Towards a Global Model for Communication

• Trends
• June 14, 2011
• by Merrie Spaeth

A version of this article originally appeared in the Winter 2011 issue of Public Diplomacy magazine.

Communication today moves faster than ever. Consider this recent example: a large international consumer products company introduced a product based on new technology. One customer believed that the material caused a skin rash. She posted a request on a blog asking if any other consumers were experiencing the same problem. Within days, thousands of consumers with skin rashes thought this product might be the cause. The press picked up the story; the U.S. Congress held hearings; other regulators started investigations. This wasn’t as great a disaster as the BP spill, but it caused a lot of problems for the company. (The new product was not the cause of her rash.)

These new patterns of communication, including a greatly expanded concept of “media,” have significant implications for companies, particularly on a global stage, which must communicate with a number of key audiences or stakeholders. To continue to operate profitably and grow, they need to build trust. They must also engage in what is being called “corporate diplomacy.” Everyone agrees that “communication” is key, yet, what does “communication” mean? Forward-thinking companies should adopt a model for communication which can provide consistency and strategic guidance in a world where some constituencies embrace the “new media” but others are still reading circulars posted in dusty stores. Such a model needs to be extremely simple yet robust, adaptable to languages and cultures, and to stretch across diverse functions from HR to IT, to shareholders, customers, community groups and other key stakeholders. It should provide a shared definition of communication which can translate into different languages and reach the internal and external audiences which demand transparency and accountability. Finally, the strategic model should serve to help preserve a company’s reputation in the face of a crisis.

Commitment to a common communication model is a leadership issue that begins at the top. My first real teacher in the kind of leadership required to run a complex organization was the Honorable William Webster, Director of the FBI, for whom I served as a White House Fellow and Special Assistant after graduating from Columbia Business School. Judge Webster’s management philosophy was, “use good judgment.” He also knew that bureaucracies filter information, reporting what they think their superiors want to know or what they want them to know. His remedy was a series of alternative channels of communication to ensure that information was not edited by the ubiquitous “rosie scenario.”

I personally experienced the wisdom of this approach. One of my tasks was to keep him updated on the number of women and minority special agents. This was a significant concern. As Judge Webster used to say, “We can’t investigate the Chinese mafia in San Francisco with a group of white men from Omaha.” The first time I reported on the numbers, Judge Webster sent me back to ask more questions. He knew he would be queried by members of Congress, and if he was incorrect, his credibility would be damaged. I quickly learned that there were a variety of ways that an agency could manipulate its recruiting numbers. We could talk about the number of minority agents we “would expect” to have, not necessarily what we had or what we might reasonably retain. (This should not be taken as a criticism of the Bureau, which is one of the most mission-driven, effective and highly competent organizations in the world. It’s just a fact that it’s a bureaucracy, and bureaucracies, as Judge Webster knew, behave in predictable ways.)

When my government service ended, along with my savings, I founded a company and had a fortunate encounter with Jim Adams, then-CEO of Southwestern Bell Telephone. They had started an enterprise-wide quality initiative, and as a component, they deployed employees to talk to customers. His first finding: “The customer does not remember what we thought we told them.” Our first insight: Most people and organizations approach communication with the mindset of what they want to say or what they think a listener or audience needs to know. When you ask, “How much does the listener remember, a lot or a little?” everyone knows it’s only a little.

Effective communication is not what is said, written or presented; it is the goal of influencing what the listener or audience hears, believes and remembers.

The next issue is how the listener or audience accesses information. We are less concerned about the communication vehicle as we are with how the audience perceives its origin. We identify three main networks or channels: what the audience knows the company controls, what the listener/audience defines as “media” and thus perceives to be objective (or at least more objective) and verbal encounters between the company and the audience. (See the diagram appearing below.)

A company’s next goal should be alignment of these channels. That is, what the organization prepares for the audience should be reinforced, and never contradicted, by what the listener sees in the media or hears in a speech, or even in a conversation or an email.

