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L&T's Crisis Exposes Dangers of Siloed Corporate Culture: Joel Cutinho Discusses

Credit: Joel Cutinho

The recent controversy surrounding the chairman of L&T, India's largest engineering and construction company, serves as a stark reminder of how quickly corporate reputation can unravel. His suggestion about implementing 90-hour workweeks, including Sundays, coupled with inappropriate comments about employees' personal lives, didn't just create a media storm, it exposed a deeper organizational challenge that many companies face: the disconnect between corporate strategy, communications, and culture teams.

This incident demonstrates how operating in silos can lead to moments where a company’s reputation doesn’t just publicly trip but takes a spectacular tumble down the stairs of perception. The ‘Silo Effect’ is everywhere, and if you’ve never heard of the concept, here’s the deal: for decades, we’ve organized business according to functional expertise. That, in turn, creates silos.

“Today, the silo effect can be a reputation risk, making it critical to establish a seamless synergy between the three pillars that shape reputation: corporate strategy, communications, and culture/HR.”

If corporate strategy is the brain, communications the voice, and culture the heart of an organization. When these pillars operate in isolation, the consequences extend far beyond public relations disasters. Companies with poor alignment between these functions may experience a higher employee turnover, lower customer satisfaction scores and a reduction in market value during crisis situations.

Lack of Awareness or Complacency?

As of March 2024, women constituted 8.1% of L&T's workforce. While this surpasses the core engineering sector's average of 3% female representation, such demographic imbalance heightens the importance of sensitive and inclusive leadership communication. The chairman's comments proved particularly problematic against this backdrop of gender disparity, especially when coupled with the organization's increasing emphasis on productivity optimization and profit-driven digitalization initiatives.

Unfortunately, a majority of the companies today do an inadequate job of managing their reputations and envisioning the risks to their reputation. Instead, they focus energies on handling the threats to their reputations that have already surfaced. This is not risk management; it is crisis management - a reactive approach whose purpose is to limit the damage.

This situation could have been pre-empted and avoided if the culture, communications, and corporate strategy teams had collaborated effectively from the outset. Employee sentiment data, gathered by HR through surveys and feedback channels, should have highlighted key concerns such as work-life balance, inclusivity, and leadership perceptions. This insight could have guided the corporate strategy team in developing policies to address these issues. With a clear strategy in place, the communications team would have been instrumental in transparently conveying these changes to both internal and external stakeholders, ensuring alignment and trust.

Building Leaders as Brand Ambassadors

Leadership development must evolve beyond traditional executive training. While the focus on profit and execution is undeniably important, it cannot overshadow the softer nuances of today's corporate reality.

Corporate communications must play an active role in aligning leadership messaging with organizational values. Real-world scenario simulations, stakeholder interaction training, media management skills and cultural sensitivity workshops can help

reflect empathy and foresight, while avoiding missteps like those made by the chairman. Integrating corporate strategy, communications, and culture tams can minimize risk by de-alienating key stakeholders—employees, customers, and the society. By fostering unison across these functions, companies can build stronger, more resilient organizations that thrive in a socially conscious and competitive world.

Organisations must “Think from Purpose, Act for Values”

Equally important is for organisations and leaders to consistently remind themselves of their purpose– what do they truly seek while ensuring the omni presence of a moral compass. The question that beckons communications teams today: does this article, social media post, leadership message, press conference, keynotes and panel discussions take purpose into consideration? While Gen AI can help sense-check communications for grammar and appropriateness, the fundamental responsibility for maintaining organizational purpose lies with human judgment.

Success in this endeavour requires more than just structural changes; it demands a fundamental shift in how organizations think about and manage the relationship between strategy, communications, and culture. Only through genuine integration of these functions can companies build and maintain the strong reputation they need to succeed in today's complex business environment.

Joel Cutinho is a seasoned public relations and corporate communications professional.

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