Archive for 2011

3 Things That Shape A Good Strategy

Wednesday, September 14th, 2011

It’s the time of year when many business owners and their teams are doing their business planning for 2012.

So in my last 2 posts we talked about the 4 hallmarks of bad strategy and the 2 reasons why there is so much bad strategy.1 

Now I want to focus on the underlying structure of a good strategy and Rumelt’s views on the 3 components of that.

1. Understanding the nature of the challenge

I may be making a “blinding statement of the obvious” when I say that it’s not possible to develop a strategy which will be successful, unless you understand the challenge.

But I’m also probably correct in saying that no strategy – even the ones that later proved unsuccessful – has been approved without the key players believing they did understand the challenge.

Typically the situations which create problems or challenges for companies are complex. A good “diagnosis”, to use Rumelt’s term, simplifies the complexity by identifying those aspects of the situation that are the critical ones. This makes failing to face the real problem impossible (see the first post in this series).

I think that really understanding the challenge requires business owners to:
• Refuse to replace thorough analysis with positive (or wishful) thinking.
• Commit time and resources to a completing that thorough analysis.
• Combine the product of trained analytical skills with their intuition.
• Remain objective in the face of other (opposing) ideas.

2. An integrated approach for dealing with the critical issues

Rumelt describes this as a guiding policy for overcoming the critical issues.

I believe that in order to develop this integrated approach, choices have to be made about which goals to pursue. This helps avoid one of the causes of bad strategy.

And immediately a company embarks on this route they take a giant step away from the template style of planning that Rumelt criticizes so much.

The approach we’ve used successfully for some years now requires conscious thought being given to the implications of the strategy for all functions in the company – not only marketing and sales but also operations, finance, HR and systems.

Our approach raises, and answers, questions like how will we finance growth; what skills and experience will we have to develop or hire to take us to the next level?

3. Coordinated actions that translate the integrated approach into results

Rumelt provides an interesting example of coordinated actions. He talks about Nvidia’s strategy for capturing leadership of the 3-D graphics chip industry.

The CEO realized that releasing a new, better chip in much less time than their competitors was the key to success. That became the company’s guiding principle.

The coordinated actions were – forming 3 development teams working on overlapping schedules; investing in infrastructure to prevent delays in fabricating chips and developing drivers; and regaining control of the development of drivers.

It’s easy to see how these 3 actions supported Nvidia’s guiding policy/integrated approach.

The strategy worked brilliantly for 10 years. But, as we know, no strategy, however brilliant, will remain unchallenged forever.

4. Wrapping up

Three apparently simple things underpin a good strategy. But, as I’ve said before, strategy is like all of those other things in life that seem simple but yet are not. Did I tell you about my golf swing……..

1 The posts summarised an article written by Richard Rumelt, published in the McKinsey Quarterly and based on his recent book “Good Strategy/Bad Strategy: The Difference and Why It Matters”


2 Things That Cause Bad Strategy

Wednesday, September 7th, 2011

Its business planning or budgeting time for many business owners and so in last week’s post I talked about the 4 hallmarks of bad strategy.

They’re featured in an article which was adapted by Richard Rumelt from his new book “Good Strategy/Bad Strategy: The Difference and Why It Matters”. The article appeared in the McKinsey Quarterly

I promised that, for those pressed for time I’d continue summarizing the article in this post and talk about why there is so much bad strategy.

1. Unwillingness or inability to choose

Rumelt argues that a good strategy requires focus. And focus means that business owners have to choose amongst business goals.

Do you remember Digital Equipment Corporation (DEC)? They led the mini-computer industry in the 60’s and 70’s but by the end of the 80’s they were losing ground quickly. There were doubts if the company could survive without making far-reaching changes to their strategy.

Three alternatives were considered – business as usual, become a solutions provider or focus on designing better technology. The CEO wanted consensus on the new strategy but the executive team was divided and unable to reach one.

The result was a compromise, “DEC is committed to providing high-quality products and services and being a leader in data processing.” Like most compromises, it contained a little bit of everything and focused on nothing.

