Professional Manager Summer 2013 by Think Publishing

THE CHARTERED MANAGEMENT INSTITUTE MAGAZINE

£4.50 | FREE TO MEMBERS | SUMMER 2013

THE TROUBLE WITH X Thatcher’s children under the spotlight

BREAKING YOUR BUSINESS Our handy guide to wrecking your livelihood

IS YOUR BOSS A PSYCHO? Charming, powerful and deadly

THE KEY CODE The off-the-cuff management style of the O2 ideas man

INSIDE

NEWS O P INI O N BOOKS M O T O RIN G FA S H I O N D IN IN G TECHNOLOGY

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In this issue

ESNES NOMMOCNU PROFESSIONAL MANAGER | Summer 2013

AG E NDA

INTELLIGENC E

05 Briefing

Steer clear of working while on holiday, says Ann Francke

24 Matthew Key

Telefónica Digital’s CEO talks to Jeremy Hazlehurst about how a flexible working style can lead to success

06 Feedback

Your letters and emails

07 Secret Staffer

Lazy employees are not welcome here

08 Management minutes

Financial Times associate editor Michael Skapinker with your business update

News

A round-up of the key management news

I N- DE P T H

30 Outlook

Managers should lead tax avoidance debate

Dangers of teaching cuts

22 View from Westminster

Gordon Marsden MP on further education

The road to hell is paved with good intentions

46 How to destroy your business

Rebecca Burn-Callander brings you the methods to lead your business into the void

32 Digital world

The gadgets that help you work remotely

34 Fleeting thoughts

The MPV bounces back

Supercharge your startup

Outsourcing is powerful, finds Iain Hollingshead

64 PM Profile

Richard Thomas talks to PM

66 Masterclass

Don’t fall for social media myths

68 Writer replies

Mike Clayton discusses his book on how to say “no”

69 My CMI

By Richard French-Lowe

69 Book reviews

New management titles

37 Insight

54 Is your boss a psycho?

38 Debate

58 The trouble with X

73 Management style

Leaders often have personality disorders

How big data can help customers

20 Policy watch

42 Sacred cows and Trojan horses

K NOWLE DGE

Can a dull leader learn charisma?

The personnel touch

Mark Crail discusses costs

Although Generation X may believe they are perfect, they are actually as flawed as any other generation – and so is the way they manage

Downtime

Why a visit to the countryside is beneficial

Staying cool in summer

74 Any other business

Simple fixes won’t work, warns Simon Caulkin

Contributors

THE CHARTERED MANAGEMENT INSTITUTE MAGAZINE

£4.50 | FREE TO MEMBERS | SUMMER 2013

THE TROUBLE WITH X Thatcher’s children under the spotlight

BREAKING YOUR BUSINESS Our handy guide to wrecking your livelihood

IS YOUR BOSS A PSYCHO? Charming, powerful and deadly

THE KEY CODE The off-the-cuff management style of the O2 ideas man

INSIDE

NEWS O P INI O N BOOKS M O T O RIN G FA S HI O N D ININ G TECHNOLOGY

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Cover photography by Pål Hansen for Professional Manager

Michael Skapinker The Financial Times associate editor wraps up the key management news p8

Jeremy Hazlehurst The leading business writer talks to Matthew Key about flexible working styles p24

Emily Seares The FashionBite editor gives advice on staying smart during the summer months p73

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honda.co.uk /noticeany thing Fuel consumption figures for the Civic 1.6 i-DTEC range in mpg (l/100km): Urban 70.6 (4.0), Extra Urban 85.6 (3.3), Combined 78.5 (3.6). CO2 emissions: 94g/km. Fuel consumption figures sourced from official EU-regulated laboratory test results, are provided for comparison purposes and may not reflect real-life driving experience. Model shown: Civic 1.6 i-DTEC SE Manual in optional Alabaster Silver Metallic at £20,075 On The Road. Terms and Conditions: New retail Civic 1.6 i-DTEC SE registrations from 1 July to 30 September 2013. Subject to model and colour availability. Offers applicable at participating dealers and are at the promoter’s absolute discretion. Honda Aspirations (PCP): £229 per month based on Civic 1.6 i-DTEC SE Manual in metallic/pearl paint at £20,075 total cash price (and total amount payable) with 36 months’ 0% APR Representative (interest rate per annum 0% fixed) with £4,259.71 (21%) deposit, Optional Final Payment of £7,571.11, annual mileage of 10,000 and excess mileage charge 5p per mile. You do not have to pay the Final Payment if you return the car at the end of the agreement and you have paid all other amounts due, the vehicle is in good condition and has been serviced in accordance with the Honda service book and the maximum annual mileage has not been exceeded. Indemnities may be required in certain circumstances. Finance is only available to persons aged 18 or over, subject to status. All figures are correct at time of publication but may be subject to change. Credit provided by Honda Finance Europe Plc. 470 London Road, Slough, Berkshire SL3 8QY. Servicing: Four years’ servicing or 50,000 miles, whichever comes first, for £399 including VAT and includes a maximum of four manufacturer’s scheduled services.

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Agenda

BRIEFING

Holidays have become another way of working

GET MORE FROM CMI

Ann Francke, chief executive, CMI When is being on holiday not being on holiday? When you’re on call. CMI has long questioned whether summer holidays are worthy of the name. Now we know the answer – for most, they’re not. Many bosses, far from taking time out, end up checking their work emails while they are supposed to be leaving their work behind them (see news, page 14). So how has this trend for busman’s holidays come to pass? Certainly, as our technology columnist, Will Dean, outlines on page 32, the increase in connectivity compared to just a few years ago has a lot to do with it. Gone are those rosy days when the physical remoteness of holidays caused blissful isolation from our working lives. We switched off, both metaphorically and literally. In the same way that our cover star, Matthew Key of Telefónica Digital (page 24), had to warn his employee who officially worked four days that she shouldn’t be checking in on Fridays, leaders must remind staff that holidays are for relaxing, not working. Yet managers themselves must share the blame for this fudging of work/ life boundaries. As with many of the excesses of professional life, holiday working can be avoided by better time management. This summer CMI links up with Profile Books – the publisher behind the Economist guides. Profile will be publishing CMI’s wisdom in a trio of new titles. On page 11, we feature a snapshot of these books – appropriately it focuses on how to manage yourself. Perhaps, with this guide, managers will ensure their August gite is a holiday home, not an office in the sun.

Many managers don’t even get as far as the airport. Research shows that 70% are failing to use their annual leave. But why are so many leaders driven by financial rewards and targets, rather than quality of life and wellbeing? Is austerity leading to such insecurity that managers feel they have to be present, physically or virtually, 24/7? Those are the questions CMI will be asking this autumn as part of its work on the future of management. Look out for more information on this in the next edition. Meanwhile, on page 46, you will find Rebecca Burn-Callander’s ironic guide to destroying your business. As wise as her words are, she might have included failing to take a break in her selection of tips. Exhausted managers, don’t manage, they subsist. Slothfulness is not something that CMI would advocate. But there’s a reason why so-called “clever-lazy” people are valued in business (page 42) – their clear-headedness means they are often the best innovators, while their desire to avoid unnecessary labour means they focus on creating the most elegant, efficient processes. Being on holiday is a great place to realise that too much toil can – and should – be avoided. And the mind space that time off gives us is invaluable. How many times have you dwelled on a problem only for a great solution to come to you when you are doing something else? Holidays are times where you think without thinking, have a read, find perspective. Breaks are beneficial for business, and they are vital for you. Make sure you have a good one.

Chartered Management Institute (CMI) Management House, Cottingham Road, Corby, Northamptonshire NN17 1TT t 01536 207307 e membership@ managers.org.uk www.managers. org.uk

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Professional Manager © 2013. Published on behalf of CMI by Think, The Pall Mall Deposit, 124-128 Barlby Road, London W10 6BL t 020 8962 3020 e professional.manager@managers.org.uk www.professionalmanager.co.uk www.thinkpublishing.co.uk Member of the Audit Bureau of Circulations 75,166 1 July 2011 to 30 June 2012

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Your chance to comment on management matters

PRIZE LETTER

With economic cutbacks, it’s not an easy time for teachers

White flag

Farah Dib’s article “Fight the good fight” (Spring 2013, page 60) hits the nail on the head. For too long the British have been averse to conflict. It is not part of our culture – which is why so few Britons have been trained to manage it. As a result, we believe it will go away if we wait long enough. It will not. Regrettably, our white gloves approach directly affects our economy. First, there are many people doing jobs at which they are not competent – yet we allow them to continue because we cannot face a difficult conversation. Second, our national competitiveness is compromised because we are unwilling to stand up to our rivals. Deepak Mahtani MCMI FRSA

LETTER PRIZE

School daze

Sadly, the Secret Staffer’s pitiful tale of Mrs Staffer’s school management betrayal (Spring 2013, page 7) is more common an occurrence in the teaching profession today than it was 20 years ago. Teaching, I believed until now, is one of those few professions that provide a job for life. From reading this article and from speaking with other teachers, this proves not to be the case. They cite mergers, increased paperwork and quality standards, short-term contracts and voluntary redundancies are all taking their toll on them and others in the UK workforce. The Secret Staffer highlights a classic example of a new manager acting as “a new broom, sweeping clean”, tasked with making drastic and immediate cuts, using roughshod tactics to weed out staff, for whatever reason, leaving the five remaining teachers having

to literally watch their colleagues leave, while they themselves quake in their boots. This management fiasco will have done more damage than good. The manager in question may in fact be empire building, but by using this autocratic management style will not win the hearts and minds of those left on board the teetering ship. Vitality Vibes (full name and address supplied)

Young business Deepak wins a night at one of 15 Classic Lodges, an independent and nationwide collection of unique hotels. The prize includes dinner, and a full breakfast awaits in the morning. Visit www. classiclodges. co.uk for more information.

David Rutley MP is absolutely right to call for business to be a meaningful subject in the school curriculum (Spring 2013, page 22). However, I am conscious that any implementation of such a proposal will take time. With this in mind I would like to advise CMI members that there is immediate action that they could take as individuals and that would at least start to address this issue. For the past 10 years I have been a volunteer business adviser within the Young Enterprise (YE) programmes in schools. Young Enterprise is building a connected world of young people, business volunteers and

educators, inspiring each other to succeed through enterprise. Each year business volunteers inspire a large number of young people aged four to 25. The programmes are aimed at empowering the next generation with the confidence, ability and ambition to succeed in a rapidly changing global economy. I am not an officer of YE – but write as a member who is concerned at the lack of advisers coming forward to volunteer their time. I can assure all that it is most rewarding and really enjoyable, so why not give it a go? Even better, if members who are also school governors actively promoted YE’s activities, we – as an organisation – would have gone a long way towards achieving business awareness within schools. John Coffin MCMI www.young-enterprise.org.uk

Pay principles

Simon Caulkin’s column (Spring 2013, page 74) on bankers’ pay was a great lead-in to a wider debate on pay differentials generally. For the Swiss to hold a referendum on executive pay is surprising given that it is a market-oriented country. For the outcome of this referendum to indicate a need for intervention in regulating executives’ pay is even more surprising. But is it the case that

Are UK businesses suffering because they don’t pack a punch against conflicts in the workplace?

06_ PROFESSIONAL MANAGER _ Summer 2013

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Agenda Get in touch Send your views to professional. manager@managers.org.uk or PM, Think, The Pall Mall Deposit, 124-128 Barlby Road, London W10 6BL. Letters may be edited for length and clarity

NOT EVERYONE IS SUITED TO THE BIG EASY

SECRET STAFFER

Only strong staff respond to the laissez faire approach, says the Secret Staffer the Swiss public and the European Parliament are wrong-headed in their courses of action? Not necessarily. While Caulkin makes strong points, I am not sure it is viable to move forward purely on the basis of self-regulation. While a market system does incentivise risk-taking, should it follow that banks – being such key components of that system – should be given the licence that they have so disastrously used in recent times? It is easy to dismiss regulatory action – but our way of life and our living standards have in part been shaped by legislation triggered by an understanding that such regulation was necessary. Bill Jordan FCMI

Tweet this Follow the editor on Twitter and share your thoughts on management topics @BenProf Manager

Royal rumble

The reply to the letter by Hazel Prowse by the editor, Ben Walker, was patronising (Spring 2013, page 7). In the US the First Lady is the wife of the President, but, in this country, the First Lady is – and always has been – HM The Queen. The term First Lady has not been adopted in the UK to mean the wife of the Prime Minister. David Cameron does not refer to his wife as the First Lady and neither did John Major, nor Gordon Brown. Terence Goodwin

DON’T MISS ONLINE Man reinvents wheel Yes, literally professionalmanager. co.uk/reinventwheel One last job Is it right to appoint a senior leader? professionalmanager. co.uk/seniorleader

European business Industry still keen on the EU professionalmanager. co.uk/europebiz Age diversity Mix up the generations professionalmanager. co.uk/agemix

Find out more Have you worked with or had to manage lazy employees? Let us know at professional. manager@ managers. org.uk

“Give ‘em an inch and they’ll take a mile.” Is it true? Maybe for some. So what happens when hands-off management meets an employee in need of hands-on guidance? Read on… As summer approached, it was clear that the bike shop where I work needed more hands on deck. Enter Karen, a refugee from the banking world who quit her job in search of a “less corporate role”. Red flag number one. When asked by Mrs Staffer how the new employee was getting on I explained – in glowing terms – how Karen was working out. Despite this appraisal something troubled my wife. Ten days into Karen’s tenure, she asked: “Is she going to get fired?” Red flag number two. But Karen didn’t get fired, at least not then. Things came to a head when she brought in her new puppy to work. Red flag number three. Ignoring the fact that a puppy has the tendency to defecate everywhere, they also demand a lot of attention. Enough attention, in this canine’s case, that it prevented its owner from doing her job. Karen was asked by the boss to not bring the pup anymore, after which she handed in her two weeks’ notice, offering to work out her final shifts. Except that she didn’t. The next day we got a text from Karen – five minutes before opening time – explaining that she wasn’t coming in. It was to be the busiest day we had had in 2013: more bike fixes than any other day and deliveries from eight out of our nine suppliers – the cataloguing of which was a key part of her job. So we had all that on and were a staff member down. It was madness. The remaining staff rallied, working extra hours. By the week’s end we were beat, but we’d also beat the problem. Karen was fired. Two days later she came to pick up her things. Greeted by a wall of unopened delivery boxes Karen remarked, “You guys are behind on your inventory, aren’t you?” – which is like the cleaner complaining that the room looks a mess. The team now knows who the grafters are and the bosses will be more careful in future. Give crap staff an inch and they will take a mile. But good ones? They’ll take the initiative. Epilogue The Secret Staffer is hanging up his timesheet and going back to school. Will he return in some form? Perhaps. Watch this space. The Secret Staffer

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NEWS&VIEWS

For the latest management news and views, visit professionalmanager.co.uk

Insights from across the world of management

Management minutes

People embarrassed to work for banks Only 13% of the general public would be proud to work in banking and 32% said they would actually be embarrassed to do so, according to a YouGov poll. The poll showed that the sector had yet to recover its reputation after the financial crisis, with 73% saying that banking’s reputation was bad.

Beijing pollution 5 sends expatriates home

High pollution in Beijing has forced companies to re-evaluate the positions of expatriates working there. Toxic smog in the Chinese capital has reached levels many times higher than that regarded as safe by the World Health Organization. Firms in China said customer enquiries indicated many families were planning

Tests to raise children’s writing and literacy The government has introduced spelling and grammar tests for 11-yearolds after years of employers complaining about the writing standards of potential recruits. The tests, which took place in English primary schools in May, are part of an attempt to ensure that students develop spelling and grammar skills throughout their school years. The tests were criticised by some who said pupils were being forced to learn these skills when they were too young.

School vocational education upgraded The government also moved to meet a longstanding commitment by all political parties to provide a vocational school education on a par with A-levels. The technical baccalaureate,

or Tech Bacc, will include a maths qualification, an extended writing project and three high-quality vocational qualifications. The government said it wanted the qualification to enjoy the high level of esteem that vocational education had in Germany, Japan and South Korea.

City age discrimination more widespread than sex discrimination Workers in the City of London believe age discrimination is more prevalent than any other form. A survey of City employees by Astbury Marsden, a financial services recruitment firm, found that just 22% said their companies were “very committed” to employing older workers. Over a third said, by contrast,

that their employers were committed to gender diversity and almost a third said their companies had a positive attitude to racial diversity.

Government says companies need older workers City companies’ lack of commitment to ending age discrimination came despite a warning from the government that employers would run short of staff unless they took on older workers. The Department for Work & Pensions said that employers would need to fill 13.5 million job vacancies over the next 10 years, but only seven million young people were expected to leave school and college over that time. Steve Webb, the pensions minister, said: “Older people are the main untapped source of labour.”

to leave when the school year ended. Employers seeking to send staff to work in the world’s second largest economy will have to evaluate the willingness of those with children to relocate. This follows research by Prof Michael Harvey of Mississippi University – who found that working parents were increasingly wary of taking up posts in emerging market countries.

IMAGES: TONYV3112/SHUTTERSTOCK.COM

Financial Times associate editor and management specialist Michael Skapinker with his regular round-up of the top 10 news items for managers

Internships for young workers with learning difficulties The government has begun a trial of internships for young people with learning difficulties. The trial is based at 15 colleges in England, where young people with special needs are placed with employers that provide on-the-job training. The programme was outlined by Edward Timpson,

08_ PROFESSIONAL MANAGER _ Summer 2013

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Agenda parliamentary under secretary of state for children and families, in a lecture organised by the charity Ambitious about Autism.

Call for employment tribunal “change of culture” The Confederation of British Industry has called for “a programme of wholesale culture-change of the employment tribunals system”. The employers’ body said it wanted judges to shorten hearings by discounting irrelevant evidence and “focusing on the facts at the heart of disputes”. The call came as figures showed that the average tribunal claim was taking 18 months to process and that there was a backlog of cases.

European workers face increased stress Employees in 26 European countries, including the UK, said they were facing increased stress at work, with the main causes being job insecurity, reorganisation and hours worked. The survey, by Ipsos MORI, found that just over half of workers said workplace stress was common in their organisation and 16% said it was very common. Female workers were more likely to experience stress than their male counterparts.

Home working rises The number of people working from home in the UK has gone up 13% in the past five years, according to the Trades Union Congress (TUC). The TUC’s analysis of data from the Labour Force Survey found that just over four million employees worked at home in 2012, a rise of 470,000 since 2007. Much of the increase in home working in the past five years has been by women, which the TUC attributed to the rise in part-time jobs.

