Page 1

l i s a

danels

w a n g

Q3 2016

AMONG LEADERS AND MANAGERS ACROSS THE WORLD

Women lead differently jianlin

Exclusive: China’s Mr Big

j o e DIALOGUEREVIEW.COM

AMONG LEADERS AND MANAGERS ACROSS THE WORLD

divanna

Be a company neuroscientist

THE BRILLIANT MIND

The trouble with brains Marshall Goldsmith on how super-smart leaders alienate their teams

Q3 2016

leadership

innovation

finance

marketing

strategy

Big shifters

Wine shop wisdom

Take a chance

Broken slogans

Asian highway

The power of mindset coaching

New ways to solve real problems

Embrace risk like Drucker

How to beat the strapline slump

China builds its new Silk Road

001_Dialogue_Q3_2016.indd 1

11/05/2016 11:39


Transform insight into action with LSE’s expertise

The global business arm of the London School of Economics and Political Science (LSE), LSE Enterprise Ltd designs applied research, executive education and customised programmes for the public and private sectors. Our approach draws on the world-class teaching and research of LSE, unique in its focus in social sciences, to maximise impact for governments, corporations, foundations and universities around the world. Contact us to apply world-leading teaching and research to the challenges facing your organisation, today and in the future. Tel: +44 (0)20 7955 7128 • Email: enterprise@lse.ac.uk • Web: lse.ac.uk/enterprise LSE Enterprise Ltd is a wholly owned subsidiary of the London School of Economics and Political Science

16_0443 LSE Enterprise AdvertV3.indd 1

11/05/2016 14:37


CONTENTS

3

Digest 14 FOCUS

THE BRILLIANT MIND

16

Classic challenges faced by super-smart leaders

20

Do men and women lead differently?

24

How to perform brain surgery on a company

28

Five steps to unshackling your creative mind

30

Group wisdom versus individual expertise

REGULARS 7

78

My edit

News nation

Ben Walker on the psychology of teams

Could the referendum on leaving the EU fracture the UK irrevocably?

8

Spark Highlights from the Global Female Leaders summit

80

Reviews Books, discovery paths and apps recommended for you

13

34

86

Overthinking undermines performance, argues Michael Canning

Advice from China’s Mr Big, multibillionaire Wang Jianlin

Karina Robinson feels optimistic about the global outlook

Upfront

The big interview

Last word

Q3 2016 Dialogue

003-005_Dialogue_Q3_2016.indd 3

11/05/2016 11:43


lidlearning-dialogue-trazada.pdf

C

M

Y

CM

MY

CY

CMY

K

1

11/5/16

14:20


CONTENTS

5

In depth LEADERSHIP & PEOPLE

I N N O VAT I O N & TECHNOLOGY

39

47

40

48

44

50

Kate Cooper: The leadership column

Coach a change in mindset to transform your organization Creative strategies for boosting performance

Chris Floyd: The innovation column

An Indian recipe for excellence

Think like a consumer and solve real problems

FINANCE & AC C O U N TA N C Y

MARKETING & SALES

55

63

56

64

58

68

Phil Young: The finance column

Andy Law: The marketing column

Harness the power of visual thinking

Why self-financing mayoralties could rule the world Embrace risk the Drucker way

The dangers of slogan apathy

S T R AT E G Y & O P E R AT I O N S

71

Patrick Woodman: The strategy column

72

China’s road to greater complexity

76

How to ensure your organization reaches the top

Q3 2016 Dialogue

003-005_Dialogue_Q3_2016.indd 5

11/05/2016 11:43


6

agenda

Contributors

marshall goldsmith

srini pillay

Dr Srini Pillay is assistant clinical professor of psychiatry at Harvard Medical School, and chief executive of NeuroBusiness Group. He teaches in executive education programmes at Harvard Business School and Duke Corporate Education. Previously director of an outpatient anxiety disorders centre, he is author of Life Unlocked: 7 Revolutionary Lessons to Overcome Fear as well as Your Brain and Business: The Neuroscience of Great Leaders.

A leadership and organizational development expert and executive coach, Lisa Danels develops effective leaders who engage employees by bringing out their personal best and driving business results. Her insights and skills are informed by more than 20 years of experience in leadership and talent management and professional and organizational development with Fortune 500 companies.

Gregers Heering

Dr Marshall Goldsmith was recognized in 2015 as the number one leadership thinker in the world and a top-five management thinker, as well as one of the top ten most influential business thinkers in the world and the top ranked executive coach at the 2013 biennial Thinkers50 ceremony. He is the author or editor of 35 books, which have sold more than two million copies, been translated into 30 languages and become bestsellers in 12 countries.

lisa danels

professor vlatka hlupic

Vlatka Hlupic is a professor of business and management, director of the emergent leadership and development research group, and director of the executive coaching and leadership development programme at Westminster Business School. Her groundbreaking book, The Management Shift, was listed by Forbes as one of the top eight business books in 2014.

thomas wedellwedellsborg

Thomas Wedell-Wedellsborg is co-author of Innovation as Usual, a Harvard Business Review Press book on the art of driving innovation in regular organizations. He is a partner at advisory firm The Innovation Architects and has worked with managers across the globe. As a keynote speaker, he has addressed organizations such as Time Warner Group, Cisco, T-Mobile, Johnson & Johnson, UBS, Deloitte, and the UN.

kevin duncan

Kevin Duncan is a business adviser, marketing expert, motivational speaker and author. After 20 years in advertising, he has spent the past 16 working as an independent troubleshooter, advising companies on how to change their businesses for the better – via change management programmes, facilitating training, and non-executive work.

Dialogue Q3 2016

006_Dialogue_Q3_2016.indd 6

11/05/2016 15:19


agenda

7

My edit

You can’t trump psychology. HR strategies can mitigate the extremes of our idiosyncrasies, but they cannot overcome them. The most effective leaders work with the grain of human psychology to get the best out of people. Capturing and exploiting the ingenuity teams carry around in their heads is the key to great management. Our Focus theme this quarter, The Brilliant Mind, says it all: what humans have up top is something special. It is our job to discover as much about our minds as we can, and to apply what we learn. Yet even brilliant brains have their downsides. Marshall Goldsmith (page 16) warns that being too smart can cause us to become detached from the needs, hopes and dreams of the people we are supposed to be leading. In a Dialogue exclusive, Goldsmith, one of the top management thinkers in the world, outlines four bad habits of super-smart leaders. Are you guilty of any of them? We are certainly creatures of habit. But are we also defined by our gender? Are male and female brains fundamentally different and, if so, how does this affect the way they lead? Or are men and women near-identical thinkers in different packaging? We asked four experts to debate, with Dr Srini Pillay and Professor Shane O’Mara up against Dr Liz Mellon and Lisa Danels. It’s an insightful, thought-provoking read from some of the best brains in the business (page 20). A debate almost as sharp is whether many brains are better than one. Paul Gibbons (page 30) argues that multiple minds are only preferable when properly managed. Beware groupthink – the phenomenon whereby members’ minds fall in line with that of the boldest or most senior person. One man who knows his own mind is the subject of our exclusive interview (page 34). Chinese

multibillionaire, Wang Jianlin, is the richest man in Asia, thanks to his masterful establishment and stewardship of the property and entertainment giant Dalian Wanda. Is it possible for global companies to systemize management to the extent that Wang recommends? Wang can point to his track record. Often, the most agile minds are supreme problem-solvers, able to identify an issue, scope a solution, then execute their strategy. In an entertaining romp that begins in baffling Main Street wine stores, Thomas Wedell-Wedellsborg (page 50) says that all too many companies fail to

Too many companies fail to identify genuine problems, and then set about proposing complicated solutions to problems that don’t exist identify genuine problems and set about proposing complicated solutions to problems that don’t exist. So often, the mundane holds the secret to successful business. Save people time and you will be rewarded; make their lives easier and your business will thrive; solve their problems, become their hero. Brilliant ideas tend to be simple; think Uber, Airbnb or Wedell-Wedellsborg’s revolutionary local wine store. Yet the human minds that spawn them are complex and always surprising. We continue to strive to understand them. Enjoy the issue. Ben Walker is editor of Dialogue

Q3 2016 Dialogue

007_Dialogue_Q3_2016.indd 7

11/05/2016 11:47


8

agenda

Spark

SPECIAL EDITION FROM THE GLOBAL FEMALE LEADERS SUMMIT 2016

“Wealthiest nations should shelter refugees” The wealthy European club of 500 million people should make space for the thousands of refugees fleeing from wars, according to London School of Economics senior fellow Philippe Legrain. Speaking at the Global Female Leaders Summit 2016 in Berlin, he

described European leaders as weak and divided, at the very time when it is vital for them to collaborate to drive change. The former European Commission adviser cited research to demonstrate that the humanitarian act of giving refuge can add economic value. He cited Steve Jobs – whose father was Syrian

– as just one example of an immigrant who has made a significant contribution to the global economy. In a keynote presentation that followed, Kristalina Georgieva, VP of the EU Commission, endorsed Legrain’s view. She acknowledged that 1.8 million refugees would have an impact, even on a system as large as a united Europe. But she warned that the alternative would be far worse, highlighting the significance of illegal people trafficking as a method of raising funds for radicalization that outstrips even the illegal drugs trade.

The right to vote does not, in itself, qualify a nation to be accepted as a democracy – a raft of other freedoms are required. That is the view of a senior leader who attended the Female Global Leaders Summit, who cannot be named under Chatham House Rules. While some argue that democracy is determined by the capacity to hold an election, one leader insisted that it must involve other essential elements, including a free media, mature

political parties, anti-corruption mechanisms, a sound judicial system and an independent police force. Democracy is more about the capability to throw out an unpopular government, the leader argued. This is a more accurate acid test than simply being able to ‘elect’ a government that might have rigged the ballot. Where Chatham House Rules are invoked at a meeting, journalists can report stories but cannot attribute quotes to individuals.

Shutterstock

What makes a democracy?

Dialogue Q3 2016

008-009_Dialogue_Q3_2016.indd 8

11/05/2016 11:56


agenda

9

IN BRIEF HIPPO SURFeRS

Braver politicians must tackle debt The Western debt burden is restricting the region’s chances of locking in growth, the global head of economics for Societe Generale Corporate & Investment Banking UK has warned. Offering a masterclass in global economics, Michala Marcussen contrasted a world in which developed countries normally support developing nations with the re-emergence of China. Until recently, China has subsidized the US consumer, she said. Yet the Asian superpower delivered its boom through expanding its credit level to just 70% of GDP. Today, established and developing countries are running equivalent debt levels at about 400% of GDP, when the recommended rate is about half of this. Marcussen added that the least painful way to emerge from debt is through growth – but admitted the process is slow-going because Western nations have run out of debt leverage. While the rich are growing richer, this trend isn’t helping to stimulate growth, because the super-rich tend to save rather than spend, she argued, warning that the central banks are unable to fix the problems faced in the West. She concluded that “braver politicians” are required, to step up to the plate and be decisive.

Juliana Rotich of Ushahidi Inc, Kenya, showed delegates images of Kenyan kids ‘commuting’ to school on rafts, risking hippo attacks. Their reward on arrival? The Kio Kit, providing access to the internet. The kit comprises 40 Kio tablets, a self-powered mobile WiFi device, wireless tablet charging and a water-resistant, hardened case.

geneRaTIOn gaMeS

Dialogue’s editorial board chair Dr Liz Mellon led a spirited debate about what it means to recruit, retain and motivate four generations in the workplace: Baby Boomers, Generations X & Y and the newly emerging Homelanders, (aka Generation Z). The highly experienced group of executives, HR leaders and UN representatives came up with a solid list of mustdos to make this work. TaLenT TUg-OF-WaR

Shutterstock

GLOBAL CIRCLE

What will it take to win the war for talent? Representatives from Unilever, Google and DHL debated this challenge. A range of issues were discussed, from customized solutions for talent development, to eliminating unconscious bias, and managing stress at work. But do we all believe, as Google does, that employees come first and foremost, before customers and shareholders? Could you embody that in your business and would it make for greater success?

Much of the glittering international attendance at the Global Female Leaders Summit is thanks to the personal connections of attorney-at-law and entrepreneur Ellen Comberg, who is chairwoman of the event and senior adviser at Management Circle. Management Circle, which managers the summit, is headed by chief executive Sigrid Bauschert (pictured above). Q3 2016 Dialogue

008-009_Dialogue_Q3_2016.indd 9

11/05/2016 11:56


LEADERS ARE THE GREATEST LEVERS FOR WINNING IN AN UNPREDICTABLE WORLD...

To win in today’s world, filling knowledge gaps is no longer enough. Yesterday’s wisdom won’t help leaders prepare for what lies ahead: more volatility and less predictability. Leaders must do more than simply learn. To be able to grapple with the unknown, they have to reorient and rewire. As our challenges become more global, social and complex, leadership is becoming more and more critical to business success. Duke Corporate Education is the premier global provider of custom solutions that enable leaders at all levels to adapt and move the organization forward. With delivery in over 75 countries, we work together with clients to understand their context and craft the right educational solution for any level of leadership — executives, high potentials, directors or managers. We’re here to help leaders get ready for what’s next.

DukeCE new ad_2015.indd 1

19/10/2015 15:39


...WE GET LEADERS READY FOR WHAT’S NEXT

DukeCE new ad_2015.indd 2

19/10/2015 15:39


Immediate impact, growing advantage. At A.T. Kearney, we pride ourselves on our uniquely collegial culture and care passionately about our work and our people. We offer our clients a range of global capabilities anchored in our heritage of essential rightness. The same promise we make to our clients—immediate impact, growing advantage—we offer to our people. Working together, we drive immediate results and help build lasting, transformational advantage. Consulting Magazine has recently named A.T. Kearney as one of the Best Firms to Work For 2014 and honored the firm with an Achievement Award for Excellence in Diversity. For more information about A.T. Kearney and to read some of our latest thinking, please visit www.atkearney.com.

A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.

012_Dialogue_Q3_2016.indd 12

11/05/2016 13:25


upfront

13

michael canning

Business is a little like tennis. You often play best when you don’t over-think it

Raise your inner game Michael Canning is chief executive of Duke Corporate Education

and others to satisfy Self 1, we inhibit Self I picked up a tennis racket for the first time 2 from doing what it does best – seeing in a while recently – and was reminded of something new, learning and adapting. Tim Gallwey. Best known for his seminal As neuroscientist Srini Pillay says, 1974 work The Inner Game of Tennis, Gallwey under pressure we resort to what we know, applied his ‘inner game’ methodology rather than opening our minds. Learning to developing excellence in a variety of becomes blocked at the precise moment fields. It didn’t help me on the court this that we need it most. spring, but I was struck by how – all these We often see tennis stars reach a state years later – his approach to learning and of effortless concentration, their brain and winning seems even more relevant in body in sync, ‘playing out of the mind’. today’s volatile world than when the book How do we accomplish this Federer Effect was first published. Gallwey interprets tennis as two games. in business? As ReD Associates principal Christian Madsbjerg says, it’s about The first is an outer game played against releasing judgment and bias, of ourselves the obstacles of an external opponent. and others, and seeing what is happening The second is the inner game, played with fresh eyes. When we abandon anxiety against our internal mental and emotional and judgment we see things as they really obstacles. Gallwey’s fundamental yet are, and open ourselves brilliant insight for to insights. tennis players is that we We worry Quieting Self 1 think too much before doesn’t mean silencing and during our shots; we excessively about it. Gallwey advises try too hard to control how we’re doing instead to ‘park’ Self 1 our movements; and are and being judged, with a series of simple too concerned about the which diminishes our techniques. When I had results of our actions the opportunity to work and their implications. concentration with him in the 1990s, In short, we worry he told me to do three excessively about how things on the court: as the ball is returned, we’re doing and being judged, which observe the spin; say “bounce” as the ball diminishes our concentration. To gain hits the ground; and say “hit” at the point clarity on the inner game, he introduced the racket makes contact with it. This the concept of Self 1 and Self 2. Self 1, the focuses the mind, squeezing out space for conscious ego-mind, likes to tell Self 2, unproductive self-chatter. the body and unconscious computer-like We might benefit from an analogous mind, how to hit the ball. But Self 2 does set of tasks to focus Self 1 in some of our almost anything naturally and effectively, meetings. As the leader, set the right leveraging a process similar to the one we environment by creating an image of the all used as we learned to walk and talk. group solving the problem and winning – We’re programmed to learn and adapt; the Self 2 responds positively to imagery. Focus trick is to reduce the interference. on the problem, not posturing; listen with Leadership, like tennis, requires us to master both games. Today, as we encounter enthusiasm, not judgment. Whether facing a new opponent on critical, but unfamiliar, challenges, the the court or an unfamiliar challenge in secret to winning may lie as much in the business, reducing the noise, worry and inner game as the outer one. It can be judgment in our heads is key to bringing uncomfortable to lead an organization fresh eyes, renewed concentration faced with such challenges. The anxiety and self-trust to rise to the challenge. and fear that come from uncertainty often Sometimes a mind is at its most brilliant elevate the critical noise and judgment from Self 1. As we put pressure on ourselves when we keep it quiet. Q3 2016 Dialogue

013_Dialogue_Q3_2016.indd 13

11/05/2016 11:58


FOCUS

14

Focus

The brilliant mind Forecasts of robot domination notwithstanding, the human brain remains the most powerful computer ever known. No machine comes close to human brilliance. Yet for all its power, brain function is still little understood. Sleep helps, but we don’t know why. Differences between the male and female minds are a topic of debate, not established fact. And we cannot agree whether we are better off with lots of bright people combining to work on a project or just one super-bright individual working alone. Yet while our understanding is far from complete, the race for knowledge is exciting and significant. How do neuroscience and cognitive psychology help us understand the power of people in business? What, within our minds, leads us to success – and failure?

ARTICLES 16

Four bad habits of super-smart leaders 20

Men are from Mars, women are from Venus… or are they? 24

Your guide to company brain surgery 28

Spark in your sleep 30

Are many minds really better than one?

