You Probably Had a Better Week Than Ron Johnson

AN APPLE A DAY KEEPS THE CUSTOMERS AWAY

Tired of the "bad Apple" puns yet? Surely Ron Johnson is. After an epic battle over brand differentiation versus price, Johnson was booted as CEO of JC Penney. Many of the "juicy" details (oh, I couldn't help myself) be found in this New York Times analysis, which begins with Johnson sweeping into his role "a star" and leaving after alienating what seems like most of the corporation and customers. What went so wrong? Sure, a few anonymous sources described his management style as condescending, but much of the problem comes from the page Johnson took from the successful Apple playbook: not testing any of his new ideas. While this is common at Apple — "customers don't always know what they want" — the strategy backfired at JC Penney. Shoppers were inundated with the message that they "deserve to look better" — but who (other than Johnson) says they looked bad in the first place? (For a smart, albeit different take, our own Gardiner Morse analyzes "What Ron Johnson Got Right.")

MIRROR MIRROR ON THE CUBICLE WALL

Hirable Like Me (Kellogg Insight)

Most managers would like to think they base their hiring decisions on candidates’ skill. But new research suggests that once a candidate passes through an initial HR screening, a bigger factor comes into play: how similar the interviewee is to the person doing the hiring. Kellogg School of Business assistant professor Lauren Rivera spent nine months embedded in a professional service organization and noted three key reasons why this takes place: the "Will this person fit in?" question; the fact that people define merit on the basis of their own experiences; and that managers get excited by candidates who have similar passions and interests. Hiring managers forget that "there are other ways people can a) be likeable and b) be socially skilled other than being a mirror image," Rivera says.

NOW YOU HAVE MORE TIME TO WORK ON YOUR BENCH PRESS

Brain Games are Bogus (New Yorker)

Sad news for anyone who relies on a "Please make me smarter" iPhone app the way a spelling bee contestant relies on flash cards. Two European scientists recently analyzed 23 studies about the effectiveness of such brain training; their conclusion is that playing cognitive games makes you really good at cognitive games, but not necessarily good at anything else. Gareth Cook runs through a host of other studies, which all echo the finding in different ways. While this may not be a huge deal to the casual Luminosity user (aside from the 10 minutes or so you could actually be doing something productive), the stakes are much higher for people who really need memory help: children with learning disabilities, people with brain injuries, and seniors with diminishing memory capacity. The fear is that companies catering to these groups might be peddling much more than a product that doesn't work very well: discouragement and false hope.

WHO DO YOU CALL?

Lonely at the Top: Being a Lady Boss Without Mentors (The Cut)

You’re a woman. You're 29. You suddenly have the word "executive" in your title. Who do you turn to for advice on managing others (and, for that matter, yourself)? No one, writes journalist Ann Friedman. "Even though I’d been working with professional women for about a decade," she writes about becoming a boss two years ago, "I failed to come up with even one mentor-type figure I felt like calling up for advice." Friedman, in a truly personal way, walks you through exactly what went through her head — from pondering the socioeconomic reasons she didn't have a mentor to what, exactly, her proper "I'm managing others" attire should be. It's a reminder that when it comes to women in leadership, the relationships necessary for tackling the "particularly thorny issues" women face are still, for many, sorely lacking.

GO AHEAD, STRESS YOURSELF OUT

Putting Things Off Isn't Always Inefficient or Unproductive (Quartz)

Turns out it's possible to harness your tendency to procrastinate and turn it into a productivity tool (really). A study of a cohort of highly intelligent people showed that some of them use procrastination as a way to trigger just the right level of stress needed to ignite positive action. Others use procrastination as a "thought incubator" that allows their brains to process ideas unconsciously, according to Quartz. Some people are even able to use their procrastination time to take care of other responsibilities, such as going through their to-do lists. —Andy O'Connell

BONUS BITS

No Rest for the Dead, Rich, or Powerful

Margaret Thatcher Got By on Four Hours of Sleep. Should You? (BBC)

What the Exhausted Will Pay for a Good Night's Sleep (The Atlantic Wire)

What Time Do Top CEOs Wake Up? (The Guardian)

via HBR.org http://blogs.hbr.org/shortlist/2013/04/you-probably-had-a-better-week-than.html

Make Priorities Clear with Green, Yellow, and Red

Boards, managements, and employees waste far too much time due to a lack of clarity in conveying and sharing what it is they are trying to accomplish. The basic task of defining goals and keeping score is so critical, yet not accomplished frequently or consistently enough. Even when we think we're communicating well, our perception of the clarity and impact of our message often outstrips the reality. Are your people nodding with understanding, or are they nodding with the look of a dog in front of the television?

