2. Communicating Strategically
A) The summary based on the textbook
Communication, more than any other subject in business, has implications for everyone within an organization-from the newest administrative assistant to the CEO. Most managers have learned to think strategically about their business overall, but few think strategically about what they spend most of their time doing – communicating.
Setting an Effective Organization Strategy
The first part of an effective corporate communication strategy relates to the organization itself. The three subsets of an organization strategy include (1) determining the objectives for a particular communication, (2) deciding what resources are available for achieving those objectives, and (3) diagnosing the organization’s reputation.
Determining Objectives
Management communication expert Mary Munter writes in her Guide to Managerial Communication that managerial communication is only successful if you get the desired response from your audience. To get that response, you must think strategically about your communication, including setting measurable objectives for it.
Deciding What Resources Are Available
Determining how to communicate about something like an employee benefits plan or introducing a new product into a market depends heavily on what resources are available within the organization, including money, human resources, and time.
Diagnosing the Organization’s Reputation
In addition to setting objectives for a communication and deciding what resources are available to accomplish that objective, organizations also must determine what kind of reputation they have with the constituencies in question.
The three considerations for creating an effective organization strategy – setting objectives, deciding on the proper allocation of resources, and diagnosing the organization’s reputation – are the building blocks upon which all other steps in communication strategy depend.
Analyzing Constituencies
Analyzing constituencies determines (1) who your organization’s constituencies are, (2) what each thinks about the organization, and (3) what each knows about the communication in question.
Usually, constituencies come from a group that is primary to the organization, but a secondary group also can be the focus for a particular communication. Companies have different sets of constituencies depending on the nature, size, and reach (i.g., global or domestic, local versus regional or national) of their businesses. Also recognize that constituencies interact with one another, and an organization must sometimes work through one constituency to reach another.
In addition to analyzing who the constituencies for a particular communication really are, organizations also need to assess what each constituency thinks about the organization itself.
Clearly then, after a firm has set objectives for its corporate communication, it must thoroughly analyze all the constituencies involved. This means understanding who each constituency is, finding out what each thinks about the organization, and determining what each already knows and feels about the communication in question.
Delivering Messages Appropriately
For companies, delivering messages appropriately involves a two-step analysis for companies. A company must decide how it wants to deliver the message (choose a communication channel) and what approach to take in structuring the message itself.
An individual’s channel choices are usually limited to writing or speaking, with some variation in terms of group or individual interaction.
For organization, however, the channels available for delivering the message are several.
Each time a corporate communication strategy is developed, the question of which channel to use and when to use them should be explored carefully.
According to most experts in communication, the two most effective message structures are direct and indirect. Direct structure means revealing your main point first, then explaining why; indirect structure means explaining why first, then revealing your main point.
Constituency Reponses
Creating a coherent corporate communication strategy, then, involves three variables : defining the organization’s overall strategy for the communication, analyzing the relevant constituencies, and delivering messages appropriately. In addition, the organization needs to analyze constituency responses to determine whether the communication was successful.
In conclusion, when developing an overall strategy, firms need to consider their corporate communication effort as manifested in the company’s vision and mission statement.
B) Viewpoint & Experience
I think that communicating strategically to the constituencies means to make a reach effectively the intended contents to the audiences. In other words, the messages which we want to communicate with someone are correctly transmitted. In order to do that, we should consider the appropriate methods, place and timing to effectively and efficiently communicate with what we want to transfer
Currently, unlike 40 – 50 years ago, there are a large variety of communication channels such as fax, E-mail, voice mail web conferencing, Intranet, and webblogs based on the developed information technologies.
In addition, even though there are various and advanced communication channels, the attitude of audiences who received a message is very crucial to communicate with each other within a organization as well as among individuals.
In light of my experiences at my work during almost 20 years, whether the communication within an organization is successful or not, depends on both communication channels and the attitudes of constituencies. In addition, the attitude of a speaker, such as his leadership and feelings, also is one of the very important elements of communication.
References:
1. www.cbd.int/cepa/toolkit/html/resources/34/34404DBC-7BBF-48CA-BFCA-1F5A3BBD906D/Section%204%20_final_.pdf
2. siteresources.worldbank.org/EXTDEVCOMMENG/Resources/DevCommBrochure(final)July07.pdf
2008년 1월 31일 목요일
Communicating Strategically : A Perspective and case study about Creating Comfort with Uncertainity
from : http://www.imetacomm.com/otherpubs/pdf_doc_downloads/strat_commg_uncertainty_v4.pdf
Communicating Strategically: A Perspective and Case Study about Creating Comfort with Uncertainty
Executives can communicate about anything but they can not communicate abouteverything. Consequently, either explicitly or implicitly, they make communicativechoices, which in turn becomes the organization’s communication strategy. Thesechoices are all the more important in times of great organizational uncertainty wrought byincreased global competition, quicker cycle times and the ever-changing marketplace.What are the communication strategies available to executives? How should they bemade? And which increase organizational effectiveness? These are the core questionsdiscussed in this article. We conclude with a case study demonstrating the benefits ofsystematically developing a communication strategy to address organizationaluncertainty.
1. Talk is not nearly as cheap as some people assume. After all, executives spend a greatdeal of time conducting meetings, giving speeches, responding to email and draftingreports. Executives usually have less time than money. And no executive wouldcavalierly spend financial capital, nor should they carelessly fritter away theircommunicative resources. Yet, many do. Why? Perhaps they do not realize the value of acomprehensive communication strategy. Executives face an array of pressing issuesincluding how to retain quality employees1, combat organizational cynicism2, and createa dynamic, evolving workplace
3. A proper communication strategy provides more thananother tool to address issues of this sort; it creates the right environment. Executives,like those at FedEx, who can create passion in the workplace through consistent andenergizing messages, tend to experience less employee turnover
4. On the flip side, acommunication strategy can provide a hedge against employee cynicism by ensuring thatdissenting opinions about decisions, practices or policies are appropriately channeled. Awell-developed communication strategy also cultivates the kind of environment moreaccepting of change and innovation5. 3M, for example, sows the seeds of innovation byroutinely recording and telling stories about breakthrough products, processes, and ideas6.Technologies like the Internet should also encourage executives to reconsidertraditional top-down communication strategies. Employees can quickly and easily accessinformation from sources both inside and outside the organization. These communicationtools can profoundly impact workers' thoughts, motivations, and actions. Executives cannot hope to control information the way they once did. Therefore, they need newstrategies that can adjust to these dynamics. What strategic options are available? Whichare most effective? We explore these issues in this article and conclude with a case studydemonstrating the benefits of developing a communication strategy designed to addressorganizational uncertainty. In short, "talk" may well be the most important and difficultinvestment decision an executive makes.
First, strategy involves a macro-level orientation that can be distinguished fromtactical concerns.
The word strategy is indirectly derived from the word "strategos"which denotes generalship. Generals are concerned with the big picture. Typicallystrategy occurs at higher organizational and abstraction levels than tactical issues.Strategy is less easily changed than tactics. There are usually many different tactics thatcould be used to implement a strategy. Southwest Airline's strategy to "serve price andconvenience sensitive travelers" is supported by a host of tactics including usingsecondary airports, flying relatively short distances, and using standard aircraft for theentire fleet.9 Presumably some of those tactics could be modified or some added and thestrategy would remain intact.Likewise, a strategic communication decision to “foster interdepartmentalcommunication” can be accomplished by various methods such as job rotation and usingcross-functional teams10. Confusion between communication strategies and tactics canbe problematic because focusing on tactical perfection does not guarantee strategicsuccess. An effective job rotation program may not result in better interdepartmentalcommunication.
Like all tactics, there is an upside and downside. While job rotation canhelp a few employees understand different departmental dynamics, the tactic may notprovide the timely information necessary to alleviate conflicts between divisions.To be fair, the distinction between strategy and tactics is not always clear and often,they evolve in tandem. Nevertheless, the distinction helps structure an executive’sthinking. Often when executives are questioned about their communication strategy theysay something like, "we have a monthly newsletter and I hold quarterly meetings withemployees". This is like an executive saying to a potential investor that our new productis our strategy. A savvy investor wants to know about the target market, the company'sunderlying objectives, and how the company is positioned. In short, a communicationstrategy involves something more than selecting channels.
Second, strategy involves implicit or explicit choices resulting in tradeoffs. Anorganization makes choices about which markets to pursue and which opportunities toignore. Sometimes this is a thoughtful and explicit choice like those who use a specificstrategic planning process. At other times, it is more emergent like those used bybusinesses focused on experimentation.3Likewise, communicators explicitly or implicitly choose what to talk about, and whatto ignore. The executives’ agenda could include virtually anything from internal issueslike sexual harassment and team building to external ones like market share or meetingcustomer expectations. How the agenda is shaped can have a profound impact on theorganization. For instance, an executive for a dairy plant was advised that it wasimportant for employees to “express their concerns”, no matter how trivial or misguidedthey may be. On the surface "listening to employee concerns" may appear to be a fineidea. Unfortunately in this company it turned out to be a counterproductive practice. Itled to a culture of complaint in which everyone was free to gripe but no one did anythingto address the problems. There was no forum or mechanism for distinguishing betweenlegitimate and illegitimate concerns. The manager made an inappropriate tradeoff infavor of allowing employees to voice their concerns instead of discussing solutions.Consequently, everyone was dissatisfied, important issues were overlooked, and the plantunderperformed. Eventually the plant manager was replaced by one who insisted that allconcerns be accompanied with ideas for resolution. This drastically cut down on thegriping while improving productivity.Managing the agenda or "what executives talk about" is not the only critical choice.The traditional questions of “who-what-when-where-why and how” are a reasonablygood starting point for developing a communication strategy:? With whom will executives communicate?? How will employees and executives communicate?? When will employees and executives communicate?? Where will employees and executives communicate?These are not trivial decisions for they will shape the communication environment ofexecutives. Unfortunately, many of these issues are rarely discussed explicitly, much lesswith an eye to the implicit tradeoffs.The age-old efficiency/effectiveness and short-term/long-term dilemmas often lie atthe root of these tradeoffs. It may be more efficient to send email to all employeesoutlining a major change but this is not an effective way to create employee "buy-in".Face-to-face communication is a more persuasive channel because it provides a dynamicand effective way for dealing with employee objections. However, a rich media likeface-to-face communication costs the organization more in terms of time and energy than4lean media like email11. Thus, executives should ask a fundamental strategic question,"which issues are worth discussing using this expensive channel?"To take a slightly different tact, consider the following tension points:?
"Who" versus "What". Employees routinely report that they prefer to receiveinformation from their immediate supervisor. Surveys also show that employeesare most curious about "organizational plans for the future".12 Unfortunately,supervisors are often in the worst possible position to a) know about future plans,b) understand the rationale for the plans, and c) advocate the plans. There areoften legitimate legal and organizational reasons why executives can notadequately inform first-line supervisors about impending plans. Consequently, astrategic question involves who is empowered to talk about what??
"When" versus "How". One executive insisted that all the details of minororganizational policies be completed before unveiling them to employees in anall-company meeting, regardless of the number of rumors circulating. He neverrealized that speed is sometimes more important than complete two-waycommunication with employees. In this case, the efficiency of email or voice-mailwould have been more effective in taming the grapevine. Thus, executives needto ask a fundamental question: when is speed more important thancomprehensiveness?? "Why" versus "what". One executive’s primary forum for communicating wasa quarterly meeting with employees about the company’s future plans. Heprovided appropriate information about how the business was doing and thefuture outlook. Employees even complimented him on his ability to explain whatwas "going on". Strangely, many employees were vaguely mistrustful of him.Fellow executives had precisely the opposite impression, which made thesituation even more puzzling. The key insight came when we analyzed hiscommunications to employees. We discovered that he never discussed hisunderlying motives; he only communicated about "what" and not "why".Equipped with this insight, he slightly altered his communication style andemployee apprehensions slowly disappeared. Thus, a critical question is how toproperly balance
"why" and "what" messages.5There are, of course, many other tension points to address. But the fundamental strategicissue question persists: How do executives make the appropriate tradeoffs? To this issuewe now turn.