Dialogue Q3 2016

014-015_Dialogue_Q3_2016.indd 14

11/05/2016 13:12


FOCUS

15

Q3 2016 Dialogue

014-015_Dialogue_Q3_2016.indd 15

11/05/2016 11:59


focus

16

Four bad habits of super-smart leaders Some leaders are too clever for their own good

writing

Marshall Goldsmith illustration

Dale Edwin Murray

While we often consider the blessings that accompany a high IQ, we seldom think of the challenges that come with extreme intelligence. Yet there are many. In my role as an executive coach, I have had the opportunity to work with more than 150 major chief executives. As a group, they would score well above the norm on any standard definition of intellectual intelligence (I am not referring to ‘emotional intelligence’, ‘artistic intelligence’ or other forms of intelligence). Although, like any group, chief executives may do stupid things, they are seldom stupid people. Here, I discuss four classic challenges faced by smart people – challenges that are even more common among the ‘super-smart’ (see definition, page 19). Dialogue Q3 2016

016-019_Dialogue_Q3_2016.indd 16

11/05/2016 12:01


focus

17

Any human – or any animal – will tend to replicate behaviour that is followed by positive reinforcement

s

1

PROVING HOW SMART WE ARE For ten years, I had the privilege of being on the board of the Peter F. Drucker Foundation. This gave me the opportunity to spend more than 50 days with the man who is – to my mind – the greatest management thinker who has ever lived. I would definitely put Drucker in the ‘super-smart’ as well as ‘super-wise’ category. Compared to him, I would consider my intelligence and wisdom to be that of a child. One of the lessons taught to me by Drucker was: “Our mission in life is to make a positive difference – not to prove how smart we are.” It is amazing how many leaders fail to grasp this basic lesson. One of the ‘super-smart’ leaders who I coached gained two simultaneous doctorates from one of the most challenging schools in the world, one in science and one in the humanities – with honours – within five years. When the brains were handed out, he was not lurking near the back of the line! The first time I interviewed him, I took copious notes. After an hour I said: “Dr Smith, let me read back to you how often you have told me how smart you really are. I don’t think I am as smart as you are, but I am not stupid. I read your bio. Did you think you really needed to point out your brilliance to me six times in the past hour?”

As I read back his verbatim comments, he was so embarrassed. “What an ass!” he said of himself. I replied: “You are not an ass. You are a very good person. You just have an incredibly high need to prove how smart you are. Perhaps, in future, you could cut back on this a little?” How deep must be a person’s drive to prove they are smart for them to gain two simultaneous doctorates from one of the top schools in the world? Very deep. Does this ‘prove I am smart’ need disappear when they gain the qualifications? Not really. They don’t have enough degrees in the world! I have asked thousands of leaders to answer this question: What percentage of all interpersonal communications time is spent on: A. People talking about how smart, special or wonderful they are – or listening to others do this? + B. People talking about how stupid, bad or inept other people are – or listening to others do this?

The answers are amazingly consistent around the world – approximately 65%. How much do we learn pointing out how smart we are? Nothing. How much do we learn pointing out how stupid other people are? Nothing. How much do we learn listening to this? Nothing. So how much interpersonal communication time is wasted on this? About 65%. Smart people are generally considered smart because they have proven how smart they are in their journey through life – over and over again. They have been given lots of positive recognition for being ‘smart’. Any human – or any animal – will tend to replicate behaviour that is followed by positive reinforcement. The more we repeat the “I am smart – I get recognition” cycle, the harder it can be to remember the excellent advice from Peter Drucker: “Our mission in life is to make a positive difference – not to prove how smart we are.” Q3 2016 Dialogue

016-019_Dialogue_Q3_2016.indd 17

11/05/2016 12:01


focus

18

2

PROVING HOW RIGHT WE ARE One night, I had dinner with a top, fourstar general from the US Army. We were surrounded by other two- to four-star generals. Each of these men and women had graduate degrees and were chosen to be two- to fourstar generals over thousands of competitors. He asked me an interesting question: “Marshall, who is your favourite customer?” I replied: “Sir, my favourite customer is smart, dedicated, driven to achieve, has incredible integrity, gets results – and is a stubborn, opinionated know-it-all who never wants to admit he or she is wrong.” I looked around the room and asked: “Do you think any of the generals in this very room may fit such a description?” He laughed and replied: “We have a targetrich opportunity!” It is incredibly difficult for super-smart people to hear something with which they disagree, without proving that the other person is wrong. After all, if others disagree with us, we assume, because we are so smart, they must be wrong. They may not be stupid people, they are just confused on this particular issue. The higher up we move in leadership, the more destructive this habit may become. One of the ‘super-smart’ scientists I worked with, Dr Jones, led the research and development function for a large corporation.

He was so smart, he knew more about the other scientists’ fields than they did! The good news was that he was very honest. The bad news was that he could be incredibly blunt. When people ‘took him on’ he almost always proved they were wrong and he made them feel embarrassed. You might guess what happened. He was always right, until the day he was wrong. He mistakenly supported one disastrous decision that ended up reducing the market capitalization of the company by more than $10bn! After this disaster, several of the scientists who worked for him were interviewed. They all said they had had doubts about the project, but they never raised them. Why? Since Dr Jones was convinced that this was the right thing to do, they assumed he must be correct. Even though they had doubts, they didn’t want to take him on and risk being humiliated. One of the telltale comments that I often receive in 360° feedback from direct reports is: “He doesn’t bear fools gladly!” Any leader who takes this feedback as a badge of honour is making a mistake. Unless the chief executive is managing a group of ‘fools’ – a situation I have never encountered – the real message behind this feedback is: “This leader always has to prove he or she is right and treats people who disagree with him or her as fools.”

3

I A L R E A D Y K N O W T H AT It is incredibly difficult for smart people to listen to someone tell them something they know without pointing out: “I already know that.” Imagine you are my boss. I am young, dedicated and enthusiastic. I come to you with an idea. You think it is a great idea. Rather than just saying: “Great idea!” which gives credit to the other person, the tendency is to say: “That is a great idea, I already knew that!” which gives credit to yourself. Next time, just say: “Great idea!” What is probably the most common phrase uttered by smart people when others say something that we agree with? “No, I agree with you.” Sometimes we say: “No, I think that is fantastic!”

In future, listen to other people respond to ideas they agree with. You will be amazed how many times the first word out of the person’s mouth is “no”. Grammatically, this makes no sense. If we agree with someone, why don’t we say: “Yes, I agree with you!” The “no” means: “Of course I agree with you. I already knew that. You are confusing me with someone who needs to hear you right now.” It’s subconscious, of course. Inside the mind, the super-smart leader probably thinks that he or she is doing the right thing – giving praise for an idea. But the “no” sounds negative and takes away the praise, just leaving the sense that there is no idea in the world that the leader didn’t have first.

Dialogue Q3 2016

016-019_Dialogue_Q3_2016.indd 18

11/05/2016 12:01


focus

19

4

WHY CAN’T THEY BE ME? Joe, one of the ‘super-smart’ leaders I have coached, graduated as the valedictorian of an Ivy League school. His parents were very poor and he had to work his way through both high school and college. Graduating as the top student at a top school when you are given no advantages as a child is an amazing achievement. Joe was both brilliant and incredibly hardworking. Joe faced a classic challenge common to the ‘super-smart’. He could not understand why other people failed to see solutions that seemed obvious to him. I watched as he led his team meeting. Each of his direct reports was instructed to share an update on their progress against each of their key objectives. One person was clearly having problems meeting goals. Joe said: “Have you thought of trying X?” The direct report replied: “No, I never thought of that.” Joe became very frustrated: “Can’t you see how X would help you solve your problem? It seems obvious to me!” Joe then looked around the table and said, “Didn’t any of you think of X?” When it was clear that no-one had, he grunted: “I cannot believe that I am the only person in the room that figured this out! What were all of you thinking about?” After the meeting, I had to explain to Joe that his colleagues were not the unusual ones – he was! I pointed out that no-one in the room but him had an IQ of 170. They were good people, who worked hard, they were smart people. They

W H AT I S S U P E R - S M A R T ? While almost all chief executives would be considered ‘smart’, I would classify some as ‘super-smart’. While I don’t have a precise definition of super-smart, I will give the term a very personal perspective. At the risk appearing immodest, I would consider myself to be ‘smart’. I have a PhD from UCLA, my Scholastic Assessment Test and Graduate Management Admission Test scores were exceptionally high, I have published 35 books and three New York Times bestsellers and I was recently ranked as the number one leadership thinker in the world. I consider most of the leaders that I am discussing in the article to be a lot smarter than I am.

were just not quite as smart as he was. Almost nobody in the world was quite as smart as he was. Joe needed to learn to work with normal human beings. I also added that, unless he changed, no-one who was as smart as he was would ever want to work for him. ‘Super-smart’ people can often make connections and see patterns that are not obvious to normal people – or even ‘smart’ people. It can be challenging for any of us to accept that what may seem obvious to us may be a complete mystery to the people around us. In many cases, the smarter we are, the more difficult this may be to understand.

A final thought Great leaders help others to succeed One of the greatest leaders I have ever met taught me a wonderful lesson: “For the great individual achiever, it is all about me. For the great leader, it is all about them.” It can be incredibly difficult to make the transition from ‘it is all about me – proving I am smart, proving I am right, knowing all of the answers’ – to it is all about them – ‘proving they are right and being proud of them having the answers’. There can be a huge difference between intelligence and wisdom. While smart leaders may spend their time proving how clever they are, wise leaders spend their time helping other people be the heroes. — Dr Marshall Goldsmith is a world authority in helping successful leaders achieve positive, lasting change in behaviour: for themselves, their people and their teams. He is the million-selling author or editor of 31 books, including the New York Times and Wall Street Journal bestsellers, Mojo and What Got You Here Won’t Get You There Q3 2016 Dialogue

016-019_Dialogue_Q3_2016.indd 19

11/05/2016 12:01


focus

20

Male bosses are from Mars, female bosses are from Venus… or are they? Do men and women lead differently? Four experts go head to head to debate the issue

The debate about whether differences in the male and female brain affect the way we manage is at the heart of gender psychology in the workplace. So do men and women lead differently because of their sex?

THE CASE AGAINST professor shane o’mara

What does the male brain most resemble in the universe?’ (the answer is below). ‘Gender’ is a fast and handy way of coding populations and classifying individuals: it is a widely used shortcut, because it quickly evokes all sorts of associations about males and females. It allows us to be ‘cognitive misers’ when we make decisions and choices. But that’s all that coding by gender is. There are infinite ways of coding populations: height; weight; education; nationality; food preferences; favourite football team. All fall short because all discard information about individuals in favour of group membership judgments and stereotypes. A better question than “do men and women lead differently?” is to ask “what collection of cognitive and non-cognitive traits (personality,

motivation, grit, oratory, etc.) in a given context, time and place, lead to outcomes that employees value?” This is a very different way of thinking about leadership. After all, former UK Prime Minister Winston Churchill was the supreme leader for wartime, but for peace? History has provided the answer. Elizabeth I of England, by contrast, was a leader for war and peace! To assume coding by gender reflects some unchanging and immutable underlying biological reality that describes all we need to know about an individual. That such an assumption is a basis for action is simply wrong – and self-evidently so, when you consider the complexity and variation found within, and between, human beings. It is not at all obvious that using gender as a proxy for the traits of leaders is the most useful way of ensuring the best leaders are selected. Nor is it the case that the traits of leaders are immutable qualities, independent of time and place, arising irrevocably from

Coding by gender is just cognitive miserliness

Dialogue Q3 2016

020-023_Dialogue_Q3_2016.indd 20

11/05/2016 15:20


focus

gender and brain differences. We need to rethink how we conceive of leaders, and realize that leaders are individuals who may, or may not, be appropriate to the needs of the time, place and context they are in. And more than that, the cognitive and non-cognitive traits – personality, motivation, grit, oratory and so forth – of leaders are not an unchanging given of the male or female brain. They can be learned, honed, sharpened through deliberate and self-conscious practice: this is the great lesson from

21

the behavioural and brain sciences for leaders or aspirant leaders. We humans are quite capable of learning and profiting from experience, and of being changed for the better, or worse, by our experiences. If we want diversity in leadership as a good thing in itself, then we need to change how we think about gender and leadership. We need to shift the focus to the traits and skills required to fulfil the demands of the position. We need to design evaluation procedures that are benchmarked according to objective

standards, and we need to design processes in organizations that select for skills and traits, and set aside gender as the selection variable. Not changing is easy to achieve – it is the approach of the cognitive miser – but who ever said anything worthwhile was easy? And, of course, the thing the male brain most resembles is the female brain – this was not a trick question! — Shane O’Mara is professor of experimental brain research and Wellcome Trust senior investigator at the Institute of Neuroscience, Trinity College, Dublin Q3 2016 Dialogue

020-023_Dialogue_Q3_2016.indd 21

11/05/2016 12:07


focus

THE CASE FOR Dr LIZ meLLon

Imagine this scene in your own life: You ask a man to fetch the butter from the fridge. He opens the door, scans the interior and reports “we’re out of butter”. You step up behind him, scan the same scene, reach past his shoulder and pick up the butter. When I try this scenario out in the executive classroom, it provokes smiles and laughter from women – and from men. We’ve all been there or somewhere similar. Men and women are different. We are driven by different hormones, are physically different and, if we are to believe Mark Gungor, our brains also operate differently (Google Gungor, he’s fun!). Yet as soon as we get to work, political correctness steps in. We don the corporate cloak and become gender-neutral executives. Men deny differences, in case they are suspected of discriminating against women. Women deny differences, because they want to be seen as executives on a par with men. But in these differences lies our

Groups with more females show greater collective intelligence because women listen better and encourage more participation

greatest asset. We know that diverse teams sustain higher and more consistent performance over longer periods. Our sex is one of our most fundamental sources of diversity. This is why studies can confidently report that organizations that most aggressively promote women to executive positions have one quarter to one third higher profits than their industry average (Pepperdine University 2007, Catalyst 2009). Other recent studies from MIT report the so-called ‘C’ factor, showing that working groups with more women in them demonstrate higher collective intelligence – problem-solving capability – because women listen better and encourage more participation (Harvard Business Review, June 2011). Our real challenge is imbalance. As Professor Alice H Eagly says: “When leadership is defined in masculine terms, the leaders who emerge are disproportionately men, regardless of the sex composition of the followers.” Globally, there are still more men in the senior ranks, so the male view will dominate and male stereotyping of the characteristics of effective leadership can have a negative impact on the perception of a female leader’s capability. But if a woman acts like a man in order to fit into the male stereotype, to be seen as effective, this doesn’t work either. That’s because we also hold a stereotype about the acceptable range of female behaviours. Catalyst explains that, because of this stereotyping, even when women do speak up and ask (as we are constantly encouraged to do – a male approach) we still don’t get what we request. You lose some, you lose some more. Even if it’s only a perception that men and women lead differently, perception is all we have – it’s our reality. In a survey by the Innis Company, nearly 100% of women and 80% of men surveyed believed that men and women behave differently as leaders. Specifically, both men and women agreed that women lead by concentrating more on relationships, managing expectations and seeking input, while men focus

on promoting their abilities and final outcomes. Do men and women lead differently – hell, yes! We need to get more balance into the system, so that we can leverage the best from each other, rather than let stereotyping and expectations render one sex or the other a disadvantaged minority. — Dr Liz Mellon PhD MBA is a doctor of psychology and former professor at London Business School

THE CASE AGAINST Dr srInI pILLaY

There are more than 1,400 definitions and 44 theories on leadership. But if we agree that by ‘lead’ we are implying a way of taking charge, a way of assuming responsibility or the ability to coordinate different business elements to reach a desired outcome, then my answer to this question is “no”. Men and women do not lead differently. Recent psychology and brain research supports my view. Many studies have shown differences in how men and women are wired: women’s brains are better connected than men’s brains, and women are more empathic; women have smaller brains but greater amounts of grey matter; women have more neuronal processes despite having smaller neuron numbers; women like women more than men like men (even unconsciously) – the studies are too numerous to mention. On the surface, this smorgasbord of studies supporting male-female brain differences suggests that men and women must lead differently. Yet, other research suggests the truth is more complex. In 2011, psychologist Daphna Joel pointed out that brains are neither male nor female, but intersex. Biological sex interacts with numerous factors in utero to determine the structure of the brain. In animals, sex differences can be abolished, reversed, created or exaggerated by environmental factors. In 2016, Joel pointed out that human brains are also better described as one heterogeneous group. Rather than being

We are prone to gender stereotyping – we see differences because we look for them

Shutterstock

22

Dialogue Q3 2016

020-023_Dialogue_Q3_2016.indd 22

11/05/2016 12:07


focus

23

differences because we look for them. We have attentional biases: we are wired to overemphasize what threatens us. The absence of evidence for male-female brains, the propensity to stereotype, and the bias to engage threat above all else, suggest that we may be better served looking at our gender biases than the differences in how we lead. — Dr Srini Pillay MD is assistant professor at Harvard Medical School

THE CASE FOR

Shutterstock

LIsa DaneLs

dimorphically male or female, brains are multimorphic – they are male and female to different degrees. This results in a heterogeneous collage of ‘male’ and ‘female’ brain characteristics in every person. In that sense, male and female brains do not exist. And if that is the case, there can be no such thing as male or female leadership if we agree that the brain plays a major role. In a separate study in 2016, Joel and her colleagues examined 1,400 human brain MRIs. The sample included males and females. They found extensive overlap in the distributions of grey matter, white matter, and connections assessed. Also, brains with features that are consistently at one end of the ‘maleness-femaleness’ continuum were rare. We stereotype people based on our socialization and expectations. If we expect a woman to be more emotional, empathic or inclusive in her leadership approach, we will look for this. If we expect a man to be more logical, directed and transactional, we will look for that. Yet, I’m sure we would all be willing to admit that there are many empathic men and many logical and unemotional women. From as early as five years of age, we are prone to gender stereotyping. This continues into young adulthood and even older age. We see

Men and women lead differently. My academic co-authors make the research-based case but, as an executive with many years’ experience, I want to make my contribution to this debate more applied. I find men more singularly focused. They have the ability to narrow down and focus in on the task at hand – they don’t always build their emotional connections or act on subtle emotional signals. Instead, the male focus is on what they need or where they need to drive the conversation or results. I have experienced women as more sensitive and able to tune into the unspoken aspects of a conversation, and focus on the needs of others, while at the same time achieving outcomes. But, fundamentally, I believe the differences between men and women at work should be celebrated and leveraged, rather than denied. Diversity makes work more interesting, productive and worthwhile, as long as we can take a strengths-based approach. So with this in mind, let me suggest how men and women might benefit from their different approaches to leadership. What do men do well? I’d like to highlight a couple of areas that I have observed. Men are better at negotiating their conditions of success. When they take on a new role, they are better at candidly requesting the resources they can see they will need to succeed, whether it be an enhanced budget or certain people removed from the team. Women, on the other hand, tend to dive straight in and do their best in the face of existing challenges, which can be a struggle. Another key difference is that men ‘fake it ‘til they

make it’. They are not afraid to take on opportunities for which they know they are not fully qualified, figuring it out as they go along. Women, on the other hand, prefer to wait until they are fully developed and feel ready for the new direction. What do women do well? We are more emotionally sensitive and therefore better able to read the nuances of a situation. While a conversation may be factually accurate, human beings simultaneously experience emotions, or even a sense of challenge to their own identity, that can undermine later execution of any decision reached in the moment. Women are better at tuning into these emotions and dealing with them, so that they don’t derail a viable conclusion. I have also observed that women tend to deal more holistically with an issue. Rather than taking a straight line to a one-dimensional conclusion, they are able to include multiple aspects and options, so that decisions are richer and multifaceted. For example, in my world of talent management, conversations

The differences between men and women at work should be celebrated and leveraged – not denied about candidates’ qualifications can also take into account a broader set of factors, such as personal motivation, experiences, development opportunities, and support from a spouse or partner. At Boston University, Erin Reid’s research shows that when women need to spend more time with their families, they discuss the issue openly at work, but are then deemed less than ideal employees and become marginalized. Faced with the same dilemma, men quietly reorganize their work patterns and achieve the same outcome while still being regarded as superemployees. If only we could learn to embrace different approaches, then the outcomes might also become regarded as equivalent. — Lisa Danels is global head of talent innovation and predictive analytics at Novartis Pharma — All contributors write in a personal capacity Q3 2016 Dialogue

020-023_Dialogue_Q3_2016.indd 23

11/05/2016 12:07


focus

24

Your guide to company brain surgery

Writing

Joe DiVanna illustration

Ben O’Brien

Companies are wired – like humans – to resist differences. To change organizations, you need to understand their biology

The jargon suggests that companies have a brain. We often hear terms and concepts such as ‘organizational learning’, ‘organizational memory’, ‘the culture of an organization’ and ‘organizational behaviours’. This begs the question: do organizations even think? And, if they do, do they have one brain higher up, above the structure and systems, the people and processes? Since organizations are collections of individuals, is there a parallel between how we think, as individuals, and how organizations function?