DEC continued losing ground and the CEO was replaced in the early 90’s. His successor focused on technology, but by then it was too late. The losses could only be stopped for a while and the company was acquired by Compaq in the late 90’s.

Failure to choose results in weak strategy and weak strategy results in failure.

2. Confusing “positive thinking” and strategy

Motivational speakers – and their books and web sites – have given rise to the notion that charismatic leaders and positive thinking can achieve the impossible. In concept it’s done by developing a vision and inspiring people to follow it, while empowering them to accomplish it.

The concept was reduced to something of a formula and distilled into a template for strategic planning. But not everyone can be a charismatic leader. Nor can success be achieved simply by applying a formula and completing templates.

A vision has to be more than a statement that the company will be the best, or the leading, or the best known.

The mission has to be filled with more than high-sounding, politically correct statements about the purpose of the business.

And a company’s values can’t be noncontroversial platitudes about integrity, respect and excellence.

Rumelt’s point is that, if the vision, mission and values turn out that way then the strategy is going to be nothing more than aspirations, goals or statements of the obvious presented as decisive insights.

Lack of substance makes a very weak foundation on which to build a future.

3. So what does work?

I’ll save Rumelt’s views on the underlying structure of good strategy for my next post.

Bad Strategy – How To Spot It

Tuesday, August 30th, 2011

Many business owners are in the middle of their business planning or budgeting process for 2012.

So, for those pressed for time, I’ll summarize a timely article by Richard Rumelt, adapted from his new book “Good Strategy/Bad Strategy: The Difference and Why It Matters”, and published in the McKinsey Quarterly.

Here are Rumelt’s 4 hallmarks of bad strategy.

1.    Failure To Face The Problem

A strategy, according to Rumelt, is a response to a challenge. But if the challenge isn’t defined, it’s impossible to assess the quality of the strategy. And if you can’t do that you can’t reject it as bad or improve on it.

For example in 1979 International Harvester produced a Strategic Plan which was thorough and rich in detail. The overall direction was to increase share in each of their served markets while reducing costs.

Unfortunately the Plan didn’t address Harvester’s main problem – its inefficient work organization. This stemmed from grossly inefficient production facilities and the worst labour relations in US industry.

This problem could not be fixed by driving people to increase market share or by investing in new equipment. Harvester survived for a couple of years but began to collapse after a disastrous 6 month strike. The rest, as they say, is history.

2.    Mistaking Goals For Strategy

Rumelt describes a CEO who had a plan to grow revenues 20% a year with profit margins of 20% or more.When asked how this aggressive plan would be achieved, the CEO replied “With the drive to succeed – by picking stretch goals and pushing until we get there”.

The CEO then quoted Jack Welch who said “We have found that by reaching for what appears to be the impossible, we often actually do the impossible.” But he had forgotten that Welch also said “If you don’t have a competitive advantage, don’t compete.”

Rumelt argues that a company needs a unique internal strength or an opportunity created by a change in the industry for this type of growth. Stretch goals and motivation alone are not enough.

He illustrates the inadequacy of this “push until we get there” type of thinking, by referring to the great pushes in the 1914-18 war. The troops who were slaughtered didn’t suffer from a lack of motivation – they suffered from a lack of competent, strategic leadership.

3.    Bad Strategic Objectives

This can take the form of a long list of things to do – often labeled strategies or objectives. These lists result from planning sessions in which the focus is on doing a wide variety of things, not a few, key things.

Rumelt refers to the planning committee for a small city whose strategic plan contained 47 strategies and 178 action items. Action item number 122 was “create a strategic plan.”

Another type of weak strategic objective is one that is “blue sky”. It’s typically a restatement of the desired state of affairs or the challenge- and skips over the fact that no one knows how to get there.

Good strategy works by focusing energy and resources on a very few, pivotal objectives and builds a bridge between the critical challenge and action. Thus, the objectives a good strategy sets stand a good chance of being accomplished.