Third, strategy involves goal setting. Virtually all organizations have statedobjectives. But determining those objectives is not a simple task. Consider the difficultyin specifying the goals of U.S. foreign policy. Former Secretary of State, HenryKissinger, remarked:The problem of most previous periods was that purpose outran knowledge. Thechallenge of our period is the opposite: knowledge is far outrunning purposes.The task for the United States therefore is not only to reconcile its power and itsmorality but to temper its faith with wisdom.13 Similar difficulties plague executives seeking to determine the objectives ofcommunication systems. Many don't think about it explicitly. Others tend to settle forvagaries such as "keeping everyone informed". An objective of this ilk invites a host ofother questions: "Informed about what?", "Informed in how much detail?", "Informed inwhat way?", "Informed how often?", etc. Even more vexing issues can be raised: "Howwill we know when employees have been properly informed?", "Is it really possibly tokeep everyone informed about everything?", and "Is it even desirable?" As Kissingerpoints out, information or knowledge is not always the answer; it may, in fact, be theproblem.The central question executives need to ask is, "why should we communicate?"Inevitably, this leads to setting communication priorities. Unfortunately, most discussionsof communication never reach this level and implicit or ill-conceived objectives underpinthe strategy.
Fourth, strategy involves anticipating others' reactions. The great militarystrategist, Edward Luttwak observed:In the ebb and flow of reciprocal development, the same device could be highlyeffective, totally useless, and positively dangerous within a matter of months, asin the case of rearward-looking radars fitted on British bombers to warn ofapproaching fighters, which were first lifesavers, then jammed, and soon becamea deadly danger to those who used them … 14In the realm of military as well as business strategy, anticipating the cascade of responsesproves critical. For instance, when a software company decides to develop a new product,6it should clearly consider how Microsoft would respond. Even when an opportunitycurrently exists, the crucial issue revolves around how competitors are likely to respond.Likewise, anticipating the probable responses of employees to communicativeinitiatives is central to the development of a viable strategy. The dance between theinitiative and the response and then the subsequent adjustments creates the dialogue thatdetermines the success of the strategy. Why? Because the messages sent influence thosereceived. If, for example, the message sent to employees is that "mistakes will not betolerated", then employees will often make efforts not only to avoid mistakes but also nottell anyone that mistakes have been made. That dance differs greatly form one based on atheme of "learning to avoid mistakes". This is perhaps a subtle difference but one thatcan have profound consequences.
Fifth, strategy naturally serves as the basis for action. Strategic planning is rarelydone solely as an intellectual activity. Rather the exercise is used to focus decisionmaking,shape personnel policies, motivate employees and guide a host of otheractivities.Likewise, communication strategy provides the basis for structuring, executing, andevaluating communication practices. All the traditional communication forums –newsletters, quarterly meetings, all company mailings etc. – naturally flow from thestrategy. Perhaps this explains why most employee newsletters are littered with thedreadful three B’s (birthday, bowling scores, and baby announcements). This becomesthe debris left from superficial discussions regarding communication strategy. If no oneasks about the strategic purpose of a newsletter, it should be no surprise that it turns into amonthly version of a high school yearbook. Yet, clarity of purpose can transform thecommunication system while significantly improving organizational performance.
Communication strategies can be developed either deliberately or by happenstance. Bychance, a few organizations stumble on strategies that appear to work. But generally, thatis not the case. Thoughtful analysis of executives’ communication needs and employees’concerns can help an organization make the appropriate choices and tradeoffs whichresult in an effective strategy designed to incite meaningful actions. We hinted at theattributes of an effective strategy in the previous section and now we make those moreexplicit.7
First, an effective strategy links to organizational goals. There is no "one size fitsall" communication strategy because organizations have very different objectives.Consider, for example, an Internet-based organization. The industry and its protocols arechanging so rapidly that a communication strategy designed to provide employees withcarefully thought out and fully developed plans would quickly break down. Therefore,the communication strategy should focus on speed. When the industry matures,companies will need to develop different approaches. In fact, researchers have linkedeffective communication strategies to productivity gains, efficiency improvements, costreductions, improved morale, and decreased turnover.15 In short, aligned strategies tendto enhance organizational performance.On the other hand, misaligned strategies can hinder organizational performance. Forinstance, in one medical clinic, the executive board of physicians determined that one oftheir key business objectives was to increase employee accountability. Unfortunately,they never developed a supportive communication strategy. In fact, their de factostrategy was to blame the employee nearest to them at the time they discovered anyproblem. Their actions (or inaction), therefore, ran counter to their objectives. The resultwas that employees were simultaneously held accountable for everything while not beingresponsible for anything in particular. Inevitably this led to low morale, high turnover,disorganization, and ultimately, patient frustration. Eventually the physicians wereconvinced to "try out" a strategic communication plan, which started with dialogue aboutjob responsibilities. They were amazed at the results. The physicians finally knew who totalk to about what. And, of course, this increased employee accountability.Finally consider one nonprofit business development organization that was quiteproud of its newsletter aimed at local businesses. In fact, the newsletter received severaldesign awards. However, when the director was asked about how the newsletter waslinked to the organization's goals, she honestly admitted that she "didn't have a clue." Thevarious awards misdirected attention from the underlying strategic purpose. In sum,communication strategies not linked to underlying organizational goals are as effective asan aesthetically pleasing advertising campaign that fails to generate business.
Second, an effective strategy legitimizes certain issues and de-legitimizes others.
"Don't go there" is a popular phrase with teenagers these days. While savvy executivesmay not use that lingo, they should be comfortable with the underlying sentiment. Asuccessful communication strategy is as much about what is not said as it is about what is8said. By setting the agenda executives shape the playing field. In one case, we quiteliterally determined what was "in bounds" and "out of bounds". The culture of complaintbecome so debilitating in the dairy plant described previously that they drew a diagram ofwhat they should talk about and what they should not talk about (See Figure 1). Theexecutives introduced the diagram, discussed why it was needed, and how it was to beused in an all-employee meeting. Then the diagram was posted in every supervisor'soffice and meeting room. "Are we talking in the circle?" became the plant mantra forseveral months. Gradually the culture of complaint was transformed into a culture ofconfronting core concerns. Companies that promote their core values or competenciesare essentially doing the same thing. The values direct attention away from presumablyirrelevant matters and shift attention to core issues.
Third, an effective strategy shapes organizational memory.
There are manyfactors that influence the interpretation of events but few are more important thanmemory. Brain researchers tell us that memory serves as a template that allows us todiscern differences and similarities between events. Consider, for example, how highaltitude climbing often degrades a mountaineer's memory. One climber returning fromthe summit of Mount Everest was prepared to leap across a seven foot crevasse when hecouldn't locate a ladder on the traditional path, even though the ladder was only moved15 feet from the original location.16 Normally functioning hikers would have noproblem discerning the similarity between the two locations. Clearly, memory has amajor impact on how we react; it can cause us to fall over the precipice or scale theheights.The aim of the communication strategy, therefore, is to create the proper kinds ofmemories. Consider the following situation. A development team spent an enormousamount of time and energy launching a new product line. They gave up weekends andvacation time to meet their quality standards and deadlines. Unfortunately, the productline was not received well in the marketplace. The crucial issue was how this eventwould be remembered. Employees invested their minds and hearts in the project and itfailed. But why? Unfortunately, most employees remembered this as the time that seniormanagement did not support them, complaining that, “if only they would have invested afew more dollars in the marketing effort, this product would have succeeded."Consequently, they were discouraged and less inclined to devote much energy to futureprojects. There was an alternative. Senior management could have created a different9memory - one based on the need to learn more about the marketplace before launching aproduct line. Thus, organizational memory creates an inertia that can facilitate innovationor kill it.The communication strategy has a great deal to do with how events will beremembered, which in turn shapes employee responses. There is a lot of discussion thesedays about the “learning organization” but it is important to note that employees oftenlearn the wrong lessons as well as the right ones. Executives have a responsibility tocreate the right memories.
Fourth, an effective strategy makes sense of the confusing and ambiguous.
Oneof the by-products of the so called “information age” is that employees often receive avast array of information that is confusing, contradictory, and ambiguous. Karl Weickperceptively comments on this fact of corporate life:The problem is that there are too many meanings, not too few. The problem facedby the sensemaker is one of equivocality, not one of uncertainty. The problem isconfusion, not ignorance. I emphasize this because those investigators who favorthe metaphor of information processing often view sensemaking, as they do mostother problems, as a setting where people need more information. That is not whatpeople need when they are overwhelmed by equivocality.17Employees use a variety of methods to cope with this situation. Some are healthy, such asdiscussions with other employees. Others are not, such as ignoring potentially usefulinformation. Weick's advice:One message for practitioners is that what is real is more up for grabs than theyrealize, which means their presumptions can have a major influence over howothers describe reality. Furthermore, managers need to author, examine, andcritique realities thought to be in place. They cannot take those realities forgranted or assume they are obvious to anyone else.18Acting on his counsel is a daunting challenge; similar to simultaneously assuming therole of a mind reader, detective, analyst, pundit, fortuneteller, and dramatist.Consider the situation of the maintenance employee who asked an executive during aquarterly meeting about the meaning of "downtime". His supervisor always pressuredhim to finish repair jobs in the allotted downtime slot for a piece of industrial machinery -even if he felt the job required an extra hour of work to "do the job right". He wasperplexed and frankly angry over the fact that the same machine could be shut down for10production reasons a couple of days later. He inquired, "what's the difference between anextra hour of downtime on Monday when you shut the entire machine down on Thursdayfor two days?" The executive responded, "Not running a machine during scheduledproduction time costs the company about $500/hour because we pay a "penalty" for notmeeting customer deadlines. When we choose not to run a machine several days later, itonly costs us about $150/hour." The employee's confusion was certainly understandable,as was the executive's response. In essence there were two kinds of downtime, not one, asmost people would reasonably assume. Confusion of this sort occurs all the time. Aneffective strategy allows employees to ask these kinds of questions and get some sensibleanswer - even if they don't agree with the response. The alternative is that employees, likethis one, become further confused and disenfranchised.
Fifth, an effective strategy provides a proper point of identity.
The employee whoidentifies with a particular job like "buggy whip maker" differs considerably from a"leather craftsman" who happens to make buggy whips. Who will more quickly adjust tochanges in the marketplace? The specificity of the "buggy whip maker's" point of identityrestricts his horizons as well as his employer's. This is why thoughtful organizations payclose attention to the language they use in everyday discourse. Xerox, for instance,defines itself as the "document company" which is quite different from the "photocopycompany". Presumably a document company can build the machinery to makephotocopies, but it is not conceptually restricted to do so. Increasing the variety,complexity and subtlety of the language changes the way employee think about what theydo19. Names have consequences.Consider those special organizations that are immersed in a quality culture that drivesthe company toward customer satisfaction. Walking around companies like SouthwestAirlines, Milliken & Co., and Wainwright Industries, you see it everywhere; on posters,work shirts, letterhead, and employee license plates. This is not merely some kind ofpolitical campaign slogan but a deeply ingrained way of life. Departments measure theirperformance against quality standards that are linked to compensation and bonuses. Thequality culture provides a unique point of identity and commonality for all employees. Itis what distinguishes these companies from the others. And it works. Consider thehourly employee who was arguing with a midlevel manager about how to pack a semitrailerwith a paper product. The hourly worker invoked the company's customer andquality process: "This is the way the customer wants us to pack it. I thought we believed11in focusing on the customer." Result: the trailer was loaded the way the customer wanted.In many companies the hourly worker would quickly acquiesce to those in authority.Thus, the proper identity provides employees with an unusual power that perhaps meetssome of their most basic human needs. It also, of course, provides the organization with aunique method for resolving conflicts that are not based solely on organizational status.
