Management Today

Australia's leading magazine for managers

The importance of great leadership communication

3rd Apr 2014 08:31
Daniel Lock

By Daniel Lock 

In 1987 Paul O’Neill became the CEO of Alcoa. Taking over the helm of a company usually means making grand statements about finances, about cutting costs, and change the investment priorities. B

ut what O’Neill did at his first investor press conference was a little different. Yes, he shared the new strategic vision of the company and declared a reorientation of the priorities. But it was one thing and it stunned Wall Street. His number one priority?


O’Neill wasn't making a platitude. He set what most considered unrealistically high goals for the aluminum manufacturer. But think about it. What front line manager and worker can’t get behind a process improvement initiative that improve safety? What about a union? Improving safety improves morale, the conversations and thus the productivity of the organization.

This focus on safety showed up in the numbers too. He also put a shine on the metal giant's financials, presiding over Alcoa's greatest growth. O'Neill helped push Alcoa's annual earnings from 20 cents per share in 1994 to $1.41 in 1999, when he stepped down.

O’Neill said part of the role of leadership is to create a crisis. And having a single goal that galvanises the organisation is the essence of change leadership.

I began my career working for a major Australian bank, Westpac. It afforded me a great deal of opportunity, training and development. But at the time banks in general and Westpac especially were not faring well in terms of tier relationship with the community. Westpac had returned from the brink of bankruptcy in the early to mid 1990’s and had made a great deal of cuts, and branch closures affecting customer satisfaction.

In the early 2000s David Morgan, then CEO, realised the organisation needed to excel in service to compete otherwise it would bleed customers to the competition. To galvanise the organisation we declared the goal and theme of “Ask once.” Unlike most top down initiatives of the time this one resonated with employees. Which call centre operator wants to speak to an irate customer who’s calling back for the third time for the same issue.

All projects, investment budgets, training programs had to demonstrate how it contributes to the goal of the Ask Once.

What change leaders can learn from Alcoa and Westpac is the power of a single unifying goal that galvanises the employees to action. That if achieved is unambiguous in it’s benefit to customers, employees and shareholders.

How Telstra sparked a cultural transformation

More recently, Telstra, the Australian telco, completed a cultural transformation. Three years ago Telstra was facing the reality that the fixed line business, once the cornerstone of their earnings, was facing imminent demise. After all, today there are more mobile phones in Australia than people. To compete in this new world of telecommunications, Telstra needed to move from engineering and "we own the pipes" mentality to that of what they called "customer advocacy.

When it comes to a cultural transformation, first things first. Telstra started with their leadership. CEO David Thodey carefully outlined what "customer advocacy" meant for all levels of the organisation and insisted the 300 top managers of the 40,000 strong employee base exemplify these behaviours. He revamped reward and recognition programs and initiated one-on-one coaching and development plans to help staff along the journey. To be sure, not all stuck around. But Thodey pressed onward, confident that leadership alignment would be essential to the transformation.

Telstra has made significant inroads, dramatically reducing referral to the telecommunication ombudsman by 26% and overall calls from consumers by 20%.

Although the company's fixed line revenue declined by 6.1% again this year, Telstra has added 1.6 million new mobile customers in the past 12 months, bringing their total to 13.8 million. It has 2.6 million fixed broadband customers and 1.4 million on bundled plans. In addition, the company increased its business in Hong Kong by 475,000 to reach 3.5 million customers.

Leadership is critical to driving change and transformation because above all, leaders must exemplify the change in behaviours they wish to see.

Ultimately motivation is intrinsic. Employees will not get behind the next random idea their manager has just because they’ve come back from a conference exited. And nor will customer buy from you because of your latest advertsing campaign. You need to demonstrate, why this change, this product or service is in their best interest. To galvanise your organisation around your next change think through the single thing that if improved would cause everything else to fall in line. 

More by Daniel Lock

About the author

Daniel Lock is the principal of Daniel Lock Consulting, which helps organisations to unlock value and productivity through project, process and change management. You can contact him on his blog , by email or twitter. Download is latest free eBook: The Fundamentals of Change Management.


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