Leadership

This is Not Responsible Leadership: Boeing’s CEO Blames Predecessor

March 12, 2020 by Nagesh Belludi Leave a Comment

David Calhoun, Boeing CEO In January, Boeing’s former Chairman, David Calhoun, became CEO after the board fired Dennis Muilenburg. Less than two months later, in a New York Times interview last week, Calhoun blamed Muilenburg for the misfortunes plaguing Boeing:

Asked why he wouldn’t give up his salary (he gets a $7 million bonus if he can get the 737 MAX back into the sky) in light of the 737 MAX-related woes, Calhoun declared, “… ’cause I’m not sure I would have done it [taken the job without a salary].”
On Boeing’s systemic culture problem (a steady trickle of revelations has exposed software problems and corners being cut in the engineering and certification processes,) Calhoun characterized the contents of the leaked emails as unacceptable but also downplayed the issue: “… I see a couple of people who wrote horrible emails.”
Calhoun has been on Boeing’s board since 2009. While the MAX crisis snowballed and Boeing’s crisis management went from bad to worse, Calhoun took over as the board’s chairman. In that capacity, he fully endorsed Muilenburg saying, “from the vantage point of our board, he has done everything right,” “he didn’t create this problem,” and “shouldn’t resign.” Now, in the last week’s interview, Calhoun had a different take: “Boards are invested in their CEOs until they’re not. We had a backup plan. I am the backup plan.”
Acknowledging that Muilenburg boosted production rates before the supply chain was ready, Calhoun declared, “I’ll never be able to judge what motivated Dennis, whether it was a stock price that was going to continue to go up and up, or whether it was just beating the other guy to the next rate increase. If anybody ran over the rainbow for the pot of gold on stock, it would have been him.”

Calhoun and the rest of Boeing’s board of directors were part of the context right from the outset. The roots of Boeing’s current crisis embody decisions made by the company’s leadership over a decade and fully sanctioned by the board. The board is wholly accountable for everything that happens under its authority.

Idea for Impact: Blame is an Accountability Killer

This is not responsible leadership. A true leader doesn’t pass the blame for failure but graciously accepts responsibility for the problems he inherited. Even though Boeing’s lapses may not be traceable directly to him in his capacity as a member of the company’s board, Calhoun should have acknowledged his—and the rest of the board’s—failing to keep an eye on Boeing’s leadership team over the last decade.

Leading with integrity means taking personal responsibility. It’s tempting for people to take flight and avoid the personal consequences of what happened, to reject personal responsibility, and to pass the blame on to other people.

Calhoun could have acknowledged that the board’s actions had a role in the situation. By facing up to these criticisms and admitting that Boeing and it’s board could have done things better, Calhoun could have encouraged others at Boeing to do the same, especially considering that he must overhaul the company culture from the top down.

The Poolguard Phenomenon

February 24, 2020 by Nagesh Belludi Leave a Comment

Even Petty Power Corrupts

Ever wondered why some people in a position of power, but without the concomitant rank or status, tend to exert their power unreasonably?

People in menial jobs can have, within their petty fiefdoms, the ability to inconvenience people. Rub a TSA agent the wrong way, for example, and you could be signaled for expanded screening. Summer-time poolguards can be seen checking excessively over kids and parents who show no deference to the poolguards’ authority. At bureaucratic offices, clerks and stern supervisors sometimes impose petty rules that must be followed for the sake of the rules—and nobody likes dealing with them!

The power tripper’s fragile ego hinges on exerting his/her power.

Power Increases People’s Sense of Entitlement

The Poolguard Phenomenon: Even Petty Power Corrupts This anecdotal fact seems to be substantiated by this study, titled “The Destructive Nature of Power Without Status.” The researchers make a case that neither power nor low status independently provokes people to mistreat others. Rather, the combination of these two facets of social interaction makes abuse that much more likely.

We predicted that when people have a role that gives them power but lacks status—and the respect that comes with that status—then it can lead to demeaning behaviors. Put simply, it feels bad to be in a low-status position and the power that goes with that role gives them a way to take action on those negative feelings.

One way to prevent such power dynamics is to find ways to make all individuals feel respected and valued irrespective of the status of their roles. “Respect assuages negative feelings about their low-status roles and leads them to treat others positively.” Courtesy pays!