Sixth, an effective strategy evolves.
As an organization's goals and employeeschange, so must the communication strategy. For years Merrill Lynch prided itself onfostering relationships with customers through well-trained full service brokers. Onlyrecently did they decide to break from this tradition and offer discount brokerage via theInternet. This was, no doubt, a painful change in communication and business strategybut a necessary one in light of the changing expectations of customers. The oldassumptions were no longer valid.Reassessing assumptions is one source of renewal. Strategies can also evolve bycarefully evaluating feedback about the various communication practices, initiatives andprograms. A company, for example, may have the right message but use the wrongchannel to communicate it. Regrettably, many executives choose to ignore the responsesto their communication strategies and tactics. The nastiest gremlin to exorcise is denial.If executives can do that they will have the prescience of a prophet.Careful observers will note that the first three attributes are mainly concerned withthe underlying needs of a successful organization. Creating focus, setting priorities, andshaping proper memories are classic notions related to organizational effectiveness. Thesecond set of attributes focuses more on the underlying needs of employees. Humans aresense-making creatures; we need to reduce disorder, uncertainty, and confusion in orderto properly function. Likewise we need to identify with others or ideas that motivate us.And finally, we all need to mature and evolve. How well an organization meets its ownneeds and those of its employees is intimately linked to the communication strategy.
What Communication Strategies Do Executives Use?
Unfortunately, few organizations have communication strategies with the attributespreviously described. Often times an organization's strategy simply emerges fromexisting practices with little hard thinking about the process or consequences.After assessing numerous communication systems and reviewing relevant literature, wediscovered the following typical strategies20:12? Spray & Pray. This strategy is based on the idea that management should spray orshower employees with all kinds of information. Executives pray or hope thatemployees will be able to sort out the significant from insignificant. The motivesseem admirable because managers often assume that more information equals bettercommunication and decision-making. Simple, yes. Effective, rarely. Consider oneCEO who was perplexed by a communication assessment that suggested thatemployees were confused about the direction of the organization. He told us that hesent out detailed email messages about "what's happening" on a weekly basis. Butmost employees were ill-equipped to discern the differences between salientmessages and those less so. Many complained that even if they knew what was"happening", they did not have clue about why decisions were made. Someemployees only attended to information that supported their own personal agenda,while others were overwhelmed by the amount of information. In short, the CEO'simplicit prayers were rarely answered.?
Tell & Sell - This strategy provides more focus than Spray & Pray. Managers aim tocommunicate a more limited set of messages that they believe address coreorganizational issues.
First, they tell employees about the key issues. Second, theysell employees on the wisdom of their approach. The tell-tale sign: executives whospend the majority of their time planning sophisticated presentations with all the"bells and whistles", perhaps even including cups and tee-shirts promotingorganizational initiatives. Consequently they devote little energy to thinking abouthow to foster meaningful dialogue with employees about concerns related to theirproposals. These executives often assume that employees are passive informationreceivers and feedback is rarely necessary. They may also believe that they are in theposition to know all the key organizational issues. These assumptions are dubious atbest. Employee skepticism, if not cynicism, can be the long-term consequencebecause they tire of yet another "program of the month".? Underscore & Explore. Executives using this approach underscore several coremessages and then explore employee reactions. They focus on those fundamentalissues most clearly linked to organizational success, while allowing employees thecreative freedom to explore the implications of those ideas in a disciplined way.Executives assume that communication is not complete until they know howemployees react to the core ideas. Therefore, they are concerned not only with13developing a few core messages but also with listening attentively for potentialmisunderstandings and unrecognized obstacles. The case study at the end of the paperprovides a detailed example of how one company implemented this strategy.? Identify & Reply. This strategy marks a departure from the first three because itfocuses on employee concerns. It stresses the importance of making sense out of theoften-confusing organizational environment. However, this is fundamentally adefensive posture in which executives identify key employee concerns and then replyto those issues. Employees set the agenda, while executives respond to rumors,innuendoes, and leaks. The strategy emphasizes the importance of listening toemployees. The assumption is that employees are in the best position to know thecritical issues when, in fact, they may not know enough to even ask the rightquestions. In the worst case, the strategy evolves into an “I bitch, you fix”conversation between employees and executives.? Withhold & Uphold. In effect, Ken Starr used this strategy when communicatingwith the press during the investigation of President Clinton. "I'll tell them when theyneed to know" is the guiding maxim behind this strategy. Executives withholdinformation until necessary and when confronted by rumors, they uphold the partyline. Secrecy and control are often the implicit values of those who embrace thisstrategy. Often executives adopting this strategy assume that information is powerand they don’t want to share it with anyone. Others assume that employees are notsophisticated enough to grasp the big picture. Consider, for example, retired GeneralChuck Horner's astonishingly blunt remarks about the leadership problems during theVietnam War:I didn't hate them because they were dumb, I didn't hate them because they hadspilled our blood for nothing. I hated them because of their arrogance … becausethey had convinced themselves that they actually knew what they were doing andthat we were too minor to understand the "Big Picture." 21Unfortunately bitterness of this sort, if perhaps less vehement, infects most organizationsadopting this strategy. Inevitably, when executives adopt this strategy the rumor millworks overtime, while productivity grinds down.Executives, no doubt, use other strategies or perhaps use hybrids of these approaches. Butnote the underlying tendencies. On one extreme, employees receive all the information14they could possible desire, while at the other, they are provided little or nocommunication. Strategies at the extremes have a similar quality: employees havedifficulty framing and making sense out of organizational events. Discovering salientinformation, focusing on core issues and creating the proper memories, are left toemployees' personal whims.We use a crescent-shaped continuum to visually highlight those similarities (SeeIllustration 2). The strategies toward the middle tend to offer employees more guidanceby prioritizing communications and providing relevant specifics. These strategies alsotend to be the most sensitive to employee needs although they make differentassumptions about the nature of those needs.Table 1 presents an evaluation of these basic strategies based on the criteria wepreviously discussed. Executives might convincingly argue that any one of thesestrategies might be appropriate in a certain situation. During a war, generals (evenGeneral Horner) may be well advised to adopt an Identify & Reply or perhaps a Withhold& Uphold strategy. Small organizations operating under great time constraints might findthat the Spray & Pray strategy works reasonably well. However, after carefullyexamining the impact of various approaches, we are convinced that those strategies at theends of the continuum usually limit organizational performance. As a general rule, webelieve the Underscore & Explore strategy maximizes organizational potential bycreatively synthesizing executives' initiatives and employee concerns. It allows executivesto shape the agenda as implied in the Tell & Sell strategy, while devoting time toemployee concerns as suggested by the Identify & Reply strategy.How Can Executives Develop an Effective Communication Strategy?There are dozens of tools available for a developing a strategic organizational plan butcomparatively few for creating communication strategies. We divide the process intothree overlapping phases: discover, create, and assess. We depict each phase in Figure 3as a triangle to signal the relative breadth of the intellectual and intuitive challenge facedduring the activities within each phase. For example, establishing the goals of thecommunication strategy is less daunting than discerning the core organizational issuesworthy of being addressed. The overlapping triangle symbolizes how the results of eachphase provide the starting point for another major thought-provoking endeavor. Thecommunication goals, for example, provide the core around which an innovative strategycan be designed. Finally, note that this entire activity takes place in the ever-changing15internal and external environment, which may impact the process in unpredictable waysat any time.Phase 1: DiscoverThe basic objective in phase one is to discover the fundamental themes and translate thatinsight into some fairly specific goals. Three activities are necessary in order toaccomplish this feat: study the organization, discern the critical issues, and establish theappropriate goals.Study the OrganizationWithout a fairly thorough understanding of the organization, the variousconstituencies, and the communication system, it would be exceedingly difficult todevelop a viable strategy. When studying something as complex as an organization it isdifficult to precisely identify what may eventually prove relevant. Thereforecommunication strategists need to cast a big net to fully understand the goals ofexecutives, the aspirations of employees, the challenges faced by the organization, andthe nuances of the existing communication system. The implicit and explicit knowledgegained in this research expedition provides the basis for a sound communication strategy.Discern the Critical ThemesDiscerning the underlying themes is the most important and difficult task in the entireprocess. Important because it is the only way in which executives can significantlyimprove the odds that the communication strategy succeeds and the organization movesforward. Difficult because there are so many competing interests. For instance, it is hardfor many executives to choose the one or two most important values to pursue over thecourse of year. The typical refrain is, "they are all important", but that is merely a way toavoid making difficult choices. On another level, employee-driven issues often competewith executive-driven initiatives. For instance, a senior administrator's desire to "developgreater employee accountability" is not necessarily congruent with the professorate'sdesire for academic freedom.Discerning is also difficult because it involves identifying the most important latentpatterns that hinder organizational performance. It is, for example, relatively easy todetermine that employees are dissatisfied and executives frustrated. But determining howthese two issues are fundamentally related is a much more vexing task. Likewise,identifying all the organizational issues that need to be addressed is fairly straightforwardbut finding the underlying connection and determining what to do first is the tough part.16The most successful strategies emerge at the nexus of organizational, executive andemployee orientations. A strategy driven only by organizational necessity is unlikely tosucceed. Consider the relatively spotty success efforts of those organizations thatdownsize. A strategy driven only by executive desires is unlikely to be sustainable.Fortune estimates that 70% of the CEOs who fail, do so because of poor execution:initiatives are not completed and commitments are not kept. As a result, employees areunsupportive.22 A strategy driven only by an employee orientation is unlikely to bedisciplined enough to remain competitive. The sad state of many public schoolsdemonstrates the perils of ignoring the needs of society. Finding that sweet middle spot ismost likely to create enough focus, motivation, and relevancy for the organization oexcel. Establish the GoalsDiscerning the core issues for organizational success provides the necessarybackground for establishing specific communication goals. Typically the goals revolvearound "pushing" certain vital messages, while allowing employees to "pull" other relatedmessages and information. For instance, 20% of the communication goals for onecompany involved pushing or pulling a "cost reduction" message:? Focus employee thinking on the personal implications of "reducing costs" (push).? Provide recognition of employees who are actually "reducing costs" (push).? Make available timely information about the status of "cost reduction" efforts (pull).The central question: If the communication strategy succeeds, what should happen in theorganization? Presumably when the communication goals are achieved, then theorganization’s, executives', and employees' objectives have been achieved.Phase 2: CreateThe communication strategy is built around the strategic goals established in phase one.There are two essential activities at this point; a) developing the specific messages,protocols, tools, and plans needed to achieve the communicative goals, and b)implementing the strategy.Develop the StrategyAs all effective strategists learn, anticipating other's reactions is the key to success.For example, unless the company previously discussed demonstrated how "cost cutting"benefited union employees, it would not be very motivating. In fact, the company decidedto link “cost cutting” and “long-term viability” to produce the core message. While cost17cutting was both an organizational imperative and an executive initiative, the “long-termviability” issue was crafted to link to employee needs for job security. They pushed thiscore message in a variety of ways including producing a short video of employee-drivencost cutting projects that improved the company's long-term viability. In addition, anIntranet web site was planned which enabled employees to pull information on thecompany's cost reduction efforts. For each of these initiatives the company specified thegoal, target audience, and rationale.One of the problems at this stage is that most organizations already have acommunication system in place that may or may not be appropriate. In fact, there is astrong temptation to merely adapt existing tools and hope for the best. One anizationrelied almost exclusively on written communication to "inform and persuade the troops".The senior executives were continually frustrated by the lack of employee "buy-in" despite the time they devoted to honing their messages. New brochures, more frequentmemos, and even a new email system did not seem to do the trick. The executives, ofcourse, never thought systematically about their communication efforts in the way wedescribed. Years later after the team was "replaced", a new senior executive realized theessence of the problem - a lack of face-to-face communication driven by explicit goals.Unfortunately, his predecessor had left in place a fairly elaborate communicationinfrastructure built around written communication. Re-orienting the communicationsystem involved considerable effort because the existing staff was ill-equipped for thenew demands.Implement the StrategyA successful implementation is based on sound tactics and execution. The decision tocreate the cost-cutting video may be strategically sound, but if it is not well produced andseen by enough employees, it will fail at the tactical and execution levels. Fortunatelythere is a wealth of resources available to executives on how to successfully createvideos, deliver speeches, plan meetings, and create compelling web sites. In fact, mostbasic communication skills training focuses on effective tactics.Phase 3: AssessNo strategy, thoughtfully designed or not, is perfect. That is why the final assessmentstage is so critical; it provides the necessary corrective feedback to improve both thestrategy and tactics. Employee surveys, focus groups and observations are all usefultools. Ultimately we want to know if the communication objectives are being reached.18For instance, are employees thinking about how they can cut costs? We also want toevaluate the responses to the core messages and the effectiveness of communicationsystems and vehicles. Skilled assessors learn to distinguish between mere awareness,motivation, and action. Awareness is often the starting point and may be, in fact, apreliminary goal but the ultimate test for most communication strategies is to shapeactions.The assessment phase can contribute much needed communicative discipline becauseit helps ensure that the central messages impact the organization in the desired way. Twomajor temptations plague the executive after implementation.