Like people, organizations must move between operating states as a result of changes in market conditions; customers’ tastes; regulations; political atmosphere; and, in many cases, a turnover in their own management. People learn, through experience, what is acceptable and what is not, what leads to desirable outcomes and what makes them harder to achieve. Organizations face the same set of challenges, but, unlike their human counterparts, the lessons learned are often transitory as people move from

Dialogue Q3 2016

024-027_Dialogue_Q3_2016.indd 24

11/05/2016 12:09


focus

25

and future outputs and outcomes. As organizations face new market challenges and opportunities, they must switch between operating states, sometimes becoming more customerfocused, at other times aiming to be a product leader. Ultimately, at some point, organizations strive to be operationally excellent by concentrating on streamlining their operations. Changing the focus of an organization is no small task: it’s like changing all the brainwaves of an individual and creating a new personality. Even when individuals in organizations say they want to change, or they welcome change, the reality for most organizations is that people strive to maintain the status quo, much as the brain, after a certain age, starts to accept the natural forces of inertia. Most people are also apprehensive about impending changes in their jobs, routines, governments and many other aspects of their lives, but they sometimes develop the resolve to change, adapt and try new things. Organizations, with their larger and more abstract brains, often find themselves firmly stuck in conflicts between the why and the what, the how and the when. At the most basic level, an organization is indeed merely a collection of people in a network, put within a decision-making framework, in much the same way as our brains and nervous systems are organized. So can recent discoveries in brain research provide insight for leaders who face transitioning their organizations from one operating state to another, as market conditions change?

THE DIAGNOSIS

job to job and company to company. Leaders try to preserve knowledge by instituting organizational policies and procedures; we set up compliance departments and give HR teams the task of distributing the rules of behaviour (both people behaviour and market approaches). However, numerous organizations still fall short of converting day-today interactions into experiential knowledge. It’s as if their brains suffer from a disconnect between past lessons learned, present inspiration and insight,

The human nervous system comprises four distinct interoperating components that form our behaviour. This is similar to the way organizations are designed to function (see graphic, page 26). The policies and procedures of organizations act in a similar fashion to the body’s autonomic nervous system, regulating key involuntary functions such as paying bills, collecting accounts payable, making payroll happen on time and many other day-to-day functions. Like the nervous system, departments within an organization react to changes in the operating environment in a same way a body reacts to shifts in external stimuli. Management employs operating

procedures to regulate the pace at which the organization adapts to change, while ensuring that the everyday activities keep the organization earning revenue. In the body, there are two distinct systems at work: sympathetic and parasympathetic. The sympathetic nervous system accelerates the heart rate, constricts blood vessels and raises blood pressure. In the organization, favourable economic activity, a surge in new orders or sudden popularity of a product, produces the same effect: productivity increases, management authorizes overtime pay, priority shipping takes place, the volume of transactions rises. The parasympathetic nervous system works in the same manner. It slows the heart rate, increases intestinal and glandular activity. This is analogous with the actions management takes when there is a downturn in economic activity, the time at which reducing the workforce, cost cutting, and process optimization becomes a key focus. Leaders often face the challenge of having to restructure the organization because of a sudden change in the economy. A loss of orders many change the focus to cost reductions; a large contract won may necessitate the development of a new business process; an emerging market may call for close integration with a supplier or customer where business process synchronization will be key to customer satisfaction. Many external factors such as disintermediation, ‘coopetition’, rightsizing and re-engineering provide the necessary catalysts for a radical change in operating state. In many cases, the organization needs to adopt new behaviours – such as becoming more entrepreneurial in nature, whereby middle managers, in order to survive, must take a greater leadership role, often assessing risks in new ways. The body functions in a similar way: external stimuli (cold, heat, anything that creates emotion) catalyze chemical reactions that change the way the body responds and the mind works. A self-fulfilled individual will master these, and put the challenges to work to his or her advantage; a healthy organization will do no different. In that sense, partnerships, collaboration, cells of competencies and other new structures, are all viable options if the individuals in the organization have the appetite for Q3 2016 Dialogue

024-027_Dialogue_Q3_2016.indd 25

11/05/2016 12:09


focus

26

organizational systems mirror the human nervous system

Human body component

Human function

Organizational equivalent

the central nervous system

Integrates information from all parts of the body and coordinates activity

Senior executive team and direct management functions

the parasympathetic nervous system

Controls internal functions under normal conditions

Company operating procedures

the sympathetic nervous system

Controls internal functions under stressful conditions

Company policies and guidelines

the peripheral nervous system

Correlates and responds to external stimuli

Data from business units and customers

change. If individuals have no appetite for change, just like the body rejecting a foreign object, they act like antibodies to reduce, delay and impede change initiatives at every opportunity. In numerous cases, this resistance to change is involuntary. The functional silos of the organization act to protect the policies and procedures that represent years of knowledge aimed at optimizing the production process. The body, in fighting an infection, becomes weaker temporarily, but it also strengthens itself longer term. Often, it desensitizes itself to a virus. Organizations don’t always respond in the same way; sometimes a wave of challenging external or internal conditions can strengthen an organization, at other times it can weaken it without any positive outcome.

Three states of being

In the seminal book The Discipline of Market Leaders, Michael Treacy and Fred Wiersema argue that organizations strive to operate in one of three states based on market forces. These are: customer intimacy product leadership operational excellence What they observed is that,

although most organizations would like to be excellent in all three disciplines, they are typically constrained by their resources, tending to focus energy on excelling in just one. That said, the economic conditions of the past two decades have brought about conditions wherein organizations have been oscillating between operating states, as technology rapidly rewrites the relationship between consumers and businesses. Like the body reacting and adapting to changes in the external environment, organizations either consciously or subconsciously change their operating state with varying degrees of success. Many management consultants have observed that changing operating states is almost like brain surgery. Any false step can result in complications or ruinous events. Changing operating states impacts both an organization’s sympathetic nervous system and parasympathetic nervous systems. In

Changing the focus of an organization is no small task: it’s like changing all the brainwaves of an individual and creating a new personality

most cases, what is missing is that, as an organization transitions between operating states, it needs to unlearn and relearn rules, guidelines, policies, and procedures whose formalization may lag behind the organization’s need to conduct business in a timely manner. And this level of proactivity and nimbleness is difficult, to say the least, for an organization with that big, abstract brain hanging up above.

Modifying day-to-day behaviour

Yet many organizations now face the change-or-die syndrome, where leaner, non-traditional competitors are entering the market; in many cases with a significantly lower cost base. So what can the science behind how the brain functions do to help senior executives be smarter when they initiate change initiatives? Successful change initiatives aren’t possible without modifying the dayto-day behaviour of people throughout the organization. Doctors have observed that only one in nine patients who have undergone coronary bypass surgery adopt a healthier lifestyle. Many start programmes of regular exercise, lose weight and improve their diet, yet eventually revert back to their old habits, even though they are aware of the risks. One can observe the same behaviour

Dialogue Q3 2016

024-027_Dialogue_Q3_2016.indd 26

11/05/2016 12:09


focus

in financial institutions, for example, as their actions move from underregulation to over-regulation, based on their inability to understand and interpret local economic activity and take action to mitigate risks in their lending decisions. Given the tendency of such companies, and others, to trend back to bad habits and poor health, what can senior executives do to institute change to reduce the risk of organizational atrophy? In recent years, medical technologies such as functional magnetic resonance imaging (fMRI), positron emission tomography (PET) and quantitative electroencephalography (QEEG) have given neuroscience a whole new array of information-gathering devices to aid in understanding the previously unknown neural connections in the brain. This has led to a host of new theories linking the physical composition of the brain with functions of human consciousness. How we feel and think, the way we act and perceive the world around us, is based on a network of communications between our sensory and autonomic systems. But these are yet to be translated into meaningful connotations for business, for the workplace, the classroom and so on. The more control one has over the once seemingly random responses of the individual brain, the more able a senior manager, chief executive or board will be to lead the random mutations around, and within, organizations, increasing their efficiency and effectiveness.

THE PRESCRIPTION

What does all this mean for leaders? Imagine that, for the most part, you are a charismatic leader; you go to your competitor and see their latest product or service. It is futuristic, and you know it will resonate with your customers. Let’s say that the innovation you glimpsed was a newfangled take on the lava lamp. You go back to your team and tell them that your company’s future is in producing the lamps. The experience of seeing the product in use is fresh in your memory. You describe the product to your team. Great, we now have a vision, based on what you saw the competition doing. Now, you say, let’s build it. Where do you start? You have a great vision; but the organization lacks the know-how, tools, and capabilities to move rapidly into implementation. Probably your

27

Although most organizations would like to be excellent in all three disciplines, they tend to focus energy on excelling in one

staff will hope that you will forget about it in a week, which undermines your leadership. So the future – the lava lamp business – and the organization itself are threatened. What could you, as chief executive, have done differently in this scenario? Brain research offers relevant insight for organizational leaders. Our understanding of how the brain works is vastly different to that of a decade ago. Then, scientists believed the brain was fully developed by the end of childhood, only to discover that, during adolescence, the brain undergoes profound changes as it continually rewires the connection between neurons, based on our learned experiences. And this continues into maturity.

Rewire for change

Think of the people in an organization as independent neurons each comprising a set of skills and knowledge. As the brain learns, it rewires the connections between neurons to cope with changes in stimuli. This would be analogous to reorganizing the company every time market conditions change. In practice, organizations resist change, which is actually at odds with the way our brains work. So the leadership challenge is to motivate change by sharing a vision that focuses on what’s possible, what’s real and what will make an impact. New thinking from neuroscience may help leaders overcome the ‘status quo effect’ by examining how the brain remembers and reacts to learning and change. The brain has a capacity called working memory, which takes stimuli in the form of perceptions, and contrasts them with stored information to determine if something is new. This recognition of newness determines how the stimulus is processed. Humans process the new things they encounter by contrasting their attributes and properties against known benchmarks. Things that are familiar become routine and a part of our working

memory. For example, you learn to drive, and within a few months of driving around your neighbourhood, you drive without thinking. You are familiar with your surroundings; you instinctively anticipate things. When you travel to an unfamiliar place, you tap into your working memory and begin to compare the current surroundings with the benchmark (home territory). However, within a relatively short time, you adapt to the new environment and revert to driving without thinking. It is the same process of cognitive dynamics that are invoked when organizations experience fundamental changes. How senior managers ‘sell’ change to the organization sets the level of stress the organization will encounter. As routines are interrupted, eliminated or drastically altered, individuals react because their ‘driving without thinking’ has been changed. This leads to people feeling unsure of their own decisionmaking processes, so they resist the change and hope for a return to the status quo. Scientists studying brain functioning note that human brains react to perceived differences between operating states. In people’s brains, those differences push individuals to become emotional or act impulsively. Organizations react in the same way – when change is not sold properly to them, and people don’t know what to expect, nor understand the likely impacts, they take undue risks; for example, offering discounts to retain customers, or selling one product below cost to beat the competitor hoping to make a profit by linking sales to another product. Yet if their brains expect a change, they are rewarded by that change occurring – the change itself is interpreted as a success rather than a threat. The key for managers is to nurse an organization’s working memory into one that enables change, so functions associated with managing the process seem less like a foreign body and more like a part of the company’s collective history. Leaders need to be expert surgeons, and operate within the limits of their organization’s brain function, rather than going dangerously against them. — Joe DiVanna is the Møller By-Fellow of Churchill College, University of Cambridge, and author of People – The New Asset on the Balance Sheet Q3 2016 Dialogue

024-027_Dialogue_Q3_2016.indd 27

11/05/2016 12:09


focus

28

Spark in your sleep The mind works best when you give it a rest, writes Phil Dobson

Have you ever had a good idea in the shower? Do your best notions come to you when you go for a walk? Ever woken up in the night with a clever way out of a tricky situation? We focus on working smarter, getting ever more done, yet it’s often only when we stop working and our minds start to wander, that solutions present themselves. Your creative brain is a formidable beast, but the conditions under which it thrives are different to the conditions under which we tend to work. Einstein said: “The intuitive mind is a sacred gift, and the rational mind a faithful servant. We have created a society that honours the servant and has forgotten the gift.” Let’s explore this gift with a view to gaining applicable insights into how to get more from your naturally creative brain, as an individual and in your team. Creativity is a skill that improves with practice, and it follows a process that can be developed at every stage.

THE MIND MACHINE The creative process is formed in five clear steps... Step 1: Experience Absorption and assimilation of knowledge and experience Step 2: Incubation Time for this experience to sink in

step 1 experience

Much like working productively, becoming more creative can be as simple as establishing the right conditions. The best first step to developing your creativity is to broaden your experiential palette. A useful definition of creativity is the ability to form relationships between unrelated concepts. The broader your palette, the

Step 3: Question A question or a problem presents itself Step 4: Illumination The generation of an idea, solution or answer Step 5: Action The implementation of the solution or idea

more unrelated concepts you have to work with. It is interesting to note that Nobel prize-winning scientists are more than 20 times more likely than the average person to perform as actors, dancers or magicians; they are ten times more likely to write poetry, novels or plays; and twice as likely to play a musical instrument. This suggests that being creative is therefore less about single-

Dialogue Q3 2016

028-029_Dialogue_Q3_2016.indd 28

11/05/2016 12:11


focus

29

Alpha brainwaves are associated with a calm, relaxed, open mind – not a mind engaged in active cognition

minded specialization, and more about cultivating interests in lots of different things. You: Learn new things, read broadly, demonstrate curiosity, explore and broaden your experience; become the polymath. Your team: Collaborate and embrace diversity. A group of people’s collective experience will likely be greater than any single person’s.

You: Challenge your assumptions and reframe your problems. Before finding a solution, examine the problem in different ways until you establish what the problem really is. Your team: Before running a ‘solutionorientated’ brainstorm, first spend ten minutes brainstorming only questions about the problem or challenge. Provide no answers. This will help challenge your assumptions. Once you have a better understanding of the problem, the solution will often present itself.

step 2 incubation step 4 illumination

Creative departments are often forced to work to tight deadlines, which can stifle creativity. Ideas need time to incubate and your brain needs time to form new associations. Your brain is particularly good at making connections while you sleep. The history of science is littered with discoveries we owe to people’s unconscious nighttime processing: Dmitri Mendeleev saw the elements arrange themselves in his sleep to form the periodic table; August Kekulé dreamt the arrangement of atoms that make up the benzene molecule. You: Be wary of coming up with quick solutions in the hope of demonstrating ‘responsiveness’. Over time, a better solution often presents itself. Your team: Allow people time to work on important problems. Present information sooner rather than later, and give people the option to ‘sleep on it’, if possible. step 3 question

Too often, people try to identify a solution before they really understand the nature of the problem. If I asked you to build a bridge across a road, you might brainstorm the best tools, materials, expertise. But a more valuable question would be ‘why do we need to get across?’ Einstein said: “If I had an hour to solve a problem, I would spend the first 55 minutes determining the proper question to ask.”

Divergent and convergent thinking are two commonly accepted forms of thinking. Divergent thinking involves coming up with lots of ideas; convergent thinking involves deciding on a single answer. Divergent thinking reflects Einstein’s take on creativity as “intelligence having fun”. Convergent thinking is more akin to how writer William Plomer describes creativity as “the power to connect the seemingly unconnected”. To get the most from divergentthinking exercises such as brainstorming, go for as many ideas as possible, defer judgment, think unrestrictedly and capture everything. It often helps to alter your perspective, either by going somewhere unusual to brainstorm, or by shifting your ‘perceptual position’: approaching the problem through someone else’s eyes. This can be particularly useful when considering business strategy. What would your customer want? What would your client say? What would your employee think? To improve your divergent thinking, it helps to increase your cognitive activity. Yet this is where our over-reliance on logic, rationality and conscious cognition becomes apparent. We’ve already acknowledged that we have ideas in the shower and when we go for a walk – and this is not the result of increased cognitive activity. Solutions present themselves in these contexts only when we stop thinking about the problem and reduce cognitive activity.