Notes

Some people will despise anyone they suspect is exerting power over them.
Compare to the 1971 Stanford Prison Experiment, in which a group of students was appointed either prisoners or guards in a mocked-up prison. Although all the participants understood they were part of a simulation, the “guards” treated the “prisoners” in extremely humiliating ways because, per the researchers, the guards recognized that they lacked respect and admiration in the eyes of others. (This controversial experiment was the subject of a 2015 docudrama.)
Compare to the concept of the Napoleon Complex, through which, shorter men could overcompensate for their height by means of social aggressiveness. (Napoleon wasn’t short.)
Cf. The “Waiter Rule” states that how you treat seemingly insignificant people says a lot about your personality and priorities.

The Best Leaders Can Make the Complex Simple

February 17, 2020 by Nagesh Belludi Leave a Comment

The New York Times‘s Adam Bryant interviewed 525 CEOs for his Corner Office column and compiled two excellent books, The Corner Office (2012) and Quick and Nimble (2014,) on leadership and management advice. Foremost among the themes common with successful leaders, Bryant says, is “a simple mindset”—the ability to synthesize the simple from the complex and create organizational priorities.

There’s a really important quality [in great CEOs] that I call a “simple mindset,” which is the ability to take a lot of complicated information and really boil it down to the one or two or three things that really matter, and in a simple way, communicate that to people.

In big organizations—frankly, in any company—there are always a dozen or more competing priorities. And it is the leader’s job to stand up in front of the troops and say, “These are the three things that we are going to focus on this year,” or “These are the goals and this is how we are going to measure them.” If you really want to galvanize people and get them operating as a team, you’ve got to create a simple scoreboard that everybody understands.

The communication style, to me, is secondary to getting the content right. And what I’ve been so often impressed by is leaders who can essentially boil down the company’s goals and operating model into, literally, less than a page.

This is a real trick to leadership—creating a simple structure so that everybody in the organization can understand how the work they are doing contributes to the broader goals.

Rob Andrews, CEO of the executive headhunting firm Allen Austin, underscores this “boil the complex into the simple” approach in his leadership manual, High-Performance Human Capital Leadership (2015,)

I have found that when I go into a company to lead, it is important to have a plan and to make that plan a simple one that everybody can understand. I am constantly asking the question,—What are the two or three levers that, if done right, if pulled correctly, will really turn this business? What are the two or three things that really matter? And I find that most leaders do not really do that often.

Idea for Impact: One of the essential attributes of a modern leader is the ability to cut complexity everywhere. Develop the ability to take large, complicated things—and information—and make them very simple.

Make Friends Now with the People You’ll Need Later

June 10, 2019 by Nagesh Belludi Leave a Comment

Addison Schonland of the commercial aerospace consulting firm AirInsight describes how the 737 MAX hullabaloos have exposed shortfalls in Boeing’s crisis communications and public relations:

The MAX crisis demonstrated to everyone in aerospace media how poorly Boeing was prepared for the recent crashes. More importantly, Boeing was unprepared for the onslaught of information that started to flow freely after the crashes. … In the absence of communications from Boeing, subject matter experts, whether highly qualified or not, become media stars overnight. An information vacuum cannot exist in today’s 24-hour news cycle and the Internet. The demand for information is great, and somebody will fill the vacuum.

The fact that Boeing had to clam up about the crashes for legal reasons is well understood. But the lack of transparency about design decisions, how the company made trade-off choices when creating the MAX, and issues related to the certification process left Boeing exposed.

Boeing Crisis Management and Public Relations Shortfalls: Leadership Lessons from the 737 Max Disaster Rival Airbus has traditionally reached out and established relationships with the aerospace media:

Airbus spends a lot of money once per year inviting the media to an event it calls “Innovation Days”. A week ago, at the most recent event, there were 130 media members from almost every country. Airbus briefed the media on both their products and plans …. Airbus provided access to the key leaders so attendees could speak with them and ask questions, with unrestricted Q&As with C-Suite executives who stayed for a substantial period of time.

Airbus clearly has an ROI. From the perspective of an attendee, and having attended several, is that the media comes away from the event informed. But more importantly, attendees feel they understand what Airbus is doing.

