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What Every CEO Needs To Know About the New Communication Department

jim | May 2, 2012 | Leadership, Performance Management

Communication departments are transforming themselves. That’s good news.

Many communication departments are in the same business they were in 25-30 years ago—informing “audiences,” which conjures images of someone speaking to an audience.

A confluence of forces including customer demands, increased competition, technology, regulation, environmental pressures and workforce changes are requiring every department and function to generate more value.   The business reality is that budgets that generate acceptable returns aren’t as likely to be cut as those that don’t.

True, not everything that’s done in a communication function–or any other function–adds the same value in terms of its contribution to cash flow, customer satisfaction, operating income or whatever financial measures the company is chasing.

But these forces and the need to add value are requiring communication departments to shift from being a source of information directed at audiences, to a function that eliminates communication defects impeding organizational performance among and within teams.

This shift makes sense to customers who benefit from improved quality, delivery and value. It makes sense to business leaders who can gain a new resource for measurably improving organizational performance. And it makes sense to those in the communication department who can go home at night knowing they influence something important to the greater good.

Communication department transformations today are not unlike those that occurred in HR in the late nineties, or in manufacturing and supply chain management before that.

  • Using rigorous analytics to focus the department’s work on activities that increase value–work that improves business results. (One auto company CEO told me our approach was similar to portfolio management.) This helps eliminate low value work that’s traditionally been done because “it’s always been done.”
  • Adopting lean six sigma principles and processes that weed out the nice-to-do activities that add no value to the customer who buys the organization’s products or services.
  • Shifting the focus from generating output to creating outcomes that are consistent with the higher level organizational measures. This includes eliminating communication breakdowns that cause people to underperform, like mixed messages or inaccurate information.

This systems-wide approach requires far more integration with other disciplines and departments, such as HR, finance and line operations, where much of the money is made.  And because the department is becoming more business-focused, it often requires new skills and knowledge, including business and financial literacy.

As the work becomes directed toward higher value activities, there’s more focus on systems and processes (e.g., measurement, rewards and recognition) that communicate and affect performance more powerfully than, say, newsletters and portals.

Communication departments have an opportunity to shift from a pure cost center to one that adds measureable value when the gains it creates are greater than the cost of creating those gains.

That’s a good news story all around.

Have a Trust Issue? Open the Books!

jim | March 7, 2012 | Communication, Employee Engagement, Leadership, Open Book Management

I took a client to open book management pioneer SRC Corporation last week. For them it was an eye opener. For me it was a reinforcement of what’s possible when a company shares vast amounts of the right information with its people. They make smarter decisions and take performance to unheard of heights.
SRC Scorecard
SRC has for years been my baseline for what well-managed communication should be. I’ve been taking clients and young communication practitioners there for years. After their visit I explain: “Now when you’re confronted with a communication problem, you can ask yourself: ‘What would SRC do?’”

Open book management is a leadership philosophy that’s grounded in the notion of creating businesses of business people where everyone in the organization thinks and acts like business owners.

People in open book companies are steeped in business literacy, work daily to improve the financials, have huge amounts of financial information available to them (hence, the term open book) and their rewards and recognition are tied to financial performance. People who see open book for the first time are “blown away.” Their words, not mine.

Here are some quotes from SRC people:

“VP’s and above don’t really know much. It’s the wisdom of the crowd that makes us much smarter.” (Comment from an EVP)

“In traditional organizations, leaders go to bed every night not knowing what they don’t know. We know what we don’t know because everyone is so involved.”

“Many leaders have a Santa Claus complex. They only want to share good news.”

“It’s liberating to give people the information they need to make better decisions.”

“Our leadership meetings help us identify where employees are constrained from doing what they want and need to do to get things done.”

The four key points from last week’s visit:

  • Communication management is, as it should be, future focused through the windshield. Most companies manage communication historically by reporting what has happened—through the rear view mirror. Sure, we want to know if we’re winning or losing but the emphasis should be on numbers we can do something about.
  • Don’t think about top down and bottom up. That’s old thinking. Think about lateral conversations—people collaborating to get the job done better. Ban we-they thinking and language.
  • Focus on the critical number you’re trying to improve—the one that provides organizational focus and that everyone can influence. So-called “messaging” becomes old way because the focus is less on talking points and more on the numbers that represent the real game that’s being played in business.
  • If you have a trust problem, open the books. If you won’t open the books—even a little—you’re perpetuating the trust problem. Can you continue to lead if you’re not trusted?

