Leading in the age of transparency

An interview with Rod Cartwright, Partner at Ketchum, and Kieran Colville, Director at Ketchum Change.

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Why is this the ‘age of transparency’ and what does that mean?

Rod: When we use the term transparency we are referring to the blurred line between the internal operations of a business and the external world of consumers, stakeholders and the media.  The line has been blurred mainly through the rise in digital and social media, which sees free-flowing information and content seized on and shared instantly.  This has changed the game for leaders because if the idea that they could “control” their organisation’s corporate culture and reputation was ever a reality, it most certainly isn’t now.

Kieran: I agree Rod, the game has changed.  You don’t need to look very far to find examples of employee communications that were “leaked”, got picked up by the media, and went viral, forcing leaders to respond and take action.  Those stories may have happened 20 years ago but today they spread so much faster and wider.

Can you tell us more about what the wider implications could be if an organisation fail to react?

Kieran: There are several.  Potential employees may be turned off; current employees may become disengaged; and ultimately consumers may question whether they would want to continue purchasing from this company. This is the crucial point.  Now more than ever, how engaged employees are, and therefore how much they promote and recommend the organisation, has a much larger impact on consumer confidence and loyalty than it used to because of this increased “transparency.”

Rod:  Indeed! And this has been one of the key findings of our global Ketchum Leadership Communication Monitor (KLCM) study, which we’ve been running for five years now. The research with consumers across five continents sets out to answer two simple questions: “What does the world think of its leaders?” and “What can those leaders do to restore confidence?”  We have found that poor corporate leadership prompts one in two respondents to stop purchasing or to purchase less.

Kieran: To make it simple: leadership drives employee engagement, which drives consumer loyalty.  In 2014, “employees we know” came in at No.3 on the list of determinants of consumers’ purchasing behaviour, with the CEO coming in at No. 10 and other senior management at No. 13.  Leaders cannot ignore the importance of creating the right culture and engaging employees in the right way, as they are the brand ambassadors in today’s world.

This makes sense.  So how bad is the current state of affairs?

Rod: At no point in five years of running KLCM have more than 25 percent of respondents said leaders are leading well.  So consumer confidence is consistently poor, with demonstrable commercial consequences.

Kieran: What Rod said.  It is that stark.

Yes, that is glaring data.  It sounds like something the CEO should care about personally.

Rod: Absolutely.  However, in 2015 we highlighted the rise of the title-less leader, with respondents overwhelmingly favouring leadership provided by the entire organisation and everyone within it, rather than just from the CEO or senior management.

Kieran: From the study, respondents look strongly to leaders at all levels who seek collaborative solutions rather than doing it alone; are open and honest about the nature and scale of the challenges ahead; and have a clear overall vision for how their organisation can survive and thrive.  At Ketchum Change we have developed a practical model for helping leaders build capabilities in these areas: our approach is called Liquid Change Leadership to reflect the need to be readily adaptable in today’s volatile and complex environment.

Sounds very relevant.  How can leaders apply this Liquid Change Leadership model?

Kieran: It is very practical and actionable.  It has four capability areas: Transparent, Dialled-In, Pioneering and Agile, each with a positive level to do more of and a negative level to eliminate.  We will be covering this at our event on 20 October so you’ll have to come to find out more.

Rod: At the event we will also dive into the study in more detail.  The latest results point to leadership communication that needs to be more “feminine” and diverse, and we will discuss what this means.

Sounds intriguing, I will definitely be there.  Thank you both for your time today.

Kieran: Thank you, this is a critical area for leaders at a critical time, so we appreciate the opportunity to discuss it.

Rod: Thank you.  See you on 20 October.

Interview by James Murphy EEA

Kieran and Rod will be speaking at our next event on October 20th – Leading in the age of transparency

 

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Your Culture Is About How You Treat People

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by guest blogger Deb Lavoy

Over the last few months we’ve been sharing what we learned when we asked 320 people about their level of engagement at work, along with a bunch of other things, such as how employees view executives, and how executives view employees. We published a white paper with Brian Solis on what he called the “Engagement Gap” – the difference between employee and executive views of engagement. Since then, we’ve published discussions on the three of four things that we found most impact employee engagement: respect for leadership, work that matters, and pride in company. Now we’re looking at another major predictor of high employee engagement – a positive view of the corporate culture.

