If you haven’t been paying attention to this customer service debacle, in a nutshell it’s this: Kevin Smith, a film director, was kicked off a recent Southwest flight because he was deemed to be too large to safely occupy a single seat even though he said he met their criteria for safety (being able to raise the arm rests). He then told his story via Twitter which resulted in an unflattering media spectacle for Southwest.

But the truly interesting aspect of this story is the reaction and shared stories of other passengers who complained of the uneven enforcement and communication of the Southwest policy. For example, here is a comment posted on the Wall Street Journal web site:

Peg wrote:
The problem is with the randomness sw uses on this policy. Listen to the people complaining about the obese passengers sitting next to them that did not get kicked off the flights- why not? If this is policy why not use it every time. Before I lost weight I flew sw and was asked twice to buy an extra seat, ( I had flown at least 5 times that year without being asked) which I did – even though I was sitting with my mother. One time they then promptly sold my extra seat to a stand by and sat him in the open seat. I did not get a refund because according to SW it was my responsibility to kick the guy off the plane (seriously- read their policy on this).

When you have formally communicated policies related to customers, employees, suppliers, media, investors, etc., for those policies to be adhered to, you must enforce “walking the talk” . Consistently. If the enforcement in sporadic (or non-existent), not only will the policy in question be disregarded but the credibility of all of the other policies issued by the company are lessened (not to mention the image of the company itself). And there could be legal trouble in some cases, as well (e.g. spotty enforcement of a “zero tolerance” harassment policy.)

What apparently set Kevin Smith off was not the policy itself (which is nothing new and fairly consistent with other airlines), but the uneven enforcement of it (the waffling on the “arm rest test”, larger customers than Smith occupying a single seat on the same flight, etc.) Southwest could have prevented this publicity nightmare by simply adhering to their stated policy — strictly and consistently.

Obviously, this is easier said than done. However, by clearly and broadly communicating policies, effectively training those who need to enforce them, and consistently adhering to them, mishaps like the one that Southwest suffered can be prevented.

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- A.B.

It’s a complex chart, to be sure. The author is trying to make the case that companies should make bold strategic moves like acquisitions during (or shortly after) the market “trough” of a recession by showing the historical, rapid bounceback of total returns to shareholders after recent recessions. The article from which this chart was taken, was published in April 2009, seemingly at the market trough of the recent global recession. But, in anticipating the bounceback of the market, did this chart provide enough context?

As a rule of thumb, the level of context needed in comparison charts should be determined by how similar the “apples” are. The greater the difference of “apples”, the more context is needed. Obviously, you should avoid “apples-to-oranges” comparison charts (since there really is no underlying foundation for comparison), but even “apples-to-apples” comparisons present problems.

In this chart from McKinsey, it treats historical recessions equally (a key issue when evaluating the point the article is trying to make). Clearly, that is not the case. The recession (or Depression) of 1929-1932 was vastly different than the recession of 1990-1991 on a number of levels, most notably on the severity of the market downturn. Even the outcomes represented in this chart are vastly different by recession, with some achieving 100%+ returns while others not hitting the 100% mark (even at Year 3).

If this chart included the percentage downturn (simply as a value next to each line chart), the reader would be much better off. [The underlying assumption being that the greater the downturn, the greater the bounceback.] They then could assess the magnitude of the current downturn (from it’s peak to the trough), and see which historical post-recessionary environment may be the better gauge.

Obviously, even this improvement may be too simplistic (given other factors like swiftness of downturn/recovery, effects on the global market, access to credit, etc.), but it might help give the reader better context in assessing possible outcomes (and strategic actions that can/should be taken).

So, when preparing comparison charts, evaluate how similar (or different) your variables are, and adjust the level of context appropriately.

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How 3D charts distort business information

The problem with pie charts – Part 1

The problem with pie charts – Part 2

- A.B.

