World Colleges Information

Corporate culture and communicating in management By Robert Heller

All sportsmen know that the basic essentials of their game can be expressed in very few words. The greatest squash player of all time, Hashim Khan, needed just one page and nine points to record a lifetime experience of the game he dominated. These pidgin-English principles are key. They take just sixty-seven words: we have added analogies for business that are just as critical for excellence as Hashim's points are for squash.

1. Keep eye on ball. Concentration on the objective is an essential element in all success.

2. Move quick to T (the position on the court from which you can dominate the play). Seek the position of greatest strength and comfort.

3. Stay in crouch (the position from which it is easiest to spring into action). Be ready to act at any time.

4. Take big step. Think and act big, if that's what you want to be.

5. Keep ball far away from opponent. The golden rule of competition is to avoid head-on conflict wherever possible - to bypass the opposition.

6. Have many different shots ready so opponent does not know what you do next. Exactly so.

7. Do not relax because you play good shot...better you get ready for next stroke. Exactly so again.

8. Soon as can, find out where opponent has idea to send ball. Know your competitors, and act on your knowledge.

9. Have reason for every stroke you make. Always think before acting.

What's the essence of the credo? Is it the words, the communication? The words convey a process: that's why they would have more force and effect if demonstrated, delivered and enforced on the player personally by the great man. All sports coaching rests on the same principle of precepts translated into action. Management coaching is no different. In trying to improve performance, both words and action are required: communication is both verbal and visible.

To put it another way, if more effective actions producing much better results are not flowing, communication has not been achieved in any meaningful way. This isn't to diminish the value of words, whose role is exceedingly important. We earlier mentioned a study on the long-term performance of twenty companies that were committed verbally to 'values': they had expanded their net income twenty-three times, while America's gross national product had managed to rise only two-and-a-half times in the same period.

But the proof of the pudding is in the numbers: values that don't add value, you might well say, are valueless. Organizations have no values, no culture: people do. As in all societies, traditions are handed down, while physical assets (factories and offices no less than cities and landscape) influence how people behave. But behavior is the crucial outcome of culture. You may communicate verbally about 'a high degree of attention to the customer, sensitivity to the individual inside the company, dedication to quality'. But these are meaningless concepts unless translated into, and proved by, behavior.

IBM's Louis V Gerstner mentioned the above trio as aspects of its culture that he valued and had 'created' in his previous roles at American Express and RJR Nabisco. He added, though, that 'I'm not interested in the part of the culture that defines processes as opposed to values. I don't want anybody to tell me about the processes.' The truth, though, is that processes enshrine culture. Change the process by which operational managers are judged, for example, and you communicate in ways that radically change their behavior.

In Gerstner's own company, people working in the research 'culture' once had as top priority communicating with their peers: 'being published in scholarly journals.' The new regime communicated a different message. 'Now they have to specify how their work will help the company.' The result, says Business Week, is that IBM's research labs are now picking up their own developments and running with them: controlling a start-up in 3D supercomputer graphics, for example, or actually manufacturing special lasers for telecommunications.

That's a clear case of process changing culture and doing so for the better. The initiatives taken at Jack Welch's General Electric likewise communicate the gospel of change through effecting change. An example is work on projects like mapping and redesigning the manufacturing process for a jet-engine shaft. Here GE workers were able to turn a total tangle into an orderly pattern, and to double production speed, by their own intelligent efforts. GE calls this 'Process Mapping' - and it's a very powerful, basic tool, not just for efficiency, but morale.

Much the same analytical technique can redesign entire 'business systems', after finding out where cost and time are most spent and most wasted. You can then design detailed plans for reducing or eliminating both cost and time. GE also uses 'Best Practice', looking for the best ideas from other organizations and adopting and adapting them for its own purposes. Sensible sports teams and individuals do the same: the example communicates, and the communication is turned into action by adopting the improved process, whether its a high-jumping technique, a soccer formation or a golf swing.

Look at service champions for further confirmation. What does 'high attention to the customer' mean? Process. There's a marvelously effective store operation in the US that has demonstrated the point while growing its earnings per share by 42.5% annually for 10 years. The processes used for this do-it-yourself chain, Home Depot, include many 'cultural' features that are special to this particular company, like having no commissions on sales. That's to ensure that small customers are treated with as much consideration as large - again, effective communication through and leading to action, to process.

