corporate perception gap
CORPORATE PERCEPTION GAP
Message to CEOs
Laszlo Kövari
You are walking to a meeting room, going through the information technology department and see 15 programmers sitting in an open space environment with headphones, staring at the screen and typing away. The phone rings, one of them answers whispering, then hangs up. He is leaving the room while making a cell phone call.
As you continue you just catch a glimpse of a project manager leaving somebody’s desk. Once he leaves people exchange meaningful glances.
You arrive at your meeting with 2 directors who are going to give you updates. The one you like personally is nervous, the one you can’t relate to is dead calm.
These signs indicate an underlying, damaging phenomena, that doesn’t only threaten profitability on the low end but the company and it’s purpose on the high end as well. This phenomena is the Corporate Perception Gap.
Corporate Perception Gap simply implies that management and staff are not on the same page. This is of course bad news for both. What is interesting is that it is typically the staff that is aware of the gap, while management is mostly blind to it, rationalizes it or flat out denies it. Due to this unawareness management’s actions cause “revolution” and disruption, eventually leading to drastic measures: either staff or management will be replaced or reorganized.
Such disruptions eliminate information flow, which means management doesn’t know what’s going on, as well as knowledge deployment, which means the organization doesn’t know what to do in defining moments. Essentially the organization becomes mechanized: instead of being a living, thinking identity, itself the source of change, a real qualitative factor on the market, it becomes “dumb”, just like a machine measured purely by quantitative standards. It becomes reactive to such a degree that the measure of success is often “reaction time” to market conditions. The company becomes a feeble reflection, a mirror image of what it should be, doing almost everything opposite the way it should:
It subordinates thinking to process, instead of process to thinking. This essentially results in “selection based” leadership and the long term decline of quality when it comes to execution. Selection based leadership is focused on choosing between available options instead of creating options. Such a model discourages qualitative, valuable initiatives like innovation (out of the box) and only appreciates the number of initiatives that stay within the box. Not only is this counter innovative but it also eliminates the foundation of respect both between peers and between staff and management: respect what? There is no culture, and if management talks about one, it is not real.
It defines reliability by predictability. True talent is not reliable because they always seek to go beyond boundaries so the company doesn’t know what to do with them. Top management forces itself to promote who it considers to be the least likely to challenge the process it previously selected. True talent is subdued and silenced or forced to leave the organization. As a result of this, the company isn’t even aware that what he preaches about people being their greatest assets is an empty cliché. Again: respect is lost.
It builds reverse hierarchy. Management puts the most value on specialization, less on management and leaves no room for leadership. To make things worse it verbally promotes the opposite, true hierarchy, which simply means that the company doesn’t walk the (w)talk. Management operates in a state of schizophrenia. It doesn’t believe what it knows and doesn’t know what it believes. This uncertainty creates fear that is apparent throughout the organization. People think this is only fear for one’s job. In actuality it is a fear much more severe than that because it relates to an identity crisis. Once true hierarchy is created the schizophrenia and the resulting fear disappears.
In a true hierarchy the role of leadership is to provide integration. This can only start at the top. Integration between perspectives, between often seemingly disruptive innovation and processes, between thinking and the deployment of knowledge, between management and staff. Such leadership walks on the borderline between visible and invisible reality. Invisible reality is the purpose of the organization, visible reality is the particular stage in the realization of this purpose.
Next in the hierarchy is management, which is focused on the integration of functions and skills. Management deals with specialists, enabling them to evolve using skills and capabilities and eliminate all distractions. Specialists are not interested in “leadership” issues, which they often confuse with “politics” and are the happiest when they can just do their jobs. They derive great satisfaction from the perfection of skills and success is defined by being the best in their particular field. Management earns the respect of specialists by understanding details and by enabling their evolution. Management earns the respect of leadership by being able to understand principles and values and relate it to specialists. Leadership is above skills and functions and it is concerned mostly with principles, strategy, identity and context. Direct communication between leadership and specialists should be, if possible, one-way only: leadership should listen to specialists. Communication from leadership to specialists should go through management (facilitators) because specialists can’t relate directly to leaders only to management and each other.