4.    Fluff

The final hallmark of bad strategy is a restatement of the obvious, combined with a generous sprinkling of buzzwords. Rumelt’s example is a retail bank which said “Our fundamental strategy is one of customer-centric intermediation.”

An intermediate is a company that accepts deposits and then lends the money – in other words, a bank. The buzz phrase “customer centric” could mean that they compete by offering better terms and service. But their policies didn’t reveal any distinction between it and other banks.

So “customer-centric intermediation” is pure fluff. Eliminate it and the bank’s fundamental strategy is being a bank.

5.    My final words

In my next post I’ll finish summarizing the article and talk about why there is so much bad strategy.

Are Your Core Competencies Coming – Or Going?

Monday, August 8th, 2011

A phrase that we often hear being bounced around the offices we visit at this time of year is “core competencies”. This is because we’re getting into annual business planning or budgeting (or anything else you call it) time.

And, as any good book on business strategy will tell you, “core competencies are a potential foundation for a new or revised strategy.”¹ Why, because they are what the company is uniquely good at.

But there are 2 important caveats. To confer advantage they must be valued by the company’s customers and they must make the company better at what they do than its competitors.

1. Beauty and the eye of the beholder

If customers stop valuing what a company is good at the owner will know quickly enough because sales will fall. While a sudden drop grabs attention, a slow decline is easier to overlook – and, therefore, more dangerous.

But how does a company know if its core competencies are more highly valued than those of its competitors? The answer, at the risk of sounding glib, is to ask.

Let me back up a step, however. Owners and their management teams have been known to identify the company’s core competencies based solely on their own opinions. But beauty, as they say, lies in the eye of the beholder.

I’m not saying they can’t do it. What I am saying is that they have to get some external, objective, third party input to confirm that they actually have hit on the core competencies. That input can be in the form of customer surveys done either by the company or by consultants on their behalf.

2. Relative performance but………

The next step is to list the core competencies, come up with a rating scale and the names of 2 or 3 key competitors. Now the business owner can get a reading on the company’s relative strength in these key areas that confer advantage.

The best assessment of where the company is strong or weak compared to its competitors will use a blend of input from employees, customers and people who know the industry. This type of assessment is comprehensive, thorough and, hopefully, objective. And it may be adequate.

However it has one important shortcoming. It represents a snapshot in time. And so it may disguise areas for concern.

It can, for example, show that the company is rated more highly than its competitors in one or more key competencies. But the competitors may be gaining ground.

3. Now you have it

So the assessment should be strengthened by the addition of a question about the trend in each company’s performance. Are the competitors getting stronger – or weaker in key areas?

Then the business owner knows not only what the company is good at, but how good they are and if they’re getting better or worse. Invaluable input to the annual business planning or budgeting (or anything else you call it) process.


¹ I happened to choose “Strategy: Create and Implement the Best Strategy for Your Business”, Harvard Business School Press, 2005

Strategy And Magic

Tuesday, August 2nd, 2011

One of my mantras is “strategic planning is based on assumptions”. It has to be because it’s about predicting what will happen in the future – and no one has been able to do that accurately yet.

To make assumptions you have to collect data and then think about it. This type of thinking is different from solving day-to-day problems. So we use various techniques to help participants in strategy sessions “think differently”.

But the other day a friend of mine made me realize that magic can also teach us some lessons about how we think and the biases that affect us all.

1. Differences in interpretation.

Different people interpret the same data in different ways. And who’s to say which way is “wrong”.

For example my magician friend, Dan Trommater (who is doing exciting things using magic for leadership training) does a trick in which a member of the audience signs their name on a $20 bill which he then makes disappear.

Later, they open a box that has been in full view the entire time and inside the box is a lime. When Dan cuts the lime open, the signed dollar bill is inside it. When Dan asks the audience for their theories about how he could have done it, he gets several different answers.

Everyone saw the same thing (or received the same data visually) – a signed $20 bill disappeared and then reappeared in the centre of a piece of fruit. But different people interpret the “data” in different ways – and arrive at different conclusions.

