Leadership and Communication

An important aspect of leadership is the ability to effectively communicate: to employees, investors, the media, large groups of people, individuals, and through speech and writing. Communication is especially important in creative industries because leaders must convey sometimes abstract visions or goals, and progress can be difficult to measure, predict, and convey in more volatile markets.

Mattel’s website claims that “ ‘Leadership’ at Mattel is the ability to develop and communicate a compelling picture of the future that insures and motivates others to take action.” Robert A. Eckert is the CEO, and as a leader in a large public company whose success is embedded in its creativity and ability to see cultural trends, he has the important task of communicating Mattel’s success and future outlook to the public.

Though Mattel’s comment on leadership has an upbeat and positive orientation towards the future, it is also important for leaders to identify and communicate the less pleasant reality of future risks and obstacles. Acknowledging and communicating risks is important for three reasons: it prepares the company so employees can have back-up plans, it keeps employees and investors from being completely surprised if the risks become a reality, and it communicates an honest assessment of the company so that investors and potential investors have access to the knowledge to which they are entitled.

Mattel’s 2006 10K risk sections does not live up to this level of detailed and honest communication. In comparison to Google’s 10K risk section, which spells out and exhaustive list of 41 possible risks, Mattel’s risk section is vague, short, and obvious. Perhaps Robert Eckert and Mattel’s leadership team chose not to disclose Mattel’s future risks so thoroughly to the public, but the risks that they have chosen to share do not paint a clear and straightforward picture for investors. Factors that they list, such as business being seasonal, recalls, and political developments are all real risks, but these risks are not very specific to their company. A leader like Robert Eckert should see the risks that no one else has thought of, and by making sure they are spelled out to all of Mattel’s stakeholders, keep the company prepared and the public informed.