In other respects, though, most giants could subscribe to Home Depot's cultural principles, such as training, meticulous recruitment, and having employees as shareholders. But such cultural elements can't make enough difference without another vital ingredient: 'atmosphere'. The word was used by Field Marshal Montgomery to describe what others might mistakenly think to be the sum total of culture. In the right atmosphere, though, people are bound to the company by love of their jobs and loyalty to the culture - as they were at IBM in its old and palmy days.

Tom Watson, Sr. used every communications device, including corny songs at pep rallies, to boost IBMers' morale. The Home Depot bosses do the same: at 6:30 one morning every month, Breakfast with Bernie and Arthur is relayed live over closed circuit TV to nearly all the 45,000 employees. The dominant refrain is to contrast 'Where do you go if you want a job?' with 'Where do you go if you want a career?' (enthusiastic screams of 'Home Depot'). The razzmatazz conceals a deep truth about management priorities: the difference between a job and a career is fundamental.

Putting people and their lives first has to come first, because nothing can be executed save through people. 'Right-sizing', for example, will be far better done if the employees are involved, not as a final thought, but as a first. In one high-tech company, job cuts were approached culturally, as a total quality exercise. The object was to ensure that only dispensable posts went; that all necessary strengths were left intact; and that everybody agreed with the decisions and their implementation.

That exercise, which involved heavy two-way communication, is a process, but one that helps to create, nourish and sustain a creative culture of change. Management's overarching priority is to do precisely that, and it isn't easy. Readiness to change can never be taken for granted. Take unnecessary meetings. In theory, meetings are excellent communication devices: in practice, as every manager knows, they can cast more darkness than light on issues. But it's not only the whole meeting that may be superfluous. Unnecessary individual attendance at meetings is just as serious a time-waster.

One consultant had a client company which suffered badly from the 'he's-in-a-meeting' syndrome. He wisely suggested that all executives be given a rubber stamp. On receipt of memoranda or agenda convening meetings, they would be free to apply the stamp. Its message read 'I see no reason for me to attend this meeting. Please let me know if my presence is considered essential'. Top management was interested; but it didn't buy any rubber stamps.

The consultants also suggested that senior management should agree to come to the office every Monday, with no meetings scheduled all morning, and doors open. Everybody could then be certain of communicating, and with luck getting needed answers and decisions, for at least that one half-day every week. That brainwave suffered exactly the same fate: nothing doing. That kind of organizational, bureaucratized kneejerk is precisely what reformed processes seek to make impossible.

Such processes drive into people's consciousness (and thus the corporate culture) the idea that communicating and accepting practical suggestions is part of the way the company manages. They do it, not by exhortation, but by example. The best example, of course, is that of the 'best practice', mentioned above as part of GE's vitalizing kit. The process involved selecting companies that were outgrowing GE's own productivity and then exchanging management ideas. The approach is so simple that its neglect (and not only by GE) is amazing.

All well and very good, but have these efforts at practical communication changed the culture enough? Not according to Welch. He believes that 10 years will be needed to alter an established hierarchical culture into a horizontally organized grouping. GE will then employ participative, successful people to whom change is a natural order, in which the role of managers is to facilitate and communicate rather than command and control. Ten years? Is that long haul unavoidable? The danger of accepting too long a view was well expressed by the new man at IBM, Lou Gerstner, soon after taking over:

'The adjustment period that IBM has been going through in trying to deal with changes in its markets is now carrying into its second or third year. The longevity of that change is as dysfunctional as the seriousness of the change'.

Delay communicates a deadly message: you needn't do anything - yet. The longer you take to implement a change process, moreover, the more likely it is to be overtaken by events. On taking over Coca-Cola, chairman Robert C Goizueta wasted no time over the first element in any change process - finding out where you're starting from:

'You make a chart. Across the top you put your businesses...Then you put the financial characteristics on the other axis: margins, returns, cash flow reliability, capital requirements. (Some), like concentrates will emerge as superior businesses. Others, like wine, look lousy'. The latter, naturally, you sell.

The message to the good businesses is that they are expected to perform by your selected yardsticks, which are crucial means of communication. Change agents look for the critical success factors, seeking to link performance measurements to strategy. To quote one US executive, 'If you're going to ask a division or the corporation to change its strategy, you had better change the system of measurement to be consistent with the new strategy'. Since WYMIWYG (What You Measure Is What You Get) applies, a central task of change agents is to pick those dynamic measures which will best communicate the company's objectives, financial and non-financial.

