Executives know success in business depends on identifying and fixing problems before they become crises. It is the most basic rule in management: No matter how smart your strategies seem on paper, if you don’t know how they’re being executed and whether there are urgent problems, you won’t be successful.
The higher executives climb, the less likely they are to know what is and isn’t working at their companies. Many are surrounded by yes people who filter information; others dismiss or ignore bearers of bad news.
“I’ve heard so many executives tell employees to be candid and then jump down their throats if they bring up a problem or ask a critical question,” says Yogesh Gupta, president and CEO of Fatwire, a software company that helps businesses manage their websites.
Gupta was determined not to do that when he was recruited to Fatwire from CA in August. Since then, he has spent hours talking with his 200 employees and seeking the advice of his nine senior managers—all but one of whom are veterans of the company. He has frequent private meetings with each member of the management team so they will feel freer with him. In that way, he can ask the important questions: What am I doing wrong? What would you do differently if you were running the company? What’s the biggest thing getting in the way of you doing your job well?
Already, he learned from these talks that Fatwire should beef up its staff in marketing and in product development. Others have counselled him to improve Fatwire’s customer-support processes. Every time he has gotten good advice privately, he has found a way to publicly praise the manager so others will come forward with suggestions.
“I know I have to say, ‘You did the right thing to speak up’ again and again, because employees fear they’ll get blamed if they say anything negative,” says Gupta.
Ken Siegel, an organizational psychologist and president of the Impact Group in Los Angeles, believes that most CEOs avoid learning what their employees are thinking and doing. He advises those who want to get to the truth to assemble a senior team of people with diverse points of view.
“Instead of surrounding them with executives who think just like they do, they need people down the hall who are their opposites, have very different strengths and push them to see reality differently,” he says.
What’s more common is for CEOs to find one confidante to confer with who usually isn’t a direct report. Riza Berkan, CEO of Hakia, a search-engine start-up, talks several times a week with board chairman and investor Pentii Kouri.
“He gives me a perspective I don’t have—about people as well as finance matters,” says Berkan, a computer scientist. When an investor said he wanted to attend board meetings, “I was ready to get into a fight, but Pentii encouraged me to win his understanding” and convince him that only directors would attend.
Executives at big companies who have many layers of management between themselves and front-line employees face the biggest challenge finding out how their strategies are actually working. Those who want accurate information must commit to spending time in the field—often and on their own—where they are away from handlers and can coax employees to be forthcoming about problems.
Kathleen Murphy, CEO of ING’s US Wealth Management unit, which sells a variety of products, from annuities to financial-planning services, oversees 3,000 employees. She holds town-hall meetings with large groups of employees but admits the sessions “are mostly for me to push my message out because people are less candid at big meetings.” So, she also meets regularly with smaller groups of managers at all levels of her division. Once, when an operations group complained about a convoluted work process, she agreed the change they proposed was more efficient.
But she says she doesn’t always act on what she hears, believing that executives have to filter out the inevitable complaints from the crucial information and ideas that create a productive and congenial workplace.
An upbeat executive, Murphy has teamwork in her DNA. She grew up negotiating with her five siblings for elbow room at the dinner table and played lots of sports. She says she has a “low tolerance” for people who are complainers. “There’s a big difference between candour that stems from caring about doing things better and negative energy, which can be toxic,” she says.
After reorganizing her division recently, Murphy sat through several meetings at which managers made suggestions and expressed their concerns. She encouraged everyone to voice their objections, but made her case that the changes would help them expand the business and better serve their customers.
They went through “a few rough sessions”, she admits. But, in the end, they found common ground. Her listening made all the difference. Now moving to a new building, she’ll be next door to her customer-service staff.
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