Leadership Lessons Close to Home

It is fascinating to see articles examining the leadership lessons of the Chilean Mining Disaster (or triumph) so soon after its successful conclusion and I notice that there’s an hour devoted to it on Channel 4 tomorrow night. Along with the film of the events, the book deals and (the probable) appearance on Oprah in due course, there is certainly something about it that draws us to it. It was after all the triumph of human endeavour over disaster. But to suggest that we can learn from the leadership of President Pinera and shift leader Luis Urzua before the whole story has emerged is I think going a little too far. As the different accounts emerge, then we will be able to look at how people reacted under pressure, how different agencies co-operated together, and how everyone seems to have been united by a common purpose, but I think there’s a much more relevant example for us closer to home.

Last year, Jaguar announced that it was to shut one of its three plants in the UK, with the corresponding loss of skills and experience to say nothing of the knock on effect in local communities. But the incoming management agreed to listen to other views (lesson number 1) and this month agreed not only to reverse their earlier decision but also to centre Jaguar R&D on the UK. Additionally they have awarded a 5% pay deal to the workforce - how many of us would jump at such an award in the current economic climate? A remarkable turn around! The lessons are there for us all, and are particularly applicable to the Public Sector after the CSR announcement last week.

So how was it achieved? Well first and foremost the incoming management team agreed to listen to other ideas. They didn’t shut themselves away, come up with the solution and then impose it. Secondly, they engaged the workforce and asked what they could do in terms of cost savings, different working practice and greater efficiency. Thirdly, the management, workforce, unions and local MPs all worked collaboratively – with a common purpose in mind. What I find remarkable was that the Union was UNITE – the same Union that is involved in the long running and acrimonious dispute with BA. It just shows that once sides are drawn, it becomes inceasingly difficult to find common ground.

The lesson for Public Sector leaders is clear. Faced with some really difficult decisions, don’t shut yourself away and forget “The Buck Stops Here” mentality. Present the situation to your employees and ask for ideas. Don’t approach it like a disaster, but look at it as an opportunity to tap into all the potential ideas that abound in your organisation. Provide an opportunity and you’ll never cease to be surprised by those closest to the action.

Simon Hollington is a Director of Leading Edge Personal Development Ltd (www.lepd.org.uk), a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280

To Grow or not to Grow? That is the Leadership Question!

You’ve heard the cry. “Recession is upon us, cut training, cut marketing, cut people, save money! Batten down the hatches and we’ll somehow survive this storm.” You just might, but will you be ready to take advantage of the upturn? Sadly not. A recent survey of 500 senior managers showed that 70% feared that they would not have the necessary skills to take advantage of the upturn, yet training budgets are under pressure.  The old wives tale of “train people and they’ll just leave for our competitors” seems increasingly to hold sway once again, along with “we don’t need to spend money, they’ll just be glad to have a job”.

  

So should leaders spend money on development during difficult times? How can you justify it when the pressure is on? Isn’t is right to cut back when finances are tight? All good questions to which the answers are: yes; difficult but do you need to: and yes and no!

Let’s look at the first question in more detail: should leaders spend money on development during difficult times? Ask a financier and the answer’s more likely to be no; ask someone from HR or L&D and the answer will be yes. Of course (you’ll say) HR & L&D people are bound to say yes because they are simply feathering their own nest. Perhaps some do but dig deeper and the real answer emerges. The real worth of any company lies in its people. Glib phrase but true. What will enable companies to weather this (and any other) storm are the people in it. Great product but poorly motivated people might mean you retain your customers in the short term but certainly not long term. Given that the conservative estimate of hiring someone in from outside is 150% of their base salary, why would you not want to save money and develop people from within?

A recent survey by Aon Consulting indicates that 47% of staff intend to look for alternative employment this year, a figure only topped by Ireland (49.4%) in Western Europe. In the current difficult economic times, employers are increasingly looking to save money by cutting down on salaries, benefits and pension options, and the results are (seemingly) increased dissatisfaction. But if you have top performers (and why wouldn’t you?) then your competitors will know who they are, and the more enlightened will look to use any dissatisfaction as a reason to poach them.

Interestingly some 70% of graduates said that development was more important to them than salary which says that they are looking for more than straight remuneration, and the same is true of those who are well passed the graduate stage – if of course you have the right people in your organisation. What motivates the top performers (by-and-large – though there are some who are only motivated by bonuses!) is their ability to grow, develop, be stretched, and take on new challenges. If you don’t provide that opportunity, then the moment there’s an opportunity elsewhere that does provide these elements, they’ll be off. If someone leaves, then you’ll need to spend all that money recruiting another, and if you are not able to demonstrate those opportunities to the new person, they won’t want to join you! So while it might be difficult to justify, it is right to continue to train, to grow and develop, if for no other reason than it’s cheaper in the long run!