First, executives, havingrestless dispositions, tire of repeating the core messages and teaching employees aboutthe implications of the ideas. Executives routinely underestimate how long it takes toeffectively communicate. Proper assessment processes should demonstrate how long itreally takes to have an impact on employee thinking and behavior. Second, executivesmay be tempted to overload the system with too much information or too many coremessages resulting in confusion and lack of focus. An assessment procedure, like a focusgroup, could uncover the employees’ quandaries.Assessment processes also provide an effective way to help the organizationassimilate and stabilize the strategy. Implementing a vigorous communication strategy islike initiating any other major organizational change effort. Executives should expectsimilar problems, like employee resistance. Deciding, for example, to routinely discussthe implications of the company financial results with all employees may underminesome manager’s perceived power base. Likewise, some employees will not immediatelybe convinced of the need for the change. These, aptly named, “late adopters” oftenunderstand the importance of a well-developed communication strategy once the datareveals less grapevine activity, greater employee focus, and progress on organizationalgoals. In short, assessment processes suggest ways to improve the strategy and tactics,while helping organizations institutionalize a more effective underlying communicativesystem.
Phillip G. Clampitt Information SciencesUniversity of Wisconsin - Green Bay
TH 331
Green Bay, WI 54311
920.465.2324
Bob DeKoch
Boldt Construction Company
Tom Cashman
Appleton Papers
Communicating Strategically: A Perspective and Case Study about Creating Comfort with Uncertainty
Executive Overview
Executives can communicate about anything but they can not communicate abouteverything. Consequently, either explicitly or implicitly, they make communicativechoices, which in turn becomes the organization’s communication strategy. Thesechoices are all the more important in times of great organizational uncertainty wrought byincreased global competition, quicker cycle times and the ever-changing marketplace.What are the communication strategies available to executives? How should they bemade? And which increase organizational effectiveness? These are the core questionsdiscussed in this article. We conclude with a case study demonstrating the benefits ofsystematically developing a communication strategy to address organizationaluncertainty.
1. Talk is not nearly as cheap as some people assume. After all, executives spend a greatdeal of time conducting meetings, giving speeches, responding to email and draftingreports. Executives usually have less time than money. And no executive wouldcavalierly spend financial capital, nor should they carelessly fritter away theircommunicative resources. Yet, many do. Why? Perhaps they do not realize the value of acomprehensive communication strategy. Executives face an array of pressing issuesincluding how to retain quality employees1, combat organizational cynicism2, and createa dynamic, evolving workplace
3. A proper communication strategy provides more thananother tool to address issues of this sort; it creates the right environment. Executives,like those at FedEx, who can create passion in the workplace through consistent andenergizing messages, tend to experience less employee turnover
4. On the flip side, acommunication strategy can provide a hedge against employee cynicism by ensuring thatdissenting opinions about decisions, practices or policies are appropriately channeled. Awell-developed communication strategy also cultivates the kind of environment moreaccepting of change and innovation5. 3M, for example, sows the seeds of innovation byroutinely recording and telling stories about breakthrough products, processes, and ideas6.Technologies like the Internet should also encourage executives to reconsidertraditional top-down communication strategies. Employees can quickly and easily accessinformation from sources both inside and outside the organization. These communicationtools can profoundly impact workers' thoughts, motivations, and actions. Executives cannot hope to control information the way they once did. Therefore, they need newstrategies that can adjust to these dynamics. What strategic options are available? Whichare most effective? We explore these issues in this article and conclude with a case studydemonstrating the benefits of developing a communication strategy designed to addressorganizational uncertainty. In short, "talk" may well be the most important and difficultinvestment decision an executive makes.
What Is a Communication Strategy?
The word “strategy” has more frequently been coupled with the word “business” thanwith “communication”. A long and intellectually stimulating history regarding businessstrategy has spawned both controversy and understanding. 7 Our aim is not to revisit thedebates but to glean the core insights that allow us to suggest a viable, though surely notthe only, approach for developing organizations' internal communication strategy. Forour purpose we broadly define strategy as the "macro-level choices and tradeoffs2executives8 make based on their organizational goals and judgments about others'reactions which serves as a basis for action." We elaborate on this notion below:
First, strategy involves a macro-level orientation that can be distinguished fromtactical concerns.
The word strategy is indirectly derived from the word "strategos"which denotes generalship. Generals are concerned with the big picture. Typicallystrategy occurs at higher organizational and abstraction levels than tactical issues.Strategy is less easily changed than tactics. There are usually many different tactics thatcould be used to implement a strategy. Southwest Airline's strategy to "serve price andconvenience sensitive travelers" is supported by a host of tactics including usingsecondary airports, flying relatively short distances, and using standard aircraft for theentire fleet.9 Presumably some of those tactics could be modified or some added and thestrategy would remain intact.Likewise, a strategic communication decision to “foster interdepartmentalcommunication” can be accomplished by various methods such as job rotation and usingcross-functional teams10. Confusion between communication strategies and tactics canbe problematic because focusing on tactical perfection does not guarantee strategicsuccess. An effective job rotation program may not result in better interdepartmentalcommunication.
Like all tactics, there is an upside and downside. While job rotation canhelp a few employees understand different departmental dynamics, the tactic may notprovide the timely information necessary to alleviate conflicts between divisions.To be fair, the distinction between strategy and tactics is not always clear and often,they evolve in tandem. Nevertheless, the distinction helps structure an executive’sthinking. Often when executives are questioned about their communication strategy theysay something like, "we have a monthly newsletter and I hold quarterly meetings withemployees". This is like an executive saying to a potential investor that our new productis our strategy. A savvy investor wants to know about the target market, the company'sunderlying objectives, and how the company is positioned. In short, a communicationstrategy involves something more than selecting channels.
Second, strategy involves implicit or explicit choices resulting in tradeoffs. Anorganization makes choices about which markets to pursue and which opportunities toignore. Sometimes this is a thoughtful and explicit choice like those who use a specificstrategic planning process. At other times, it is more emergent like those used bybusinesses focused on experimentation.3Likewise, communicators explicitly or implicitly choose what to talk about, and whatto ignore. The executives’ agenda could include virtually anything from internal issueslike sexual harassment and team building to external ones like market share or meetingcustomer expectations. How the agenda is shaped can have a profound impact on theorganization. For instance, an executive for a dairy plant was advised that it wasimportant for employees to “express their concerns”, no matter how trivial or misguidedthey may be. On the surface "listening to employee concerns" may appear to be a fineidea. Unfortunately in this company it turned out to be a counterproductive practice. Itled to a culture of complaint in which everyone was free to gripe but no one did anythingto address the problems. There was no forum or mechanism for distinguishing betweenlegitimate and illegitimate concerns. The manager made an inappropriate tradeoff infavor of allowing employees to voice their concerns instead of discussing solutions.Consequently, everyone was dissatisfied, important issues were overlooked, and the plantunderperformed. Eventually the plant manager was replaced by one who insisted that allconcerns be accompanied with ideas for resolution. This drastically cut down on thegriping while improving productivity.Managing the agenda or "what executives talk about" is not the only critical choice.The traditional questions of “who-what-when-where-why and how” are a reasonablygood starting point for developing a communication strategy:? With whom will executives communicate?? How will employees and executives communicate?? When will employees and executives communicate?? Where will employees and executives communicate?These are not trivial decisions for they will shape the communication environment ofexecutives. Unfortunately, many of these issues are rarely discussed explicitly, much lesswith an eye to the implicit tradeoffs.The age-old efficiency/effectiveness and short-term/long-term dilemmas often lie atthe root of these tradeoffs. It may be more efficient to send email to all employeesoutlining a major change but this is not an effective way to create employee "buy-in".Face-to-face communication is a more persuasive channel because it provides a dynamicand effective way for dealing with employee objections. However, a rich media likeface-to-face communication costs the organization more in terms of time and energy than4lean media like email11. Thus, executives should ask a fundamental strategic question,"which issues are worth discussing using this expensive channel?"To take a slightly different tact, consider the following tension points:?
"Who" versus "What". Employees routinely report that they prefer to receiveinformation from their immediate supervisor. Surveys also show that employeesare most curious about "organizational plans for the future".12 Unfortunately,supervisors are often in the worst possible position to a) know about future plans,b) understand the rationale for the plans, and c) advocate the plans. There areoften legitimate legal and organizational reasons why executives can notadequately inform first-line supervisors about impending plans. Consequently, astrategic question involves who is empowered to talk about what??
"When" versus "How". One executive insisted that all the details of minororganizational policies be completed before unveiling them to employees in anall-company meeting, regardless of the number of rumors circulating. He neverrealized that speed is sometimes more important than complete two-waycommunication with employees. In this case, the efficiency of email or voice-mailwould have been more effective in taming the grapevine. Thus, executives needto ask a fundamental question: when is speed more important thancomprehensiveness?? "Why" versus "what". One executive’s primary forum for communicating wasa quarterly meeting with employees about the company’s future plans. Heprovided appropriate information about how the business was doing and thefuture outlook. Employees even complimented him on his ability to explain whatwas "going on". Strangely, many employees were vaguely mistrustful of him.Fellow executives had precisely the opposite impression, which made thesituation even more puzzling. The key insight came when we analyzed hiscommunications to employees. We discovered that he never discussed hisunderlying motives; he only communicated about "what" and not "why".Equipped with this insight, he slightly altered his communication style andemployee apprehensions slowly disappeared. Thus, a critical question is how toproperly balance
"why" and "what" messages.5There are, of course, many other tension points to address. But the fundamental strategicissue question persists: How do executives make the appropriate tradeoffs? To this issuewe now turn.