Try this exercise: ask two or three board members or employees what the top three priorities are for the company. Then ask them the underlying activities or metrics best used to measure those priorities. See how consistent the responses are — or are not.

How to do better? You need first to commit to setting your top priorities, tasks and metrics [the content]. Once that is done, you need to commit to the using the most impactful possible means — usually with a strong visual element — to communicate those items [the form]. It's simple: Prioritize, then visualize.

1. Prioritize. Be crystal clear on your top three to five goals. Fewer than three likely means you are not driving hard enough. More than five means you are diluting yourself and others. After that, establish the critical tasks required to achieve those goals AND identify the right metrics and benchmarks to know if you are getting there. Priority-setting is not enough if it lacks concrete and common measurement yardsticks, because people end up having divergent visions of success.

2. Visualize. The output of a process of priority setting, task management, and benchmarking often becomes so complex that it hampers effectiveness. Ironically, the proliferation of new management and measurement tools can make things worse. These tools usually are built on the assumption that all users are similarly competent and diligent in inputting, sharing, and reviewing data. How often do you really read and digest the "number reports" and "task updates" you receive? That's why I rely more on a very basic system: Green, Yellow, Red, or GYR.

No joke — I have painted my business world green, yellow, and red. From simple task lists and project activity updates to scorecards for financial performance, everything is coded in green, yellow, and red. Most of the time, these are in Excel. Because of the ease in which they can be created and understood, I use them as my most frequent management communication tool. The easier something is to visualize and digest, the more likely it is to be understood and used, and few things can be easier than green, yellow, and red.

GYR task sheets sort the most critical information with simple GYR status — green meaning good, yellow watch-out, and red alert. You probably already knew that, of course. Our minds are well-trained to understand what those colors mean.

Here is an example of a typical task sheet/project plan without GYR:

Here is the same in GYR form:

That makes the priorities a bit clearer, doesn't it? Or look at the flash report card that we use to measure the progress of a retail business in which we are invested (the numbers have been changed):

This is an overall scorecard that the CEO uses to measure progress against her number one priority. The organization is clear, first with the metric (revenue per square foot, year-over-year growth, etc.), followed by the benchmark (researched across the industry), and finally the stores' performance.

Perhaps the greatest value of GYR management is that it allows you to really do exception-based management. As humans we like to focus at least as much on what is going well as what is going badly — which plays out in overly comprehensive updates to our teams and managers. GYR forces you to focus instantly on things that are not on track. It's a system and process to acknowledge the good stuff, but spend the majority of the organization's time on the things requiring work. It also encourages more frequent interactions and transparency across the organization.

We are in an era where we are overwhelmed with information and underwhelmed with insight. GYR encourages a discipline of high-quality communications defined by simplicity, relevancy, frequency, and transparency — the path to insight.

via HBR.org http://blogs.hbr.org/tjan/2013/04/winning-with-green-yellow-and.html

How to Avoid Virtual Miscommunication

Why is miscommunication common in the virtual workplace? Lack of context. And it's not just that e-mails and phone conversations lack a person's visual reaction to what you've said.

Think about the information you can glean just from the seating arrangement in a physical conference room — who sits next to whom, who's at the head of the table, who has put a little extra distance between herself and her neighbor, and so on. All those cues are missing in a typical teleconference.

As a result, even the simplest of things can be misinterpreted. For instance, does the use of an exclamation mark in a text message ("I didn't know that!") indicate that the writer is excited, surprised, or angry? Before sending an important e-mail, ask someone else to read it just to make sure it won't be misconstrued. Moreover, I strongly advise that virtual communications use respect, positive affirmations, and gratitude to set the right tone and proper context. "When you have shared context and you exchange information, you'll have a shared understanding," says Karen Sobel-Lojeski, a professor at Stony Brook University. To achieve that shared understanding, I recommend the following best practices:

Fight the "illusion of transparency." We often think that others are more in synch with what we're thinking than they really are. The obvious fix for this illusion is greater empathy. Put yourself in the position of the other person. Actually visualize that individual in his office as you send him an e-mail. Since virtual teams might lack the necessary context for empathy, managers should encourage team members to share information about themselves, perhaps on an intranet site. Researcher Yael S. Zofi recommends that virtual team members actually give a video tour of their offices or cubicles to provide a mental image for others when communicating through e-mail, phone, or texting.