In a crisis like BP’s, the first thing that happens is that messages are out of alignment. BP’s marvelous green ads citing they went “beyond petroleum” were overwhelmed with the news about the spill. However, alignment is important long before a crisis. At its simplest, an organization can’t say one thing to one audience and contradict it to another audience.

The Wall Street Journal published a comparison, “The Two Faces of Lehman Brothers,” of what the company was saying about its financial condition externally and what it was saying internally on conference calls and in emails within a 24-hour period. Externally, the CEO said that the planned restructuring “will create a very clean, liquid balance sheet,” and their CFO said, “We have maintained our strong liquidity and capital profiles,” adding, “We don’t feel that we need to raise that extra ($4 billion) amount.” Internally, firm executives discussed the need for as much as $3 to $5 billion USD of new capital.

The line between internal and external audiences, which was never as hard and fast as executives thought, is more porous than ever. Senior management needs to model the expectation that information will be as straightforward and dependable as possible and be consistent across all networks.

There are some immediate and obvious implications for companies and organizations. We first examine the advertising, recruiting, reports to investors and other material that a company prepares and we pull out what we call the “good words”—that is, the anchor or value words which distill the mission, vision and goals of the entity. They’re always there. Then we look to see if the senior leadership is using those words frequently and passionately. If they are not, the leadership conveys that it is not fully committed to the claims or messages.

Here’s a quick test: When listening to a presentation, you should be able to pick out discern these good words. They may even be reinforced by the visuals. (And, in the best of all worlds, the presenter has actually rehearsed. Remember, my former boss President Ronald Reagan always rehearsed.) But then, too frequently, when Q&A starts, what happens to that list of positive words? They disappear, sending the clear message that the speaker is now speaking candidly. The lesson: Positive words which occur during a presentation must reappear in Q&A to be credible.

We’ll introduce only the first two dynamics, since space constrains a complete discussion of how to influence what the listener hears, believes and remembers. We believe that the first fundamental lesson of influence-based communication is the recognition that we pick up and repeat each other’s words.  Remember that the definitions must be simple and easy to translate, so we define the words you want repeated as “good words” and the words you don’t want repeated as “bad words.” Negative words have immense power and, like bad currency, drive out good words. In 2009, U.S. Sen. Charles Schumer, D-NY, leaked a letter to the FDIC sharing his concerns that IndyMac bank might “fail.” Within 24 hours, there was a run on the bank and it failed.

One of my favorite examples from 2009 was a lawsuit by Pursuit Partners against UBS.  UBS invested Pursuit’s funds and lost all the money. Pursuit sued. In court, Pursuit produced brochures and PowerPoint slides where UBS committed to invest in “investment-grade securities” and emails, produced in discovery, where UBS personnel referred to the investments as “vomit” and “crap.” The court’s decision, for Pursuit, noted that no one could mistake “investment-grade securities” for “vomit” and “crap.” It would be hilarious if it didn’t show a complete breakdown of integrity and alignment.

BP’s executives, alas, got caught with word blunders. CEO Tony Haywood took a weekend off, no doubt well deserved, to go see his “yacht.” In his normal circles, “yacht-watching” would undoubtedly be a positive pastime, but during the cleanup, when the lives of thousands of people had been disrupted, it was a slap in the face. Similarly, BP’s Swedish chairman announced, “We care about the small people. Some may say that the big oil companies are greedy, but we care about the small people.” It may be an error in translation but when speaking from the Rose Garden with the President of the United States, every word will be scrutinized. The incident indicates that BP still did not have, or would listen to, competent communication advice.

Next, statistics: What matters is what the audience thinks of the number, not what the number means to the company. One of my favorite examples is lifestyle doyenne Martha Stewart’s attempt to explain why selling her ImClone stock on what may have been an inside tip was irrelevant. She explained that from the sale she only made “$40,000, about .006 percent of my net worth.” She thought this showed how miniscule the amount was, but it infuriated the jury.

