Leading Out Loud: Why Communication is the Most Essential Leadership Skill | with Terry Pearce [Transcript]


Link to podcast episode: EL 33: Leading Out Loud: Why Communication is the Most Essential Leadership Skill | with Terry Pearce

JESSE LAHEY: Welcome to the show, Leaders! Is it true that communication is the most essential leadership skill, and if so, what are the biggest keys to leadership communication? To address that today, our guest is Terry Pearce, author of Leading Out Loud: A Guide for Engaging Others and Creating the Future. This is the bestselling guide to authentic leadership communication and the newest addition of this book has just hit bookstores. Terry had many years of experience at IBM and Charles Schwab. He’s taught leadership communication courses at Berkley and the London Business School and for the last couple of decades have been coaching and consulting with CEOs and elected leaders. Terry, welcome to the Engaging Leader show!

TERRY PEARCE: Thank you, it’s a pleasure to be with you.

JESSE: In your book, you say that communication, specifically leadership communication, is the skill that is most essential for leaders to be effective. Why do you say that?

TERRY: Well, leadership, by its very definition, involves other people and the way we engage with other people is through communication, so it’s almost a talkology. It seems to me that its 90% of it; the way a leader communicates with his presence or with her words or with emails or any way that communication passes back and forth is absolutely vital to success and you’re trying to inspire others.

JESSE: Now I can imagine some CEOs and CFOs might say that you’re exaggerating the importance of communication, for example, that technical competence is more important. What would you say to them?

TERRY: Well, I’d say they’re both important, but I’d ask the two folks why the word ‘chief’ is in their title. Since they’re sitting at the top of an organization I would assume that maybe 97% of the work product that they actually put out comes through others. That suggests to me that 97% of their job is to inspire others to do the very best they can; keep them engaged. Now I’m not demeaning the idea of competence, obviously it’s really important, but there’s a lot written about that. So in theory you need both competence and connection and it’s a term that we often use. People are pretty good at competence, so that’s why the board room puts them in that place in the first place, but rarely do they think about the need to connect and how to do it in a thoughtful professional skilled manner.

JESSE: So technical competence really is a given or table stakes and the communication aspect of leadership is perhaps the part that’s a little more uncommon.

TERRY: Yes, or the communication of that part which allows you to connect with others and there’re plenty of CFOs and CEOs that give great PowerPoint presentations, so in a way, they’re communicating, but that’s communicating about competence. Is this the right thing to do – not – are we inspired to do it. So it’s the connection part of communication that really gets ignored and often the competence part ends up being very dry. You really don’t need the human being to explain a pie chart.

JESSE: Now how would you estimate the proportionate importance of leadership communication in a leader’s effectiveness on average?

TERRY: Well you really have to remember Jesse that I’m like a carpenter with a hammer. Everything looks like a nail to me! I would say it’s a very very high proportion – I want to say it’s all of it – but it’s a very very high proportion. People who don’t inspire others to work for them, obviously there’s a continuum here, there are really competent folks who really belong as individual contributors and they do really well in that post. There are other people who are extremely good at human interaction and perhaps they’d do well in being involved in those kinds of fields. There are very few that can actually practice both.

JESSE: Often we hear that a leader is a change agent, but you day that’s not true.

TERRY: I say it’s not true just to be a contrarian. I think there are a number of different distinctions that we can make about leadership communication and this is a central one. That’s become a cliché, you know, a leader is a change agent and that’s what a board would look for as they’re looking to appoint a leader or it’s what a people would look for inside of an organization if they’re looking to put someone in charge of a particular function. Is the person entrepreneurial? Have they dealt with change before? Can they generate change? But if you look at a thousand psychological studies on the element of change, you’d try that 990 of them conclude that people hate change.