Third, strategy involves goal setting. Virtually all organizations have statedobjectives. But determining those objectives is not a simple task. Consider the difficultyin specifying the goals of U.S. foreign policy. Former Secretary of State, HenryKissinger, remarked:The problem of most previous periods was that purpose outran knowledge. Thechallenge of our period is the opposite: knowledge is far outrunning purposes.The task for the United States therefore is not only to reconcile its power and itsmorality but to temper its faith with wisdom.13 Similar difficulties plague executives seeking to determine the objectives ofcommunication systems. Many don't think about it explicitly. Others tend to settle forvagaries such as "keeping everyone informed". An objective of this ilk invites a host ofother questions: "Informed about what?", "Informed in how much detail?", "Informed inwhat way?", "Informed how often?", etc. Even more vexing issues can be raised: "Howwill we know when employees have been properly informed?", "Is it really possibly tokeep everyone informed about everything?", and "Is it even desirable?" As Kissingerpoints out, information or knowledge is not always the answer; it may, in fact, be theproblem.The central question executives need to ask is, "why should we communicate?"Inevitably, this leads to setting communication priorities. Unfortunately, most discussionsof communication never reach this level and implicit or ill-conceived objectives underpinthe strategy.
Fourth, strategy involves anticipating others' reactions. The great militarystrategist, Edward Luttwak observed:In the ebb and flow of reciprocal development, the same device could be highlyeffective, totally useless, and positively dangerous within a matter of months, asin the case of rearward-looking radars fitted on British bombers to warn ofapproaching fighters, which were first lifesavers, then jammed, and soon becamea deadly danger to those who used them … 14In the realm of military as well as business strategy, anticipating the cascade of responsesproves critical. For instance, when a software company decides to develop a new product,6it should clearly consider how Microsoft would respond. Even when an opportunitycurrently exists, the crucial issue revolves around how competitors are likely to respond.Likewise, anticipating the probable responses of employees to communicativeinitiatives is central to the development of a viable strategy. The dance between theinitiative and the response and then the subsequent adjustments creates the dialogue thatdetermines the success of the strategy. Why? Because the messages sent influence thosereceived. If, for example, the message sent to employees is that "mistakes will not betolerated", then employees will often make efforts not only to avoid mistakes but also nottell anyone that mistakes have been made. That dance differs greatly form one based on atheme of "learning to avoid mistakes". This is perhaps a subtle difference but one thatcan have profound consequences.
Fifth, strategy naturally serves as the basis for action. Strategic planning is rarelydone solely as an intellectual activity. Rather the exercise is used to focus decisionmaking,shape personnel policies, motivate employees and guide a host of otheractivities.Likewise, communication strategy provides the basis for structuring, executing, andevaluating communication practices. All the traditional communication forums –newsletters, quarterly meetings, all company mailings etc. – naturally flow from thestrategy. Perhaps this explains why most employee newsletters are littered with thedreadful three B’s (birthday, bowling scores, and baby announcements). This becomesthe debris left from superficial discussions regarding communication strategy. If no oneasks about the strategic purpose of a newsletter, it should be no surprise that it turns into amonthly version of a high school yearbook. Yet, clarity of purpose can transform thecommunication system while significantly improving organizational performance.
What Makes a Communication Strategy Effective?
Communication strategies can be developed either deliberately or by happenstance. Bychance, a few organizations stumble on strategies that appear to work. But generally, thatis not the case. Thoughtful analysis of executives’ communication needs and employees’concerns can help an organization make the appropriate choices and tradeoffs whichresult in an effective strategy designed to incite meaningful actions. We hinted at theattributes of an effective strategy in the previous section and now we make those moreexplicit.7
First, an effective strategy links to organizational goals. There is no "one size fitsall" communication strategy because organizations have very different objectives.Consider, for example, an Internet-based organization. The industry and its protocols arechanging so rapidly that a communication strategy designed to provide employees withcarefully thought out and fully developed plans would quickly break down. Therefore,the communication strategy should focus on speed. When the industry matures,companies will need to develop different approaches. In fact, researchers have linkedeffective communication strategies to productivity gains, efficiency improvements, costreductions, improved morale, and decreased turnover.15 In short, aligned strategies tendto enhance organizational performance.On the other hand, misaligned strategies can hinder organizational performance. Forinstance, in one medical clinic, the executive board of physicians determined that one oftheir key business objectives was to increase employee accountability. Unfortunately,they never developed a supportive communication strategy. In fact, their de factostrategy was to blame the employee nearest to them at the time they discovered anyproblem. Their actions (or inaction), therefore, ran counter to their objectives. The resultwas that employees were simultaneously held accountable for everything while not beingresponsible for anything in particular. Inevitably this led to low morale, high turnover,disorganization, and ultimately, patient frustration. Eventually the physicians wereconvinced to "try out" a strategic communication plan, which started with dialogue aboutjob responsibilities. They were amazed at the results. The physicians finally knew who totalk to about what. And, of course, this increased employee accountability.Finally consider one nonprofit business development organization that was quiteproud of its newsletter aimed at local businesses. In fact, the newsletter received severaldesign awards. However, when the director was asked about how the newsletter waslinked to the organization's goals, she honestly admitted that she "didn't have a clue." Thevarious awards misdirected attention from the underlying strategic purpose. In sum,communication strategies not linked to underlying organizational goals are as effective asan aesthetically pleasing advertising campaign that fails to generate business.
Second, an effective strategy legitimizes certain issues and de-legitimizes others.
"Don't go there" is a popular phrase with teenagers these days. While savvy executivesmay not use that lingo, they should be comfortable with the underlying sentiment. Asuccessful communication strategy is as much about what is not said as it is about what is8said. By setting the agenda executives shape the playing field. In one case, we quiteliterally determined what was "in bounds" and "out of bounds". The culture of complaintbecome so debilitating in the dairy plant described previously that they drew a diagram ofwhat they should talk about and what they should not talk about (See Figure 1). Theexecutives introduced the diagram, discussed why it was needed, and how it was to beused in an all-employee meeting. Then the diagram was posted in every supervisor'soffice and meeting room. "Are we talking in the circle?" became the plant mantra forseveral months. Gradually the culture of complaint was transformed into a culture ofconfronting core concerns. Companies that promote their core values or competenciesare essentially doing the same thing. The values direct attention away from presumablyirrelevant matters and shift attention to core issues.
Third, an effective strategy shapes organizational memory.
There are manyfactors that influence the interpretation of events but few are more important thanmemory. Brain researchers tell us that memory serves as a template that allows us todiscern differences and similarities between events. Consider, for example, how highaltitude climbing often degrades a mountaineer's memory. One climber returning fromthe summit of Mount Everest was prepared to leap across a seven foot crevasse when hecouldn't locate a ladder on the traditional path, even though the ladder was only moved15 feet from the original location.16 Normally functioning hikers would have noproblem discerning the similarity between the two locations. Clearly, memory has amajor impact on how we react; it can cause us to fall over the precipice or scale theheights.The aim of the communication strategy, therefore, is to create the proper kinds ofmemories. Consider the following situation. A development team spent an enormousamount of time and energy launching a new product line. They gave up weekends andvacation time to meet their quality standards and deadlines. Unfortunately, the productline was not received well in the marketplace. The crucial issue was how this eventwould be remembered. Employees invested their minds and hearts in the project and itfailed. But why? Unfortunately, most employees remembered this as the time that seniormanagement did not support them, complaining that, “if only they would have invested afew more dollars in the marketing effort, this product would have succeeded."Consequently, they were discouraged and less inclined to devote much energy to futureprojects. There was an alternative. Senior management could have created a different9memory - one based on the need to learn more about the marketplace before launching aproduct line. Thus, organizational memory creates an inertia that can facilitate innovationor kill it.The communication strategy has a great deal to do with how events will beremembered, which in turn shapes employee responses. There is a lot of discussion thesedays about the “learning organization” but it is important to note that employees oftenlearn the wrong lessons as well as the right ones. Executives have a responsibility tocreate the right memories.
Fourth, an effective strategy makes sense of the confusing and ambiguous.
Oneof the by-products of the so called “information age” is that employees often receive avast array of information that is confusing, contradictory, and ambiguous. Karl Weickperceptively comments on this fact of corporate life:The problem is that there are too many meanings, not too few. The problem facedby the sensemaker is one of equivocality, not one of uncertainty. The problem isconfusion, not ignorance. I emphasize this because those investigators who favorthe metaphor of information processing often view sensemaking, as they do mostother problems, as a setting where people need more information. That is not whatpeople need when they are overwhelmed by equivocality.17Employees use a variety of methods to cope with this situation. Some are healthy, such asdiscussions with other employees. Others are not, such as ignoring potentially usefulinformation. Weick's advice:One message for practitioners is that what is real is more up for grabs than theyrealize, which means their presumptions can have a major influence over howothers describe reality. Furthermore, managers need to author, examine, andcritique realities thought to be in place. They cannot take those realities forgranted or assume they are obvious to anyone else.18Acting on his counsel is a daunting challenge; similar to simultaneously assuming therole of a mind reader, detective, analyst, pundit, fortuneteller, and dramatist.Consider the situation of the maintenance employee who asked an executive during aquarterly meeting about the meaning of "downtime". His supervisor always pressuredhim to finish repair jobs in the allotted downtime slot for a piece of industrial machinery -even if he felt the job required an extra hour of work to "do the job right". He wasperplexed and frankly angry over the fact that the same machine could be shut down for10production reasons a couple of days later. He inquired, "what's the difference between anextra hour of downtime on Monday when you shut the entire machine down on Thursdayfor two days?" The executive responded, "Not running a machine during scheduledproduction time costs the company about $500/hour because we pay a "penalty" for notmeeting customer deadlines. When we choose not to run a machine several days later, itonly costs us about $150/hour." The employee's confusion was certainly understandable,as was the executive's response. In essence there were two kinds of downtime, not one, asmost people would reasonably assume. Confusion of this sort occurs all the time. Aneffective strategy allows employees to ask these kinds of questions and get some sensibleanswer - even if they don't agree with the response. The alternative is that employees, likethis one, become further confused and disenfranchised.
Fifth, an effective strategy provides a proper point of identity.
The employee whoidentifies with a particular job like "buggy whip maker" differs considerably from a"leather craftsman" who happens to make buggy whips. Who will more quickly adjust tochanges in the marketplace? The specificity of the "buggy whip maker's" point of identityrestricts his horizons as well as his employer's. This is why thoughtful organizations payclose attention to the language they use in everyday discourse. Xerox, for instance,defines itself as the "document company" which is quite different from the "photocopycompany". Presumably a document company can build the machinery to makephotocopies, but it is not conceptually restricted to do so. Increasing the variety,complexity and subtlety of the language changes the way employee think about what theydo19. Names have consequences.Consider those special organizations that are immersed in a quality culture that drivesthe company toward customer satisfaction. Walking around companies like SouthwestAirlines, Milliken & Co., and Wainwright Industries, you see it everywhere; on posters,work shirts, letterhead, and employee license plates. This is not merely some kind ofpolitical campaign slogan but a deeply ingrained way of life. Departments measure theirperformance against quality standards that are linked to compensation and bonuses. Thequality culture provides a unique point of identity and commonality for all employees. Itis what distinguishes these companies from the others. And it works. Consider thehourly employee who was arguing with a midlevel manager about how to pack a semitrailerwith a paper product. The hourly worker invoked the company's customer andquality process: "This is the way the customer wants us to pack it. I thought we believed11in focusing on the customer." Result: the trailer was loaded the way the customer wanted.In many companies the hourly worker would quickly acquiesce to those in authority.Thus, the proper identity provides employees with an unusual power that perhaps meetssome of their most basic human needs. It also, of course, provides the organization with aunique method for resolving conflicts that are not based solely on organizational status.
Sixth, an effective strategy evolves.