To understand why, and to gain insight into how to grow more creative, it helps to look at the neuroscience of ‘aha! moments’. Flashes of insight are associated with a spike of highfrequency electrical activity in your brain, typically preceded by ‘alpha brainwaves’. Alpha brainwaves are associated with a calm, relaxed, open mind – not a mind engaged in active cognition. Research suggests that the more you think about the problem, the more you inhibit the answer. By contrast, having a bath or going for a walk may result in a shift in your brain state that facilitate ‘aha! moments’. Use brainstorming techniques when you need to generate lots of ideas or potential solutions. But when you need to make sense of it all, find the missing link, see the big picture and the interrelatedness of it all, or require a single answer; slow down your brainwaves to alpha. To do this, you need to stop working on the problem. You: Have a break and immerse yourself in something different. Go for a walk or do some light exercise. Learn how to meditate, as this can help shift your brainwaves into a more creative state. Your team: Create a culture that acknowledges and appreciates your creative brain. Don’t ask people to do their creative work at their desks, if you know their best ideas come when they are in a park, or late at night over a glass of wine. Encourage people to take more breaks, and ensure they have lunch breaks. Not only will this help them maintain their energy levels and cognitive performance throughout the day, it might also provide the conditions for their next innovation. step 5 action

Now implement. Creativity only ever became innovation through action. — Phil Dobson is founder of BrainWorkshops and author of upcoming The Brain Book. He turns insights from neuroscience and cognitive and behavioural psychology into applicable skills for the workplace Q3 2016 Dialogue

028-029_Dialogue_Q3_2016.indd 29

11/05/2016 12:11


focus

30

Are many minds really better than o Don’t confuse group wisdom with the madness of crowds

writing

Paul Gibbons illustration

David Humphries

“All of us is smarter than one of us” is a nicesounding aphorism. It is the sort of platitude that gets thousands of retweets and shares, while making the proclaimer sound like a team player: immensely humble, and up-to-date with their management reading. But pithy feelgood phrases such as this get in the way of real management learning and insight, and can actually impede the development of group wisdom in teams and organizations. The phrase is not unarguably true. It is wrong as often as it is right, and falls under a branch of management thinking that might be called ‘pop leadership’ – a category that has bloomed as social media has forced ‘wisdom’ into smaller and smaller bites. Understanding when it is true (or false) that many minds are better than one, is an essential leadership capability. So how can a leader tell? Under what conditions do groups make better decisions than individual experts?

Mobs: masterminds or madmen?

In 1907, Francis Galton found that the mean of social group estimates could be more accurate than those of experts. The ‘mob’, it seemed, had more group wisdom than the pros. Since then, 100 years of research has suggested that this can be the case with many kinds of predictions, stock markets, political elections, and quiz shows. The idea that ‘all of us is smarter than one of us’, unlike many pop leadership intonations, does have some research grounding. Yet 70 years earlier, another publication, Extraordinary Popular Delusions and the Madness of Crowds, sounded a warning note. Its author, Charles Mackay, debunked the classic crowdfollies of the time – financial bubbles, forecasters, cults, religious wars, and witch hunts.

So are groups good or bad at making calls? Ideally, in business, our different perspectives, world views, information, and expertise lead to some kind of convergence – a group wisdom. Those perspectives are often brought together in a business meeting – of which the average manager attends 30 each week. Managers hope that group wisdom will emerge from deliberations; indeed we rely on the effectiveness of meeting-based decision making, both in business, and in public policy. Yet those same managers claim that 40-50% of their meetings produce no value.

Meeting doom

We have all been on work teams that have made terrible – not just suboptimal – decisions. It is common to hear of meetings where those poor decisions were the product of tortured hours of conversation. Businesses the world over put in significant resources (i.e. time) only to arrive at counterproductive resolutions. Thus, billions of dollars a year are wasted on meetings that trigger terrible decisions. What is going wrong? It might just be that we get on too well. In the 1960s, Yale psychologist Irving Janis coined the term ‘groupthink’: “The more amiability and esprit de corps there is among the members of a policy-making in-group, the greater the danger that independent critical thinking will be replaced by groupthink…” The phenomenon of ‘groupthink’ suggests that critical discussion can be suppressed in groups because of loyalty, conflict aversion, or other dysfunctions. Yet human beings enjoy such camaraderie: we want our work teams to be collegial. However, four powerful demons common to groups weaken their decisionmaking power…

Dialogue Q3 2016

030-033_Dialogue_Q3_2016.indd 30

11/05/2016 12:13


focus

31

n one?

Q3 2016 Dialogue

030-033_Dialogue_Q3_2016.indd 31

11/05/2016 12:13


focus

32

Businesses spend billions of dollars on meetings that trigger terrible decisions

group demons

The cock Bad decisions by a team are exacerbated by the overconfidence effect, a cognitive bias that rears its head because consensus may produce more confidence in decisions – without necessarily improving decision quality. Here, again, is a double-edged sword; we want consensus and confidence, yet those can be the enemies of accuracy. The lion The business world is replete with examples of charismatic or domineering leaders who trample dissent. Were power and wisdom correlated, group decisions swayed by the most powerful would not be problematic. Yet we know hubris intoxicates the powerful, and under stressful circumstances wisdom and power may be inversely related. The hyena Dissent and debate produce better decisions, but conflict and poor group functioning mean debates are poorly conducted and produce suboptimal outcomes. Leaders are not typically trained in the arts of facilitation. Facilitation skills are more typically the province of counsellors, mediators, and organization development consultants. Leaders require the humility to hear – and retain – such advice. The sheep There is a moral case for team diversity, but also an efficiency case. Groups that lack diversity (not just visible diversity, but diversity of style, and perspective) make worse decisions. I have worked with groups composed of senior, well-educated, middle-aged, affluent, single-raceand-nationality men who consider their team to be diverse!

To exorcise the demons, we need balance. Too much amiability can lead to groupthink, but too little leads to hostile environments. Too much diversity, and overly broad participation, can lead to cumbersome decision-making processes; too little reduces creativity and effectiveness. Consensus and confidence in decisions is key, but groups must avoid self-delusion, and not confuse confidence with competence.

Group wisdom and the role of the leader

“A feast to which many contribute is better than a dinner provided out of a single purse.” – Aristotle Although there are inherent weaknesses in team decision making, good leaders can overcome them, and embrace the powerful wisdom of crowds that Galton once identified. Understanding the truths below is a big step on the way to creating a ‘group wisdom mindset’ – the realization that groups are often wiser, tempered with awareness of factors that suggest when they are not. group truths

Influence can be ruinous. Models of leadership that we inherit from the media show strong-willed charismatic leaders (think Patton and A Few Good Men, or more recently, Jobs and Selma). While leadership, as taught by boutiques and business schools, is more nuanced, leaders’ effectiveness at influencing remains at its core. In fact, leaders need to temper their own influence. Because of their position, their views will be given more weight anyway – and by holding back, they may permit ideas and perspectives to surface that might otherwise have been suppressed by their charisma and power. This is not an easy task for people who have spent their entire lives being influential. Experts are often wrong. Beware experts when they make predictions. It is all too easy for groups to be swayed by self-sure experts, but research on expert predictions, conducted by Philip Tetlock, suggests that when an expert predicts something is an absolute certainty, it fails to happen 25% of the time, and when experts suggest there is zero chance of something happening, it happens roughly 15% of the time. One of the most interesting implications of a more volatile world, suggested by scholar Nassim

Dialogue Q3 2016

030-033_Dialogue_Q3_2016.indd 32

11/05/2016 12:13


focus

33

Leaders need to preserve the voice of the person everybody wants to strangle

Taleb, is that we need to create business portfolio strategies that are less sensitive to our forecasting ability – so-called non-predictive decision making. Diversity is abrasive. Group wisdom is a function of heterogeneity. In experiments on prediction, the greater the diversity of estimates, the more accurate their average tends to be. Yet nobody really likes dissent when they are trying to make progress, nor the oddball team member’s ideas when they are trying to converge. But leaders need to preserve the voice of the person everybody wants to strangle. Leaders know that quiet people have good ideas too – perhaps better ones because they spend more time thinking and less talking! Great leaders amplify those voices to give their perspectives equal voice, and proactively hire people who may challenge the group. Estimates are anchors. Where group decision making involves numbers, such as predicting the size of a market, the pricing of a product or the length of time to execute a project, the decision making is prey to a cognitive bias called the anchoring effect. An initial proposal is offered, but once that credible estimate is lodged in decision makers’ minds, subsequent estimates tend to converge upon that ‘anchor’ (estimate). Were the first guess always the best guess, this would not be a problem, but frequently the first guess is way off reality. One remedy for this is that private reflection should precede public discussion. This is the opposite of what was taught 20 years ago – and what still happens frequently in companies – where group ‘brainstorming’ was seen as the best way to achieve creativity and divergent perspectives. Tech is making us lazy. When was the last time you tried to drive somewhere new without GPS? I seriously wonder how I used to get around before Google Maps. We have lost the ability to find things by ourselves and have become intellectually lazy. A similar phenomenon is happening in business. Increasingly, business decisions are supported by analytics. Analytics are highly algorithm dependent, vulnerable to sampling errors, and to errors in initial assumptions – ‘garbage in, garbage out’. As artificial intelligence grows stronger, senior leaders will have to retain the critical faculties they stand to lose, and have to know enough about what is ‘under the model’s hood’ to know when it might be wrong.

Voting is used badly. Leaders have considerable say over the process by which groups make decisions, more so even than they have on the content of the decision. Development of this faculty, too, is under-represented in typical leadership education. Voting is a feature of group decision making but is very poorly used. Premature voting is almost always an error, because it forces groups to choose between two or more options when, in some cases, a blended solution is best. When voting is used, it should not be the end of the decision-making process but, rather, just a waypoint. First, the majority may be wrong, and there is an opportunity for them to ask themselves what they might have missed – a ‘split decision’ may be a bad decision. Second, the minority (on a leadership team or board) must get behind the majority decision and that, too, presents an opportunity for post-voting dialogue.

Many of these guidelines require a balancing act. This balancing act is much more difficult to execute than dogmatic prescriptions which fit nicely into LinkedIn posts of the form “great leaders always ….”, or “six things great leaders do…” that get an astonishing – and undue – amount of attention. Research on individual and group decision making, cognitive biases and heuristics, naturalistic decision making – trusting your gut – is still lacking and is a relatively young area. We have recently learned many of the sources of error, but we are still far less good at producing concrete prescriptive advice on personal and group decision making. When seeking ‘group wisdom’, the leader’s primary role is to be the guardian of the decision-making process by being alert to the above sources of error. Groups can be powerful decision makers if managed properly. But they rarely are. — Paul Gibbons is an independent scholar, consultant, and the author of The Science of Successful Organizational Change. He is adjunct professor in business ethics at the University of Denver Further reading The Science of Successful Organizational Change, Paul Gibbons The Signal and the Noise, Nate Silver The Gut Delusion, Ben Walker bit.ly/gutdelusion Q3 2016 Dialogue

030-033_Dialogue_Q3_2016.indd 33

11/05/2016 12:13


interview

34

The master of systemization Multibillionaire president of Dalian Wanda, Wang Jianlin, believes systems manage companies more effectively than people, and has advice for British businesses on dealing with Chinese counterparts

writing

Ben Walker photography

Ming Tang-Evans

A story about a bowl of rice exemplifies Wang Jianlin’s deep interest in systems. As a 15-yearold on national military service, he marched 20 miles a day through knee-deep snow. Meals were tightly rationed. But Wang’s squad leader told him the secret of never going hungry. “When you go up to fill your bowl with rice, first fill it only halfway,” the squad leader told the young Wang. “No matter how slowly you eat, you will still finish your rice before the others, and can have seconds. Then fill your bowl to the brim and you won’t feel hungry. Never foolishly fill up your bowl at first serving, because when you go back for seconds there will be no rice left.” According Jianlin’s new book The Wanda Way, the secret system worked – Wang never went hungry again.

Systems in action

After 16 years in the People’s Liberation Army, Wang went into business, designing organizational mechanisms that would make him rich, propel Chinese business onto the world stage, and bring prosperity to his employees, whom he claims are the best paid in their sector in China. His passion for systemization was one of the major factors that led him into business. He became an entrepreneur, he says, “so management systems could manage companies instead of their being managed by people”. His answer comes as a shock because it is so unusual. Most Western company leaders rush to emphasize people power as the driving force of a successful organization, whether they really believe it or not. But Wang’s hero is Jack Welch, the heavily systemizing former boss of General Electric who created league tables of staff, fired the weak ones, and showered the best with stock options and other incentives. “He is not only the master of management – he has lots of

philosophies and ideas on management – but also highly respected by the business community in China,” says Wang. “Jack is the greatest person I admire.” Wang is president of Dalian Wanda, the behemoth that dominates the Chinese entertainment and property sectors and reaches right around the globe. Systemization is at the heart of managing it all. Wanda has a global information portal into which its various companies pour their management and financial information. Wanda’s acquisitions “have to integrate into our information management system so we can monitor those companies on a daily basis in terms of their income and in terms of their cost”, Wang says. “We began the system ten years ago – we have a very strong R&D centre – and now we have a very strong system.” Wanda is ranked among the top companies in the world by CIO magazine, Wang points out. “We are the only Chinese company listed.” The organization’s business information management has become ever more crucial as it has grown. It has been on a rampant acquisition drive; in the past five years it has picked up the US entertainment chain AMC and the British luxury yacht brand Sunseeker. It also has a 20% stake in the Spanish football club Atletico Madrid, although Wang assures Dialogue that this was a favour to the club’s owner Miguel Ángel Gil Marín, whom Wang counts as personal friend. “It wasn’t,” he says, “part of our strategy”. In those foreign businesses in which Wanda owns a majority share, the management structure and company cultures have, largely, been left untouched. But the acquired companies soon voluntarily climb aboard the Wanda data train, Wang says: “After a while, many find it’s more applicable and user-friendly to use our own software, so they apply our system,” he

Dialogue Q3 2016

034-037_Dialogue_Q3_2016.indd 34

11/05/2016 12:26


We should regard this period of time between the UK and China as a golden age

034-037_Dialogue_Q3_2016.indd 35

11/05/2016 12:26


interview

36

British companies are more conservative than US companies; they are not bold enough to do business with China

says. The systemization and homogenization has it its limits: “Many business owners would like to unify their companies into one system, but we respect the cultures of different companies. AMC has 100 years of history so we respect its own cultural background, we just incorporate its information into our information management system. With Sunseeker it’s a high-end luxury brand – we respect its tastes and cultural differences, so as to maintain its originality.”

International advice

Perhaps Wang was drawn to Sunseeker by his Anglophilia. He recently purchased an £80m house in west London. His son, Sicong, was educated at Winchester College and University College London. And Wang says the English are the “friendliest of all Westerners”. Yet he offers some home truths for them. “I really encourage UK companies to have their senior management

team and CEOs to be local people – and appoint only a chairman from [their Western] headquarters.” That key point grasped, they still have work to do. Wang appears to reject the received wisdom that Westerners in general, and particularly Anglophone ones, rush their Chinese counterparts into a deal, fail to build up trust and develop relationships, and are too keen to clinch new business without putting in the necessary groundwork. Instead, Wang warns that the British are too meek in their dealings with the Chinese. They should, he suggests, look across the Atlantic for lessons on how to deal with them. “Compared to US companies, UK companies are more conservative,” says Wang. “They are not spearing ahead, and they are not bold enough to do business with China.” It’s time for the Brits to shape up, he asserts, because the environment for trading with the Eastern superpower has never been better. At the

Dialogue Q3 2016

034-037_Dialogue_Q3_2016.indd 36

11/05/2016 12:26


interview

UK launch of The Wanda Way, barely a sentence was uttered that did not include the words ‘golden age’, and Wang rolls it out again. The proactivity of London’s politicians is bearing fruit, he says. “We should regard this period of time between the UK and China as the best time – a golden age,” he says. “Through all these interactions between our top political leaders, we have established a very good relationship between our two countries, and our two governments. It’s a very good time for us to do business in bilateral ways.” I wonder why it matters to him so much. China is already the world’s biggest national market, consumerism is booming there. It’s possible for Chinese magnates to lead one of the biggest companies in the world without ever leaving their home territory. As it turns out, Wang wants to get into the West so he can buy its companies’ IP and scale the product immediately for Chinese consumers. “The businesses we have acquired can be transplanted into Chinese markets,” he says. “After we have made those mergers and acquisitions we can quickly have the IP and transplant it into the Chinese market – we can leverage the IP we have acquired. Take the World Triathlon Corporation. After we acquired WTC, we soon had the IP of Ironman – and we now have two Ironman races in China.” Despite rumours about his interest in recently relegated English club Aston Villa, Wang claims to have little interest in investing further in football clubs. Instead, it’s the rights to show the games that excite him. “In sports assets, we are interested in companies that own the IP,” he says, “or the media rights or the marketing rights, instead of a football club [itself]”. I wonder whether he’d be interested in doing a deal with Sky Sports – the Rupert Murdochowned TV network that owns the rights to some Premier League games in the UK – or BT Sport, Sky’s archrival, which also broadcasts live matches in the same competition. Wang smiles. “We are very interested,” he says. Ever with his eye on goal, Wang will push and push to make his global dream come true. He puts much of his success down not to raw talent but to tenaciousness, arguing that perseverance is the key to success. He encountered barrier

37

after barrier when trying to establish Dalian Wanda as the global giant it is today, he says, but a refusal to give in got him there eventually. “The areas we have entered into are brand new – they are avant-garde in the Chinese market – shopping centres, sports, entertainment and tourism,” he says. “We are number one in these markets. We faced many challenges and difficult years. Had we not kept moving forward we may have failed many times. After these successful experiences, we came to the conclusion that perseverance is always the key to success.”Certainly, at 61, there is no let up for Wang personally. I ask him

I get to the office at 7am and get out of work at 8pm. I work more than 12 hours a day. It’s mostly seven days a week to describe a typical day – expecting to hear of a plural, networked existence that bounces between home, office, client and private jet. What I get is corporate austerity. “I get to the office at 7am and get out of work at 8pm,” he says. “ I work more than 12 hours a day. It’s mostly seven days a week.” Does he never tire? “I’m probably a workaholic!” This work ethic is regularly trotted out as a characteristic of ‘the Chinese’ but Wang isn’t keen on his countrymen being seen as a homogenous society. “China is a diversified country with many cultures,” he says. “It has 56 national groups – and we speak a thousand different dialects.” Does he have any advice about how that affects business in China? “With all this diversity, we believe that for small and medium-sized businesses it’s better to find local partners,” he says. Given his international outlook and fondness for the West, you’d think, if the deal is right, Wang would be keen to help.

