Transparency at work: Zuckerberg opens up; Facebook rebounds (a bit)

Back on June 1, I argued here that Facebook‘s CEO Mark Zuckerberg needed to lead an effort toward greater transparency in conducting the newly public business of the social network behemoth. Two weeks after its epically hyped IPO, Facebook had plunged 28% from its opening price of $38 to reach a new low of $27.50.

I had no pretensions of Zuckerberg noticing my advice, let alone heeding it, even though there were plenty of other voices calling for more business transparency from Facebook. And indeed, the famously maverick young founder of the company continued to keep a fairly low profile. Facebook continued to be vague in detailing its plans to monetize its enormous base of “friends” and failed to provide guidance on future revenue projections. When he did speak, Zuckerberg reminded us that Facebook’s mission was never to simply make money but to “give people the power to share and make the world more open and connected.”

Having a well-articulated, noble and inspiring mission is critical for encouraging an active and participative employee culture geared to execute corporate strategies. Shareholders can likewise be inspired by the vision. But they also want some guidance to help them figure out if their invested dollars are wisely held in the company, or should be put somewhere else.

(And BTW, employees also want to be reassured that the business has a sustainable trajectory of profitable growth. In short, every stakeholder wants to invest in, work for, do business with…winning companies. “Winning” encompasses all aspects of reputation including social responsibility as well
as, yes, profitable growth.)

Throughout the summer, Facebook stock continued its downward trend, dropping below $18, less than half of its initial price four months earlier. That will get your attention, no matter how maverick you are.

Finally, this week at a tech conference in San Francisco, Zuckerberg let it be know that the company’s profit performance was indeed important to management. As John Shinal wrote for MarketWatch:

Now that Zuckerberg has seen the damage that the stock drop has done to the image of his company — not to mention to the morale of employees with restricted stock grants — he’s on board with the whole profit thing.

Today, Facebook closed at $22 — up a cool 25% from its low 10 days ago. There’s still a long ways to go before Day One investors recoup their investment. But it’s a good start.

So, yes, transparency is critical for all stakeholders, including (especially) employees. And that includes detailing efforts being made to ensure sustainable, profitable growth.

follow url - Jon Harmon

 

Few employees are truly engaged or know the strategy; Great internal communication sets winning companies apart

In a hyper-competitive world and in a weak economy, companies need fully engaged employees who understand and buy into the corporate strategy. So there’s a shockingly huge opportunity at most companies in America today:

    • A 2009 Gallup study found only 28% of employees at large companies describe themselves as fully engaged in their work; 54% say they are not engaged and 18% say they’re “actively disengaged.” (Accompanying graphic courtesy of Gallup Management Journal, Sept. 2010)

  • “Only 37% of employees have a clear understanding of what their organization is trying to do and why. Just one in five employees are enthusiastic about their organization’s and teams goals.” — You Can’t NOT Communicate2, by David Grossman

Fortunately, Grossman’s latest book is an incredibly useful tool for business leaders and communicators who want to increase employee engagement and alignment. Clear, compelling, purposeful communication can make a huge difference in the workplace.

Grossman makes the case for the greatness: “Good internal communication gets the message out, but great internal communication helps employees connect the dots between the overarching business strategy and their individual roles. When it’s good, it informs; when it’s great, it engages employees and moves them to action.” (p. 17)

The book itself models many of Grossman’s principles for effective communication–it’s short and easy-to-follow with simple, bulleted copy and lots of illustrations.

Each chapter has practical tips, questions for self-reflection and specific actions to implement. It amounts to a comprehensive, self-guided business school course, beginning with the fundamentals (that ought to be obvious but will be of benefit to just about everyone) and including “Advanced Communication Mastery” for those ready to take the fundamentals “to the next level.” Grossman makes even this graduate level material easy to understand, but warns that it will take courage to put into practice. “What courageous conversation might you need to have today,” he asks, “and how can you develop your communications skills to prepare?”

Disclosure: David Grossman is a friend and someone I admire.

– Jon Harmon 

Corporate strategy advanced … but left communications behind

Fifth in a series on strategic communications.

At each stage in the evolution of corporate strategy as a discipline over the past two to three decades–from an emphasis on “positioning” to “process” and now to “people”–its dependence on equally strategic communication has become more essential.

But strategic communications as a discipline has not kept pace. And neither have the bright minds driving the strategy trains inside corporations or the leading consulting firms grasped the rapidly escalating need for communication strategy to mature as an essential input into corporate strategy.