As an organization's goals and employeeschange, so must the communication strategy. For years Merrill Lynch prided itself onfostering relationships with customers through well-trained full service brokers. Onlyrecently did they decide to break from this tradition and offer discount brokerage via theInternet. This was, no doubt, a painful change in communication and business strategybut a necessary one in light of the changing expectations of customers. The oldassumptions were no longer valid.Reassessing assumptions is one source of renewal. Strategies can also evolve bycarefully evaluating feedback about the various communication practices, initiatives andprograms. A company, for example, may have the right message but use the wrongchannel to communicate it. Regrettably, many executives choose to ignore the responsesto their communication strategies and tactics. The nastiest gremlin to exorcise is denial.If executives can do that they will have the prescience of a prophet.Careful observers will note that the first three attributes are mainly concerned withthe underlying needs of a successful organization. Creating focus, setting priorities, andshaping proper memories are classic notions related to organizational effectiveness. Thesecond set of attributes focuses more on the underlying needs of employees. Humans aresense-making creatures; we need to reduce disorder, uncertainty, and confusion in orderto properly function. Likewise we need to identify with others or ideas that motivate us.And finally, we all need to mature and evolve. How well an organization meets its ownneeds and those of its employees is intimately linked to the communication strategy.
What Communication Strategies Do Executives Use?
Unfortunately, few organizations have communication strategies with the attributespreviously described. Often times an organization's strategy simply emerges fromexisting practices with little hard thinking about the process or consequences.After assessing numerous communication systems and reviewing relevant literature, wediscovered the following typical strategies20:12? Spray & Pray. This strategy is based on the idea that management should spray orshower employees with all kinds of information. Executives pray or hope thatemployees will be able to sort out the significant from insignificant. The motivesseem admirable because managers often assume that more information equals bettercommunication and decision-making. Simple, yes. Effective, rarely. Consider oneCEO who was perplexed by a communication assessment that suggested thatemployees were confused about the direction of the organization. He told us that hesent out detailed email messages about "what's happening" on a weekly basis. Butmost employees were ill-equipped to discern the differences between salientmessages and those less so. Many complained that even if they knew what was"happening", they did not have clue about why decisions were made. Someemployees only attended to information that supported their own personal agenda,while others were overwhelmed by the amount of information. In short, the CEO'simplicit prayers were rarely answered.?
Tell & Sell - This strategy provides more focus than Spray & Pray. Managers aim tocommunicate a more limited set of messages that they believe address coreorganizational issues.
First, they tell employees about the key issues. Second, theysell employees on the wisdom of their approach. The tell-tale sign: executives whospend the majority of their time planning sophisticated presentations with all the"bells and whistles", perhaps even including cups and tee-shirts promotingorganizational initiatives. Consequently they devote little energy to thinking abouthow to foster meaningful dialogue with employees about concerns related to theirproposals. These executives often assume that employees are passive informationreceivers and feedback is rarely necessary. They may also believe that they are in theposition to know all the key organizational issues. These assumptions are dubious atbest. Employee skepticism, if not cynicism, can be the long-term consequencebecause they tire of yet another "program of the month".? Underscore & Explore. Executives using this approach underscore several coremessages and then explore employee reactions. They focus on those fundamentalissues most clearly linked to organizational success, while allowing employees thecreative freedom to explore the implications of those ideas in a disciplined way.Executives assume that communication is not complete until they know howemployees react to the core ideas. Therefore, they are concerned not only with13developing a few core messages but also with listening attentively for potentialmisunderstandings and unrecognized obstacles. The case study at the end of the paperprovides a detailed example of how one company implemented this strategy.? Identify & Reply. This strategy marks a departure from the first three because itfocuses on employee concerns. It stresses the importance of making sense out of theoften-confusing organizational environment. However, this is fundamentally adefensive posture in which executives identify key employee concerns and then replyto those issues. Employees set the agenda, while executives respond to rumors,innuendoes, and leaks. The strategy emphasizes the importance of listening toemployees. The assumption is that employees are in the best position to know thecritical issues when, in fact, they may not know enough to even ask the rightquestions. In the worst case, the strategy evolves into an “I bitch, you fix”conversation between employees and executives.? Withhold & Uphold. In effect, Ken Starr used this strategy when communicatingwith the press during the investigation of President Clinton. "I'll tell them when theyneed to know" is the guiding maxim behind this strategy. Executives withholdinformation until necessary and when confronted by rumors, they uphold the partyline. Secrecy and control are often the implicit values of those who embrace thisstrategy. Often executives adopting this strategy assume that information is powerand they don’t want to share it with anyone. Others assume that employees are notsophisticated enough to grasp the big picture. Consider, for example, retired GeneralChuck Horner's astonishingly blunt remarks about the leadership problems during theVietnam War:I didn't hate them because they were dumb, I didn't hate them because they hadspilled our blood for nothing. I hated them because of their arrogance … becausethey had convinced themselves that they actually knew what they were doing andthat we were too minor to understand the "Big Picture." 21Unfortunately bitterness of this sort, if perhaps less vehement, infects most organizationsadopting this strategy. Inevitably, when executives adopt this strategy the rumor millworks overtime, while productivity grinds down.Executives, no doubt, use other strategies or perhaps use hybrids of these approaches. Butnote the underlying tendencies. On one extreme, employees receive all the information14they could possible desire, while at the other, they are provided little or nocommunication. Strategies at the extremes have a similar quality: employees havedifficulty framing and making sense out of organizational events. Discovering salientinformation, focusing on core issues and creating the proper memories, are left toemployees' personal whims.We use a crescent-shaped continuum to visually highlight those similarities (SeeIllustration 2). The strategies toward the middle tend to offer employees more guidanceby prioritizing communications and providing relevant specifics. These strategies alsotend to be the most sensitive to employee needs although they make differentassumptions about the nature of those needs.Table 1 presents an evaluation of these basic strategies based on the criteria wepreviously discussed. Executives might convincingly argue that any one of thesestrategies might be appropriate in a certain situation. During a war, generals (evenGeneral Horner) may be well advised to adopt an Identify & Reply or perhaps a Withhold& Uphold strategy. Small organizations operating under great time constraints might findthat the Spray & Pray strategy works reasonably well. However, after carefullyexamining the impact of various approaches, we are convinced that those strategies at theends of the continuum usually limit organizational performance. As a general rule, webelieve the Underscore & Explore strategy maximizes organizational potential bycreatively synthesizing executives' initiatives and employee concerns. It allows executivesto shape the agenda as implied in the Tell & Sell strategy, while devoting time toemployee concerns as suggested by the Identify & Reply strategy.How Can Executives Develop an Effective Communication Strategy?There are dozens of tools available for a developing a strategic organizational plan butcomparatively few for creating communication strategies. We divide the process intothree overlapping phases: discover, create, and assess. We depict each phase in Figure 3as a triangle to signal the relative breadth of the intellectual and intuitive challenge facedduring the activities within each phase. For example, establishing the goals of thecommunication strategy is less daunting than discerning the core organizational issuesworthy of being addressed. The overlapping triangle symbolizes how the results of eachphase provide the starting point for another major thought-provoking endeavor. Thecommunication goals, for example, provide the core around which an innovative strategycan be designed. Finally, note that this entire activity takes place in the ever-changing15internal and external environment, which may impact the process in unpredictable waysat any time.Phase 1: DiscoverThe basic objective in phase one is to discover the fundamental themes and translate thatinsight into some fairly specific goals. Three activities are necessary in order toaccomplish this feat: study the organization, discern the critical issues, and establish theappropriate goals.Study the OrganizationWithout a fairly thorough understanding of the organization, the variousconstituencies, and the communication system, it would be exceedingly difficult todevelop a viable strategy. When studying something as complex as an organization it isdifficult to precisely identify what may eventually prove relevant. Thereforecommunication strategists need to cast a big net to fully understand the goals ofexecutives, the aspirations of employees, the challenges faced by the organization, andthe nuances of the existing communication system. The implicit and explicit knowledgegained in this research expedition provides the basis for a sound communication strategy.Discern the Critical ThemesDiscerning the underlying themes is the most important and difficult task in the entireprocess. Important because it is the only way in which executives can significantlyimprove the odds that the communication strategy succeeds and the organization movesforward. Difficult because there are so many competing interests. For instance, it is hardfor many executives to choose the one or two most important values to pursue over thecourse of year. The typical refrain is, "they are all important", but that is merely a way toavoid making difficult choices. On another level, employee-driven issues often competewith executive-driven initiatives. For instance, a senior administrator's desire to "developgreater employee accountability" is not necessarily congruent with the professorate'sdesire for academic freedom.Discerning is also difficult because it involves identifying the most important latentpatterns that hinder organizational performance. It is, for example, relatively easy todetermine that employees are dissatisfied and executives frustrated. But determining howthese two issues are fundamentally related is a much more vexing task. Likewise,identifying all the organizational issues that need to be addressed is fairly straightforwardbut finding the underlying connection and determining what to do first is the tough part.16The most successful strategies emerge at the nexus of organizational, executive andemployee orientations. A strategy driven only by organizational necessity is unlikely tosucceed. Consider the relatively spotty success efforts of those organizations thatdownsize. A strategy driven only by executive desires is unlikely to be sustainable.Fortune estimates that 70% of the CEOs who fail, do so because of poor execution:initiatives are not completed and commitments are not kept. As a result, employees areunsupportive.22 A strategy driven only by an employee orientation is unlikely to bedisciplined enough to remain competitive. The sad state of many public schoolsdemonstrates the perils of ignoring the needs of society. Finding that sweet middle spot ismost likely to create enough focus, motivation, and relevancy for the organization oexcel. Establish the GoalsDiscerning the core issues for organizational success provides the necessarybackground for establishing specific communication goals. Typically the goals revolvearound "pushing" certain vital messages, while allowing employees to "pull" other relatedmessages and information. For instance, 20% of the communication goals for onecompany involved pushing or pulling a "cost reduction" message:? Focus employee thinking on the personal implications of "reducing costs" (push).? Provide recognition of employees who are actually "reducing costs" (push).? Make available timely information about the status of "cost reduction" efforts (pull).The central question: If the communication strategy succeeds, what should happen in theorganization? Presumably when the communication goals are achieved, then theorganization’s, executives', and employees' objectives have been achieved.Phase 2: CreateThe communication strategy is built around the strategic goals established in phase one.There are two essential activities at this point; a) developing the specific messages,protocols, tools, and plans needed to achieve the communicative goals, and b)implementing the strategy.Develop the StrategyAs all effective strategists learn, anticipating other's reactions is the key to success.For example, unless the company previously discussed demonstrated how "cost cutting"benefited union employees, it would not be very motivating. In fact, the company decidedto link “cost cutting” and “long-term viability” to produce the core message. While cost17cutting was both an organizational imperative and an executive initiative, the “long-termviability” issue was crafted to link to employee needs for job security. They pushed thiscore message in a variety of ways including producing a short video of employee-drivencost cutting projects that improved the company's long-term viability. In addition, anIntranet web site was planned which enabled employees to pull information on thecompany's cost reduction efforts. For each of these initiatives the company specified thegoal, target audience, and rationale.One of the problems at this stage is that most organizations already have acommunication system in place that may or may not be appropriate. In fact, there is astrong temptation to merely adapt existing tools and hope for the best. One anizationrelied almost exclusively on written communication to "inform and persuade the troops".The senior executives were continually frustrated by the lack of employee "buy-in" despite the time they devoted to honing their messages. New brochures, more frequentmemos, and even a new email system did not seem to do the trick. The executives, ofcourse, never thought systematically about their communication efforts in the way wedescribed. Years later after the team was "replaced", a new senior executive realized theessence of the problem - a lack of face-to-face communication driven by explicit goals.Unfortunately, his predecessor had left in place a fairly elaborate communicationinfrastructure built around written communication. Re-orienting the communicationsystem involved considerable effort because the existing staff was ill-equipped for thenew demands.Implement the StrategyA successful implementation is based on sound tactics and execution. The decision tocreate the cost-cutting video may be strategically sound, but if it is not well produced andseen by enough employees, it will fail at the tactical and execution levels. Fortunatelythere is a wealth of resources available to executives on how to successfully createvideos, deliver speeches, plan meetings, and create compelling web sites. In fact, mostbasic communication skills training focuses on effective tactics.Phase 3: AssessNo strategy, thoughtfully designed or not, is perfect. That is why the final assessmentstage is so critical; it provides the necessary corrective feedback to improve both thestrategy and tactics. Employee surveys, focus groups and observations are all usefultools. Ultimately we want to know if the communication objectives are being reached.18For instance, are employees thinking about how they can cut costs? We also want toevaluate the responses to the core messages and the effectiveness of communicationsystems and vehicles. Skilled assessors learn to distinguish between mere awareness,motivation, and action. Awareness is often the starting point and may be, in fact, apreliminary goal but the ultimate test for most communication strategies is to shapeactions.The assessment phase can contribute much needed communicative discipline becauseit helps ensure that the central messages impact the organization in the desired way. Twomajor temptations plague the executive after implementation.
