I did some work with a company recently where the Group VP, in charge of four product divisions, decided to launch a priority setting effort to place more resources against the high potential projects, eliminating struggling, marginal efforts, hopefully leading to market share growth. He got his five VP’s together and indicated his intent and also said that in the process of providing the sharper focus, he hoped that budgets could be cut in the range of 4-6%. Each VP was to come back with their proposal.
John, one of those product division VP’s, got his direct reports together and explained that the Group VP is on the cost warpath again, and he believed their division needs to come up with about 2-4% of budget saving to make the challenge go away. John believed that his division was clearly a high priority for the Group VP, so there was no need to get into the priority setting task the Group VP had mentioned or make any drastic budget cuts.
Fred, the head of R&D in John’s division, was not about to cut anything. After all, R&D is the engine of the future, so he got back to John, indicating that he really believed IT and HR were spending way too much, and Fred proposed an aggressive plan to cut the HR and IT personnel, which could turn up about 2% for John’s division.
I think you get the picture! It is dangerous to attempt to communicate a plan for change by trickle-down communications. The infamous “telephone game” is alive and well.
So…what is the ideal way for a leader to communicate a plan for change? Here are three key steps:
1.) All employees need to be told the same message at the same time – This can be done by a town hall meeting or an organization-wide e-mail or position paper that goes to everyone at the same time.
2.) Be very specific – A detailed description of what the end result should look like is critical. This requires the leader to have thought things out very thoroughly after several iterations with key people in the organization that will be carrying out the plan.
3.) Follow up with the appropriate measures, reorganization, and personnel assignments – People need to see that this is for real and that immediate action is being taken.
In summary, aloof leaders who sit in their office and pass along vague requests for change to their direct reports are almost guaranteed to be disappointed in their lack of impact.