Corporate happiness

Company information often strains the bounds of credibility and is at odds with the reality of the outside world.

by Tom Kowaleski
Last Updated: 23 Jul 2013

What's better in this summer holiday period than finding the perfect book for a bit of enjoyment and enlightenment? Getting an early start, I found mine in Stumbling on Happiness (Harper-Collins), by Harvard professor of psychology Daniel Gilbert. It might sound a bit 'pop psy', but it's a fascinating look into how the brain makes life enjoyable by aiding our memories of the past, experiences of the present and imagination of the future. But here's the interesting point: our brain does this not by being more accurate, but by editing what we remember of the past, how we want to see reality today and how we wish to imagine the future. In short, it subtly bends reality to suit our desires and wishes.

Companies often function in this same manner by engaging two flawed actions in communicating to their most important constituencies of employees, customers and shareholders, as well as those charged to follow their fortunes, such as the media and analysts. First, they assume outsiders have the same thirst for complex facts and an equal knowledge of the innermost workings of the company, its processes, culture and history, as they do. Second, they paint a bright picture of a future based solely on their own plans and neglect to balance these against a fast-paced competitive environment.

This is classic 'inside out' thinking. Executives, consumed with their own challenges and opportunities, spend much of their time communicating with each other. Even when speaking to the outside world, they move within a well-defined set of colleagues, business associates and constituents - all of whom understand the basic code. Go a bit further afield, however, to those influential audiences that are critical to shaping a company's image and it's little wonder this complex mix of inside information - no matter how well communicated - often strains the bounds of credibility and relevancy. Companies can compound this by falling in love with their own scintillating vision and plans for the future. They become blinded to the fact that major competitors may be plotting the very same outcome and some may already have a significant market advantage. Is it any wonder we continually read of plans for success that end up anything but, to the detriment of the company's credibility?

Having spent 25 years in the auto industry, I've seen this manifested time and time again. Regularly, in the deep recesses of design centres the world over, senior managers gather to see and review new vehicles about to be unleashed on a world of expectant consumers. There's a palpable feeling of anticipation - vast increases in margins and revenue per unit, and the pleasure of soundly trumping the competition. But this is going on in dozens of design centres, all at the same time.

Is there a way of communicating a future that's simple, rational and believable, and stands the test of outside perception? Communicating from 'outside in' rather than 'inside out' is a good way to start. Become connected to a world of constituents that have a vested interest in your business success, but are not insiders. The odds are they use your products and avail themselves of your services simply because it enhances and helps their life, or makes their business more successful. That's all that really matters. Does the plethora of information you're ready to unleash really aid this cause?

Mike O'Neill, senior vice-president of corporate affairs and communications at American Express, cites three important audiences for his company: major institutional shareholders, small and large business customers and consumer advocates. The company keeps in touch with them by a mix of formal research and continual contact; for example, following up qualitatively after presentations to the company's most important investors. "Smart people who are spending their own money are very truthful with you," says O'Neill.

Of course, when facing a crisis, transparency and context are even more critical. "Crisis management often plays up those differences between what you have been thinking and believing internally, and what your outside stakeholders have been saying," says Bill Margaritis, corporate vice-president of communications and IR at FedEx. "And if you haven't been consistent before with your language and actions, and continually measured for inconsistencies, finding out now is too late."

There's another benefit in staying connected to these audiences. The odds are that if they're important to you, they are to your competitors as well. Listen to them. You might find they know something about the competition's future that even you don't and that can help alter the outlook created in the deep recesses of your own company. It could even help you stumble on a bit more of your own corporate happiness.

Tom Kowaleski is head of communications consultancy actk2. He was vice-president of global communications at General Motors before retiring in March 2006.

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