First, executives, havingrestless dispositions, tire of repeating the core messages and teaching employees aboutthe implications of the ideas. Executives routinely underestimate how long it takes toeffectively communicate. Proper assessment processes should demonstrate how long itreally takes to have an impact on employee thinking and behavior. Second, executivesmay be tempted to overload the system with too much information or too many coremessages resulting in confusion and lack of focus. An assessment procedure, like a focusgroup, could uncover the employees’ quandaries.Assessment processes also provide an effective way to help the organizationassimilate and stabilize the strategy. Implementing a vigorous communication strategy islike initiating any other major organizational change effort. Executives should expectsimilar problems, like employee resistance. Deciding, for example, to routinely discussthe implications of the company financial results with all employees may underminesome manager’s perceived power base. Likewise, some employees will not immediatelybe convinced of the need for the change. These, aptly named, “late adopters” oftenunderstand the importance of a well-developed communication strategy once the datareveals less grapevine activity, greater employee focus, and progress on organizationalgoals. In short, assessment processes suggest ways to improve the strategy and tactics,while helping organizations institutionalize a more effective underlying communicativesystem.
2008년 1월 29일 화요일
1. The Changing Environment of business
A) The summary based on the textbook
The industrial revolution moved American industry away from a model of small workshops and hand tools to mechanized mass production in factories. Soon thereafter, business has never had a completely positive image in the United States.
The public’s current expectations of corporation are also different from what they were 40 or 50 years. With the bursting of the “dot.com bubble”; the exposure of corporate fraud at large companies such as WorldCom, Adelphia, and Tyco; and the collapse of Enron and its auditor, Andersen, due to fraudulent accounting, American perceived business as actively trying to deceive them.
As Marshall Mcluhan foresaw decades ago, technology has strengthened communication channels around the globe, disintegrating national borders to produce what the creation of a world so interwoven by shared knowledge that it becomes a “Global Village.” Disintegrating national borders, coupled with the liberalization of trade and finance in today’s “Global village,” also have fostered an increase in cross-border corporate mergers and the number of multinational corporations.
Meanwhile, the anti-globalization movement extends beyond traditional union bodies to include young and old customers, concerned parents and vocal student activists alike. Many individuals and communities object to the enormous political clout that large corporations wield today.
Therefore, in order to compete with other companies, managers should recognize that the business environment is constantly evolving.
Most importantly, corporate communication must be closely linked to a company’s overall vision and strategy. Successful companies connect communication with strategy through structure, such as having the head of corporate communication report directly to the CEO.
B) My viewpoint : The changing environment examples in the real-world
In these days, many countries want to sign the free trade agreements (FTAs) with other countries to improve their country’s benefits. I believe that it obviously shows one part of the changing business environment. Thus, the companies should make an effort to overcome the changing environment to compete with competitive firms in various areas.
The global economy is surrounded with extremely competitive business environments. Also, it is sustained by a free trade system, not a protective trade system. The free trade system requires the highly competitive markets to the firms because of ensuring free movement of goods, services and human resources. After all, the companies cannot help seeking the lower-cost places in overseas. This changing business environment results in facilitating the trade with cross-nations.
Another side of the changing business environment is emphasis of transparency on company operation. We remember many business bankruptcy and fraudulent accounting records such as Enron, Auther Andersen, and WorldCom. In the aftermath of these misconducts, ‘Congress passed the Sarbanes-Oxley Act, which introduced a new requirement that CEOs sign off on company balance states so they can be personally and legally liable for accidental of deliberate mistakes found later.’ In a another example, Samsung, electronic company in South Korea, has been investigating by prosecutors due to building illegal tens of billions dollars bribe through money laundering.
As we see the two cases, illegal accounting records might result in destroying of company as well as influencing on bad image about the firm. In this sense, the transparency of company is required of one of the changing business environments.
The industrial revolution moved American industry away from a model of small workshops and hand tools to mechanized mass production in factories. Soon thereafter, business has never had a completely positive image in the United States.
The public’s current expectations of corporation are also different from what they were 40 or 50 years. With the bursting of the “dot.com bubble”; the exposure of corporate fraud at large companies such as WorldCom, Adelphia, and Tyco; and the collapse of Enron and its auditor, Andersen, due to fraudulent accounting, American perceived business as actively trying to deceive them.
As Marshall Mcluhan foresaw decades ago, technology has strengthened communication channels around the globe, disintegrating national borders to produce what the creation of a world so interwoven by shared knowledge that it becomes a “Global Village.” Disintegrating national borders, coupled with the liberalization of trade and finance in today’s “Global village,” also have fostered an increase in cross-border corporate mergers and the number of multinational corporations.
Meanwhile, the anti-globalization movement extends beyond traditional union bodies to include young and old customers, concerned parents and vocal student activists alike. Many individuals and communities object to the enormous political clout that large corporations wield today.
Therefore, in order to compete with other companies, managers should recognize that the business environment is constantly evolving.
Most importantly, corporate communication must be closely linked to a company’s overall vision and strategy. Successful companies connect communication with strategy through structure, such as having the head of corporate communication report directly to the CEO.
B) My viewpoint : The changing environment examples in the real-world
In these days, many countries want to sign the free trade agreements (FTAs) with other countries to improve their country’s benefits. I believe that it obviously shows one part of the changing business environment. Thus, the companies should make an effort to overcome the changing environment to compete with competitive firms in various areas.
The global economy is surrounded with extremely competitive business environments. Also, it is sustained by a free trade system, not a protective trade system. The free trade system requires the highly competitive markets to the firms because of ensuring free movement of goods, services and human resources. After all, the companies cannot help seeking the lower-cost places in overseas. This changing business environment results in facilitating the trade with cross-nations.
Another side of the changing business environment is emphasis of transparency on company operation. We remember many business bankruptcy and fraudulent accounting records such as Enron, Auther Andersen, and WorldCom. In the aftermath of these misconducts, ‘Congress passed the Sarbanes-Oxley Act, which introduced a new requirement that CEOs sign off on company balance states so they can be personally and legally liable for accidental of deliberate mistakes found later.’ In a another example, Samsung, electronic company in South Korea, has been investigating by prosecutors due to building illegal tens of billions dollars bribe through money laundering.
As we see the two cases, illegal accounting records might result in destroying of company as well as influencing on bad image about the firm. In this sense, the transparency of company is required of one of the changing business environments.
Show and Tell: The Importance of Transparency
From: http//www.investopedia.com/articles/fundamental/03/121703.asp
by Ben McClure, Contributor -Investopedia Advisor
Ask investors what kind of financial information they want companies to publish and you'll probably hear two words: more and better. Quality financial reports allow for effective, informative fundamental analysis.
But let's face it, the financial statements of some firms are designed to hide rather than reveal information. Investors should steer clear of companies that lack transparency in their business operations, financial statements or strategies. Companies with inscrutable financials and complex business structures are riskier and less valuable investments.
Transparency Is Assurance
The word "transparent" can be used to describe high-quality financial statements. The term has quickly become a part of business vocabulary. Dictionaries offer many definitions for the word, but those synonyms relevant to financial reporting are "easily understood", "very clear", "frank", and "candid".
Consider two companies with the same market capitalization, same overall market-risk exposure, and the same financial leverage. Assume that both also have the same earnings, earnings growth rate and similar returns on capital. The difference is that Company A is a single-business company with easy-to-understand financial statements. Company B, by contrast, has numerous businesses and subsidiaries with complex financials.
Which one will have more value? Odds are good the market will value Company A more highly. Because of its complex and opaque financial statements, Company B's value will be discounted.
The reason is simple: less information means less certainty for investors. When financial statements are not transparent, investors can never be sure about a company's real fundamentals and true risk. For instance, a firm's growth prospects are related to how it invests. It's difficult if not impossible to evaluate a company's investment performance if its investments are funneled through holding companies, making them hidden from view. Lack of transparency may also obscure the company's level of debt. If a company hides its debt, investors can't estimate their exposure to bankruptcy risk.
High-profile cases of financial shenanigans, such as those at Enron and Tyco, showed everyone that managers employ fuzzy financials and complex business structures to hide unpleasant news. Lack of transparency can mean nasty surprises to come.
Blurry Vision
The reasons for inaccurate financial reporting are varied: a small but dangerous minority of companies actively intends to defraud investors; other companies may release information that is misleading but technically conforms to legal standards.
The rise of stock option compensation has increased the incentives for companies to misreport key information. Companies have increased their reliance on pro forma earnings and similar techniques, which can include hypothetical transactions. Then again, many companies just find it difficult to present financial information that complies with fuzzy and evolving accounting standards.
Furthermore, some firms are simply more complex than others. Many operate in multiple businesses that often have little in common. For example, analyzing General Electric - an enormous conglomerate with dozens of businesses, from GE Plastics to NBC - is more challenging than examining the financials of a firm like Amazon.com, a pure play online retailer.
When firms enter new markets or businesses, the way they structure these new businesses can result in greater complexity and less transparency. For instance, a firm that keeps each business separate will be easier to value than one that squeezes all the businesses into a single entity. Meanwhile, the increasing use of derivatives, forward sales, off-balance-sheet financing, complex contractual arrangements and new tax vehicles can befuddle investors.
The cause of poor transparency, however, is less important than its effect on a company's ability to give investors the critical information they need to value their investments. If investors neither believe nor understand financial statements, the performance and fundamental value of that company remains either irrelevant or distorted.
FREE Report: 7 Things Every Investor Must Know!
The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!
Transparency Pays
Mounting evidence suggests that the market gives a higher value to firms that are upfront with investors and analysts. Transparency pays, according to Robert Eccles, author of "Building Public Trust – The Value Reporting Revolution". Eccles shows that companies with fuller disclosure win more trust from investors. Relevant and reliable information means less risk to investors and thus a lower cost of capital, which naturally translates into higher valuations. The key finding is that companies that share the key metrics and performance indicators that investors consider important are more valuable than those companies that keep information to themselves.
Of course, there are two ways to interpret this evidence. One is that the market rewards more transparent companies with higher valuations because the risk of unpleasant surprises is believed to be lower. The other interpretation is that companies with good results usually release their earnings earlier. Companies that are doing well have nothing to hide and are eager to publicize their good performance as widely as possible. It is in their interest to be transparent and forthcoming with information, so that the market can upgrade their fair value.
Further evidence suggests that the tendency among investors to mark down complexity explains the conglomerate discount. Relative to single-market or pure play firms, conglomerates are discounted by as much as 20%. The positive reaction associated with spin-offs and divestment can be viewed as evidence that the market rewards transparency.
