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How to communicate corporate goals: seek out images, trim values, study advises

December 15, 2014

For more information, contact: Ben Haimowitz, 1(718-398-7642) or 1(917-903-9287), press@aom.org

How do leaders communicate corporate aims? Their most salient expressions of ultimate goals, company vision statements, are notorious for dull predictability -- whether expressing Coca-Cola's aim to "bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs," or American Express' vow to "work hard every day to make [itself] the world's most respected service brand," or Chevron's aspiration "to be the   global energy company most admired for its people, partnership, and performance."

Yet, as a paper in the current Academy of Management Journal   points out, "researchers have popularized the notion that leaders can inspire action by articulating the organization's ultimate purpose";  in fact, "some scholars have suggested that communicating purpose is the most central of all leader behaviors, because if infuses work with meaning and direction."

And it isn't as if leaders don't devote great effort to articulating their visions. One executive interviewed for the new study said she felt her 20-word statement for employees to be so "extremely important" that she spent two years crafting and re-crafting it.

The problem goes well beyond official vision statements themselves, according to the study's authors, Andrew M. Carton of the University of Pennsylvania's Wharton School, Chad Murphy of Oregon State University, and Jonathan R. Clark of Pennsylvania State University. On the basis of interviews with CEOs and other top leaders in 34 companies of varying size and in different industries and regions, they conclude that official communications reflect "leader rhetoric in ongoing conversation" and that "the wording in statements and the rhetoric that leaders use on a daily basis reinforce each other." Executives expressed themselves along these lines at orientation and training sessions, company-wide recognition ceremonies, holiday parties, and meetings in which the organization was determining its strategic direction.

In other words, the challenge here requires more than language-tinkering by creative consultants.

What makes for effective communication of corporate visions and the values that complement them? In the study's words, "Increases in performance gained from a shared purpose are most likely to occur when leaders simultaneously communicate a large amount of vision imagery (e.g., words that describe people, colors, and actions) and a small number of values…Image-based words are needed to bring these values to life by leading organizational members to reach the same understanding of how abstract concepts can be realized."

As elaborated by the professors, "the vivid detail gleaned from image-based rhetoric about the future (e.g., 'to one day see a city full of hybrid cars') leads employees to share a similar mental image, and the limited amount of conceptual detail gained from a focused value system (e.g., 'our core value is environmental sustainability') provides meaning that is construed in a consistent way by different employees." Image-based words, they explain, "include nouns with recognizable physical attributes versus nouns with uncertain physical attributes (e.g., 'children' versus 'customers'); verbs that indicate observable actions versus verbs that do not (e.g., 'smile' rather than 'enjoy'); and objects, people, and actions that are very familiar (e.g. 'parents')."

Unfortunately, "leaders typically transmit visions with concepts (e.g., 'to become the world's leading seller of luxury goods') rather than images (e.g., 'to see customers smiling as they leave our stores')." Among vision statements of 30 randomly chosen Fortune-500 companies, the researchers found, only three depicted observable behaviors. Moreover, leaders "tend to impart a number of values so large as to harm employee sense-making...They under-utilize imagery and then further obscure the clarity of their rhetoric by over-utilizing values."

In contrast, those who "convey a vision with image-based words cause organizational members to not only visualize a future scene but the same future scene. Leaders who express a small number of values cause organizational members to not only ascribe these image-based words with meaning but the same meaning."

Further, following these two practices contributes measurably to effective organizational performance. In an analysis of leadership rhetoric in 92 California hospitals, the study finds that the combination of the two bears a statistically significant relationship to a key indicator of clinical excellence -- namely, the rate of readmission within 30 days of Medicare patients treated for heart attacks. Controlling for a host of relevant factors, a comparison of statements with many image-based words and those with just a few of them credits the former group with reducing those readmissions by as many as two per hospital per year, which would amount to about 600 fewer readmissions across all the hospitals in the state. But the relationship remains statistically significant (with less than 5% likelihood of being due to chance) only if leaders express four or fewer values, as more values dissipate the force of the vision. 

How can fewer values result in improved clinical outcomes? In the professors' view, by enhancing coordination between patients' physicians and the nurses who oversee patient discharges. As the study puts it, "a small number of values is likely to contribute to a strong culture, in which individuals share the same general understanding of which types of actions are encouraged and which are discouraged." In contrast, "a hospital leader who communicates multiple values (e.g., efficiency, accountability, quality, integrity, and innovation) may lead hospital employees to be guided by different implicit protocols" to the detriment of coordination among staff.

To further test their thesis, the professors conducted an experiment in which 62 three-person teams recruited from an online database were asked to design a toy. The best designs were produced by groups spurred by a vision statement with strong imagery (toys that "will make wide-eyed kids laugh and proud parents smile") combined with just one value randomly chosen from among a variety that commonly crop up in values statements (such as those enumerated in the previous paragraph). The combination fostered goal-sharing and coordination among group members, which in turn abetted performance.

How, then, can leaders be helped to produce some measure of inspiration in their communication of corporate goals? Prof. Carton offers several suggestions. One that he calls the "time-machine test" entails imagining how the world will look differently in 10 years because of what the company is doing today. A second, the "champagne test," conceived by academics Chip and Dan Health, involves envisioning achievements that would merit cork-popping. A third is simply to avoid numbers. And, finally, the professor says, "follow the advice of this study: seek images and spare values - children and parents rather than customers, smile and laugh rather than enjoy." Asked for a favorite example, he credits Toys R Us: "To put joy in kids' hearts and a smile on parents' faces."

The study, "A (Blurry) Vision of the Future: How Leader Rhetoric about Ultimate Goals Influences Performance," is in the December/January issue of the Academy of Management Journal. This peer-reviewed publication is published every other month by the Academy, which, with more than 18,000 members in 119 countries, is the largest organization in the world devoted to management research and teaching. The Academy's other publications are The Academy of Management Review, Academy of Management Perspectives, Academy of Management Learning and Education,  and Academy of Management Annals   .A sixth publication, Academy of Management Discoveries,  is currently accepting submissions and will begin publishing in March 2015.

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