Change-masters like Goizueta succeed, while other CEOs fail (like John Akers at IBM), because the successes insist on a proper management process. That no longer means a well-structured hierarchical pyramid. In the flatter, horizontal, fluid organization, excellent communications are still needed for command and control, but they don't take the form of 'order-and-obey' instructions. Rather, people with clear responsibility are expected in turn to give clear responsibility to others.

The process of communication becomes a continuous loop, in which feedback leads to action which leads to feedback which leads to action, and so on. Without that process, change can't be achieved. And without change, you can't establish what Kalchas, the London strategic consultants, calls 'Total Organization Capability'. To find if you possess that capability, ask: are priorities effectively ordered? Is decision-making of the highest quality? How efficient is execution? Inadequate capability shows itself in observations like these from senior managers, who seem wholly baffled by botched internal communications:

'I will tell you why I cannot get things moving. I can never get the right people together at the right time, and when I do the action step is another meeting, or let us set up a working committee or something, but I can't get action'...'I have so many people to speak to get a decision that it takes ages and I'm exhausted at the end of it. I can't do that on every issue'...'I have got two major problems in trying to get to grips with the business myself: I cannot get the right data and when I do, eventually, force what I need out of the system, it's inconsistent or unreliable'

These fairly standard communications gripes, as Michael de Kare Silver of Kalchas points out, actually indicate 'process roadblocks'. The moans reflect obstacles in the way of prioritization, decision-making, and efficient execution. Remove the communications roadblocks and you change the 'culture' - and improve the total organizational capability. Kalchas found a wholly different, much more effective culture at another business in the very same industry, which generated managerial quotes like these:

'We don't have meetings that are not decision-making'...'Everyone helps out if someone is behind on a profit target, as we'd all suffer otherwise'...'I cannot recruit any additional manpower without the approval of the president of the company'...'It's simple - we all know what we're shooting for and what our individual responsibilities are in getting there'...

We have stressed that last sentence because it enshrines the guiding principle around which all good communication revolves. In this particular company, staff, skills, style, symbols, systems and controls, and the shared values are all used to communicate and achieve the desired business results. Kalchas found that, 'before we do anything', three questions are invariably asked:

1. Do I need to do this?

2. If yes, how can I do it at no extra cost?

3. Now it's done, how can I do it at less cost next time?

The questions are excellent, although we would improve the first: as phrased, it invites the answer No: a more positive rephrasing is Why do I need to do this? But the trio establish what kind of capability the company seeks (the ability to achieve optimum cost-effectiveness), and everything else communicates the importance of that drive. For instance, managers are rewarded with money for achieving profit goals; they receive public recognition for cost efficiencies; they suffer public embarrassment for cost inefficiencies.

Obviously, the installation of these approaches in the first company in this odd couple would enormously change the 'culture'. But acceptance is the greatest change of all. Somebody, or some group of people, has to determine and communicate that 'we're going to change' - and show it by instituting new processes. That's axiomatic to the Welch regime at GE. In many organizations, though, the communicators write and talk too much about changing the 'culture', and do too little to turn worthy thoughts into valuable deeds.

The problem starts with the word itself. 'Culture' in the sense of the organizational norms of a business has a very recent meaning: the word used to refer only to 'improvement or refining by education and training', coupled with 'the intellectual side of civilization'. Every company does have a distinctive nature, a set of traditions, often dating back deep into its past, which can only be broken by sharp discontinuity - as must happen if the traditions have become embedded in obsolete or inefficient systems.

One of the best antidotes is to look, listen and learn (i.e., communicate) outside the company. The outside world offers important lessons from which you can benefit. Not Invented Here, a stupid excuse for rejection in many companies, should rather be a recommendation. When GE looked outside, its major discovery was exactly what this chapter has been stressing: that winners concentrate on process - how you manage - rather than on function - what you do.

Likewise, good communications concentrate less on what media are being used and more on how people are aligned with the collective purposes. The overall object is to improve processes continually in a culture which becomes self-generating and self-regenerating. That's the ideal of the management consensus. It can be realized - but only through process, not just by preaching. Get procedures and structures out of the way so that what really matters - process and behavior - enables everybody to learn what's going on and why. Then the company must win. If, of course, you also 'keep eye on ball.'