Often the dialogue itself results in a better concept. Nesbitt recalled a situation in which an employee proposed a new business idea. Nesbitt wasn’t convinced that it was a good idea, but the two of them kept talking about it. “I changed his perspective and he changed mine. Now we’ve morphed it into an idea that we both came up with. And the dialogue wouldn’t have ever started unless he brought the idea to me.”
Of course, leaders must sometimes take charge and make the tough calls, and in some cases there is no time to collaborate or solicit alternative views. But such situations are not the norm. “My way or the highway” is not an effective way to lead on a regular basis. As former IBM chief Lou Gerstner has said, workers should fear the competition, not their bosses. In an uncertain economic environment, leaders must solicit diverse viewpoints, remain open to new approaches and be willing to accept harsh realities.
Nesbitt is convinced that leadership means trusting smart people to make good decisions even when a suggested approach is unusual. When The Parking Spot, which owns and operates parking facilities near major airports, started in 1998 it was built around a relatively conservative brand. “A couple of years later we hired a marketing person to take control of our brand and the first thing he said was that our identity was all wrong,” Nesbitt recalled.
The new brand manager proposed a new identity based on black-on-yellow polka dots — “spots.” “He thought it was a good idea and I didn’t, but I knew if I was to be the leader I want to be, I had to let this go. It was the best leadership gesture to say we must do it,” Nesbitt said. He gave the go-ahead for a total rebranding campaign, and attributes much of the company’s subsequent growth and success to the new identity.
“It was the single most important business decision we ever made and I made it, not from a financial perspective, but because I knew it was the right thing to do as a leader.”
Yet over and over, companies fail to listen to new approaches or warnings of dangers ahead. They avoid the “unspeakables” — the formidable challenges that everyone acknowledges but no one is willing to bring up for fear of incurring the leader’s ire. Thus employees not only deprive the company of their own best thinking, but they miss the opportunity to collaborate and come up with better solutions. I believe that the biggest single failing of many companies is that they leave so much money on the table — the financial gains they could have realized had they heeded warnings and embraced new approaches.
Recent research conducted by consulting firm Ferrazzi Greenlight supports that conclusion. Writing in the Harvard Business Review, CEO Keith Ferrazzi reported that, of six top banks, those whose leadership teams scored the lowest on candor saw the poorest financial returns during the recent global economic crisis, while groups that communicated candidly about risky practices and potential problems managed to maintain shareholder value. Ferrazzi concluded, “True collaboration is impossible when people don’t trust one another to speak with candor. Solving problems requires that team members be unafraid to ask questions or propose wrong answers.”
When Sonny Garg became president of Exelon Power in August 2010, the company was facing serious challenges, including the closing of several plants, external industry challenges and regulatory changes. Exelon Power appeared to be shrinking and rumors of its demise were rampant.
In early 2011, Garg brought in the Center for High Performance to train leaders and managers to create an open, honest, non-punitive environment where new ideas could take root. Under Garg’s leadership, the company created the “Answering the Call” campaign to encourage communication, formalize the grapevine and bring hallway conversations into the meeting room. “We took people who are well trusted by their peers and made them conduits for information,” said Garg. “We’ve built a stronger sense of trust between leadership/management and employees. People want to feel that they have access to information. We treat them like adults,” he added.