37. Be Better: How Communication Catalyzes Business Transformation

Matt Abrahams: One truism in business and in life is that we need to adapt to stay relevant and survive. However, many of us in the companies we found and work for struggle with this. Are there key approaches and best practices we can follow to help us adapt and transform? Hello, I’m Matt Abrahams and I teach Strategic Communication at Stanford Graduate School of Business.

Welcome to Think fast, Talk Smart, the podcast. Today, I am totally excited to chat with my friend and sometimes therapist Rob Siegel, who is a lecturer of management at the GSB. In fact, Rob and I started at the GSB on the same day over a decade ago. Rob’s teaching and research cover many topics including the opportunities and challenges that technological change brings to companies.

How companies combine digital and physical solutions for their customers, product management and product development, as well as financial management for entrepreneurs. While some of us at the GSB teach one or two different classes, Rob teaches five or six. Two of the most popular are the industrialist’s dilemma and systems leadership. Rob recently published a book inspired by those two courses called The Brains and Brawn Company: How Leading Organizations Blend the Best of Digital and Physical. Welcome, Rob. Thanks for being here and congrats on your new book.

Robert Siegel: Thanks, Matt. It’s great to be here. I guess I should say the doctor is in.

Matt Abrahams: That’s exactly right, yes. Start charging me now. Let’s go ahead and get started here. People who know me well know that I love alliteration. So Bravo to you and your Brains and Brawn model. Can you briefly walk us through the framework?

Robert Siegel: Well, the two courses really look at what happens in a world when companies have to blend both digital and physical attributes for the products and services they deliver to customers. Which at this point is almost every product and service that’s made and sold. And so what we found in the over 70 companies that have visited us and that we’ve studied is that we found kinda five digital and five physical attributes or five brainy and five brawny attributes that really the winning companies seemed to be focused on most or all of them.

On the digital and brainy side, we had the left hemisphere, the ability to use analytics in your business, but also the right hemisphere of your brain, how you manage creativity. We saw the amygdala which is great companies had empathy towards employees and towards their customers and towards their ecosystem. You had the prefrontal cortex, how do you manage risk? And then finally the inner ear. How do you balance what you make and where you do internally and what you partner with people externally? And on the physical side, we saw companies often incumbents, but even a lot of the new disruptors, they got really good at using their spine for logistics or how they managed their entire business.

Manufacturing has become increasingly important with additive manufacturing, the hands, how do we actually make things? We saw companies operate with muscles at scale on a global basis be able to operate in many, many unique markets. We saw companies be able to have good, what I called hand-eye coordination, or drive and shape their ecosystems to get to what they want. And finally, companies that had great stamina, that was the fifth of the brawny attributes, where they could survive over time through the ups and downs of running the company.

Matt Abrahams: Well, I didn’t know I was gonna have to be up on my anatomy to have this conversation with you, but I love the metaphor and it helps. Is there a company or two that stands out as a good example of folks who execute on this brains and brawns model of yours?

Robert Siegel: Well, we look in the book about ten different companies in each different area. And within each area, we will look at two or three, but we do a deep dive on one. Perhaps the most obvious one that we can look at is Amazon. Amazon does an unbelievable job of giving us a great user interface for shopping online as well as making sure the logistics go well, making sure that distribution goes well. Another one maybe, from a disruptor standpoint, is the company 23andMe, which uses saliva and software to give us understanding of our DNA and where we might be susceptible to diseases.

And now they’re using that for drug development and how they’ve partnered with GSK, the British pharmaceutical company for manufacturing and distribution of drugs. So I think those are two companies, one an incumbent and kinda one a disruptor, that are really doing some very interesting things.

Matt Abrahams: That’s awesome. So, hey, in your model, you know me, I’m a communication guy. What role does communication play in the brains and brawn framework you’ve defined?

Robert Siegel: I think perhaps the most important thing is we talk about this notion of systems leaders. And systems leaders are the people who have to understand how systems work in a world that blends digital and physical when everything’s connected.

You have to see how things are interacting with each other. You have to see how your organization is interacting both internally and externally. And so what we found is that great systems leaders were really good at managing the narrative. One of the phrases that one of your previous guests, Jeff Immelt, likes to use is truth equals facts plus context.

And we found that great leaders were able to manage context for employees, for customers, for other members of their ecosystem, so that people could understand how they were trying to shape the narrative. And so I think being a great communicator is critical in your written communication, in your verbal communication in a world that’s increasingly connected. Because there’s so much input for everybody, you wanna kind of control and shape the messages that get out there.

