Corporate Culture

Image Source: Christian Bucad, Creative Commons

Continuing the discussion – click here for Knowing the Answer Can Be Very Costly Part 1.

If it’s costly for a manger to stop listening because he “knows” the answer, imagine the risk involved when this same attitude pervades a company’s culture. I can give you two examples of this problem – one taken from my own experience and one you’re all familiar with.

A few years ago, I worked closely with a high-technology company with clients around the world. The leadership team understood it was vital to serve their customers and they devised their own customer service rating system.

Every month, the CEO and the leadership team received a report that showed the customer service scores for each of their clients. They were proud of the fact that their biggest client consistently received the highest scores in their system.

But one day, I was called into an emergency meeting and told that this No. 1 customer had terminated its contract. The leadership team and the CEO were stunned. They were sitting around the table saying, “How could they have fired us? We always made sure they received the highest customer service rating of any client!”

The answer back from the customer was, “You didn’t listen to what we were asking of you.” The customer service ratings measured those factors my client deemed important, but it overlooked other factors the customer valued. The team that collected the ratings was so enamored with their “answer” that when the customer was asking for something different, they didn’t hear it.

“The outcomes are never in doubt”

In the aftermath of General Motors’ bankruptcy, a lot of the blame rests with GM’s failure to listen to its customers or employees. Rob Kleinbaum, who spent 24 years with the company as an employee and a consultant, described meetings at GM as “exercises in procrastination, rubber stamping, or idea killing, without anything that would pass for genuine debate or dialogue.” Those are classic symptoms of a leadership culture that “knows” the answer.

The same problem had been going on for a long time. Twenty-one years ago, one of GM’s top executives, Elmer Johnson, wrote a cautionary memo to the executive committee. Johnson said that the company’s “most serious problems pertain to organization and culture.” Old assumptions about the stability of the auto market and the advantage of massive scale were no longer valid, but the entrenched culture could not be challenged.

Johnson complained that “the meetings of our many committees and policy groups have become little more than time-consuming formalities. The outcomes are almost never in doubt. The important decisions have almost always been reached behind the scenes before the time of the meeting. Accordingly, there is a dearth of discussion and almost never anything amounting to lively discussion. … Our culture discourages open, frank debate among GM executives in the pursuit of problem resolution. …. As one case in point, our poor quality and reliability in recent years was surely attributable in large part to GM’s historic resistance to creating an environment in which problem identification and correction is consistently applauded and encouraged by management.”

Companies and leaders who know the answer don’t tend to listen well, so they turn a deaf ear to problems that may eventually overwhelm them. Not listening to others is a form of pride and arrogance. The antidote is humility.

Being a humble leader doesn’t mean you have to be weak or self-effacing. It means you have to be grounded in the truth, and smart enough to realize that the truth needs to be discovered, not decreed.