It can be disconcerting; it can upset folks; it takes away a sense of security. On the other hand, if you look at those same studies, you’d find that 100% of people love progress. So what we refer to as change is really transformed into progress through the communication of the leader. Progress is something that we move toward that we want. It’s a state that we desire and we have to perform certain actions to get from here to there. It’s like transformation – a much better word than change because it carries with it the substance of moving forward and having some future that’s desirable. So that’s my argument with the word ‘change’ and the term ‘change agent’.

JESSE: In the book, often you use the term in place of ‘change agent’ – you’ll say ‘creator of progress’.

TERRY: Yes, I prefer that. If someone else wants to come up with some better way to say that it would be terrific! (laughs)

JESSE: Well I do like that because it does require the leader to put on certain glasses and just think about ‘as I share this vision with others, how do I create the context so they can see this as progress the way that I do’ because in absence of that I suppose they’re just going to see it as change and probably negative change.

TERRY: People who are – as we might talk about context a little later – a leader, you just mentioned that one of the primary responsibilities is to actually use the imagination and be able to see the future that others can’t see and then to be able to explain that in a way that’s visceral. Not just explain it, but to convey it in a way that it’s visceral to the people that are going to join in, who are going to live in that future with them. That’s a talent that has to be developed and it’s a point of view; it’s a way of looking at things that isn’t normal for someone that’s used to just pulling levers and having the train go where it goes. Years ago, a teacher of mine used that metaphor and I’ve liked it ever since – that most people, as we go through life, we’re riding on a train and we’re looking out one side at the scenery and when we don’t like it we go over to the other side and we look out there and see how that is. Then there’s always someone who has his hands on the levers or her hands on the levers that is actually running the engine, but the leader is neither one of those. The leader is out front laying new track. They’re looking for new places to go and places where we can move this engine into a future that’s a lot more desirable for all of us.

JESSE: That’s an interesting picture you paint there. One of the things about your book early on that made me realize that this is going to be different from other books on this topic was that you say that leadership communication begins with personal awareness of a discovery of what matters to you personally as a leader. Why do you say that?

TERRY: Well, because the simple element in leadership that I’m emphasizing – and it’s not the only one, again, I want to emphasize that competence is very important; business aptitude obviously in the business world; very important. We don’t want to follow someone up that hill who’s never fired a rifle, so it’s very important that someone’s competent, but that’s, as you said, those are table stakes. That’s the corner of the realm. – What I wanted to emphasize here was ‘what is it that builds trust’? What is it that the leader can communicate that will actually inspire other people? So I emphasize that and in order to build trust one has to share of themselves. You can only do that if you know who you are, so the first step to me is self-awareness.

Now I’m not alone in advocating that, you know there are several books about leadership that start there; Bennis was probably the first to advocate it, but I’ve been really interested lately in really good leaders coming to this conclusion and coming forward with it. [Steve] Jobs was one, who as you know, is famous now for his famous graduation speech at Stanford, laid that out in brilliant terms about the four things that drove him that were most important to him in life and how hooking those four things together allowed him to understand and live life in a fuller way and to inspire people around him. One of those was that you have to love what you do. He was quite open about that, so I think a certain amount of introspection is vital for people to be able to deploy themselves in a way that others will trust them.

JESSE: Speaking of Steve Jobs, I love in the book how you contract Steve with his successors at Apple, Michael Spindler and Gil Amelio and how they really were never able to make the transition as leaders there because they never really identified how their personal values fit with what Apple was doing… but when Steve came back after many years away – he was able to make that transition. Why is that?

TERRY: He stepped right back into it because the fundamentals had been maintained by his colleagues. Jobs was able to come back into Apple and have the instant impact because it never lost his personality. Sculley was able to keep it, that is he was able to appreciate who Jobs was and how important he was. As you recall, it was the board who fired Jobs, not Sculley, but Sculley himself was not a gifted designer. He was an engineer as a tinker, but not really as a designer the way Jobs was. When Sculley introduced the Newton, it fell flat because it didn’t have that Jobs-like magic to it. That’s what Steve kept bringing back to the table. It was who he was. It was his sense of beauty and order; what made him love calligraphy and what made him become a fruitarian in the first place and kind of a kook. (laughs)