Further reading The Wanda Way LID Publishing bit.ly/thewandaway Q3 2016 Dialogue

034-037_Dialogue_Q3_2016.indd 37

11/05/2016 12:26


038_Dialogue_Q3_2016.indd 38

11/05/2016 11:21


leadership

39

kate cooper

Toxic leadership undermines success, so recognize and eradicate it

Is toxicity polluting your organization? Kate Cooper is head of applied research and policy at the Institute of Leadership & Management

tyrannical and destructive to laissez-faire. It is thought that the term ‘toxic leadership’ Destructive behaviours include deception, was coined by author Marcia Whicker, undermining, intimidating, creating in 1996, when she contrasted the leaders scapegoats and pursuit of personal agendas. she termed ‘toxic’ with ‘trustworthy’ and Yet although many leaders resort to such ‘transitional’ leaders. Since then, the term styles or behaviours on occasion, this alone has been used increasingly to describe a does not make those leaders toxic. wide range of poor leadership practice Another way to understand toxic in the commercial, not-for-profit and leadership is to examine the detrimental political spheres. effects on followers – with research Toxic leadership is bad for indicating a negative effect on wellbeing organizations. Studies have linked and self-esteem. It is therefore in it with higher staff turnover, lower everyone’s interest to recognize when productivity, decreased job satisfaction, such practices are occurring –and stop reduced employee morale and motivation, them. Toxic leadership is only able to diminished organizational commitment flourish when an organizational climate and a much lower likelihood of individuals lets it, when followers are prevented going above or beyond the demands from challenging the of their contract. behaviour or, even The impact of toxic more damagingly, leadership on followers It is simplistic to begin to imitate it. So often comes to light assume we can much behaviour in life, almost immediately: produce a checklist of toxic and at work, is learned employees make through observation complaints, resignations traits, identify potentially and imitation. are proffered, absence toxic leaders and simply When toxic leaders due to stress becomes avoid employing them exhibit abusive and common. In the worst unscrupulous behaviour, cases, employees adapt unpredictability and their behaviour to fit inconsistency, their actions are observed in with the toxic leader’s regime, which by members of their teams – and a climate results in an expansion of the toxicity. So emerges where such toxicity is replicated. how do we ensure it doesn’t happen? Cultures that allow leaders to put selfOne solution has been to identify the interest above the needs of their teams and personality traits of a toxic leader. Such organizations, to behave without integrity an approach has the limitations of any and consistency in their treatment of the trait-based approach to understanding leadership, but is useful in helping to reveal people with whom they work, invite in toxic practices. So how we can ensure we a number of recurrent indicators. Traits avoid toxic leadership practices? A starting of the toxic leader include narcissism, point is to answer the following questions. arrogance, amorality, recklessness, insensitivity, a lack of integrity and Are our decisions honest, transparent and cowardice. But it is simplistic to assume in the best interests of the organization? we can produce a checklist of toxic Are we consistent, respectful and fair in traits, identify potentially toxic leaders at our dealings with all colleagues? interview and simply not employ them. Do we challenge actions that deviate With a wide range of behaviours from these standards? and personalities labelled ‘toxic’, a Answer yes to all three, and your single definition for toxic leadership organization might be in the clear. If any eludes us. The term is associated with of the answers is “no”, toxicity could be leadership styles that range from abusive, lurking within it already, or on its way. Q3 2016 Dialogue

039_Dialogue_Q3_2016.indd 39

11/05/2016 12:15


leadership

40

Dialogue Q3 2016

040-043_Dialogue_Q3_2016.indd 40

11/05/2016 12:17


leadership

41

Mindset: the big shift Coach a change in your people’s attitudes and behaviours and your organization will break away from rigid hierarchy and transform itself

writing

Professor Vlatka Hlupic illustration

George Myers

The big shift never arrives by chance. Moving individuals from a Level 3 (traditional, controlled) mindset to Level 4 (emergent, enthusiastic) (Dialogue Q1 2016, p36) can be brought about through practical training and coaching. In many cases, a crisis or a threat triggers the demand for change (see Fig 1, page 43). Or there may be a perceived need to improve engagement and performance across the board. Sometimes, the sheer slowness of decision making in a rigid hierarchy causes frustration to build until the case for distributed leadership becomes compelling. “You have to wait for the decision that the senior person makes,” one executive told me.

When leaders engage in empathic behaviour, they directly alter their own brain chemistry, and that of people around them

“Usually that senior person doesn’t have enough information to make the right decision. Usually they call you back, ask for more information … you almost end up making the decision yourself anyway.” Such testimonies are common. Appointed decision makers often have the power to make the decisions, but lack the tools to do so. Their subordinates commonly have the tools but lack the power. There are other scenarios where a big shift is likely. When a formal leader steps down, instead of anarchy ensuing, sensible people step in to encourage self-organizing teams of knowledge workers, with key individuals acting more as facilitators than traditional executives. Leaders who want to bring about the big shift can implement my Emergent Leadership Model, a 10-week Individual Shift Programme (see Fig 2, page 42). The initial self-assessment often reveals a dissonance between leaders’ self-impression and the actual situation. Q3 2016 Dialogue

040-043_Dialogue_Q3_2016.indd 41

11/05/2016 12:17


leadership

42

THE LEXICON OF LEADERSHIP How language tells a story about capability If a person is anchored at Level 3, the coach can use the language of Level 4 to initiate the shift of the mindset to Level 4. Often, it is about letting go of fear, so it can involve very personal work. Once the higher level is seen to be effective, the leader feels empowered rather than threatened by having ceded formal control, and enjoys the benefits of superior performance. A major implication of the research is the recognition that performance depends upon culture, which in turn is an aggregation of individuals and groups operating at certain levels. ‘Culture’ can come across as an abstract concept, but those who are living in a high-performing workplace experience it very tangibly. They use phrases such as, “there’s a real buzz about this team”. Fig 3 (right) shows typical phrases used when individuals are anchored at Levels 3 and 4, respectively.

Introspective dissonance

In the initial individual assessment of the programme using an online tool, leaders are asked, in detail, about how they actually operate, and how they perceive the organization and their colleagues. In the results of an individual assessment, someone may consider himself or herself to be mostly at Level 4, but the analysis reveals a person who is anchored at Level 3. This can be very disheartening for the individual. It may be the case that the person feels culturally constrained to operate in a command-and-control manner. He or she may have gained early business experience in an environment dominated by targets, bonuses and formal hierarchy for making most decisions. In my coaching experience, it is common for executives to consider

fig 2

fig 3 examples of thought and language pat terns at level 3 and level 4

Level 3

Level 4

I am in charge

We can achieve great results as a team

I need to be in control

We identify shared values and aspirations The more I delegate the more I get back

If they underperform, I may have to sack them I feel overworked I worry about burnout

I feel inspired I am fulfilled at work

I do not tolerate mistakes We try to learn from mistakes My leadership style is based on formal power

themselves to be more empowering than they really are, and to struggle, in practice, to cede control, despite having good intentions. But many are both willing and able to move up to a higher level of operation. The move up to Level 4 often means letting go, having the confidence to say to a suitably knowledgeable and empowered individual: “Go ahead with that course of action. You don’t have to check in with me for approval of every step.” The leader learns to say: “You design and implement that project, and I’ll help resource it.” Instead of: “Do it this way, to this set of established guidelines, and you get a bonus for meeting this deadline.” This shift in an individual’s mindset transforms the organizations in which they work. In the past, there was a tacit assumption, in both personal

I am seen as a role model

and organizational development, that the two are separate or only loosely connected. But this limiting belief understates the extent and depth of interdependence. Individuals proceed through levels of development – for example from Level 3 to 4 – both while, and by, influencing others. In turn, organizations exhibit similar levels of operation. Imagine that a leadership team with a controlling approach oversees a competent, but underperforming, company. Some key leaders gain insight into these weaknesses and they begin to empower themselves and their colleagues to move to a higher level. Once tangible benefits to the organization are experienced, the confidence grows to repeat and deepen the process, in a virtuous circle. This interdependence can be

mindset management

THE 10-WEEK INDIVIDUAL SHIFT PROGRAMME

1

leadership assessment

Research-based online diagnostic tool: participant receives an individual report

2

kick-start workshop

One-day workshop. Introduce key concepts, set goals, discuss group results

3

eight-week individual shift

Covering all 5 levels, focusing on ‘the big shift’ (levels 3 to 4)

Three oneto-one coaching sessions

Dialogue Q3 2016

040-043_Dialogue_Q3_2016.indd 42

11/05/2016 12:17


leadership

fig 1

43

change makers

FOUR TRIGGERS FOR A MINDSET SHIFT

1. Where there’s a will There is a collective understanding in the company that change is necessary

2. Tired of waiting Executives grow exasperated waiting for decisions from distant leaders

observed in neuroscience. When leaders engage in empathic behaviour, they directly alter their own brain chemistry, and that of people around them.

Confidence boost

When an empowering approach to leadership begins to take hold, the confidence soars, not only for the individual given such responsibility, but in his or her team members, and other teams within the organization that are inspired by the example. Trust, communication and exchange of ideas multiply. The benefits that begin to ripple through the organization include: accelerated project completion, greater innovation, increased organizational resilience and adaptivity, sustained growth, an enhanced ability to renew or reinvent the organization, plus better

Weekly module: Theory and examples: videos, articles, multimedia Individual practice Simulations with buddy Personal reflection journal Personal action plan

retention of knowledge workers. Organizational culture is not something separate or ‘out there’. It is continually being created by the people who make up the company: their values, conduct, self-awareness, ability to communicate and collaborate and their relationships. Another implication is that developing leaders may be a more effective, and more cost-effective, approach than managing individuals out of organizations and replacing them.

Implications

Given the immense power of a shift to Level 4 and above to improve business achievement across a range of objectives (more productivity and better service, more innovation, superior customer service and financial returns), and given the evidence base supporting these findings, one would expect the majority

4

leadership progression assessment

4. The queen is dead A leader leaves and selfmotivated employees step into her role

3. Opportunity from crisis A threat to the business sparks action

Research-based online diagnostic tool: participant receives a new individual report

of organizations to be at such levels – or to be close to and/or aspiring to achieve them. This is not the case, however. According to the book Tribal Leadership, more than twice as many employers are at Level 3 (49%) than at Level 4 (22%). The sheer gap between our knowledge and our achievement is huge, and previously understated. As a profession, we in management are not even close to being rigorously evidencebased, or the best that we can be. A quantum leap in performance is needed, and we now have the knowledge on the ‘how’ as well as the ‘what’, for individuals and their teams. — Professor Vlatka Hlupic is a management consultant, executive coach, award-winning international thought leader and author of The Management Shift

5

integration workshop

One-day workshop. Future personal steps, moving towards an organizational shift

Q3 2016 Dialogue

040-043_Dialogue_Q3_2016.indd 43

11/05/2016 12:17


leadership

44

The power in the artist’s toolkit Companies are using arts practice to influence mindsets and culture, and to equip their leaders with invaluable business tools, writes Martin Gent

Creativity requires passion and commitment. It brings to our awareness what was previously hidden and points to new life. The experience is one heightened consciousness: ecstasy Rollo May, The Courage to Create

risk, mess, emotional engagement, the unknown, embodiment and a deep connection to ideas. In our work with clients, we look to set up and embrace the environment and behaviours of rehearsal and studio spaces. These are the arenas in which we experiment with ideas. The arts are powerful transformative tools that play an important and ongoing practical and alchemical role for individuals, societies and organizations.

Tools of the trade

Arts practice with teams and individuals can have a huge impact, as it requires experiential working

– actively, physically, doing and making together. Using different arts tools and methodologies can change fundamentally the way we work together, problem solve and think strategically. Many of us are unused to, or not practised in, working in this way so this can help develop new, latent dormant tools and methodologies. It is important, when working creatively, that we do not ‘chunk it down’ into just a process… it kills it! Working in a creative way unlocks the conscious and unconscious on many different levels. But we can highlight five key tools and sensibilities that can help us in the current climate.

Shutterstock

You might wonder why organizations are working with the arts, strategically and with their people. The answer is that artistic practice has an effect on the mind, body and soul of individuals and organizations. It encourages people and businesses to be mentally and organizationally agile (see box, right), qualities that can – and must – be embedded and exploited long after the arts have left the building. Many people regard arts practice as a soft task, whose only application is to improve so-called ‘soft skills’. But the process of ‘making’ with the arts is a robust, hardcore investigation and development tool that involves

044-045_Dialogue_Q3_2016.indd 44

11/05/2016 12:19


leadership

tool 1

Creative confidence Working creativity requires us to teeter on the edge - to strike a balance between being in – and out of – control. In this leadership space, one might describe the dynamic as “holding on just enough to guide what’s happening without squeezing the life out of it” (The Choreographer’s Handbook – Jonathan Burrows, 2010). In an artistic environment, we look to develop our capacity and skills so that they become more fluid and flexible to new ideas and change, and to step forward when these ideas emerge, rather than retreating into our protective shells. tool 2

Unshackled thinking The creation of something new is rarely accomplished by the intellect, but by letting the mind play. To develop this sense of creative play, we must forget the endgame and lose our fear of being wrong, becoming less self-conscious. We must be prepared to trust the journey – attempt to bypass and distract the intellect. New ideas and notions will surface when unhindered by judgment and habit. Arts allow our intuition to have a more powerful role. tool 3

Shutterstock

Comfortable discomfort Complexity isn’t generally liked by the human mind. Our natural state is to crave simplicity and clarity. Yet complexity is not only a fact of business life, it can be a powerful catalyst for the generation of ideas. Arts practice enhances our ability to be open and comfortable with the risk and discomfort inherent in working creatively. This allows us to enjoy complexity, and to release our tendency to want to control everything. In

45

ARTS AND AGILITY Agility has become shorthand for describing the capacity of leaders and organizations to navigate, innovate and thrive in a complex and fast-changing world. Agility is easy to describe, but can be hard to achieve. It requires individuals and organizations to depart from the dominant hierarchy and control principles of traditional corporations and embrace the non-linear behaviour of complex, self-organizing systems, allowing for an open process of experimenting, learning and innovating. In a volatile, unpredictable and complex world, leaders and organizations must be responsive, fast moving and resilient in the face of new challenges and opportunities. To be agile is a physical, visceral and multi-sensorial ability. To work in a qualitative, agile way is to engage at a multi and meta level with your subject. For us to be sustainable and insightful, we need to develop and reengage our own innate, intuitive, creative selves.

this loosened mental state, we are more confident about letting things appear. We can allow what is there in the moment to inform us. It is here that we gain new insights. tool 4

Improvisation power Ad-hoc action does not necessarily come naturally to businesspeople, who mostly work in a heavily planned, corporate environments. Yet great things often happen almost by accident, as a reaction to an experience or random elements appearing, rather than a strategy designed to anticipate it. Arts practice encourages us to improvise, experiment, try out and observe. Improvisation in arts practice – be it physical, material or verbal – is a fundamental making tool, and can be exported successfully to business. The key is to become fully present and more comfortable with the new; to improvise with these new elements, to see them as drivers of innovation, new perspectives, and solutions. Embracing failure or accident inherent in the creative process and making, is often a tool of innovation,

helping reveal a new and unforeseen story. We must be sufficiently present and open to see this new scenario, and agile enough to respond. tool 5

Freedom permit When we talk about arts practice, we are talking about ‘devised’ work: original work that emerges from, and is generated by, a group of people collaborating. This way of making enables people to be physically and practically creative in the sharing and shaping of original work, new ideas and new solutions. Devised working encourages freedom for all those involved to discover, and supports intuition, imagination, spontaneity, thinking and a building of ideas. — Martin Gent is an artist, director, consultant and performer who works with businesses on developing performance and effecting organizational change. He is head of solution centre, Agile Business at Better Business, an international boutique consulting firm dedicated to next generation business. He works on many art projects in the UK and internationally and lectures at a number of universities and colleges

The creation of something new is rarely accomplished by the intellect, but by letting the mind play

Q3 2016 Dialogue

044-045_Dialogue_Q3_2016.indd 45

11/05/2016 12:19


TY

PA

EC

RY

OM

ST

CIL

LIN

FINANCE LEADERS

SUBJECT MATTER EXPERTS

Executive Compensation Surveys

TW

PEE

NE

RS

UN O C R SO

ON

RS

DVI

NE

T

ED A T S U R

RT

CFO Breakfast Roundtables

Growth Accelerator Initiative

MU

DU

NI

IN

IndustryShare Groups

OR KIN

Private Capital Advisory Board

G

CFO Sentiment & Planning Study

7KH&)2$OOLDQFHLVDQH[FOXVLYHFRPPXQLW\ZKHUHÆ“QDQFHOHDGHUVFDQDFFHVVWKH SRZHURIWKHLUSHHUVLQDVDIHHQYLURQPHQWWKDWIRVWHUVGLVFXVVLRQGHEDWHDQG GLVVHFWLRQRIWKHNH\LVVXHVDQGRSSRUWXQLWLHVNHHSLQJWKHPXSDWQLJKWLQRUGHUWR LQFUHDVHWKHFRQÆ“GHQFHLQWKHLUGHFLVLRQPDNLQJ