Airbus, through these events, communicates with the trade and news media. This communication provides attendees with, de minimis, a sympathetic view. If Airbus had suffered the two crashes, we believe the press would not have attacked the company the same way it has Boeing.

Schonland highlights how such a web of relationships becomes indispensable during a crisis, whether the crisis is self-inflicted or caused by external events:

By not being more open Boeing has helped create a gap between itself and much of the media. … Boeing has lost any control of the [737 MAX disaster] story. Whatever Boeing does provide now is seen as biased and self-serving—there is little goodwill from the media. When [Boeing CEO] Dennis Muilenburg goes on television for the rare interview, he does not come across as well as he might. Why is that? Because everything he says is now filtered through a non-sympathetic, hyper-critical lens.

Boeing needs to invest in the small army of trade and press media that cover the industry—not just a handful of selectees. This small army provides crucial perspective en masse during a crisis and fills the vacuum with educated views and perspective.

Businesses that fail to develop such goodwill or simply lose their way with regard to public relations become vulnerable to condemnation and backlash. This can result in a wide-ranging loss of credibility, as has transpired with Boeing and its leadership.

Idea for Impact: Invest in formal and informal relationships with key external constituents who can help your business—and personal—interests. The Guanxi tradition in the Chinese culture has it just about right in placing a huge emphasis on building social capital through relationships. From Wikipedia,

At its most basic, guanxi describes a personal connection between two people in which one is able to prevail upon another to perform a favor or service, or be prevailed upon, that is, one’s standing with another. … Guanxi can also be used to describe a network of contacts, which an individual can call upon when something needs to be done, and through which he or she can exert influence on behalf of another.

Shrewd Leaders Sometimes Take Liberties with the Truth to Reach Righteous Goals

April 12, 2018 by Nagesh Belludi Leave a Comment

Shrewd Leaders Must Sometimes Take Liberties with the Truth to Reach Righteous Goals Duplicity must be decried when used to justify the attainment and exercise of power. However, sometimes, even principled leaders must put on an act to realize noble ends—infuse optimism to surmount hopelessness, win followers’ devotion to audacious new ideas, for example.

In the Zen parable that follows, a warrior motivates his followers in the face of desperate odds. He persuades his outnumbered army by flipping an unfair coin and proclaiming that they are fated to win the battle.

A great Japanese warrior named Nobunaga decided to attack the enemy although he had only one-tenth the number of men the opposition commanded. He knew that he would win, but his soldiers were in doubt.

On the way he stopped at a Shinto shrine and told his men: “After I visit the shrine I will toss a coin. If heads comes, we will win; if tails, we will lose. Destiny holds us in her hand.”

Nobunaga entered the shrine and offered a silent prayer. He came forth and tossed a coin. Heads appeared. His soldiers were so eager to fight that they won their battle easily.

“No one can change the hand of destiny,” his attendant told him after the battle.

“Indeed not,” said Nobunaga, showing a coin which had been doubled, with heads facing either way.

Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

A wise leader must be open to bringing deception into play to smooth the way to sound decisions and noble results.

As long as leaders use these methods to respectable purposes, and until people wise up to their methods, certain ends can justify certain means.

Postscript: The quoted Zen parable is sourced from the celebrated compilation Zen Flesh, Zen Bones: A Collection of Zen and Pre-Zen Writings, Shambhala Edition (1961) by Paul Reps. This book traces its roots to the thirteenth-century Japanese anthology of Buddhist parables Shasekishū (Sand and Pebbles) compiled by the Kamakura-era monk Mujū.

Lessons from Peter Drucker: Quit What You Suck At

March 1, 2018 by Nagesh Belludi 1 Comment

Peter Drucker and Jack Welch on Strategic Prioritization: Strengthen or Abandon

The essence of leadership is risk- and opportunity-assessment and resource allocation. It follows that one of the persistent responsibilities of leadership is to mull over each individual and organizational endeavor and investigate, “Do we produce results that are meaningful and profitable enough for us to justify investing our resources to this purpose?”

Jack Welch’s Strategy for General Electric: #1 or #2 Businesses Only

When Jack Welch became CEO of General Electric (GE) in 1981, he set out to make GE “the world’s most competitive enterprise.” However, the company was a hodgepodge of many businesses—some unrelated or irrelevant, several unprofitable, and a few at the brink of failure.

