When working to change an organization’s culture and strategies, exactly what role should the C.E.O. play?
Years ago, a company I worked with wanted to roll out a new set of values and practices for the entire organization. Acceptance was needed and it was needed quickly. But it’s often really tough to alter a company’s internal culture. A.M. Rosenthal, who was the executive editor of The New York Times for more than two decades, once said that changing his huge newsroom’s habits and attitudes was like trying to steer an aircraft carrier with a paddle.
At the company I was working with, a board member told the C.E.O. that he should spend at least 60 percent of his time focused inside of the company; he needed to talk with employees at all levels, listening carefully to them and adapting. The message was clear — “communicate excessively.”
But given the demands on a C.E.O.’s time, spending the majority of his or her days inside the organization can be a very tall order. After all, there are clients to keep happy, as well as investors, regulators and other external audiences to win over. Moreover, in many organizations, internal and external communications do not necessarily work in tandem; they often compete for the chief executive’s time. The communications teams retreat to their respective corners, come up with calendars dotted with town hall meetings, employee memos, intranet posts and internal videos, to name a few tried-and-true tactics. But is this enough? Is this the best way to employ your primary culture-carrying asset — your C.E.O. — in the battle to change hearts and minds?
Culture in the workplace involves the implicit understanding employees have with one another. It dictates how they talk to each other, treat one another and react to success or failure. There is no shortage of studies on organizational culture, on how to create, assess and change it. But humans are creatures of habit, of course, and asking them to modify something as deep in their bones as their work culture can pose real challenges. The Communications Department can ease the way, but in order for it to have maximum impact, the messaging needs to be authentic and the program must be tightly coordinated and extremely integrated. And, perhaps most important of all, the C.E.O. needs to be at its core.
Let’s look at a case that recently appeared in the business press.
Last summer, as the Credit Suisse C.E.O., Tidjane Thiam, took the helm with the board’s support, news outlets reported that he had decided the bank needed to change its business strategy. It would diverge from its higher risk, capital intensive investment banking practices in favor of a safer asset-management strategy. Internally, this was obviously a major shift, though not virgin territory for banks generally. Other European banks, including Barclays, Deutsche Bank and UBS, were opting for similar approaches to diminish risk. Credit Suisse’s new strategy had also been endorsed by many stakeholders outside the company.
Fast forward one year. In one of Mr. Thiam’s written updates to employees, it was reported, he said that hedge funds were betting against the bank as its stock price fell. Some of the bank’s employees have been quoted anonymously as brimming with open hostility, and some have left the institution. There are many reasons for the turmoil, some of which news reports will likely never uncover.
While it’s hard for outsiders to know precisely what went on inside Credit Suisse, it certainly seems clear that Mr. Thiam has not yet succeeded in selling his new strategy to many of his employees.
Employees will inevitably question change; sometimes it may even be in their best interest to do so. But they also need to understand the impact of change at work and beyond – and the long-term value, to them and to the organization, of altering practices and strategies to adapt to an ever changing business environment. That’s why communication is so critical.
Taking a work culture or a business strategy in a new direction is a major challenge. It certainly does not succeed overnight. You have to approach it as a process, with integrated communications planning and execution. Understand and set the expectations early on. But stay nimble, leaving room for change when you see certain tactics are ineffective.
Be sure to place your C.E.O. at the center of the conversation. There’s often an understandable urge to shield the C.E.O. from internal critics, to let him or her only hear pre-screened questions. This is a disservice to both your employees and your C.E.O. She needs to hear what employees are saying.
Embrace the questions. Get comfortable with the fact that you will never have all of the answers. But never stop engaging. For new strategies and practices to succeed, the conversation needs to reach every single employee.