Matt Abrahams: ;And in your experience, is it just the leaders who are responsible for shaping that narrative or is it in the ecosystem that these companies exist into? Are there partnering and discussions and iterations on that narrative that help?

Robert Siegel: That’s a great clarification. I define leaders not just people in the C suite, and not just vice presidents, but leaders or anybody in the organization, managers, directors and above, who have to be really good at understanding. You might work in finance in an organization, but you really need to understand what’s happening outside of the four walls of your company.

What’s happening with your suppliers, what’s happening with your channel, and being able to communicate well with them and understanding what’s happening. Communication is critical for every function inside of an organization and that’s what’s different than the past. In the old days, you might have people who are externally focused and a bunch of people in the company who might be internally focused.

Now, no matter what your job is, you really have to understand the holistic picture of what’s happening and what’s going on. And so, therefore, you’re gonna be communicating. If every product’s connected, you’re gonna be hearing from your customers on an increasing basis, and you might need to communicate back to them. And so it’s therefore not just a C level requirement, it’s a requirement of every leader in the company, leader broadly defined.

Matt Abrahams: Great, I’m using you for PR for my classes. That was fantastic. Of course, you know I agree that being able to communicate clearly is critical, just to function in your role. But also it sounds like to help your company make sure that it’s adjusting, adapting, and transforming as it goes.

Robert Siegel: Absolutely.

Matt Abrahams: So I’m gonna ask you a two-part question next. If you were advising leaders and employees at an established large company confronting the need to adapt and transform, what would be a couple bits of advice that you would give?

Robert Siegel: I think the first is understanding that which made the company great in the past, what are those successful things? And are those things that are necessary in the future to be competitive? And if not, are you up to speed on how new technologies and new capabilities are changing the — what’s required to be competitive in the market?

So, for example, if you come from a manufacturing company, you might not necessarily understand all of the issues around what we sometimes refer to as the four As: Artificial Intelligence, additive manufacturing, analytics, and automation. And I would argue that every leader in an established company needs to be on the forefront of understanding how new technologies are gonna impact all functions.

So like in my product management class, we have a whole discussion about how artificial intelligence is shaping how product management is done. And I’d say the next thing is, for somebody inside of a company, one of the questions Katrina Lake from Stitch Fix taught us was she asks herself, and her team every two years if you’re hiring yourself for your job today, would you pick yourself and your resume?

And that’s a very scary comment sometimes you kind of have to sit back and say my goodness, right? Am I the best person for my job and if not, what are you going to do to like upgrade your skills or upgrade your capabilities so that you are the best person for the job.

And so sometimes we’re rewarded for how we grow and scale a company and that what worked in the past. Now we’ve got to be thinking not only do we have to continue to deliver on those things, but how do we make sure we stay current in what’s needed and required going forward for serving customers?

Matt Abrahams: Wow I mean, I think all of us could benefit by thinking about are we relevant? Are we developing the skills that we need to take things forward? That’s certainly a motivation and an excellent way of doing some reflection. A key theme across many of our podcasts episodes has been to take time to reflect as to where you’ve been, where you are and what you need to change and adjust to move forward, so thank you for echoing that.

Now, allow me to ask the same question but this time, what advice would you give for a smaller newer company around what leaders and employees could do to adapt and transform?

Robert Siegel: I would say learn from companies that have come before you without condescension. In particular, like nobody got on the cover of BusinessWeek or of Fortune, excuse me, by dealing with logistics and manufacturing and supply chain and yet that’s what makes a company operate while on often where customers will have the best experience.

And so I think in kind of in our sterile digital world that you and I come from in Silicon Valley, sometimes we don’t appreciate the hard dirty, grungy work that comes from making companies run well and serving customers well. And I think that people could really benefit from understanding how do those functions work?

And you know, walk a factory floor. If you are in an upstart, in a digital upstart, do you understand how things get made and why things work well and don’t work on a factory floor? And I think that appreciation for what I’ll call the plumbing of an organization, for what makes things happen to kind of actually deliver things, not the sexy/just the artificial intelligence.

Can you understand well that last mile that the customer and can you help your team execute on it? Approaching that with respect and an understanding of how hard that is? That’s, I think something that people in Silicon Valley and digital upstarts could really learn from their incumbent brethren.