NINE TO FIVE

KRISTINA GLUSHKOVA

Kristina Glushkova is co-founder and co-director of Makerhood, a social enterprise in south London that supports locally based artists and makers to develop small-scale creative businesses 0830 Makerhood is a “hyper-local” social enterprise, to use the jargon, so most of what I do is based in my immediate area. My day begins with a short cycle ride to the house of one of the other directors. We spend a few hours working through our business model. When we first launched two years ago, we started by experimenting with many different things because no one else was doing what we wanted to do, so we didn’t have anyone to learn from. But now we know what works and what doesn’t, the time has come for us to focus on a few core activities that we know add the most value to the community. 1130 I attend an exhibition in Dulwich, where four makers who are part of our Makerhood community are having a textiles exhibition. We have started a new project in a neighbouring area, so this exhibition is part of the process of creating a new maker community. 1330 Return home to do some work on a research project we’re about to start with another social enterprise in Leeds and two universities, Sheffield Hallam and Northumbria University. It’s a government-funded study looking at making and sustainability, and we hope it will be useful to people looking to set up similar initiatives. 1600 Have a meeting with Lambeth Council to discuss our ideas about rolling the Makerhood model out to other areas. It’s worked well in Brixton and Norwood – and we’ve had a lot of interest from people in other areas

wanting to set up their own projects, not just in London, but also in other parts of the UK and abroad. Over half the people who joined Makerhood weren’t selling their work beforehand, now they are, and it’s amazing to see their progression – it’s very exciting. The council sees the potential of that model and is interested in us extending the project. 1900 Makerhood involves many evening engagements. Tonight we have a celebration dinner with some volunteers who worked to put on an event we held last week that was all about showcasing some of the local makers. It was a great event, and so we felt we needed to celebrate!

THE BOTTOM LINE SHORT, SHARP AND SMART SECRETS TO SUCCESS

“It’s fine to celebrate success, but it is more important to heed the lessons of failure” Bill Gates, Microsoft founder

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RESEARCH

UK FIRMS FAIL TO INNOVATE British business leaders are focusing on customers – but at the expense of creative commerce, finds Ben Walker

It is worrying that UK business chiefs are happy to follow their customers’ lead rather than take the initiative themselves

WORLD FOCUS

How business priorities vary around the globe STRATEGIC CHALLENGES BY RANK 2013 CHALLENGES

EUROPE

ASIA

CHINA

INDIA

Customer relationships

GLOBAL

Operational excellence

Human capital

Government regulation

Corporate brand and reputation

Sustainability

Global political and economic risk

Innovation

Global expansion

Trust in business

CMI head of external affairs. “In many ways, Jobs was right. While being customer-focused is generally to be welcomed, it is worrying that UK business chiefs are happy to follow their customers’ lead rather than take the initiative themselves. Breaking into new markets and inventing products would help develop our

Businesses can crumble without original ideas

economy – and give customers a better deal. Can we afford to take our eye off innovation when competitors in the US, China and India are striving to break new ground?” Woodman’s warning reflects that of Dragons’ Den entrepreneur Deborah Meaden, who told the CMI 2011 conference: “The customer is not king. The customer is your best friend.” Meaden stressed that firms who place their customers on a pedestal often end up failing them – arguing that only by challenging and advising their clients in the manner of a best friend will they serve their needs. On the upside, the research revealed that most UK business leaders were outward-looking – preferring to focus on their clients rather than the internal machinations of their companies. While the chief executives cited customer focus as the number one strategic challenge, challenges two and three – organisational excellence and human capital – can also be seen as strategic priorities “designed to meet the customer challenge”, the report says. “The external focus of UK business leaders is cause for cautious optimism,” said Woodman. “While internal structures and processes are clearly important, very rarely do businesses succeed by navel-gazing.”

IMAGE: IMAGESOURCE

British businesses are slavishly following their customers’ lead while sidelining innovation. A report for The Conference Board reveals that UK chief executives place less emphasis on innovation than business leaders from any other world region. The report, The Conference Board CEO Challenge 2013: The UK Challenge, will raise fears that UK bosses are resting on their laurels – preferring to be guided by their customers rather than persuade their clients of the need to invest in groundbreaking products and services. UK chief executives consider customer relationships as their top strategic challenge, the report reveals. Operational excellence, human capital, government regulation, and corporate brand and reputation are the next four. Innovation comes eighth out of 10. “The late Steve Jobs warned that customers rarely know what they want – it’s your job to work that out and show them,” said Patrick Woodman,

010_PROFESSIONAL 10_ PROFESSIONALMANAGER MANAGER_ Summer _ xxx/xxx2013 2012

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Agenda BOOK OFFER

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Agenda READER SURVEY

THE MAGAZINE THAT HELPS YOU MANAGE

BALANCED READERSHIP Readership by economy sector

PROBLEM SOLVER

74% of readers have tackled a management problem in a different way because of Professional Manager

BEST IN CLASS

76%

76% of readers rate it good or excellent when compared to other magazines of a similar content

IT’S A KEEPER

74%

58%

58% keep their copy for future reference

bl ic

un ta r

47 % iv at e

Vo l

Junior manager 15%

Middle manager 28%

Senior manager 27%

“The style of the magazine always manages to grab my attention.” “It is real – it highlights the challenges that leaders and managers face on a daily basis.” “It combines the punch of The Sun with broadsheet-esque analysis.”

518272815 ALL LEVELS

Readership by job role

Director 18%

“It is varied, punchy and relevant. I like the way it challenges how I think and encourages research.” “It is an excellent read. I find it a great help in my job role.” “It is very educational and enhances my managerial skills.”

a minority of men (38%) want more of this. This finding was in line with last year’s survey, suggesting a distinct difference in reading preference between male and female managers. Again, like last year, seniority makes a big difference to reading preferences. Some 77% of readers earning more than £70,000 a year read our analytical features and investigations while only 52% of those earning less than £30,000 do so. But all sections have high readership rates (63%+) overall.

to other magazines of a similar content. This popularity is reflected in its pass-on and retention rates. More than half (51%) pass it on for others to read, while 58% keep their copy for future reference. Given its high satisfaction scores, it is perhaps unsurprising that it is so well read. More than two-thirds of readers (69%) read most or all of the magazine. But when asked what you wanted more of there was a clear split. More than half of female readers (59%) demand more features on social psychology while

Chief executive 5%

The annual Professional Manager reader survey reveals that 74% of readers have tackled a management problem in a different way after reading the information and insight within its pages. The finding is one of many encouraging metrics in the survey, which reveals that more than half (53%) score it eight out of 10 or higher as a source of management information – the average score was 7.33. And Professional Manager rates very highly in comparison to its rivals – 76% of readers rate it as good or excellent when compared

Readers have approached management problems in a different way thanks to the insight and information in the magazine

RUTH WINS IT

Congratulations Ruth McIlveen from Belfast, who wins the prize draw for survey respondents. Ruth wins an iPad Mini.

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big time

500 goes large yo u tu b e.c o m / F i a tU K

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Agenda NEWS

EXHAUSTED MANAGERS SACRIFICING HOLIDAYS TO WORK Fear of falling behind is preventing managers from taking a break, finds Lily Howes

Managers are failing to take the time off they are due. A CMI survey found that only half of those managers surveyed had booked summer holidays. The research also revealed that 35% won’t use up all their annual leave. The overwhelming reason cited by managers is workload, as well as fear of problems on their return. The research also saw that those that do get away in the summer months find it difficult to switch off. Some 12% of those surveyed admitted to checking their work email daily with a further 19% taking a look “most days”.

Petra Wilton, CMI’s director of strategy and external affairs, encouraged managers to take a break and highlighted the benefits of time away from the office. “With the economy in a rut, managers are working harder and longer,” she said. “It’s about time some of them took a well-earned break, which will pay dividends when they come back healthier, happier, and full of renewed energy and enthusiasm.” Nearly nine in 10 agreed that taking time off was important, despite a quarter of them making up the time with extra hours before they go or when they return.

The small proportion of managers that do take time to relax and resist regularly checking their emails reap the benefits, said researchers. In addition to rest and relaxation, time away enables the opportunity to assess careers and projects with a fresh perspective, they added. And Wilton stressed that a holiday can be enjoyed fully – as long as managers prepare properly. “You need to manage yourself and your teams effectively,” she said. “You can make the most of your time at work – and make it easier to take a break.”

WE’RE NOT GOING ON A SUMMER HOLIDAY TIME POOR

35%

Proportion of managers who fail to use all their annual leave

PREPARATION PERSPIRATION

Average additional hours worked in the week before a holiday

ON CALL

57%

Proportion of managers who check their work email at least once a week while on holiday

AWARDS

HERO OF THE HOUR Outstanding Leader of the Year Des Tidbury, chief fire officer for Cornwall Fire and Rescue Service

What did you do?

I joined the service shortly after it had been designated as a failing service by the Audit Commission. I took it from being an organisation with no confidence and ambition to a high-achieving community safety service during a time of reduced public spending.

How did you do it?

One of the biggest issues with the service was a lack of leadership. I instigated a programme where I spent time with the teams, asked questions and built a picture of what needed changing. I also built a stronger senior team.

What did the win do for you? The award helped me to become a Companion of CMI, which is great

recognition and something I’m proud of. But it also helped the service. Prior to the win we had gained approval for two new fire stations to be built, as well as a new headquarters. We are now in the final stages of the process. The win proved how far we’ve come and has helped me fulfil my dream of leaving a legacy. Des Tidbury CMgr CCMI led Cornwall’s fire and rescue service out of government intervention, winning him a 2012 National Management and Leadership Award

Find out more The 2013 National Management and Leadership Awards take place on 10 October. Submit entries online by 3 August at www.managers. org.uk/ nmlawards

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Agenda MEET THE JUDGES

THE CSR BOSS

Karen McArthur, global head of corporate responsibility at Thomson Reuters, spoke to Lily Howes ahead of judging this year’s MBOY

What management book have you been most influenced by throughout your career? That’s a tricky question as I have used different books at different stages of my career. However, one that made a big impact was Malcolm Gladwell’s Blink: The Power of Thinking Without Thinking. Certainly there is a science to management, but Gladwell’s book shows that intuition has its place, too. As managers we can get too caught up with data, but there is room for intuition and this has often been dismissed as a skill. Blink shows there is legitimacy to going with your gut feeling. How easy is it to translate management advice from a book into real-life scenarios? It depends on the aims of the book. If the objective is to develop skills and practice then that is often simpler than if the goals are more conceptual. Good books are the ones that make it easy and that’s why I’m so glad to be a part of the Management Book of the Year awards. There are so many management books out there and it can be difficult to discern the good from the bad. These awards help managers know which ones are worth reading. Are there any gaps in management literature? I don’t think there is enough written on my speciality – corporate responsibility and sustainability. As constraints on natural resources increase, this is an issue all managers will have to face, but at the moment it remains a niche topic. There have been a couple of books that have been entered into the Book of the Year competition, but these have been heavy textbooks. There needs to be more literature on the topic for general managers.

NEWS

NORTHERN IRISH MANAGERS GAIN CHARTERED STATUS

Two public sector managers from Northern Ireland are accredited as Chartered Fellows A vice-principal has become the first Chartered Fellow in secondary education in Northern Ireland. Richard Massey is one of two public sector managers to have recently been awarded Chartered Fellow status by the CMI. John O’Dowd MLA, Northern Ireland’s education minister, presented the award during a visit to Newtownbreda High School where Massey has been vice-principal since last August. Also presenting the award was Tom Doran, Northern Ireland Electricity learning and development manager and CMI Ambassador, who commended Massey for breaking the boundaries. “Richard is leading by example in incorporating his professional management skills with his teaching,” said Doran. “This kind of manager ensures our

children are getting the best from their education. Teaching staff like Richard are committed to their own personal development, as well as that of the students they educate.” Massey recently visited schools in Scotland and London that have been classified as “outstanding” to seek out best practice to take back to Newtownbreda. A second public sector manager of Northern Ireland to be made a Chartered Fellow was Keith Millar. Former business improvement manager at the NI Fire and Rescue Service, Millar is now a risk manager at Invest Northern Ireland. He was also presented with the award by Doran, who described him as a dedicated manager and advocate of lifelong learning and development.

As a judge in the Commuter’s Read category, what do you look for in a book to read while commuting? Something that grabs my attention that I can easily dip in and out of. I like books that give me the chance to learn something – either a lesson that provokes thinking throughout the day or a practical skill. There is a constant need to update your business knowledge, so why not make the most of your commute to do this?

Find out more For more information on CMI’s Management Book of the Year, visit yearbook.managers.org.uk

Find out more To become a Chartered Fellow members must have strategic experience (seven years plus) and a degree-level qualification. For more information or to apply, visit www.managers.org.uk/cmgr

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Agenda EVENTS

BUSTING CONFIDENCE MYTHS The secrets to that all-important key to business – confidence – are not what you think

No wonder so many people find it difficult to become confident managers – the entire issue is swamped in myths and mistruths. So argues Positive Belief’s lead coach, Jules Wyman, who presents a major CMI event on the problem at the end of the summer. In York on 12 September, Wyman will show just how important confidence is to

success in our careers and demonstrate the ways to achieve it – busting persistent myths that surround it along the way. So don’t be another talented manager that is overtaken by a less bright, but more confident rival. Sign up for this event and learn how to boost your self-belief – and your job prospects.

● The Truth About Confidence takes place at York St John University, Lord Mayor’s Walk, York YO31 7EX on 12 September from 6.30pm to 8.30pm.

For more CMI events, please visit www.bit.ly/ CMI_events

MANAGEMENT SPEAK Bleeding edge, adj. A concept, product or service advanced beyond the now apparently defunct branding of plain

old “cutting edge”. Of course, just as a stopped clock tells the right time twice a day, so almost meaningless marketing terms

can have their uses – in this case as an advertising slogan for a particularly innovative form of knife or other bladed implement.

BRAIN BOX CMI’S TOP MANAGEMENT ARTICLES IN MINIATURE

HOW NOT TO RUN A PROJECT

A catalogue of errors presents lessons for managers everywhere It was a salutary lesson about what happens when management operates in isolation from its staff and customers. One retailer – keen to improve its customer relationships and tailor its sales – decided to launch a loyalty card. But nobody got the memo. The lack of buy-in from staff and customers led to confusion, resistance, resentment and project failure. Dr Karise Hutchinson et al from the University of Ulster found that the company – known only in their research as Company A – had made mistakes during its card rollout. These included: • A failure to align departments so, instead of working towards a common goal, different sections of the business operated in silos. • A lack of integration and buy-in – for example staffers in the buying department were unwilling to use loyalty card data to inform their buying decisions. • A mishandled social media marketing drive that couldn’t boost the project. This was due to Company A failing to command the relevant expertise. • A deficient use of data – rather than using its wealth of data to tailor its offer to different customers, Company A used it for mass mailshots. This contradicted the purpose of the card. • Focus group sessions revealed a dearth of communication with the most important people: customers. Those that did express a view were apprehensive. Whatever benefits there may have been, it seems that the customers were not aware of them. Dr Hutchinson pushed the need to: • find company-wide acceptance; • achieve operational efficiency; and • use data wisely. While the project relates to one small retailer, it contains overarching wisdom that can be applied to many projects. Find out more

Closing the Needs-to-Offer Gap www.bit.ly/articlesoftheyear

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POLICY WATCH

The government’s Comprehensive Spending Review could spell bad news for the training of the next generation of managers, writes CMI director of strategy and external affairs Petra Wilton

The Chancellor, George Osborne, has announced more investment in transport, energy, and science and technology. This, however, comes at a price – namely £45m that has been cut from teaching grants. Investing in research is always welcome. But Osborne’s package, announced in the government’s Comprehensive Spending Review in June, leaves the teaching of future managers at great risk. The Chancellor announced that £11.5bn of savings would be required in 2015-16 from a total expenditure of £745bn. Five billion pounds of this will be made through so-called “efficiency savings”. These relatively painfree savings are often the easiest to advertise and the hardest to make – they are only sometimes realised. The remainder of the budget comes through cuts to general spending and a 6% slash to the British Investment Bank. Cuts are easier when they are made against an upbeat economic prognosis, and so the Chancellor has been at pains to give these assurances. The UK is moving

CODE OF CONDUCT

out of intensive care and towards recovery, he claimed. There have been some positive indicators, but unemployment remained higher, at the time of writing, than when the coalition came to power. Yet Osborne stressed that the government was acting for everyone to get more from the money that it spends, secure growth and create fairness. Perhaps. But there is still work to be done to ensure that management skills gaps identified by employers are addressed. As the CMI starts its work with the Association of Business Schools to review the curriculum, it is clear that quality of teaching has an impact on student employability. Fortunately, despite the cuts, it was confirmed that more money will be allocated to apprenticeships. The Chancellor defended the cuts, arguing that enterprise builds growth. And he announced that the Treasury will spend £50bn on capital investment in 2015, amounting to more than £300bn of spending guaranteed until the end of this decade. CMI and IC Codes coming together As reported previously in Professional Manager, a review of the Codes of Conduct within the CMI and the Institute of Consulting (IC) is planned to start in September this year. The review will encompass a consultation exercise with members and other stakeholders, including IC practices and partner organisations. Although the roles of manager and consultant are different, the proposition being put forward by the Professional Standards Committee is that a single Code, applying to both CMI and IC members, could readily be created, encompassing specific elements dealing with each role. This would allow consultant members of CMI to be bound by

However, despite the need for such growth, these plans are two years away. They need to act now, and fulfil existing promises. We are still awaiting the implementation of the British Investment Bank pledged at the last review. This year’s review continues to highlight the economic dilemmas of how to stimulate growth. Meanwhile, Labour wants to remove the speculation regarding the size of the budget should it win in 2015. It has pledged to match the coalition’s spending level and, as such, both major parties are committed to the overall spending levels of this review. As the next election starts to loom, the differences in promises will be distributional rather than quantitative. This autumn, the All-Party Parliamentary Group on Management will start its own inquiry into the role that leadership can play in driving a sustainable growth agenda. We look forward to lively debates, practical insights and radical ideas to help us make the most of what spending there is – and develop a shared manifesto for management and leadership. the same requirements as IC members, and managers in consultancy organisations who are IC members to be similarly included. An important stage in the project is to carry out focused consultation among members, to identify shortcomings in the existing Codes and opportunities for improvements, based on research into good practice. This consultation process will commence during September and be completed in early 2014. If you have a particular view on whether the two Codes should or could be combined, or you are interested to take part in the consultation process, please contact Valerie Hamill, CMI secretary, CMI, 2 Savoy Court, Strand, London WC2R 0EZ or email valerie.hamill@managers.org.uk

ILLUSTRATION: QUINTON WINTER

CUTS TO TEACHING ARE FOOD FOR FEAR

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National Management & Leadership Awards Thursday 10 October Park Plaza Riverbank Hotel, London

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Agenda

VIEW FROM WESTMINSTER

COALITION IS BLUNDERING ON WORK TRAINING

The government may say it wants to prepare youngsters for work, but its actions tell a different story, says Gordon Marsden MP t is crucial that businesses are actively engaged with the skills agenda to ensure the training and education young people receive is relevant to today’s labour market. Further education (FE) colleges – many already at their heart of the local communities – can play a pivotal role in facilitating this engagement. The Labour Party has been calling for employers to help in the design of vocational qualifications, so we welcome the entrepreneur Doug Richard’s report into apprenticeships that called for the government to do exactly that. Supporting apprenticeships and further education was a key theme in Ed Miliband’s 2012 speech to the Labour Party conference, where he spoke of the importance of supporting the “forgotten 50%” who don’t go to university. Following this, we set up our One Nation Skills Taskforce, comprising leading representatives from business, education and trade unions, to look at how best to take this agenda forward.

‘Supporting further education teachers is of great importance in ensuring learners receive high-quality education’ The taskforce’s interim report, published in May, recognised the link between FE and business. It recommended FE staff spending time in the relevant industries to give them modern, first-hand experience of how businesses operate today and the skills young people need to succeed in them.

