Organizational Behavior: The Smart-Talk TrapBy Robert I. Sutton
Organizational Behavior: The Smart-Talk Trap
Ten years ago, I was hired as a consultant by the top managers of a Fortune 500 firm to advise them how to improve their group dynamics. As an academic who frequently suffers through meetings dominated by pompous speeches that have little effect beyond bolstering professorial egos, I wanted to see how things were done in the real world.
To my dismay, the firm's dynamics were just as dysfunctional. In particular, the team kept making the same decisions again and again, but they never got around to actually implementing them. My report to the CEO concluded, "A decision by itself changes nothing. You actually have to put it into action." Not only did they lack procedures for implementing decisions, but worse, they rewarded smart talk, not smart action. Witty people with exciting ideas got ahead, not those who did the gritty work of implementation.
My colleague Jeffrey Pfeffer and I call this problem "the smart-talk trap." It happens partly because saying intelligent and persuasive things has become central to management work, and there are so many rewards for smart talk. Even the best managers occasionally forget that words aren't of much use if they don't inspire action. Some managers also forget that if their words aren't credible, they will lose their ability to inspire action.
One cause of the current accounting scandals is that, at least for a while, analysts, shareholders and the press unwittingly provided so many rewards for smart-talking, persuasive and upbeat CEOs. In late 1999, a Silicon Valley lawyer told me that most startup companies fit Mark Twain's supposed definition of a gold mine: "a hole in the ground with a liar sitting on top of it." Looking back, this lawyer was right to argue that if these startups didn't start producing and selling some gold, they were doomed.
Worse yet, smart talkers from Enron, WorldCom and the like didn't just exaggerate prospects for the future, they cooked the books to bolster their lies. We now can see how stupid this was, but it wasn't long ago that executives who offered downbeat (or even mildly upbeat) news were routinely denounced. After all, the news was so good everywhere else that if a company wasn't doing spectacularly well, it was seen as a sign of weak management.
Hollow talk doesn't just happen at bad companies. Even the best managers sometimes forget that great ideas communicated in inspirational ways aren't enough to spark action. But our research suggests that the best managers use several methods to avoid the smart-talk trap.
Many companies spout vague and predictable platitudes about putting customers first, treating people well, doing quality work and so on. Yet some apparently reputable companies routinely violate such claims. One consulting firm had a much-ballyhooed policy that people should never travel on Sundays. The result: Their own consultants saw it as a cruel joke because that's exactly what so many of them had to dotravel on Sundays. Or, consider this excerpt from Enron's Human Rights Principles: "Ruthlessness, callousness and arrogance don't belong here." Or, more laughable: "We are dedicated to conducting business according to all applicable local and international laws and regulations with the highest professional and ethical standards."
The best organizations don't only turn knowledge into action; their philosophies also guide how people act. At Intel, manufacturing plants espouse and follow the "copy exactly" philosophy. Intel's leaders justify this by saying "physics works," meaning that if you change one thing at a time and hold everything else constant in a system, valid lessons can keep being learned. Intel has zealously followed this philosophy for years, and it's a main reason why Intel has dominated its industry, even while such competitors as Advanced Micro Devices develop superior designs.
Steve Mariucci, coach of the San Francisco 49ers football team, says coaches and players always talk about coaching techniques and exercise regimes they should use, but rarely get around to doing such things. Mariucci fights this problem by never wearing a watch, because "I always know what time it is," he says. "It is always now. And now is when you should do it."
The smart-talk trap is difficult to overcome when what leaders say clashes with what they do. Both President George W. Bush and Vice President Dick Cheney now face this problem. Most Democrats and many Republicans don't believe that Bush and Cheney, regardless of their ultimate guilt or innocence, are making sincere promises to clean up the accounting scandals when they might have committed these same sins.
Another impediment to action arises when leaders are inundated with more good ideas than they can possibly implement. Smart talk can be produced far faster than smart action: It is easy to say that a company needs a world-class Six Sigma program, but it takes years to implement one. We studied one company where the CEO seemed to fall in love with every new management concept and then announce a program to implement it: 360-degree evaluations, balanced scorecards, total quality and on and on. His managers learned to deal with the onslaught by pretending to adopt each program, but they didn't waste time actually implementing any of them. After all, each one would soon disappear, only to be replaced by another. Jeff Pfeffer and I call this the "Otis Redding syndrome." In the song, "(Sittin') On the Dock of the Bay," Redding sang, "I can't do what 10 people tell me to do, so I guess I'll remain the same." In companies, this means that managers get so much advice and so many new programs that they learn to ignore everything senior management says.
Lead by Example
Lead by Example
If you want your people to do something, regardless of your past actions or how many good ideas they hear, spend a lot of time doing it yourself, and they will believe you. Take a lesson from the late Ray Kroc, McDonald's CEO. When Kroc visited a McDonald's restaurant, he first wandered around the parking lot picking up the trash. He did the same thing in the restaurant. Then he would talk to the manager about the importance of cleanliness.
Companies that use talk to guide action often are led by those who know the industry and have done the work. Consider the SAS Institute. The $1 billion software firm has enjoyed 25 years of revenue and profitability growth, and Fortune consistently ranks it as one of the best places to work in America. At SAS, nearly every senior executive is a working manager, doing a job and managing others. This extends to cofounder and CEO James Goodnight, who devotes much of his time leading product development teams. By doing programming and development work, SAS executives have credibility with those they lead. People can't complain about a boss who does not understand their problems when the boss faces those same problems. And because they know the work, SAS executives talk about things that are closely linked to action. They are not likely to be fooled by smart talkers.
Finally, the best leaders realize that an uninformed but powerful person can undermine performance by asking irrelevant questions and demanding constant updates. As William Coyne, who led R&D at 3M for many years, put it, "When you bury a seed in the ground, you don't dig it up every week to see how it is doing."
CEO William Ryan is renowned for transforming the Banknorth Group in Maine into a powerhouse financial institution. Last year, I asked Ryan to name the most insidious cause of the smart-talk trap. His answer: reporting quarterly profits. Ryan says the relentless focus on short-term numbers and analyst opinion pressures executives to do things that look good now but undermine long-term performance. He suggests there would be far less hollow talk and useless action if companies could do financial reporting just once or twice a year. This is intriguing given the current scandals. Companies need credible accounting, but if we demand it too often, their ability to act wisely will suffer.
Robert I. Sutton is a professor of management science and engineering at Stanford University, and author of Weird Ideas That Work: 11 1/2 Practices for Promoting, Managing and Sustaining Innovation. Sutton also co-leads Stanford's Center for Work, Technology and Organization. His next column will appear in October.