Let’s take a look at the evolution of strategy from the eyes of a corporate communicator:

  • Positioning–As the “father of competitive strategy,” Harvard’s Michael Porter defined strategy as positioning. “Operational effectiveness” shouldn’t be confused with strategy, he said. “Competing to be the best” equates to “running the same race faster.” Strategic positioning is “creating a unique and sustainable competitive advantage,” that is, “choosing to run a different race.” Years ago, Hewlett-Packard pioneered a strategy aimed at market dominance of small printers for personal computers–HP would follow the classic Experience Curve model of a market leader driving down its prices to drive share and volume gains, in turn lowering its costs even further. In fact, HP would sell its printers at a loss in anticipation of building a highly profitable business selling expensive ink cartridges to its printer customers. HP’s strategy wasn’t to maximize its share of “printer units sold” but its “share of pages printed.” HP’s competitors have been forced to follow this strategy, resulting in both a price war for printers and sticker shock for customers needing replacement ink cartridges (leading to this less-than-forthright explanation from HP). This market dynamic creates an opportunity for a daring competitor to seek a counter positioning strategy: Kodak in 2007 began to sell its printers for a premium with the promise of low-cost replacement ink cartridges. Aimed especially at the “big burners” (customers printing lots of pages), the strategy has been only partially successful. Clearly the strategy works only to the degree it is communicated effectively–customers are willingly to pay a premium for a printer only if they are attracted to the appeal of lower ink costs. Advertising, point-of-purchase displays and successful PR (including participation in social media) should all be aimed at communicating the benefit of low cost ink, and, importantly,tapping into the anger of customers outraged by high ink costs. A smart, fully integrated, emotional communications blitz strategically aimed at outraged customers would be much more successful than the staid campaign Kodak has pursued. It’s a mistake to attempt marketplace positioning without a strategy actively positioning within the sphere of customer awareness. Communications should not have been merely a conduit of Kodak’s positioning strategy, it should have been one of its pillars.
  • Process–Total Quality Excellence, Re-engineering, ISO and black belt certification and the like are systematic efforts to wring out further improvements in productivity and product quality.
    Relentlessly reducing costs and shortening cycle times are critical to survival in competitive industries, and what industry today isn’t competitive? But process improvement isn’t enough–except for market leaders selling commodities solely on price who can exploit scale advantages over their competitors. Eliminating waste and shaving costs are important, but they amount to what Porter called “running the same race faster,” and Walter Kiechel calls “Greater Taylorism.” Not very inspiring as strategy or battle cry, and therefore unlikely to prove transformative.
  • see url People–Today more than ever, competitive advantage is fleeting. Globalization and the ever-quickening pace of technological advancement (e.g., Moore’s Law) allow competitors to leap-frog complacent market leaders. Contemporary corporate strategy focuses on capabilities and competencies, rather than current product advantage. Strategy aims to unleash the creative power of the team. And the team may be defined broadly to include customers, as in the case of open-sourced technology development, such as apps for mobile devices. (The greater availability of free apps for Android will be a critical competitive advantage vs. Apple’s I-phone.) In this paradigm, information is power not when it is protected, but when it is shared broadly. Cloud-computing can make formerly proprietary resources available to anyone in the world, and facilitate the rapid generation of ideas into concepts, concepts into products, products into social fads, and, perhaps, fads into adaptive (and therefore lasting) cultural icons. Sharing information and encouraging individual expression are foreign concepts for most corporate managers–and, therefore, true culture change will become an ever-more important element of strategy. Corporations traditionally have been designed to enforce norms of behavior and productivity through top-down authority. Actively urging people to push beyond the expected requires a shock to the system. “Innovative,” “creative” and “entrepreneurial” aren’t just buzz words; they describe the essence of people-centered enterprises built to continually produce competitive advantage.

Next: Enough with the concepts already! How can strategic communications deliver results NOW?

- Jon Harmon

 

Communication strategy should not be an oxymoron

First in a series.

As a communications consultant, I’m struck by how often senior executives are disappointed in their public relations functions’ ability to meet even low expectations. Corporate leaders are frustrated that their communication teams are slow to react, do not take initiative, and produce less-that-desired results in terms of positive media coverage or marketing support. Internal communications deliver messages from on high, as instructed, but are not moving the needle, in any measurable way, toward educating employees on the corporate mission and strategy. And no wonder: PR is disconnected from corporate strategy and operates without much regard to supporting the objectives in the business plan.

The problem may be that corporate leaders are aiming far too low in deliverables expected from their communication function. Certainly, PR should be proactive, anticipating opportunities and executing quickly and sharply. And communications, internal and external, should closely coordinate with the business to focus on vital issues and areas of anticipated growth. The stakeholders to whom the communications team aims to reach should reflect the present and the future, not the past.

