By: Robert F. Amter, a Special to Overdrive, Turnaround CEO and Former Division President of Emerson Electric Co.
One of the best ways to encourage superior results and teamwork within the work place is by communication, involvement, and interaction.
Hold bi-monthly or quarterly employee communications meetings with “all” hourly and salaried employees – if necessary, use video conferencing and tapes of the actual presentation to present your thoughts to all employees. Present and explain the strategic plan, actual and forecast financial metrics the company is working toward. Do not give a sugar-coated state of the company presentation – tell them the truth, the facts. Even in the most successful companies there are shortfalls and negative issues. If you do not, you will lose the respect of the employees since they know when a company has problems and is struggling. Also imaginations will exaggerate an issue’s seriousness. Although a company may be distressed and losing money, its condition may not be dire. But employees’ imaginations frequently speculate that the company may be faced with making layoffs or, even the most grave, liquidation. The facts are always more comforting than imaginative speculation. At the end of the presentation, hold a question and answer session.
While communicating effectively is not life threatening in business, the critical need for it is brought home by the experts of waging war. Infantry soldiers are more effective and motivated when they receive full and frequent communication about their location, the enemy’s location and the objectives of the battles. Soldiers that had suffered from combat fatigue stated that they were affected by: “…the sense of helplessness and disorientation…lack of information…suffered from ignorance, stupefying, brutalizing ignorance…what attempting to achieve.”
Well-run companies function with candid cross-functional communication. It is essential for the new Chief Executive Officer to maintain fluid, open exchanges of information. Meetings should always include everyone involved with the initiative, issue or problem. For example: do not invite only the vice president of sales while investigating a problem with sales. Include marketing, manufacturing, supply chain, product and accounting in the meeting because each of these functions affect sales – even tangentially. Does Supply Chain have the component parts needed by manufacturing to produce the product? Is there a parts backorder condition? If not a component parts availability issue, is manufacturing’s productivity, staffing and production plan the issue?
Cross-functional communication gives a balanced determination of issues. Each function has a different perspective and information on the subject. This will qualify and eliminate the tendency to “pass the buck” to another function or department of the company since all functions related to the issue are in the meeting. More effective and constructive solutions are obtained. A strong team mentality is created.
Meeting alone with one function is labeled “silo management” which will lead to mistakes and failure. It leads to an unhealthy back stabbing culture. Effective management includes all the functions that may be affected in the meeting. Knowledgeable employees from the third and fourth tiers of the company should be included with second tier officers. Including the other functions affected by decisions avoids creating problems and inefficiency.
Although it is common sense to have cross-functional communication in any enterprise, it does not always exist. It is absent in the distressed companies I have been involved with, because it takes the direction, energy, and patience of management to maintain it. “Silo management with top-down decision making” is considerably easier for a chief executive officer to use. But this weaker offering, always results in a failing business. Companies without open communication sink. Mistakes are easily hidden and slowly multiply because of the absence of sharing information. When internal functions do not discuss vital issues, a business gradually becomes uncoordinated. It produces negative surprises. Successful companies are never surprised.
Alexander Hamilton was a strong supporter of a President conferring with cabinet ministers prior to making decisions. He was critical of President John Adams practice of not discussing decisions with his cabinet ministers. He compared President George Washington’s successful decision making with President John Adams, who he felt was a failure, with this statement:
“Very different from the practice of Mr. Adams was that of the modest and sage Washington. He consulted much, pondered much, resolved slowly, resolved surely.”
Operating as the new Chief Executive Officer of a complex manufacturing company is analogous to a number of activities most of us encounter in everyday life. We all must turn to experts who have far greater understanding of issues in our lives. Just as one turns to a plumber or electrician to repair something in your home, it is practically impossible for one individual to have the technical knowledge and capability for everything. No one will know it all. No matter how impressive someone is, they simply cannot function alone in complex business operations. Some of the best leaders have the ability to “listen”. To run a successful company, a solidly performing CEO will seek input and seriously measure all of the available advice. One can be selective through trial and error, before committing to a course of action, but never ignore or limit seeking and listening to opinions.
Meet face-to-face to encourage healthy communication. Avoid being dependent upon telephones or video conferencing. Judging performance and initiatives is best evaluated first hand, in the same room with the people orchestrating the endeavor. Seeing body language, facial expressions, and sensing a person’s passion, provides signals often missed when using various advanced technologies.
An astute CEO will personally visit all manufacturing plants, distribution facilities, and company offices. If a business has 10 facilities, visit each site, at least three times a year. If there are 100 locations, visit the less significant facilities once every two years, and the more important sites at least once or twice a year.
Go unannounced to manufacturing plants, distribution facilities, and even various sales offices. The reason for going unannounced is simple, if a visit is announced, a large amount of time will be wasted cleaning and preparing for a visit from the CEO. A visit from the Boss should be welcomed, and never feared. A serious leader wants to be viewed as a decision-making resource with constructive input to the operation.
About the Author
Since 1991, Robert F. Amter has served as a Chief Executive Officer and Advisor to distressed manufacturing companies on behalf of such clients as Bank of New York, GE Capital, and Morgan Stanley. His CEO assignments have included Evenflo Company and Ladish Co. Prior to 1991, Amter worked at Emerson Electric Co. for fifteen years, advancing to Division President.
Robert Amter, who received his MBA from New York University, is currently completing a book about the role of the CEO. You can learn more at www.robertamter.com.