• What you can learn about communication from NASA. “Say what you want about the bureaucracy and waste in a large institution such as NASA; these folks know how to communicate well in a complicated deployment (launch), and there seems to be much we can learn from them in managing large IT programs.” Not just IT project management, but business communication in general. Great post on communication during NASA launch process by Scott Booher at CIOpedia.
• Free data visualization tools from Tableau. We rarely do product endorsements, but this one is definitely worth it. Tableau Software just released Tableau Public, a free application that allows you to develop sophisticated charts and graphs for your web site, blog, twitter feed, etc. Most data visualization professionals use the enterprise version of Tableau, and we think it’s terrific that a free version is now available to a wider audience. Check it out!
• Google also launches new web-based chartware. Not sure if it’s a coincidence (probably not), but Google also launched free data visualization tools so users can create, embed, and share charts and graphs with others. To be honest, we haven’t downloaded or evaluated the Google application, but it may be something worth considering.
• Bill Gates vs. Steve Ballmer: Who is the better communicator? Surprise! It’s Bill Gates according to Nancy Duarte, the presentation guru. She skewers Steve Ballmer’s launch presentation for Windows 7 and heralds the TED 2010 presentation by Bill Gates. Although Bill Gates’s presentation is not yet available on the TED site (as of this posting), Nancy includes several pictures of the slides he used in her blog post.
• The annual report of your life. There was a recent blog post from the New York Times on Nicholas Felton and his unique, internal spin on the annual report. Edward Tufte furthered this discussion by asking others how they use data analysis and data visualization as path to self-discovery — the comments submitted by others are thought-provoking. Not exactly within our scope of business communication but it’s interesting to look at annual reports as an assessment tool as opposed to a marketing vehicle.

- A.B.

The stakes are especially high with Kraft’s recent, tumultous acquisition of Cadbury and therefore it’s not surprising that Kraft CEO Irene Rosenfeld turned to outside HR help as noted in a recent article from the Chicago Tribune:

Going forward, Rosenfeld said, Kraft will cull from the “best of both worlds,” Kraft and Cadbury, when it makes strategic decisions, including hiring top managers. Rosenfeld said Kraft has hired an independent human resources firm to help with selecting those managers.

The reason: There’s a tendency within any organization to gravitate toward the people you know best, not necessarily the people who are best for a job.

“It’s human nature that if you know someone for 10 years versus 10 minutes, you can’t make an objective assessment,” Rosenfeld said.

While Rosenfeld puts a positive spin on the reorganization as a search for top talent, implicit in her words is the need to divest talent as well.

With Cadbury Chairman Roger Carr’s stinging criticism of Kraft as an “unfocused conglomerate” still ringing in employees’ ears, the worst thing Kraft could do is to live up to this charge by implementing an impersonal, disjointed reorganization process by relying too heavily on consultants. Here are some thoughts on how Kraft can avoid an integration debacle during reorganization:

• Make sure the information flow is 2-way. The above clip from the movie “Office Space” is an iconic one in which the protagonist, Peter, turns the table on the HR consultants by pointing out how the corporate structure is leading to poor employee performance (and not the other way round). This is essential information that any acquiring company would love to have but they rarely try to elicit it during reorganization interviews and typically have no process in place to channel it to those who need it. Additionally, a merger-related interview is like a normal job interview for an external hire — there should be equal give and take, and there should definitely be someone present who can answer employee questions about the acquiring company (a staff member in addition to the consultant).
• Sell the merger to everyone. Even if you know certain people do not have a shot at being retained, it is imperative that they are given equal treatment in being on the receiving end of the merger “sales pitch.” Just because their employment ends does not mean that all of the ties are severed. They may still be customers, or investors, or even future employees. And the best “salespeople” of the merger will always be employees — not consultants.
• Keep the process fast but not cursory. There are a number of reasons to hurry up the reorganization process, most notably financial ones. But, too often companies approach the task like it is a speed test and zoom through interviews, decisions, and logistics, leaving a wake of poor hires, miscommunication, and low morale. Pick reasonable deadlines and do the job right.
• “Man up” and do the dirty work yourself. Nobody wants to be the person to tell another that they’re not wanted — it is without a doubt the cruelest act in business. But when it must be done, it is important that it is done with respect and dignity. And that means the message needs to directly (and personally) come from an employee of the company doing the firing — not a consultant. Using consultants for such a task signals weak management. And it’s just plain tacky.

Reorganization is, without a doubt, the most difficult integration task. But it is also the most critical as it sets the tone for the entire merger. If handled well, merger integrations execute more smoothly. If handled poorly, well, there’s a good chance that the stated merger synergies will not be realized.