Speak the right "language." In the book "The 5 Love Languages," author Gary Chapman describes five different preferences people can have for expressions of love — through affirming words, spending quality time, gifts, acts of service, or physical contact. Similarly, we all tend to prefer a certain "language" for communications at work. Some people are more quantitative (preferring raw numerical data) while others are more visual (favoring pie charts and bar graphs). For others, storytelling and anecdotes are best. Managers should encourage teams to express such preferences at the start of a virtual project. In one study team members shared their Myers-Briggs Type Indicator to provide a feel to co-workers for how they perceived the world and processed information. Knowing communication style prevents misinterpreting someone's curt e-mail as annoyance or anger if you're aware of his typical brusqueness.

Amplify the signal. We often communicate less information than we think we are, a syndrome psychologists call signal amplification bias. Virtual teams, lacking contextual cues that the other person hasn't understood what we're trying to say, often hear only too late that "I thought it was obvious that..." or, "I didn't think I needed to spell that out."

How to avoid signal amplification bias? Spell things out! Don't just say, "Circle back with me." Do you want final input to a decision or just want to be informed of the decision after it's been made? For important communications, Yael Zofi advises her executive clients to use more than one medium. So, for example, if you have a phone conversation about possible delays in a project, follow up with an e-mail to minimize misunderstandings.

Remember that the medium is (partly) the message. When Marshall McLuhan coined the phrase, "The medium is the message," few could have imagined today's variety of communications media (e-mail, IM, texting, videoconferencing, online discussion boards, etc.). The resulting communication issues have multiplied as well.

Here's a classic example. An executive overhears a rumor at a conference and texts that information to someone on his staff. Later that day, he's baffled to learn that his entire team has been scrambling all morning to confirm the rumor, which he had merely passed along as idle industry gossip. The lesson here is that certain media (like texting) imply urgency, so be mindful and don't let the medium color your message.

Respond promptly (if only to say you'll respond later). A person's response time can matter as much as the medium. In general, people will interpret the promptness of your response to an email or voice message as an indication of the quality of your relationship. When your reply is tardy, the other party is left wondering whether you value that relationship or not. Of course, oftentimes a slow response simply means you were extraordinarily busy. But in a virtual environment, the limited contextual clues like response time tend to take on greater significance.

Avoid sloppy e-mailing. A new status symbol in today's generally more egalitarian business environment has arisen: sloppy e-mails. One provocative study found that many executives have write terse e-mails with half-sentences, bad grammar, and atrocious spelling. The underlying message is that those individuals are far too busy to be bothered with writing perfectly polished text. Unfortunately, sloppy e-mails at best require wasting time trying to decipher them, and at worse cause workplace misunderstandings and costly errors. For offenders who claim they simply don't have time to write better emails, researcher Jaclyn Kostner doesn't mince words: "I tell them you have to find the time; otherwise, you're not fit for the job and somebody else should be doing it. Or maybe you need to offload some responsibilities because there's no excuse for sending people cryptic emails."

Finally, encourage everyone to expect problems. At the start of any virtual project, experts recommend a "meta communication" of basic guidelines, such as how quickly people should respond to e-mails and what media should be used for which purposes (for instance, all team meetings will take place through videoconferencing). A major component of that document, according to Pam Brewer, a professor at Appalachian State University, should be a mechanism for resolving such communication problems as the volume of e-mail becoming unmanageable. Setting the expectation that there will inevitably be problems makes everyone much less hesitant to raise an issue. In fact, the team leader could emphasize that point by adopting the attitude of, "If no one has any communication issues, it's a sure sign that we really do have problems."

via HBR.org http://blogs.hbr.org/cs/2013/04/how_to_avoid_virtual_miscommun.html

The Toyota-Nissan Recalls: Noblesse Oblige

The recent massive recall of Toyota and Nissan is a stark reminder of the costs of strategic dominance.

Although external suppliers account for most (around 75%) of the cost of making a car, automobile manufacturers have long for been legally responsible for the entire product. This principle, enshrined in US law by a famous decision of the New York Court of Appeals in 1916 (MacPherson vs. Buick), means that the automobile manufacturers, for better and for worse, have to stand by the car's faults, whether they are the result of themselves or their suppliers.