Supporting FE It’s also about ensuring teachers and lecturers in we support the young reskilling and upskilling people who lack the basic is of great importance in skills necessary to enter ensuring learners receive employment or take high-quality education. up an apprenticeship. With demographic That’s why I’ve long trends that will see one called for a system of in five FE teaching staff pre-apprenticeship reaching 65 in the next training. The government 10 years, it’s crucial that has belatedly taken Name Gordon Marsden the government engages note and is introducing Party Labour with this issue to ensure traineeships for the Seat Blackpool South a new cohort of staff can 2013/14 academic First elected 1997 be recruited to deliver year. However, by only Current majority 1,852 Political compass high-quality teaching confirming these details Centre-left and learning. in May, they have given Parliamentary roles It’s vital that young colleges and training Shadow minister for people are prepared providers less than three further education, skills and regional growth (2010-) for the world of work. months to have these up The government has and running by August. VOTING RECORD undermined this agenda And, despite initially More EU integration by abolishing compulsory Strongly for promising that these work experience from the More autonomy would be available to for schools Key Stage 4 curriculum, all people aged 16 to Moderately against despite protests from 24, the government is University tuition fees business groups and only allowing 16-to-19Moderately for employer associations year-olds to take them such as the EEF. Labour up at present. believes this is the wrong approach, Further education isn’t just and we are looking at ways to support about supporting young people; it’s expanding work experience, both at also about helping those already in Key Stage 4 and at “work discovery” employment upskill or retrain for the sessions for pupils earlier on in the jobs of tomorrow. Given the changing school curriculum. demographic profile of the UK, 80% of Young people also need the right the 2020 workforce has already reached information to choose the courses or adulthood. We must acknowledge this vocational options that are best suited to ensure individuals are equipped for them. In devolving the provision with the skills businesses need to boost of careers advice to schools without productivity and economic growth. providing any additional funding, the Given the major emphasis emerging government has deprived thousands economies are putting on boosting their of young people of the face-to-face skills base – especially India, which guidance they previously received. wants to train 500 million people by Here we see a role for businesses 2020 – it is vital we in the UK rise to the to offer more careers advice to challenge and ensure our skills system young people. is fit for our 21st-century economy.

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Swiss movement, English heart

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Intelligence

KEY MAN Matthew Key’s flexible, open-minded management style has brought him major success in the telecoms sector, writes Jeremy Hazlehurst PHOTOGR APHY BY PÅL H ANSEN

There is a story that sums up Matthew Key. It’s the one he tells about the evening last year when he became a member of the Royal Order of Isabella the Catholic, the Spanish equivalent of getting a knighthood. He joined Eva Perón and Samuel Morse among the foreigners who have been given the medal, which is awarded for services to Spain. It is, as he says, “quite a big gig”. He and his parents, both of whom are in their 80s, arrived at the Spanish embassy in Belgravia for the ceremony at which the Spanish ambassador would present the gong. As they were going in, Key’s mother turned to him and said: “I used to clean the embassy next door to this one.” Key laughs and adds: “It was a nice circular moment.” The phrase “down-to-earth” could have been coined for the 49-year-old former head of O2, who since September 2011 has been in charge of the newly created Telefónica Digital (the Spanish telecoms giant owns O2, hence the medal). He lives in Beaconsfield, Buckinghamshire, a 15-minute commute from O2’s head office in Slough, but the job means he spends much of his time jetting to Silicon Valley, Buenos Aires, Tel Aviv and São Paulo, when he’s not in Digital’s office in London’s Air Street. With his jeans, professionalmanager.co.uk _ 25

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casual shirt, Nike FuelBand on his wrist and affable manner, however, he takes this insane-sounding workload in his stride. His current job is another big gig. Key says his remit is “effectively to take Telefónica beyond connectivity”, which means he deals with anything that is not voice or text. That covers machine-to-machine – the so-called “internet of things” – consumer banking, e-health, big data, e-wallet, mobile advertising, you name it. An early product is TU Go, which lets people use their phone number across multiple devices, but Digital aims to develop innovative products in “whole new value chains,” says Key. A Spanish newspaper summed up his job by calling him “el hombre de internet”, the man of the internet. You might also call it Telco 2.0. So how does a boy whose mum used to be a cleaner get a job like this? Key grew up in Rochester, Kent, the son of parents whose educations finished at 13 and 16. But he passed the 11+ and went to grammar school, the fantastically named Sir Joseph Williamson’s Rochester Mathematical School for Boys, which was founded to train navigators in the nearby dockyards at Chatham (some of whose old boys no doubt had interesting encounters with Spaniards themselves). He didn’t exactly excel, academically. “I got three Cs at A-level,” he says, laughing in an accent that still has a good amount of Kent in it. “I was not a star student. I was too busy playing sport.” Route to the top It was while he was at Birmingham University studying economics that he had a “dawning realisation of the amount my parents went through to put me through university and what I owed them. I started to work to an acceptable level.” He emerged with a first, although he points out that, “I played first-15 rugby, so it’s not like I was a bookworm.” After university he trained as an accountant. “You get such a broad vision of so many different companies through so many different facets that I think it’s a really good, broad management training,” he says. “If you can take some of the capabilities and skills you learn in your financial training, and combine that with a bit of marketing and sales nous, then it can be a very powerful combination.”

He didn’t do an MBA and doesn’t read management books, although he says his presentation style owes a lot to “an influencing skills course. It was really about dance and motion around how you express yourself.” Sport has formed him far more than business school. “Particularly team sport,” he says. “Rugby is an amazing team sport that creates a real combination across different skills and capabilities.” It also helped keep him grounded. After university he played football for Broomfield in the Southern Amateur League. “I was the only graduate in the team,” he recalls. “Everyone else was a painter and decorator, although one was a postman and there was also a fireman; they were from a totally different social background and for me that was such a good thing. One of the dangers of corporate life is that you become divorced from what the rest of the world is like.” He’s taken this lesson to heart. “When I am in London I always travel on the Tube,” he says, “because it just gives

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Intelligence a different perspective: who’s advertising what, what people are doing with their mobile phones and their tablets. I don’t have a chauffeur. It’s just not the right thing.” His three children went to state schools. Key admits that taking the Digital job was one of the hardest decisions of his career. “O2 was my baby; I had grown nine, ten years with it and turned the company around,” he says. “I was being asked to go and run a totally different business, a global business, that didn’t have a 100% chance of success. It was risky. Exciting but risky.” Assessing risk and taking it is a hallmark of his career. He joined O2 from Vodafone when it was BT Cellnet and “it wasn’t the best mobile business around”. Everybody thought he was mad. Then in 2007 he convinced O2’s board to do a deal on the Millennium Dome, renaming it the O2, and came up with the idea of Priority, where the first tranche of tickets for any gig go to O2 customers. It not only got O2 amazing publicity, it helped the firm keep its customers. Key says churn for people who have heard of Priority – whether they use it or not – is 20% lower than other customers. Then there was the iPhone. He went to Apple with César Alierta, the chairman of Telefónica, to meet with Apple, and when Steve Jobs pulled out his iPhone Key knew it was a “game-changer”. Three weeks later, the deal to launch the iPhone on O2 in the UK was done. So Key has good instincts, but he also puts it down to having “great teams around me”. He clearly enjoys managing a talented team, and seems at least as fascinated by people as technology. His current direct reports include “an Argentinian, a Peruvian, two Spaniards, two English people and a Welshman”, and he thinks the mix is a fertile one. “The Anglo-Saxon way of running a meeting is that we start at nine, we have 15 minutes for each

Matthew’s milestones 1998

UK operations finance director, Vodafone

2002

Chief financial officer, O2 UK

2005

Chief executive officer, O2 UK

2007

Chairman and chief executive, Telefónica O2 Europe

2011

Chief executive, Telefónica Digital

agenda item and we run through the agenda and we finish. The Hispanic way is a lot more flexible, more fluid; there is a lot richer conversation.” Everybody can benefit, he thinks. “For us, we get a more free-flowing conversation, from the Hispanic point of view we operate a more efficient way of doing our daily business.”

Jeremy Hazlehurst met Matthew Key in O2’s office in Slough

Flexible perspective What are his tips for good management? “The first thing is that you can’t address every management process with the same style; you have to be flexible, and you have to make a fundamental decision: are you going to flex your style, or ask everyone to flex their style around you? And I think you have to flex your style.” He tells a story of being in Buenos Aires recently and having breakfast with his Argentinian teammember. Their meeting was meant to start at 9.30am, but the coffee hadn’t arrived. “I said, ‘It’s time to go to the meeting,’” Key remembers, “but he said: ‘No, I’ve got to have my coffee.’ From an Hispanic perspective, if you’ve turned up to a meeting five minutes late but you have had your coffee then that’s far better.” Key laughs, and

‘Are you going to flex your management style, or ask everyone to flex their style around you? I think you have to flex your style’

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03/07/2013 30/05/2013 14:51 22:43

Intelligence

‘The majority of people want to do a good job and feel proud of their output at the end of the month. Think of all your friends – who does not want to do a good job? I think that is basic human nature’

adds with a shrug: “We were in Argentina – so we were five minutes late.” The second thing is to give very clear direction and “make it very clear what is negotiable and what is non-negotiable”. You need to have a big debate “because you need the richness of the input from everyone round the table, but as a leader and a manager you have to be 100% clear with your decisions. At the end you say: ‘Thank you very much, we are going over there, get on the bus.’” Reaping what you sow Third, embrace diversity. “It is very easy to recruit and assemble a team in your likeness, but unless you have diversity, it’s very hard to get a rich result. Constructive tension is a very positive thing in business, and so you have to have people coming from different perspectives.” He’s keen on flexible working, and one woman in his team works four days a week. “I tell her not to check emails on a Friday,” he says. “If you are doing four days, do four days. As long as everybody knows, they can work around it.” Incidentally, he’s a fan of remote working. “I make sure there’s once a month we are always physically together as a team, but the majority of time my team spend will be by telepresence. Yesterday we had one room in Madrid, one here, one in London, one in Silicon Valley and one in Buenos Aires. It’s a very efficient way to do it.” Predictably, he seems unconvinced by the decision by Marissa Mayer, the boss of Yahoo!,

Key’s future challenge is to look beyond connectivity

to ban remote working. “My view on this is that you have to create the passion to succeed and alignment in your workforce – this will mean you will get the extra 20% discretionary effort,” he says. “It is not possible to micromanage a global workforce. In my experience the vast, vast majority of people want to do a good job and feel proud of their output at the end of the month. Think of all your friends – who does not want to do a good job? Who doesn’t want to add value? I think that is basic human nature.” Given his sporting and managerial backgrounds, does he have any views on Sir Alex Ferguson, arguably the best manmanager in Britain, who recently retired as Manchester United boss? “He has always had a core group of players who have the right attitude and will set the standards that all have to adhere to,” says Key. He points out, too, that Ferguson created loyalty, and few of his top players left. Also, he was able to “get the best out of players who have been known as very difficult to manage and combine them into a cohesive unit with his ‘core’. Diversity in any team is good if you can harness the different attitudes,” he adds. His final tip for managerial success? Make sure you can get away from it all at the end of the day. “People see what time I get in and go home, and what I have for lunch,” he says. “As a leader that can be tough and lonely, and you need absolute escape time. You can’t live life with the profile I’ve got all the time.” Golf is the only he sport he plays now, and he makes a point of keeping it social, very rarely mixing it with business; the week after we met he was going to Portugal to play with his old schoolmates, something he does every year. “You have to switch off,” he says, “and I switch off when I’m with my mates from my village. We have a blast and I’m not Matthew Key, CEO of Telefónica Digital, I’m Matt who lives round the corner.” professionalmanager.co.uk _ 29

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02/07/2013 14:55

What’s next for the wider economy?

The outlook

MANAGERS SHOULD LEAD TAX AVOIDANCE DEBATE Not all tax planning is unfair. What is lacking is managers who can explain their position, says KPMG head of tax policy Chris Morgan called for. My forecast is that – for privately owned businesses and individuals – HMRC’s focus will be: n Director and senior management remuneration. n Employment status – the company’s use of intermediaries (IR35 entities, for example: see the recently launched consultation on members of limited liability partnerships), be it for nonexecutive directors, in the supply chain, the company’s delivery model or general resourcing. n High-net-worth individuals and the use of partnership loss schemes (aimed at sheltering income from tax) or interest-relief schemes (aimed at allowing interest relief to be claimed against general income). n High-net-worth individuals and connections with offshore low-tax jurisdictions. With regard to the latter, HMRC is pushing for greater transparency in lowtax jurisdictions. Developments include: n A new tax agreement between the UK and Switzerland, which came into force in January and could affect all UK persons with assets in Switzerland. n The Liechtenstein Disclosure Facility – a worldwide disclosure regime involving undisclosed offshore assets. n The recent agreement of several UK Overseas Territories and Crown Dependencies to sign up to the Organisation for Economic Co-operation and Development Multilateral Convention on Mutual Assistance in Tax Matters. The “right amount of tax” So what is the “right amount” of tax and how does a taxpayer, especially a corporate taxpayer, demonstrate that they are paying it? For most people, tax is simple. Many Professional Manager readers will be on the PAYE system, their income tax

deducted by their employer at source and sent by it to the Exchequer on their behalf. Indirect tax contributions – VAT, duties – are similarly simple, being collected when you buy goods and services. You may encounter other taxes, such as stamp duty if you move house, capital gains tax if you are in receipt of a windfall, or inheritance tax if you are the beneficiary in a will. Generally, though, it is pretty straightforward and most people have few decisions to make. But, as finance directors and chief executives will attest, for a corporation, particularly a multinational, life is much more complicated. Each decision has consequences and there are different routes leading to the same objective. For example, a business may be planning a new research facility. Some countries or regions may offer grants or tax incentives to locate the facility in

Taxing numbers

“N

othing,” wrote Benjamin Franklin, “can be said to be certain, except death and taxes.” That was 13 November 1789. More recently, reading media reports on tax avoidance, one might conclude that tax is less of an inevitability for some entities than others. Whether multinationals and some high-profile individuals have been paying the “right amount” of tax has been the focus of much media and public debate. Politicians in the UK and other countries are taking a keen interest in the issue. There is a lot of money at stake. One of the aims in the government’s 2010 spending review was for HM Revenue & Customs (HMRC) to raise an extra £7bn in tax receipts each year by 2014/15. Much of the debate on tax has been on large corporations and the amount of tax they are paying in the UK. But, alongside this, public spending watchdog the National Audit Office (NAO) released a report in November 2012 calling for HMRC to focus on the £10.2bn it estimates to be at risk from marketed tax avoidance schemes it is currently investigating by small businesses and individuals. The NAO estimated the annual tax gap (the difference between the actual tax take and what HMRC says should have been collected) attributed to avoidance to be £5bn. In addition, the Cabinet Office implemented measures to ensure the government procurement policy promotes tax compliance by taking into account the extent to which suppliers have put arrangements in place that are disclosable under the current applicable tax rules (Disclosure of Tax Avoidance Schemes or DOTAS rules, a newly introduced General Anti-Abuse Rule or, in the case of VAT, subject to the Halifax principle). Greater tax transparency over past, present and future tax affairs has been

THE TAX GAP

£32bn £5bn tax gap in 2010/11

part of tax gap due to avoidance

SOURCE: HMRC/NAO

30 _ PROFESSIONAL MANAGER _ Summer 2013

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02/07/2013 14:57

Intelligence their jurisdiction. Going to country A may result in a lower tax bill than going to country B. Tax won’t be the only factor driving the decision. Availability of labour, access to raw materials, transport links, the country’s infrastructure and so on will all be considerations. The point is that these options have tax consequences. Similarly, the way a business structures its financing can have an effect on its tax profile, and if it has historical losses or has been investing heavily, this can also affect its effective tax rate. There are many elements that affect the amount of tax a company pays. And that amount may well not be the same as the headline rate of corporation tax.

businesses shied away from them because of risk. At present, tax reporting is generally fairly basic and – even for accountants – it is often impossible to work out what is going on from a set of statutory accounts. Corporates must become more transparent on tax. Ideally they will do this voluntarily to promote an informed debate. The risk is that an ill-informed debate could damage the progress the UK has made in becoming an attractive place for businesses to locate; in a recent KPMG survey, the UK came first against key competitors on tax. Businesses less inclined to be transparent may find that they are forced to be so as stakeholders

‘With public interest – and often anger – growing around behaviour on tax, it’s important to have an informed and transparent debate’ Time to talk tax The challenge for managers and leaders in businesses today is to communicate around tax. With public interest – and often anger – growing around behaviour on tax, it’s important that there is an informed and transparent debate. It’s only with full possession of the facts that an intelligent conversation is possible. As I hope I’ve outlined with these basic examples, there are many reasons the amount a business pays in tax might vary. Governments do use incentives to attract investment into particular sectors or regions. It would be a shame if those became ineffective because

take an interest, ask questions and demand answers. The way forward So how best to achieve this? The answer is not to publish even more data such as turnover, profits and tax payments for each country. You would need a PhD in international tax to make head or tail of such detail and it could be giving away competitive information. What is required is a better quality narrative. KPMG, together with other tax advisers, is talking to businesses about how to formulate principles for tax transparency so there can be a best

COME HITHER

practice. Here is how KPMG has been working so far. Together with its clients, KPMG has been helping managers to: n Understand their stakeholders, what their concerns may be and how they can be prepared, in the short to medium, term to explain their tax position. n Collate the data on taxes paid and analyse that data to understand how much tax they pay and what this tells them about their tax-planning strategy, transfer pricing and business model. n Develop a communication strategy for the medium to longer term. n In the longer term, understand their wider economic contribution to help support their tax contribution. n Improve their governance and risk around their taxes and ensure they have clear accountabilities and visibility over taxes paid, and that their strategy is approved by the board. n Review their tax planning, business model and transfer pricing to assess whether it is appropriate. n Assist those affected by legislation or the self-certification process for UK government contracts to ensure they comply with legislation and meet the requirements of self-certification. Management understand their business better than any external adviser. You know what you are doing and why you are doing it. But the outside world may not understand. The challenge is to help external stakeholders understand your position by articulating your strategies clearly in the context of a changing global landscape. Not easy, but failure to achieve it may have serious consequences.

