you have to commit to that transparency, and to spending the time with people so they understand what you’re doing. If you do that, it can be managed and managed effectively, without hurting the morale of the overall company.’

Jim Owens of Caterpillar echoes the thoughts of many we talked to. They were technologically savvy but wary of having their agenda hijacked by being available every single second of every minute of the day. ‘I don’t allow myself to be the slave of email. My secretary screens them and she gives me a priority call on things that I absolutely have to answer and if I don’t answer them that day she gets after me the next day’, Jim told us. ‘I never leave the phone on if I’m in meetings. I think it’s rude to allow yourself to be interrupted in the middle of meetings. I don’t carry my BlackBerry around to meetings in the office. I use it extensively when I’m travelling, but never in the office. And I usually try, when I leave the office, between six and seven at night, not to do very much at home, other than read the paper or magazine articles and things like that, that are interesting.’

In the age of the Internet, many senior executives offer their own weblog – a blog – as a source of communication. At Mitsubishi Corporation, Yorihiko Kojima, the President and CEO, has his own internal blog. Some leaders have found blogs to be a persuasive marketing tool – Jonathan Schwartz, CEO and president of tech giant Sun Microsystems, David Neeleman, founder and CEO of JetBlue Airways, and Richard Edelman, of Edelman, the largest independent PR firm in the world, are all avid corporate bloggers. Among our interviewees, John Brock of Coca-Cola had started his own internal blog – ‘It has proven to be a great way of informally communicating with people.’

In his blog, Jonathan Schwartz, says: ‘We’ve moved from the information age to the participation age, and trust is the currency of the participation age. Companies need to speak with one voice and be authentic. Blogging allows you to speak out authentically on your own behalf, and in the long run people will recognise that. Do it consistently and they trust you.’

Studies show that 45 per cent of Fortune 1000 executives think that corporate blogs are growing in credibility as a way to develop and build brands. ‘For corporations, the attractions of corporate blogging are varied, but include improving market status, personalising customer relationships, boosting public relations and improving recruitment. Corporate blogs are also being used to foster internal collaboration and improve knowledge management. One of the key benefits of corporate blogging is that companies can track thousands of posts and know what Internet users are thinking about in real time’, says Jose Esteves of Spain’s IE Business School and an expert on corporate blogging. ‘For researchers, like me, it also offers a new mirror to see into the corporate soul.’

Expect to be misunderstood

The best leaders have an innate ability to identify what needs to be done today and what can wait. They know the key messages to communicate from day to day, from audience to audience. They prioritise constantly, aware that wars are lost by fighting on too many fronts. This requires a high degree of patience. ‘Everyone feels we’re moving like a bullet’, one leader confided. ‘But I feel like we’re crawling.’ Pace is relative.

Communication demands patience. It is surprising how easily you can be misunderstood – and for us it’s not an English language problem, it is a question of understanding, emphasis and expression. We had a communication go out in the organisation, and in Europe we went to three different countries, and they said, ‘Hey, Kevin, this is great. We get it; we understand you’re growing, you’re not shrinking the business, but you’re going into new businesses, et cetera.’ And then we came back to America, same communication, and my colleagues in America said, ‘Kevin, what the hell are you doing? You’re shrinking our business.’

Leaders learn to modify how they speak, to make their vocabulary more simple and easy, in an attempt to get their message understood. The reality is that each person reads material from their own perspective, taking their own meaning from what is written, and you need to try to predict that. That goes for both emails and spoken word.

The reality is that leaders want to do the right thing and communicate and be clear and transparent but have to spend so much time checking that the communication isn’t possibly going to be misinterpreted, or misunderstood, by great sections of the organisation that sometimes the timing is not as swift as they want it to be. And guess what? After all that, it still gets read the wrong way.

This is yet another reason why all good communicators share one underlying quality: strong self-esteem. Only when strongly grounded can leaders listen twice as much as they speak and when they speak it is the truth.

Resources

Judi Bevan, The Rise and Fall of Marks & Spencer . . . and How It Rose Again, Profile, 2007

Phyllis Mindell, How to Say it For Executives, Prentice Hall, 2005