The oil industry fell into this trap a few years ago when it ran ads of bar charts comparing their rate of return, about eight percent, to grocery stores, about 1.5 percent and financial institutions, about 20 percent. They were trying to offset the headlines of making “billions” and counter public anger on then-rising gasoline prices. The problem was that we still read about “billions,” and most of the public finds comparative rates of return a mystery. This was a compelling argument to the industry, not to their public audiences. (Both of these examples also show how much people can pay for bad advice.)

I hope the illustrations above have convinced you that what matters is what the listener hears and that there is a well-developed methodology to analyze and influence it. Let’s turn now to some trends and developments which every company and organization should be aware of and prepared for in case of emergency.

Speed of response: As noted in the first paragraph, information moves at a much faster pace than ever before. The six o’clock news has been replaced by a 24 hour news cycle. The implications are important. Stories get filed or posted immediately. A company may be contacted by a reporter, see a posting in a blog or a video on YouTube, and must be prepared to respond almost immediately. The luxury of researching the actual facts is out of the question. This requires a new strategy. It requires an organization to identify all of its stakeholders, identify the expected things that could go wrong or threaten a reputation and to prepare beforehand what can truthfully be said, who can say it and what channels will be used to carry the message.

Use other companies’ real examples as a benchmark of what you might have to deal with. For example: The CEO of the Indian division of a Turin-based company, which itself was a division of a Zurich-based company, was beaten to death in front of his employees. The initial conference call involved the Chairman of the parent company who was traveling in China, the Turin CEO, corporate executives in Zurich, shaken executives in Mumbai and experts in Dallas and Florida. The Chairman expressed hope that the story would be confined to Mumbai, but it was front page news the next day in the U.S. and Europe. Then, the Indian Minister of Labor issued a statement that the company’s labor practices were responsible for the violence. That produced a second round of stories around the globe.

The company found itself managing inquires from the Indian government, global media, regulators, customers and other businesses while it was trying to ascertain what actually had happened and why. (It became clear later that the Indian division had been reporting that labor relations were improving, and they could protect the plant from violence. These reports were clearly inaccurate. They had rejected offers of assistance from both division and corporate headquarters, apparently because they did not want to admit they were unable to manage the risk.)

Preparing for these scenarios requires a thorough assessment of audiences, possible scenarios and a candid analysis of the skill of spokespersons. It almost always requires Judge Webster’s strategy of multiple routes of communication to the company’s leadership. Is there a trusted, experienced resource who can be depended on to provide rigorous critique?

Again we turn to BP as an example. The oil spill added the new dimension of emotional alignment.  The people affected by the spill – fishermen, families living along the gulf coast, businesses – were devastated, and their stories were heartwrenching. BP’s CEO responded late, and with characteristic British reticence, coming across as detached and uncaring. Further, BP tried to counter the emotional stories with facts and statistics. Their original reports and ads detailed how many million feet of boom, how many boats and how many people had been mobilized. One clear lesson is that you do not counter anecdotes, particularly emotional ones, with facts and statistics.

Perhaps this is the moment to remind senior management that complaints and dissent are being democratized, enabled by cell phones (as seen so vividly in the protests in Iran a year ago), Twitter and the proliferation of internet sites and services. (I sometimes think that everyone has a cell phone with a camera. If you have a rodent in your warehouse, expect a picture of it to get on the internet.)

This phenomenon brings new requirements. In an age where images flood our consciousness, companies must compete with visuals as well as facts. The rescue of the miners in Chile from their near-tomb is an excellent example. The Chilean government appealed for and accepted help. Not only did this provide them the most innovative resources, it broadened those identified as responsible to approximately a dozen countries and 20 companies. The Chilean president was highly visible consoling families, leading cheerleading efforts and calming tempers. The drama of the miners emerging one by one produced a worldwide euphoria. It also produced an exceptional opportunity for the companies involved to demonstrate commitment, caring and expertise. The Houston company supplying the pioneering technology, which guides drilling by using precision gyroscopes rather than the more conventional magnetic sensors, found itself doing dozens of interviews.

Companies need to anticipate what sorts of images will be generated when things go wrong, how audiences will see and react to those images, and ask, what are we doing now that could produce competitive video which can be readied in advance? For example, any oil company should know what images and stories an oil spill is going to produce. The competitive stories – on video — should include what a company is doing for safety drills, for prevention, for mitigation and to be a good corporate citizen.