WHAT THEY PAY Businesses’ share of taxes

How the UK’s tax framework has made it more attractive to investors

Businesses were asked: which three countries do you think have the most attractive tax regime? 100% 2007 2008 2009 2011 2012

80%

60%

40%

10 3.6 7.1 1.8

FRANCE

20%

GERMANY

6.7 2.9 5.1 1.9

0% d lan Ire

s nd rla the Ne

d an erl itz Sw

rg ou mb xe Lu

Corporation tax as percentage of GDP Corporation tax as percentage of total taxes SOURCE: KPMG

SOURCE: OECD

professionalmanager.co.uk _ 31

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02/07/2013 14:58

Analysis of the latest technology trends

Digital world

TAKE A BREAK – BUT STAY SWITCHED ON Taking your gadgets on holiday need not lead to your working 24/7 from the beach. But technology can be a great safety net if used wisely, says Will Dean

nce upon a time it was impossible to do any work on your summer holiday. Sure, there were phones in foreign hotel rooms. But only a masochist would give their room number to the office – and the extortionate hotel call charges were disincentive enough to ring in to work to see how things were going. Then, 40 years ago, Dr Martin Cooper and his design team at Motorola built the prototype of the first mobile phone and, give or take a couple of generations, we’re now in a situation where whoever “needs” to get in touch can call you as you’re sat beside the pool, and not only that but you can also use your phone to do anything from sign off a budget to weigh in on a pitch for a new client. Which is, well, good? Bad? The answer may come from your spouse. There are some arguments that working while on holiday might not be such a bad thing. In a minute, the academic, but first the anecdotal. My father-in-law ran a one-person operation in the wholesale meat trade. It served him well and only required a couple of hours’ work a day to turn over a tidy income. Without his BlackBerry Bold, though, he’d have regularly lost business and inconvenienced his major clients while away on a regular trip to

CMI_032-033_digital.indd 32

the coast. For the sake of a couple of minutes of emailing and calling from the beach, people didn’t even have to know he was on holiday in Devon. That’s obviously different from a national or multinational office where work and deals can be assigned to other colleagues. But if you’re employing and managing, say, 10 people in a small IT consultancy and your approval is needed to sign off or read over deals, then yes, having an iPad with a 3G connection on the beach seems more than sensible, even if you’ve gone away to escape the everyday strains of the office. However, that’s probably about as much work as you should do. Lest your partner FedEx you back to Britain with a thick ear. However, thinking about work when on holiday – or NOT thinking about work on holiday – can have real benefits for what you want to achieve. And technology can help you here. A 2011 study by Adam Galinsky, a business professor at Columbia University, and William Maddux, an expert in

organisational behaviour, suggested that holidays make it much easier to take a detached view of any problems at work. The psychological distance created by being physically removed from a situation makes it easier to come to conclusions on something you may have been dithering over for weeks. Or you may have an epiphany about the way your company works through observing foreign customs. “Not just taking time off from work, but actually getting away from where you live is really important,” Galinsky told CNN upon the report’s publication. “Because that’s the only way that you can achieve that perspective.” So if you do manage to detach yourself from office politics and other dull ephemera, it should be for this kind of macro thinking. Which is where tech can aid and abet. That doesn’t mean taking your work laptop on holiday with you, though. The only thing you could achieve with it is to plug it in and do work that can wait or be done by somebody else. But maybe you should take a tablet

‘We’re now in a situation where whoever “needs” to get in touch can call you as you’re sat beside the pool. Which is, well, good? Bad? The answer may come from your spouse’

02/07/2013 15:00

Intelligence

Tech it away WILL’S HOLIDAY HELPERS

ILLUSTRATION: QUINTON WINTER, MICHELLE THOMPSON

computer: a) you can load it up with your ebooks (or Grand Theft Auto: Vice City), meaning you can avoid filling up your suitcases with all six volumes of the Chronicles of Barsetshire; and b) if an idea strikes, it’s simply a case of jotting it down quickly in your drafts folder and, if you insist, sending it back to the office. The best state of affairs is to be in a situation where, if work had to be done, you could do it. Maybe set up a few voice-over-internet-protocol apps such as Viber and WhatsApp messaging on your devices and invest in a tablet keyboard such as the much-loved Logitech Ultrathin (see reviews). Try not to use them if you don’t have to, though – taking a holiday is good for your health. The long-running Framingham Heart Study, which since 1948 has been tracking thousands of men in a town in Massachusetts for three generations to monitor the causes of heart disease, has found that participants who holidayed the most were the healthiest. And they probably didn’t work on their year-end budgets while doing so. If you can keep wired up enough to avoid worry, you should be okay. Just as long as your blood pressure can withstand the Ryanair queues at Brindisi Airport.

Viber

Wi-Fi Finder

PM rating: ★★★★★

If you insist on making calls back home from a foreign holiday, there’s now no reason to get diddled with roaming charges – just so long as you can find a decent Wi-Fi connection in your hotel. Voice-overinternet-protocol apps mean you can do it through data. Though Skype is by far the best known of these, I’ve found that Viber – which offers calls and messages – is the most efficient. However, as with Skype, you do need to make sure that all the people in the office you might need to call are set up with Viber accounts and are signed in on their own devices to make the whole thing work. Similarly, if you’ve got teenagers, you’ll probably have heard of WhatsApp, which allows you to send free SMS through your data allowance (and not just to iOS users like Apple’s iMessage). iOS, Blackberry, Android, free

Obviously, to do any of the above, you need Wi-Fi, unless your company is generous or daft enough to subsidise the scandalous cost of data roaming. Yes, your hotel will likely have a Wi-Fi router, but if you’re out and about on a Greek island or Australian outback route you’ll need an easy way of getting online. My usual trick is to find a Starbucks and stand outside, but even Starbucks doesn’t have too many branches in Alice Springs, so maybe downloading JiWire’s Wi-Fi Finder app would be a good idea. It works offline with your GPS and gives you a map of the closest free and paid Wi-Fi spots from locations around the world. You can filter by provider types and it can even tell you what kind of venue the connection is located in, so you can pick a quiet hotel lobby over a grubby dive bar. iTunes, Android, free

Logitech Ultrathin Keyboard Cover for iPad

This might be my favourite gadget for working on the go. Typing at length on an iPad can be one of the most infuriating activities known to modern man. Thankfully companies that aren’t Apple have spent the past three years since the launch of the device working out ways to make it into a decent work-on-the-go machine. Some sacrifice Jony Ive’s cool looks for durability, but, for my money, this Logitech effort retains the iPad’s chic, while making it possible to write more than one paragraph without punching yourself in the face in frustration. The Bluetooth-connected Logitech case snaps to your iPad like one of Apple’s own smart cases, works in portrait or landscape and has a battery that will last for months, let alone weeks. It’s not cheap, but it would be just as useful on the commute as it would on the Canary Islands. £89.99 PM rating: ★★★★★

professionalmanager.co.uk _ 33

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02/07/2013 15:00

Managing your company’s transport needs

Motors

FLEETING THOUGHTS

THE MPV BOUNCES BACK The modern multi-purpose vehicle is a very different beast to the people-carrier of old, says Robin Brown

ILLUSTRATION: QUINTON WINTER

ery rarely are people impressed by MPVs. Even more rarely will motoring journalists admit to being impressed by the humble people-carrier, forever referred to as the multi-purpose vehicle. Received wisdom dictates that MPVs are too big, costly, boring, hard to drive, ugly and even vulgar to take their place in the company car park. But I have been impressed recently by what manufacturers are doing with their MPVs. The sector is introducing innovations that are new to the industry and reviving bonkers ideas that were once the preserve of sports cars. Take the Ford B-MAX and Vauxhall Meriva, for example. The former has a rear sliding door; the latter has rear-hinged doors that were recently seen on the Rolls-Royce Ghost and Mazda RX8. Why? Well, because they make ingress and egress (otherwise known as getting in and getting out) a lot easier, especially if you’re trying to manoeuvre child seats or the less mobile into the back. Vauxhall has several innovations on the flex theme. For instance, the Flex7 system on the Zafira Tourer means you can choose between a five-seater or seven-seater; or fold the middle

seat in the middle row down to make a 2+2 formation; or even fold up all six seats for a flat load space. Perhaps it should come as no surprise that MPVs are flexible and versatile. But what continues to impress me about modern MPVs is how manufacturers have acknowledged the historical problems of people-carriers. First-generation MPVs were more akin to vans than cars: big, gruff things that were difficult to drive. They were wholly undesirable – like a concession to middleage, an unfavoured compromise candidate or admission of defeat to those who take pride in their cars. Carmakers have addressed these problems in two ways. First, they’ve made them enjoyable to drive by dialling up suspension and refining grumbly engines into quiet, smooth and torquey powertrains. Dynamics have improved enormously since early MPVs, to the point where the large Ford S-MAX is a pleasure to drive. Second, MPVs look good. No, really, they do. Take a look at the Seat Alhambra, Ford Galaxy or Vauxhall Zafira Tourer. They’re smart, streamlined cars with knockout interiors and plenty of gadgets to keep employees happy on the motorway. In short, they’re excellent fleet vehicles. Still, there’s a lingering suspicion that any big car – apart from an SUV – is something of a hair shirt. Yet there is no reason in 2013 to ignore the MPV. There are sporty SUVs such as the Ford S-MAX; a hybrid seven-seater from Toyota; MPVs-in-disguise such as the SUV-like Chevrolet Orlando; mini-MPVs such as the Ford B-MAX and Renault Scenic; high-end MPVs such as the

Mercedes-Benz B-Class; oddities such as the Citroën C3 Picasso; and van-oriented MPVs such as the Citroën Berlingo Multispace. There are even fleet specialities such as the Vauxhall Zafira Tourer Tech Line, rammed with technology and attractive details, with engines that will emit as little as 119g/km and return fuel economy as high as almost 63mpg.

‘MPVs are smart, streamlined cars and they’re excellent fleet vehicles’ What constitutes an MPV is no longer clear: their DNA has been cross-fertilised with estates, SUVs and hatchbacks. What is clear is that the sector has thrown off its historical connotations. Received wisdom has a habit of lingering, but just look at Skoda: once derided, it now offers some of the best cars on the road. If you listened to the man on the street when it came to MPVs, you’d be wrong.

CARRIER SIGNALS Five reasons why MPVs have shrugged off their bad image Refinement Driving an MPV used to be like driving a van. But vastly uprated suspension and smooth engines make new MPVs quiet and refined. Exterior innovation The Ford B-MAX is notable for not

having a pillar between front and rear doors to improve access; the Vauxhall Meriva applies the same trick to incorporate rearhinged doors. Efficient engines Modern engines not only sound better, they’re much better for the wallet. Fuel economy in excess of 50mpg and some of the lowest bandings for road tax take the sting out of owning an MPV.

Hybrid tech As demand grows, petrol-electric technology has found its way into people-carriers. Toyota is blazing a trail – you can be sure the rest will follow. Versatility Perhaps the most important facet of the MPV. Interior flexibility allows owners to optimise their car for comfort, people-carrying or load-lugging – an automotive chameleon.

42 _ PROFESSIONAL MANAGER _ Winter 2011/12

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03/07/2013 12:17

Intelligence HOT METAL

BIG WINNERS Carry your fleet with these MPVs

Renault Scénic

Engine: 130bhp 1.6-litre, four-cylinder diesel engine Price: £21,325 CO2 emissions: 114g/km Combined fuel economy: 64.2mpg 0-60mph: 10.3 seconds Annual road tax: £30

Lest Renault be accused of focusing on electric cars to the detriment of other technologies, it does offer the excellent Energy dCi diesel engines. I got the full factory tour when Renault launched the 130bhp engine and was staggered by the attention paid to wringing the smallest increments of fuel economy and power out of the unit. With some technology ported over from Formula One – yes, really – the Scénic compact

MPV returns more than 64mpg and emits 114g/km. For business users who take the car home at weekends to transport big families and large dogs there’s a clear attraction. The diesel unit is smooth and responsive, the interior is up to par and there are plenty of gadgets – so much so that the factory-fit satnav is mentioned in the specification. The Grand Scénic packs in two more seats, but is essentially the same car, just a bit bigger.

Excellent running costs Gadget-packed Responsive, torquey engine A little pricey for the sector Not the most desirable MPV on the market 110bhp engine option offers more bang for your buck

Vauxhall Zafira Tourer

Engine: 2.0-litre, four-cylinder turbodiesel with ecoFLEX Price: £23,950 CO2 emissions: 119g/km Combined Fuel Economy: 62.8mpg 0-60: 10.6 seconds Annual road tax: £30

While Vauxhall still sells the long-serving Zafira MPV, it was essentially replaced by the Zafira Tourer in 2012. The Tourer is an altogether stronger proposition, with an ingenious interior and significantly improved quality. Despite being larger, the Zafira Tourer looks more dynamic and adds the sort of functionality inside that means the middle and rear seats

can be folded into dozens of clever configurations for comfort, flexibility and practicality. A 130bhp 2.0-litre turbodiesel with ecoFLEX start/stop offers 62.8mpg and with a low 119g/km; best-selling Exclusiv trim has all the required baubles and tools. The Zafira Tourer offers looks, style and specifications that may even catch the eye of executive car owners.

Classy styling inside and out Versatile seating configurations Economical engine range

engine has to be a workhorse in this sector, but more than 50mpg is possible and there’s plenty of grunt. Practical accessories boost the Galaxy’s appeal further if towing or extra storage is required. Ford calls the Galaxy a luxury MPV. With very strong specification, genius safety tech, a quality interior, intelligent interior arrangement and a willing engine that’s genuinely enjoyable to drive, it’s no hollow claim.

Comfortable and incredibly spacious High specifications Surprisingly good to drive

Rear seats are best for children Higher specifications look too expensive Size means it arguably falls between two niches

Ford Galaxy

Engine: 2.0-litre, four-cylinder turbodiesel Price: £28,655 CO2 emissions: 143g/km Combined fuel economy: 50.4mpg 0-60: 9.8 seconds Annual road tax: £140

One of the largest MPVs – heck, one of the biggest cars – on sale today, the Galaxy is another cracker from Ford. A large MPV with space for seven plus luggage, the Galaxy was perhaps the first MPV I drove that really indicated how far the sector had come since the early Renault and Toyota tanks of the mid-1990s. The Galaxy feels big inside – and it is, with up to 2,325 litres of storage space possible – but never feels unwieldy from behind the wheel. The Duratorq

Luggage space suffers with seven seats in use Prices are undeniably high The slightly smaller S-MAX may be a wiser choice

professionalmanager.co.uk _ 35

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03/07/2013 12:25

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036_CMI_SUM13.indd 36

03/07/2013 14:51

Intelligence Big data will make business better for seller and buyer alike, writes head of international markets at Dunnhumby Professor Mick Yates insight

how Big data can help customers

Big data is a buzz-concept that everyone is talking about. But too often it gets discussed in technological terms. What is its real meaning for business strategies? Remember the old adage: data– knowledge–insight–wisdom? Well, big data is only as useful as the insight that is derived from it. We accumulate lots of data, but we can’t always make sense of it. We need to extract wisdom. There is no formal structure to these, in the sense that we don’t predetermine what is in the database as we do, for example, for the shopping items in a retail database. The tweet may be “happy” or “angry” and – while the context may be clear to

to pull. Instead of businesses pushing marketing services and products at customers, the individual can now discriminate and pull services towards them, to suit their exact needs, preferences and timing. Big data makes this possible. Individuals can view recommendations from other customers, access the products, services, resources and media that they need, and optimise how and when it is all delivered and how it is subsequently used.

Building an advantage

And big data also helps businesses innovate. Many businesses already use networks with their suppliers and others to create innovation

‘Big data is only as useful as the insight that is derived from it. We accumulate lots of data, but we can’t always make sense of it. We need to extract wisdom’ the reader – there is no predetermined structure to the tweet. Yet this unstructured data can be extremely rich in helping us understand individual preferences and activities.

What can businesses do with this information?

Consider the example of looking at someone’s Facebook timeline, and noting that they tend to like wearing blue, but never wear orange. If you are a clothing manufacturer, and knew that fact, wouldn’t that help you make more appropriate offers to that potential customer? And if you could match this insight against the customer’s purchase records of clothes or other items over time, wouldn’t that give a richer insight into their behaviour? Customer and client interactions are all moving from push strategies

and build competitive advantage. InnoCentive is an excellent example of a business that matches problem-seekers with problemsolvers to create new ideas. These innovation networks increasingly rely on big data to speed up the flow of new ideas, products and services. Big data changes everything – business strategies, decision processes and innovation processes. The key? Focus everything on your customer.

definition Most experts would accept that big data is: • complex: it comes from multiple sources – structured databases and unstructured social media • analysable: it must be captured, processed, analysed and visualised • useful: insight must create decisive action • pervasive: it affects everyone – and changes everything in the organisation’s processes. I believe that there is a further way to define it: Tiny data + unstructured data = big data Tiny data means data from a single source in a structured format, which – while it may be huge in quantity – is actually limited in its complexity. Too often we confuse big with complex. A single source could be the vast dataset of the national census, a record of all the Google searches ever done or all the purchase records by Visa. But with today’s computing power these datasets are all crunchable and analysable. Unstructured data means exactly that – no fixed database format or predefined structure. Think of messages sent on Twitter, Instagram images, Vine videos, Facebook likes, phone calls, customer service calls and so on.

the author

Professor Mick Yates CCMI Professor Mick Yates with clients to help them CCMI is head of take better customerinternational markets focused decisions. He is at Dunnhumby, a global also a visiting professor business that partners at the University of Leeds.

He has been chairman of biotech company Living Cell Technologies, as well as a trustee of Save the Children.

professionalmanager.co.uk _ 37

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03/07/2013 17:09

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Can a dull leader learn charisma? YES

DOMINIC IRVINE, FOUNDING PARTNER, EPIPHANIES LLP

Can dull leaders be taught charisma? If they can’t, there’s almost no hope for anyone. What is charisma? It’s that certain something some people have that just attracts people to them. Gravitas is another example. You know when someone has either almost the moment they walk into a room. Just as you can teach people to improve their handshake – who likes holding a wet fish of a grasp? – you can teach them other nonverbal aspects of communication. In the late 19th century, two scholars, William James and Carl Lange, identified that physiology dictates emotion: how you hold yourself affects how you feel. So if you want to feel miserable, lower your shoulders, slump and look down. Want to feel confident? Head up, look out, shoulders back, clasp your hands loosely behind your back and look people in the eye. Charisma is a set of nonverbal attributes – including tone of voice – that creates a sense of energy and attractiveness. It’s

also the words you use and the interest you take in others. Like all skills, it takes practice. If you do not have a predisposition to be charismatic, then it may take longer than for other people, but just as actors practise a role, so too can a manager practise being charismatic. However, the label of charisma is something that is given to you by others. If they are used to a dour, miserable, introverted loner, it may take them some time to appreciate the shift you have made and not simply write it off as a behavioural blip. The more interesting question is whether the price of developing charisma is worth it. Do all leaders need to be charismatic? Given leadership is meant to be an attribute of managers at all levels of business, imagine an office filled with charismatic people. It would be like dark chocolate: one or two pieces is delicious, a bar is too much. While undoubtedly we can teach charisma, not everyone needs it.

PHOTOGRAPHY: IMAGESOURCE

Is charm an acquirable skill like any other? Farah Dib plays mediator

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02/07/2013 15:11

Intelligence

Just as we cannot expect a Geoffrey Boycott to bat like a Kevin Pietersen nor a Rob Andrew to tackle like a Jonny Wilkinson, we should not expect a chief executive to suddenly develop a character that is antithetic to their personality. Marshall Goldsmith suggests in his book What Got You Here Won’t Get You There that people can and must change parts of their personality to make a success of being at the top. Yet it is entirely wrong for people to

DAVID DUMERESQUE, EXECUTIVE HEADHUNTER, TYZACK

expect someone who has attained a high position on the basis of a set of strengths and characteristics to suddenly turn into someone completely different. Someone has risen to the role of chief executive thanks to talents that have clearly been displayed in a previous management position. They have been promoted on the basis of what they have achieved and how the board perceives that those talents and attributes can be translated into the new role.