Again who’s to say which conclusion is right and which is wrong? (Dan says he’s used at least 10 different ways to get the bill into the lime.)

2. Differences in perception.

We also see data through the lens of our own perspective.

In another part of his act, Dan illustrates the power of perspective by bringing a volunteer on stage. He or she sees Dan cut pieces from a length of rope and then restore it “by magic”.

Meanwhile, out of the volunteer’s sight, Dan shows the rest of the audience how the “trick” works by showing concealed bits of rope which are cut in place of the long piece.

So the audience sees the “trick” while the volunteer experiences the “magic”. And they have different perceptions of reality because of what they see.

3. How do you deal with these differences?

These are examples of only 2 of the many factors that allow 2 people to take the same piece of information or data and perceive it or interpret it in different ways.

We have to accept that they exist and that their effects can’t be prevented.

So, when business owners ask teams of their people to think about important matters – e.g. when they’re involved in strategic planning or annual business planning – here are a couple of “must do’s”.
• Get the very best data available with which to fuel their thinking.
• Suspend judgement when someone says something that seems “out in left field”.
• Take the time to understand how they came to their conclusion.
• Challenge your own interpretations, perceptions and other biases.

By the way, if you have the opportunity to see Dan perform, watch the rope trick carefully because there’s a sting in the tail.

More Heat Less Chill

Tuesday, July 26th, 2011

Although the weather’s changed a bit since my last post – Don’t Let The Summer Heat Cause A Winter Chill – we’re still in vacation season and it’s still hot.

But we’re also well into the third quarter of 2011 and heading for the annual business planning; budgeting; whatever you call it, process for 2012.

And I believe that process is the engine that drives your growth. So in the last post I talked about 2 things business owners should be thinking about now. Here are another 3……

1. The Opinion Trap.

The planning process has to be completed by a specific date. Often that’s set to enable Finance to use the output/numbers to produce projected financials for the upcoming year(s) while still completing their regular work. 

However vacations, short work weeks and long Holiday weekends and a more laid back, summer mind set can result in the focus being on doing the things that are urgent rather than the things that are important. 

So, even although the deadline is well known, the process is often started later than it need be. And that puts the value of the output at risk.

Why – because the logical thinking required to make the process effective declines in direct proportion to the increasing proximity of the deadline. It becomes more and more about getting it done on time and less and less about getting it done right.

When that happens the basis on which key assumptions are made is less likely to be well collected and considered data and more likely to be someone’s opinion. And by definition an opinion is a subjective belief, often the result of emotion.

2. Who’s Baby Is It Anyway?

The owner must take ownership of, and remain the champion of, the planning process. If the perception that anyone else is driving it is allowed to take hold, the motivation for doing it thoroughly will suffer.

If, for example, the accounting department are seen to be driving the process it will be seen only as a number crunching exercise. And people will treat it simply as something to be completed as quickly as possible and get off their desk.

The only way to get everyone involved, engaged and buying in is if the owner demonstrates the importance of the process by leading it personally.

3. Keep It Together.

I talked to an executive recently who was busy completing annual expense budgets. This at a time when many of the people who had the detailed knowledge required to complete the schedules thoroughly were on vacation.

They told me that budgeting had been separated from the creative, thinking part of the planning process so that the Finance department could meet their internal deadlines.

But I’ve also seen other variations of this in the past. A favourite with companies which have enjoyed a leadership position in their industry for some years, is to start by producing the numbers – revenue, bottom line etc. – and then develop action plans and programs to fit them.

That’s as bad as a company that completes the creative, thinking part of the process then becomes distracted by tactical issues, allowing a lengthy period of time to pass before completing the numbers. Valuable momentum is lost and the participants are left to wonder if anything is being done with their input.

4. Last Words.

It’s not enough just to have a planning process and to complete it.

Like any other engine, if you want to get maximum output from it the parts must work smoothly, without friction, and you must use a high energy, premium power source/fuel.

Otherwise it’s unlikely to carry you anywhere near to where you want to go.

