The recent furore surrounding News International raises many issues and highlights the essential connection between Leadership and Communication. This, together with the failure of BP to get its communications right over the Gulf of Mexico oil spill and Gerald Ratner’s throwaway remarks trashing his own products, demonstrates how communication and leadership failure can have a catastrophic effect on a company’s fortunes.
Leaders need to be able to effectively communicate what matters when it matters. They also need to be heard properly and to generate a climate in which they get to hear from subordinates any critical information that comes their way. Companies can only operate in this happy state by analysing their leader’s communication style, testing its impact on direct reports and other stakeholders and then managing The Communication Gap.
“The Communication Gap” consists of the parts of the leader’s message that are not heard or misheard, plus the critical information held by subordinates and not passed up the line.
Measure it, train and develop in order to ameliorate it and then manage it.
The impact of failing to do this can propel companies into disaster management.
A recent article in The Times suggested that many organisations are missing out on the commercial benefits to be gained from Dynamic Performance Management (DPM), because their performance management system does not include “magic bullet” ingredients such as setting suitably stretching goals, providing commercially acute coaching and differentiating consistently.
The statistics quoted for organisations applying the magic bullet should indeed be sufficient to make any HR Director confer with his or her CEO:
- Productivity increased by 15%
- Customer loyalty increased by 18%
- Ability to hit sales target improved by 29%
Yet despite the impressive commercial rewards available, within many companies both appraiser and appraisee see little value being added through the performance review process – many an HR professional would have amassed a small fortune if they had a pound for every time they have had to remind or chase a line manager for a completed appraisal form!
The Way Ahead
There are undoubted advantages to be gained from re-branding or re-inventing existing processes in order to leverage their latent benefits. HR Directors would also be able to exert more influence by understanding and leading the commercial advantages that might accrue from using a DPM system. However, in our experience this would not be sufficient to deliver an effective performance management system.
An effective performance management system requires, above all else, line managers to have the skills to deliver it according to best practice principles. This is no easy task as managers have a natural predisposition towards their technical or functional task set, rather than the application of so called ‘soft skills’. Unless organisations build DPM systems around the capabilities of managers and end users, the commercial benefits will not be realised.
Given that there is now such clear evidence linking employee engagement with performance; both corporate and individual, it seems perverse for any organisation in 2011 to fail to manage engagement actively.
In many organisations, employee satisfaction or engagement are regarded as things that just happen because of the way we are, and because the management team are all such wonderful, warm human beings. That isn’t managing anything. Engagement should be managed in just the same way that you would manage RONI, cash flow or receivables and that means establishing suitable measures by which to monitor; regularly reviewing, and taking appropriate initiatives to bring about continual improvement.
The best way to measure employee engagement is through a regular employee survey.
As the new decade beckons are you optimistic or pessimistic that the HR function will emerge with growing authority?
Those organisations which elevate the management of their people resource to the heart of their decision making processes seem to have an aura of sustainable success in the way that they go about their business, but there are many organisational leaders that still keep HR at arms length in the functional support box.
Why is this?
Is it a reflection on organisational leadership or, the way that the HR world goes about it’s business?
There is no “one size fits all” answer to this question, and there are as many answers as there are prejudices. Some organisational leaders still regard the HR department as the means for keeping people in line, and some HR professionals still struggle to measure their efforts in terms of ROI.
Is it a language or a cultural problem?
It is probably both, business organisations do not function as democracies in which the prevailing assumption is that everyone’s word carries equal weight, the most weight is given to the kind of earned or appointed authority that does not come with a staff as opposed to front-line management post. The result is often that decisions are taken on the balance of personal authority rather than quality of argument.
The most obvious solution is to have the best arguments, and in business that means the case that will give the best returns. An alternative approach is for HR to to boost it’s authority by bringing in business centric HR consultants who have learnt the language and made the cultural transformation.
Be optimistic, the world revolves around human relations: perhaps the “R” in HR should be changed from Resource to Relations!