Become a Member Today! thecfoalliance.org

046_Dialogue_Q3_2016.indd 46

11/05/2016 13:23


innovation

47

chris floyd

There’s a knack to finding people to meet your digital challenge

Getting Big Data talent won’t be easy Chris Floyd is a Rolls Royce leadership educator

agree to a high acquisition price, based The ability to collect and interpret data has on a multiple of potential future sales, is become critical. The retail and banking challenging, particularly for a loss-making sectors have been addressing this software startup with uncertain prospects. challenge for years, and it is a growing There is a further complication in that priority for consumer and industrial software tech companies are often at such products businesses. an early stage that it is not clear in which The strategic challenge is broadly the market the technology will deliver most same regardless of sector: data is becoming value. One aerospace company invested essential to future success, and there is in analytical software for predictive a real risk of disintermediation – with maintenance, only to find that the biggest corporations ending up as commodity market for it was in the healthcare sector. suppliers to the big software and data Despite these challenges, it is vital that businesses, such as Alphabet and IBM. multinationals take action, as they need to Whoever controls the data controls build the software capability to collect and the industry. interpret their own data. The obvious way forward is for Before buying software companies, established multinational corporations to arm yourself with information. Build an acquire software capability for themselves. internal team of experts, But this is not easy, as and hire managers many are finding out. Data is essential to who have experienced The first challenge is both startup and that most multinationals success: control the multinational cultures simply don’t know data, control the industry and can act as a bridge how to manage small, between the two. This high-technology team can help you through the interim step companies. Large global corporations are of buying in software and support services, structured, bureaucratic and well-ordered, and also help you adjust your approach to with explicit and implicit hierarchies plus increase the chance of success. well-managed investment allocation and Don’t rush in too early. It is tempting financial reporting processes. to buy very early-stage companies, as they Small, fast-growing software startups are comparatively cheap and provide firstare the complete opposite. Software mover advantage. All the evidence suggests engineers are passionate about their it is better for large corporations to bide software, rather than the company they their time, and that post-acquisition work for or the markets they serve. They integration is more successful where the expect to be treated differently, provided acquired business already has structure, with a flexible working environment and sales and profits. given fast-rising stock options. Alternatively, with board and This does not fit with the structured and shareholder support, you could take a more bureaucratic way in which multinationals aggressive stance, investing heavily to buy work, so it is not surprising that the key companies and transform the business. For talent often walks out of the door shortly example, in the 1990s, IBM succeeded in after an acquisition, leaving the parent migrating from hardware to software. company owning a hollow shell of a With GE Digital, GE appears to be doing business with limited value. the same. The second challenge comes from For most, the best approach is to build the multinationals’ shareholders, who internal competence gradually and then are usually more focused on shortacquire capability. Given this is a slow term performance than on longer-term process, you had better make a start now. investment. Persuading shareholders to Q3 2016 Dialogue

047_Dialogue_Q3_2016.indd 47

11/05/2016 12:21


innovation

48

The secret Indian recipe for brilliant minds

It’s the metric that I prize the most. India tops the world on “countries that love to read”. The average Indian reads 10 hours and 42 minutes a week, a staggering 300% more than the typical Korean, who manages just three hours. The US and UK don’t even feature in the top 20. Indians’ thunderous passion for reading is one of the many reasons I am proud to be Indian. More importantly, it is the reason why one of our greatest exports is our people. Indian academic prowess isn’t limited to the subcontinent. The US’s annual Scripps National Spelling Bee is for children, but that doesn’t stop it being a big deal. The event carries a $37,500 prize and its finals are screened

on sports network ESPN. During my 15 years living in the US, it seemed as if an Indian-American won the Bee every year. It seemed that way because that is pretty much what happened. An Indian-American has won the past eight annual contests. Of the past 16 contests, an entrant from another ethnic group won on just four occasions. Indian-

Students survive on an average four hours of sleep a night and the college infrastructure is basic. It’s like a survival course

American dominance of this hotly contested children’s event is almost total. Yet Indian-Americans account for less than 1% of the US population. So why do Indian kids perform so well? It’s not genetics. It’s because Indian parents prioritize education and invest more time with their children from an early age. These contests provide their children with an opportunity to shine in front of an audience at a young age and it builds confidence. Children with access to tablets question why learning spelling is of any value when spellchecks are readily available. But Indian parents push their kids to achieve literacy by the old method, by exploring the origin of

Shutterstock

The South Asian giant is a global hotbed of technical talent, writes Nikhil Raval

Dialogue Q3 2016

048-049_Dialogue_Q3_2016.indd 48

11/05/2016 12:22


innovation

words, which builds roots of hard work and perseverance. Much of this success is attributed to their first-generation immigrant parents, who see scholarship and endeavour as key tenets of their Indian culture and heritage.

India’s technical edge

India’s new Prime Minister Narendra Modi has visited 25 countries in his first year in the job. Expectations of the new premier are high, with initiatives such as Make in India, Clean India, Digital India, and Skill India being launched by the government. But Modi is confident. He says that India offers three distinct advantages to the world: the three ds of democracy, demand and demographics (see graphic, below). India is a young country, and close to 35% of its billion-plus population is younger than 35. This means the pool vying for a college education is very large. Indian Institutes of Technology (IITs) are treasured houses of engineering; and Indian Institutes of Management (IIMs) represent the sacred Mecca for business education. With such a large eligible population for technical and business education (estimated at between 300,000 to 500,000 young people a year), the competition is intense. Consider this statistic. The IITs accept students through the JEE (Joint Entrance Exam) and IIMs have their own Common Admission Test (CAT). Both of these exams are significantly tougher than both GRE and GMAT, the

m

cr

de

ac

y

I N D I A’ S G O L D E N TRIANGLE

Shutterstock

de

d

m

o

an demographics

internationally accepted tests for such education. The class size of coveted IIMs is about 250 and roughly 250,000 apply, giving applicants a one in a thousand chance of entry. The average CAT percentile score of students who become eligible is 99%. These levels are significantly tougher than Harvard or any of the Ivy League universities. Getting into these schools is one thing but coming out the other end is another. The education in the two years is character building to say the least. Students survive on an average four hours of sleep a night and the college infrastructure is basic. In some sense, it’s like a survival course. When industrialist Narayana Murthy was asked recently what the fallback would be if his son Rohan failed to get into an IIT, he replied that if Rohan failed to make it, he could always go to Harvard or MIT! The list of alumni from India’s leading institutions is long, impressive and diverse. IITs have provided notable leaders in the technology industry. Names include: Vinod Dham, founder of Intel’s Pentium chip, Satya Nadella, chief executive of Microsoft, Sundar Pichai, global chief executive of Google, Nitin Nohria, Dean of Harvard, Vikram Pandit ex-chief executive of Citi Group, Harish Manwani, chief operating officer of Unilever and Indra Nooyi, chief executive of Pepsi. Nooyi completed her education in IIM and then did stints in J&J and Booz Allen, before joining Pepsi. Fortune magazine now ranks her the second-most powerful woman in the world. What do these leaders have in common? They cite their tough education, grit and determination as the key ingredients to their success. And the talent is coming back. In the 1990s, India saw a brain drain with talent going out, but with bursting of the dot.com bubble, global financial crisis, and increased opportunities in India, there has been a huge reverse. Many successful Indian captains of industry have returned to “give back” to the motherland, in many different forms – mentoring, joining political corridors to reform change, becoming board members in Indian multinationals, helping a good cause at a NGO, or simply providing reforms in education.

49

the story of education in india

In the oldest scriptures, we find ‘Gurukul’. Guru (teacher) and Kul (school) was a type of residential school, where students lived as equals, irrespective of their social standing. After studies, the pupils would offer dakshina (fees) to the guru as a gesture of acknowledgement, respect and thanks. But the origins of modern Indian education began when the British ruled India. East India Company officials wanted a skilled workforce. Since English was increasingly prevalent, petitions were sent to the British Parliament in support of establishing and adequately funding university education in India, which resulted in the Education Dispatch of July 1854. The British established teachertraining schools in each province with universities modelled on the University of London. After gaining independence, India’s first education minister recommended a strong central government and a uniform education system. The Indian government did, and does, place great importance on education, and all children – especially the underprivileged – are eligible for free education from age six to sixteen. Students decide on a stream of specialization before going to college. Until the 1970s, career choices were primarily medicine, engineering or chartered accountancy. This ensured a constant pipeline of highly educated professionals. Prime Minister Nehru created the All India Institute of Medical (AIIM) for medical research. The Indian Institutes of Technology (IITs) were created to build engineering talent for the manufacturing sector and in the 1980s and 1990s we saw the first appearance of management institutes to train the managers who would run the Indian and multinational firms in the country. Q3 2016 Dialogue

048-049_Dialogue_Q3_2016.indd 49

11/05/2016 12:22


innovation

Shutterstock

50

Dialogue Q3 2016

050-053_Dialogue_Q3_2016.indd 50

11/05/2016 12:24


innovation

51

What’s in a wine store? The way vintners sell their product tells a great truth about companies’ failure to think like consumers, writes Thomas Wedell-Wedellsborg

When I give talks to companies, I often pose the following problem to the audience: You have been invited to dinner by your boss and, right before you head out, she sends you a text: “Could you bring the wine? We’re having steak.” You don’t know anything about wine, but you do know your boss is a huge wine snob, to the point where she considers people terribly uncultured if they cannot at least pick a good bottle for dinner. Sensing it would be best to hide your ignorance, you rush into a wine store. You only have a few minutes to make the purchase. What do you do to make sure you pick a good bottle? My audiences tend to offer a variety of strategies: Check online for recommendations Buy an expensive bottle Hope the sales assistant is free and can help you Go for a French wine, it’s a safer bet Call a friend for advice Pick one with a fancy-looking castle on the label Or, hey, just show up with a good Scotch instead and hope for the best…

The real point of the exercise, however, is to highlight something that people, curiously enough, seem to take for granted: buying wine is difficult. The vast majority of people don’t know much about wine – and yet, the vast majority of wine stores are designed in a way that does very little to help non-experts make a quick, informed choice. It is quite remarkable, really. There is an entire industry that is locked into one way of selling its products – a way, notably, that does not solve a basic problem the majority of its consumers share.

Dishwashers from hell

I mention wine stores because they provide a vivid illustration of a much larger phenomenon that I have seen in industry after industry. When companies look for opportunities to innovate, they tend to look mostly at new technology: “What can we use social media for?” “How about 3D printing?” And so on. This is what you call solution- or technology-driven innovation. At the same time, as in the wine store example, they can seem surprisingly blind even to the most basic pain points their customers face. Sometimes, this blindness – call it a lack of customer empathy – is not too costly. Wine stores might miss out on some sales, and they often waste your time, but nobody seems to get too aggravated by that. We have somehow grown used to the fact that wine stores are confusing, impenetrable, and politely condescending. In other cases, though, the lack of customer empathy can have a more corrosive effect on your business. Consider the following observation by Dave Allen, founder of the consultancy BrandPie. Allen points out that some Siemens dishwashers are designed so that when the dishes are done, the dishwasher beeps intermittently until you empty it. This, surely, was a well-intentioned decision made by Siemens’ product development team. But what Siemens seems to have overlooked is the fact that many people put on the dishwasher right before they go to bed – turning the function into a pretty annoying and uncalled-for alarm clock. To make it worse, the beeping function is notoriously tricky to disable. Given that people keep kitchen appliances for years, you have to wonder how many consumers are, right now, being trained by their dishwasher to feel a slow-burning resentment towards Siemens. And Siemens is not the only company guilty of this Q3 2016 Dialogue

050-053_Dialogue_Q3_2016.indd 51

11/05/2016 12:24


innovation

52

error. Which brings an unpleasant question to mind: do any of your company’s products have the same effect on your customers? What is your lack of customer empathy costing you? Because there is no reason to believe your company is not making mistakes of a similar calibre, perhaps without knowing it.

How to reap the empathy dividend

The good news is that, if you can make your company better at spotting these basic consumer pain points, not only can you prevent outcomes such as the dishwasher from hell, but also create better results – and sometimes drastically so. Below, I offer three counterintuitive practices, uncovered through my research, that could help you achieve a better hit-rate with your innovation projects.

Seek problems, not solutions As mentioned, when searching for new ideas, people have tendency to look to new technology, asking how they can apply it to their business. They also tend to look to the future, asking “what will our consumers want in three years?” While those are valid areas to look at, they are also risky: the future is notoriously difficult to predict, and new technology is, by its nature, a dicey area in which to dabble. Too often,

At Bottlerocket, the shop’s layout supports customers to make a quick, informed wine choice (above and opposite)

companies have an idea, build the product or service, and then realize that nobody cares. A better approach is to take a problemdriven approach to innovation. In short: start looking for problems and pain points that your consumers are facing, and that have not been adequately addressed by the offerings in the market. By starting your innovation process with a really solid, validated problem, you drastically increase the chances that your new product or service will not miss the mark. At the same time, you may discover that your solution can be built with existing technology that you have already mastered, making it even less risky and costly to pursue.

Look for unstated problems To identify customer problems, many companies rely on actions such as focus groups and incoming customer complaints. These methods are relatively cheap to deploy, and they will, at times, uncover problems that are relevant to product development. However, they also suffer from a significant weakness: they assume that consumers have themselves spotted the problem and are capable of describing it. As the example of the wine shop demonstrates, it’s not only companies that can be blind to problems. There are many problems out there to which customers

Dialogue Q3 2016

050-053_Dialogue_Q3_2016.indd 52

11/05/2016 12:24


innovation

are blind as well – problems that are entirely unstated, and won’t surface in an interview. More directly observational methods are required to uncover those. Consider the experience of Samsung’s European innovation team, about which I recently published a case study. When the team decided to take a look at Samsung’s camcorder market, it didn’t just rely on focus groups: members also conducted active field studies, involving small groups of users, equipping them with camcorders and following them around to see what happened. And there they found an unstated problem that Samsung hadn’t yet addressed: a majority of customers never edited their footage because it was too cumbersome to sort though the filmed material. Customers just assumed editing was a hassle, considering it a fact of life rather than a problem to be solved. Having spotted that pain point, Samsung’s team came up with a creative idea – a bookmarking button that tracks the key moments as you film them, making the editing job easier and even allowing the camera to auto-

It’s not only companies that can be blind to problems. There are many problems out there to which customers are blind as well edit footage. The addition of that function alone made Samsung’s camcorder department go from a negative to a positive bottom line. To come up with better ideas, use methods that let you discover the unstated problems.

Revisit ‘solved’ problems Unstated problems are not the only source of potential ideas. Another rich area to mine is problems that are well understood, but that the company believes have already been solved. Sometimes, such problems have not been solved as fully as the company likes to think and, at other times, changes in the customer environment have made the existing solution less useful than it was initially. This point was also illustrated by the work of Samsung’s innovation team. A few years ago, when you switched to a Samsung phone from a competing brand, Samsung had an app that would automatically transfer all your data and pictures from the old phone to the new one. This data transfer issue was considered a solved problem within Samsung’s Korean headquarters. But, sensing that there might be more to the story, its innovation team ran an experiment in which it paid a small group of consumers to switch to a new phone brand for a month, in return for a payment of UK £300 (US $427).

53

Through this, the team discovered that Samsung’s existing app was overly complicated to use. In fact, after trying to use the app, several of their test subjects grew so concerned about losing data or photos that they refused to partake in the experiment, opting out of the payment as well. Having spotted the problem, the team built a better app for data transfer that led to more than a million downloads in the first month post-launch, markedly boosting sales of Samsung’s phones. To find value-adding problems, remember to look at the things that are assumed to work well.

How to solve the wine problem

So, you can see how your company’s problemfinding abilities can lead to significant, and at times, relatively risk-free innovation, because your employees become better at understanding the real pain points of their customers. In my neighbourhood in New York City, there is a wine store called BottleRocket. The owner is a rare vintner indeed, in that he has clearly grasped the problem customers face. BottleRocket has the usual sea of shelves of bottles, catering to wine connoisseurs. But it also has a series of big stands with clearly marked signs labelled ‘Fish’, ‘Meat’, ‘Poultry’, ‘Takeout’ and so on. Under each sign, there are three or four bottles to consider, giving customers the flexibility to make their own selection, while allowing them to make a more informed choice. The shop even has stands with signs for more contextual situations, such as ‘Gifts’, ‘Third Date’ and – thank heavens – a selection of bottles for ‘The Boss’. There is hope. — Thomas Wedell-Wedellsborg is an innovation expert, keynote speaker and author of Innovation as Usual. He has been named one of the world’s 20 most influential international thinkers by HR magazine. Follow him on @thomaswedell and his website www.wedellsblog.com

Q3 2016 Dialogue

050-053_Dialogue_Q3_2016.indd 53

11/05/2016 12:24


The sharpest writing worldwide on global management and leadership Dialogue is a quarterly business journal for senior managers and leaders across the world, covering global business issues. It is distributed in print and digital formats. We can offer advertising, sponsorship and collaboration opportunities on special projects designed for your brand. Contact us for more information Niki Mullin, Business Development Manager | niki.mullin@lidpublishing.com |

+44 (0) 20 7112 8861

www.dialoguereview.com

Drucker_sup_v2.indd 23 054_Dialogue_Q3_2016.indd 54

11:39 11/05/2016 12:44


finance

55

phil young

They were once denounced as bean counters. But fast food menus show how finance bosses now play a key role in company strategy

Back the hot dogs, hold the beans Phil Young PhD is an MBA professor and corporate education consultant and instructor

providing breakfast ingredients for an When a line manager in a business thinks all-day service in McDonald’s 14,000 US about finance, it is usually all about restaurants, where the all-day breakfast budgets, cost-cutting, and operational rollout has begun. Second, consider efficiency. Indeed, in my experience, the ‘finance function’ for the operations person the costs of training managers and workers to handle this menu shift and is more akin to cost accounting. Hence, the the price negotiations with suppliers. finance executive on any operations team Third, McDonald’s does not offer the is often stereotyped as the person whose same number of breakfast offerings all main job it is to police the purse strings – day in every restaurant. For example, the so-called “bean counter”. But finance Egg McMuffins will not be offered in the is not just about cutting costs or saving southern states because the firm decided money. It is also about spending money to that it was difficult to serve both what help the company grow. In fact, one of my Americans call biscuits (known as savoury favourite sayings is: “You can tell what a scones in the UK) and McMuffins all day. company’s growth strategy is by where it Egg McMuffins are puts its money.” to be served only in Sure, the role of the northern states, finance in helping the One of my favourite while biscuits will be company grow is most sayings is: “You can served in the South, prominent in merger and tell what a company’s where McDonald’s has acquisition activities. Its growth strategy is by identified a preference cooking up of leveraged for this form of carbs. buy-out schemes or where it puts its money” Fourth, McDonald’s stock and cash deals is now testing the use worth billions always of touch-sensitive screens in front of makes the headlines. But finance also plays its restaurants to help speed customers an important, if less public, role in efforts through the ordering process. Mobile apps to grow the company ‘organically’ – on its for ordering ahead of time are also on the own or without buying or merging with way. All this costs money, and I have to another company. assume finance was part of the decision to Imagine some recent behind-theinvest heavily in IT. scenes activities involving the finance What is McDonald’s arch-rival Burger function of two competing fast-food King doing to energize its top line? Rather giants – McDonald’s and Burger King. than modifying its existing menu, it has Competition and changing tastes and decided to add a new offering: hot dogs. As preferences have put a serious dampener with McDonald’s, Burger King’s strategic on the duo’s top-line growth. But after marketing move began in the US. In doing several years of declining same-store sales, so, it hopes to capture a share of a market McDonald’s finally reversed the downward in which around 20 billion hot dogs are trend. In the third quarter of 2015 it grew eaten annually – more than 60 hot dogs its same-store sales by 4%. Its sales in the per person a year. Imagine the financial fourth quarter of the same year grew 5%. analysis that went into this business case. The switch to an all-day breakfast menu Consider all the work the company’s and a simplification of its offerings were finance, planning and analysis professionals cited as the two main drivers of must do to monitor and control this rollout. this turnaround. Conclusion: finance helps companies grow, So where does the finance function not just to cut costs. come in? First, imagine the cost of Q3 2016 Dialogue

055_Dialogue_Q3_2016.indd 55

11/05/2016 12:28


finance

56

Why city mayors could rule the world A new breed of self-financing metropolitan mayoralties are the future of decentralized government, writes Professor Alan Harding

The age of dominant nation states is on the wane. Economists, social theorists and political scientists have advanced different claims as to why that might be the case. But they largely unite around a central premise: that the nation state now tends, on one hand, to be too small to resolve mega-challenges that are no longer containable within increasingly porous national boundaries. On the other hand, it is too large to deal effectively with the complexities of subnational diversity and the need for sensitive responses to key economic, social and environmental challenges. It once seemed that the main subnational challenge to nation-centric forms of governance would come from territories comprising distinctive cultural or linguistic groups. Yet in recent years the focus has been on cities.

