Quy Huy, Professor of Strategic Management at INSEAD has come up with five ways to inspire purposeful collective action to pull out a company from the doldrums of a crisis and improve productivity among other things.
Prof. Huy, in an INSEAD blog post, says often at meetings to resolve a crisis, agreements are reached over action plans for strategic chances. However, even after several months, none of the expected results materialise.
It is as if a disconnect has occurred between those with the big vision and others tasked with executing it. Such a situation may be more common than most executives are willing to admit, says Prof. Huy.
“Clear thinking and logic can chart a navigable path up the mountain, but the commitment to brave a risky climb can come only from the heart,” he says.
Verbal commitments mean little when they aren’t backed by collective emotional engagement, as several leaders have discovered.
The substantial body of literature on “emotional intelligence” brims with tips on how leaders can inspire people one-on-one, or in small groups. But creating an inspiration ripple effect that can be felt throughout large collectives necessitates a different, though related skill set.
Prof. Huy goes on to illustrate his five points by presenting the case of Carlos Ghosn and the Renault-Nissan Alliance. In 1999, Renault invested over five billion dollars to acquire a minority equity stake in the flagging Japanese automaker Nissan.
Nissan was burdened with high debt, unprofitable product lines, and losses over six of the previous seven years.
The Renault executive chosen as architect of the alliance was Carlos Ghosn. Within three years, a business miracle happened: Nissan became profitable—not only through cost-cutting but also through enormous strides in innovation.
Prof Huy says if Ghosn was asked to explain his success, he would probably have highlighted traditional change tools such as building trust, transparency, clarity of change goals, etc.
While these logical, “left-brain” explanations make intuitive sense, they do not fully explain why he succeeded so decisively.
Prof. Huy claims Ghosn had masterfully applied these tools to elicit five different types of collective emotions.
The first is ‘Respectful Authenticity’, an alignment between thought, action, and feelings. Ghosn, on his part, realised that attempts simply to impose changes from the top, would have failed. He had to open up unconventional channels for constructive criticism.
This he did by directing that all top-level meetings be conducted, and all reports be prepared, in English, so that senior leaders could start fresh on neutral territory.
Thus, a path was found for frank and open discussion in formal meetings that actively encouraged Japanese managers to disagree and debate their points with him.
Second factor was ‘Deserved Pride’, when people are appreciated for differences and concrete contributions to others.
He included Japanese middle managers in strategy development and assigned company president Yoshikawa Hanawa the face-saving duty of picking the Japanese members of the executive committee.
In so doing, Ghosn demonstrated to employees that Nissan’s cultural identity was something they could be proud of.
Third factor was ‘Realistic Hope’, a feeling that today’s actions will improve the collective future. Ghosn wasted little time in signalling his faith in Nissan’s long-term growth.
By mid-2000, the “Nissan Revival Plan” was in full swing, with Ghosn announcing plans to introduce 22 all-new models over the next three years.
He set about hiring new engineers for electric cars and invested $922 million building new plants in the U.S. In addition to making good business sense, his actions encouraged employees to focus on Nissan’s bright prospects.
Fourth factor was ‘Aspirational Discontent’ or the belief that it is possible to fulfil one’s highest potential. Restlessness and dissatisfaction have their place, as long as they do not devolve into apathy. Even narcissistic ambition can be channelled in a healthy direction.
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After the Nissan Revival Plan began to bear fruit, Ghosn refused to proclaim ultimate victory, saying, “My biggest worry is complacency inside Nissan.”
The fifth factor was ‘Thoughtful Passion’, a feeling of deep, high-energy personal engagement. We are never more passionate than when an exciting new challenge beckons.
Ghosn assembled nine cross-functional teams composed solely of middle managers from different departments and divisions within Nissan and assigned them to develop an ambitious corporate strategy for renewal.
Understandably, this unaccustomed authority kindled extraordinary passion, pride, and effort in the middle managers.
Note that all of the actions above could have been ascribed to sound business rationale alone. Herein lies the “magic” of emotional capital actions: they display both left-brain logic and right-brain emotional engagement—and don’t require one-on-one interactions to inspire large crowds, says Prof. Huy.
He concludes by saying that the five levers of emotional capital can be applied almost anywhere leaders seek to influence more people than they can closely engage with, using left-brain and right-brain alignment to inspire positive collective action within their organisations.(Image source:Google.com)