While the board may well expect some form of development of an individual’s personality, that does not mean they expect the person to turn into someone they clearly are not. People don’t just become charismatic. Still, the new chief executive has to recognise that their leadership style will need to adapt to the new circumstances in which they find themselves. And, accordingly, they may well need to find others in the senior management team more able to provide other parts of the leadership dynamic that they may find harder to provide. The new leader will need to be able to put together a cohesive management team, which, in addition to being able to drive the business forward, will be able to fill in gaps in their own abilities. Facebook is an excellent example of this. The quiet chief executive Mark Zuckerberg works closely alongside his gregarious chief operating officer Sheryl Sandberg. Just as a strong sales-orientated chief executive needs to make sure they have a strong chief financial officer, so too a leader who perhaps lacks the personal characteristics attributed to a charismatic leader, will need to find others within the management team who can provide this to the organisation. That’s the strength of it: if you are not charismatic, don’t try to become so, just work with someone who is. Perhaps charisma is overrated; more important is that people play to their strengths while recognising their weaknesses. professionalmanager.co.uk _ 39

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02/07/2013 15:11

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03/07/2013 15:41 19/04/2013 22/04/2013 16:03 11:48

Intelligence

THE PERSONNEL TOUCH

Professionals have lived with falling living standards long enough. Those that want the best are upping the ante, writes Mark Crail

ILLUSTRATION: QUINTON WINTER

PANCAKE PAY WON’T BRING IN THE BEST A great mystery of the wave of recessions we have endured since 2008 is that unemployment has stayed low compared with previous economic downturns. Early on, commentators tended to suggest that employers were “hoarding” surplus capacity – holding on to staff who would otherwise be let go in the expectation that they will be needed when business picks up. Perhaps it is the need to keep this zombie army of workless workers busy until the upturn comes that explains all those long and pointless meetings filled with people who don’t need to be there. But, five years on, with little more than the merest whiff of an upturn in sight, the zombie army explanation is wearing thin. Indeed, in a paper that earlier this year attempted to unravel the conundrum of rising employment and falling productivity since the downturn began, the Institute for Fiscal Studies (IFS) explicitly rejected the hoarding explanation, pointing out that this can hardly account for the increased flow of people into new jobs. However, the IFS does endorse a more sophisticated version of the theory as at least part of the story. It points out that the weakened financial sector has been more averse than in previous recessions to pull the plug on underperforming companies, and equally disinclined to invest in risky startups. In other words, it is not so much that employers have kept less productive people in work, either generously or through enlightened self-interest. It’s more that companies that would themselves have gone to the wall in the recessions of the 1980s or even 1990s have been allowed to stagger

on and therefore – as a by-product – people still have jobs to go to. Now this may not have been the sort of economics that would have appealed to the late Lady Thatcher (think coal, steel, the UK car industry and many more besides). But tearing down and rebuilding entire economies is somewhat beyond my pay grade. What it all means for both employers and employees alike is that incomes have been depressed and falling in real terms for the past three years. Not since the start of 2010 have wages been rising more rapidly than prices – and in the year before that it was only the fact that prices fell that meant employers got away with pay freezes without provoking middlemanagers to armed insurrection.

FIND OUT MORE… For more information on XpertHR, go to www. xperthr.co.uk

the coming year. Which may be just as well as this is likely to be yet another year of falling living standards. Research suggests that 2013 will see average earnings grow by around 2.1% while prices go up by 2.3%. Another tightening of the belt all round, another year in which the English Tourist Board can look forward to a bumper year as the prospect of a foreign holiday in the sun disappears. But people are not daft. Many of us may be happy to sit tight if we have a job that seems secure, even if each year makes us worse off. But it is also clear that some jobs are harder to fill than others. And the people with the skills to do them are in a good bargaining position. Employers know this, too. The same XpertHR survey

‘It is clear that some jobs are harder to fi ll than others. And the people with the skills to do them are in a good bargaining position’ Low-productivity firms may not have gone out of business or made people redundant. In their own inefficient way they have been keeping everyone busy. But neither have they been awash with cash and able to award big salary increases. Research at XpertHR has found employers citing the lack of ability to pay more as the biggest source of downward pressure on wages. But what of employees? There is evidence that people understand that there is no more money to spare. A recent XpertHR survey of HR professionals found that three out of four felt that employees at their organisation accepted the need for subdued pay rises in

MARK CRAIL IS HEAD OF SALARY SURVEYS AND BENCHMARKING SERVICES FOR XPERTHR.

of HR professionals found that nearly two out of three were already increasing salaries for some roles to attract skilled staff. One would hope that the people who command these higher salaries are the ones whose productivity is going to lead the upturn. Which may mean that employers need to rethink the idea that rising pay follows on from business success. Instead, they might start investing in the pay of new – and existing – high performers now as a way of driving that success. This may not be easy in a prolonged downturn but, a few years down the line, with hindsight, it may turn out to have been uncommon sense. professionalmanager.co.uk _ 41

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SACRED COW OR TROJAN HORSE? The road to hell is paved with good intentions, writes Ben Walker I LLU STRATIONS BY JONNY WAN

Jake Breeden felt like a bad father. In the 12 years since his first daughter, Emily, was born, he had never missed any of his three children’s birthdays. As busy as he was – travelling and teaching across the globe – he always made certain that he’d be home on the big days. Yet, one year, he couldn’t make it. Breeden, a management guru, had to attend a crucial two-week leadership development in Dubai. However he sliced it, there was simply no way he’d be home for his middle daughter Clara’s 10th birthday – a milestone. His perfect record was coming to an end. “Daddy,” said Clara, sobbing. “Will you do anything I ask you to make up for missing my double-digit birthday?” Breeden hesitated: “What do you want?” “I want,” said Clara, “you to promise you’ll miss Emily’s 13th birthday.” When asked why, Clara said: “Because it’s fair.” Fairness is generally a good thing to strive for but, like so many nice-to-haves, the pursuit of it can sometimes lead to absurd outcomes. “Fairness is a virtue,” says Breeden, who uses the anecdote about his daughters to open his book Tipping Sacred

Cows. “But when it’s a virtue that trumps reason, it can backfire.” The trouble with virtues is that they are theoretical concepts removed from the cut-andthrust world of day-to-day business. All other things being equal, it is reasonable to aim for them, but all other things rarely are equal. Relentlessly pursue virtues, says Breeden, and prepare for unintended, unhappy consequences. “The truth is,” he says, “that many workplace values that seem beyond reproach actually do hidden damage.” Breeden makes clear that the point of his thoughtprovoking book is not to completely destroy all conventional wisdom, but to challenge it. Only by doing this, he says, can we save this wisdom from its undoubted flaws. “When leaders embrace beliefs without understanding and managing their potential side effects,” he writes, “the beliefs become sacred cows and get in the way. I have seen the same heartbreaking story play out too many times. Wellintended leaders, driven by deeply held beliefs, try to do the right thing. But the right thing backfires.” Here we outline why sacred cows are often Trojan horses.

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In-depth

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Collaboration has become fetishised in the modern, open-plan workplace. Team players are crucial to a business. Yet some tasks are clearly unsuited to teamworking and are better executed by one competent individual.

LAZY

CLEVER

This reporter remembers a clever game from a management training course. It was a giant geometric puzzle, the rules being that everyone in the team had to move at least one piece during its construction. Of course, as with any other geometric puzzle, it was really a one-person job. Our team leader solved the challenge brilliantly by simply having all his teammates move a piece an inch and then letting the guy with an aptitude for geometric puzzles build it alone. Mission accomplished. Had everyone tried to contribute, the task may well have descended into confusion. It almost certainly would have been slower, as the teammates simply got in each other’s way. “Very clever,” said one delegate. “The point is that it’s not a task best suited to teamworking, so why make it one?” Collaboration is often seen as virtuous, yet, argues Breeden, it can actually be inefficient, frustrating – disastrous even. He cites the example of the BlackBerry PlayBook – a tablet device similar to the iPad. Canadian Business reports that one director of Research In Motion (RIM), BlackBerry’s manufacturer, had wanted the product aimed at the business market, thus it was billed as being “professional grade”. Another director, however, had demanded it was aimed at consumers – hence the frolicsome name PlayBook. The result was that it met the needs of neither group. RIM would have been better letting one director or the other have his way. Not both.

DILIGENT

STUPID

COLLABORATION SOMETIMES KNOWN AS: “TOO MANY COOKS SPOILING THE BROTH”

Hammerstein’s heroes Decorated Wehrmacht leader Gen Kurt von Hammerstein-Equord valued clever-lazy types most of all

INDUSTRIOUSNESS SOMETIMES KNOWN AS: “PUSHING A BOULDER UPHILL” He’s hardly a management guru, but Lord Sugar is fond of mocking those who defend their own performance by saying they worked hard. “Gerbils work hard,” he says, “they run around in a wheel and get nowhere.” Hard work is, of course, a good thing – but only when targeted in the right areas. Miscued hard work squanders the resources many organisations value most – time and energy – and very often leads to organisational damage. Gen Kurt von HammersteinEquord, a decorated chief of the German army and a fierce opponent of the Nazi regime, divided his men into four groups: clever, diligent, stupid and lazy. He added that most of his troops displayed two of those characteristics. The most valuable, he said, were the clever-lazy men. “Anyone who is both clever and lazy is qualified for the highest leadership duties, because he possesses the intellectual clarity and the composure necessary for difficult decisions,” he said. And the worst? “One must beware anyone who is stupid and diligent – he must not be entrusted with any responsibility because he will cause only mischief.”

While there is a certain cruelty to this analysis, it is nevertheless reflected in a modern management model (see graphic above) that many leadership gurus swear by. “While the clever-diligent group is working late nights and weekends, members of the clever-lazy group innovate more creative solutions to save the time and energy the stupid-diligent group is spending,” writes business intelligence blogger David Crandall. “This creativity – this innovation – is the reason Hammerstein wanted cleverlazy people as his highest leadership. Instead of throwing more man-hours at a problem, this group looks for a much more elegant solution.” Hard work is extremely valuable in management, but only when coupled with intellect. “Laziness” – rather than actual slothfulness, this is better defined as a very rational determination to avoid unnecessary work – can be highly valuable if coupled with cleverness. Clever-lazy people create the most efficient, elegant processes.

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03/07/2013 12:36

In-depth

CREATIVITY SOMETIMES KNOWN AS: “MIRROR, MIRROR ON THE WALL, WHO IS THE FAIREST OF THEM ALL?” In his book, Breeden tells a story of his own misjudged piece of creativity – the creation of a comedy character to walk around a trade fair. The idea was that this strapping bright-pink being would tread the tech-conference boards and drive people to buy his client’s new videoconferencing software. The guy who turned up to don the costume was short, fat and keen on taking regular cigarette breaks. “That was fine,” recalls Breeden. “Keeping him off the show floor was the best thing that could have happened.” Breeden uses the story to make the point that much of what is creative is also narcissistic: designed by and for the benefit of its creator – not their client or their target audience.

The problem stems from the fact that novelty, even in the absence of utility, gives our brains a hit of the pleasure chemical dopamine, says Prof Scott Barry Kaufman, a cognitive psychologist cited in Breeden’s book. “This is why it’s important to use conscious thought to contemplate the dopamine rush and decide whether the idea is effective,” Kaufman says. Breeden compares the contrasting fortunes of Apple and Sony in his quest to prove that much of what is creative is also wasteful. “Think of Sony and their thousands of new products from video-game players to TVs to music,” he writes. “Meanwhile Apple’s entire product line can fit on a kitchen table.”

Yet, in the first quarter of 2013, Apple’s iPhone sales alone were worth $22.7bn, more than the entire sales of its rival Microsoft ($17.4bn) and, for that matter, Sony ($18.4bn). Critics of Sony’s performance have lambasted the Japanese giant for its lack of ideas, points out Breeden. “Wrong,” he writes. “Sony’s failures stem from too much creativity.” Sense-check new ideas to make sure the creativity is useful and not just novel. “Creativity should be pragmatic, not prideful,” writes Breeden. “Creativity exists to solve an important, unsolved problem.”

EXCELLENCE SOMETIMES KNOWN AS: “LETTING THE BEST BECOME THE ENEMY OF THE GOOD” “It is better,” writes Jules Goddard and Tony Eccles in their book Uncommon Sense, Common Nonsense, “to be first rather than to be the best.” The trouble with being the best is that it often takes a lot longer than just being good. And first movers’ advantage is massive. One of the biggest corporate-performance studies, the Profit Impact of Marketing Strategy, shows that pioneers command an average market share of 29%, compared with 13% for later entrants. Unless you believe that the first products into markets are pretty much always vastly superior than those that follow – unlikely given the follower can base its product on the pioneer, and better it – the evidence is that it is indeed better to be first than best. “Markets have a single summit,” write Goddard and Eccles. “And buyers have an irrational and

FURTHER READING

Tipping Sacred Cows Jake Breeden £17.99

enduring bond with the brand that sits on the summit.” Breeden argues that demanding excellence in everything we do is timeconsuming, energy-sapping and, thus, opportunity-destroying. We should instead be “comfortable with a little bit of low quality from time to time”. “My advice is be excellent occasionally,” he adds. “When we study leaders who accomplish great things, they seem to have a sixth sense that gives them permission to do second-rate work on the way to doing a first-rate job.” Breeden says that a sure-fire way of killing off a great idea is to demand it is fully formed and painstakingly researched at the formative stage. A policy journalist recalls being cornered by a government policy director after being invited to present an idea he had for a structural reform to an audience

Adapt: Why Success Always Starts With Failure Tim Harford £8.99

of experts. “She said she was very interested,” he recalls. “But she then asked me to detail every single aspect of my concept and provide her with all the supporting evidence. I said I didn’t have all that because it was merely an idea, a talking point. But we didn’t talk. Indeed, my lack of civil-service standard appendices meant I never heard from her again.” Rough-and-ready work can be of real value. By its very nature it is quick – and this is how ideas turn into business concepts and subsequently break new markets. The book Adapt: Why Success Always Starts With Failure provides great evidence that “just get started” has much to recommend it over the “make sure it’s excellent” approach, says Breeden.

Uncommon Sense, Common Nonsense Jules Goddard and Tony Eccles £9.99

professionalmanager.co.uk _ 45

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etâ€™s talk about the F word. Nine out of 10 startups fail within their first year and more than 10 businesses went bust each day over the past three months. At the height of the financial crisis, that figure soared to 120 businesses a day. It may be easier than ever to start and run a business, but itâ€™s just as easy to fail. Rather than examine the survival tactics, the myriad methods for keeping

CMI_046-049_destroy business.indd 46

your venture alive, I decided to look at the sure-fire ways to bring your beloved business down in flames: the management decisions that cripple a company; the marketing mistakes that send brands into the mire; the cash conundrums that cost firms dear. Here are those perilous pitfalls, experienced or witnessed first-hand by business veterans.

03/07/2013 12:42

In-depth

Demolisher-general Rebecca Burn-Callander brings you the bombproof methods to lead your business into the void I LLUSTRATIONS BY STE VE SC OTT

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03/07/2013 12:43

‘How to kill a business? You stubbornly ignore other people’s great ideas just because you think, as “the entrepreneur”, only you are capable of such amazing thinking’

KILLER TIP 2:

Listen to your customers

KILLER TIP 1: Be an egomaniac

It’s one thing to be sure of your vision for a company and pursue that vision doggedly, and quite another to believe that you are irreplaceable and refuse to delegate. Xenios Thrasyvoulou, chief executive of online freelancer marketplace PeoplePerHour, explains: “Business owners generally have strong egos, which is understandable because it’s their vision, a business which they have probably grown from an initial idea on the back of a beer mat. But the first job of any business owner is to effectively put themselves out of a job by hiring great people who are better than they are at their respective roles in the company.” Jamie Doig-Wilson, founder of Doigs of Troon, admits that he almost destroyed his Scottish jam and condiment business by giving into ego and refusing to listen to others. “How to kill a business?” he asks. “You stubbornly ignore other people’s great ideas just because you think, as ‘the entrepreneur’, only you are capable of such amazing thinking. Result: waste a fortune plodding on regardless.”

Sometimes in business, you can come a cropper if you pay too much attention to what your customers want. It may sound contrarian, but listen slavishly to them at your peril, especially when it comes to innovation. Instead, students of the Steve Jobs school of thought try to answer a need their customers haven’t even begun to imagine yet. “You can’t just ask customers what they want and then try to give that to them,” the Apple mastermind once said. “By the time you get it built, they’ll want something new.” George Spencer, co-founder of property software platform Rentify, concurs. “Customers never know what they want,” he says. “They all have opinions, but they never actually know what it is that they need. We’ve made it a policy to ignore our customers 99% of the time except for ‘this is broken’ type requests, and it seems to work.” This sentiment was also echoed by Ferdinand Alexander Porsche, the man who designed the flagship Porsche 911. “When we ask Porsche customers what improvements they want in their car, they always say the same things,” he laughed. “Better safety features. A bigger trunk. More legroom. Well, congratulations, you just designed a Volvo.”

KILLER TIP 3: Hire your lazy, no-good progeny

Family businesses account for some 66% of the UK small and medium enterprises (SME) sector – that’s around three million firms employing their nearest and dearest. For most, a sibling, parent or child makes a dedicated employee, willing to go the extra mile for the health of the business. But hiring decisions prompted by family ties rather than talent are often a huge mistake. “Letting nepotism dictate hiring decisions is all too common,” says Adam Riccoboni, director of business development at MBA & Company, “particularly with small businesses who struggle to attract the best talent and who are reliant on recommendations from their contacts and existing staff. “Good hires help a business thrive,” he continues, “bad hires can quite literally send a company bust. Companies wanting to take a more risk-averse strategy to recruitment should try before they buy, and hire professionals on a temporary, projectby-project basis before committing to offering them a permanent role.”

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In-depth

KILLER TIP 6:

Pick a terrible brand name

KILLER TIP 5:

Slate your own brand

KILLER TIP 4:

Lose sight of your cash flow

We’ve seen it countless times on Dragons’ Den: the smartest business ideas begin to unravel when the figures are put to the test. The trick to ensuring robust cash flow for your business is to do your research, test the market and extrapolate your projections accordingly. Flavia Fraser-Cannon, founder of theatre production firm Fraser Cannon Productions, says: “If you really want to go spectacularly bankrupt, overestimate your financial forecasts. I’ve seen countless shows go bust when they’ve budgeted for nothing but sell-out dates and been unable to get enough bums on seats. Always stick to conservative estimates if you want to stay in business. It’s better to overachieve massively than to run out of cash halfway through. The show can’t always go on.” Matt Thomas, chief operating officer of Smarta, which builds web-based tools for SMEs, adds: “Keeping an eye on the cash is even more important when you’re raising money. It’ll take you two to three months to raise even small amounts of cash so you need to be looking not at what you’ve got in the bank now, but what you’ll have on your current trajectory in six months’ time.” The phrase “cash is king” is enshrined in business parlance for a reason.