Management pioneer Peter Drucker famously advised Welch to ask of each constituent of the GE business portfolio he now presided over, “If you weren’t already this business, would you enter it today? And, if the answer is no, what are you going to do about it?”

Welch’s responded with his legendary dictum that every GE division be—or become—the leading or the runner-up business in its respective industry, or plan to exit it completely.

Welch argued that in many markets, the number three, four, five, or six players suffered the most during cyclical downturns. On the contrary, number one or number two businesses could protect their market share by way of aggressive pricing approaches or by developing new products. Welch’s approach portended the emergence of oligopolies in many industries.

The resultant strategic focus eventually led to an immense restructuring of GE. Welch sold or discontinued dozens of divisions—including computers and time-shares. Over the next decade, he cut nearly one in four jobs at GE, warranting the nickname “Neutron Jack.”

By year 2000, GE had reached dominance or near dominance in most of its business markets across the globe.

Peter Drucker on Strategic Reprioritization

Explaining this method of strategic reprioritization, Drucker wrote in Post-Capitalist Society (1993,)

To turn around any institution—whether a business, a labor union, a university, a hospital, or a government—requires always the same three steps:

Abandonment of the things that do not work, the things that have never worked; the things that have outlived their usefulness and their capacity to contribute;

Concentration on the things that do work, the things that produce results, the things that improve the organization’s capacity to perform; and

Analysis of the half successes, half failures. A turnaround requires abandoning whatever does not perform and doing more of whatever does perform.

Drucker further elaborated on abandonment as the keystone for strategic reprioritization in his Five Most Important Questions (2015,)

To abandon anything is always bitterly resisted. People in any organization are always attached to the obsolete—the things that should have worked but did not, the things that once were productive and no longer are. They are most attached to what in an earlier book I called “investments in managerial ego.” Yet abandonment comes first. Until that has been accomplished, little else gets done. The acrimonious and emotional debate over what to abandon holds everybody in its grip. Abandoning anything is thus difficult, but only for a fairly short spell. Rebirth can begin once the dead are buried; six months later, everybody wonders, “Why did it take us so long?”

Idea for Impact: Assess What Endeavors Must Be Intensified or Abandoned

Don’t do—or continue to do—something just because it’s been a tradition, custom, or habit. Strengthen, abandon, or stay on. Align your efforts with your mission, your values, and the results you want to achieve.

If you abandon something important mistakenly, you can quickly pick up where you left off.

Invest your precious resources where the returns are rich.

Figure out what’s vital and stay focused, even if you have to cut your losses (read about sunk costs.)

No Boss Likes a Surprise—Good or Bad

January 16, 2018 by Nagesh Belludi Leave a Comment

Never surprise the boss, particularly on potentially volatile issues that could affect your project’s timeline, budget, or performance.

Even good surprises can backfire. Many an example exists of employees bringing the boss what they believe were good news, only to realize later that that the surprises weren’t so good after all.

Consider the following example of a Boeing test pilot pulling off a shocking stunt on a prototype aircraft, much to the exasperation of his company’s leadership.

A Reckless Stunt That Created a Buzz

Boeing 707 Dash 80 prototype The Boeing 707 was America’s first passenger jet aircraft. Prior to the 707, which entered service in 1958, air travel was mostly limited to the affluent—and even they were hesitant about air travel’s safety. The 707’s in-service safety record and its economic characteristics quickly made travel more accessible and dependable. The 707 ushered in the Jet Age.

But for Boeing, today’s leading aircraft manufacturer, developing the 707 was a big gamble. The 707 had no orders, and Boeing embarked on its development entirely on the wager of its prospective commercial success. When the aircraft’s design commenced in 1951, Boeing’s estimated development costs were $16 million. That was roughly 20% of the company’s value, and more than twice its yearly profits—nearly all of which originated from military contracts.

The Demonstration That Was Far from What the Boss Had Authorized

Boeing built its first and only 707 prototype aircraft in 1955. The company’s leadership decided to show off the aircraft at Seattle’s Seafare Hydroplane races on August 7, 1955.