Don’t Let The Summer Heat Cause A Winter Chill

Thursday, July 21st, 2011

It’s almost the end of July, it’s hot and it’s vacation season. The heat saps your energy and getting ready for; switching off during; and scrambling to catch up after vacations takes most of your attention.

Together they make it easy for business owners to lose sight of fact that it’s the end of the second quarter and planning, budgeting, whatever you call it, for 2012 will be starting soon.

So what, you ask? Here’s what – your annual business planning/ budgeting/ whatever you call it process is the engine that drives your growth. If you don’t approach it with that in mind you’re setting yourself up to underachieve in 2012.

Based on mistakes we’ve seen made repeatedly in 10 years of strategy consulting there are several things you need to think about now. Here are a couple to get you started……

1. Don’t postpone the second quarter/mid-year review. Hold it ASAP.

Quarterly reviews are a reality check. What’s really happening in the industry, to our customers and with our competitors? How does that compare to our assumptions and how has it affected our forecasts? What can we do to leverage this reality in the next 2 quarters?

How many of the programs we planned have we actually put in place? Are they yielding the results we wanted? What has worked well that can be we build on? Which programs are behind time and how do we adjust for that?

The answers to these questions and others like them, asked in the quarterly review, will allow you to put form around what the situation will be at year end and give you a jumping off point for forecasting sales and bottom line in 2012 and beyond.

If you haven’t been doing quarterly reviews, or have let them slip, this is the time to start or re-start them.

Don’t let vacations be an excuse for postponing them.

2. Waiting until the week before the annual business planning session to start thinking about next year isn’t nearly good enough.

You’re going to make as accurate a guess about what the future holds as possible. To do that you’re going to have to make assumptions which will underpin your financial forecasts, priorities and action plans.

On what information will you base the assumptions? Something you read in an economic outlook from a bank or industry association or in articles about your industry or competitors on the web?

Or are you going to get out and talk to your customers and suppliers about what is happening in their world and what that will mean for you? Why not put a simple but systematic process in place to ask the same, key questions from several sources?

But that will take time; it can’t be done in the week or two before the planning session. Who is going to see whom and ask them what has to be decided soon – using output from the second quarter review. And the meetings will have to be arranged – and everyone has a full, busy schedule.

If information is power – or at least confers power – why settle for anything less than the best information available? Decide what you need and how to get it now – then start collecting the information soon.

3. Quick tip.

Dealing with the summer heat and vacations, doing the things that are urgent, can take the focus off preparation for the thing – the annual business planning process – that is important. If that happens and business catches a chill next year, it will not be this summer’s heat that’s to blame.

More in future posts, but today is the hottest day so far this year – so I’m off to get a Frappuccino. Staying cool is hard work!

Features and Benefits Don’t Build Brands

Friday, July 15th, 2011

This is the second guest post from Jeremy Miller, President of Sticky Branding, a brand consultancy specializing in digital marketing and social media. Jeremy speaks, consults and writes on how companies build remarkable brands online.

Companies love to compare their products to the competition, and justify why they’re better. They’ve got the latest doohickey, fandangled, whatyamacallit feature, which of course makes them better than the competition.

RIM has embroiled itself in this classic feature-benefit positioning game with their Playbook tablet. The key selling features listed in their ads:

1. It plays Flash. “It runs flash. So unlike some tablets we can mention you get the best of the internet,  not just part of it.”
2. It’s smaller. “Small enough to take anywhere, powerful enough to take you everywhere.”
3. It runs multiple apps simultaneously. “It runs all this at the same time. Why can’t every tablet do that?”

RIM backs up these impressive features with its latest tagline, “Amateur Hour is Over. The world’s first professional-grade tablet.” Compared to what? The iPad? If that’s the case, this is a pretty precarious branding and positioning strategy.

Positioning on features and benefits is risky for 3 reasons:

1. Features are susceptible to innovation.

RIM’s positioning strategy is a classic one. It’s applied in almost every industry: automotive, consumer electronics, computers, building materials, you name it. Companies are constantly trying to up the ante, and offer their customers new features or choices.