Now, being legally liable for something might appear to be a headache, and many in the automobile industry certainly treat it as such. Yet my recent research, with Wharton's John Paul MacDuffie, suggests that this short-term headache is also a long-term strategic weapon, which automobile manufacturers have used to ensure they keep a high, and steady proportion of the total value-add in the sector.

Despite the extensive outsourcing that took place in cars, from the 1980's onwards, automobile manufacturers have been able to retain value. Unlike the computer sector, where vertical dis-integration led to value migration from computer makers such as IBM to chipmakers such as Intel and software and OS writers such as Microsoft, in cars the automobile OEMs still are able to keep the lion's share of the sector's total market capitalization.

This achievement is in no small measure due to the fact that they are ultimately legally responsible for a car. This liability has allowed them to shape standards and demand compliance (with backing from regulators) from their suppliers. As a result the "master and servant" relations between those who outsource and those who produce have not reversed in the car industry, unlike in the computer industry.



That being so, it is quite reasonable to expect automobile manufacturers to graciously accept responsibility for the faults of their cars, and take the short-term financial hit that recalls, small and large, impose.

The same goes for Tesco's and other retailers in Europe, who were found to have horsemeat in their burgers. They were wise not to use the cheap defense that "we didn't know, and it was the fault of our (obscure) suppliers who told us all is good". They recognized that with their acceptance of responsibility was the price of being seen by customers to be their products' guarantors of quality, a key driver of strategic control and profits.

As they used to say in medieval France, "Noblesse Oblige." Much as the nobles of yesteryear understood that they had to accept some responsibilities to stave off revolutions, today's industrial leaders must be willing to take the hit if they are to keep their role at the top of the supply chain pecking order. History is full of examples of what happens to those who become too greedy, choosing short-term gains over long term positioning.

via HBR.org http://blogs.hbr.org/cs/2013/04/the_toyota-nissan_recalls_nobl.html

Are You Paying Enough Attention to Your Sales Force?

There's a question all top managers should ask: How can I make my sales force, which is one of the biggest and most important investments my company makes, perform more effectively?"

There are several reasons that question is so important.

Sales forces are expensive. Despite predictions by some pundits that many sales jobs would disappear due to the Internet and "big data", companies continue to invest in sales forces in a big way. According to Selling Power magazine, the largest companies in America selling products such as computer and office equipment, consumable goods, insurance, telecommunications, and financial services, each employ tens of thousands of salespeople. By our estimates, the amount invested in U.S. sales forces exceeds $800 billion a year. This is 4.7 times the estimated $169.5 billion spent on all media advertising in 2012 and more than 20 times the estimated $39.5 billion spent on Internet advertising in 2012.

Sales forces are empowered. The significance of a sales force goes beyond its cost. The sales force is perhaps the most highly empowered organization within most companies. Usually working alone and unsupervised, salespeople are entrusted with a company's most important asset — its relationship with its customers. To many customers, the salesperson is the company. As customers face a proliferation of buying choices, the way a company sells becomes a key point of competitive differentiation and a source of customer value. This makes an effective sales force essential for driving top-line performance.

Sales force dynamics are complex and poorly understood. Managing a sales force requires many difficult decisions. For example, you need a sales strategy defining which customers to target, what value proposition to offer, and what sales process to use to engage customers and create mutual value. You need to decide what sales force size and structure best allows you to meet customer needs and achieve company goals. You need to choose who to hire for the sales team, and how to continually develop sales team skills and knowledge. And you need to determine the goals, incentives, and sales culture that will motivate peak sales force effort levels and performance.

Many companies today are taking a more strategic and data-driven approach to making all of these and other sales force decisions. But regrettably, our understanding of what drives sales force success still falls short when compared to the cost of a sales force and the huge impact that salespeople have on customers and company performance. Sales continues to be one of the most poorly understood and under-optimized areas of business. Compared to marketing, the number of good books and academic articles in the sales force space is woefully inadequate. In the last ten years, only 3% of the articles in four leading academic journals (Marketing Science, Harvard Business Review, Journal of Marketing, Journal of Marketing Research) have focused on sales force topics. In 2009 (the last year that one of this blog's authors taught MBA students at the Kellogg School of Management at Northwestern), the graduating class left the university having taken over 4,000 course equivalents on marketing topics — but only 100 course equivalents on sales. Less than 1% of undergraduate institutions in the U.S. offer a major or minor in sales and none of the top 20 graduate business schools offer a concentration in sales for their MBA students. (HBR ran an article on the dearth of academic programs in sales in its July/August 2012 issue.

