Portugal is one of the OECD countries with less skilled managers and less investment in their development. Being such a vast problem, and not being an economist myself, I would not dare, outside the context of a friends’ chat, to propose a set of specific solutions that can achieve the intended ends. But, as a frequent student and continuously fascinated by communication in Portuguese companies, I consider that the poor productivity problem will, at the very least, be exacerbated by strategies and communication habits that can be dealt with by the manager in his daily work.
A simplistic reading of the most common economic models, which describe labor productivity as the value created per hour of work, leads many people to focus their efforts on wage restraint or creating workplaces that can extract as much work as possible from each “human resources” at the lowest cost possible. So if a person works 150 hours a month to receive a salary of 700€, we will be more productive if we can “encourage” the same resource to work 200 hours and receive the same salary or, if we can hire those who work for 150 hours to receive 600€.
On paper, it seems to make sense, but the problem with this approach, beyond any ethical or social responsibility argument, is that it does not work at the economic and financial level, at least in a minimum development economy. If so, the Germans, as the kings of productivity in Europe, would all be working 30% more hours than the Portuguese and the Greeks and receiving lower wages, when in fact is the exact opposite situation.
Basically, what makes people productive is (1) the ability to work in a coordinated way, (2) sell things that add the most value possible, with (3) the least possible resources. And if we want this situation to last over time, we need to do so (4) in a motivated way and with a sense of purpose and common values.
Without a well-designed strategy and effective organization management, none of this is possible. However, in addition to strategy, communication also plays a crucial role in each of the four mentioned factors:
The best competitive strategy in the world will fail if we are not able to help people on the ground translate it into action, decision and attitude. The strategy cannot be a dialogue developed only on the top floor of the headquarters and then communicated with pomp and circumstance at an annual event to the remaining “mere mortals” of the organization. Or at least it cannot be summed up to this.
The strategy must be able to provide decision-making guidelines that are sufficiently clear for each to interpret in their work context – simple, coherent, didactic rules and narratives that help people make decisions, as situations arise, with enough assurance that even if they make mistakes based on their own interpretation of the strategy, they will not be “punished” as long as they learn from the mistake. These rules and narratives, although they can/should be built on deep analysis with Porter models and SWOTs, earn points in terms of communicative effectiveness because they are easy to memorize and remember, and easy to change and fine-tune in time by the management team to reflect changes in the market and the circumstances of the organization itself.
However, it should be remembered that history is full of profound change moments that provide us with relevant insights into the power of simple rules. In the early 16th century, after a thousand years of monopoly over religious doctrine in Europe, during which it had built a set of systems and relationships that dominated not only religious but also economics, education and political power, the Roman Catholic Church’s structure was deeply threatened in a secular process that culminated in the Thirty Years' War. Meanwhile, the Portuguese continued to expand their horizons across borders in an impressive period of expansions and discovery.
The exponential change was also happening in the production of knowledge, with the press invention causing a revolution in reducing the time and money required to produce literature. In this context, a religious movement emerges in the middle of the 16th century which, with the help of its simple rule-based “formula”, has managed to grow its influence on the world in a truly stunning way – the Jesuits.
Contrary to the installed order's power, with its magnificent buildings that housed large groups of religious men or women governed by a multitude of rules about behavior, the simple rules of the Jesuits helped us size the opportunities that the fast change era of the 16th century offered.
There were three rules: to accept any task indicated in the service of the order anywhere in the world, to excel in education and the “no obligation” to pray together with other members of the order, freeing individuals from the physical and cognitive constraints that limited the power of action. The Jesuits have grown exponentially and built a network of global impact and influence that remains very active to this day.
None of this is new, but an economy characterized by fast changes, companies must do this exercise of synthesizing their strategy and translating it into a language that focuses and facilitates decision-making.
To test how well your organization’s strategy is being communicated, just ask half a dozen people from different departments and hierarchical levels why are they doing what they are doing. Unfortunately, the answers tend to be eerily distant from the designed purpose in the strategy meetings held by the “top lords”. The most successful companies in the country do constant and deliberate work in this regard.
At Outsystems, one of the only three Portuguese companies considered “Unicorns” – a private start-up value at 1$ billion US – the purpose is worked out almost obsessively. Of the few rules that exist to govern workers’ behavior, the most important of all is the “WHY?” rule, which encourages any worker to question straightforwardly the reason for decisions and activities, whether from the side co-worker, superior or the CEO himself.
In times of strategic change or crises, this exercise becomes even more critical. The creation of “critical action guidelines” – 4 or 5 basic rules that guide everyone’s action – is crucial if we are to achieve new strategic goals in a minimally coordinated and timely way. And here, it should be considered, that less is really more. Humans have a hard time keeping more than 5 or 6 concepts in their working memory, so strategic plans that exceed these numbers in terms of priorities, or where those same priorities are too vague and open to interpretation, tend to fail. If a manager in your organization does not have the strategic priorities of the company, or at least in his area, at the tip of the tongue, it is because we have failed to communicate or have poor strategic clarity.
While it is true that communication plays no role in positioning, pricing and other decisions that determine what we sell at what price, it is also true that poor communication of the advantages of what we are trying to sell significantly limits the likelihood of success. There is no space here to talk about marketing communication (a topic that would be much better developed by other colleagues), but a good understanding of how to translate the characteristics of our product or service into the advantages and benefits to the customer language is crucial.
