Dialog or Death? (page 1 of 3)

Not about the weather or the skiing at the Swiss retreat where they were gathered for the World Economic Forum. He arranged to have them break into random groups and actively discuss ways they could work together in the next five to 10 years. The executives came from all kinds of industries in all parts of the world. Even chosen at random, after a few hours of discussion 75% found potential alliance opportunities and 20% actually made plans to follow up. All it took was the opportunity to engage in a serious, constructive discussion. Perlmutter later termed such discussion a "deep dialog."

As the global business environment becomes more diverse and complex, Perlmutter believes that "deep dialog" will be one of the most important capabilities for organizations. "The more I study global challenges - from new product launches to post-merger integration - the more I see the potential of deep dialog," he says. "If you are very good at it, it becomes an important advantage, a core capability for the 21st century firm, which will be less hierarchical, and often involve electronic networks extending around the world."

Deep Dialog Defined

Perlmutter, a pioneer in the study of global corporations, has worked with managers and companies around the world on improving the global mindsets of the senior executives and managers as well as the quality of their cross-cultural communication. Through these experiences, he has developed a framework for systematically building dialog and for diagnosing dialog deficits.

So what is deep dialog? It is purposive communication that involves the exchange of information as well as constructive feelings and attitudes to reach shared objectives. Westerners might describe it as an "exchange of meaning" or "two-way communication." Easterners might characterize it as "warm feelings" or "conversation from the heart." It is differentiated from superficial conversations in which information is exchanged. The issue is, "How do you move beyond the differences to establish mutual trust, share knowledge (often implicit) and reach goals none of the parties could reach by themselves?" Perlmutter says.

Global Challenges and Opportunities

Perlmutter points out that the process of engaging in deep dialog is not the same as negotiating. Negotiation, as BP Amoco's CEO John Browne once put it, encourages a "bazaar mentality." In contrast, deep dialog inspires those who engage in it to share knowledge and identify processes that promote or hinder communication. Deep dialog, in fact, prompts people to go beyond communication to communion.

Two studies in 1997 and 1998--one of a global insurance firm and the other of a high-tech conglomerate of entrepreneurial companies--found that the deep dialog process was extremely helpful. In fact, at both firms, Perlmutter found that the absence of dialog resulted in costs that could have been avoided if communication were enhanced. In addition, Perlmutter discovered that when executives in an Advanced Management Program in June 2000 were asked to compare relatively successful and unsuccessful cases of new product development and launch, building alliances, post-merger integration, headquarters-affiliate relationships, cross-cultural negotiations and even virtual global team building, the trends were similar: Successful cases involved deep dialog, while in unsuccessful cases deep dialog was absent or minimal.

In an earlier instance, when Whirlpool acquired the European appliance division of Philips Electronics a decade ago, some 90% of Whirlpool executives had not been outside the U.S.