January 11, 2017

Demonetization: 7 Lessons on Communication

Note: This is not an economic or a political analysis of demonetization; this is an attempt to study the communication strategies used while the government declared something extremely important.

The Modi government’s demonetization raked up a hornet’s nest, to say the least. People have vehemently argued on either side. Opposition parties have cried hoarse on how insensitive and counter-productive the decision will turn out. Modi supporters have whole-heartedly welcomed the decision, expressing strong optimism.

We will not discuss the social, economical or political aftermath of the decision – we will study the communication strategy Prime Minister Narendra Modi used during the entire announcement and what lessons management professionals can learn from it.

Nothing about the declaration could have been easy. A seasoned statesman like Modi and his entire team would have known all along what they were attempting was extremely delicate. That is where using a great communication strategy was not only important, it was critical. Let us take a look at the strategy used.

1. Be direct: When PM Narendra Modi announced that Rs.500 and Rs.1,000 notes will cease to be legal tender within hours, he didn’t mince words – he was direct. However tough and potentially unpopular the decision may turn out to be, he did not beat around the bush. That prevented baseless speculations.

Additionally, notice the way Modi chose the audio-visual medium (the television) instead of relying on print. When you see a leader in flesh and blood (even if virtually) announce a strong decision himself, it contributes to his image as somebody who is direct and forthright with his people, and reinforces the image of a strong leader.

2. Appear logical: He made sure the decision didn’t sound Quixotic or Tughluq-like. In his speech, he carefully explained the entire rationale behind the decision, the likely problems people might face, the way the administration was expected to respond and the potential benefits.

A true leaders doesn’t merely announce, because he knows a true leader needs not only the full support of his team but also the co-operation of the masses. The way displayed the long-term benefits, he completely silenced extreme remarks from the common man. Notice that the reactions from the common man have been extremely mild, considering how momentous the decision was.

3. Keep it simple. Had Modi chosen, he would have shared the dais with RBI governor, deputy governors, finance secretary, senior economists or top officials. Prima facie, this could have added more credibility to his decisions, as the economists and others would have brought out all the economic terms to explain and justify the decision.

Modi apparently knew it might be helpful to a very few people, but the majority of common man would only be more confused. He explained everything in the easy language so everybody understood what the government was trying to do and what objective the government was trying to achieve. Without jargons, he sold the idea in simplest terms possible.

4. Show how the listener would benefit: Two of the biggest ills troubling the common man were terrorism and the rising gap between the have’s and have not’s (brought about, at least partly, by a black-money economy). He claimed the decision to withdraw the notes would fully or partly solve both the problems. While the problem of black money is still wide open to debate, terrorist activities came to nearly a standstill – no major terrorist attacks have been reported for a long time.

Demonetization seemed to cripple financial support to terrorist activities that was fully fuelled by black money and counterfeit Rs. 1,000-notes. By derecognizing the Rs.500 and Rs.1,000 note, he almost pulled the rug beneath the feet of the nation’s enemies.

5. Appear sensitive, be diplomatic but not overly emotional: During the 1-hour speech, Modi empathized with the masses. He acknowledged that the coming weeks may not be easy. That, however, did not conveyed a sense of helplessness; indeed, he presented it as a short-term sacrifice every citizen was to make for long-term benefits.

The tact with which he asked for a 50-day window for things to settle down was a sound diplomatic approach: anyone momentarily scared was assured that the hardships were really short-term. Besides, the way it was put showed his was a participative approach: he had taken a decision that he felt was in the best interest of the country and he was asking the people to co-operate.

6. Show you are in control of the situation: When you impose such a severe measure upon a 1.3 billion people, you simply cannot get away without putting emergency measures in place (Government hospitals, for instance, were instructed and permitted to accept currency notes that were to be unacceptable tender elsewhere.).

Modi and his team very well knew the kind of chaos demonetization was likely to unleash. To contain it and to prevent the situation from going out of hand, the PM conveyed the sense of having thought of everything and that everything was going to be under control.

How successful or effective these measures ultimately were is a debate that belongs elsewhere, but the government tried to show it was trying to be as helpful in the situation as was possible without ruining the overall objective.

7. You don’t have to respond to everything: There were countless criticisms (and even allegations) against the announcement. The common man criticized the measure wasn’t executed well, some economists said the decision did not make sense in the long run, and parts of the opposition parties questioned not only the wisdom of the PM but also the very intention behind the decision. Modi sat silent. He had said all he had wanted to and wasn’t too keen to respond to every allegation floating around.

How far this strategy of not responding was fruitful is debatable. But he got a few benefits too. One, because he did not respond (mostly), there was only one version of the action. Had he clarified over and over again, it might have brought up newer interpretations which his critics might have termed self-contradictory. By choosing to mostly ignore criticism, he could contain his contents.

Two, by not responding, he refused to play the game his critics or political rivals wanted him to get involved in or get defensive. He could focus on what he wanted, instead of wasting energy on debates. While in a democracy, a leader must be accountable and answerable for every decision, Modi’s shrewd approach of choosing to respond only when he decided to ensured communication was properly delivered in the right quantity, at the right time and not in a haphazard way.

Even the worst of Modi detractors confess Modi is one of the top communicators of our generation, so any lessons we can learn from such situations must be more than welcome.

Views expressed here are personal

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