The resurgence of interest in cities is born of the fact that we now live in a predominantly urbanized world in which life chances are dominated by what the cities we live and work in can offer. Moreover, the modern information-driven economy favours dense, diverse, interconnected cities far more than preceding phases of development did.

Globally networked cities are places where things get done, rather than just talked about

Globally networked cities

The rise of cities begs some significant questions about how they, and the broader territories they influence, are run. When books with titles such as If Mayors Ruled the World start appearing, it is clear that the urban challenge to nation-centric forms of governance is growing. Benjamin Barber’s book offers a fascinating glimpse into a potential future world in which pragmatic, diverse, globally networked cities – the places where things get done, rather than talked about – jostle for influence with the panoply of nationally centralized forms of governance that have done very little to resolve the

Dialogue Q3 2016

056-057_Dialogue_Q3_2016.indd 56

11/05/2016 12:31


finance

mega-challenges that affect us all. In the UK, serious attempts to devolve powers only really began at the turn of the current century and have focused, until very recently, on the non-English countries in the union (Scotland, Wales, Northern Ireland). These three countries account for only 16% of the UK’s total population.

Devolution for city-regions

But next year, tentative moves towards devolution for England’s urban areas will reach a new stage. A handful of northern English city-regions, including Greater Manchester (see graphic, right), will catch up with London and elect mayors to govern their metropolitan area for the first time in their histories. Greater Manchester’s experience over the past 30 years demonstrates that continuity of pragmatic, determined urban leadership, careful attention to a vision for the future that binds local political and business leaders together, and the bottom-up development of institutional capacity to deliver programmes of change across the cityregion can have purchase over the way in which both international investors and the national political establishment view and engage with the city. New metro mayors represent another incremental stage in a journey whose end cannot yet be foreseen and there are some knotty problems

to be overcome, not least in terms of fiscal reform. Currently, city leaders throughout the UK are not even allowed to control the limited range of taxes that are collected from their citizens and businesses. National government, effectively, has a stranglehold over all income flows into the major city-regions whose performance is increasingly critical to national wealth and wellbeing. It is nervous about loosening the reigns. Paradoxically, though, the success of national plans to reduce the UK’s budget deficit depends upon places like Greater Manchester delivering ambitious programmes for growth and public service reform which increase income and reduce demand over the long term. The speed at which a new fiscal settlement for cities develops and provides stronger incentives for sustainable urban growth and experimentation will be critical. ‘When the Greater Manchester mayor helps rule the world’ may sound like a pipe dream just now. But if the city’s experiment in city-regional governance and autonomy can work in the traditionally centralist UK, Barber might just have a point. — Alan Harding is chief economic adviser to the Greater Manchester Combined Authority and a visiting Professor at the Manchester Institute for Innovation Research at the Alliance Business School. He writes here in a personal capacity

57

MANCHESTER M A Y O R A LT Y KEY POWERS metropolitan scope

Jurisdiction of Manchester’s entire metropolitan area of 2.7 million people rather than just the city proper’s population of 520,000 transport powers

A devolved and consolidated transport budget, including franchised bus services and oversight of rapid transit tram network Metrolink spatial planning

Includes the power to create a statutory spatial framework for Greater Manchester housing money

Control of a £300m housing investment fund

police commissioner

Will take on role of existing Greater Manchester police and crime commissioner

Shutterstock

Further powers To be agreed over time and included in future legislation

Q3 2016 Dialogue

056-057_Dialogue_Q3_2016.indd 57

11/05/2016 12:31


finance

58

How to take a chance the Drucker way The father of modern management, Peter Drucker, tells us what to do about risk, writes William A. Cohen

Risk in management is unavoidable. Some of Peter Drucker’s clients did not acknowledge this. They thought risk could be avoided and wanted Drucker to show them how. But instead, Drucker told them not only was risk unavoidable, it could be desirable. In fact, the assumption that risk is present is a basic element of any successful enterprise.

Change is inevitable, risk is necessary

Drucker saw that, in attempting to lower risk, managers and professionals of all types sometimes made assumptions that could lead to disaster. The most popular method of risk lowering is to assume either no change in the current situation or that a trend, whatever it is, will continue into the future. The fallacy of either can be seen almost daily as many stock market investors make one of these assumptions with poor results. Drucker understood that change is inevitable and he advised his clients to think the same way.

Picking the right risk is crucial

Drucker learned to analyse situations and emphasized the importance of taking the right risks, because taking the wrong ones can be disastrous. Drucker’s investigations led to the discovery of a critical factor in the process: while deciding on the right risk, one must establish controls over the actions involved in taking that Dialogue Q3 2016

058-061_Dialogue_Q3_2016.indd 58

11/05/2016 12:33


finance

59

Q3 2016 Dialogue

058-061_Dialogue_Q3_2016.indd 59

11/05/2016 12:33


finance

60

risk. If managers fail to do this, actions might be mismanaged and intended objectives not reached, even though the right risk has been taken. Selecting the best bet to make is useless if that bet is poorly executed.

The near impossibility of objectivity

From 1924-1932 a study of lighting conditions was carried out at the Hawthorne Works, a Western Electric factory near Chicago. One experiment involved examining the effect of better lighting on productivity. It sounds simple enough. The control was based on increasing the wattage of the light bulbs weekly and then noting the results in productivity. It was

Good work can be done on the wrong things. To complicate controls further, how do we know what are the right things? expected that productivity would increase as lighting improved week on week and, sure enough, it did. However, one week, some joker decreased lighting intensity instead of boosting it. Guess what? Productivity improved anyway. It was neither a miracle nor an error in measurement. In practice, workers had expected the lighting intensity to increase and this motivated them to work harder, more efficiently, and more productively. Today this is known today as the Hawthorne Effect. It demonstrates that the

novelty of being the subject of research, along with increased attention to measuring the results, can cause at least a temporary increase in productivity. Measuring people’s actions is unlike measuring physics. “Controls are not applied to a falling stone,” said Drucker, “but to a social situation with living, breathing, human beings who can and will be influenced by the controls themselves.”

How to focus on real results

It is relatively easy to measure effort or efficiency, but much more challenging to measure real results with a control. Drucker explained that it was of no value to have the most efficient engineering department if the department was designing the wrong products. Drucker also differentiated leadership from management, saying: “Management is doing things right; leadership is doing the right things.” Measuring efficiency is usually less difficult. For example, one can measure the number of times a leader recognizes subordinates for accomplishing good work. That’s considered a sign of good leadership. However ‘good work’ can be done on the wrong things, as well as the right ones. Maybe salespeople are doing a marvellous job of selling the wrong products. Is this ‘good work’? To complicate controls further, how do we know what are ‘the right things’? This is much harder to know when so many factors, and multiple human beings, are involved. Since leadership is an art, an observation, its value might well be in the eyes of the beholder.

THE CHARACTERISTICS OF RISK CONTROL Drucker found that all controls invariably have three basic characteristics:

1

Controls won’t be objective and they won’t be neutral

2

While controls need to focus on real results, real results aren’t always possible to control

3

Controls are needed for both measurable events and events that cannot be measured or cannot be managed without difficulty

Dialogue Q3 2016

058-061_Dialogue_Q3_2016.indd 60

11/05/2016 12:33


finance

61

risk control specifications

Economical

Meaningful

Appropriate

Congruent

Some results cannot be measured

Controls can be challenging because some events, relevant to organizational risk, simply are not measurable. We have already noted that nobody possesses facts about the future. We cannot know what may suddenly happen. For example, the ubiquitous slide rule, once carried by every engineer worthy of the name, disappeared almost overnight when the pocket electronic calculator hit the market in the early 1970s. Drucker investigated further and determined that all controls must satisfy certain specific specifications (see panel, above): They must be economical. The less effort required to gain control, the better.

They must be meaningful. In other words, they had to be intrinsically significant or symptoms of significant developments. They must be appropriate to the nature of what you are measuring. Absenteeism of a yearly average of ten days per employee sounds acceptable, but what if you have only two employees and one was never absent and the other recorded 20 absent days? Measurements must be congruent to the phenomenon measured. As a writer, I’m interested in book sales. I once read a bestselling book by a famous entrepreneur. He had bought a well-known company and promoted the company’s product frequently on television stating, “he liked the product so much, he bought the company”. His advertising promotions were great. However, when I read the book, I found it was, at best, fair. Yet it sold 2 million copies, surpassing many better books about entrepreneurship in sales, including Drucker’s Innovation and Entrepreneurship, which came out at about the same time (not to mention several that I had written, the best of which sold just under 100,000 copies). One day it was revealed that the author had spent almost $2m of his own money promoting his book. Book royalties are a lot lower than you might think, frequently around 15% of the net total received by the publisher - itself often only half of the retail price of the book. Since this entrepreneur was not the publisher, I estimated that he earned approximately $1m in royalties

Timely

Simple

Actionable

from his total book sales, which amounted to a personal loss of $1m. Of course, he may have been willing to pay this to have had a bestseller, just for bragging rights. But it demonstrates that, as a control measurement, book sales alone – the tool most frequently used to measure public demand for a particular book – is deeply flawed without other factors being noted and compared.

Control requirements 5, 6, and 7 are much easier to grasp, and more intuitive. Controls need to be timely. They are an expensive waste of time if the information received arrives too late to be of use. They need to be simple. As Drucker noted, complicated controls don’t work. They frequently cause confusion and lead to other errors. Finally, controls need to be orientated towards action. Controls are not created for academic interest. They are for implementing strategy once actions, which involve the right risks, have been chosen.

The final limitation

The final limiting factor for controls is the organization itself. An organization operates with rules, policies, rewards, punishments, incentives and resources, capital equipment and so forth, but its success comes from people and their daily, frequently unquantifiable, actions. The expressions of their actions, such as an increase in salary, may be quantifiable. However, their feelings, motivations, illnesses, drive, ambitions and the like are not. As an operational system, the organization cannot be quantified accurately.

What it all means

Risk is essential. The key to success is picking the right risks and then controlling these risks, taking into account the many factors that make controls so difficult to comprehend and use. But knowledge is power. Selecting the right risks, and monitoring the seven important aspects of the risk controls identified by Drucker, leads to effective risk management. One cannot do more, nor should the consultant consider doing less. — This article is adapted from Peter Drucker’s Consulting Principles, to be published by LID Publishing in 2016

Q3 2016 Dialogue

058-061_Dialogue_Q3_2016.indd 61

11/05/2016 12:33


BEYOND THE WRITTEN WORD AUTHORS WHO ARE EXPERTS

LID Speakers are proven leaders in current business thinking. Our experienced authors will help you create an engaging and thought-provoking event.

A speakers bureau that is backed up by the expertise of an established business book publisher.

062_Dialogue_Q3_2016.indd 62 LIDspeaker_AD_dialogue.indd 1

11/05/2016 13:27 27/07/2015 13:04


marketing

63

andy law

Don’t let the headline numbers lull you into a false sense of security, your customers could freeze you out at any time

Beware ‘unsubscribe’ Andy Law is executive chairman of Inition and an independent consultant to businesses on how to modernize and keep ahead

and services displace the old ones. It’s the apocryphal red button. One push Marketers might want to think how and… bang! You are gone. they can best vaccinate against capricious The ‘unsubscribe’ option empowers and promiscuous customers regularly your customers and renders you just one clicking that unsubscribe button. Hiding click away from being sent to oblivion. ‘unsubscribe’ will not be enough. By law, in the UK, every marketing Email messages are a blend of mail, email you send must give the recipient message and medium. They arrive through the ability to opt out of further emails. It’s your letterbox and they advertise and law elsewhere too, with differing levels of sell at the same time. They connect and enforcement. America’s 2003 CAN-SPAM communicate instantly, but they are rarely has been criticized for a lack of proper personable. The language of the internet is controls. But the Australian Spam Act of not a thoughtful one. Think of ‘error 404’ 2003 scored noteworthy hits, issuing fines which screams at you when you follow a of AUS$ 110,000 to Virgin Blue Airlines broken or dead link. Why not: “Sorry. This (2011), Tiger Airways Holdings (2012) and isn’t going anywhere. Why not check the Cellarmaster Wines (2013). link you are trying to use?” The unsubscribe option is invariably Marketers must make their messages hidden at the bottom of marketing emails, meaningful. They must although occasionally reflect what they know I notice it cunningly about the recipient: placed at the top – Marketers might either a bold nod to Assume your want to think how transparency or a clever customer is intelligent. they can best vaccinate way of disguising it. They are web savvy against capricious and Email marketing and know a lot about certainly had an you, your competitors promiscuous customers auspicious beginning. and marketplace. Talk Internet legend has confidently, but it that, in 1978, a certain Gary Thuerk of don’t belittle them with poorly Digital Equipment Corp sent out the first crafted storylines. mass email to some 400 potential clients Be relevant. Contextualize your via the Advanced Research Projects Agency messages. It’s easy to spot email Network. It resulted in $13 million of sales ‘carpet bombing’ campaigns. Invest in in DEC products. An industry was born! sophisticated automation for this, the tech The sector has grown rapidly, driven is available and inexpensive. by advanced technology, ballooning Be personal. Write to customers as if they internet capacity and a growing, hungry were sitting opposite you. Never before has online consumer base. On the surface, there been so much material to read. Never there’s little for marketers to worry about. before have we needed skilled, trained and Globally, unsubscribe rates are a fraction of experienced copywriters so badly. Poor 1%. Phew. No cause for alarm then. writing reflects on you. I’m not so sure. The unsubscribe button Pace yourself. Your messages should gives customers the ability to personalize connect with one another. Make their online experience. Customization communication seamless; inconsistency will grow as we become accustomed to the can devalue previous messaging. online tools available to us. The more data The ultimate aim for customer we receive and send, the more tailored our marketing is to get more customers; make cyber-lives will become. Signing in and out them stay with you longer; make it easy of companies and their offers will become for them to buy more from you; encourage second nature, particularly as our email them to introduce their friends; make boxes reach capacity and/or new products it impossible for them to leave. Q3 2016 Dialogue

063_Dialogue_Q3_2016.indd 63

11/05/2016 12:35


MARKETING

64

The power of visual thinking Go diagrammatical and reap the dividends, writes Kevin Duncan

Even expert consultants find it hard to express ideas and solve problems purely with words. Those whose job it is to convey messages quickly and simply – and that means most modern professionals – will usually find it easier to use diagrams. The diagram is a form of visual thinking. It can help distil analyses, hone marketing strategies and identify important points – vital tools of the successful marketer. Here are seven of the most popular and useful diagrams that can help marketers convey their views, express them pithily, and get to the point fast – which can mean the difference between winning new business and losing it.

THE MARKET MAP VARIABLE X HIGH

DESIRED FUTURE POSITION

COMPETITOR A

The Market Map

The Market Map (right) is a highly effective and flexible way of establishing clarity and strategic authority when looking at any market. Start by selecting two important factors in the market in question. For example, in the automotive market, these might be price and safety reputation. Plot two overlapping axes from high to low, always placing the high ends to the top and right. Place your company, and any competitors, on the grid. So, in this example, a car with a good safety reputation and a high price would appear top right. Use the results to identify any gaps in the market, or significant overlaps. Being out on your own could be a good thing (more distinctive) or a bad thing (what do the others know that you don’t?). If you are presenting to win a pitch, pointing out some current deficiencies and explaining how your proposals will improve matters (moving towards the top right) can be very powerful.

VARIABLE

VARIABLE Y HIGH

Y LOW

COMPETITOR B

C O M PA N Y POSITION NOW

COMPETITOR C

VARIABLE X LOW

Exercise Select a market or category to look at. Choose your first two variables. Place your company or brand, and competitors, on the grid. Repeat with different variables and new combinations. Examine the results, identifying where opportunities lie.