As the character Peter in “Office Space” ironically bids goodbye to “the Bobs” (HR consultants) after his interview, “Good luck with your layoffs, all right? I hope your firings go really well. ”

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- A.B.

An easy way to make your information more accessible is through color choice in charts and graphs. In business, certain colors are used more frequently (and have stronger connotations) than others:

• Green typically = Increase, Growth, Positive, On Track
• Red typically = Decrease, Loss, Negative, Danger, Problems

But to someone who is “red-green” color blind, distinguishing between these colors is often impossible. And this is no small problem – it is estimated that roughly 9% of the overall population suffers from “red-green” color blindness (predominantly affecting Caucasian males).

The above illustration is a part of the Ishihara color test. For most people, the number “74″ is visible in the circle. However, for those afflicted with visual impairments for color, they may only see the number “21″ or no number whatsoever.

So what? Let’s see how this applies to business information.

In the “stair step” chart above (from Occidental Petroleum’s Q4 2009 earnings presentation), Occidental uses green to show the magnitude of positive factors impacting earnings growth and red to show negative factors.

However, for some people afflicted with red-green color blindness, the positive and negative factors look relatively the same. And since the label on the negative factor (sales price) is shown as an absolute number (not reflecting its negative value), the viewer may be confused as to the meaning of the chart.

In some business communication, the meaning is less obvious. The positive or negative direction of for a number, for example, may simply be highlighted by the use of green or red in font color. To someone who is “green-red” color blind, the meaning connoted by the choice of color would be entirely missed.

As graphics become more and more important in communicating business information (often without accompanying textual explanation – e.g. dashboards, business intelligence software), it is essential that business information is conveyed optimally through “accessible” color choice.

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- A.B.

Typically, mission statements are developed by committee (big mistake). A team of people crowds around a table or a whiteboard debating the inclusion, exclusion, and nuances of every word. The very thought of it is enough to drive the hardiest soul to drink (or at least to pop a few aspirin).

The result is typically a generic, watered-down, statement sprinkled with MBA-speak that is incapable of serving as an enduring foundation for corporate strategy. Sadly, this type of mission statement is more the rule than the exception.

So, what can be done?

Pick a Thomas Jefferson. Blue sky, group-think is a bad idea for mission statement creation. Assign one person (preferably a senior executive with strong writing skills and a thick skin) to develop a draft or multiple drafts. These drafts should be shared, discussed, and debated in meeting with all of the senior management present (possibly with the help of an outside facilitator). It is critical to have the buy-in of all of the entire senior management team because they will have to “walk the talk.”

Ruthlessly focus on specifics. A good mission statement contains a few key specifics:

• Description of the industry and/or markets you will serve.
• Description of how you will make money.
• Definition of success.
• How your company is unique. (Very important)
• Company values (although it is generally a better idea to detail these separately and show how they support the overall mission – e.g. reducing impact on the environment will eliminate waste and improve overall profitability.

The operative word here is “specific.” It is not helpful to say you will be the “best” in your industry. The best at what? Product innovation? Customer service? Product quality? The more specific you can be on your mission, the better your strategies will be because they will be clearly focused. Nothing is more useless than vague strategy.

A good rule of thumb: If your mission statement can be applied to another company (especially a competitor), it needs more work.

The good news about mission statement creation is that it is typically an infrequent exercise. An effective mission statement should endure for years as the foundation of your company’s strategy, tweaked occasionally to reflect new market forces or business structure. So bite the bullet, invest the effort, and develop a meaningful mission statement to guide your corporate strategy — if you’re successful, you will be light years ahead of your competition.

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- A.B.

Let’s start with the audience segments for business information. Audience segments do not fall into neat, mutually-exclusive groups. Your employees might also be your customers. Your suppliers might also be your investors. Your board members might also live in the community where you are located. We could not think of a single distinct segment that did not have real (or potential) overlap with another segment.

What is the potential impact of this audience overlap?

Suppose you are in charge of investor communication for your company. You prepare an investor presentation that gives a broad overview of new, upcoming expense reductions and post it on the corporate web site alongside a webcast of the presentation. As employees are often shareholders, a few employees download and view the presentation. They’re shocked. Expense reductions? Where? What? Who? If there was no associated and proactive employee communication, the company might have an internal panic on its hands.

