While organisations such as Toyota, Southwest Airlines and WL Gore are not immune from trading conditions, they have closer control over their destiny. The difference comes down to leadership, and strong leadership has many dimensions. One of the most easily overlooked is communication, not just the style or type of communication or types of media used but the relevance and honesty: in short, its authenticity.
WL Gore, for example, the manufacturer of the outdoor waterproof fabric GoreTex, has as a founding principle that all management decisions are fully explained to all affected staff and justified in terms of the company's values of ethical conduct. This is a strict injunction upon all managers. It is a test of the coherence of their strategy that managers must subject it to the most critical scrutiny it can endure - from their own staff. Not only do they have to tell the story, but also they have to have a convincing story to tell, and one that does not betray the company's principles.
In the short term, this is often a significant investment in management time that can appear to delay essential change programmes. Many managers feel that speed is of the essence, especially in difficult economic times, but too much haste and poor communication can be a false economy. WL Gore's approach engenders strong engagement and organisational adaptability. The savings and returns are considerable. To begin with, managers typically only have to say something once, in contrast to a more passive culture characterised by multiple memos and emails that go un-read.
Moreover, it is impossible not to communicate. Failing to inform staff of the situation or the strategy sends out a clear message, but it is not one that is likely to engage the commitment often necessary for recovery. The most effective leaders with whom I have worked do not separate strategy from communication, treating the latter as if it were supplementary or optional. Rather, they attend to the communication needs at all times.
They also address communication in all dimensions: language content, emotional commitment and body language. Research shows that people will quickly switch off unless all three dimensions are engaged. If the content is positive, but the leader is frequently looking at his or her watch or sounding irritated, it will not be absorbed.
Barack Obama is an example of someone who communicates on all three levels and people generally believe him, whether they agree with him or not.
Such integral, authentic communication is not an optional extra. All businesses rely upon trust: the customers will not buy unless they trust the staff; the staff will not stay unless they trust the business has a future; nor will they be convincing if they do not trust the product or service. The right kind of communication is essential for building and maintaining that trust.
Communication isn't always easy: telling the truth at times of trading difficulty, for example, is a tricky balancing act. Employees will quickly distrust a management who insists on ‘Business as usual; we're going for growth' when the evidence around them demonstrates sharply reduced consumer demand. On the other hand, an overly gloomy or fearful message can cause morale to slump and talent to flee. It is perfectly acceptable to remain authentic while accentuating the positive.
It helps to understand the importance of communication if we challenge some of our popular reference points and assumptions. In the 20th century we used the metaphor of a structure for organisations: they were assumed to consist of ‘units', and strategic changes were and are referred to as ‘restructurings'. But the real organisation is far more complex than that - it is more akin to a human brain than a Meccano set. Using this imagery, communication becomes the millions of neural connections essential for ensuring each part is functioning and is sent the right signals.
It isn't by accident that some organisations are much less affected by the economic cycle than others, and it isn't achieved by strategic thought alone, but rather by intelligent leadership, communicating the right message - and doing so with conviction and belief.
Neela Bettridge is an executive coach and co-founder of Article 13
