The Idea in Brief
Want to know why so many organizations sink into chaos? Look no further than their leaders’ mouths. Too many executives pass on vague marching orders about “results,” “company direction,” “accountability,” and other fuzzy concepts—forcing followers to develop their own interpretations of what the boss means. The consequences? People waste time by working at cross-purposes. Big projects fail. And destructive rumors abound.
A leader has one job: inspiring followers to create a better future for the organization. And effective communication is his single most critical tool for accomplishing that mission.
According to Hamm, the best leaders work particularly hard to communicate clearly about five core topics: organizational structure and hierarchy, financial results, the purpose of the leader’s job, time management, and corporate culture. Communicate precisely about these topics to your immediate reports, and you exponentially improve your company’s performance: each of your direct reports communicates with equal precision to dozens more talented employees—aligning everyone around a clear, shared vision of your firm’s goals, priorities, and opportunities. Your reward? You save your company money, time, and resources—and enable extraordinary things to happen.
The Idea in Practice
To inspire your workforce to greatness, Hamm recommends crystal-clear communication about these five topics:
Organizational Hierarchy
When your company reorganizes, quickly frame the change as a way to optimize your company’s resources—not to oust or devalue employees. Example:
The CEO of a small software company had to realign internal resources when a close rival began gaining an advantage. He called an all-hands meeting, explaining, “We’re in a war for market share. I don’t think we’re properly configured to win the battle, so I’m restructuring resources so we can execute more effectively. Most of you will continue doing the same jobs, but you may have a different supervisor.” He showed them the new organization chart, then asked them to begin working in their new positions after lunch.
Financial Results
Discuss disappointing results not as evidence of punishable failure but as useful diagnostic and learning tools that enable constant improvement. Example:
When a technology firm missed a quarterly goal, the CEO asked his team rigorous questions about what caused the shortfall, rather than placing blame. Instead of worrying who would take the heat, team members uncovered the problem’s root cause and identified ways to prevent a recurrence. From then on, the company’s track record for quality was the envy of the industry.
Your Job
Let followers know that your job is not to provide all the answers but to invite their ideas. Example:
When one CEO met with functional leaders to discuss the company’s failure to increase market share, he listened to their viewpoints, posed questions, and challenged opinions rather than stating his own theory. He then assigned a task force to address the problem. The team generated numerous recovery plans, the most compelling of which was implemented. The plan produced the desired market-share gains in the next three quarters.
Time Management
Communicate the importance of using time strategically, rather than trying to get more things done faster. Ask where you can best focus your team’s energy. By understanding that you have a choice about how limited time can be used, you can free up needed resources to focus on your most important goals.
Corporate Culture
Create a healthy culture by articulating the right goals and defining criteria for success. Example:
The CEO of a telephony-software company runs his firm like a high-performing sports team. He displays metrics—sales, expenses, revenues—on a scoreboard for all to see. And he clearly defines what success looks like: “P/E ratio of 15, market share of 20%, 30% year-over-year revenue growth.” Large goals—“$20 million by the third quarter”—are broken into strategic parts marked on the scoreboard.
If you want to know why so many organizations sink into chaos, look no further than their leaders’ mouths. Leadership, at any level, certainly isn’t easy—but unclear, vague, roller-coaster pronouncements make many top managers’ jobs infinitely more difficult than they need to be. Leaders frequently espouse dozens of cliché-infused declarations such as “Let’s focus on the key priorities this quarter,” “Customers come first,” or “We need a full-court press in engineering this month.” Over and over again, they present grand, overarching—yet fuzzy—notions of where they think the company is going. Too often, they assume everyone shares the same definitions of broad terms like vision, loyalty, accountability, customer relationships, teamwork, focus, priority, culture, frugality, decision making, results, and so on, virtually ad infinitum.