Interestingly, a positive view of culture is the least powerful of the four employee engagement predictors. This could very well be, however, because of the fact that “culture” is not a very well understood idea.

Ask someone in the field what organizational culture is, and they’ll say something like “a system of shared assumptions, values, and beliefs, which governs how people behave in organizations.” But what does that actually mean? How do you build a positive culture?

You’ve heard the expression that life is what happens while you’re doing something else? Well, so is culture. A company’s culture is a behavioral experience, but it’s also an emotional one. To get that positive culture – the one that makes employees feel engaged and committed, you want that to be a positive emotional experience. Why?

Whether or not you believe the recent New York Times story on the culture at Amazon, you can be certain that parts of it are true. You’ve probably been in situations that echo that nastiness. It’s what I call “management by fear.” It makes you sick, it dulls your creativity, it makes work 99% anxiety and tricks people into stretching themselves far too thin in order to prove something. This is clearly a toxic environment. Did Amazon set out to create a toxic environment? Not likely.

A recent Harvard Business Review article “Why organizations don’t learn” cites a gap similar to the Engagement Gap. They cite the gap between the fact that nearly all companies believe innovation and learning are essential to success, and how few companies are consistently successful in doing that. The learning gap is not about intelligence but about fear of failure and the need to sustain the status quo. This fear begins with the CEO, who passes it down through the ranks. It would seem that fear is the most common barrier to a good culture. It prevents us from treating one another with the respect and compassion that great collaboration and great culture demands.

Why so scared?

We fear failure, we fear our own vulnerabilities. We fear the scorn of others. The classic hierarchical organization is a perfect environment for fear to flourish and grow. It’s a rare and remarkable leader who can overcome these fears and create an environment of learning, listening, common aspirations, and trust.

Can you set out to create a positive culture?

You can set out to create a positive learning environment. You can commit to a set of values that you believe in. You can model the behavior you want to see. You can hire people who share your attitudes and values – as long as you balance that with the need for diversity that is clearly required for real innovation.

But first, you need to be clear-eyed and honest about your intentions. Is it your intention to invest in people because they will drive profitability? Or is it your intention to pursue profitability at the expense of people? Be honest with yourself. The former requires a significant act of faith – that people can and will do great things in the right environment.

Several recent research articles attribute hiring, training, and promotion practices as key drivers of culture. This makes some sense, as it looks to “attitudes and behaviours” which are about people interacting with people. Healthy, Mexican fast food chain, Chipotle, has been hiring for the values they think will make them successful. That is, they don’t hire for skills, they hire for values and attitudes. Then they train. A lot.

Costco has a similar approach. They hire well, pay well, and train, train, train. And, as compared with Walmart, they are vastly more efficient and profitable. This recent Bloomberg article cites Costco’s average hourly wage as $20.89 vs Walmart’s $12.67. They also note some (radical) differences in their stock performance. The pay differential is only one of many differences in the two approaches to employees. The level of training and commitment to those employees is fundamental to building that culture of treating each other well.

Why does training matter? The more capable your people are, and the more deeply they understand the business, the more you can trust their judgment. If you can trust someone’s character (because that’s why you hired them) and trust someone’s judgment (because you’ve given them all the training they need) you can let them use their discretion. You no longer need to micromanage them. You can allow them to think, to serve to commit. You can allow them to do good. Importantly, this also allows you to do good. It’s an act of courage. It’s an act of humility that recognizes the value and potential contribution of others. It’s a mindset that believes you are not the only smart person in the room.

Even more so, all this training and compassion allows employees to treat one another with respect, trust, and compassion. They are confident in one another’s skills. They are respectful, confident, and humble in balance. Training and values can do that.

It would appear that these different approaches also have a very noticeable impact on performance and momentum.

 

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So how can we invest in a positive culture?

  1. Commit to a set of principles or values that drive your decision making after examining the truth and depth of your commitment to them.
  2. Hire and train people in accordance with those values.
  3. Encourage everyone to treat one another well, by treating them well.
  4. Ensure that those people and those values inform every decision.
  5. Fight your fear with courage and humility, and help everyone else do the same.

