CEO Mistakes: What Big Corporations Can Teach Us About Communications

The business press loves to attack big corporations and point out CEO mistakes which cause earnings to slip. I’m cautious about negative hype because journalists know bad news sells better than good news.

Yet it’s crucial to pay attention to the CEO mistakes journalists love to point out. When Microsoft, Google, and other huge corporations goof up, the effects may cause a dip in earnings, but rarely total collapse. The same mistakes made by small business owners, however, can cause total failure and bankruptcy.

What can we learn from the big guys? Pay heed to the following articles recently published on big mistakes being committed right now in these big corporate offices. Here’s a sampling:

Each article is full of examples of poor corporate communications. Too many big corporations have one-way communications from the top down, with no opportunities for employees to point out inadvertent consequences. I wrote about Microsoft’s challenges in this post here: Bad Leadership: What Small Businesses Can Learn from Microsoft.

Here are a few pertinent excerpts, from Harvard Business Review bloggers Boris Groysberg and Michael Slind, who ask this important question:

“What causes a company to go astray? Recently published reports on the slips and stumbles of two much-heralded companies [Microsoft, Netflix] provide a close look at some of the internal dynamics that can undermine optimal decision-making and effective execution — even within organizations that have a history of market-leading performance

“…What they [their leaders] have lost, in many cases, is the ability to enable organizational conversation. That’s our term for the process by which key ideas and crucial information circulate within a company…

“Where organizational conversation flourishes, leaders and employees alike are able to talk among themselves in ways that are interactive and inclusive: Ideas move back and forth between people of all ranks, and leaders empower employees to participate fully in cross-organizational collaboration…

“The factors that have led Microsoft and Netflix to lose their way are numerous and complex. Both companies face truly daunting competitive challenges, and we don’t claim that better communication alone can make those challenges go away. That said, all signs indicate that leaders at each company have lost their flair for organizational conversation, and that loss has made it difficult, if not impossible, for them to mount a nimble response to strategic problems and opportunities.”

What do you think about this? I haven’t worked at any of these companies, but I know from my own career experiences and those of my clients that open flow of information and ideas is a rarity in big organizations. It usually flows from top to bottom. It usually isn’t as clear as it needs to be. And the bigger the organization, the worse it seems to be.

How are communications encouraged in your own company? Are there tools set up that allow for multiple voices to express ideas and feedback? Just like social media allows for better communications with customers, so do interactive tools create new ways for the free flow of communications between managers and employees. But if leaders don’t encourage it, if they aren’t listening, and if they aren’t asking questions and having conversations, then all the tools in the world won’t help.