Crafting a Conversation that Matters

January 11, 2008

After more than a decade of implementing the process and researching its consequences,we have identified several overriding lessons that we believe are relevant in any organizationwide conversation, whether or not leaders use our particular process. To wit:

A conversation about strategy needs to move back and forth between advocacy and inquiry. Most failures in organizations start when top management advocates a new direction and begins to develop programs for change without finding out what influential people in other parts of the organization think of the new focus. They thereby set themselves up to be blindsided by concerns that emerge much later. A smaller number of well-intentioned top managers make the opposite mistake. They do not advocate at all. Instead, in the name of participation and involvement, they depend entirely on inquiry – assembling a large group of managers and asking them to define a direction. The result is often widespread frustration. Managers and employees look to leaders to articulate a point of view about where the business is going, a point of view to which they can respond. Leaders need to advocate, then inquire, and repeat as needed.

The conversation has to be about the issues that matter most. To energize the organization, the conversation must be focused on the most important issues facing the organization – the company’s strengths and the obstacles to performance. It’s all too easy for senior managers to become swamped in the operational details of managing a business.What gets crowded out are tough and honest conversations about the fundamental issues that will determine long-term success. Do we have a distinctive business strategy that key managers believe in? Do we have the capabilities to execute that strategy? Is our leadership effective?

The conversation has to be collective and public. Successfully realigning an organization with a new strategic direction almost always requires simultaneously changing the worldview and the behaviors of a whole set of interdependent players – the CEO, the senior leadership team, and managers down the line. This won’t happen without a collective, public conversation. By “collective” we mean that several levels of management across important functions and value-chain activities have to be engaged. By “public”we mean that senior managers need to keep everyone three to four levels below them informed about what has been learned, as well as what changes are planned.

The conversation has to allow employees to be honest without risking their jobs. In most of the companies we’ve studied, managers talked about strategic problems with one or two people they trusted but pulled their punches in more public settings. In Agilent’s SGDU division, for example, everyone knew about the tensions between the regional entities and the functional departments. Everyone was aware that the senior team wasn’t managing effectively, and many managers doubted Camp’s ability to lead the organization out of the morass. But none of these issues was discussed publicly, for two reasons. First, managers feared that being honest would hurt their careers or even endanger their jobs. Second, they were afraid that Camp and her senior team would feel so hurt and defensive that the conversation would not lead to change and might even set back the organization.

The conversation has to be structured. When people hear “honest,” they tend to think “spontaneous.” But public conversations in organizations are rarely spontaneous, as Lou Gerstner found out when he took charge at IBM in 1993, because the stakes are so high. Gerstner describes a strategic meeting at which managers sat at a large conference table with scores of assistants behind them, all listening to a PowerPoint presentation and engaging in little or no discussion. He was so frustrated by the lack of real dialogue that he turned off the overhead projector, with what he calls “the click heard around the world.”Gerstner learned, as we have in our work, that the “free-for-all of problem solving” so essential for high performance “does not work so easily in a large, hierarchically based organization.” Paradoxically, to achieve honesty and full engagement in these organizations, you need to structure the conversation carefully.1

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