Naturally, there could be other reasons for the conglomerate discount. It could be the lack of focus of these companies and the inefficiencies that follow. Or it could be that the absence of market prices for the separate businesses makes it harder for investors to assess value.
It's worth noting that, even if a company's financial statements are totally transparent, investors may still not understand them. If biotech specialist Amgen and semiconductor maker Intel were totally forthcoming about their R&D spending, investors might still lack the knowledge to properly value these companies.
Conclusion
Investors should seek disclosure and simplicity. The more companies say about where they are making money and how they are spending their resources, the more confident investors can be about the companies' fundamentals. It's even better when financial reports provide a line-of-sight view into the company's growth drivers. Transparency makes analysis easier and thus lowers an investor's risk when investing in stocks. That way you, the investor, are less likely to face unpleasant surprises.
by Ben McClure (Contact Author Biography)
Ben is director of McClure & Co., an independent research and consulting firm that specializes in investment analysis and intelligence. Before founding McClure & Co., Ben was a highly-rated European equities analyst at City of London-based Old Mutual Securities.
by Ben McClure, Contributor -Investopedia Advisor
Ask investors what kind of financial information they want companies to publish and you'll probably hear two words: more and better. Quality financial reports allow for effective, informative fundamental analysis.
But let's face it, the financial statements of some firms are designed to hide rather than reveal information. Investors should steer clear of companies that lack transparency in their business operations, financial statements or strategies. Companies with inscrutable financials and complex business structures are riskier and less valuable investments.
Transparency Is Assurance
The word "transparent" can be used to describe high-quality financial statements. The term has quickly become a part of business vocabulary. Dictionaries offer many definitions for the word, but those synonyms relevant to financial reporting are "easily understood", "very clear", "frank", and "candid".
Consider two companies with the same market capitalization, same overall market-risk exposure, and the same financial leverage. Assume that both also have the same earnings, earnings growth rate and similar returns on capital. The difference is that Company A is a single-business company with easy-to-understand financial statements. Company B, by contrast, has numerous businesses and subsidiaries with complex financials.
Which one will have more value? Odds are good the market will value Company A more highly. Because of its complex and opaque financial statements, Company B's value will be discounted.
The reason is simple: less information means less certainty for investors. When financial statements are not transparent, investors can never be sure about a company's real fundamentals and true risk. For instance, a firm's growth prospects are related to how it invests. It's difficult if not impossible to evaluate a company's investment performance if its investments are funneled through holding companies, making them hidden from view. Lack of transparency may also obscure the company's level of debt. If a company hides its debt, investors can't estimate their exposure to bankruptcy risk.
High-profile cases of financial shenanigans, such as those at Enron and Tyco, showed everyone that managers employ fuzzy financials and complex business structures to hide unpleasant news. Lack of transparency can mean nasty surprises to come.
Blurry Vision
The reasons for inaccurate financial reporting are varied: a small but dangerous minority of companies actively intends to defraud investors; other companies may release information that is misleading but technically conforms to legal standards.
The rise of stock option compensation has increased the incentives for companies to misreport key information. Companies have increased their reliance on pro forma earnings and similar techniques, which can include hypothetical transactions. Then again, many companies just find it difficult to present financial information that complies with fuzzy and evolving accounting standards.
Furthermore, some firms are simply more complex than others. Many operate in multiple businesses that often have little in common. For example, analyzing General Electric - an enormous conglomerate with dozens of businesses, from GE Plastics to NBC - is more challenging than examining the financials of a firm like Amazon.com, a pure play online retailer.
When firms enter new markets or businesses, the way they structure these new businesses can result in greater complexity and less transparency. For instance, a firm that keeps each business separate will be easier to value than one that squeezes all the businesses into a single entity. Meanwhile, the increasing use of derivatives, forward sales, off-balance-sheet financing, complex contractual arrangements and new tax vehicles can befuddle investors.
The cause of poor transparency, however, is less important than its effect on a company's ability to give investors the critical information they need to value their investments. If investors neither believe nor understand financial statements, the performance and fundamental value of that company remains either irrelevant or distorted.
FREE Report: 7 Things Every Investor Must Know!
The Investopedia Advisor analyst team wants to share with you 7 time tested tenets that they use to uncover market stomping stock ideas. This is a must-read report for anyone serious about controlling their financial destiny. Click here to access your FREE report online right now!
Transparency Pays
Mounting evidence suggests that the market gives a higher value to firms that are upfront with investors and analysts. Transparency pays, according to Robert Eccles, author of "Building Public Trust – The Value Reporting Revolution". Eccles shows that companies with fuller disclosure win more trust from investors. Relevant and reliable information means less risk to investors and thus a lower cost of capital, which naturally translates into higher valuations. The key finding is that companies that share the key metrics and performance indicators that investors consider important are more valuable than those companies that keep information to themselves.
Of course, there are two ways to interpret this evidence. One is that the market rewards more transparent companies with higher valuations because the risk of unpleasant surprises is believed to be lower. The other interpretation is that companies with good results usually release their earnings earlier. Companies that are doing well have nothing to hide and are eager to publicize their good performance as widely as possible. It is in their interest to be transparent and forthcoming with information, so that the market can upgrade their fair value.
Further evidence suggests that the tendency among investors to mark down complexity explains the conglomerate discount. Relative to single-market or pure play firms, conglomerates are discounted by as much as 20%. The positive reaction associated with spin-offs and divestment can be viewed as evidence that the market rewards transparency.
Naturally, there could be other reasons for the conglomerate discount. It could be the lack of focus of these companies and the inefficiencies that follow. Or it could be that the absence of market prices for the separate businesses makes it harder for investors to assess value.
It's worth noting that, even if a company's financial statements are totally transparent, investors may still not understand them. If biotech specialist Amgen and semiconductor maker Intel were totally forthcoming about their R&D spending, investors might still lack the knowledge to properly value these companies.
Conclusion
Investors should seek disclosure and simplicity. The more companies say about where they are making money and how they are spending their resources, the more confident investors can be about the companies' fundamentals. It's even better when financial reports provide a line-of-sight view into the company's growth drivers. Transparency makes analysis easier and thus lowers an investor's risk when investing in stocks. That way you, the investor, are less likely to face unpleasant surprises.
by Ben McClure (Contact Author Biography)
Ben is director of McClure & Co., an independent research and consulting firm that specializes in investment analysis and intelligence. Before founding McClure & Co., Ben was a highly-rated European equities analyst at City of London-based Old Mutual Securities.
Free Trade Agreements
From : http://www.export.gov/fta/Free Trade Agreements (FTAs) can help your company to enter and compete more easily in the global marketplace. Trade agreements help level the international playing field and encourage foreign governments to adopt open and transparent rulemaking procedures, as well as non-discriminatory laws and regulations. FTAs help strengthen business climates by eliminating or reducing tariff rates, improving intellectual property regulations, opening government procurement opportunities, easing investment rules, and much more.
International trade is an integral part of the U.S. economy, accounting for more than one-quarter of U.S. gross domestic product and supporting more than 12 million U.S. jobs, including 1 in 5 manufacturing positions. FTAs can be a catalyst for accelerating economic growth by allowing greater competition, encouraging the formation of international partnerships, and by greatly liberalizing many industries. Most FTAs include specific obligations in the areas of intellectual property, services, investment, and telecommunications. Many FTAs also provide for groundbreaking cooperation in promoting labor rights and the environment.
This website is designed to help you learn more about U.S. Free Trade Agreements and how they can help grow your business. Learn how your company can benefit from FTAs today! ________________________________________________
International trade is an integral part of the U.S. economy, accounting for more than one-quarter of U.S. gross domestic product and supporting more than 12 million U.S. jobs, including 1 in 5 manufacturing positions. FTAs can be a catalyst for accelerating economic growth by allowing greater competition, encouraging the formation of international partnerships, and by greatly liberalizing many industries. Most FTAs include specific obligations in the areas of intellectual property, services, investment, and telecommunications. Many FTAs also provide for groundbreaking cooperation in promoting labor rights and the environment.
This website is designed to help you learn more about U.S. Free Trade Agreements and how they can help grow your business. Learn how your company can benefit from FTAs today! ________________________________________________
________________________________________________
Symbol indicates a non-U.S. Government site
2008년 1월 24일 목요일
The Changing Business Environment for Retailing (video interview)
From : http://www.bettermanagement.com/seminars/seminar.aspx?l=11534
Presented By:
Carl Steidtmann, Deloitte
Deloitte
Winston Churchill once said, 'The future is one damn thing after another.' And so it is when it comes to the business environment for retailing. The environment for the retail industry has never been more volatile. Currencies, customers, and competitors all seem to change directions on a daily basis. Coupled with concerns over rising government deficits, rapidly expanding trade imbalances with China, new competitors and changing technology, forecasting the future has never been more challenging This presentation by Carl Steidtmann, chief economist for Deloitte Research will examine the key business variables impacting the retail business and project how they will shape industry performance in the years ahead.
This interview will be moderated by Murray Forseter of Chain Store Age.
Who Should Attend?
Senior executives responsible for making strategic decisions. CFOs, Controllers Managers or Directors accountable for both operational performance and achieving strategic objectives Coordinator of a project-based improvement program such as MBO or TQM.
About Carl Steidtmann
Carl Steidtmann, Chief Economist and Director of Deloitte Research – Consumer Business, is a nationally recognized expert on economic forecasting of retail sales activity, consumer trends, technology, and general economic trends.
Based in New York, Dr. Steidtmann works with individual clients to assess the impact of economic, demographic, political, and technological changes on their business strategies. He has also testified on numerous occasions as an expert witness on consumer business issues in both state and federal courts.
His research has been quoted in The Wall Street Journal, Women’s Wear Daily, USA Today, and The New York Times, among other publications. Dr. Steidtmann has appeared on the MacNeil-Lehrer News Hour, CNN, CNBC, Adam Smith’s World, and the Nightly Business Report as an expert on retailing. Dr. Steidtmann has authored or co-authored more than 400 publications on economics, demographics, competition, and socio-technological trends as they relate to business.
Presented By:
Carl Steidtmann, Deloitte
Deloitte
Winston Churchill once said, 'The future is one damn thing after another.' And so it is when it comes to the business environment for retailing. The environment for the retail industry has never been more volatile. Currencies, customers, and competitors all seem to change directions on a daily basis. Coupled with concerns over rising government deficits, rapidly expanding trade imbalances with China, new competitors and changing technology, forecasting the future has never been more challenging This presentation by Carl Steidtmann, chief economist for Deloitte Research will examine the key business variables impacting the retail business and project how they will shape industry performance in the years ahead.
This interview will be moderated by Murray Forseter of Chain Store Age.
Who Should Attend?
Senior executives responsible for making strategic decisions. CFOs, Controllers Managers or Directors accountable for both operational performance and achieving strategic objectives Coordinator of a project-based improvement program such as MBO or TQM.
About Carl Steidtmann
Carl Steidtmann, Chief Economist and Director of Deloitte Research – Consumer Business, is a nationally recognized expert on economic forecasting of retail sales activity, consumer trends, technology, and general economic trends.
Based in New York, Dr. Steidtmann works with individual clients to assess the impact of economic, demographic, political, and technological changes on their business strategies. He has also testified on numerous occasions as an expert witness on consumer business issues in both state and federal courts.
His research has been quoted in The Wall Street Journal, Women’s Wear Daily, USA Today, and The New York Times, among other publications. Dr. Steidtmann has appeared on the MacNeil-Lehrer News Hour, CNN, CNBC, Adam Smith’s World, and the Nightly Business Report as an expert on retailing. Dr. Steidtmann has authored or co-authored more than 400 publications on economics, demographics, competition, and socio-technological trends as they relate to business.
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