These were all of the characteristics of Jobs personality and character that he imbued into an organization that has never really, unfortunately, got that back. Now Spindler and Amelio I will speak frankly – I don’t think either of them had a clue about what I just said. I think Sculley did. You remember, it was Jobs that recruited Sculley and he recruited him purportedly with a famous line in New York in a restaurant when Sculley had said ‘no’ twice (Sculley, as you recall, was president of Pepsi-Cola at the time) and purportedly Jobs said, “John, if you want to sell sugar water for the rest of your life, go ahead. I’m going to change the world.” That sealed the deal, so I think Sculley came into Apple knowing full well the import of what he had his hands on. While Spindler and Amelio were really more operators, they were looking and the board was looking for financial expertise. I don’t think they ever looked at this conversation we’re having and gave any import to it and they made two bad choices.

JESSE: So both John Sculley and Steve Jobs could realize that Apple actually stood for values that they personally believed in.

TERRY: Yes, and they had a strong enough personal connection that Steve was actually able to infect Sculley. You know a second example of that that’s probably more well-known today is that of Howard Schultz who as you know is the – well he wasn’t the founder of Starbucks; he certainly bought it and put it on the map and made it what it was for a number of years and then came back and rejuvenated it when it went south. I think he’s even a more interesting case because he’s very verbal about the values that he had that caused him to create Starbucks the way he did. If anyone wanted to read the story, it’s in his first book called Pour Your Heart Into It where he relates that he grew up in the Bronx and as a ten-year-old boy watched his father go from job to job and eventually broke a leg and was out of work and was laying on the couch and as Schultz put it, was beaten down by life. He had had a series of jobs and at that point Schultz’s father was driving a truck that delivered and picked up diapers and his mother was taking in ironing from the neighborhood and that’s how they made a life but he said that the vision of his father burned out by life lying on the couch with his leg up in a cast really impacted him and that he remembers saying to himself, ‘I had no idea that I’d ever run anything big or have an opportunity, but I did decide that if I ever had an opportunity that I would never leave anybody out’. Now that was a value that was formed by an image that came straight out of Schultz’s heart and never left him and of course he was the first person to get the SCC to agree to give ownership rights to part-time employees, so he kept that value strong as well as his value of customer loyalty and service all through his career and continues to do it today.

JESSE: It’s been of huge value for him to keep people involved in what’s going on and build a sense of community.

TERRY: Yes, not only his employees but also his customers. He just went through a major remodel of more of the stores to include more space for more people to have conversations. It’s a very strong value of his and he’s making that company a reflection of his own values. That’s, again, why I think it’s so important for anyone who aspires to lead to know who they are; understand what drives them, and be able to articulate that in the context of the business.

JESSE: That’s a great story or what’s helped make Starbucks successful. Now that discovery and clarification of personal values, that of course requires a lot of introspection and time that a lot of leaders are not willing to take, but you pointed out in your book that that doesn’t guarantee success. The primary distinction between a leader and someone who just merely gets results is the ability to relate to others in a way that inspires them, which of course requires emotional intelligence. You provide a definition for emotional intelligence that I had not seen before. Will you share that with us?

TERRY: Sure. Like you, I began reading about emotional intelligence when Daniel Goldman published the original book and I was fascinated by it, but I always had trouble explaining it, so through the years as I’ve recognized the importance of it to leadership communication, I’ve tried to simplify it. The way that I describe it now really has to do with recognition, regulation, resonance, and response. So those four things – you can remember those, you can practice them – will take us a long way down the road.

Recognition is really being able to recognize your own emotional landscape. There are many people that can’t do that, in fact, in the original volume, Goldman says that women do this a lot better than men, and I think then he modified that in a later work to suggest that feminine urge is much stronger and in the original book in the appendix he identifies 150 different emotions; separate emotions. In the narrative in the book he claims that men can identify 3 and that’s if you include ‘hungry’. (laughing) His point was that it’s more difficult because men, at that time of course, tended to be more operational and we tend to overlook the development of our emotional brain which is how most decisions are made. So recognizing our own emotional landscape is the first idea.