The challenge is features can be displaced by innovation. Apple has been the 800 pound gorilla in the consumer electronics arena. The iPod made the Walkman and Discman obsolete. Why carry around a CD with 12 to 15 songs when you can carry 1,000 songs in your pocket?

Then there’s the iPhone, which sparked the app revolution for mobile devices. And now the iPad is changing the way we interact with the internet and consume digital content.

Apple is an unusual competitor. In less than a decade Apple it has created 3 new consumer electronic categories. They didn’t try to compete on features and benefits with existing options in the market. Instead they created devices and platforms that serve untapped markets.

RIM is entering Apple’s playing field, and employing a classic features and benefits positioning strategy is shortsighted.

2. Features aren’t always the deciding factor

People are wise to the feature-benefits positioning game. Eventually they get tired of the comparisons, and choose what they’re comfortable with.

The Playbook does some things really well, and the iPad does other things really well. At the end of the day, both Apple and RIM have released incredible pieces of technology. Really you can’t go wrong with either, and buyers know that.

3. People value intangible factors.

The Playbook may have impressive features and capabilities, but it’s not an iPad.

That may not be fair, but that’s how many people think. The iPad is a status symbol. The iPad has more apps. The iPad comes from Apple. The iPad looks cooler. Everyone else has an iPad, and I want one too.

Perceived value, perceived leadership and perceived quality all come together in the customers’ minds to influence their purchases. It may not be logical and may not even be accurate, but those perceived values are as important to customers as the actual features.

Brand beyond the features

Features and benefits come and go, but brands last much longer. People buy brands first, and features second.

Instead of pushing the features and benefits of your products and services, look to the intangible aspects of your brand. Why does your company exist? What does it value? What is it thriving to accomplish? What kind of relationship does it have with its customers?  These are the intangibles to build upon that can lead to a clearly differentiated brand.

You can reach Jeremy at or 416.479.4403, Ext. 22.

10 Tips to Improve your Public Speaking Body Language

Thursday, July 7th, 2011

This week’s guest blog post is provided by Mark Bowden, business presentation skills trainer and body language expert, President of TruthPlane, a communication and presentation training company used by Fortune 50 companies, CEOs, Celebrities and G8 leaders. His bestselling book, Winning Body Language, is out now.

As a leader, there is no getting around it: your job calls for presenting and public speaking under extreme pressure. What your listeners think of your ideas, plans, and your entire organization is affected by how they react to you as a leader when you communicate. Never underestimate the crucial role your presentation skills and style play in your success.

Studies show that close to four out of five leaders fail to present effectively because public speaking is a source of huge anxiety. How do you rise to the challenge and take the opportunity to speak with confidence? Do you project your leadership strengths and the strengths of your company to get the reactions you need?

Expert Mark Bowden offers ten tips on how to use body language to your advantage in public speaking

When speaking, step away from the podium. If sitting, pull your chair back from the table — in short, display more of your body. Your audience’s instinctual ‘reptilian’ brain and emotional ‘limbic’ brain need to see your body to decide what they think your intentions and feelings are towards them. The less you show, the more they make those feelings and intentions up, and tend to default towards the negative.

Place your hands in what is called the TruthPlane, the horizontal plane that extends 180 degrees out of your navel area, to display a sense that you can be trusted. Bringing the audience’s unconscious attention to this vulnerable area of your body makes them feel that you are very confident. By assuming this physicality, you will feel confident too.

Show your palms open with nothing in your hands to let others know that you mean no harm and are speaking for their benefit. This is a universally recognised ‘friendly’ gesture.

When someone else is speaking, keep your hands in the TruthPlane to show you are open to what they say. By making small “inviting” gestures in towards you, you convey the feeling that you want to know more from them. This gesture makes presenter and audience alike feel good about what is being said, producing the stress-relieving chemical oxytocin in the brain.

Show your audience you are excited by your subject matter by raising your hands to chest level, aka the PassionPlane. This sends your own heart rate up, and your audience will mirror this physical reaction by getting excited with you.