Every businessperson worth their salt has heard the phrase “doing a Ratner”. It refers to the moment that Gerald Ratner, founder of the eponymous jewellery giant, called his products “total crap” at an industry dinner in 1991. The gaffe wiped £500m from the value of Ratners jewellers almost instantly. Ratner added insult to brand injury when he later quipped that his stores’ earrings were “cheaper than an M&S prawn sandwich, but probably wouldn’t last as long”. You would think that high-ranking executives in the hyper-conservative banking industry would be less likely to make the same mistake. Not so. Back in 2003, Matt Barrett, the then Barclays chief executive, told a panel of MPs that consumers should steer clear of the Barclaycard because it was too expensive. “I do not borrow on credit cards,” he said, oblivious to his blunder. “I have four young children. I give them advice not to pile up debts on their credit cards.” Still, if being scathing about your products is bad, being scathing about your customers is even worse. Topman brand director David Shepherd once called his target market “hooligans”, while Urban Outfitters chief executive Richard Hayne went so far as to describe his core customer as “the upscale homeless”. Sue Otto, an executive director at the fashion chain, also joked to Wall Street analysts that after 31 years studying customers of the brand, she had racked up more experience than Jane Goodall, the anthropologist who researched chimpanzees for 50 years.

Fans of the long-running sitcom Only Fools and Horses may remember that Del Boy’s company name, Trotters Independent Traders, made a rather unfortunate acronym. Choosing a brand name is a tricky business, made all the trickier by the rules surrounding trademark law. Fiona McBride, partner and trademark attorney at Withers & Rogers, recommends a “stitch in time saves nine” approach. “It is vital to carry out a series of standard checks and searches to ensure that a business name doesn’t infringe any existing trademark rights,” she says. “For the enthusiastic entrepreneur, it may be tempting to overlook this stage in the development of a new business.” But it’s not just newbies that can fall foul of trademark law. When Lord Sugar opted to name his new internet-connected TV service YouView, his team failed to realise there was already a Gloucestershire-based telecoms business with a similar name: YourView. As a result, Lord Sugar’s firm had to appear at an appeal court hearing, which determined that YouView was “confusingly similar” to its preexisting rival. The Apprentice star had to cough up a fair wedge of cash to pay for the infringement. Jonnie Shearer, the founder of the Pussy energy drink, thought he was on to a winner with the provocative brand name. It certainly attracted a lot of publicity in the early days. And it was no coincidence that Sir Richard Branson’s children, Holly and Sam, were early supporters – Sir Richard shocked the business community by adopting the word “Virgin” for his portfolio of companies, after all. But you can go too far, as Shearer recently found out. His poster ad campaign was recently banned by the Advertising Standards Authority for being too “sexually explicit”. A rum deal for a brand with a tagline that reads: “The drink’s pure, it’s your mind that’s the problem.” professionalmanager.co.uk _ 49

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0800 977 8000 @oregacentres sales@orega.com 03/07/2013 14:52

In-depth

‘Gone is the job for life with a decent pension… we are becoming a nation of entrepreneurs, acutely aware that the biggest risk might be taking no risk at all’ HOLLINGSHEAD REPORTS

SUPERCHARGE YOUR STARTUP

ILLUSTRATION: QUINTON WINTER/GETTY IMAGES

Entrepreneurs are increasingly hiring expert contractors to do their IT, HR and accountancy – so they can concentrate on bringing in business Who doesn’t want to be an entrepreneur these days? If it’s not the excitement generated by television shows such as The Apprentice or fairy tales such as Instagram selling to Facebook for $1bn, it’s the rapid realisation that we live in a very different world to the one known to our parents. Gone is the job for life with a decent pension and a carriage clock on retirement. Both have been replaced by rapid churn, low economic growth and high youth unemployment. We are becoming a nation of entrepreneurs, acutely aware that the biggest risk might be taking no risk at all. It is no surprise that organisations such as The National Association of College and University Entrepreneurs (Nacue) have attracted huge support in recent years. Running a startup is, of course, no bed of roses. Not only are you a challenger brand, you often lack the resources, such as HR, IT, legal services and travel support, which more established competitors take

for granted. One of the most stressful early decisions can be deciding how much and how often to outsource. Taking the first step “Outsourcing key duties – and hefty loads of much-needed cash – to relatively unknown outsiders feels like a mad stab in the dark,” says Charlie Anson, who set up Charlie’s Cartoons, a bespoke caricature business. “But wherever

the in-house skillset doesn’t match the task at hand, it has to be done.” Anson successfully outsourced the dark arts of search engine optimisation, which he believes are the cornerstone of a startup’s success. By and large, his fellow entrepreneurs agree on the importance of following suit. “It’s not just business support services,” says Patrick Tolhurst, a solicitor who cofounded Well Seasoned, a company that makes seasonal British pesto. As well as looking to outsource its PR and bookkeeping, Well Seasoned already outsources its herb growing to a specialist near Worcester. “By operating an ‘orchestra conductor’ type of business it’s possible for a small startup company to develop the means to scale up without incurring huge expense in plant and machinery,” says Tolhurst, “as well as avoiding dabbling in areas where we have limited knowledge.” It is, of course, vitally important for the conductor to remain on his toes.

professionalmanager.co.uk _ 51

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03/07/2013 12:45

THE CHARTERED MANAGEMENT INSTITUTE MAGAZINE

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In-depth

‘As important a tool as outsourcing undoubtedly is, there are some instances when, approached naively, it can be a false friend’ “Executed poorly, outsourcing can quickly turn into a real mess,” says Nick Hungerford, co-founder and CEO of Nutmeg, an online investment manager. “Startups are not the most structured environment and it is structure that helps support good outsourcing, so that both parties have absolute clarity on responsibilities.” Avoiding pitfalls Nutmeg initially ran into problems when it outsourced payroll and accountancy. “The arrangement was poorly defined, unable to cope with the vagaries of life at Nutmeg and handled by staff who were not suited to the role being outsourced,” says Hungerford. “Unwinding the mess put more of a burden on the business than if we had just done it ourselves to start with.” The company later entered a structured relationship with a new provider, with clearer responsibilities. “It works like a charm and definitely takes a load off our plate,” says Hungerford. So how can a budding entrepreneur spot potential pitfalls as early as possible? According to Chris

Sandilands, a management consultant and co-founder of Executips, a private network for PAs and office managers to connect and communicate, the key is to manage the process closely and not to outsource too soon. “We only outsourced our development after doing it inhouse for a while,” he says. “Then we discovered that it made more sense for my co-founder to focus on product management and to oversee a developer. That way he could focus on product strategy without being absorbed by the detail of the code. My co-founder talks to the developer every day and the developer now feels like he’s part of the team – although we’ve never met him!” As important a tool as outsourcing undoubtedly is, there are some instances when, approached naively, it can be a false friend. “Outsourcing is about handing parts of your business to third parties that can actually do the job better and cheaper than if you kept it in-house,” says Hungerford. “It is not a short-term stopgap for skills.”

TOP STARTUP TIPS

External expertise

Many business functions naturally lend themselves to outsourcing. Here is a selection that can help your startup by taking niche work off your hands so you can concentrate on the development of your core business.

Business travel

Advanced single, off-peak return, super-saver? Rail companies and airline ticketing is often bewildering, and can end up wasting your company money if you don’t successfully navigate the maze. Travel outsourcing companies will do it for you.

Accountancy

Paying people and tracking payments from clients is a non-trivial task for those who have a wider business to run. That’s why many startups outsource their accountancy – give the job to experts who know how to manage it.

Publicity

Want to get a great story about your business in the paper? Chances are you haven’t got the contacts or experience to make it stand out. PR agencies do. That’s why many startups call them up when they need to get their name out there.

Human resources

Human resources can suck away time from your startup. Personnel issues are often complex and time-consuming, so bringing in external skills to take the strain often makes sense.

IT is such a niche area that it lends itself to bringing in external suppliers. For example, keeping up with technological developments in the sector is a full-time job – it may well be that you’d rather someone else do that for you.

Legal services

You probably don’t employ a lawyer – and, if you do, you probably want him to concentrate on the bigger stuff. There is a range of legal services suppliers who will do the donkey work for you.

professionalmanager.co.uk _ 53

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Leaders with personality disorders are more common than you might think, writes Rebecca Burn-Callander ILLUS T R AT I ON S BY L A BOCA

For many, the word “psycho” calls to mind an image of Norman Bates, clad in his dead mother’s gown and wielding a kitchen knife. But psychopaths aren’t necessarily serial killers or criminals; they are found in all walks of life. They can even be overachievers with high-flying careers. In fact, research suggests that one in 25 business leaders could be a psychopath. It’s not that surprising that psychopaths are likely to go undetected in the workplace. Organisations will often actively reward psychopathic characteristics in a corporate environment: being ruthless, results-driven, using charisma to get the most out of staff and colleagues, to name but a few. “Just look at modern working environments: what are the priorities?” asks Dr Cheryl Travers, chartered psychologist and lecturer at Loughborough University. “Beating the competition, hitting ambitious targets, hard selling, finding out what rivals are doing and sometimes stealing their ideas. Those who are ruthless and resilient to others’ opinions and immune to the fear of failure are more likely to climb to the top.” So how can you tell the difference between a driven leader and a genuine psychopath? “Look for those that consistently take credit for others’ ideas,” says Travers. ‘Those who are incredibly charming to one’s face, then stab you in the back with no apparent remorse. They may lie to serve their purposes, and can be very manipulative. They also tend to set impossible deadlines and make 54 _ PROFESSIONAL MANAGER _ Summer 2013

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In-depth

employees feel like they can never work hard or efficiently enough.” Psychopaths also, it turns out, come in many guises. “There are many different flavours of psychopathy,” explains Professor Craig Jackson, senior lecturer in occupational health psychology at Birmingham City University, and an expert on deviance and psychopathology in the workplace. “There are some that you’ll never encounter in the workplace, like schizoid disorder. These people are incredibly withdrawn and isolated, so they don’t tend to have successful careers. Likewise, those with antisocial disorders don’t tend to flourish in a work environment. The real ones you have to worry about are the narcissistic and borderline personality disorders.” Narcissism isn’t necessarily a bad thing – it is healthy to take some pride in your appearance and normal to enjoy praise. But, for a select few, it becomes a consuming obsession. Narcissistic personality disorder is characterised by a strong need for admiration alongside a lack of empathy for others. It used to be known as megalomania and is estimated to affect around 1% of the world’s population.

‘Hundreds of thousands of people in the UK work for a manager with some kind of disordered personality’ Borderline personality disorder (BPD), however, is characterised by impulsive behaviour, variable moods and intensity. “Those with BPD can display poor impulse control,” says Travers. “So watch out for bosses that are unable to plan long-term.” One senior manager within a management development consultancy, who prefers to remain anonymous, worked for a psychopath for years. “She had a way of making me open up to her by sharing information with me, saying things like, ‘I haven’t told anyone this’, or ‘confidentially, this person…’ and then, before I knew it, I would be manipulated into doing or saying something I didn’t want to,” she reveals. “I don’t even think she knew she was doing it.” Working with a psychopath can be a dilapidating, life-swallowing pursuit. But if you think there might be a psychopath in your organisation, don’t jump ship just yet. “Having a boss with a personality disorder is not always bad for you as a worker,” says Jackson. “Hundreds of thousands of people in the UK work for a manager with some kind of disordered personality, whether diagnosed or not.” Moreover, the very definition of a psychopath has evolved over time. Fifty years ago, people could be institutionalised for having an ‘eccentric’ personality disorder – wearing a funny hat or odd shoes, for example. But 10 years ago, this so-called disorder was phased out of medical parlance. “Personality professionalmanager.co.uk _ 55

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03/07/2013 14:52

In-depth

‘Each day people are rewarded for moaning with more “followers” and retweets. We are breeding a workplace that views everything as a disaster’ disorders come and go depending on societal rules and norms,” explains Jackson. “Imagine refusing to wear shoes to work, or setting up a protest camp in Parliament Square a century ago? These days, it’s practically considered ‘normal’.” The next big thing on the psychopathy spectrum, posits Jackson, is something he likes to call “histrionic disorder”. This is a personality always in crisis: a late train, a sock lost, a phone call missed – these all become huge dramas that must be endlessly discussed. “Histrionics are attention-seeking and like to talk about their problems,” says Jackson. “And it’s being brought about by societal change. Just look at Twitter. Each day millions of people are rewarded for moaning about traumas with more ‘followers’ and retweets. The hashtag ‘FML’ is everywhere [look it up – it’s unprintable spelled out]. “We are breeding a workplace that views everything as a disaster.” There are many factors that contribute to creating a psychopath, most of which take place throughout childhood. And while it is impossible to “un-psycho” a manager, there are organisational

and societal changes that could help prevent these individuals from thriving. “This is why I’m not a fan of The Apprentice,” says Jackson. “I guarantee that the majority of the contestants will be narcissistic or have some kind of personality disorder. These are the kind of nut-jobs that make great TV: they scheme and connive and put people down. The problem is that they also become role models. People think that is how you should behave in the workplace, which is profoundly negative.” And despite personality disorders manifesting as bullying behaviour or harassment, many organisations choose to turn a blind eye. “Companies make allowances, don’t they?” says Jackson. “They go, ‘that’s just Geoff ’s way’.” If you work for a psychopath, you don’t have to keep silent. It is only by speaking out that problem characters can be removed from organisations. “It was people being afraid to speak out that meant Jimmy Savile got away with his behaviour for so long,” warns Jackson. “We may have medicalised the condition, but ultimately, many of these people are just wrong ’uns – plain and simple.”

OUT-PSYCH A PSYCHO

Psychopathy is not genetic – it is developmental. But once habits are formed, they are almost impossible to break. There are no known cures for personality disorders, no pills that can be popped. So how can you best handle a psycho manager? BE GOOD

FIND PEACE

“Make sure you have someone to vent to outside of work and find ways of getting a break on days when they’ve affected you particularly badly,” says Travers. “A good, brisk walk often helps.”

“If you are an expert at what you do, it makes it hard for you to be criticised,” says Dr Cheryl Travers. “Do your homework and prepare for every interaction if you can.”

RESPOND WISELY

AVOID ATTACKS

“Never tell a psychopath they are wrong, either in private or in person,” warns a management consultant who does not wish to be named. “They will punish you. Never trust them.”

Professor Craig Jackson says that the most important thing is that you change your reactions to their behaviour. “You are not the one at fault, they are,” he says. “It’s not personal: this individual doesn’t see you as human but as a tool. Never get emotional in front of them. Breaking down won’t help.”

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TAP IN

Try to find out as soon as you can what motivates them, be it money, beauty, status, power or knowledge, says the anonymous management consultant: “Make sure every interaction you have with them taps into these values and motivators.”

PAY ATTENTION

“Learn the games these people play so you can predict their next move,” Travers adds. “Become your own amateur work psychologist!” professionalmanager.co.uk _ 57

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Powerful and dominant, Generation X might have you believe they are perfect. Yet they are as flawed as any other generation – and so is the way they manage, writes Laura Evans

THE TROUBLE WITH I LLU ST RATIO NS BY AR MY O F TR O LLS

“CLIQUE MAINTENANCE: the need of one generation to see the generation following it as deficient so as to bolster its own collective ego: ‘Kids today do nothing. They’re so apathetic. We used to go out and protest. All they do is shop and complain.’” When Douglas Coupland published Generation X: Tales for an Accelerated Culture in 1991, popularising the name for the children of the 1960s and 1970s, it was a Baby Boomers’ world. The generation who had grown up in the shadow of war were the middle-managers in charge of the twentysomethings clambering on to the career ladder. They were the peer group Roger Daltrey sang about on The Who’s My Generation, except people were no longer trying to put them “d-down”. Boomers were writing

the newspapers, running the country, calling the shots – and, frustrated by the upstart Generation X, they were increasingly forced to manage in the workplace. Not any more. Now Generation X are writing the newspapers. The Boomers are retired, and the generation previously denounced as selfish, lazy, disrespectful, disloyal and entitled find themselves in the position of managing a younger peer group about whom they have their own complaints. Careless, coddled, uncivilised, idle, lacking in direction and initiative, Generation Y are a blight on our workplaces and a millstone around the neck of their Generation X colleagues, who cannot be blamed for failing to manage them effectively. Can they?

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For the record, it’s important to point out that generational characterisations are as flawed as any stereotype. Not only do they fail to account for variations between individuals, who may exhibit any (or none) of their peer group’s typical traits, they impose a false model of generational change as a series of discrete steps. The reality is more nuanced – factors including democratisation, advancing technology, higher disposable incomes and broadening secularity have gradually wrought a “seismic shift in formative influences,” says Geoff Trickey, managing director of Psychological Consultancy Limited. “With successive generations, the influence gets deeper, impacting on the developing child earlier and more pervasively.” The arbitrariness of peer groupings such as Baby Boomers and Generation X is reflected in the fact that their definitions vary significantly in the literature. (Trickey, for instance, uses William Strauss and Neil Howe’s boundaries, which put Baby Boomers as those born between 1943 and 1960, Generation X as the 1961 to 1981 generation and Generation Y as those born between 1982 and 2001. For others, the milestones are several years earlier or later, particularly when it comes to the Baby Boomers, whom many understandably define as those born in the post-war period – that is, from 1946 onwards.) Artificial as they are, though, generation groupings are useful constructs. For one thing, they allow us to understand how the manager-employee dynamic is evolving, and how management techniques could – or should – be adjusted accordingly. Danilo Sirias, professor of management at Saginaw Valley State University’s College of Business and Management in Michigan, US, has been interested in Generation X since they first appeared on the career ladder. In 2002, he coauthored Bridging the Boomer-Xer Gap: Creating Authentic Teams for High Performance at Work, a publication sparked by the emerging discord between Baby Boomers and Generation X in the workplace. Because many Boomers perceived their Generation X workmates as lazy and uncooperative, Sirias and his colleagues began their study suspecting that Generation X hated teamwork and tended towards less collaborative working than the older generation. They rapidly discovered this was not the case. Generation X was not averse to teamwork – it was simply that the way they worked in teams was new. Xers valued teamwork for its opportunity to bring together different talents and different styles of working for the common good. While Boomers wanted the efforts of team members to be similar, Xers actively encouraged them to be unique. The discovery made perfect sense given one of the most defining characteristics of Generation X: its independence. “Growing up in a period when women were entering the workplace in record numbers, while the divorce rate was

skyrocketing, many in this generation learned to fend for themselves,” explains Seth Mattison, chief movement officer at BridgeWorks, a Californiabased consultancy specialising in multigenerational workforces. “They found themselves coming home from school to empty homes, making their own meals, doing their own homework, navigating their time on their own. This made them incredibly independent, entrepreneurial and resourceful.” X was “the great under-supervised generation,” agrees Bruce Tulgan, founder of Rainmaker Thinking and author of Managing Generation X: How to Bring Out the Best in Young Talent and Not Everyone Gets a Trophy: How to Manage Generation Y. What’s more, he adds, the peer group began work at a time when globalisation and emerging technology meant restructuring was on the increase and job security becoming an outdated concept. “They came into the workplace at a time when everybody was telling employees, ‘You’ll have to take responsibility for your own success’.” Little wonder they rubbed the Baby Boomers up the wrong way – the last generation to have a job for life and to identify themselves more with the company employing them than the skills they used at work. But now Generation X are the managers, many are finding their habits and working styles are leading to new conflicts with the generation still finding their professional feet: Generation Y.

