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Reputability LLP are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com We help business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Tuesday, 27 January 2015

None so deaf

We are delighted to welcome a guest glog from Mark Powell and Jonathan Gifford, authors of "My Steam-Engine is Broken".  We enjoyed working with them as they researched their book; and now they have written a blog post based on one of our shared insights.


We are, it would seem, communicating more than ever, but not necessarily to greater effect. The world of business, in particular, seems to be stuck with merely faster versions of industrial era, top-down modes of directive communication that are preventing creative involvement and genuine engagement. The lack of real dialogue is increasing the likelihood of failure – and, on occasion, even disaster.

How organisations fail to encourage real dialogue

If communication is good then more communication should be better. It depends, it would seem, on the quality of the communication. 
The communication that the person walking in front of you has stopped suddenly to read on their mobile device might be a tweet (currently over 500 million per day); a text message (estimated 21 billion per day); the now more popular instant message (estimated 50 billion per day – see previous link) or even an old-fashioned email (estimated 196 billion per day).

The email is an interesting case in point. Despite the fact that the new generation views email as an overly-complicated way of delivering a simple message, the business world has got pretty much stuck with email. Of those 196 billion daily emails sent worldwide, 109 billion are estimated to be from business.

Business looks askance at text and instant messaging (with the notable exception of the marketing department) but it has always liked email. This is probably because email offers a way of sending what is effectively a memo to a lot of people without the fuss of having to have many paper copies of the latest edict made, put into internal mail envelopes and distributed by the organisation’s mailroom to ‘all desks’ – if any readers can remember such ridiculously antiquated methods.

The point about memos is that they are not even intended to be a dialogue. They are an instruction; a directive. ‘That may be so,’ business bosses might argue, ‘but of course we also have regular meetings where people can air their views.’

But most business meetings are not a form of real dialogue either: the rigid hierarchies of most businesses and the subtle but keenly-felt gradations in the status of those present make real dialogue almost impossible to achieve.

Stuck in the industrial era

In our new book, My Steam Engine is Broken: Taking the organization from the industrial era to the Age of Ideas, we argue that modern business has got stuck in a late nineteenth- or early twentieth-century industrial mode of operation; the age of ‘scientific management’ and the ‘one best way’ of doing things, and of a sharp and quite deliberate distinction between management and ‘workers’.

In the book, we identify ten core behaviours that organisations persist with, despite the fact that these behaviours are actively preventing the very outcomes that those organisations know that they need in the modern world: creative thinking, innovation, agility and adaptability, for example. Self-motivation and heartfelt commitment from the members of the organisation. That kind of thing.

These ten paradoxical behaviours have to do with old-fashioned and inappropriate issues of control, measurement and ‘efficiency’; with outmoded, hierarchic management structures; with an absence of real leadership and a lack of genuine diversity – and with a failure to communicate in any meaningful sense of the word.

Communication: the canary in the mine

While researching material for My Steam Engine is Broken, we turned to business consultants, coaches, senior executives and business thinkers for their own experiences and ideas. One of these was Reputability’s chairman, Anthony Fitzsimmons.

“We regard the effectiveness of communication as the canary in the mine as to what’s going on in the organisation,’ Anthony told us, ‘because the ability to communicate freely is influenced by all kinds of incentives – by the culture of the place, by the way the leadership behaves – and if communication is actually flowing freely, it also tells you that it’s quite likely that a lot of other things are set relatively well which permit the information to flow, and it tells you that other important things are almost certainly happening, because if they weren’t happening, the information flow would be likely to be messed up. So that’s why we think of it as the canary in the mine.”

Failures in communication are not merely unfortunate, they can be disastrous, as Fitzsimmons and others explore in Roads to Ruin, the Cass Business School report for Airmic.  Senior leadership can fail, all too easily, to communicate its real concerns about safety standards (for example) to the organisation as a whole. Breakdowns in communication between the people on the ground and management – typically because of problems of hierarchy and status, and of the existence of silos in all large organisations – can prevent the communication of known problems to the people who are in a positon to address them.

Group intelligence

The thing about good communication is that it is relational: it is a multi-dimensional process.

Recent research has shown that the ‘collective intelligence’ of any group has less to do with the individual intelligence of the group’s members than it does with the way in which ideas are shared around the group.

As Anita Woolley, assistant professor of organizational behaviour and theory at Carnegie Mellon University, told Harvard Business Review in an interview about her research: ‘What do you hear about great groups? Not that the members are all really smart but that they listen to each other. They share criticism constructively. They have open minds. They’re not autocratic. And in our study we saw pretty clearly that groups that had smart people dominating the conversation were not very intelligent groups … Our ongoing research suggests that teams need a moderate level of cognitive diversity for effectiveness. Extremely homogeneous or extremely diverse groups aren’t as intelligent.’

Yet what Woolley describes as good successful group behaviour, leading to higher collective intelligence, is quite recognisably the antithesis of most organisational behaviour. Managers and workers do not ‘listen to each other’; they don’t ‘share criticism constructively’; managers are indeed ‘autocratic’; they work hard at ‘dominating the conversation’; groups and organisations as a whole are highly ‘homogeneous’.

We all know that this is true from our daily experience. In My Steam Engine is Broken, we invite business leaders to examine the outmoded behaviours that are still embedded in their industrial era organisations, and to begin to unpick and unravel these, little by little, piece by piece. Encouraging real, constructive, non-judgemental, open-ended dialogue in every form of communication would be a good place to start.

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Mark Powell is a partner at the global consulting firm A.T. Kearney and an Associate Fellow at the University of Oxford’s Saïd Business School, where he has spent 10 years directing leadership development programmes. Jonathan Gifford is a business author and a partner of the digital advertising agency, Bluequest. He was the launch publisher of BBC History Magazine.

My Steam Engine is Broken: Taking the organization from the industrial era to the Age of Ideas is available now at bookshops and online.

Is your own organisation stuck in the industrial era? This short questionnaire will give you an instant (and slightly light-hearted) analysis: How Steam Are You?

Join the debate @MySteamEngine.