The display plan was to have Boeing’s Chief Test Pilot, Alvin “Tex” Johnston, do one low pass over the racecourse so that the airline executives, industry pundits, and government officials who attended the high-profile event could witness Boeing’s new undertaking.

Johnston had other plans. In his mind, the audience needed to be sold on the plane’s performance and safety. Seized by the impulse to flaunt the agility of the 707, Johnston had a little more in mind than just an unpretentious flyby.

During the in-air demonstration (see YouTube video,) with the aircraft soaring over Seattle’s Lake Washington, Johnston suddenly pulled back on the controls, and the plane started to climb at a speed of 400 miles per hour. Then, he did a complete 360-degree roll and flew the plane upside down for a moment. As the crowd watched in shock and amazement, Johnston did a second barrel role.

Overconfident Employee, Furious Boss

Alvin Melvin (Tex) Johnston, Boeing Test Pilot In the startled crowd was Boeing’s legendary president William “Bill” Allen. Allen, who had authorized no more than a simple flyby, thought that Johnston’s first barrel role was a mistake. When Allen witnessed the second barrel roll, he feared that either Johnston had lost his mind, or the aircraft was in grave trouble.

According to Robert J. Sterling’s Legend & Legacy: The Story of Boeing and Its People (1991,) Allen summoned Johnston into his office the next day. Allen demanded an explanation and inquired why Johnston had foolishly risked the company’s only prototype.

Pleased with his successful accomplishment, Johnston offered a simple explanation, “I was selling airplanes.” Johnston explained that he had previously tested barrel rolls on the prototype, and it was a safe maneuver. He hadn’t risked the aircraft at all.

Allen reproached Johnston and told him that he appreciated the efforts, but Johnston was never to do anything that had not been approved previously.

Never Let Your Boss Be Surprised by Bad News

If there is only one thing worse than delivering bad news, it’s not delivering bad news as soon as you know that some trouble is brewing.

No boss wants to hear about any looming issue from some third party—especially if it could be worrying—and put her on the spot with her peers and superiors.

When you fail to report any bad news, you are leaving your boss exposed to being blindsided with a potential problem, and the perception that your boss doesn’t have control of her organization.

Idea for Impact: A Good Employee is Predictably Excellent

The surest way to delight your boss is by setting the right expectations, discussing and coordinating on a plan of action, and delivering on her expectations of your performance.

When the status of important any project changes, make it a priority to bring your boss and other affected constituents up to date. If, right from the beginning, you’ve made the true picture clear, your boss may be less surprised with the bad and the good.

Never surprise your boss—just keep her clued-in on a regular basis.

Power Corrupts, and Power Attracts the Corruptible

January 12, 2018 by Nagesh Belludi Leave a Comment

Picture of Statue of Demon Mahishasura atop Chamundi Hills in Mysore, India The recent sexual misconduct allegations of influential men abusing their towering positions for contemptuous behaviors provide yet another reminder that power corrupts. As the British politician and historian Lord John Dalberg-Acton famously wrote in an 1887 letter to the Anglican Bishop Mandell Creighton,

Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which … the end learns to justify the means.

The recent scandals lay bare the three distinctive characteristics of the intoxication of power: the inflation of the self, the devaluation of the helpless, and a dreadful shortfall in self-awareness of actions and consequences.

In the case of studio executive Harvey Weinstein, the worse outrage is that, many prominent people, despite their awareness of Weinstein’s uninhibited abuse, stayed silent—and possibly benefited. Some Hollywood celebrities are said to have overlooked his transgressions. Meryl Streep, one of Hollywood’s most successful actors, who once referred to Weinstein as ‘God,’ had to contend the blame that everyone in Hollywood knew of Weinstein’s conduct. His staff sheltered him or paid off victims, many of whom chose to remain silent for fear of derailing their budding careers. Going public would have hurt them more than it would have damaged Weinstein, until those accusations reach a critical mass and suddenly everyone flipped against him.

The Intoxication of Power

The British philosopher Bertrand Russell first wrote about the “intoxication of power” in A History of Western Philosophy (1945,) and best described what develops in the minds of many people who, in all walks of life, exercise a measure of power and dominance.