Or suppose you just announced a new merger, and in your investor communication, you mention that significant synergies will be achieved through the streamlining of suppliers. Your suppliers (some of whom are also investors) get wind of this and start blanketing your operations department with calls and requests for sales meetings. Even suppliers who would not be affected are reacting because they have no clue that the changes don’t apply to them.

Like most mixed messages in communication, these scenarios result in time-consuming fire-fighting. And most fires can be prevented through a unified communication strategy that is based on better organization and cooperation.

How does organizational structure exacerbate the problem?

In a typical company, formal business communication flows from the following functional areas: Corporate Relations, HR, Marketing, Legal, and Operations (informally, the list grows much larger, but let’s just stick with formal communication for now). And if a company has multiple divisions and business units, the complexity grows exponentially.

The scope of each department’s audience is usually similar to what is depicted in the above graphic. As you can see, most departments address more than one audience segment and there is quite a bit of overlap.

Where there is clear commonality of audience segments, you’ll find the best cooperation between departments. On Labor Relations issues, typically you’ll find HR and Legal joined at the hip. Community Relations is often a joint effort of Marketing and Corporate Communications. And, of course, HR and Corporate Communications typically share responsibility on Employee Relations.

However, where there the audience target is a bit murky, that’s where you will find confusion and inconsistency. A department issuing communication may be unaware of its potential effect on other audience segments or departments. Or there may be a power struggle amongst the different communication groups as to who “takes the lead” on disseminating important information, and one department (or more) may purposely avoid coordinating with another department.

Whatever the reason may be, weak organizational structure and lack of a unified communication strategy are typically the roots of the miscommunication. And, generally speaking, the larger the company, the larger the communication problem.

We’ll explore options for overcoming this communication crossfire in subsequent posts (mostly, in context of the different audience segments and subject matter), but we wanted to start by highlighting the roots of this issue. If you’ve had experience in overcoming the issue, we’d love to hear from you!

- A.B.

After any merger announcement, the first thing that employees fear is job cuts. And in this economy, that fear is more resonant.

Kraft strongly addressed this fear, according to an article, “Kraft pledge: we will invest in Cadbury and create more jobs,” in The Telegraph.

“I would fully expect that once we can actually look at what is going on and have a more informed perspective that this should, down the road, increase manufacturing jobs in the UK.”

“I genuinely believe that we can create a tremendous amount of savings in things like procurement, on how we source cocoa, dairy, sugar, packaging and advertising. I am very optimistic that the vast majority of our synergy savings will come from things that do not affect jobs.”

- Michael Osanloo, Kraft’s EVP of Strategy

Wow. It is extremely rare for a company involved in a hostile takeover (where they haven’t been able to do proper due diligence) to take such a strong stance on jobs in pre-merger communication. It is even stranger considering that Cadbury’s management (with an insider’s perspective on operating details) was already moving to shift manufacturing jobs out of the UK as a course of business.

“On Cadbury’s two major plants at Somerdale, near Bristol, and Bourneville, [Michael Osanloo] said: ‘Those are very important plants for Cadbury historically. I think it is unfortunate that Cadbury has in the past been cutting jobs at those plants and I would love to be able to figure out a way to do something other than what the current plan is.’”

Again, strong words that could come back to haunt Kraft if they can’t walk the talk.

Most companies wisely punt on the topic of job cuts and focus on the growth aspects of the deal. The danger of addressing job cuts head on with only limited knowledge of the acquired company’s operations, is that if Kraft has to go back on their pledges regarding job reduction or job creation in the UK, there most certainly will be both an internal and external backlash that could derail merger execution.

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- A.B.