(If your PR capabilities do not measure up to the expectations outlined in the previous paragraph, congratulations. Your business can realize significant, tangible benefits quickly — you just need to invest in a wholesale up-grading of communications. Start by examining its budget. Companies that view communications as overhead (as opposed to a vital contributor to the business) get what they pay for. And I bet you cut that meager investment further during the Great Recession, right?)

A winning company expects and demands competent, proactive communications from a PR team tirelessly working to tell the company’s stories internally and externally, in sync with business strategies.

But that should just be the beginning. When a business leader says, “I want my communications team to be more strategic,” he (she) generally wants the PR folks to plan ahead better, to take advantage of known coming events and maybe even to check in with corporate strategy once in a while to begin working on the promotion of products coming in the near future (or to put less emphasis on products soon to be phased out).

All well and good, but none of that begins to rise to the level of being “more strategic.” A communications function that is truly strategic works actively to protect and enhance corporate reputation, and to advance employee engagement. (“Employee engagement” is a higher calling than “employee communication” — employees not only knowledgable about the company’s strategy but actively involved in its execution, continually providing feedback as well as creative ideas for fully realizing the strategy.)

It begins with knowing the difference between having a strategy and having a well-developed calendar. Communication strategy is connected to (and is, in fact, a vital input to) corporate strategy, not just a proactive means to convey the company’s strategy to various audiences.

“Communication strategy” as such is a foreign concept at most companies, including large and well-respected ones. It represents a new frontier to be developed and exploited, just as total quality management (remember that?) helped companies that had been paying lip service to quality.

I will further develop the concept of “communication strategy” in coming days and weeks.

- Jon Harmon

Avoid the crisis: Ensure employees are treated fairly

The best form of crisis management, of course, is crisis prevention. Take steps now to avoid problems that can become a crisis if poorly handled.

A crisis audit should include careful inspection of places and go to site processes that could be subject to tragic failure (A facility fire … a faulty manufacturing process leading to an unsafe product, etc.), but don't overlook Big Y Homework Help Number people. The standards a company sets for fair treatment for all employees, and the way it ensures these standards are upheld, are crucial for avoiding a crisis from within.

Prime example: With thousands of veterans returning to civilian life from active combat duty in Iraq or Afghanistan, companies need to ensure steps are consistently taken to onboard veterans as employees in caring and sensitive ways. Companies hiring (or welcoming back) veterans rightly enhance their status as responsible employers, and, for their part, military vets often make exemplary employees. But supervisors should be trained to be sensitive to the often hidden specter of Post Traumatic Stress Disorder (PTSD).

Surely no supervisor at your company could be so insensitive as to deny a leave of absence to an employee suffering from PTSD–and instead give her a more stressful assignment and eventually have her incarcerated by a police psych unit, right? That's exactly what happened to Kay Morris-Robertson, an executive employed by Westfield Holdings, a multi-billion-dollar company operating shopping malls on three continents.

Jonathan Bernstein recounts Morris-Robertson's harrowing story in an article in Crisis Manager titled "Employer Mishandling of Post-Traumatic Stress Disorder — A Preventable Crisis:"   

The police arrived and Morris-Robertson was taken off and detained in the Los Angeles psych unit.  There she encountered various individuals suffering from mental illness, drug withdrawal, and any number of other stressful situations – the last thing to which someone with PTSD should be subjected.

Morris-Robertson's PTSD did not stem from military conflict but from the emotionally wrenching experience of having her husband die in her arms after he suffered a heart attack while the two were out in a sailboat together. She tried to get away from the pain by throwing herself into her work, but the heartache festered inside her until she became distraught. The callous way she was then treated by her employer caused further harm.

And now the company must deal with her lawsuit along with the unwelcome media attention it is generating. Even more importantly, the culture at Westfield has been shaken and employees at all levels must wonder what kind of company they work for. This calls for a sincere "teaching moment" for Westfield's CEO to make it clear that the behavior Morris-Robertson endured was an aberration and will not be repeated. He must demonstrate senior management's commitment to ensure that the work environment at Westfield is not just free of hostility but genuinely nurturing. And he must understand that winning back employee trust will not be easy and it will not come soon.

- Jon Harmon

Start thinking about the upside of the business cycle, reinvest in vital communications

As the economic recovery slowly begins to take hold, smart  business leaders will start activating their companies' recovery plans. That means going after new market opportunities aggressively. And it means starting to invest again in essentials to the business, investments that were deferred during the downturn.

And that may include communication. If your company cut its communication budget to the bone, now is the time to make the case to adequately (not extravagantly) resource smart, effective communication.

Here's an excerpt from an interview I gave to the Bulldog Reporter:

My advice is to start thinking about the upside before your competition does. Think about how the industry will look and how you will gain market share over the competition. The first people who start looking at the horizon—as opposed to at their feet—will have the advantage.