What’s your biggest barrier to opening the books? Leaders who don’t trust their people? Fear of exposing reality? Saddled with the myth that the SEC won’t let you?

Time Is Currency

jim | March 1, 2012 | Communication, Customer Satisfaction, Leadership, Performance Management

It hasn’t taken me 30 years to realize that great companies and great people manage time well, among other things.

I initially heard “time is currency” when I was working at Microsoft. Referring to Bill Gates’ obsession with time management, my host told me they refer to his time as “Bill capital.” “It’s a strategic asset that we monitor regularly.”

I was recently reminded of that comment when I was waiting for a client to start a weekly leadership meeting. Scheduled start time was 10 am. At 10:15, people were filing in as though it were a backyard barbeque. There was no sense of urgency. The meeting ran 20 minutes late.

Contrast this experience with one I had when I was working with GE Chairman Jack Welch at the company’s leadership institute in Crotonville, NY.

Welch and I were facilitating an afternoon session on leadership for Amtrak, who was one of my clients. Welch’s office had sent me his schedule for the event: Helicopter lands at 1:10 pm, he speaks at 1:15.

Sure enough, at 1:06 pm I heard the whop-whop of the chopper blades. It landed at 1:10 and we started precisely at 1:15.

  • Being on time means people can count on you.
  • Being on time shows you respect others around you.
  • Being on time communicates you have your act together.

Of course there are extenuating circumstances when you simply can’t help being late. But not chronically late.

Being late means you’re undisciplined. If you can’t manage your own time, why should I put my trust in you?

Being late probably means you’ll run late. When you run late you do so at my expense.

When a group of people schedule a time to start, they’re making a contract. When you show up late, you’re breaking the contract. Why bother to agree to a start time if you aren’t going to live up to your end of the deal?

When a television network or cable channel says a program will start at 6 pm, they don’t start at 6:03 because someone couldn’t get through traffic or misjudged how long it would take to get to work because of the rain.

6 pm is 6 pm.

Is There a Best People Measure? Maybe Not.

jim | January 26, 2012 | Communication, Employee Engagement, Human Resource Management

Measurement is a powerful communication device.

What you count counts. What you measure tells people what’s important. It drives actions people take and the results they create.

When you try to measure too many things, it may tell the people you lack priorities because “everything’s important.”

Recently, we worked with a leadership team that had 15 performance measures. In focus groups employees told us they were confused about priorities. “One minute everyone’s running after improved safety,” one employee told me. “Then it’s quality. Then it’s something else. They need to make up their minds what’s important.”

We were able to whittle the list down to four core measures. Then everything that was said and done focused on those four measures.

One of the most difficult measures to decide on is a people measure—a measure that lets us know how well we’re leading our people.

Here are two schools of thought.

One school says that measuring relevant operating and financial performance such as safety, quality, delivery and cost or productivity is the best measure of how people are performing. Open book management supporters believe financial statements are stories about people and what they do. All their employees understand the financial statement and manage pieces of it every day.

The other school acknowledges that there are specific people-related measures that can be adopted. That’s fine in theory, but you need to make sure you know what outcomes you want before you adopt one of those measures.

Take engagement, for example. Measuring engagement through the use of surveys is useful, but engagement isn’t an outcome. It’s a condition that can lead to the right outcomes if focused well.

Or take retention. Measuring retention can be helpful if you’re measuring turnover of key people. But simply measuring retention may encourage managers to keep poor performers.

Productivity is another measure, with revenue per employee being the most widely used. But measuring revenue per employee might invite some leaders to downsize over the short term in order to hit the numbers, or play the numbers games by outsourcing people.

A better measure might be output produced to total employee compensation. This measures return on compensation (investment) rather than return on employees.

A few years ago, I worked with a client who measured the number of people attending training during a year. That’s fine if that’s all you want to know. But if you want to increase the competencies of your workforce so they generate better business results, you should measure that, not training hours.

Measurement is a powerful communication force. But if you don’t use it right it will send energy in all the wrong directions.