Many Stakeholders, One Story

For the first two decades of my career, I worked as a Wall Street analyst, and one thing above all drove my success: the effort I put into synthesizing all the messages coming out of a company into one strong story line. Don’t make it so hard for people to discern your narrative. Occasionally corporate executives would ask for pointers on enhancing their relationship with the Street. My advice was pretty simple: Don’t make it so hard for people to discern your narrative. Communicate a clear and consistent story, and offer data points over time that demonstrate progress toward your vision. That sounds like common sense, but you’d be surprised how many companies change their messages often or present differing agendas to different audiences. Big organizations have a lot of internal parts whose motivations vary, and they address groups of stakeholders with conflicting priorities. Take the automotive industry, which I spent 20 years covering. It touches consumers, dealers, suppliers, employees, labor unions, social activists, and more. It’s natural to emphasize what the immediate audience wants to hear, but it’s also easy to move too far in that direction. In 2005 I left the analyst business and started working in the industry. For nine years I’ve served as lead director at a large supplier, Dana Holding Corporation; been an adviser to the United Auto Workers; and done several stints at General Motors, including one after its bankruptcy. It wasn’t long before I realized that the advice I’d been giving applied far beyond dealing with investment analysts. Throughout my career I gave presentations to the UAW to help its members understand the financial realities of the business. Many auto industry challenges are rooted in antagonism between manufacturers and labor unions, whose relationship has historically suffered from too little transparency. I spoke candidly to the union members and shared real numbers, just as the company would do with analysts. The workers, who weren’t used to hearing this, felt respected and better understood why GM needed their help. The situation was similar at Opel, the German auto operation GM has owned since 1929. When I was named chairman of the Opel supervisory board, in 2012, the company was losing several million dollars a day. I made big changes, beginning with asking top management to give presentations to the employees every four weeks. I suggested that the union’s consultants attend important management meetings so that they’d know exactly what was going on. I told German politicians and the union that GM was likely to make unpopular decisions, including closing a plant—bad news that some might have been tempted to gloss over. Today, companies can no longer assume that inconsistencies in their stories will go unnoticed. Workers are smart; they may not buy stock, but they are heavily invested in the company’s success. Customers are smart too—and often interested in far more than product features. Smart managers won’t resent the need to come up with a unified story. They will see the power of having one. Opel’s losses were reduced by 60% in 2013, and it looks destined to break even by its mid-decade deadline if not before. Of course the achievement is bigger than a communications strategy. Opel is delivering lower costs, better products, and strong leadership by a new management team. But every improvement has been facilitated by a clear, consistent understanding of what Opel needs to do. And

Many Stakeholders, One Story

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