• Strategy first. “There is a lot of talk about social media strategy in IR at the moment. Before even starting to think about this, you need an IR strategy.” Great post from Stefan Petterson.
• Ethical considerations in investor reporting Thought-provoking post and discussion from Dominic Jones of IR Web Report — “Am I An Ethics Prude?”
• The case for small M&A Teams. “If the essentials for the governance and execution of M&A are in place, many companies can carry it out successfully with a small, experienced team that pulls in resources project by project.” Business communication processes are also more effective when teams are smaller. Interesting article from McKinsey Quarterly: M&A teams: When small is beautiful. [Note: you need to register to read the article.]
• Annual reports & non-GAAP reporting. Excellent discussion points regarding standards (or the lack of them) for non-GAAP information in annual reports from PWC’s IFRS blog post by Richard Keys.
• Data visualization — effective dashboard design. We’re big fans of Stephen Few and he always has helpful posts on data visualization for business. His latest post on dashboard design for business performance is no exception: “Designs that are effective for monitoring information are quite different from the designs that are usually featured by software vendors and thus emulated by those who use their products. As a result, what people expect of a dashboard’s design is often quite different from what they actually need.”
• Leadership and business communication. From the Washington Post’s article on President Obama’s communication style: ” In speaking about the work of building organizational culture, Jack Welch talked about the need for leaders to be relentless and boring — to repeat, more often than a leader felt necessary, a message that would resonate, help people make sense of what was going on and what they needed to do, and remind them of what the overarching vision and objectives were.” Article is focused on Obama (in context of healthcare reform), but is applicable to every leader in business.

- A.B.

An example of the jarring effect of color on financial data can be seen in a recent investor presentation from Bombardier, a Canadian aerospace company with a good growth story but in need of some help in visually telling it. For this analysis, we’ll focus solely on Bombardier’s income statement slide — content that is challenging for any company to present in an effective manner.

There are a couple of glaring aesthetic distractions in this table, most notably the color choice.

• Resist the temptation to use copious amounts of bright colors, especially in data-intensive tables. Viewing row after row of numbers can be boring, but bright colors are not the way to ease the monotony. Bombardier uses a glaringly bright blue to highlight columns of data, that if you look at it for a while, it becomes painful (especially when contrasted with the navy blue). Not the reaction that you wish to have if you are trying to communicate business information. If you must use background colors for your data, try sticking to more soothing tones. Earth-tones are always a good idea. “Cool-toned” colors like blues and greens also work well as long as they are muted.
• Use color to highlight key data. What is interesting about the above slide is that it seems that Bombardier is trying to highlight their most current financial data and chose the white type on dark navy background to do so. However, most people’s eyes will immediately gravitate to the lighter blue because it is brighter in tone. As there is no visually neutral “anchor” on the page (i.e. standard color palette in which contrasting colors/tones stand out), the current year’s data is competing with past year’s data for the viewer’s attention. It doesn’t seem like this was Bombardier’s intent. Imagine if the row labels and the past year’s data had a background color of a medium or light grey — the navy blue columns would really stand out then.
• Avoid using white type on dark backgrounds. White or light-color type on a dark background is certainly dramatic and can be effective in small doses. But for data-intensive presentations like an income statement, it’s visually distracting. If you are using a background color, always strive for a light-medium tone with dark type for the data. Your readers will thank you.
• Be discerning in the use of bold type fonts. Similar to the above point on light-on-dark-backgrounds, bold fonts should be used judiciously and just to emphasize key points. Bold type that is grouped together (especially in data-intensive charts) has a similar effect to a large mass of all-capitalized type — it decreases readability.
• Try to eliminate or diminish grid lines. Grid lines are helpful in drawing the eye across sequences of data, but the lines themselves should be as unobtrusive as possible. Ultra-thin gridlines or gridlines in neutral colors are the way to go — avoid the heavy, black lines that seem to be the default setting in Excel and Powerpoint. Even better, see if you can avoid gridlines altogether. Let the data guide your judgement on how, when, and if to use them.

Let’s see if we can use the above-mentioned points to improve a sample of the data presentation in Bombardier’s income statement.

Notice how we kept a blue-based color palette (to fit in with Bombardier’s branding) but chose more soothing, muted tones. We developed a neutral “anchor” in the lighter blue columns and highlighted the current period/year’s data with a deeper, slightly brighter background tone. Finally, we tried not to detract from the numbers by choosing minimal horizontal gridlines in the same grey-blue shade as the header bar (and we abolished the vertical gridlines which did not seem necessary). In viewing this chart, our eyes immediately focused on the current data and not on the distracting color scheme.

Color choice is very subjective, but usability and readability should be the primary drivers of color decisions when developing visual presentations of data. And the more data-intensive the presentation is, the more careful the choice and use of color needs to be.

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Presentation tip – avoid “shouting” in color

How 3D charts distort business information

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- A.B.