The second is to be able to regulate it. That is, to recognize when we’re becoming angry or becoming sad (or whatever emotion it is) and be able to regulate it so that we can have an opportunity to have an interaction with someone else that includes that emotion but isn’t dominated by it.

The third then is being resonant which is really the ability to demonstrate empathy. Can you understand or can you perceive the emotion of other people and can you resonate with that? The term ‘limbic resonance’ is a good one to remember; it really has to do with emotional resonance or empathy and it was coined by some friends of mine here in San Francisco, psychiatrists as well as neurobiologists. As you’re resonating with others we see this work, for example, at a rock concert. The more people that are there, the more excited they get, the more excited we get. That’s a gross example of a resonance, but it really is an empathetic response.

Finally, the last one is response, and by response I’m contrasting that to reaction because most of us, when we’re in an emotional realm, have a tendency to react out of that instead of having the wherewithal to take a breath and to observe ourselves and then to respond appropriately instead of reacting.

JESSE: You share a story in the book regarding patents and I thought I did a great job of taking all four of those aspects of emotional intelligence and kind of making is simple with this idea of “showing the math.”

TERRY: It was the report of a quarter’s performance and he had six- or seven-hundred people listening from around the world. He happened to be broadcasting from the east coast and he went on and made the report and then at the end of his presentation he asked his charges to do certain things. This was a technical company, so one of the things he asked them to do was to be sure that they were emphasizing the creation of intellectual property in the company that would give them competitive advantage. In other words, he wanted to see them apply for more patents and engineers love to hear that.

At the end of the presentation when he asked for questions, someone in Texas said, ‘you know we got a note from the corporate staff this last week that said specifically that we were going to spend less money defending patents that we have; how does that square with what you just said?’ and my client shot back immediately, ‘the corporate office doesn’t run the business; we do!’ and he got a rousing ovation from the people that were in attendance and a lot of noise on the telephone. Later on he and I debriefed that. This guy was really one of the top four officers of the company and obviously had eyes to go even higher and in today’s world, we call that a reaction, we don’t get a second chance at that because information travels so fast so it would be predictable that whoever wrote that memo on the corporate staff heard about that episode probably less than a day after it happened and that would have an impact on my client’s reputation and the corporate staff might have repercussions elsewhere perhaps with his peers.

So as he began to look at that he began to see that maybe he could have used a more reasoned response as opposed to a reaction. We went through an exercise of framing that out; what that would look like. For example, those were financial tough times, and he knew that. Perhaps a better response would have been,

‘I don’t know who wrote that memo; let’s just say that we’re all trying to minimize expenses and I imagine that’s happening in the corporate staff as well. Certainly we have hundreds if not thousands of patents that we hold and are defending that are no longer useful to us as a competitive advantage. It would be senseless of us, particularly in these times, to continue to defend those patents, so decreasing our effort to defend those patents makes absolute sense in today’s environment and that has nothing to do with the urgency of creating new intellectual property to increase our competitive advantage in the future, so both positions actually make sense.’

Now that would have been a more reasoned response, but he would have had to have defeated his own defensiveness in a split second – actually it’s about 200 milliseconds – in order to make that kind of a response, so that’s what I mean by developing the capability to respond rather than react.

JESSE: But even just taking a breath – and I like the way you did that. You basically were letting him do a little bit of thinking out loud and as he said, I don’t know what’s behind that, but I can imagine, and some of those types of phrases gives yourself a little bit of time to think and, as you say in the book, he’s basically showing the math. He’s showing people the thought process that he’s going through and so even though you may not have incredible skill or very specific skill on the spot in recognizing and regulating and resonating and responding – as you said, people can see your heart if you’re willing to show the math like that and you can actually build trust even though you may be a little bit awkward about it in the moment.

