Inside player: top management's new role; when pursuing short-term strategies for long-term gains, it is more important than ever to keep communication lines open inside the organization. Here's how three company leaders make it work - Strategy

Chief Executive, The, May, 2002 by Chuck Martin

When managing for the short term, it is essential that an organization's strategy and direction and all of its implications be understood from the top down and from the bottom up. The most effective way to do this is to increase interactive communication inside an organization, which can be more difficult than it sounds.

For senior executives, this means spending considerable time inside the organization. For managers, it means taking the initiative to understand the organization's goals and objectives and to provide input back up the chain of command. It is not about more memos or meetings, but about creating a culture in which managers and executives truly communicate, both the good and the bad, and then collectively move on.

KRAFT FOOD SERVICE

Taking the inside view

To foster this type of communication, executives and managers must constantly shift between external (such as shareholders and customers) and internal (such as supervisors, peers, and employees) forces. "There's a balance needed, depending on the size and complexity of an organization," says Steven Rudnitsky, president of Kraft Food Service and executive vice president of Kraft Foods. Rudnitsky, who was president of Nabisco Food Service and took over the combined food service operations after Kraft acquired Nabisco in 2000, is responsible for all Kraft and Nabisco food products that go to restaurants, hotels, hospitals, and schools throughout the U.S.

"Our organization is large and the business dynamics are complex. The nature of my job requires that I spend a fair amount of time, perhaps a disproportionate amount, on the inside," says Rudnitsky, who echoed the views of many executives we interviewed. Says Rudnitsky:

"When managing internally, you have to start with a clear understanding of your strategic direction and it has to cascade through the entire organization. In fact, you're doomed unless everyone -- from top to bottom -- shares the organization's vision and strategic direction. That requires a fair degree of 'managing up,' if you will, so that people at the very top of the organization understand the business dynamics. This, in turn, helps set proper expectations for the division and leads to support for the strategies for attaining what should be clearly defined business objectives.

"Internal management also requires managing across functions. At Kraft, it's a true collaborative effort. At my level, I need to ensure that every discipline -- R&D, manufacturing, marketing, information technology, and so forth -- and every division employee is working off the same page. We won't succeed unless everyone in the organization understands the business objectives, embraces them and conceptually understands their role in achieving them."

Rudnitsky created an open and interactive environment to facilitate clear direction down and feedback back up. He started conducting quarterly town hall meetings that include a large portion of his staff. Says Rudnitsky:

"I open every town ball meeting personally. Most recently, in an attempt to provide greater focus for the division, I told everyone there, 'If you're doing something that is not consistent with these five strategies, then do not do them and tell your boss.' Once you set the strategy, it's incumbent on employees to determine if what they're doing is a fir. I strive to have very little ambiguity about what I want and expect. Directness works best for me. If people disagree, I want to understand why. I have confidence in my managers that the people working for me are as open and as honest with me as I am with them. It's part of a culture. People can be extremely guarded and it's easiest to continue down a path because 'that's the way it's always been done.' I want people to challenge the status quo and focus on our clearly defined business objectives. Two-way communication is essential, and you have to demonstrate by example.

"The key to managing for the short term is to try to make work fun for your team. It's important. Encourage them to look at their assignments and be able to fix, change, or finesse them and, hopefully, have fun doing it. At the end of the day, we are a company with high expectations; however, we all need to find ways of having fun as we pursue our goals."

DOW CHEMICAL

Bringing the outside in

Not every executive has the luxury of leading only during the best of times. During the great prosperity of the mid-'90s many executives found their companies faced with non-stop growth and increasing market size or share. Under the circumstances, concern for costs often seemed relatively unimportant. Dramatic increases in revenue and stock price kept most stakeholders happy. However, during economic downturns, corporations tighten their belts and executives feel more pressure to deliver positive results -- by any measurement. The economic fallout of the World Trade Center attack on September 11 accelerated the challenges of coping with an impending recession, and in 2001 there were few companies that were not in some way affected.