The Greeks, with their dread of hubris and their belief in a Necessity or Fate superior even to Zeus, carefully avoided what would have seemed to them insolence towards the universe. The Middle Ages carried submission much further: humility towards God was a Christian’s first duty. Initiative was cramped by this attitude, and great originality was scarcely possible. The Renaissance restored human pride, but carried it to the point where it led to anarchy and disaster. … Man, formerly too humble, begins to think of himself as almost a God.

…

In all of this I feel a great danger, the danger of what might be called cosmic impiety. The concept of ‘truth’ as something dependent upon facts largely outside human control has been one of the ways in which philosophy hitherto has inculcated the necessary element of humility. When this check upon pride is removed, a further step is taken on the road towards a certain kind of madness—the intoxication of power which invaded philosophy with Fichte. I am persuaded that this intoxication is the greatest danger of our time, and that any philosophy which, however unintentionally, contributes to it is increasing the danger of vast social disaster.

Idea for Impact: People with even the smallest amount of authority can and will find ways to abuse it

People can become corrupt with power, fame, wealth, and influence, and, as I’ve written previously, they regularly get away with it. The solution, I believe, is to subject our elites (and the sycophantic supporters who are disposed to collude in self-interest) to as many restrictions, supervisions, and checks and balances as possible, and scrutinize them closely so as to spot hubristic traits and symptoms of the abuse of power.

Learning from the World’s Best Learning Organization: Book Summary of ‘The Toyota Way’

November 27, 2017 by Nagesh Belludi Leave a Comment

Toyota is a Paragon of Operational Excellence

Toyota is the World’s Most Benchmarked Company, and for Good Reason

Toyota’s cars are reputed for their reliability, initial quality, and long-term durability. It is the pioneer of modern, mass-production techniques and a paragon of operational excellence. Even if its reputation has taken a beating in the last few years because of the uncontrolled acceleration crisis and major product recalls, Toyota’s long-term standing as the epitome of quality production is undeniable.

Toyota measures and improves everything—even the noise that doors make when they open and close. As cars roll off assembly lines, they go through a final inspection station staffed by astute visual and tactile inspectors. If they spot even a simple paint defect, they don’t just quietly fix the problem merely by touching up the paint to satisfy the customer or their plant manager. They seek out systemic deficiencies that may have contributed to the problem, and may hint at deeper troubles with their processes.

World-Class Processes, World-Class Quality

As Jeffrey K. Liker explains in his excellent The Toyota Way, the genius of Toyota lies in the Japanese expression ‘jojo‘: it has gradually and steadily institutionalized common-sense principles for waste reduction (‘muda, mura, muri‘) and continuous improvement (‘kaizen.’) Liker, a professor of industrial engineering at the University of Michigan (my alma mater) has studied the Toyota culture for decades and has written six other books about learning from Toyota.

Liker establishes the context of The Toyota Way with a concise history of Toyota Motor (and the original Toyoda Textile Machinery business) and the tone set by Toyota founders Sakichi and Kiichiro Toyoda. Quality pioneers such as Taiichi Ohno, W. Edwards Deming, and Joseph Juran instituted groundbreaking philosophies that shifted Toyota’s organizational attention from managing resource efficiencies in isolation to managing the flow of value generated by the Toyota Production System (TPS.)

“No Problem is the Problem:” How Toyota Continuously Improves the Way it Works

Liker devotes a bulk of his book to the distinct elements of Toyota’s foundational principles: continuous flow, minimal inventory, avoidance of overproduction, balanced workload, standardized tasks, visual control, etc. He drills down to the underlying principles and behaviors of the Toyota culture: respect people, observe problems at the source, decide slowly but implement swiftly, and practice relentless appraisals of the status quo. Liker states, “Toyota’s success derives from balancing the role of people in an organizational culture that expects and values their continuous improvements, with a technical system focused on high-value-added flow.”

Toyota mindset and the organizational discipline

Companies that have tried to emulate Toyota have struggled not with understanding its management tools but with putting into practice the mindset and the organizational discipline that permeates everything Toyota does. “Understanding Toyota’s success and quality improvement systems does not automatically mean you can transform a company with a different culture and circumstances.”

Book Recommendation: Read The Toyota Way. As Liker observes, “Toyota is process oriented and consciously and deliberately invests long term in systems of people, technology and processes that work together to achieve high customer value.” The Toyota Way is comprehensive and well organized, if tedious in certain parts. It can impart many practical pointers to help improve the operational efficiency of one’s organization. Peruse it.