Avoid dangling your hands by your side when giving important messages. When you are still, your brain gets messages to slow down breathing and heart rates, and your voice will take on a depressing or sleepy downward intonation. Again, your audience will mirror this action – and that’s how to put them to sleep!

Keep your gestures symmetrical. The brain understands symmetry in the body more easily than asymmetry, and we find it more attractive. In nature, symmetry is seen as an indicator of a healthy gene pool.


Avoid having your hands at mouth level when speaking, for example when sitting at a table with your chin in your hands. We lip read more than we think, and when the picture of the words is taken away it becomes harder to verify the language. The audience will perceive or create negative feelings about the speaker’s intentions — in the absence of information, we ‘make it up’ and always lean towards the negative to prepare for the worst.

When giving a complex message, avoid complex movement, so no fiddling with your pen! It is hard for the brain to decode complex verbal language when it is concentrating on complex nonverbal behaviour. Your audience will stop listening while they try to understand what you are doing and what it means.

Don’t try to read other people’s body language consciously. Generally, most of us stand little more than a 50/50 chance of getting it right. Instead, concentrate on influencing your audience to mirror your simple and positive nonverbal behaviour, and they will be extremely likely to trust and engage with you every time you communicate.

You can contact Mark for speaking engagements or consulting services at 416 880 9965 or

To Be Or Not To Be…..In The Room That Is

Tuesday, June 28th, 2011

Should senior management be in the room during a session to identify the company’s strengths and weaknesses? That’s a question we’re asked quite often when we facilitate business planning sessions.

So here’s our point of view – and if you don’t agree with it, feel free to leave some comments telling us why not.

1. It’s an “all or nothing” question.

Regardless of who raises the question – the senior management team or the employees invited to the meeting – it’s often accompanied by the suggestion that management “leave the room at some point”.

That may seem like a fair proposal. But is it? Or is it just a way to make a difficult situation seem better?

How do you decide when management should leave and when they should come back? Because how does leaving and returning address the real issue – which is that the people invited to attend don’t believe they can be frank when the senior management team are present?

Management should either not be there at all or should be there all of the time. And the only way to make that choice is to tackle the real issue.

2. The real issue is………

The question is really about trust. The attendees don’t want to say certain things for fear of either not being understood and/or believed. And yes, there’s also the fear of some form of retribution – from being considered negative to being branded a troublemaker

We usually encounter the question when we work with companies whose revenues and profits have been dropping. They may even be losing money and have been through a period of “right-sizing” (according to management) or “downs-sizing” (according to employees). Or in companies where there has been a change of owner.

Both are examples of situations where change has caused uncertainty or where the management team thought that communication was regular and thorough – but the employees didn’t.

3. So how do you tackle it?

It is best done with a mixture of openness, logic and an outside perspective.

Everyone has to agree that the lack of trust exists.

The management team typically understands the value of the employees input and participation. But they also have to know how to act. They have to listen actively; comment only when appropriate; and watch the tone and language they use when responding to employees’ comments.

The attendees can usually be persuaded to suspend judgement until they are convinced that the management team is listening; not dominating the conversation; and not simply forcing their views on the employees.

If the meeting isn’t managed carefully all input/conversation will die. But if it is, then both the employees and management team will learn and trust will grow. Using an external facilitator can help

Logic and common sense dictate that, regardless of whether senior management attends the session or not, they are going to see the output. And they are unlikely to use it to develop a strategy without editing it. That output will only form a strong foundation for that strategy if everyone is in the room for the discussion and there’s been a frank assessment of the company’s strengths and weaknesses.

As a third party we can, for example, point to the investment being made in the session and that it is the first step in developing a growth strategy to secure the future of the company.

4. Final words.

The management team must be in the room. But they have to understand that when the culture is changing most people are confused and uncertain. And when they’re uncertain they usually avoid anything they consider risky.

The attendees have to understand if they don’t speak up they have to take responsibility for not giving management the chance to act on their thoughts.

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