The Power of Executive Candor

Recently, I spoke with L. J. Rittenhouse, president of Rittenhouse Rankings Inc., a strategic investor relations and coaching company. When I heard about her recent book Investing Between the Lines: How to Make Smarter Decisions by Decoding CEO Communications, I was intrigued by this idea that decoding executive communications can help me pick better investments.

After reading this book I realized that her research and findings go beyond investing.  Rittenhouse’s research introduces new, important ideas about strategy, culture, communications, values, and trustworthy leadership.  Not long ago, I asked L.J. about how philosophy and research are supported by her work with CEOs and investors.

The Power of Words and Corporate Culture

You have said frequently that, “Words matter as much as numbers in determining the investment potential.”  That’s not something I typically hear on Wall Street.

Candor is the domain of leaders. -LJ Rittenhouse

I’m sure you’ve heard lots of pundits boldly predict the future by looking at past historical trends.  How many of these predictions came true?  Not many.  In fact, Warren Buffett has observed that if the future resembled the past, then the Forbes 500 list of wealthiest people would include a number of librarians.

COVER - Investing Between the Lines

My research shows that while no one can predict the future, we can create the future through our communications.  We do this when we choose words that inspire others to imagine new opportunities – and let go of the status quo.  This is a critical competency in today’s world.  Standing still is not a viable option.

One of the great delusions in business is the idea that words don’t matter.  They do. When my clients choose candor over obfuscation, they build reservoirs of trust.  In fact, the words a CEO chooses will reveal the trustworthiness of the corporate accounting.  This becomes obvious when you understand how financial statements are created.

It starts with company employees who decide how much cash to recognize during a reporting period, and when and where to report it as earnings. These judgments may be conservative, like ones you’d expect at a Berkshire Hathaway company, or they may be aggressive, like Enron’s accounting.

CEOs who rely on jargon, clichés, and confusing statements to explain their strategies will weaken trust and create cultures of fear.  Employees will be discouraged from speaking truth to power. Rather than attend to the needs of customers, colleagues, owners and other stakeholders, they will look out for themselves. This increases enterprise risk and destabilizes earnings.

We create the future when we choose words that empower and energize others. -LJ Rittenhouse

On the other hand, CEOs who adopt a candor standard and choose authentic, relevant words will create high performance cultures.  Striving to meet the needs of the company’s stakeholders, these CEOs and employees will execute clearly defined strategies.

Candor as a Competitive Advantage

Let’s go back to Warren Buffett. He’s a master communicator. Many people who don’t even invest in his company read his shareholder letters.  Since you’ve studied them at a level most don’t, tell us what characteristics make them exemplary.

Buffett’s letters stand out because: 1) he writes them himself and imagines an audience; 2) they reveal his investor partnership philosophy; and 3) he’s never afraid to say, “I was wrong.”

10 Myths of Creativity

 

The idea for the novel is not only clear, but the story is outlined and researched.  Still, the page is blank.  She is waiting for the inspiration to make it happen.

The business to create a fortune is constantly pushed to the backburner.  Magazines and books are consumed like candy as he studies ideas only to continue looking.  The idea never is good enough.

Someone is waiting for a divine moment, that flash of insight that is a near-religious experience.  Until that happens, the idea is frozen.

Creativity myths have been around for centuries.  David, you say that these myths hinder the creative process.  In fact, the subtitle of your new book is The Truth About How Innovative Companies and People Generate Great ideas.  How does knowing the truth about these myths help?  Why is rewriting the myths so important?

David Burkus is the author of The Myths of Creativity: The Truth About How Innovative Companies and People Generate Great Ideas. He is also founder of LDRLB and assistant professor of management at Oral Roberts University. Find out more about David at www.davidburkus.com. He also writes for Forbes, 99U, and the Harvard Business Review.

We’ve been writing myths for thousands of years. Myths are attempts to describe the world around us, everything from where sun comes from to the creative process. But myths are dangerous because they’re often not true, or at least are half-true. So it is with the myths surrounding creativity. They help us explain a little bit, but because they aren’t totally true, believing the myths in entirety can actually limit our ability to express our creativity. If we question them, find the truth, and rewrite them, then we stand a better chance of reaching our full potential.

3DCoverWileyYou are rewriting and busting these myths, but they are legendary in some ways because we love them.  That “falling apple” moment or “lightning strike.”  Why do we love these stories?

I think we tell a lot of these stories because they let us off the hook. If some outside force, a fallen apple or a lightning strike, is responsible for our creative insight, then the pressure is taken off us to generate great ideas. But creativity doesn’t come from outside ourselves, it comes from inside and from thought patterns we’re all capable of, as long as we believe we are capable of them.

Your new book The Myths of Creativity outlines ten creative myths.  Let’s walk through a few of these myths. Starting with the Expert Myth, aren’t trained experts the best source for creative solutions to dire problems?

Creativity doesn’t just love constraints, it thrives under them. David Burkus

Not always. In fact the research shows that many times professionals in a given field reach a peak early or mid-way through their career and then their contribution to the domain lessens. In Physics for example, it’s commonly held that PhDs will make their greatest discoveries before the age of 30. (Einstein was 26 when he published the paper that won him a Nobel Prize.) The reason is that expertise is important, but truly creative ideas often come from people on the fringes of a domain. They have enough experience to understand problems, but don’t have enough experience to write off “crazy” ideas without testing them. They don’t know what won’t work; so they try everything. The lesson is to keep learning and gaining experience in a variety of domains because you never know what field your breakthrough insight will come from.

Let’s talk about The Constraints Myth.  You write “constraints shape our creative pursuits.”  Give an example of how constraints encourage creativity.