TERRY: Yes, exactly! In fact, that phrase in this context was actually coined by a woman named Judith Honesty about 8 or 10 years ago who works for my corporate partner Blessing White (or did at the time) and she used the analogy that if anybody took math in the United States that they know (if they got up to algebra) if you had a proposition to solve that was given to you by the teacher and then there was a result that was the correct answer, but you had to show all of the steps in between the original problem and the result and if you showed that math and you didn’t get the answer but the steps were all correct, maybe you just made an arithmetic error inside the equation or something like that.

But you got the process correct, then you know what happened – of course the answer is that you get partial credit and you know credit is from the same root as crédito, or credibility or trustworthiness. So showing the way got a result and gives you a lot of trust, even when people don’t’ agree with the result.

JESSE: Yeah, that’s a great analogy. So once you’ve laid the groundwork in building loyalty and trust, especially using emotional intelligence – in your book you talk about a few ways that leaders can connect with people and actually create connections that inspire people to action that go beyond just motivating but actually inspire people to action. What are some of those key ways that leaders can do that?

TERRY: It actually – all of the devices that tap into the limbic brain and the emotional brain, now again I just want to emphasize so that people don’t get the wrong idea. I’m not suggesting that confidence isn’t necessary, that data isn’t necessary – it’s absolutely essential. We have to be confident and we have to know what the figures are, but when we’re communicating with people in a way that we want to inspire them, there are other devices that we can use that are far more effective, for example just image and symbol are ways. We know that an image of something conveys not just the denotative power but the connotative power. One of my favorite examples is Monsanto that really wanted to suggest that we minimize pesticides in oranges and anybody in a board room might put ‘minimize pesticides in oranges’ as words on a PowerPoint slide, but what they chose to do was to show a baby holding an orange with the peel still on and the peel in its mouth and it conveys far more in terms of the emotional brain than just the words themselves. So that’s one example.

Symbols of course are even more powerful in that we tend to go through symbols into great meaning. You know, the difference, for example, if you were advertising Easter – if you had an image or a picture of an Easter egg gives you one idea but if you had an image of a Cross, it would be symbolic, so you’d go far deeper into that, into the more religious or spiritual meaning of the story of Easter. Of course, the same is true of all religions; they use symbols just exactly that same way.

Metaphor we use naturally. We are always reaching for the objective terms and there are good and bad metaphors, so as long as we remember that when we use metaphor, people see themselves in it. So for example, Scott McNealy used to talk about Sun Microsystems as being at war with Microsoft. Now it’s a pretty tough thing to come to work every morning and go to war and those kinds of metaphors – the people at work there will see themselves as the soldiers; they will see the CEO as the General and they’ll see the enterprise as war and they’ll see the consequences as life or death.

To continue to use military metaphors as you’re trying to inspire people probably isn’t going to work as well as you’d like it to. A second device is story. There are now social scientists that are really advocating and suggesting that the human being is actually the only story-telling animal. They’re defining human beings as Homo Narrans; that story-telling being, because we all tend to live our life someplace between once upon a time and forever after. Relating things with story and personal experience is really a powerful way of getting peoples emotional brains engaged, even if you’re telling it about the past.

Whether you’re telling it about the past or whether you’re telling it about the future. Offering a story that is an example of some data is a far greater and more powerful way to communicate it. I had a friend, Jonathan Young who is a psychologist who frequently said that that is how he saw his job was when people were coming to him troubled and they were actually saying to him ‘I don’t like my story’ and his job was to help them edit it so it would come out in a different way. The same is true of leadership initiatives as we tell the stories that surround them. We engage people where they live. So those are two devices that I like a lot.

JESSE: Those are excellent devices and I love that; helping people edit their stories and certainly leaders help teams create a new story for the future.

Link to podcast episode: EL 33: Leading Out Loud: Why Communication is the Most Essential Leadership Skill | with Terry Pearce

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