This exercise sometimes reveals that a company is not, in fact, doing what needs to be done. The tendency then is to find excuses, to claim the company is prepared—like the Indian division in the example above.

We live in an electronic age, and the leaders of any organizatio—any company, any nonprofit, any government—are called upon to communicate, and to use communication as a strategic business tool and as a leadership skill. Our library of examples is replete with examples where the leadership was incompetent, and where no internal or external resource was empowered to provide honest criticism and direction.

General Motors’ ultimate failure could have been predicted by analyzing its communication. A number of years ago at a press conference announcing good news, the CEO read text while standing behind the podium, stumbling through a key sentence, “This is a sig, sig, sig, significant milestone in the history of General Motors Corporation.” The internal audiovisual crew showed members of the audience yawning. The CEO had obviously not rehearsed; he was not enthusiastic about what he was saying; the a/v crew were obviously not considered important by the leadership, and so they didn’t care about their work product, even ridiculing their employer by what they chose to shoot. This snapshot in time was indicative of the lack of honesty, transparency and courage by management and the unions. It’s hardly a trivial matter since GM’s market share was cut in half in the last few decades and thousands of people and small businesses have been hurt. It wasn’t lack of understanding that drove GM into bankruptcy; experts had pointed out for years that union contracts had turned GM into what was described as a healthcare provider which made cars on the side. Both sides knew it, but couldn’t bring themselves to be honest.

We tell our clients, always tell the truth. In a pinch, you can remember it. If that doesn’t inspire you, focus on the examples of General Motors, UBS and Pursuit Partners.

The final thought to add as we consider communication as a crucial tool for corporate diplomacy is the need to empower and enlist employees and customers as ambassadors. This is the positive aspect to the democratization of dissent; it is the enabling of advocates.

BP again provides an instructive and, this time, a mostly positive example. They enlisted their employees in ads. The employees described their families, their history in the Gulf, their commitment to doing the right thing and to a long-term process. They were very effective. BP showed courage running them despite being criticized for spending money on them. Even more effective was when BP finally allowed the media to talk to its highly trained professionals drilling the relief well. When employees told reporters, “I’m proud of BP,” or “It’s killing me to see the company portrayed like this,” and “We will get this done,” they were very credible.

The strategy for corporate diplomacy today is that it’s important to engage, equip and deploy your employees as part of the normal course of business. It is too late when a crisis strikes.

To do this effectively requires a very different mindset from the past. The organization is flattened. Information is more accessible. Senior leadership is more subject to criticism, and imperial behavior is inconsistent with employees as ambassadors.

What is the goal, the test of success? Here is an illustration from some of the large community banks we work with in the U.S. For the last several years, negative media attention about banking has produced questions to their executives and employees: Are you at risk?; Why are banks greedy?; and, How much does your CEO make? They look at these as opportunities to engage the questioner and share the contributions they make to their communities and the important role they play in the lives of their customers. They understand that they must focus and simplify their message. And never compete with yourself.

As this article is being written, BP’s new CEO hasn’t learned this. He recently made headlines with a speech accusing the media of “fear mongering.” The speech also talked about BP’s commitment to the Gulf and their long-term intentions. However, the “fear mongering” comments got most of the play. He should have reinforced what his employees say in the ads, “We’re committed to making it right and we’re making progress,” and what the workers on the relief drill told reporters, and resisted the temptation to blame others

In the movie, “The Bucket List,” the character played by Jack Nicholson adds to his list of things to accomplish, “Kiss the most beautiful girl in the world.” When the other lead character, played by Morgan Freeman, asks how he intends to accomplish this, he replies, “Volume.” Effective communication isn’t just volume. Without an effective and easily explained approach and definition, a company has the illusion of communication, an illusion which does not serve well given the demands of stakeholders for transparency and accountability. One more time: Know your audience and aim to influence what they hear, believe and remember; then enlist them as ambassadors.  This approach will help companies succeed in true corporate diplomacy.