High level alignment must be made between leadership, management and staff, between strategy and operations; this is the foundation of “execution excellence”, whereas low level alignment is made between strategy and people, processes and customers.
The execution of strategy, and achieving alignment prior to that, however cannot be successful if the Corporate Perception Gap (CPG) is not eliminated.
The bad news is that it is almost impossible to eliminate the CPG… at least without drastic measures, “reorganizing” or replacing either staff or management. And even worse news is that -to varying degrees- every organization that has been operating for more than 5 years experiences the CPG problem.
The good news is that this kind of reorganization or alignment is based on awareness of the solution as opposed to merely on awareness of the problem.
Ironically the company maybe successful financially, yet have a CPG. This is in fact the most dangerous situation because the Gap maybe the largest in times of financial success. This is when management makes the most mistakes and is the blindest, consequently this is when the seeds of failure are being sawn.
So what can be done?
Be aware of the Gap. The signs are everywhere and there is no such thing as an insignificant or unimportant event. When walking around, always look for anomalies. The examples above indicate organizational “disconnects” on several levels, which means there is no leadership/integration in place. Simple questions could have shed light on even more anomalies, like programmers exchange emails with their peers sitting next to them. By using headphones and avoiding even eye contact they are trying to recreate the cubicle walls management decided to remove because they had thought it fostered a creative environment. This of course indicates a lack of understanding about the nature of the programmers’ job, a lack of information flow from the programmers to management, ineffective management and lack of communication between leadership and management. Specialists, management and leadership operate in silos.
Profile, reorganize. Know your people and your own place as well. The organization is not the company, and the company is not an organization: it is organized. This means that ideally the company is an organic organization and not an artificially assembled “entity”. Leaders organize around principles, managers organize around leaders, specialists organize around managers and functions. Internal placement should be a continuous effort, always refining the balance between skills, capabilities and performed functions. People instinctively want to move to the roles they belong to. Work out a plan with your HR managers to enable people to communicate where they belong. Once there, let them function. When they are not in their own place, they are inevitably nervous, often fearful since they are out of their element. Hire a consulting company to help you. Look for profiling systems that identify predispositions HiHhhhto tasks as opposed to “personality profiles” and ensure that people are doing the right job. Manage change appropriately. If you are a CEO be aware of whether you are a leader (when you read, you probably read poetry and philosophy and when you write or speak it is about purpose) or a manager (you read business books by corporate leaders; you write about how your knowledge can be implemented in your environment). Hopefully you are not a specialist (you read about problems and solutions in your domain, you rarely write). If you are a manager use consultants who can provide you with the higher perspective you need. Make sure that the consultants you hire are not specialists. If you are a leader surround yourself with managers who get excited about and truly understand principles, context and strategy. Your job is integration and to decide where compromises are not to be made. Let your managers decide on where compromises can be made.
Lead. Stay in the leadership domain. Your biggest enemy is disintegration! In order to be able to integrate you must be living in the Whole; this is the only way you can be truly aware of what’s going on…more so than anyone. Integrate both within and without the organization. The concept of the organization is based on principles. What is the context of your organization and what principles is it based on? Align your board and advisors along principles. ALWAYS search for context. Think! Get used to writing before reading. Reading is a passive knowledge acquisition tool, which is most useful for specialists and managers; pre-digested knowledge disintegrates the Whole. Subordinate finance to principles! This is something only you can do and probably something only you can understand. Exercise this power wisely. Make sure the managers surrounding you trust your judgement on this. Know your principles and live by the corresponding values. Always look for anomalies and investigate. Since organization starts from the top, whatever happens in the organization is related to you and is your responsibility.
Preventing the appearance of the Corporate Perception Gap is only possible by living in a different “reality”. To create this reality is the responsibility of one person: the CEO. Once the CEO makes compromises and stops thinking or leading and becomes unaware, it is only a question of time before the CPG becomes visible.