Postscript: I’ve taken many tours of Toyota’s Georgetown, Kentucky, factories and a few associated suppliers—once as part of a lean manufacturing study tour organized by Liker’s research group and other times privately. I strongly recommend them for observing Toyota’s matchless culture in action on the production floor. I also recommend the Toyota Commemorative Museum in Nagoya for a history of Toyoda Textile Machinery and Toyota Motor and their management principles.

How to Prevent a Communications Breakdown During Crisis

November 13, 2017 by Nagesh Belludi Leave a Comment

How to Prevent a Communications Breakdown During Crisis

The ultimate test of a leader’s and an organization’s communication skills is how they deal with a crisis—natural disasters, crisis of confidence, acts of malevolence, strategic errors, acts of deception, management misconduct, and so forth.

It’s not difficult to see why communication is an important element of crisis management: leaders today have to tackle media that is unsympathetic to what it regards as management incompetence, shareholders and customers who are ever more demanding, legislation and regulation that is getting stricter, and competitors eager to pinch customers during times of distress.

Effective crisis communications must be able to have a consistent and clear message and present this message swiftly and regularly following a crisis.

Here are seven elements of effective crisis communication.

Strategic Thinking: Think purposefully about what you want your constituencies (employees, stockholders, customers, suppliers, communities, the media) to know under the given circumstances. Many a routine problem has transformed into a crisis because too many people were told too much and the situation became exaggerated and out of control.

What happened
Who is responsible
Why did it happen
Who is affected
What should be done
Whom can we trust
What should we say
Who should say it
How should we say it

Openness: When a crisis befalls, be prepared to talk about it internally and externally as assertively as you respond to the crisis operationally. Understand the expectations of your constituencies and go beyond what is expected or required. If you are not communicative enough, people may make erroneous assumptions about the crisis. Bad news can travel fast and sell best.
Candor: If your constituencies should know about a crisis that your organization is experiencing, talk about it as quickly and as completely as you can, especially to those most directly affected.
Concern: Keep the people most directly affected by the crisis updated until the crisis is completely resolved. Do not brand a whistle blower a troublemaker.
Sensitivity: At the earliest possible moment, step back and analyze the impact of the crisis. Inform and alert all the constituencies that are affected. Demonstrate concern, compassion, sympathy, remorse, or contrition, whatever the case may require.
Integrity: If you are responsible for the crisis or perceived as such, acknowledge the situation promptly. Be true to your corporate and personal conscience. Share the crisis action plan and seek inputs.
Honesty: Learn from your mistakes and talk openly about what you’ve learned. Demonstrate your commitment to keeping errors and problems from resurfacing.

Idea for Impact: Reputation and goodwill represent a great part of business value. Protect yourself when faced with attacks on your reputation and competence. If you do not communicate effectively and frequently with your constituents, somebody else will. In the absence of information, your constituents can develop their own perceptions of the problem and its implications.

Leadership

Idea for Impact: Blame is an Accountability Killer

Wondering what to read next?

Even Petty Power Corrupts

Power Increases People’s Sense of Entitlement

Notes

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Idea for Impact: Moral Leadership Relates to the Integrity of Leaders and Their Intentions

Wondering what to read next?

Jack Welch’s Strategy for General Electric: #1 or #2 Businesses Only

Peter Drucker on Strategic Reprioritization

Idea for Impact: Assess What Endeavors Must Be Intensified or Abandoned

Wondering what to read next?

A Reckless Stunt That Created a Buzz

The Demonstration That Was Far from What the Boss Had Authorized

Overconfident Employee, Furious Boss

Never Let Your Boss Be Surprised by Bad News

Idea for Impact: A Good Employee is Predictably Excellent

Wondering what to read next?

The Intoxication of Power

Idea for Impact: People with even the smallest amount of authority can and will find ways to abuse it

Wondering what to read next?

Toyota is the World’s Most Benchmarked Company, and for Good Reason

World-Class Processes, World-Class Quality

“No Problem is the Problem:” How Toyota Continuously Improves the Way it Works

Wondering what to read next?

Wondering what to read next?