Improving sales force management is a huge opportunity. We believe that sales force improvement initiatives typically produce incremental short-term revenue gains of at least 10%, and long-term increases of 50% or more. Consider the following examples of companies that have implemented sales force improvement initiatives that had big positive bottom-line impact.

• A business within GE that leases over-the-road trailers sought to refocus sales efforts to improve productivity. Leaders invested to develop better measures of customer potential. In just one year, qualified leads increased by 33%. The customer potential data also helped GE redeploy several sales territories into more lucrative markets, allowing the business to grow sales productivity by 7 percent without adding people.


• Global healthcare company Novartis identified a group of outstanding performers in its U.S. sales force, and isolated a set of "success principles" and behaviors that differentiated their performance. Leaders developed a new sales process based on these success principles and behaviors, and aligned sales hiring, development, and other programs to support the new process. The initiative contributed to six consecutive years of double-digit top line growth, well above the industry average.


• Temporary housing provider Oakwood Worldwide transformed its sales force to align better with customers' need for a more consultative sales approach. This involved a new sales force hiring profile, training program, coaching process, and sales enablement tools and metrics. A large percentage of the sales force did not survive the transformation, but most top performers did. A year after implementation, deal win rates had tripled, sales cycle time had dropped by 50%, and salesperson turnover had declined to under 5%.

More research and education on sales, and continued work to develop and refine frameworks for understanding the drivers of sales force effectiveness can make a significant business impact in the years to come.

via HBR.org http://blogs.hbr.org/cs/2013/04/are_you_paying_enough_attention_to.html

Where the Race for Talent Is Tight, Women Gain Speed

"I think multinational companies like to recruit women in China," an ex-pat female senior executive in Beijing explained to me recently. "They are more likely to have the language skills, a cooperative management style, and are enthusiastic about working for foreign firms which are more likely to promote them." That may be why the leadership team I was working with last week was the reverse of what I see in most countries: women outnumbered men.

Some of the research confirms this impression, putting China way ahead of the US and making most Western countries look like a bastion of backwardness. An example is the latest Grant Thornton report, which puts China's senior management at 51% female, which would make it the first country to have a majority of female executives.

Now, some of this data has to be taken with more than a grain of salt, especially since last year's report from the same survey had just 25% of Chinese senior managers as female. Even China can't possibly change that fast. (Asked about this, Grant Thornton agreed they would have to review their criteria.) Yet it does seem to reflect the reality of what I have seen in many multinationals' statistics. Foreign firms are tapping into a vibrant pool of high-performing female talent in China in greater numbers than they do in most western countries. This is also true in a number of other emerging countries.

International companies are discovering that they can often cherry pick the very best female talent in countries where the local firms still discriminate against women. They also discover that the best male talent would often rather work for local firms which may offer better long-term prospects and tempting job roles without having to leave the country. So the choice, as one manager put it to me, is simple: "In terms of local talent, it's between first-rate women or second-rate men."

Smart, highly educated, ambitious women are increasingly learning to prefer the opportunities that global companies offer them over the sometimes-stodgy cultural norms of local firms that are reluctant to promote them. And interestingly, the result is that multinational companies end up with better gender balance in new markets than they ever managed to get at home.

Female executives are also more loyal than their male counterparts, Sylvia Ann Hewlett's work on the female talent pool in China has found. In China's red hot, hard-to-retain talent market, that should be soothing music to recruiters' ears. "88% of women are loyal to their current employers," she found, "And 76% are willing to go the extra mile."

The World Economic Forum has found that China has a gender gap that favors women at "professional and technical" levels (where there are 1.08 women for every man) and in university education (where there are 1.1 women for every man). China has a 74% female labor force participation level, the highest of all the BRIC countries.

And yet it's not all good news — according to the WEF, only 17% of "legislators and managers" are female, a number the OECD data (shown at right) agrees with. Now, this merging of private and public sector is not very helpful, as it is clear that women are hugely under-represented in the Communist Party's senior echelons (where many may argue the real power lies).

