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Tuesday, February 17, 2009

Rereading (and Rethinking) Your Organization’s Classics

When you last read your organization’s annual report ... oh, sorry, you never read it?

How about the annual business plan? The code of conduct?

Well, pull them out because I want to chat with you about them for a few minutes. What’s that, you don’t know where they are?

We’re talking about important documents. They must be because no money or time is spared benchmarking them, jawboning in committees about content, and pressing out the wrinkles in the language. Yet, ironically – I mean, strangely – the audiences for whom those documents are intended do not scurry to read them or spend much time applying the information. Some do, but certainly not in the numbers hoped for.

Why is it that much more attention is paid to the annual report, business plan, and code of conduct -- the “classics” of the organization -- before they are published than afterwards? And why hasn’t management done much over the years to change the situation?

3 Reasons the classics are overlooked

1 The classics are intended to be gates but end up as bulwarks
Undoubtedly, the CEO and his/her management team are proud and bullish about the organization’s financial and people resources, and especially their potential. Consequently, they want to:
  • parade that good-news story in the annual report;
  • embolden the team with the business plan; and
  • ensure that employees continue to act like the good people they are by crafting a code of conduct for them.
However, what comes next is the delegation of good intentions to group processing. Those chosen as captains of the report, plan, and code projects are typically finance and legal, inside-out thinkers, who view communication as what people need to hear. Outside-in thinkers, who start with the audiences’ interests and work backwards, are assigned to the outfield.

For the inside-out captains, the challenge is not too difficult initially: simply clone documents from previous years or borrow similar language and formats from similar documents from similar organizations.

Then, cracks appear.
  • Someone argues for using “optimistic but guarded” rather than “confident” in the shareholder letter of the annual report.
  • The head of a new product division wants to up the ante on sales projections in the business plan and “push people to deliver.”
  • Yet another executive describes the reality of kickbacks in some countries and suggests that the language in the code of conduct may be too legalistic.
You know what happens from here. Numerous meetings and numerous iterations (I once wrote 32 drafts of a corporate annual report!). Personalities clash, credentials get flashed, and, in the end, weariness gives in to compromise and vanilla language. The gates of communication close; the organization's defensive bulwarks are refortified

2 The audiences know what’s in the classics. No need to read them.
  • The annual report highlights what happened last year, which most folks already know. Too bad investors – the audience – want to hear what’s likely to happen next year and the expected rewards of being “well-positioned,” as the report says. Since there are no surprises in the report, no groundbreaking developments, and no invitations to join in the discussion, there is also no need to pay much attention.
  • The business plan often is overly ambitious and strongly suggests that success will be achieved only if employees work harder than they were told to work in last year’s business plan. There’s usually not much in there about innovation and collaboration -- or about accountability for last year’s failures.
  • Simply put, the code of conduct is written for the exceptions – the people who screw up and those who cut corners -- not for ethical folks, or so employees think. And the miscreants certainly won’t be reading the code.
    • 3 Management marches on
      Having worked for and with CEOs over the years, I sense they are resigned to the fact that whatever meaty content they start with for the report, plan, and code inevitably will be ground into hamburger by group-think. In part, they give up, and, in part, getting on with the business is much more important than upending organizational democracy. At least the CEO has documents he can refer to when talking with shareholders and the media.

      Besides, the audience doesn’t seem to be upset that the classics are not more communicative than they are.
      • I have rarely seen shareholders coming into an annual meeting holding the previous year’s annual report and quoting “you said” to the CEO.
      • Rarely have I known master business plans to work their way down into departmental plans of every functions, including support functions, or into individual performance plans where they might get traction.
      • And the code of conduct didn’t seem to matter much to executives who over-promised, under-delivered, enriched themselves, and are now sorting mail in prison.
      In other words, those documents are important, they just don’t matter that much.

      I happen to think the annual report, business plan, and code of conduct, among other organizational classics, do matter. That’s why I have five remedies for curing what ails them.

      5 Remedies
      1. Annual report: The CEO should thoroughly read three drafts of the annual report, make changes, and raise questions. His/her changes are irreversible, and each successive draft should resolve the issues raised by the CEO on the previous draft. The final version goes to the CEO for approval after the heads of investor relations and communication have agreed that it will communicate effectively.
      2. Business plan: The litmus test for whether the plan is viable or not should be its ability to be translated into departmental and individual performance objectives. No translation, no plan.
      3. Code of conduct: Integrate this document with a “values” statement, call the combined piece “What We Believe, How We Show It,” and survey employees after a year to determine if it is working at street level.
      4. The annual report, business plan, and code of conduct should not be approved until they are linked to comprehensive, workable communication strategies.
      5. Humanize the classics.

      Richard Skaare 02.17.09

      Photo credit: Cam Uhlig, Camagine


      Anonymous said...

      A lot of noise has been made about Zappos' company culture and their practice of publishing anecdotes from employees in a book each year.

      I wonder how they approach their "classics". Hopefully with the same clear thinking and practical application you outline here.

      A pleasure as always!