December 14th, 2022 | From our CEO
I am sure you know the reality TV show “Undercover Boss”. A CEO works in disguise alongside employees to reconnect with what is going on in the business. The CEO gets surprised about the reality of the company and often decides to do whatever possible to change the reality in both the short- and long term.
Is “Undercover Boss” just a reality TV show – or does “Undercover Boss” display the unpleasant truth about how disconnected CEOs are from what happens in their companies?
I am convinced of the latter, and I believe this is the golden opportunity for IC professionals to move the needle inside their companies.
Water Melons, Mum’s, and the illusion of the org chart
Firstly, let me share a few organizational insights with you that I believe will convince you of the same.
Water Melon cultures have become the norm.
In a “Water Melon” culture the unpleasant truths are hidden from the CEO, as his/her reaction is feared. The messenger may be shoot for delivering bad news. Regretfully, the “Shoot-the-Messenger”-syndrome happens every day in businesses across the world. For the same reason, staff color all KPIs green, so they look nice on the outside. Yet, if you cut through the surface, it is all a big mess and should have been communicated as a red KPI.
Is the real organization running at risk? If one person is removed from the network, then it disintegrates and a drop in performance and disconnect in communication is to be expected. In this case, the person had just signed her resignation.
The Mum-Effect keeps CEOs away from the truth until something is really broken.
I have five brothers. Every time we had made trouble – and we did it a bit too often… sorry mum – we either kept it as a secret for our mum or made the trouble sound better. All to protect our mum from reality! Bob Sutton, one of my favorite thinkers, argues that this happens in companies every day. He calls it the mum effect. The impact of the mum effect in the organization is that bad news becomes a happier and happier story the closer it gets to the top of the organizational hierarchy. The result is clear… the CEO never hears about the trouble, until something is really broken! I have a personal example: my best friend and I managed to glue together a very old antique inherited glass that we had broken after playing soccer in the living room. My mum did not notice until six months later when I had forgotten all about it…
The illusion of the org chart.
The first action of a new CEO is often to build a new org chart, as it gives the illusion of being in control. In my humble opinion, the org chart has become irrelevant as a tool to steer work. In 2005, only 1/10 of staff primarily worked outside their own box in the org chart. Now, it is 9/10. For the same reason, peers have become more important than the immediate manager for most employees. Change happens at the water cooler, not at the town hall meeting or through top-down communication cascaded down in the organization.
Voice of People is identified across the organization. It is not enough for IC to find the most influential staff. It is more important to reach all corners of the organization, or in other words, to maximize the organizational impact of the Voice of the People.
CEOs are disconnected from the reality
CEOs and other top executives are disconnected from the reality in the organizations they are supposed to lead and we have the data to back that statement.
Firstly, they do not know who drives the daily sense-making in the organizations.
Data show that sense-making is not equally distributed among all employees. We use peer identification to diagnose how influence travels. The numbers should be intriguing to IC professionals because 3% of employees influence 85% of their peers. We have even established that those 3% drive all perceptions. Unfortunately, CEOs and other executives do not know the 3%.
Secondly, CEOs are never hearing what is going on in the organization.
Is that a problem? – Yes, because that makes it impossible to drive successful change. If the organization cannot make sense of what the CEO is looking to achieve – and if the CEO does not understand the reality faced by the organization, then change will never happen!
An example: the top executives had just launched a new strategy, so we asked the organization to describe the strategy in their own words. The evidence was clear. The top executives were all positive (they had spent nine months on defining the new strategy) and used words like innovation and growth to describe the strategy. At the bottom of the pyramid, the words were all negative, like cost-cutting, layoffs, and cumbersome. Pushing a change forward, when there is such a disconnect in perception, is certainly a road to failure. Luckily, the executives decided to halt their change and engage in sense-making conversations with their “voice of the people” group.
The real org chart displays how people are connected. A network view displays how people are connected. Lines display hidden organizational elements, like who people go to for advice, who gives energy, who collaborates, and who is accessible to whom. The figures display organizational attributes e.g. the color, in this case, displays departments, whereas the form shows the hierarchical level. Simple network illustrations of smaller organizations can be developed manually – see here: Internal Influencers through the #ThreePercentRule
Is this the golden opportunity for IC?
The direct connection between the top and the bottom of organizations must be re-established! I believe strongly that this is a golden opportunity for IC.
CEOs and other executives need to expand their internal exposure and conversations to include vertical interactions with lower-level employees. I do not see a better place to get this facilitated than in IC.
Specifically, I believe IC should take on the responsibility to:
Identify who drives the conversations at the water cooler
Connect the CEOs to them
Make sure a disciplined mechanism is formed for trustful conversations with them, so they understand and embrace what is going on in the organization
Track the “voice of the people” on a continuous basis
Naturally, the CEO cannot talk to everybody in the company, and this is another critical element for IC to address. When people peer-identify who they engage with, they help you define the “voice of the people”. A small group of people, where you can focus your IC energy rather than a broad de-focused initiative. Much like Influencer Marketing!
Communication flows after a series of acquisitions. A company had engaged in a series of acquisitions. The lines show communication flows. The colors show the different acquisitions. Observation. The companies are still not acting integrated, but the diagram indicates exactly who IC should work with (and who not to work with) to integrate them.
“It is not rocket science”
IC can do this in any company that values trust, honesty, and transparency, and understand the value of IC. It is not rocket science.
Here are a couple of examples:
a biweekly brown bag was launched between the CEO and the 2-3 identified individuals driving the sense-making in the organizations. This was facilitated by IC, who drove this as a core communication channel.
a CEO was traveling between his +20 locations. Rather than using his normal routine to talk to local management, he changed his routine, and he talked to the “voice of the people” first, then the managers, and lastly held a town-hall meeting, where he up-front addressed the issues he had learned about from the “voice of the people” and discussed with local management.
The issues faced by the “Undercover Boss” were addressed; even without disguise!
IC professionals, what are you waiting for?
The 3% is a rule that represents the minimum number of the right people you should engage with if you want to maximize your impact. We identify the exact point, where it does not make sense from an efficiency point of view to engage more people.