So what's going on? Is there a new "gap" we can start to name the Mature Market Gender Gap, where western companies will increasingly gender balance in growth markets while remaining unbalanced at home? And where local companies in growth markets perpetuate a male dominated model?

If this is true, it will certainly make for some interesting future analyses of the competitive advantages of gender balanced workplaces. In the meantime, expect to see a lot of global companies start to move their senior Chinese, Russian and Brazilian women around to improve their overall gender balance. As companies strive for more senior executives that are both women and from growth markets, they may find that they can, if you'll pardon the pun, get two birds with one chick.

via HBR.org http://blogs.hbr.org/cs/2013/04/where_the_race_for_talent_is_t.html

Conversations Can Save Companies

Each period of business history has its own representative corporate type. The 1960s were the age of the conglomerate. In more recent decades, the startup has achieved iconic status. But the kind of organization that marks our own historical moment is, arguably, the turnaround company. In almost every sector, there are once-dominant enterprises that find themselves on the wrong side of a shift in customer demand or the emergence of a disruptive technology. You know their names: Hewlett-Packard. Starbucks. Best Buy. Research in Motion (Blackberry). RadioShack. And, most recently, JC Penney.

So what does it take for a leader to pull a company out of the doldrums, or indeed out of real or potential bankruptcy? It starts, no doubt, with a sense of urgency. In that respect, a turnaround effort differs from a standard organizational change initiative. Change happens slowly, whereas, in a turnaround situation, time is of the essence. A company that's going in the wrong direction or losing money needs to change, and change fast, or soon it will be past the point of no return. Decide, act, decide, act: That must be the order of the day.

Or so it might seem, anyway. In fact, while the need for speed is undeniable, effective turnaround leaders also keenly appreciate the need to stop — to stop and talk with the people in their company who must do the day-to-day work of moving the organization in a new direction. Such leaders understand that a push to undertake a new strategy or to redirect operational performance depends pivotally on how well they communicate with employees. Equally important, it depends on how well they manage communication throughout their organization. Successful transformations require many people pulling together.

Consider the example of Starbucks. In 2008, the coffee chain was struggling to maintain its market position and to ward off a growing set of competitive threats. So Howard Schultz, the company's founder, retook the reins as its CEO and launched a drive to revitalize its operations from the ground up. As reports on that effort demonstrate, Schultz placed communication at the center of his turnaround strategy.

"Schultz'[s] capacity for hands-on communication is impressive," one writer observes. "He blitzed each core constituency — senior managers, store managers, customers, media, analysts, shareholders, and employees — with various communications concisely presenting the case for change or a particular decision." Another commenter, drawing upon a published interview with Schultz (subscription required), highlights several principles and practices that Schultz has sought to pursue: "Share the Vision." "Clearly Lay Out the Plan." "Let Employees Know How They Can Help." "Foster Two-Way Communication."

Yet a focus on enhancing communication isn't enough. It has to be communication of the right sort. In normal times, leaders can allow ideas and information to move across their organization in a deliberate, structured, layer-by-layer fashion. In a turnaround scenario, however, leaders must do whatever they can to make that process nimbler and smoother — more dynamic and more immediate. In many successful turnarounds, the best ideas and important strategic information comes from front-line workers. "Corporate communication," as businesspeople have traditionally understood and practiced it, must give way to organizational conversation.

That's our term for an approach to managing communication that draws upon the immediacy of personal conversation. Our model features four distinct elements: intimacy, interactivity, inclusion, and intentionality. Here, in the spirit of that model, we present four steps toward powering a turnaround project through conversation.

Talk straight. Conversational intimacy involves efforts by leaders to create and maintain a close connection with employees at every level of their company. And it requires leaders to be honest and authentic, especially when it comes to sharing bad news or addressing difficult topics.

In 2000, when Anne Mulcahy took charge of operations at Xerox, there were plenty of difficult topics to confront. Xerox was deeply in debt, its stock was plummeting, and its core business model showed every sign of being unsustainable. In that role and at that moment, Mulcahy focused on getting out into the field and talking with people. A study of her tenure during this period quotes a colleague of hers as follows: "Anne appealed to employees with missionary zeal, in person and through videos." According to the study, Mulcahy herself said, "I'm never happier than when I'm milling around with a group of Xerox people, in a town hall meeting, or a Q&A. I don't like giving speeches, but I love dialogue."

