The "Instant Referendum" That's Undermining Your Leadership

Harvard Business Review

Outgoing New York City Mayor Michael Bloomberg knows more than a thing or two about running huge, complicated organizations and digital media. So when he notes in a farewell interview that, thanks to social media, there's now "an instant referendum on everything; I think it's going to make governing more difficult," private sector managers better get nervous, too.

The Arab Spring and other Twitter-credited uprisings get virtually all the headlines, but the C-suites and high-profile executives at enterprises worldwide are increasingly conducting "instant referenda" on their presentations, decisions, and actions. The digital institutionalization of the instant referendum makes leadership and management more difficult, as well. The more controversial or confusing the leadership decision, the harsher and more influential the instant judgments of that referendum can be.

Don't think for a moment that mid-level J.C. Penney managers and employees weren't sharing their unhappiness and concerns during Ron Johnson's troubled tenure there. At Microsoft, no sooner had Steve Ballmer's resignation set the company's digital tongues a'wagging than another internal debate broke out in the wake of the company's multi-billion-dollar Nokia acquisition. Are Google's employees running comparable referenda on the impact that a cofounder's relationship status may have on their company?

The water cooler hasn't vanished; it's simply become virtual, transported into the cloud. What's fundamentally different, of course, is the new speed and scalability of sentiment. Where rumors and reactions once took weeks to coalesce into enterprise attitudes, internal networks and "gray market" social media now compress into days. Global firms — indeed, any organizations of size and/or scale — are now captive to social-mediated "information cascades" that can turn quiet doubts into open skepticism and reluctant accommodation into passive resistance.

Managing — or at least influencing — information cascades will become one of the core communications competencies of top-level executives. Facilitating favorable cascades will matter as much as killing one in its virtual tracks. If information is cascading in private Twitter, Facebook, and/or LinkedIn networks, executives may indeed have to ask to "friend" or "follow" hub colleagues and subordinates.

At one European global financial firm, I saw heavily lawyered internal communications about an internal problem managed so poorly that managers across the enterprise collectively lost respect for the senior executive tasked with handling it. The instant referendum in the aftermath almost instantly devalued that executive's brand within the firm. He had to rehabilitate himself in face-to-face meetings throughout Europe to make up for losing that referendum. Needless to say, he and the corporate communications folks monitored the internal chatter that followed his make-up sessions. Issues of privacy and anonymity for these informal "off-network" referenda become managerially challenging, as well.

In instant referenda environments, being likable and/or highly competent counts for a lot. Leaders and managers want to be seen as either nice or credible enough to get the benefit of the doubt for a difficult decision or a controversial choice. Being more accessible or responsive can help. Similarly, so might "information inoculation" strategies and tactics where — like with a good vaccine — people get exposed to just enough of the decision or conflict to prevent uncontrollable outbreaks of negative sentiment.

Does this create the real risk that managers and leaders appear afraid of negative reactions from their subordinates? Yes, it does. Does it also create the possibility that employees and colleagues will be even angrier and more resistant to leaders who behave as if their reactions don't much matter? Why, yes.

Michael Bloomberg knows things have changed. In the digital enterprise where BYOD has become the new normal, instant referenda are an emergent phenomenon that leaders and managers ignore at their peril. The more important — and controversial — the decision, the more important that instant referendum will prove.

Poker players worldwide understand the admonition that if you can't spot the fish at the table in the first half hour, then you're the fish. In the socially mediated enterprise, leaders who aren't really aware of their internal referenda aren't really leading.

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