The X-Y divide

Part of the problem is that the very traits creating discord with Generation Y are those Generation X has traditionally perceived as strengths. For instance, Xers “tend to be hierarchical, seeking authority to make decisions and preferring formal processes,” says Claire McCartney, resourcing and talent planning adviser at the Chartered Institute of Personnel and Development. “This is a strength in that they can guide people through workplace procedures, but it’s also a weakness if team members don’t want to operate in a hierarchy.” And Generation Y, by and large, don’t. Similarly, valuing individual contributions and encouraging employees to work under their own steam are managerial strengths – but “what I’m hearing from managers is that Generation Y need more instruction,” says Sirias. “That’s going to be a conflict, if it’s not already.” Indeed, for Tulgan, their reluctance to spoonfeed younger colleagues is one of the greatest flaws in Generation X’s approach to management. “Xers figure, ‘Nobody held my hand! Why should I hold your hand?’” he says. This becomes problematic because younger employees, who “feel a great sense of uncertainty” about their professional roles and career prospects, need “much greater day-to-day engagement from their immediate managers”. A lot of it comes down to communication: how managers inform, instruct and advise. Experts agree that one of the most effective ways for Xers to improve their management of other peer groups

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In-depth

Bill Boomer Born: 1946-1964 Lives: In family home with partner; children have grown up and moved out or (for the less fortunate) boomeranged home. Owns his home outright, but is lender of first resort to his highly mortgaged Xer children. Workplace attire: Suit and tie. Accessories: Wristwatch, BlackBerry. Works best: In teams, given strong direction on tasks. Leadership style: Supportive, handson, but with clear delineation between manager and team. Loyalty to employer: High; willing to make sacrifices for the good of the company. Water-cooler conversation: Sport, politics, television, grandchildren, the 1960s. Likes: Face-to-face communication, respect for authority, dedication to work, enthusiasm. Dislikes: Workplace conflict, competition, overly bureaucratic or disinterested managers.

is to become more flexible communicators, being mindful of the unique needs of both Baby Boomers and Generation Y. The former, Mattison argues, expect a more formal approach and a willingness to communicate face-to-face; the latter also want more face time, but whereas Boomers look to their managers to simply tell them what to do, Gen-Yers favour a collaborative approach in which goals and processes are developed together. When it comes to written communication, Calcom director Natalie Calvert suggests Generation X are better equipped to communicate with Boomers than with Generation Y. “Baby Boomers drill deep; Generation Y take in a lot of information over a broad range and skim,” she says. “Generation X take in less information, but still drill deep. This means managing upwards is fine, but when Generation X needs to manage Generation Y, they are managing their opposites.” John Rosling, chief executive of business performance and coaching organisation Shirlaws, confirms that Generation X probably share more with their senior neighbour than their junior one. “Boomers tend to rely on data and a ‘think’ style of management and decision-making,” he confirms. “Generation Y are tending towards a more intuitive and instinctive form of communication. The challenge for Generation X is to communicate simultaneously in a thinking style (data-evidence-argument) and intuitively (real experiences, bullet point style).”

Generation “why?”

More problematic than conflicting learning styles are the deeper ideological differences between generations. Generation Y is known for its strong convictions, on everything from international development to higher education – and these are no less present in the workplace. “Generation Y need to believe in what the organisation they work for believes in,” says Rosling. “They are less motivated by hierarchy or money. Generation X

‘ONE OF THE MOST EFFECTIVE WAYS FOR XERS TO IMPROVE THEIR MANAGEMENT IS TO BECOME MORE FLEXIBLE COMMUNICATORS’ professionalmanager.co.uk _ 61

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‘GENERATION Y ARE LESS MOTIVATED BY HIERARCHY OR MONEY. GENERATION X NEEDS TO UNDERSTAND THIS’

Ysabel Y Born: 1982-2000 Lives: In a shared house with friends, or a rented flat with a partner. Workplace attire: Casual clothing, including jeans and sneakers, for meetings and day-to-day work. Accessories: iPad. Works best: On collaborative projects, given encouragement, training and mentoring. Leadership style: Sociable, consultative, unassuming, optimistic. Loyalty to employer: Low; not careerfocused, but likes

to build a network of professional contacts to ensure any career move will be to an interesting and rewarding role. Water-cooler conversation: Anything and everything, including personal life and plans to change career. Likes: Communicating via Twitter and text, multitasking, frequent rewards and recognition, active focus on professional development. Dislikes: Scepticism, condescension, lack of clear instructions; feeling an employer does not share beliefs and priorities.

needs to understand this and communicate their beliefs. Policies need to have good reasons that underpin them.” This isn’t a question of pandering; the best Generation X managers look to not only accommodate, but actively harness, their employees’ beliefs. Indeed, Trickey points to their idealism as one of the most rewarding things about managing Generation Y. He also, however, concedes that “the combination of their values and their expectations could be pretty demanding” for managers – and that’s just the tip of the iceberg. The fact that they belong to consecutive generations makes it difficult for Generation X to change the way they relate to younger colleagues. As Calvert points out, many managers have teenage children and therefore unwittingly associate Generation Y behaviour in the workplace – listening to an iPod, using Twitter rather than working on an urgent report, or texting in the middle of a meeting – with actions they would scold in a domestic context. “Generation X are very good at treating their employees like their kids,” she says. “This means they’re no longer having adult-toadult conversations.” If the first step is to stop seeing younger colleagues as nuisances, the ultimate goal for Generation X managers is to embrace their employees’ differences – and benefit from them. Sue Honore, associate research consultant for Ashridge Business School, suggests Generation X should “try to create the opportunity to marry experience with youth and enthusiasm”, whether

Xander X Born: 1965-1981 Lives: In family home; children might be any age from toddlers to teenagers.

Workplace attire: Suit and tie for client meetings; suit and no tie, or smart separates, for day-to-day work.

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In-depth through multigenerational projects and teams or by instituting two-way mentoring, which not only gives younger employees the active management they crave, but also – gasp! – allows managers to learn from their younger counterparts. What could Generation X possibly learn from Y? For a start, there’s technological aptitude; sending an email, Calvert points out, is often the most sophisticated way in which Generation X interacts with technology, but that’s not enough to help them understand the working environment Generation Y operates in. “Generation X are described as technomigrants,” she adds, “but a lot are still at the fringe.” Honore suggests looking to younger colleagues to learn about effectively managing social networks. Generation Y are the most socially engaged at work, with less marked boundaries between work and life than older generations. And, although this is often perceived as a bad thing, it can be beneficial when it comes to building relationships, both within an organisation and with clients and customers. It is also important for sustaining good mental health – as is the ability to get away from work altogether. They may let their social life spill into the office, but “one thing Generation Y are really good at,” Calvert confirms, “is maintaining a work-life balance” – by which she means spending good amounts of time away from the workplace. Being idealistic, Generation Y are less prepared than Generation X to work more than they are paid for; they’re also aware of the benefits of being out of the office, something Generation X forgets. Managers could do worse than foster a culture where staying late is indicative not of dedication, but of inefficiency. “Get over the tuts and frowns about leaving at 5pm,” Calvert urges Xer managers. “Be smarter about how you work and get out of the door!” The trick, always, is to strike a balance. Managers can and should adapt to suit their staff, but shouldn’t completely overhaul their approach to create an environment that works for Generation Y, but not Generation X. Tulgan, for one, endorses a tough-love approach, giving younger colleagues what they need rather than what they want. “Some argue that since Generation Y have grown up with self-esteem parenting, teaching and counselling, the right way to manage them is to praise them and

Accessories: Smartphone.

results-focused, with high expectations.

Works best: Given freedom to choose the best process to reach the desired result.

Loyalty to employer: Moderate; works hard, but has no qualms about changing jobs to climb the career ladder.

Leadership style: Informal and hands-off;

reward them with trophies just for showing up,” he says – but this is not an approach he endorses. “The high-maintenance Generation Y workforce calls for strong leadership, not weak. Managers should never undermine their authority; should never pretend that the job is going to be more fun than it is; never suggest that a task is within the discretion of a Generation Yer if it isn’t; never gloss over details; never let problems slide; and should never offer praise and rewards for performance that is not worthy of them. They need structure, boundaries and a high degree of engagement; they need managers to guide, direct and support them every step of the way.” Above all, although it is helpful to understand generational differences, the most important thing is to look past peer groups and deal with every person in the way that works for them. The best managers, says McCartney, focus on individuals. They adopt an open style and show their staff they are willing to learn; they avoid making assumptions about others’ career goals (particularly when managing Baby Boomers, who may not be looking to retire at 65); they are aware of people’s talents and let them play to their strengths. “Trust people to get on and do work,” she suggests, “even if they’re doing it a different way.” The problem is, for a great many Generation X managers, that’s easier said than done.

Water-cooler conversation: Changes within the business, holidays, kids, home improvement, the 1990s. Likes: Deserved rewards, efficient systems, regular feedback,

communicating by email or telephone. Dislikes: Micromanagement, focus on process rather than results, gimmicky training and incentive programmes, laziness, distraction.

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Knowledge

A successful team should have a shared understanding of the future. There can be debate, but then everyone must get behind the leader PM PROFILE

Richard Thomas

CMI’s newly appointed co-chair of London and the South East, Richard Thomas, has a breadth of management experience. He tells Lily Howes about managing change in the Royal Navy and why Chartered Manager status was the hallmark he was looking for The Royal Navy taught me how to be an effective manager and get the most from my team. I joined the Navy at the age of 22, trained at Dartmouth and made my way up to become a commanding officer. After demonstrating my proficiency I moved into a tri-service role, working with the Royal Air Force and British Army, as well as on coalition operations with other countries. Following a sabbatical to gain an MBA, I moved from operations into change management. I am now chief of staff at the UK’s Joint Services Command and Staff College in the UK Defence Academy, where I help with the training of future leaders in all three armed forces. My management style is collaborative and collegiate. Having seafaring experience at all ranks in the Royal Navy helped me when in command to understand the challenges a team may face on a daily basis. I believe teams work best when managers express a vision, leaving members to work through the detail; thus, any potential constraints are identified and everyone can work together to overcome these. A successful team should have a shared understanding of the future. There can be debate, but then everyone must get behind the leader and give the team their full backing. In a top team there is a sense of privilege in working with the people around you. Obtaining Chartered Manager status has helped

break stereotypes about my experience and skills. During my MBA I became interested in continuing professional development (CPD) and was pointed towards CMI. In addition to CPD, I found online advice on challenges I was facing at work. To prove my credentials I applied for Chartered Manager accreditation. Being Chartered translates across sectors and shows that you have that quality hallmark of expertise. It’s a great way of starting conversations with other managers. My biggest professional achievement has been to lead the change within the Royal Navy.

More info

Take a look at which Royal Navy courses are eligible for CMI qualifications at www.bit.ly/ navycmi

In 2011, Lord Levene made recommendations on how to introduce better efficiency in the armed forces and reviewed the clarity of the organisational structure. The efficiency drive coincided with a wide redundancy programme. This left the staff that remained needing motivation to continue their quality work, while learning to manage with fewer people. My contribution was to implement improvements to management within the Royal Navy’s strategic headquarters, helping them to work smarter, not harder. I devised the Royal Navy’s 10 Simple Steps to Better Management, a programme that has been subsequently adapted for use within other sectors. I’m thrilled to have been appointed co-chair of London and the South East. Our meeting at the beginning of June was the first time all elected volunteers of the regional board got together. We’re keen to understand how best to support current members and the overall growth of the CMI. We’re consulting the current structures so that, before the board goes live in October, we have a clear understanding of how to integrate the needs of the CMI, Institute of Consulting and Women in Management. I’m also looking forward to helping the CMI establish a new mentoring network. I would be delighted to see an increase in Chartered Managers as I truly believe it will help bring a professional rigour to our workforce, and in turn assist the UK economy.

Want to be a Chartered Manager?

To find out whether the Chartered Manager award is right for you, head to www.managers.org.uk/cmgr, email cmgr@managers.org.uk or call 01536 207380 for information on the benefits and details of what’s involved.

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Autumn term short courses at Central Saint Martins. Do something different. Advance your knowledge. Discover creative London. Let go. Be inspired.

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03/07/2013 17:08 14:52 28/06/2013

Practical hints and tips to help you on your management journey

Masterclass

DON’T FALL FOR SOCIAL MEDIA MYTHS A lot of what you know about social media is wrong, writes Ben Willis IL LUS T R AT I O N BY GA RY N EI L L

Love it or loath it, social media is one of the defining developments of our age. Facebook now has more than one billion users and, towards the end of last year, micro-blogging site Twitter revealed that the number of tweets sent every day had hit half a billion. Much of that half a billion is pretty anodyne stuff, drivel even. But it’s also the stuff of revolution, with Twitter acknowledged to have played a key role in the recent Arab Spring uprisings that unseated four governments. Yet despite its undoubted power and ubiquity, the different forms of social media remain, for many, something of a mystery. How, for example, do you go from a handful of spam followers on Twitter to a large and loyal fanbase who hang on your every word – and, more importantly, buy your product or service? Or how can you use LinkedIn to position yourself as a “thought leader” in

your particular field when so many others are vying for the same position? It was to answer questions such as these that social media experts Michelle Carvill and David Taylor recently published The Business of Being Social. With a stated aim of “debunking the key myths of social media marketing”, the book sets out to show businesses how to optimise social media to build brand and business. The myths of social media The authors’ premise is that social media’s application in the world of

business is plagued with myths. Here are the main ones: Social media is free Social media platforms are indeed free. “But managing and feeding them [are] certainly not,” the authors say, pointing out that in some companies social media management is a full-time role. You have to do it all “You don’t,” say the authors. “Just as you don’t with any other form of marketing or communications.” Instead, a targeted and strategic approach is preferable. It’s only for kids Users of all ages are now adapting to social media, in much the same way as they have email, Google and the internet generally. If you set up accounts, magic will automatically happen “The evidence from the huge number of companies who start, then give up when it doesn’t deliver instant results, says that this simply isn’t the case,” Carvill and Taylor write. You have to share absolutely everything about yourself and your business Although social media has the tendency, particularly with Facebook, to bring out the exhibitionist in us, the authors take the view that in business, social media does not need to be used to share everything about a company or individual. “We live in an age where content is still king, particularly on social media. There it’s got to be good. After all, you are what you share.” Content is king With the myths debunked, Carvill and

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Knowledge WHAT I’VE LEARNED

Taylor go on to explore the different forms of social media, their potential application in all aspects of business activity – sales, marketing, HR and recruitment, PR, customer relations, internal communications – and how best to use them. The maxim that “content is king” is a thread that runs throughout their tips. The far-reaching nature of social media platforms makes them potentially hugely powerful to business, but the authors point out that they should be used wisely – and not to share insights, say, about what cheese was in the tweeter’s sandwich for lunch.

Ken Medlock OBE

Engineer and cricket enthusiast Ken Medlock CCMI first became involved with CMI when it was still the British Management Institute. In his late nineties, he’s now approaching his own century

‘Social media should be used wisely – and not to share insights about what cheese was in the tweeter’s sandwich’ Businesses generally operate in a content-rich environment, offering countless opportunities for dissemination through social media: product demos, internal research, industry reports, customer testimonials, video… all of these are fair fame for brand-building through social media. The way forward The key for businesses to make the most of their social media opportunities is to have a strategy – or a content roadmap, as the authors describe it. Their four-point approach to planning social media content is simple: “Plan, listen, analyse – before you engage.” Rather than adopt a “machine gun approach” to social media – rattling out tweets and status updates ad infinitum, without thought to what is being broadcast – the authors instead advise seeking the “sweet spot”: taking time to build a following among key influencers or your target audience. “At that point, your social activity tends to create a life of its own,” they say. “Of course you will have to remain focused on your objectives, but the nature of what you are creating and the engagement level of those you engage with will have created some advocates. Those advocates then start to share on your behalf and bring others to you. Effort becomes shared.”

Opportunities have come my way and I’ve been able to take advantage of them. Some people get them and don’t have the courage to take them, but some never get them at all. Chance in life is nothing to do with intelligence. But it’s treated me extremely well; I’ve found myself in circumstances where if I’d planned things they couldn’t have worked out better, but I didn’t plan; it was one of those things. When I first became a chief executive I realised if you were going to appoint a manager you had to tell him very clearly what his job was, how he was going to be judged, what freedom of action he had, what decisions he could take. And you judged him on this. I used to hear chief executives of major companies say: “I let him make his own decisions and if they aren’t right I’ll sack him.” That’s not right, because management is about risk-taking and you won’t be right all the time. You must learn from those mistakes; that’s how you get your knowledge and your strength.

Further information To find out more about The Business of Being Social, visit www.the business ofbeing social.co.uk

It’s important to be approachable in positions of seniority and to listen to people. When I was founder chairman of Radio City in Liverpool, people came to me with their problems and I listened to them. Now that didn’t

mean they were always right; often they were wrong. But they always had the opportunity and platform to explain a situation. You can’t treat everyone the same way; human nature is not like that. When I appointed managers who were answerable to me I assessed them on their own characteristics and recognised that they’re not all the same; some are more reserved, others have that degree of arrogance – you’ve got to learn how to handle them. And what you’ve got to do is be able to identify what their strengths and what their weaknesses are, and adjust your management technique to fit that. It’s the manager’s job to obtain the confidence of the people they manage. If he can’t do that it’s not going to be an easy passage for anyone. I support wholeheartedly what Winston Churchill said, which was that a successful man moves from one failure to the next without any loss in enthusiasm. I agree with that, because I make no claim that everything I’ve done has turned out successful. It hasn’t been for lack of trying, but management really is risktaking – and you’ve got to understand that. That’s one of the characteristics I believe very strongly in.

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A look inside the work of top management thinkers

Reviews

Anne Hathaway and Meryl Streep in the 2006 film The Devil Wears Prada, in which a young assistant says yes to all of her manager’s demands

WRITER REPLIES

JUST SAY NO

IMAGE: C.20THC.FOX/EVERETT/REX FEATURES

We need to learn to say no and prioritise the right things. This is the message in Mike Clayton’s book The Yes/ No Book – How to do less… and achieve more. He tells Farah Dib how to take control and be more productive Why are managers so bad at saying no? Saying yes is a route to success. At least at the beginning of our careers. We get into the habit of always saying yes to everything because we want to progress and develop our careers. When we then move into management roles we’re not used to saying no and because it has proven so effective not to up until that point, there is a risk associated with changing this habit. But when should they say yes? It’s only when you know and understand what your role is within your organisation that you can make that call. In

principle, management by objectives makes sense, but only if people understand what their role is and where they belong within the organisation. Managers need to ask themselves the questions “will saying yes further the objectives of my team or department?” and “will saying no get in the way of progress?” before they make that decision. Where did you get the idea for this book? I’ve been running time management courses for a while and very early on I came up with the idea that one of the reasons it’s so hard to say no is the negative implication of the word. No one wants to be negative, but

if we can transform its meaning, and I came up with the idea that NO can be a Noble Objection, this can change. I developed the book around this, as well as the idea that we say yes because we feel compelled, by society, to do a lot of stuff all the time to feel satisfied. Who should read your book? It’s designed for business people, because that’s my background, but really everyone who has a busy life and a lot of responsibilities can benefit from it. It’s about making choices and changing your perception of saying no. Anyone who feels they don’t get as much done as they want to should pick it up.

Find out more

The Yes/No Book – How to do less… and achieve more, Pearson Education, paperback £10. To find out more, visit http:// theyesnobook. co.uk.

