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Communicating with Senior Management
A Harvard Review case features a division manager in Italy, Peter Arnell, facing a turnaround situation. Inheriting an outdated product line, poorly positioned against more efficient Asian competitors, he must present his corporate managers with a plan.
His best option, however — to enter a new market — violates instructions given him by his direct senior manager and does not comply with the near-term revenue targets set by corporate. The other options seem "safer" but are not likely to stop the $1 million per month hemorrhaging the division is suffering in 2009. Arnell has proven his ability to plan in previous positions with the company; being able to communicate with senior management will be key to moving forward in his current position.
"Communicating up" is critical. New ideas usually require funding and integration with other company functions and capabilities. It will help Mr. Arnell and others to understand the senior management perspective when commitment from them is needed.
The figure below captures the near-term and long-term concerns senior managers have. They are interested in both new markets and competitiveness at the business level and in growth and earnings at the corporate level. In Mr. Arnell's case, it would be best to not only talk about the opportunity of the new market, but to articulate how the company could exit the existing business AND how it would lead to eventual revenue growth for the firm. Can Arnell convince them?
While the "troops" and their managers often voice misgivings about corporate and senior managers' willingness or ability to listen, the disconnect is often based in where people place their day-to-day focus. At the business level, people are immersed in competitive pressures and pursuing sales targets. Senior-level managers value these things as well, but they also maintain a corporate perspective that may supersede these business concerns. Business managers like Peter Arnell would be wise to understand those corporate considerations, both current and future.
When communicating up to senior management about business opportunities, consider these things:
While it may seem that senior managers are tuning you out, good ones will not start from the premise that any single business is essential to the company. Your goal is to make discussion of opportunity address not just the short-term revenue (or productivity) goals, but with overall growth and profitability goals.
- Relate opportunities to the capability of the firm. You may be able to exploit a new market, but it is often unclear how this will align with the current capabilities of the company. Provide a solution that are more than a band-aid to a current problem. Does it have the chance to improve profitability? Does it leverage existing capabilities or require new, expensive ones?
- Talk at their level of concern. Senior managers are at least two steps away from the actual work. The chart at left should help you think about where their interests are (or should be), so avoid immersing them in operational details. They are too far removed from the day-to-day work.
- Explain how the idea can help the company grow (even if it is not market related, but focused on gaining efficiency or effectiveness). Growth is a corporate imperative, and your business, department or project may be only one piece of the larger puzzle.
Finally, if a corporate manager insists on driving into operational details, then you might try focusing their attention where it should be — on the corporate imperatives relevant to senior management.
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