You still want to stay as lean as you can. But this idea of saying "no" to opportunities in the name of cost cutting will not serve companies well.

One thing you should look at in particular is internal communications … extremely important in difficult times and in times of change…. Employees are worried and insecure—and they need to hear from senior management….Communicating optimism is hugely important for getting employees in the company to buy in to the strategy and work at full capacity. Management and leaders in business should be communicating frequently and candidly. That means listening as well as talking."

- Jon Harmon

Optimism inspires the confidence of a winner

I’ve written earlier about the power of a positive leadership message (for example, here and here).

The current issue of BusinessWeek, dedicated to “The Case for Optimism,” provides a good reason to dig into this topic again.

Numerous articles in the magazine cite encouraging economic statistics indicating the “green shoots” of a coming recovery. Optimism (or pessimism) can be a self-fulfilling prophecy and BusinessWeek sets out to do its part to help spur business leaders to begin to invest again in the future, and consumers to begin to spend. When we all start to accept that the worst is likely behind us, we can begin to take actions that collectively will ensure that the worst is, indeed, behind us.

PR and HR professionals have long understood the importance of positive thinking in driving confidence among employees. As Michelle Conlin writes in BusinessWeek:

“Most human resources managers base their motivational policies on a simple psychological premise: that optimistic, engaged employees are more productive and hence can help their employers grow and make more money.”

Conlin provides proof that the premise is sound: a study showing that Best Buy store locationsreport a $100,000 increase in annual sales when employee engagement scores increase by 2%.

So how can a company’s communication people help drive confidence without being dismissed as vapid cheerleaders?

 

  • Confidence-building communication must be credible. Don’t sugar-coat bad news. Be candid in assessing challenges and disappointments, then make the case for future success built on facts and sound reasoning.
  • Hunt out real success stories and then tell employees about them. Personally congratulate and thank the employees behind the successes.
  • Find the compelling visuals to help tell these success stories. Nothing resonates more and sticks more than a good photo or video of a real person at a real moment. Capturing a truly compelling visual means thinking like a photojournalist. Don’t stage a cliched photo, like the employee and manager shaking hands and grinning at the camera. What about the person’s involvement in the improved process tells the story with authentic emotion?
  • Populate your company’s intranet with confidence-boosting information and anecdotes. In addition to messages from company leadership, the intranet might feature discussions from employees at all levels, positive news stories about your company, its people and its products, as well as opinions from analysts, bloggers or community leaders.
  • Use communication channels to help management understand problems and to move quickly to fix them; then celebrate the fixes rather than pretending the problems never existed. Analysts are cheering news today that General Motors has scuttled plans  Vuickfor a new Buick SUV soon after hearing on Twitter unfavorable comments about the SUV’s design (Tweeters complained it looked too much like an old Saturn Vue and dubbed it the “Vuick”) — evidence that the “new GM” is determined to act quickly to correct mistakes and move on.

- Jon Harmon

 

Too much transparency can be a bad thing

When is too much of a good thing no longer good?

Transparency clearly is a communications virtue. So is reader/user participation. There is great power in providing an audience with clear insights into difficult issues, as well as in encouraging audience participation in finding solutions and in guiding content development. These actions foster audience engagement which greatly improves both acceptance of the message as well as the quality of the message itself as we tap into the collective wisdom of the audience at large.

But that doesn't mean that more transparency is always better.

The Chicago Tribune recently launched an ill-fated project to solicit responses from subscribers to sketches of stories as reporters were still fleshing out story details. The idea was to tap into the power of open-sourcing for additional leads as well as to grow reader appetite for an upcoming story or series.

But soon after the experiment was kicked off, dozens of reporters signed a letter to the Tribune's editor, Gerould Kern, urging him to pull the plug on the idea. They were concerned that teasing stories before all the facts were in might, in fact, recklessly spread ill-founded rumors.

"We stopped this," Kern was quoted in a susequent Tribune story. "To prematurely disseminate information about stories in progress compromises reporting (including) potential legal issues, fairness, accuracy and completeness."

The project also raised the specter of news judgments being made by opinion poll, an abdication of editors' responsibility. "Journalists make decisions about news play. We're not taking a marketing survey … and saying 'OK, this goes on Page One,'" Kern said.

It's safe to say that few corporate communications functions are likely to tilt so far in favor of transparency to require a corrective reaction. Most companies could continue to benefit from far more openness in their communications. And open-sourcing for idea-generation and best-practice sharing can greatly enhance the power of company intranets. But it is also useful for us advocates of transparency to take note of the danger of going too far, too fast.

- Jon Harmon