Matt Abrahams: Again, another plea for reflection but this time on a very tactical level and I agree. I think in this valley where we live a lot of people don’t think about those specific parts of an organization and really what helps to make them successful. Now, I want to switch gears a little bit and I don’t mean to make you blush, but you are truly a master teacher. I’ve watched you teach in all of your ability, and you were among the first of us at the business school to jump headfirst into virtual teaching.

And many of us now find ourselves in the roles of meeting facilitator or teaching via virtual tools and I’m wondering what advice and guidance can you provide about how to be more effective in our virtual presence, in our engagement, in our communication?

Robert Siegel: When the pandemic started, what kept going through my head was, I have a face for radio and now I’ve got to be a television star. And that’s not a good thing and that’s not a good place to be. But one of the lucky things that happened to me early in my career is I was media trained when I worked for Intel. And so I was lucky enough to kind of have that exposure what does it take to be on television and know how to talk to the media and those cases I was mostly talking to journalists.

But so teaching became the same way. So I tried to create an environment in my home office that felt a little bit like a television studio and a little bit like what it was like in front of the classroom. So I made sure that I could be standing up, but I can almost be pacing a little bit.

I got a high-resolution camera with a little slightly wider angle. I got Studio lighting. I decorated my office behind me with Stanford gear, took down pictures of my grandparents, my children, and my wife and put up Stanford banners and a picture of the oval. But try to basically think like it was television, and when you think like it’s television, you don’t try to just recreate what you did in the classroom.

You’re trying to think about how do you call on people, how do you make it interactive, how do you think of them like a studio audience and create that back and forth. The other thing is also bring energy. Like it’s really hard because you’re staring at the camera all damn day, right? You’re not getting any of the softer skills of people laughing. You’re not getting things like people looking confused or getting angry. And so you’ve got to try to kind of create those ways that you can kind of bring energy and kind of look over. Sometimes you’ll have to sneak a look at one of your screens ‘cause you cracked a joke and are people smiling?

Matt Abrahams: Right

Robert Siegel: And happy, do you get kind of the haha, that’s a funny dad joke, right, or it’s a really bad dad joke, do they roll their eyes the way your kids are supposed to roll your eyes at you? So I think it’s that notion of trying to fit into the medium and be fit into that context of the medium, but also bringing/trying to bring some energy and bring some fun.

And it is hard to do, right? Like I will often drink a couple of cups of coffee before I start teaching. Just to kind of put myself in that mindset of I’ve got to bring energy because if I’m not feeling energy, I guarantee you the students aren’t feeling energy.

Matt Abrahams: All of us have become mini TV producers and directors. And I know for a fact when you walk me through some of the technology that we’ve had the opportunity to use one of your mantras was you have to practice, and I think that is what has helped make you a better communicator would have certainly helped make me a better communicator too.

To actually do like a dress rehearsal as you would if you were doing a TV show, to really understand the flow, to understand the timing to make sure you can integrate the technology and that notion of energy and a little caffeine to help doesn’t hurt. I like to do some quick exercise before I do a big lecture just to get my energy up.

The problem is unlike drinking caffeine, I always start sweating, but the point is you wanna have some energy. So that’s great advice. I wanna talk specifically about your industrialists dilemma class, because it is super popular among our students. And for those who don’t have the opportunity to take the class, I’m wondering if you can share what your goal is for the class, along with one or two key takeaways that can help all of us derive value.

And if one of the things you mentioned happens to have communication it’ll give you extra credit.

Robert Siegel: I need the extra credit — my grades are really bad. I trust that I was not a good student.

So the industry’s dilemma looks specifically at a world that blends physical and digital. How do you change how you develop products and how do you change how you organize the company? And then changing products like a lot of the things that we used to do, even when I ran my division of GE how you thought about, how you’re in QA, how you were, six sigma inefficiencies about how you made sure that you were …. decisions were made hierarchically, and how to flip that on its head there were times you need to be agile.

There were times that you would want to push decision making authority down to the people closest to the customer. How instead of using intuition to make decisions you would have to actually use data. And so the class explores how incumbents are changing and adapting and bringing in some of the new capabilities and technologies into their business. And by the same token also how disruptors were not only bringing new ways of doing things, but also learning from some of the best practices from incumbents who had been around a long time. And we looked at industries from healthcare to financial services to mobility, really there’s not an industry not being disrupted, retail, etc.