So the real secret to a great culture is to treat one another well. The secret to treating people well is to think about what your values are and commit to them. The Scylla and Charybdis of positive culture are hypocrisy and fear. They will constantly try to undermine your efforts. It takes ongoing courage, humility, and compassion to help yourself and your team past them.

There are companies whose management will berate and bully people. But there are also companies that have the courage to invest in people and build trust in them and vice versa. We’re delighted to see that the good guys are winning with employees, customers, and the stock market.

Breaking Through Barriers to Great Leadership: A KLCM Five Year Worldview

by guest blogger 

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Five years ago, we set out–through our annual Ketchum Leadership Communication Monitor (KLCM) Study–to answer two simple questions: “What does the world think of its leaders?” and “What can those leaders, and the organizations they steer, do to restore confidence? (click to tweet)” Issues that lie at the heart of what we do to help organizations, and those at their helm, establish and maintain leadership advantage.

Fast-forward to today as we unveil the fifth edition of KLCM–less than a week after last Thursday’s UK’s Brexit vote sent shock waves around the world’s financial markets and corridors of power. We could not have imagined that our exploration of this critical area could be quite so relevant.

As political leaders across Europe strive to convey a sense of stability, and British politics comes to terms with a short-term leadership vacuum, conversations with more than 25,000 members of the public over those five years have revealed a detailed picture of people’s views of leaders around the world–across five continents and 22 industries. Revealing a low-trust, high-expectation gap as the new normal for leaders, with deep-seated leadership concerns having a direct, sizeable impact on bottom-line outcomes and political systems.

Looking at this year’s findings, while also standing back and surveying the five-year vista, a single, striking theme shines through–the critical importance of breaking through persistent barriers to great leadership.

  • In 2013, we found an inbuilt tendency of people to believe that leaders aged 35 to 49 and at the height of their powers are the most effective source of leadership.
  • In 2014, our exploration of gender and leadership revealed that while the world still looks most to male leaders, people are markedly more impressed with female leaders than their male counterparts. Suggesting that the future of leadership communication will be more “feminine” – with practical lessons for leaders of both genders
  • Last year in 2015, we highlighted the rise of the title-less leader, with respondents favoring by far leadership provided by the entire organization and everyone within it, rather than just from the CEO or senior management
  • This year, our exploration of leadership issues such as religion, ethnicity, disability and sexual orientation has revealed a leadership glass ceiling stretches way beyond gender. Shockingly, for all of the social progress of recent decades, a majority of respondents globally view four of those five issues as standing in the way of equality of leadership opportunity – with almost half feeling the same for religion.

Crucially, with political leaders, laws and legislation seen as much a part of the problem as the solution, there is an unprecedented opportunity for the corporate sector to lead the way in shattering the leadership glass ceiling. With huge reputational and commercial dividends for those willing to do so in their words and actions in an environment that has seen the right of traditional politicians to lead fundamentally questioned across the globe.

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For business leaders to enjoy the full benefits of grasping this particular bull by the horns, the key will be starting with a simple, honest question, “How ready are we? Here are our best practices summed up into five areas:

1.       What measures do you have in place to ensure reasonable expectation-setting and to avoid “say-do” gaps between what you do and the expectations you set through what you say (especially in a crisis)?
2.       How open are those in your organization – individually and collectively – to genuinely listening to understand your audiences’ definition of transparency?
3.       Does your approach to leadership balance a clear vision with a willingness to admit mistakes and make continuous improvements?
4.       How committed are you and your organization to enabling leadership at every level?
5.       Beyond legal and legislative requirements, how are your leaders breaking down barriers to equal leadership opportunity in areas such as gender, age, ethnicity, religion, sexual orientation, class and disability?

Let’s be clear–there is a big job to do here and the events of the past week have highlighted that fact in dramatic fashion. At no point in five years have more than 25 percent of respondents said leaders are leading well, with under one in five expecting an improvement in leadership next year. So as we continue to work with our clients in navigating a course to more effective leadership communication, we hope others will join a conversation that has never felt more relevant and critical to our collective future.

Ketchum Change, part of Ketchum, is a boutique change management and communications consultancy. We help organisations through complex and continuous change by driving growth, transformation and communication, and create breakthrough engagement strategies that inspire human behaviour change and deliver results.