It wasn't all happy talk — far from it. In talking to fellow top executives, in particular, Mulcahy was blunt about reckoning with points of potential conflict. "I knew there would be people who certainly wouldn't be supportive of me," she recalled. "So I confronted a couple of them and said, 'Hey, no games. Let's just talk.'" She also put forth a more general rule: "When there are tough messages to deliver, it's important to communicate the good and the bad. Respect people by delivering the truth."

Make talk happen. When a company enters a turnaround crisis, it's often in part because people in the organization have lost the ability to interact with each other. So conversationally adept leaders find ways to promote interactivity, critical debates, and relationship building. They deploy communication channels that allow for back-and-forth discussion, and they build a culture that fosters that kind of discussion.

That's what Carlos Ghosn did after he became president and CEO of Nissan in 1999. The Japanese automaker had seen its performance deteriorate over the preceding decade, and a shake-up was clearly in order. Among the first items that Ghosn changed was a protocol that had been in place for meetings of top executives. In a study of Ghosn's turnaround leadership, a fellow executive offered this observation: "In old Nissan, there was hardly any discussion in most senior management meetings. . . . Today our meetings are different. We actually debate issues. We openly disagree with one another. It took some time for all of us to get used to it, but our meetings are much more productive."

Ghosn also initiated practices that enabled greater interactivity throughout Nissan. Instead of relying on memos — or on middle managers — to convey his message, he used a companywide video hookup to present his transformation plan to employees. "This was the first time in the company's history that the president spoke directly to everyone in the organization," one Nissan executive explained. And the organization responded.

Let everyone talk. Conversation inclusion exists where leaders adopt measures that enable employees to participate fully in the communication process. By including people at all levels of a company in the organizational conversation, leaders can achieve a more intense quality of engagement among those who must carry out a turnaround project.

HCL Technologies wasn't at a point of crisis in 2005, when Vineet Nayar took on the role of president, but right away Nayar saw the need to initiate a major transformation effort. The company needed to move up the value chain in the technology services industry and reposition its customer offerings, and making that shift would require HCL employees to change how they related to each other — and to the company. Toward that end, Nayar and his team launched a internal communication initiative that featured the tagline "Employees First, Customers Second" (EFCS). In a study of his early push to transform HCL, Nayar explained the EFCS theme: "The idea behind Employee First was that as a services business, the employee interface with the customer was critical. ... I wanted value-focused employees who were willing and able to drive an innovative, sophisticated experience for customers."

Elements of the EFCS project included the launch of a new, "employee-friendly" intranet portal and the creation of an intranet-based service called U&I, which empowered employees to engage directly with Nayar. "Communications at HCL used to be handed down from up high," a senior manager at HCL noted. "Vineet replaced that with lots of direct contact through video conferencing, online tools, and face-to-face talks."

Talk strategy — and talk strategically. Only when leaders approach communication with intentionality can they ensure that smart talk will result in sustained action. By carefully building communication efforts around a clear organizational vision, and by taking care to follow an overarching strategy for those efforts, a leader can pursue a turnaround conversation that will keep a company on message and on track.

Consider the turnaround push that Jan Carlzon undertook at Scandinavian Airlines Systems (SAS) in the early and mid-1980s. To improve the company's ability to attract business customers, Carlzon aimed to improve the level of service that frontline employees could offer. The best way to do so, he concluded, was to empower those employees — to give them greater autonomy and flexibility in how they did their job. Yet they could exercise that autonomy fruitfully only if SAS leaders also gave them a big-picture sense of what the company was aiming to achieve. Carlzon, in a study of his early work as CEO, put it this way: "Anyone who is not given information cannot assume responsibility. But anyone who is given information cannot avoid assuming [responsibility]."

According to that study, Carlzon and his team went so far as to create a booklet for employees that used cartoon imagery — a smiling airplane, for example — and "simple, direct language" to tell "the story of the company to date." Employees came to call it "the little red book," and it exemplified Carlzon's theory of turnaround communication: "Rather than merely issuing your message, you have to be certain that every employee has truly understood and absorbed it."

Here's what Ron Ullman, the newly rehired CEO of JC Penney needs to understand: In the 21st century, it is becoming harder and harder to orchestrate a successful turnaround without turning around the firm's employee engagement and communication practices. And that means making them more intimate, more interactive, more inclusive, and more intentional.

via HBR.org http://blogs.hbr.org/cs/2013/04/turnarounds_turn_on_conversati.html