Wednesday, November 16, 2005

Your Organization's Tone

What’s the “tone” in your company? New York City mayor Michael Bloomberg, in explaining how he grew his dominating Bloomberg LP financial-data empire, states that one of the most important things that a CEO or mayor does is to “set a tone.”

What exactly is a tone? Well, it’s the climate, the “vibe”, the mood, the value set, the persona, the spirit and soul of the place. These are abstract concepts, but they’re real, and I submit that just like our health is better with well-toned body muscles, a company would be wise to build a strong, vibrant tone rather than be satisfied with a weak, flabby one. While I can’t read Bloomberg’s mind about his definition of tone in his company, let me suggest some elements of strong, vibrant tones in other organizations that I’m pretty sure he’d approve of.

First, a strong tone permeates boldness. Organizations with strong tones strive to carve new unchartered paths . In other words, they avoid reactive mimicry. When Stephen Privett came on board as the new President of the University of San Francisco in 2000, the local press asked him about “the competition”. His response: “We compete against our own standards. Nobody imitates their way to greatness.” That non-reactive tone he instigated has helped galvanize USF to develop uniquely new programs in professional schools and fresh new approaches to liberal arts pedagogy. These initiatives helped propel the university to several national “top 100” lists in both undergraduate and graduate education for the first time.

Second, a strong tone is offensive. Defensive tones focus peoples’ attention primarily on protecting the company’s product line and defending its market share from competitors. That’s fine to an extent, but as former HUD Secretary Henry Cisneros points out, managers in both the public or private sector can no longer be content in “managing for steady state” because the incessant changes in the market will no longer allow steady-state success. That is why offensive tones are so powerful; they concentrate peoples’ attention on creating new products and markets, and attracting new kinds of customers. Forbes publisher Rich Karlgaard summarizes why talent and buzz is flowing towards Google at the expense of Microsoft: “At Google one works to change the world; at Microsoft one works to protect the Windows and Office profit margins. Which mission do you think (the most talented) people prefer?”

Third, a strong tone is marked by collective impatience and urgency. Ed Catmull, the President of Pixar Animation Studios, constantly warns his people about the dangers of complacency: “The success of Toy Story can make you think that you’re good at everything…It’s easy to fool yourself.” The “vibe” at Pixar is a constant hum of dissatisfaction with current results and a visceral resolve to make quantum improvements. Says executive vice President John Lasseter: “Every single one of our films has been the worst thing you’ve ever seen…” until brutally honest working sessions catapult the product to new heights.

Finally, a strong tone marked by hope and optimism. For people to strive for extraordinary goals, they must feel a confidence that it’s all possible, and desirable, and wonderful. Hope and optimism are essential parts of a healthy organizational tone because there are so many forces of resistance to anything that violates conventional wisdom. Ex-GE chief Jack Welch says this issue is so critical that one of the most important things a leader must do is to constantly resist “the gravitational pull of negativity.”

There are many reasons why companies succeed or fail, but their “tone” is certainly one of them. How does your company stack up?


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