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Knowledge For more reviews,

MY CMI

Management tailor

visit www. managers.org. uk/bookclub

Richard French-Lowe CMgr FCMI, workforce development manager at Camden and Islington NHS Foundation Trust

Theory or instinct? I use theories as a launch pad. When I was younger, I was more of a gut instinct person. But, now I work in training and learning, I am more aware of management theories, which means I consider them closely. Theories are useful – but you have to adapt and apply them to the situation you are in. Hierarchy or flat structure? Hierarchy – but that’s not so much a preference as a reality. The NHS is one of the biggest employers in Europe – it could not operate without a robust structure in place. So yes, we do have hierarchies, and we need them. Yet, in the NHS, those hierarchies can be fluid, depending on the task in hand. Iron fist or laissez-faire? Tough question! Our systems can be iron fist in nature. But what I do is adapt them to the situation. Yet sometimes we do have to stick to rigid frameworks, for reasons of accountability – which is important in a public organisation. How has CMI helped you develop as a manager? It’s given me the opportunity to reflect on what I do. Writing the case studies has also helped me address my own shortcomings. Chartered Manager has helped me develop my skills, and, in my job particularly, the endorsement of competency that the accreditation gives is invaluable.

Reader offer

Buy it now for just £11.99 (with free p&p). To order, visit www.koganpage. com and apply the code GBE2013 at the checkout or call 01206 25 5678 and quote the same reference. Offer ends 30 September 2013.

Reader offer

Readers can buy Visual CBT with a special discount of 30% (plus p&p). To order, please visit www.wiley. com and apply the promotional code VBE23 at the checkout. Offer ends October 2013.

Improve Your Global Business English Fiona Talbot and Sudakshina Bhattacharjee Kogan Page £14.99 Specific sections cover report Written English comes in many writing, agenda preparation styles depending on the region and note-taking. These offer the author comes from. In crosssuggestions on maximising the border business transactions, effectiveness of documents, it is important that the author’s especially where the recipients meaning is understood fully. come from differing cultures. This book shows the problems The book focuses on the quality that arise from differing of writing and on the correct use English styles. Individuals are of grammar, punctuation and the judged by how they express avoidance of common mistakes. themselves in print. High-quality Each section has checklists writing strengthens business and exercises. The authors’ relationships. Sloppy writing style is a little close to that of destroys them. primary school teachers, but The authors trace the the content is strong enough development of English, that it does not detract from its suggesting why writing is so message. The book comes highly important. The effect of the digital age is detailed, and pointers recommended to all managers. Andrew May FCMI are given on how style, layout and font size affect the content. PM rating: ★★★★★ Visual CBT Avy Joseph and Maggie Chapman Wiley £12.99 Understanding our emotions is as emotional state, as well as help them with personal development. fundamental to being an effective Each chapter contains an individual as it is to our role as a introduction to the title emotion manager and leader. and a checklist of triggers. It is an ambitious attempt to Illustrations are then used to show how Cognitive Behavioural represent both unhealthy and Therapy (CBT) can help us make healthy cognitive consequences. sense of our emotions. Although full of useful material, These visuals aim to illustrate without help from others to how we think, and what we do, in assist the process it is difficult to addition to providing indicators envisage that many readers will to those who want to use CBT to have the discipline to do it justice. help them improve their life. Professor Bruce Lloyd FCMI, The book can be used by the London South Bank University reader to improve the insights that they have about their PM rating: ★★★★★ Employee to Entrepreneur: How to Ditch the Day Job and Start Your Own Business Chris Garden and Catherine Blackburn Pearson £12.99 bolts of running your business, as An increasing number of people well as offering some important want to jump off the corporate unconventional messages. This bandwagon and strike out on is essential reading for anyone their own. The authors did just contemplating a move of this kind. that shortly after being made And those who have already taken redundant and soon they were the plunge would also benefit running a successful business. from the authors’ experience. This highly readable guide Professor Bruce Lloyd, starts with the reasons for going London South Bank University it alone, discusses building your plan, and details the nuts and PM rating: ★★★★★ professionalmanager.co.uk _ 69

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Knowledge For more reviews,

MY CMI

Management tailor

visit www. managers.org. uk/bookclub

Richard French-Lowe CMgr FCMI, workforce development manager at Camden and Islington NHS Foundation Trust

Reader offer

Readers can buy Visual CBT with a special discount of 30% (plus p&p). To order, please visit www.wiley. com and apply the promotional code VBE23 at the checkout. Offer ends October 2013.

Improve Your Global Business English Fiona Talbot and Sudakshina Bhattacharjee Kogan Page £14.99 Specific sections cover report Written English comes in many writing, agenda preparation styles depending on the region and note-taking. These offer the author comes from. In crosssuggestions on maximising the border business transactions, effectiveness of documents, it is important that the author’s especially where the recipients meaning is understood fully. come from differing cultures. This book shows the problems The book focuses on the quality that arise from differing of writing and on the correct use English styles. Individuals are of grammar, punctuation and the judged by how they express avoidance of common mistakes. themselves in print. High-quality Each section has checklists writing strengthens business and exercises. The authors’ relationships. Sloppy writing style is a little close to that of destroys them. primary school teachers, but The authors trace the the content is strong enough development of English, that it does not detract from its suggesting why writing is so message. The book comes highly important. The effect of the digital age is detailed, and pointers recommended to all managers. Andrew May FCMI are given on how style, layout and font size affect the content. PM rating: ★★★★★ Visual CBT Avy Joseph and Maggie Chapman Wiley £12.99 Understanding our emotions is as emotional state, as well as help them with personal development. fundamental to being an effective Each chapter contains an individual as it is to our role as a introduction to the title emotion manager and leader. and a checklist of triggers. It is an ambitious attempt to Illustrations are then used to show how Cognitive Behavioural represent both unhealthy and Therapy (CBT) can help us make healthy cognitive consequences. sense of our emotions. Although full of useful material, These visuals aim to illustrate without help from others to how we think, and what we do, in assist the process it is difficult to addition to providing indicators envisage that many readers will to those who want to use CBT to have the discipline to do it justice. help them improve their life. Professor Bruce Lloyd FCMI, The book can be used by the London South Bank University reader to improve the insights that they have about their PM rating: ★★★★★ Employee to Entrepreneur: How to Ditch the Day Job and Start Your Own Business Chris Garden and Catherine Blackburn Pearson £12.99 bolts of running your business, as An increasing number of people well as offering some important want to jump off the corporate unconventional messages. This bandwagon and strike out on is essential reading for anyone their own. The authors did just contemplating a move of this kind. that shortly after being made And those who have already taken redundant and soon they were the plunge would also benefit running a successful business. from the authors’ experience. This highly readable guide Professor Bruce Lloyd FCMI, starts with the reasons for going London South Bank University it alone, discusses building your plan, and details the nuts and PM rating: ★★★★★ professionalmanager.co.uk _ 69

CMI_068-069_reviews-summer.indd 69

04/07/2013 16:02

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A PIONEERING BOOK FOR POST-STRATEGIC ORGANIZATIONS

"Charles-Edouard Bouée's argument that lightness is a primary value in a more volatile and uncertain business world is pervasive and well made." JOHN QUELCH, HARVARD BUSINESS SCHOOL, USA

£ 25

"The picture Charles-Edouard Bouée paints of tomorrow's business world, and of the kinds of organization most likely to thrive in it, is both original and plausible." SIR TOM HUNTER, CEO, WEST COAST CAPITAL

Published July 18, 2013 / ISBN: 9781472900050 / Also available as an ebook / www.bloomsbury.com

Charles-Edouard Bouée proposes the adoption of "light footprint" management – comparable to President Barack Obama's military doctrine and similar to the recent emergence of vision and tactics over strategy in Chinese management. Bouée argues that this shift in approach blazes a trail that Western companies will be obliged to follow, and explains how conventional management methodologies, techniques and tools can be adapted to the conditions of an increasingly ambiguous world.

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Knowledge

DOWNTIME

For cherished clients it pays to go an extra few miles to find that special out-of-town bolt-hole. John Innes visits Martin Wishart’s restaurant on the banks of Loch Lomond

A breath of fresh air Jet skis zip past and a seaplane taxi comes to a halt at the nearby jetty as we walk up the drive to Cameron House. The bucolic scene reminds us how far we’ve ventured beyond Glasgow’s usual dining hangouts for lunch today. Long business lunches may not be as popular as they once were. But that doesn’t mean there isn’t value in taking a client somewhere special on occasion. Blocking out time for a proper conversation in a special location can pay dividends, both for your day-to-day working relationship and for the opportunity to discuss long-term plans in a relaxed environment. There is something about abundant natural beauty that clears the mind. Martin Wishart’s restaurant on the banks of Loch Lomond is the perfect destination for businesses on the west coast of Scotland. Only 35 minutes by car from central Glasgow, the restaurant offers a dining experience that clients won’t soon forget. As we walk in, throughout the imposing baronial architecture of Cameron House, the restaurant opens out into an airy, stylish

BOOZE AND SCHMOOZE

FIVE OF THE BEST Close to: Cardiff This country pub does fine local fare and has a Celtic take on tapas: potted crab laverbread, anyone? The Clytha Arms, Clytha, Monmouthshire NP7 9BW

space with a view over the loch and hotel grounds. While highend dining often seems to attract staff that exude the faint whiff of condescension, the team here couldn’t be any more helpful or approachable. Today, after perusing the menu, we’ve decided to go with the tasting menu. This offers a selection of dishes from the Michelin-starred chef that include chargrilled razor clams with pork jowl, Kilbrannan langoustines and – since we’re being brave – a garlic velouté with buckwheat roasted veal sweetbreads and wild crispy rice.

Heston’s haven Bray is a bizarrely gastronomic place. This village of fewer than 9,000 souls is home to two of the four three-Michelin-starred restaurants in the UK – Heston Blumenthal’s Fat Duck and the Roux brothers’ Waterside Inn. Waiting lists are measured in fractions of years. Thankfully the local boozer is also owned by Blumenthal and also has a Michelin star (just one). The Hinds Head is a halfway house between the weirdness of Blumenthal’s other ventures and classic pub food: so the crab soup came as a scintillating foam, but was accompanied by a traditional (yet delicious) crab sandwich. The Rhubarb Fizz was a sparkling, alcoholic version of rhubarb and custard. The steak was very good ribeye, and came with Blumenthal’s triple-cooked chips. (Be warned: these can be in short supply in summer – our companion had visited before in August, and they were off the menu due to a lack of spuds.) In idyllic Berkshire, close to west London and very good. Impossible to book? Seemingly not. We managed to get a Friday lunchtime table at two days’ notice. Just a five-minute cab ride from Maidenhead. The Hinds Head, Bray, Berkshire

Each of the six courses arrives looking beautiful and tasting wonderful, displaying the care and thought that has so obviously been lavished on this restaurant by Wishart and his team. While a restaurant like this is a memorable treat, it’s important

‘Blocking out time for a proper conversation in a special location can pay dividends’ not to splash the cash too regularly: you don’t want your guest mentally calculating the size of your profit margins with every bottle of wine. However, done correctly, it’s an opportunity to strengthen working relationships with valued clients. Whether by the high road or some other route, there can be few better destinations for a business lunch than this on the bonny, bonny banks of Loch Lomond. Martin Wishart at Cameron House, Loch Lomond, Dunbartonshire G83 8QZ 01389 722504 www.mwlochlomond.co.uk

Close to: Leeds This top-drawer gastropub teams real ales with a great menu. Simplicity is key, and everything is homemade. Ilkley Moor Vaults, Ilkley, West Yorkshire LS29 9HD Close to: London This modern coaching inn mixes old (timber beams) with new (elegant food) to great effect. The Olde Bell Inn, Hurley, Berkshire SL6 5LX Close to: Newcastle Craster kippers, North Sea sole, Northumbrian bacon, speciality mushrooms: find them here – and book ahead. The Feathers Inn, Hedley on the Hill, Northumberland NE43 7SW Close to: Nottingham Bit of a stretch from Nottingham, but well worth it for the Michelin star. The setting of Rutland Water is almost as good as the food. Hambleton Hall, Hambleton, Rutland LE15 8TH

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Summer shouldn’t mean shabby

ILLUSTRATION: QUINTON WINTER

Rising temperatures ought not lead to lower standards. Emily Seares shows you how to dress comfortably while staying sharp With temperatures rising, temperamental aircon and hot, sticky commutes, deciding what to wear in the morning can be as onerous as a stroll down Oxford Street on a Saturday. But when it comes to summer style, there are some definite pitfalls to avoid. The biggest mistake I’ve come across is thinking that summer means casual. Sadly, most of us don’t work on the Côte d’Azur, but, even if we did, we’d still need to adhere to a smarter dress code for work. Flip-flops, spaghetti straps, chests, backs, midriffs and anything too tight or short should be left for the beach. The last thing you want to do is feel uncomfortable when you’ve got a busy day ahead. So think cool, loose fitting, comfortable, easy to wear and lightweight. Relaxed tailoring, clean, simple shapes and nothing too short or heavy fabric-wise are the essentials to summer style in the city. Lightweight silk blouses, fresh cotton and natural fibres will all allow your skin to breathe. Thanks to the likes of Louis Vuitton and Moschino, the 1960s are in full swing this season and, along with them, a raft of stunning shift dresses. The shift is the perfect summer wardrobe staple. Keep the length just above the knee and have fun with colour and print. Roksanda Ilinčić is the go-to designer for no-fuss, relaxed work-wear, and she has some beautiful silk dresses. Team

with Whistles sandals and a Mulberry Del Rey bag to complete the look, or head to the high street for alternatives. Next has some fantastic bags at great prices (or try Aldo and French Connection), and for more shift dress styles, LK Bennett and Cos both have a good selection. If you opt for separates, hemlines should be knee length or just above and paired with nothing transparent or tight on top. If you choose a sleeveless blouse, combine it with softly tailored Capri pants or knee-length city shorts (as seen at Chloé) – don’t show too much flesh at once. Make-up should be kept light and fresh, with just a hint of scarlet on the lips – as seen at Prada and Burberry. Layering is key to your summer wardrobe and investing in a Burberry trench will last you season after season. The British brand now offers a bespoke service, where you can design your own trench – choosing everything from style and colour to sleeves, lining and buttons. Alternatively, the high street has some great options, including trench styles from Reiss, Zara and Topshop. Keep accessories light and avoid black as it can look heavy during the summer. Tan works well and has a warmer tone. Faux snakeskin is everywhere, from Longchamp and Kenzo to Stella McCartney, so add glamour to your outfit with snakeskin heels or bag. Comfort is key, so keep shapes soft, fabrics light and lengths appropriate and you’ll breeze through the season.

Summer style essentials

•Shift dress – summer wardrobe staple •Silk blouse – chic, comfy separates •City shorts or Capri pants – paired down classics •Summer jumpsuit – key piece for easy dressing •Trench coat – layering is key

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Summer style no-nos •Visible bra straps •Exposed backs, chests or midriffs •Spaghetti-strap tops •Flip-ﬂops or beach footwear •Hot pants or anything too short or tight

Style inspiration: Roksanda Ilinčić silk and cotton dress at Net-a-Porter, £980 http://bit.ly/pmdress Splash out: Mulberry slate blue Del Rey bag, £895 http://bit.ly/ pmmulberrybag Steal: Next navy bowler bag, £20 http://bit.ly/ pmnextbag Shoe: Whistles Bellini panelled sandal, £155 http://bit.ly/pmshoes

professionalmanager.co.uk _ 73

02/07/2013 15:24

ANY OTHER BUSINESS

The best leaders embrace the fact that management is full of paradoxes, says Simon Caulkin

Simple fixes rarely work

74 _ PROFESSIONAL MANAGER _ Summer 2013

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environment for your people – so they can get better at the game of taking care of your customers. Consider the finding that companies that have a purpose beyond shareholder value create more of it than those that don’t. In the post-1980 era of shareholder primacy, shareholders have done less well overall than in the postwar years when managers aimed to take care of all their stakeholders. To reach even its most basic goals, management has to go round about. Counterintuitively, efforts to cut costs usually raise them. Cutting corners means customers don’t get what they want, so they either go somewhere else or come back again until they do. Paradoxically, costs are minimised by managing value: getting it right first

‘Cutting corners means customers don’t get what they want’

time, and minimising the time taken to do it properly. Targets and incentives are similarly deceptive: they are shortcuts that lead swiftly to places you don’t want to be. They are merely establishing a false purpose – “How do we hit our target?” – they divert people from the real, overarching aim behind. Incentives almost always cause people to cheat, at the extreme, or at least game the system. They distort an organisation’s focus, sometimes so severely that they lead to banks that impoverish people rather than enrich them and hospitals that kill rather than cure. Management – the art of getting things done through others – doesn’t run in straight lines. That doesn’t necessarily make it technically more difficult, but it does make it less obvious. It’s why, for instance, in ranking management qualities, Google puts coaching ability top and technical competence last. Forgive the twist on an old Irish joke, but to get from here to there in management you are best to head in the opposite direction. ILLUSTRATION: QUINTON WINTER. PHOTO: IMAGESOURCE

At the heart of management is a paradox of power. The higher the pay grade and the greater the trappings of power, the less you can accomplish directly yourself. As a worker with a mere walk-on part you can press buttons or write a report and go home satisfied that you have done your job. A manager’s role, on the other hand, depends on others pressing buttons, writing reports and doing many things besides. And until at the top, almost the only thing in the direct power of the executive responsible for an entire organisation is hiring or firing those who carry out the myriad tasks on which the accomplishment of their job stands or falls. Avoiding management’s commonest pratfalls accordingly begins with an act of humility: accepting that its ambitions are too complex, multifaceted and dependent on other people to be addressed directly. They can only be achieved as a byproduct of something else. And this is true at every level. For example, big changes such as those being visited on the NHS contain far too many variables and interests, all constantly reacting with each other, for the end destination to be knowable, let alone planned by the most powerful manager. Change can only be emergent, evolving bit by bit from the bottom up. Or take profits. Profits are the byproduct of satisfying customers. They are “the applause you get,” as author and management expert Ken Blanchard neatly put it, “for taking care of your customers and making a motivating environment for your people”. They are the score, not the game. Attempts to improve the score directly, without getting better at the game, are like doping in cycling: illusory performance that leads to Maxwell, Madoff, Enron and, in 2008, the logical conclusion: financial meltdown. Shareholder value is even more indirect. It is the market’s applause for your work in providing a motivating

Profits are the applause you get for satisfying customers

02/07/2013 15:26

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04/07/2013 12:21 12:00

Proof, you can please all the people all the time.

NEW FORD MONDEO ZETEC BUSINESS EDITION Touchscreen Navigation

There is a lot to the new Mondeo Zetec Business Edition. As well as Touchscreen Navigation you also get USB Connectivity Port, Front and Rear Parking Sensors, Privacy Glass, LED Daytime running lights and 17´´alloys. That’s pretty much something for everyone – including an astute Fleet manager. For more information please email info@fordfleet.co.uk

Official fuel consumption figures in mpg (l/100km) for the Ford Mondeo Zetec Business Edition range: urban 34.5-55.4 (8.2-5.1), extra urban 52.3-74.3 (5.4-3.8), combined 44.1-65.7 (6.4-4.3). Official C02 emissions 149-112g/km. The mpg figures quoted are sourced from official EU-regulated test results, are provided for comparability purposes and may not reflect your actual driving experience. Please see your Ford Dealer for details. Vehicle shown is Ford Mondeo Zetec Business Edition.

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02/07/2013 16:32

Professional Manager Summer 2013

Published on Feb 13, 2014

mark.searle

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