And I think the key takeaway from the class is that one of the key takeaways was incumbents are not doomed, and disruptors are not ordained. That really leadership has the ability to, whether you’re in an existing organization that’s been around for a long time or you’re in one of these upstarts, you have the ability to drive leadership and change into your organization and be successful. And that leaders can have a big impact on it, but you’re going to have to adapt to the best of both worlds. And I would say that, from a communication standpoint, one of the things that we saw great leaders and these leaders, CEOs on down was they had what was called a product manager mindset. And a great product manager understands customers and understands how to make a product. And understands how to work with sales to separate customers from their money. And I think a great, product managers mindset is one of these you have to do, you have to be a great storyteller. Like you have to own your narrative.

And I think one of the best people I ever saw on that was Brian Cornell, the CEO of Target. And what Brian did that I thought was always so spectacular is he talked about Target’s message. He talked about what Target was trying to do and how Target was trying to transform. And then he always asked the students questions about, what was their target experience like, where did it work and where did it not work? And he was genuinely interested in what they had to say. And so it was not just that he communicated well, but he listened well. And then would kind of say back what he heard from them. And he seemed genuinely interested in hearing what these students, what their experience was like at Target. So Brian was one of the best at it. And he really had what I would say was a great product manager’s mindset, and he was a great storyteller.

Matt Abrahams: So again, this notion of being able to craft a narrative and own a narrative comes through loud and clear and I really appreciate the fact that you highlight that communication we tend to think is what we say. But listening is as important, if not, in many cases more important in the communication dynamic and to remind us of that as a great gift and we all have to remember, that we have to listen to better understand what’s needed of us and how we can best help and hone our messages. So thank you for that. I’d like to ask you the same three questions I asked everyone who joins me. Are you up for that?

Robert Siegel: Absolutely.

Matt Abrahams: All right. If you were to capture the best communication advice you had ever received as a five to seven-word presentation slide title, what would it be?

Robert Siegel: Use the pyramid strategy of communication.

Matt Abrahams: Aha, okay, you get to teach in a very short amount of time the pyramid principle.

Robert Siegel: Give answer first, especially when you’re dealing with more senior people in your organization, given the answer be succinct. And if the person to whom you’re talking to wants more information, let them pull you down and then you can give more and more information. But when someone asks you the time, don’t tell them how to make a clock.

Matt Abrahams: There you go. That’s one of my favorite sayings. Excellent, very good. Who is a communicator that you admire and why?

Robert Siegel: I’m gonna date myself here. I think my favorite communicator was Ronald Reagan and Reagan, what I always loved about Reagan is he had the ability to inspire. He would talk about ideas that he thought were timeless, and he had the ability not only to use humor and to tell stories, but to almost to get all of us to appeal to our better angels. And as I look at politicians and the like, and so much of it, especially in the discourse today, it seems so harsh, and it seems so divisive.

And if you go back and look at some of Reagan’s speeches, even people who didn’t agree with his philosophies, he was just an amazing communicator, and he always kinda felt like he was trying to take us to a better place, even if you disagreed with his point of view. You never doubted his sincerity and his desire to try to have a positive impact.

Matt Abrahams: Clearly a good pick, clearly somebody who has an excellent communicator, in fact, the great communicator as he was known, and it was a blending of empathy, authenticity and focus, I think. What are the first three ingredients that go into a successful communication recipe?

Robert Siegel: I would say number one, a clear takeaway — get your message out concisely. Number two, showing general interest and enthusiasm for your topic and you can’t just be on autopilot. And finally, if you can provide insights that are not obvious, if people can walk away thinking, I learned something or that made me think that will actually keep people wanting to come back for more.

Matt Abrahams: Absolutely, and you have provided us with many aha moments and thank you Rob, so much, certainly you did not disappoint. You provided us with very specific relevant guidance and advice. And I just wish that you could have had a little more energy and passion behind what you’re saying. I just wish it were there. And I truly wish you good luck on the launch of your book The Brains and Brawn Company: How Leading Organizations Blend the Best of Digital and Physical. I have read it and know that our listeners will take away many useful, actionable insights. Thanks so much, Rob, for spending time.

Robert Siegel: Thanks, Matt. It’s great to be here and I really love the podcast. Thank you for having me.

Matt Abrahams: Thank you for listening to Think Fast. Talk Smart, the podcast. A production of Stanford Graduate School of Business. To learn more, go to gsb.stanford.edu. Please download other episodes wherever you find your podcasts.