Earlier, I wrote about my experience at the Jack Welch Management Institute. One of the courses in the program is Business Communications and Ethics. In hindsight, it was very appropriate that this course be the very first course in the program. After an overview of communications and ethics, the course pressed two things very hard.
Candor and differentiation
Mr. Welch contends that “the biggest dirty little secret in business” is the absence of candor (Winning). The course teaches that so many problems rise out of the fear of honest communication. We are reminded that children are naturally candid and have no filter in what they say. It is through cultural conditioning that we learn to hold in what we are really thinking. In some organizations, the culture discourages real candor. Instead, saving face is valued more.
A key example of candor taught in this course relates to performance appraisals. Jack is famous for teaching a 20/70/10 differentiation method where management communicates to employees where they stand. This is most important for the bottom 10%. He contends that it is unfair to the employee to keep that honest feedback from those employees, who may spend more years at the company not understanding why they are not progressing in their careers. Instead, Jack contends that being candid with these employees, and helping them leave, is much more fair to them. The central idea in this is the belief that everyone is a star at the right company and the faster they realize the current company isn’t tapping their unique strengths, the sooner they can find the company and role that helps them shine.
This method of candid performance communication drives a lot of controversy, but usually not from the top 20%. After this course, we slowly implemented this method at Headspring, and I have to attest that it works. We do quarterly performance reviews, and we differentiate. Through some conference call questions with Mr. Welch during the program, students were able to ask him questions, and he clarified his method for smaller companies where the law of large numbers doesn’t yield a good 20/70/10 distribution. He said that the benefit is there as long as there is real differentiation. He coaches that management must be honest with itself and realize that not all employees are the same.
Ethics and managing a crisis
After some academic reading on case studies involving corporate ethics, we were able to discuss a timely scandal. That was the scandal of BP and the communication method used after the oil spill in the Gulf of Mexico. Tony Hayward, the CEO of BP at the time, failed to get out ahead of the crisis. When a crisis happens, the curriculum teaches that leaders need to get out ahead of crisis communication and be the source of new information. Tony Hayward failed to do this. Because of it, news media filled the role of finding and communicating new pieces of information. When the news is coming from reporters, the revelations allude to a cover-up, where there is one or not. As a leader, claiming the role of briefer positions one as transparent. Regardless of mistakes made in a crisis, a worse mistake is not owning and leading crisis resolution.
You can read one of the lectures of this course here.