Simon Hollington is a Director of Leading Edge Personal Development Ltd (www.lepd.org.uk), a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280

We All Have a Responsibility for Leadership

So the outgoing HR Director of RBS (Neil Roden) says that HR was not at fault for anything that happened at RBS. To quote a recent interview, he says:

"I can't see what HR could have done. Lack of money was not an HR issue, the portfolios our businesses kept was not an HR issue; none of them were. I wasn't running the bank - the CEO makes decisions, not me. There's a debate here about what HR can reasonably be held accountable for. People think HR runs companies. I say, stop getting carried away; HR is a support function, no more or less important than sales or IT. HR critics are way ahead of themselves; they need to get back inside their box."

What a complete abdication of leadership! So HR doesn't run the business (I agree) but how does he then account for another comment in the interview in which he says"

"the HR team has been doing an average of one business reorganisation a week for the past 18 months - new talent management and executive development processes"

If the HR function isn't the soul and conscience of the business then it is a waste of money. All the accounts I've read suggests that there was a culture of sycophancy at the top and that Fred the Shred bullied those who didn't agree with him. That's exactly the time that HR  - and particularly the HR Director -should have stood up and acted.

But let's not suggest that simply because HR has a privileged position in an organisation that it is only they who have a responsibility to challenge. We all have a leadership responsibility, whether just for ourselves, our immediate team or for the wider business interests. It may not be easy to challenge, but if we don't we are in effect condoning what is happening. When things are going well it is very easy (and tempting) to overlook those little things that go wrong but which don't have a significant impact. But that's exactly the time we should be challenging them - in the right way of course - because if we don't challenge them when they first happen, they become part of the institution and the culture, and then when the going gets tough, it is even harder to challenge because people will simply say - well we've always done that and no-one has complained before. Difficult conversations and bad news don't get any better by leaving them, and everyone has a responsibility to raise them as they happen. It is after all part of our responsibility as leaders - all of us.

Simon Hollington is a Director of Leading Edge Personal Development Ltd (www.lepd.org.uk), a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280

It's a Privilidge to be a Leader

Some time ago I spoke to a long standing colleague who had recently moved into a new role in a different organisation. His first few months had been difficult to say the least. A few weeks into his new role he was told by his head office to cut costs and headcount in the face of the economic downturn. So instead of looking forward to developing his new business and taking it forward, he became known as the hatchet man brought in by head office to ruin a once successful business.

“That’s the privilege of being a leader” I said. “I’m not sure being a leader is a privilege at the moment!” was his reply, and our conversation started me thinking. Leadership has three principal components: power; accountability; and responsibility - the latter being nowhere more important than when dealing with people. In this aspect, the privilege of leadership really comes to the fore.

The starting point perhaps is to go back to a (sadly) not untypical approach to leadership. Back in 1960, Douglas McGreggor suggested that people were either Theory X or Theory Y. Theory X people came to work and tried to do as little as possible. They therefore had to be controlled, measured and almost forced to work! On the other hand Theory Y people naturally sought to be the best they could be and therefore just needed to be guided. Of course it’s all rubbish (well in my opinion at least!) because people don’t fit into neat little boxes – though sadly leaders often treat people as though they do. There is a business leader called Randy McGurk who runs a chain of fast food restaurants in the South West of the USA. His approach is the “2% Jerk Factor”. Believing that since the vast majority of his team of assorted cooks, waitresses, and cleaners want to do a good job, he therefore reasons that he should base his approach around them, not the 2% of his team who were “jerks”. His experience is that if he treats people well, they respond accordingly, thus disproving Theory X/Y. Incidentally he has also found that the 2% of jerks didn’t last very long because his other employees quickly make it clear what is expected and the so called jerks either fit in or leave. That means that there is little need to resort to complicated and prescriptive performance management policies and procedures! Incidentally, Nordstrom (the upmarket chain of departmental stores in USA can fit their entire employee handbook onto less than one page. Their approach is simple – “Use Your Best Judgement”. If you care to look at their share price and shareholder return it outperforms the S&P Index significantly. Richard Branson has a similar view. In this month’s HR magazine he says “"I’m happy to say I’ve never read a book on HR theory or people management. Our guiding principle is this: give individuals the tools they need, outline some parameters to work within, and then just let them get on and do their stuff." So the bottom line is that if a leader treats all his employees as Theory X they will appear to be exactly that because we all get what we focus on. So my belief is that there’s no such thing as Theory X/Y people, only Theory X/Y leaders.

