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Lead by aligning your Brand, your Culture and your Social Network

November 30, 2010

Many of the brightest-bulb chief executives we talk to have been mentioning the end of command and control culture, what in the military is called C3 – Communications, Command and Control, instead using the easier to scale creation of healthy cultures.  We’ve written before (we started this blog in 2007) about toxic cultures and embattled companies, but now we’re seeing executives ‘get it’.  But there’s another aspect of brand and culture convergence based on the tenants of social media, making this transformation both more complex initially and ultimately, more successful.

A big, flashy and will-be successful restaurant, an outpost of a Vegas home run, recently opened in NY.  The NY Times gave it a ‘Fair’ rating and I asked some 20 something’s how that would influence trying it out.  The overwhelming answer was just short of “what’s the NY Times?”  Their opinions are based on peer reviews, Yelp and other sites being most mentioned and this is part of the social media fueled conversation about everything.  But why, I asked, would you trust a site that could be filled with paid-for bloggers/writers, hired by the restaurant or their very formidable PR firm?  Their answer was, sure, that could happen, but overwhelmingly, the sites they use consistently align with their own experiences.  Just like a person credible at face value, these few sites continually ‘re-earn’  their trust as the place to read and post experiences.  But that person has to be somewhat specific or their input is ignored.  For example, they told me the posting saying a restaurant or club is ”fantastic” is not very credible, while a more detailed posting about specific dishes or drinks and the atmosphere is relied upon.

Edelman, the giant PR firm, publishes a ‘trustbarometer’ report each year, having polled global opinion leaders, and the 2010 edition clearly shows how trust in the social media age depends on who is sending the message. If you’re an expert or academic, 64% said they would believe the source, while if a CEO says it, only 40% would take it in.  Interestingly, one of the tenants of social media, that the group knows all/tells all, is rebuffed since per this survey only 32% would trust a company’s employees.  Basically, they want a highly knowledgeable source they can trust based on past collective experience and that this person speaks ‘for them’, which is consistent with what the 20 something’s said about not relying on a (implied) 50 year old plus mainstream media food critic. Our society has evolved from people blindly adapting to their employer’s culture to needing their at-work and off-hours cultures to align around trust issues.

One survey area clearly resonates, aligning brand and culture. When asked what is most important in their positive view of a company, where in 2006 the top entries were quality of products and services followed by attentiveness to customer needs, in 2010, with our recession, people are concerned first about a company having transparent and honest practices followed by a ‘company I can trust’.  In Marketing terms, trust is reflected in brand equity.  In the US, cynical respondents (and presumably consumers as well), probably knowing someone who has been downsized, outsourced,  laid off or having heard about a company defending adulterated products, feel a full 59% of companies will revert back to business as usual post-recession and so mutual trust and two way transparency will determine the winners.  What‘s scarier is per this survey, in the US, from 2007 to today, Banks have lost trust by over 39 points (from 68% to 29% trusting), while impersonal technology has remained strong at 78%, which could mean we trust machines more than organizations at least when it comes to our money, even though the rules driving these machines were designed and programmed by humans. The other issue is, questionable business practices and sometime personal gluttony aside, we need Financial Services as our business lubricant unless we collectively decide to revert back to wampum. Leaving 79% of the population not trusting an essential business sector is a non-starter.

Aligning your culture, brand and trust is about communicating and living core values about who you are as a company, being open about how you do business and producing what you claim in ads and social media.  For example, the CEO of a large soup manufacturer was recently reported in the NY Times as saying his company lacked new products in the R&D pipeline and price was not a driver.   Bloomberg BusinessWeek, in a recent a report on the same company, said they were pulling costs out of manufacturing where one of the innovations was to base all soups on a core chicken broth base.  So their answer to falling sales is to destroy trust since if they will no longer use a specific recipe for each soup, simply manipulating the seasonings and how much can that differentiate products? Didn’t work for GM or anyone else for that matter, but why not here?  They seem to be selling based on lower COGS, which is great except that will not stem customers turning away from their soups towards inexpensive ready to eat meals and competing brands, which this CEO cited as his competition.  Clearly, the culture is wrong and the internal conversation stilted in this very fixed-in-its-ways company.

The key to fixing culture in this kind of situation is to incorporate all stakeholders from floor level talent to supervisors to mid-level to senior executives in a one tier internal conversation, an internal social network, rather than doing what would be seen as ‘in the shareholders’ best interests’, i.e. the ‘numbers’.   It requires giving up tops down metrics based command and control (“produce cheaper or else I’ll cut cost from my Wages P/L line!!!”), allowing peer communications across a broad range of activities to achieve a commonly accepted High Performance Organization operating language which is then implemented and managed openly and transparently.  It means an end to defensiveness and the Ottoman Empire style politics inherent with too many management levels. It means living full heartedly within the regulations, not trying to skirt rules because “we’re smarter than the regulators”. To put it simply, it means forcing a new culture of openness, candor and honest conversations, actively moderated and guided towards driving permitted behaviors, standards and execution timeframes designed to achieve corporate goals.  This is not reverting to kumbaya kindergarten or not protecting your IP;   it means treating people at work how they run their lives after work, i.e. not barking out orders and directives, instead giving them a range of permitted behaviors, i.e. a common social norm. The usual practice of a ‘same as always’ culture and a hot Facebook page is unacceptable in this new paradigm since we’re proposing a new integrated and economically effective management, not corporate communications, strategy.  For those companies in unionized environments, it will mean a hard effort to break through the kabuki theater like labor relations of each side playing an ancient role without fully knowing why it’s still being performed.

This change in paradigm, from C3 to managing by social network norms and trust will be the biggest change in corporate America for the next 10 years, forcing those managers who cannot evolve to leave, perhaps earlier than they had expected.  It also is our only hope of ending a no-lending, no-expansion, no-investment general business climate based in defensiveness, selling by price or brand destroying via de-contenting products or putting less product in the same size package.  It’s our best hope for empowering us to compete with the rest of the industrialized world.

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached at richard.eichen@growroe.com

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