The Peril of Not Talking-Case Study of an Executive Team

A number of years ago I was a member of a senior executive team that failed to come to consensus on the strategy of the business. This experience was a powerful example of how important it is for people to learn to talk openly and the severe consequences when we don’t.

The company was a manufacturer and distributor of components within the computer industry. For many years the company had an excellent reputation and dominance of their market place. Their largest customers included such companies as Compaq, Sun Microsystems, IBM and AT&T.

As in most industries, competition began eroding the company’s market share. Foreign competitors were manufacturing and selling their products at a much lower price than our company. These low prices more than offset the company’s reputation for quality and ability to customize their products to the needs of their customers. This fact caused a serious crisis that forced the company to reevaluate and renew its business strategy.

After thoughtful analysis, the president concluded that to remain profitable the company would have to expand its product base to include an entirely new product, different from what it had traditionally manufactured. During this time the president met a systems expert who had grown another electronics company to a position of prominence within the industry. Confident in the ability of his staff and organization, the president hired this individual and thus initiated a major shift in the direction of the business. Although they would maintain their expertise within their traditional product lines, they would begin development and manufacturing this new product.

The logic of the move made perfect sense to the president and many others within the organization. However, not all of the key stakeholders agreed. The president persuaded a skeptical board of directors to allow him several months to make the endeavor work. But the senior managers were divided in their support. Those who had been recruited and hired by the company president and were relatively new to the company supported the strategy. However, most of those who had been with the company since its early history, much longer than the president, remained ambivalent at best.

The company eventually designed and even manufactured a number of prototypes. But every success came at a very high price and problems with the design and manufacture of the new product plagued the entire process. It was clear that not everyone was committed to the success of the project.

The response of the president was to lecture his senior managers about the importance of their commitment. He stated on a number of occasions that the strategy could only succeed with “the support of everyone in this room.” But he never got the support of everyone in the room and the project eventually failed. The product never got into full production, several million dollars of cash reserves were depleted, the trust among members of the organization eroded, and the board of directors eventually fired the president and the half of his staff that supported the strategy. They brought in a turn-around consultant who laid-off much of the workforce and eventually sent a lot of the company’s manufacturing overseas.

What went wrong? Was the strategy flawed? Or did a few naysayers derail a bold venture and business opportunity? I’m convinced that the heart of the problem was not the strategy per se but the process by which it was implemented. If this group of senior leaders had been able to engage in open and honest dialogue, the outcome would have been entirely different.

The president of the company, a capable leader, failed to listen to opinions which differed from his own and pushed ahead in spite of objections from the people whose support he so desperately needed. And thus he failed.

Of course, I can’t say for sure what would have happened if he had listened and everyone had an opportunity to express his/her point of view. It is possible that through open and honest dialogue and airing of all the pros and cons and misgivings about the project, the staff would have come to a genuine support for the project. On the other hand, the skeptics may have convinced the president and other members of his staff that the project was not viable. Or, they may have decided the timing of the project was poor and established clearer criteria about when to pursue it. By entering into honest dialogue, it’s far more likely that the members of this executive staff would have arrived at the best decision and one which each of them could support.

Consequences from a Lack of Dialogue

This is not an isolated incident. A lack of dialogue occurs not only in the largest companies, but in any size company and at every level of the organization. It exists between managers and their subordinates, between departments, between management and the union, among co-workers, even between a business and its clients.

There are two consequences that result from a lack of dialogue. First, personal and organizational performance suffer. As the above examples illustrate, decisions are made with incomplete data or are implemented without understanding and buy-in from those people responsible for making them succeed.

And second, an absence of honest dialogue results in a culture of mistrust and suspicion. Relationships are characterized by an adversarial attitude: me vs. you; us vs. them. Rather than goodwill there may be deep, often hidden, animosities and resentments. Rather than feeling like we have a common purpose or vision, we feel like we are struggling against one another for what we want. The more you win the more I lose and visa versa.

Unfortunately, mistrust, suspicion, and alienation are the rule rather than the exception in organizational life. It is a pervasive and insidious problem whose consequences are severe and far reaching and yet which is accepted, by many, as a fact of organizational life.

Lacking constructive ways to discuss the key issues, many people gradually lose their enthusiasm and desire to contribute to the business. They put their heads down, do their daily work, and go home. Essentially, they’ve “retired in place.” A Gallup Poll, completed by more than 1.5 million employees in this country, shows that only 28% of all employees are engaged in their work, 55% are disengaged, and 17% are actively disengaged. In other words, 72% of employees in the US are either emotionally disconnected from their work or actively undermining their organizations.

I worked for a textile company which eventually learned that some of their employees had started an underground manufacturing and distribution operation using their brand label. Auto manufacturers have been known to put pop bottles, tin cans and other debris into the unsealed doors of cars during the fabrication process. Employees of another company used to pour toxic chemicals down the toilets knowing that the company would be hit hard with fines from the EPA. In another case, nurses would interfere with the career advancement of unpopular doctors by violating guidelines related to the security and storage of medications.

The common and logical assumption that those at the top of an organization possess a lion’s share of organizational power is erroneous. Their followers who perform much of the core work and implement their strategy and decisions wield enormous power that dictates the success of the enterprise. By their commitment or lack thereof they decide how successful the business will be in implementing its strategy.

The Dialogue Imperative

Dialogue is communication that permits people to share their honest opinions—even those which have, historically, been difficult to discuss—in ways that get ideas out on the table but without offending others.

Most forms of communication are monologue rather than dialogue. Monologue means that the individuals involved are preoccupied with their own point of view rather than seeking to understand all points of view. People attempt to convince, control, or persuade and, ultimately, “win” their argument, which sets up mistrust and alienation.

Dialogue is different. The intent is not to control or win but rather explore the similarities and differences between you and I so that we can come up with the best possible solution, a solution which meets each of our needs. I define dialogue as creating shared understanding in an atmosphere of mutual respect and support in order to arrive at a mutually beneficial outcome. Dialogue is sharing more than information. It is sharing meaning. In fact, it is only after creating a pool of shared understanding or shared meaning that people can go on and come up with creative and synergistic solutions to the challenges or problems they face.

There are three objectives or phases in the process of dialogue. The first is to communicate in a way that creates an atmosphere of unity, goodwill and mutual respect. This includes bringing up issues and framing them in a way that lets people know of the intent of the conversation and which establishes ground rules that create a feeling of safety for all involved.

The second objective is to create a pool of shared understanding in which all parties involved are able to get their points of view on the table. The purpose is not to convince and strong arm others into agreement, but to hear one another out and make sure all points of view have been represented.

The third objective is to arrive at a win-win outcome. This consists of exploring what is important to all parties and then brainstorming alternatives that are in the best interest of everyone involved. This does not mean the final decision has unanimous support. It does mean that all points of view have been expressed and the group or individuals come up with a decision or actions that everyone can support.

Through dialogue we establish strong and healthy relationships. Through dialogue we develop confidence in the integrity, motives and benevolence of those around us. We learn that we can count on that individual to do what he/she says; we know that this person has no personal, hidden agendas; and we believe that this individual cares about our interests as well as their own.

Although relationships can be founded upon other factors (fear, intimidation, positional authority, duty, etc.), it is the relationship of trust, created through dialogue, that results in a mutual commitment to long-term positive and sustainable performance. Dialogue, therefore, is the bedrock (firm ground) of trust and successful relationships and business performance.

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