So where does the privilege come in? Well – if we go back to the responsibility that comes with leadership, then the greatest responsibility that a leader has is for people. Ah yes, but what about bottom line profit? Yes of course that is a leader’s responsibility as well, but he or she doesn’t actually produce any bottom line profit. Leaders guide, direct, command, produce policies and make deals, but hardly ever produce hard cash. It is the employees who actually do that. So leaders need people if they want to increase bottom line profit, or growth, or shareholder return. Without talented people to deliver what the customers need, a leader’s efforts will achieve nothing. The greatest responsibility – and therefore privilege - a leader can be given is for other people. There’s a well known campaign that goes along the lines of “A dog is for life, not just for Christmas” and so it is with people. Employees have to endure the good and bad times and a leader’s prime responsibility is to ensure they are engaged, have the tools, skills and freedom to give of their best (Theory Y) and are then supported so they can perform to the best of their ability. In good times and bad – indeed especially in bad times - if employees feel that they are supported they will continually surprise and delight leaders with their talents and efforts.

There‘s a simple formula in terms of performance.

Performance = Potential + Support – Interference

A leader’s responsibility is to maximise the support and minimise the interference. At times it may seem like a thankless task as my colleague found last year, but it goes with the territory. Being given the privilege of guiding, directing, liberating, and at times controlling the work destiny of others is the greatest privilege a leader can be afforded. Perhaps we should all remember that privilege!

Simon Hollington is a Director of Leading Edge Personal Development Ltd (http://www.lepd.org.uk/) , a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280

Myths and Mistakes of Leadership

Do you remember the election? A strange question perhaps as it is only just over 4 months since Election Day, and the month that proceeded it was – to coin most political commentators at the time – “unique!” The election battleground was drawn up in the usual way (a head to head between the Conservative and Labour Parties) but then Nick Clegg rather put a spanner in the works; after all whoever heard of a boxing match between three fighters? However, looking back (isn’t hindsight such a wonderful thing?) one thing is clear: all of the leaders bought into typical leadership myths and made mistakes.

Take leadership. All the leaders spoke about was the need for strong decisive leadership. That’s myth number one. Leadership needs to be effective and appropriate which sometimes might be strong and decisive, but it also might be collaborative (it will need to be in the hung parliament!), reflective, consultative, or visionary. So mistake number one is only to have and hang your hat on one style. Different situations and different people need different types of leadership so to suggest what was needed was simply strong decisive leadership was to suggest that we are all the same and that the approach that suited – for example Maggie Thatcher during the miners’ strike - was the only style needed. Actually looking even further back to her time, perhaps that was one of her big mistakes as a leader; the lack of flexibility in her style. Leaders need to be able to flex their style to suit different needs and situations which means that they continually need to consider – consciously – what is needed in terms of leadership.

Myth number two is that leaders have to make bold decisions – about the economy, the deficit, immigration and so on. Decisions need to made, but often the “Buck Stops Here” mentality kicks in and leaders assume that they have to make all the decisions. They don’t, and they certainly don’t have to make instant decisions. A great question for leaders (come to think of it for everyone) to ask themselves is “By when do I have to make the decision?” Instant decision making – the sort that strong decisive leaders so often make – has a habit of backfiring because it is made without the benefit of reflection and knowledge. So mistake number two is to assume that they have to be swift and decisive. Instead leaders need to find the ability to stop, stand back, reflect and then make decisions.

Myth three? Myth three is that leaders have to tell people what they need to do. Leaders need to lay out what people need to achieve, and then get out of the way and let people find the best way of achieving it. That way they’ll release the potential in everyone. Adopt a parental approach and people will automatically assume a child like role, looking to you for answers, Of course this might feed your own ego and need to be seen as a strong decisive leader, but that would be mistake three because you will limit your team to your capability. Years ago, just after I had completed my Officers Training in The Royal Marines, I took over a troop of 30 in a Commando Unit. There was (and indeed still may be) a mantra that you never – as an officer – asked your men to anything you could not do. How daft - and that’s the polite word! If I had followed that mantra then I would have limited the capability of 30 professional men to what I could do. Luckily for me my Troop Sergeant (Gary Jones) quickly dispelled any thoughts of that approach.

We can earn much from this election, but sadly I fear that much of it will be how not to lead!