We tend to assume that when we’re having trouble coming up with a viable solution to a creative problem, it’s because we’re too constrained. In reality, constraints actually help us find solutions. It’s impossible to solve a problem without understanding the structure around it. We can generate lots of wild ideas, but without the constraints of a problem, we’ll never know if those ideas are also useful. That’s why a lot of companies actually force constraints. Companies like 37Signals mandate small project teams and put limits on the amount of features their products can have. And it’s paying off for them. Creativity doesn’t just love constraints, it thrives under them. It’s like G.K. Chesterton suggested,  “Art consists of limitation. The most beautiful part of every picture is the frame.”

Are You A Lovemark?

This is a guest post by Brian Sheehan. Brian is Associate Professor of Advertising at the S.I. Newhouse School of Public Communications, Syracuse University. Previously he was with global creative powerhouse Saatchi & Saatchi, with CEO roles at Team One Advertising and at Saatchi & Saatchi Australia and Japan. Brian is the author of Loveworks: How the world’s top marketers make emotional connections to win in the marketplace (powerHouse Books).

No matter how much we think we have grasped it, love remains full of surprises. Most of us would say that we know what love feels like, but try to get people to explain what makes love happen (and how to keep it alive!), and you’ll find that that there are no guaranteed solutions. If we take our understanding of interpersonal love and apply it to brand love, the needs of the relationship share some similar characteristics.

So I hear you ask, how do I know if my brand has reached Lovemark status? Here’s a fast way to do it. Though Love tends to dominate conversations about Lovemarks, people forget about its non-negotiable partner, Respect. Without Respect, a brand can never be a Lovemark. It’s impossible to love something that you can’t trust or rely on.

It’s impossible to love something that you can’t trust or rely on. -Brian Sheehan

Ask yourself:

  • Does your brand perform best in class each and every time?
  • Does your brand stand for things your customers believe in and admire?
  • Is your brand good value for the experience it offers?BrianSheehan246

If you answer “no” to any one of those questions, you need to focus on building Respect before you get ahead of yourself. If you answered “yes” to all the questions, you can move on to thinking about building Love. Look at the questions below and see where you rate strongly and how your brand may need work. Love can get stronger — and weaker. Your job is to ensure that the hearts of your consumers only get bigger for your brand.

Mystery stimulates excitement, surprise and wonder. It’s the stuff that dreams are made of. To have Mystery, a brand needs to take on the role of storyteller: draw on its past, present and future; and also inspire people to dream.

  • Do people share positive stories about your brand?
  • Is your brand recognizable through an icon, logo, symbol or mythic character?
  • Do people feel inspired by your brand?

Sensuality involves interacting with our senses. Sight, sound, touch, smell and taste are direct connections to our emotions, and brands that have strong connections with their consumers provide distinct sensory experiences.

Your job is to ensure that the hearts of your consumers only get bigger for your brand. Brian Sheehan

  • Does your brand deliver the best in design?
  • What is the sound of your brand?
  • Does your brand deliver a physical sensation that people can’t find in anything else?

 

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Intimacy is where we get up close and personal, and it involves Empathy, Commitment and Passion. Consumers today want to be understood and feel cared for.

  • Do you act on feedback provided by your customers? Do you listen to them?
  • Do your customers have confidence that if something went wrong, you will do the right thing and fix the problem quickly?
  • Does your brand gain new business by referral?

 

Why Your Success Depends on Being Off Balance

Dan Thurmon is on stage, and I’m already wondering how I will describe this scene.  He’s completely different from other speakers, but I’m not even sure I would characterize this as speaking.  He moves effortlessly from motivational speaker to performer.  One minute I am furiously writing down nuggets of wisdom to review for later.  The next, I am gripping my hands together as I watch him balancing on a unicycle as knives are thrown his way.  After he leaves the stage, I intentionally eavesdrop on the others around me.  They, too, are trying to put it into words.

Dan Thurmon’s performance may be difficult to describe because he has blended his many interests and talents into a role that suits him uniquely and perfectly—roles that include speaker, author, juggler, and acrobatic performer.  Dan is a keynote speaker, a member of the prestigious Speaker’s Roundtable, and the president of Motivation Works, Inc.9781608320141

Dan dispenses advice that seems to contradict common wisdom.  He talks about life balance in a way that gets your attention: balancing atop a tall unicycle as he juggles sharp objects.

Here are five things you may not expect to hear from a motivational speaker:

  1. Forget balance.  The goal to have a life in balance in unattainable and also undesirable.  Life is off balance and you must be off balance to grow.  The key is to be off balance on purpose.  Embrace uncertainty to create a life you love.
  2. Let go to get a grip.  You need to let go of the necessity to control everything.  Let go of the need to do everything yourself.  Let go of negative emotions.  Letting go will free you.
  3. You won’t reach your potential.  It may seem strange to hear this from a motivational guru, but you have an infinite capacity to grow, learn and love.  Keep reaching higher.

Improve Your Happiness At Work

Kevin Kruse is a New York Times bestselling author, former CEO, speaker, and a blogger.  His newest book is Employee Engagement for Everyone.

Kevin, thanks for talking with me about your new work.  Previously, you’ve written for companies and managers.  Your latest book is aimed at everyone who wants to be happier at work.

What is “engagement” and why should anyone care?

Engagement is similar to being happy at work, but it’s a little deeper. Engagement is the emotional commitment someone has to their organization and the organization’s objectives. When we care more, we give more discretionary effort. Whether we are in sales, service, manufacturing or leadership, we will give more, the more engaged we are. Not only is this good for a company’s bottom line, but when we are engaged at work, we also end up being a better spouse and parent, and we have improved health outcomes.

How is commSpeechunication connected to engagement?

Communication is one of the top drivers of engagement. It is sort of the “backbone” that runs through the other primary drivers of Growth, Recognition and Trust.

What are your top three tips for improving communication?