It still gets too many people looking to sell from feature lists, beautiful, extremely detailed catalogs where I have to do all the work myself to understand why a particular technical feature is indispensable to my survival.
Those who sell well (and who also increase the likelihood of selling without focusing on price) know how to create a dialogue that finds out my pains and passions, then explain how their product will appease or activate them (or not, saving time to both). Also, I’m keen on the idea that selling is not only for commercials. Any employee in the organization should know at a minimum what their products do and how they make the world a better place, as these are the people most likely to be called upon to talk about them in daily conversations with friends, family, and acquaintances. We are unlikely to build purpose in an organization where every worker is unable to explain to a friend, preferably with pride, what the company does, where he works, and why he does it.
The primary waste of resources in many organizations stems from the communication that doesn’t add value and even destroys it by diverting focus, taking up unnecessary time, and denigrating the ability to prioritize. Everyone realizes this, but unfortunately, the attempt to reduce noise is too often focused on small talk, like conversations around the coffee machine, which are a fundamental aspect of human socialization, building and maintaining trust, when it should focus more on, for example, the 30% of emails that today’s professionals say they receive without adding any value, the poorly organized and overly long meetings, and excessive formalism and hierarchical deference.
In fact, a large proportion of this wasted time will be avoided if the first point above is well worked – often excessive noise comes from a lack of purpose, focus, and alignment – but even if there is a well-communicated strategic narrative, the weak and excessive use of technological tools in an environment where deference and power games block the information flow is painful in terms of productivity and well-being.
As a foreigner, I hesitate to suggest measures that move with the fundamental cultural structure of the country that welcomed me so well, but on the other hand, I’m beginning to see the positive impact on many traditional Portuguese companies of policies that seek to eliminate “Mr. Doctorism”. Titles may serve to briefly describe the role of a doctor, for example, but the idea that we should treat a co-worker based on his undergraduate degree from 30 years ago that has nothing to do with his job today is painful for meritocracy and hinders the “whys” that help us develop purpose.
The last, but not least, of the factors that help organizations to be more productive, and where communication plays an important role, is motivation. We have long known that companies with higher motivation rates are more productive. And we have already talked about one of the most important pillars of this motivation: the presence of a clear strategy that can serve as a guiding light for the decision. But to be motivated we still need to promote:
This last pillar – the ability to learn new things – should not be only built through training, although it is an important ingredient in the cake recipe. The reality is that we can take the courses we want, but what counts most is the daily attitude, of those who work with us, about clearly communicating their expectations and how far we are meeting them. In other words, feedback.
Foreignness often takes on different meanings when they enter our language, and feedback is for me an example of this. The bottom line – a mechanism that gives us feedback on the results of what we contribute to a system – is not in question. But when I talk about feedback in Portuguese companies, it is too often connoted with the formal performance appraisal system, which in most cases happens once a year. However, for me, the feedback that has the most influence on organizations is that which is part of everyday life.
At this point, Latin countries in general, and Portugal in particular, are not usually well evaluated by outsiders working in their companies. Feedback tends to fail as much whether the news is positive (I’ve often heard comments such as “don’t praise, they have to realize that good performance and effort are their obligation”), or when it is bad because there seems to be too much connection between performance or professional actions and our personal feelings.
This last point is especially damaging to productivity. I have witnessed feedback sessions on completely unacceptable situations where those who received the feedback left the meeting with their confidence increased, so many comments “you know I appreciate what you have done over the years for us …”, “Overall you are doing a great job, however …” or “don’t get it wrong, you know I like you very much but …”.
In part, this approach comes from a trend that emerged in the ’90s from giving negative sandwich feedback, to enter a negative comment, we should start with something positive, then move on to the negative message, and end with something positive again. Although I agree that in most situations, we should end up with something positive, that “something” should be only and only one way for improvement. The path in which I, your boss, commit to being an active part, not a platitude that risks being interpreted as “I have difficulties, but overall the boss is pleased”.
The good news is that these approaches can be worked on and improved – those who adopt a “constructive frontality” attitude rarely look back, as they can have truly impressive results. In the end, far worse than receiving negative feedback from our boss with a path to improvement is not realizing that things are going wrong until it is too late.
More generally, I have some difficulties with the lack of separation between work and private life that I’ve seen in Portugal. I don’t mind working more hours in a given week, but not always, and as long as my organization is flexible the few times I need. I don’t want to feel pressured to accept all the dinner and weekend lunches my co-workers make, especially when I feel that most of those present would rather be at home. And then, I’ve lost track of companies that tell me “here we are a family”. For me, it is not positive. Family is there for me whether I mess up or not. Invests in me unintentionally in return. Accept my absences, bad moods, and bad jokes. My co-workers deserve more!
Finally, I challenge you to pick a few tips (no more than 6 to not contradict the functional memory rule) and start applying them today. Once you feel the effects of the shift to “productive communication” you will hardly go back.
Reading suggestions:
HBR's 10 Must Reads on Communication (Harvard Business Publishing, 2013)
Switch: How to Change Things When Change Is Hard (Heath & Heath, Crown Business, 2013)
Simple Rules: How to Thrive in a Complex World (Sull, D and Eisenhardt, K, Mariner Books, 2016)