Simon Hollington is a Director of Leading Edge Personal Development Ltd (http://www.lepd.org.uk/) , a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280

Leadership Under Pressure

I don’t think there’s any doubt that the pressure’s on. The current economic climate, the pressures of shareholders (whether in the form of the City for private industry or customers for the public sector), the media doom and gloom approach, and the increased rumblings of discontent across wide swathes of business and public sector all put pressures on leaders – regardless of where they are in an organisation. Against that background, it is only natural that the reaction to this emotional turmoil will be one of concern and uncertainty leading to defensiveness and a "belt and braces" approach. So just how do leaders respond to those pressures. Intellectually it is relatively simple – there is simply no other choice for all businesses but to change. Emotionally it is far more complex and people react to change in different ways from unbridled enthusiasm on the one hand, to panic and freeze on the other.

The dichotomy of change is that much of it is driven by the enthusiasm and willingness of leaders who want to be more prepared for the future, and yet much of the frustration in organisations is caused by the safety first, risk-averse approach of those same leaders and their direct reports. There will always be those in organisations who – under pressure – revert quickly to a leadership and managerial style of ‘protect, maintain, fear, tell and let me check everything’.  This is not done from negative intent, more an uncertainty about how to react to change - resulting in a natural fall back to doing what people have always done – “reverting to type”.

By reverting to type, I mean the inward looking protective approach that so often characterises organisations under pressure, and we have already seen examples of this in the form of a more adversarial approach to industrial relations across the country. Sadly, the one approach that is guaranteed to fail in the difficult times ahead is that protective approach in which (under the guise of ensuring value for money) everything is checked, double checked and checked again. That approach slows decision making by creating a "jobsworth" mentality, which in turn encourages managers to work at an unnecessary level of detail, which then prevents the thinking and actions that create the innovative environment required to maintain services with less resource.

But consider the impact of that revert to type. In all the dealing that we do, the vast majority of people recognise without prompting that the age of austerity is about to hit home (if it hasn’t already done so) and that more with less is the order of the day. Of course there are some for whom the answer is a naïve “provide more money/people/resources”, but most people are sensible enough to recognise the need for change even if they don’t like it. So “check, check and double check” is actually saying to people who are already on the same page “I don’t trust you!” Is that what we need our leaders to be saying in difficult times?

In fact if the necessary radical savings are to be made, then doing the same thing more carefully and spending more time checking is exactly the opposite of the approach that is necessary. I am of course not suggesting that all checks and balances need to be scrapped – you would quite rightly laugh me out of court if I did suggest that. However if any organisation is going to change yet retain high levels of service and value for money, it is going to have to ask different questions of itself, and its staff. Boxer’s maxim in Animal Farm of “I must work harder” has to be replaced with “I must work smarter”. Easy to say and less easy to do, but leaders at all level of the organisation have to get used to asking incisive questions such as:

·        What value does this add? (many processes are seldom questioned and become "laws")

·        What assumptions are we making regarding our customers top priorities?

·        What are the key measures? (the dials in our cockpit which demonstrate that we are flying the plane in the  optimum manner?)

·        How must we actively promote, recognise and reward innovation and creative thinking? (to use a well known space race analogy, will we be like the Americans and spend millions on inventing a pen that writes upside down or, like the Russians, would we use a pencil?)

·        What mechanisms must we put in place to gather and distribute best practice quickly and in a cost effective manner?

A recent study by (I think) McKinsey Consulting is revealing in the extreme. The study looked at current situations in a number of market sectors and asked what the future held for that sector. They asked two groups of people: the so called experts (consultants who regularly appeared on television to expound – probably at great cost – what the future held; and workers in the sectors. The latter were not CEOs and MDs but people on the front line. Guess what? The latter group proved to be correct in their estimation of the future far more often that the experts. So leaders under pressure don’t need to tell, they need to ask and engage their employees. So if you have to make cuts, don’t hide yourself and your immediate team away and decide what to do, tell your employees what needs to be achieved and ask them how they would go about it. The former is, it seems to me, to be the approach adopted by BA, and just look how UNITE reacted. The latter characterises those many unknown and unseen companies who consult, engage and involve their employees and who, like Waitrose, go from strength to strength, even in difficult times. So, if you are a leader under pressure, repeat after me: “ask don’t tell, ask don’t tell!”

Simon Hollington is a Director of Leading Edge Personal Development Ltd (http://www.lepd.org.uk/) , a company formed to release potential and improve performance. He can be contacted at simon@lepd.org.uk or 07811 332280