Hi, I’m Ian McClean. I’m the founder of Flow Group and GreenLine Conversations, and this podcast has grown out of the chaos that’s been thrust upon us. During the podcast, I’m going to try and share with you the best of 25 years of helping corporate organizations deal and cope with change. So, as you’re out there, busy making sense of it all, trying to cope, and maybe, in some cases, trying to rebuild your organizations, I’m hoping that some of this can be of some assistance. We’ll keep it deliberately short, because I know you’re busy. Let’s dive in.

I described conversations last week as being the wallpaper of humanity. Because there is nothing I know that has the power of a conversation to either connect us or to divide us. And we’ve all been in that situation at that moment where, following a conversation, we feel totally connected. Or, we feel exactly the opposite.

We rarely recognize that power, particularly in our role as leaders. I call it wallpaper because we’re surrounded by it. It happens all the time. We don’t even notice it, and we just take it for granted. We think that it’s something that we do, but conversations are real, they’re material, and they’re really powerful.

We spoke in earlier episodes about one of the leading misapprehensions or underestimations of leadership, one of which is we underestimate our impact, and our impact is very often conducted through the conversations we have and the impressions that we make.

As we look around, we see that the chaos continues in our society. Much of the chaos currently is emanating from the confusing and inconsistent messaging we’re getting from our leaders. Which has reduced itself, in Boris Johnson’s case, to relying on the common sense of the British people. I’m not quite certain how many oxymorons are built into that phrase. The confusion and inconsistency lead to uncertainty, which in turn invokes the primal brain.

Last week, we talked about two of the main characteristics of the primal or survival brain. That it forces us towards uncertainty and helps us polarize or become polarized so that we can enforce that certainty, and this is what’s leading to the suspicion, the intolerance, the aggression that we’re witnessing all over the world, but bringing it closer to home, our research tells us that amongst our clients the majority, vast majority of us are expecting that there is more pain to come in this crisis and the pain in the future, short term, is going to be peppered by some very, very difficult conversations that we’re going to need to have. In the days and weeks ahead. And as I mentioned last week, it’s through these conversations that we are going to be defined in terms of our leadership and how we show up during them.

And it was mainly the mishandling of these critical, difficult conversations during the last crisis that made or broke the reputations of the leaders that emerged either with credit or discredit. So what I aim to do is just build up the picture of how to approach conversations in a very, very simple way and go back to very, very basics.

A very basic definition of conversations is all interactions that we have, and they come in four channels. The first is face-to-face or in-person, which is becoming less and less direct and indirect as a result of the virus. Secondly is video, the third is audio, and fourthly is electronic conversations, which is any e-messaging, email, etc.

Every conversation, as I mentioned, has the power to either connect us or divide us. And in reality, there are only three possible outcomes to every conversation that we have. And it’s a little bit like the gear shift on an automatic car.

The first outcome is the D outcome, where you have the conversation, you create the agreement, and things move forward. It drives the business ahead. This is the intention of every conversation, but not always the outcome.

The second possible outcome is where you have the conversation; the conversation happens, but then nothing happens. That’s the N or the neutral outcome. The conversation may as well not have happened.

But there’s a third setting or outcome potentially to a conversation, which is the R setting and the R in Gearshift terms stands for reverse.

In terms of conversations, we label it residue, which we talked about last week. Residue has one of two consequences. There’s either a loss of commitment from those participating in the conversation or there’s a loss of clarity, which leads to a loss of inefficiency or waste.

And one or either of these erodes leadership reputation.

Managers globally spend an average of 15 hours a week tidying up residue, which is a huge sum of time when you consider that in most developed Western economies, the average working week is less than 40 hours, at least officially. And time, of course, is money. Because when you take those 15 hours and multiply them by 48 weeks of the year, you multiply that by the average hourly rate of the employees, and you multiply that by the number of employees employed in the company.

I can remember sitting down with one CEO of a global investment house, and when he did the calculation for himself and his entire organization globally, the cost of residue turned out to be somewhere in the region of 70 million, which is a number that you will never find on any balance sheet or in any bottom line.

It’s a stealth cost. Actually, it only presents half the picture because, for every hour that a manager spends tidying up residue, it’s an hour that the manager is not spending focusing on driving revenue. I mentioned it as a stealth cost because the number one assumption for people is that it’s something that seems to be part of the wallpaper. Most people believe that it’s inevitable and just part of how we do it.

I can remember one CFO of a large state organization. And when we were talking about residue and the calculation of how many hours were spent tidying up residue. His observation was that 90% of his time was spent tidying up residue. After which, he made the remark or the rhetorical observation, but sure, isn’t that what work is?

One of my favourite films is The Usual Suspects, and there’s a line in the film which is the greatest trick the devil ever pulled was persuading the world he didn’t exist. Well, the greatest trick that residue ever pulled was persuading the world it doesn’t exist.

Interestingly, the higher up the food chain you go in organizations, the higher the figure becomes for residue and managing. The reason I’m emphasizing this idea of residue so much is that we’re now entering the phase in the chaos of the current climate, where in the parallel phase during the last financial crisis, residue went nuclear.

And where leaders and managers approach difficult conversations in the wrong way, that was the source of the devastation of their reputation. So, as you approach inevitably difficult and challenging conversations in the coming days and weeks, there is good news. Following the crash 12 years ago, we put conversations under the microscope to understand what actually happens and, how residue gets created and what we can do to avoid it. And there were three things that we found about conversations.

The first is that it’s a zero-sum game. It’s a garbage-in, garbage-out system. So what you put into it as a leader is what you’re going to get out of it on the other side.

The second thing is that as the conversation evolves and starts to unfold, there are points of choice along the way, a critical moment where you can turn left or turn right in the conversation. By turning right, you get to the right outcome or continue on in the right direction. By turning left, you create residue.

And the third insight is that at those points of choice, the decisions that are being made by leaders are typically unconscious.

Back to our principle, we are all well intended. Nobody goes in to create a bad outcome with a difficult conversation, but good intentions are not going to be enough to carry the day.

Over the last quarter century, I’ve seen countless well-intended leaders endeavour to have conversations and get bad outcomes. Unfortunately, we get judged on the outcome, not on the good intentions.

Next week, I’ll be getting more granular about how to translate the good intentions into good outcomes by introducing principles that you can apply in every conversation, however difficult as you go forward.

Many of our subscribers have got in touch with the podcast with ideas, suggestions, or just saying hello. And if you’d like to do that, connect with me on LinkedIn or send an email to [email protected].

In the meantime, stay safe, stay sane, stay connected.

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