Dialogue Q3 2016

064-067_Dialogue_Q3_2016.indd 64

11/05/2016 12:38


MARKETING

65

THE BOW TIE

REDUCE

REVEAL

E X PA N D

The Whittling Wedge

The Bow Tie

Exercise Choose a presentation or story that needs explaining, ideally one with quite a few options or wide-ranging subject matter. Use the Whittling Wedge to start broad, and then reduce the number of options or topics.

Exercise Choose a strategy or rationale that requires explaining in a presentation. Use the Bow Tie as a template. Start broad, explain how options were reduced down, reveal the central theme, and then expand on how it could be applied in many contexts.

The Whittling Wedge (below) is perfect for telling a strategic story and narrowing down options. This allows the presenter to explain their workings, show that a lot was considered, but still end with a clear, preferably single, recommendation. Starting on the left, many options can be introduced, analysed, and then systematically rejected, using as much rationale and detail as is appropriate to the subject. By the middle of the wedge, we should be down to a maximum of three or four possibilities. These can be analysed more closely, or even recommended for detailed research. Finally, the presenter arrives on the right with a beautifully argued recommendation that has covered all considerations.

The Bow Tie (above) is a close relative of the Whittling Wedge. It is an extremely simple depiction of how to tell an effective strategic story. The line of argument flows from left to right. Starting broadly on the left, many wide options and possibilities are considered and discussed. After investigation and analysis, these are gradually ruled out and reduced down. When the reduction of options is complete, the central idea, thought or theme is revealed. After pausing for a moment to consider the quality of what has been revealed, the idea is expanded out again to explain all its possible applications. This is the ideal way to tell a strategic story.

THE WHITTLING WEDGE

MANY OPTIONS

FEWER OPTIONS

RECOMMENDATION

A diagram can help distil analyses and hone marketing strategies Q3 2016 Dialogue

064-067_Dialogue_Q3_2016.indd 65

11/05/2016 12:38


MARKETING

66

THE BRAVERY SCALE

THE BARRIERS TO PURCHASE AXIS

0

CONSERVATIVE

AVERAGE

BRAVE

BARRIER 2

BARRIER 1

10

BARRIER 3

NOT INTERESTED

The Bravery Scale

The Bravery Scale (above) is a good way of establishing how adventurous projects or proposals should be before a lot of time and effort is spent preparing them. The project leader or proposal writer asks three questions: 1 How adventurous is the company culture? 2 What standards are expected? 3 How brave should the targets be? A score out of ten is generated to see whether conservative (below 5), average (5-7), or brave (above 7) levels are desired. The scores can be blended to create one overall figure. For example, a conservative company asking for brave work may need to have its scale weighted downward to reflect its overall conservatism. The three questions can be varied to suit the nature of the work. When the work is reaching its conclusion, the scale helps to remind all present what level of bravery was requested in the first place, and provides a measure with which to compare. The scale is particularly useful to both sides in a service relationship such as a client and agency, where the bravery of work is frequently under discussion.

BARRIER 4

INTERESTED

By mapping the decision-making process diagrammatically, each barrier to purchase can be identified and isolated. A plan to knock down each one can then be devised. Exercise Choose a product and a potential customer type. Use the axis to plot all the reasons stopping someone from purchasing. If relevant, put the barriers to purchase in chronological order, or place the biggest or hardest ones first, to the far left. Then come up with a plan to knock down each barrier.

The Less Than Twelve Month Year

The Less Than Twelve Month Year is a diagram (below) that makes a philosophical point about activity, or the lack of it at certain times, in companies. On the surface, businesses are active for 12 months a year, but in truth there are plenty of periods during which they are not very productive, and this diagram helps work out when those times are likely to be. Businesses have different rhythms, but in this typical example the most productive –

THE LESS THAN TWELVE MONTH YEAR

Exercise Choose a client or proposal. Consider what questions would provide the most helpful guide. Ask the person or team receiving the proposal to answer them. Use the responses to inform colleagues who are working on the proposal of what is expected. Judge the ideas against the scale before deciding which to present and use the scale to frame expectations when presenting.

J

F

M

A

M

PRODUCTIVE

The Barriers to Purchase Axis

The Bravery Scale is useful to both sides in a service relationship

Lines and axes can be helpful to demonstrate a progression from one state of affairs to another. With the Barriers To Purchase Axis, inactivity or disinterest is shown on the left, and interest or action on the right. Each notch of the axis represents a barrier to action, in this case a series of reasons why the potential customer will not purchase a product.

Productive 6 months (above average) Underproductive 6 months (below average)

Dialogue Q3 2016

064-067_Dialogue_Q3_2016.indd 66

11/05/2016 12:38

J


MARKETING

THE PERSONAL DEADLINE

67

PANIC

E S S AY C R I S I S PROCRASTINATE

CONSIDERED

THINK & DECIDE DIRECTION

A 12-month year is almost always ‘shorter’ than you think

EXECUTE

above average – periods are in March, May and September. In these ‘decision windows’, every important decision maker is present, things get decided, and done. From time to time, ‘crisis bombs’ go off – unexpected developments that are unhelpful (in this example, this happens in January, April and August). They deflect the company from its normal work, making its performance below average. By looking at the pattern of previous years, most of these events can be predicted and allowed for. Often this tallies with simple holiday patterns, but not always. Viewing the year in this way usually shows that the ‘12-month year’ is almost always ‘shorter’ than you think. Exercise Consider the year ahead. Predict the likely highly productive periods, and the unproductive ones. If necessary, predict when the decision windows and crisis bombs will occur. Now add up the truly productive months and consider reviewing any forecasts and resource planning you have undertaken.

M

J

J

A

S

O

N

D ABOVE

AVERAGE

UNDERPRODUCTIVE & UNDER-RESOURCED

Decision windows

Crisis bombs

BELOW

DELIVER

The Personal Deadline

The Personal Deadline (above) examines the problem that most people leave it too late to start a task. For most people, this was a bad habit they acquired at college when faced with a deadline for handing in an essay or dissertation. Common sense suggests that a measured approach over the time available would yield a less stressed run-up and a higher quality result, but human nature dictates otherwise and many leave everything to the last minute. This timeline helps to focus the mind on the task ahead while there is still plenty of time. The considered line shows that it pays to examine as much of the material and as many of the important issues as early as possible. Once direction is decided, then orderly execution of the work can be embarked on, with completion being achieved smoothly. The idea is to avoid an ‘essay crisis’ in which the thinking phase is left too late and hasty work is crammed in at the very end under unnecessary time pressure. The cliché “I work better under pressure” is both false and misleading. Exercise Choose a project with a known deadline, preferably no less than one week away. Work backwards from the due date to work out how much effort will be needed to complete it. Decide direction immediately, or no later than tomorrow. Initiate the execution in an orderly fashion over the remaining time. — Kevin Duncan is an author, trainer, speaker and business adviser. Contact him on kevinduncanexpertadvice@gmail.com

Further reading The Diagrams Book, by Kevin Duncan, contains 50 ways to solve any problem visually. A bestseller, it has been translated into Japanese, Chinese, Korean, German, and Spanish. Further editions have been agreed in Russian, Thai, Portuguese, Swedish and Hungarian Q3 2016 Dialogue

064-067_Dialogue_Q3_2016.indd 67

11/05/2016 12:38


marketing

68

Slogans’ zeros: end for the endline Most advertising slogans are being devised to make companies feel good about themselves, writes Anthony Tasgal

Peak slogan apathy could be upon us. There has been something approaching an outcry from commentators inside and outside the advertising industry regarding recent slogans such as Stella Artois’s ‘Be Legacy’ or transport agent Trainline’s ‘I am Train’. What do these odd phrases mean? Have offences been committed against the English language? And, if so, who is culpable? The age of TLDNR (too long did not read) and #hashtaggability demands ultra brevity, so perhaps the first question to ask is: Does anyone really care? Those of us who are paid to develop, devise, research or comment on these slogans naturally make them seem far more significant than they are in reality. So should we be worried about the apparent sea of apathy that is overwhelming slogans? I think we should. In my recent opus The Storytelling Book, I argue that too much communication has become ‘messaging’, the relentless transmission of information based on the mistaken assumption that most of the consumers to whom we sell (aka people) and the audiences to which we present (aka people) care more than a jot about what is being transmitted. The weighty evidence emerging from behavioural economics is that 99% of the material we receive goes into ‘attention spam’: stuff about which our all-important instinctive System 1 deems insufficiently important

bat tle cries

According to the experts, the word ‘slogan’ is derived from the Gaelic word slogorne, meaning battle cry, and dates back to the early 16th century. The later metaphorical sense, relating to a “distinctive word or phrase used by a political or other group” was first recorded in 1704. The humble slogan originated from a need to inspire fear in an enemy and to foster a sense of camaraderie among troops, ahead of the inevitable wholesale bloodshed of battle.

to inform our rational System 2. This spam is known as TBU: true but useless. This tide of unwanted and irrelevant information shows no sign of relenting, yet the neuroscience is clear: it’s not getting through. The whole point of the slogan should be to short-circuit all the TBU stuff so consumers and clients get the gist of your product or service without having to think about it or do any of the boring reading bit. Yet many of today’s slogans are subconsciously designed to win pitches, not customers. In this regard, the slogan appears to be sliding back towards its original meaning (see box, left) – to instil esprit de corps in armies (companies, in the modern world) in preparation for a bloody war (the consumer market). Years of experience working on ad pitches has led me to the controversial view that many modern slogans are essentially useless at attracting consumers to a product, instead functioning as rallying cries to the companies that make that product. The actual target audience of slogans is very different from its intended recipients. No wonder consumers are apathetic about many modern straplines. Slogans are often designed by agencies to woo clients by flattering them. Positioning the brand expressively to its ends users is but a secondary consideration. It is primarily a bonding mechanism to cement internal culture as identified by the pitch-winning agency. So, given this, how do we save the slogan from an ignoble demise? Here are five ways...

Dialogue Q3 2016

068-069_Dialogue_Q3_2016.indd 68

11/05/2016 12:41


marketing

69

1

Do the need test. Ask yourself: do I really need a slogan? If so, is it really little more than a rallying cry for the internal teams? Are those words only there because you can’t bear to do the hard marketing work through creative innovation and branding expertise?

3

Be expressive. Expression trumps description. “You, but on a good day” is a beautiful expression of the creative idea for Berocca tablets, as is “you’re not you when you’re hungry” for Snickers: these therefore slip effortlessly into our memory banks because they combine emotion with meaning. Avoid, at all costs, phrases such as “servicing your infrastructure”.

2

Don’t lose F.A.C.E. Personality is neglected in brand literature. Humans tend to respond better to the softer elements of a brand and communication than to the rational messaging of so much communication. Lasting brand memories will be better created by an appeal to F.A.C.E – feeling, atmosphere, culture and experience – than by relentless bombardment with facts

4

Beware compression. Stella Artois’s ‘Be Legacy’ attempts to tie into the advertising concept of leaving something behind, just as the founder of the beer did, but it feels clumsy and sounds more like a parting farewell from Mr Spock. Meanwhile, ‘I am Train’ sounds rather like the early utterances of a computer trying a little too hard to pass the Turing test.

5 — Trainer, lecturer and strategist Anthony Tasgal is author of The Storytelling Book, runner up in the global Marketing Book of the Year award 2016. Tweet him @taswellhill

Look to the best. We should all aspire to come up with a line as powerful, memorable and effective as the slogan for Specsavers. When they hear this word, anyone within the optician’s core market of the UK is automatically flooded with a variety of associations, feelings and images. Chief among them will be the brand’s classic slogan: ‘Should have gone to Specsavers’. Q3 2016 Dialogue

068-069_Dialogue_Q3_2016.indd 69

11/05/2016 14:36


17-18 MAY 2016 BERLIN Deliver a seamless, consistent customer experience across all channels Future Omnichannel Retail Strategies 2016 will provide the perfect platform to learn how to implement an omnichannel strategy that places the customer at the heart of decision making. Keep up to date on the biggest issues to impact all retailers and hear the latest on achieving profitability whilst you deliver an omnichannel, customer-centric and effective retail strategy. Compare experiences, share best practice and determine the most efficient way of moving forward so that you can stay ahead of the game. Join your peers at our innovative and dynamic sessions on:

• Bridging the gap between in-store and digital for the ultimate customer experience • So how do you establish a profitable, customer centric omnichannel business model? • Geolocation and the potential of beacons in retail – Just another fad or here to stay? • What’s next for social media in retail? • Omnichannel retailing is here, but is your organisation structure fit for purpose? • Creating an innovative, fail fast culture to stay ahead of the competition • What’s next for mobile commerce? • Is mobile payments finally here? • Pushing the limits in delivery – What to expect next? Keep up to date, be inspired and benchmark strategies this May and join us in Berlin. Secure your place today by quoting reference code: MK-HJ-AD

For more information on how to attend, please visit www.arena-international.com/futureretaileurope/

Organised by Arena International Events Group · www.arena-international.com

BOOK

NOW


strategy

71

patrick woodman

Diversity is the core responsibility of every manager who cares about the success of their company

A strategy of diversity Patrick Woodman is head of external affairs at the Chartered Management Institute

– and the need for employers to do more Is diversity truly a matter of business to support women through the talent strategy? Some management traditionalists pipeline. We’re undertaking a major project might argue that it’s not: strategy surely into the ethnic diversity of management relates to business models, markets and across the UK, working with the former margins – not some fluffy concern that’s global director of talent at both Lloyds and best left to HR or compliance managers. Barclays, Pavita Cooper. But such a myopic world view misses To date, it’s on gender that there the reality of business today and the has been the strongest collective drive ingredients of sustainable success – key to for action. Large employers have been which are a company’s people. addressing the under-representation of For an organization to prosper, it women in the boardroom, spearheaded needs to understand its customers. It by the Lord Davies review, while the needs to engage with and understand government published further details in different points of view, avoiding the February 2016 about its plans to require quicksand of groupthink. And it needs large companies to report on the gender to value the talent of its employees. With pay gap. This has to be the right approach. up to 80% of company value resting in To adapt the old adage: what gets intangibles – including the value added measured, gets managed through the knowledge, – but what gets skills and engagement of employees – no What gets measured, reported publicly gets managed even better. employer can afford to gets managed – Transparency will be a neglect any group. but what gets reported driver of change. All this means publicly gets managed Companies that diversity should be approach this regulation central to strategic even better as a box-ticking thinking. The benefits exercise will not only be are clear. Credit Suisse selling short their female employees, but has measured a 25% improvement in missing an opportunity to modernise and return on equity for firms with genderstrengthen their company culture. Many diverse boards. McKinsey has shown that women continue to report that business the most diverse management teams are remains male-orientated and macho in its 15% more likely to outperform their peers general operations and culture. They often financially – with the least diverse more vote with their feet. While approximately likely to underperform. 60% of junior managers are female, There are many strands to diversity, all women account for around 40% of middle of which employers need to acknowledge. managers and 20% of directors. But gender and race have been most Progressive companies are addressing prominent in recent years. Businesses still have much progress to make when it comes this. Businesses such as Netflix allow all parents to come and go as they please, to race diversity: a 2015 report by executive focusing on outcomes, not face-time. recruiters Green Park showed that 62 of Deloitte lets anyone take off up to one the FTSE 100’s boards are all-white. And Britain’s Trades Union Congress identified a month of unpaid leave every year. These practices boost loyalty and engagement 23% gap in hourly pay rates between black making everyone more productive. and white university graduates. The evidence is clear. Diversity delivers The challenges around gender equality results and every manager – whether are similar. At the Chartered Management setting business-wide strategy or executing Institute, we have looked at both the it on the frontline – has an obligation to gender pay gap – our data with XpertHR embrace and support it. shows it stands at 22% among managers Q3 2016 Dialogue

071_Dialogue_Q3_2016.indd 71

11/05/2016 12:43


strategy

72

The road to complication China’s One Belt, One Road initiative will boost connections, but at the cost of simplicity

Dialogue Q3 2016

072-075_Dialogue_Q3_2016.indd 72

11/05/2016 12:55


strategy

73

There is so much money that the ropes used to string coins together rot and break…the granaries in the capital overflow and the grain goes bad and cannot be eaten Sima Qian, Chinese historian, 1st Century BC, describing consequences of the Silk Road

WrItINg

Michael Netzley ILLUstratION

Alex Mathers The Trans-Pacific Partnership was just the start. With the successful negotiation of the TPP trade deal, now awaiting ratification from participating countries, global attention is shifting towards China’s ambitious One Belt, One Road project (Obor). So what is Obor? And is it likely to be a success? Obor is essentially the vision of a new consumer-producer network in Eurasia, creating an integrated trading bloc in the East and rolling back the existing global model, where the East produces and the West consumes. The story began on 7 September 2013, when China’s President, Xi Jinping, gave a speech at Kazakhstan’s Nazarbayev University. Here, he articulated what seemed a simple vision to integrate and better connect Eurasian markets, with China at the hub. “We can innovate the mode of cooperation and jointly build the Silk Road Economic Belt step by step to gradually form overall regional cooperation,” he said. But its simplicity is questionable. When read today, the matter-of-fact reporting from 2013 questions few of the consequences from this ambitious plan to build a modern version of the ancient pathways described by Sima Qian. For two millennia, what is today known as the Silk Road – a complex patchwork of overland and maritime routes connecting China and southeast Asia with India, Africa, Rome and later western Europe – enabled the exchange of silk, spice, textiles, knowledge and religion. The centres of exchange – inland cities and coastal towns such as

Goa or Constantinople (now Istanbul) – became vibrant hubs of commercial and cultural activity. When put into a historical context, President Xi’s ambitions take on a much grander scale. How exactly does Obor differ from the TPP? What role will China’s new Asia Infrastructure Investment Bank (AIIB) play in this growing geopolitical tug-of-war over trade? And, finally, what does it all mean for executives who have a business to run? The answers are relatively simple. Increased connectivity on the scale proposed by China will bring substantially increased complexity to any business operating within this proposed network.

O N E B E LT, O N E R O A D : TWO PERSPECTIVES eXPert VIeW

Parag Khanna, global strategist, leading author, and senior research fellow in the Centre on Asia and Globalization at the Lee Kuan Yew School of Public Policy at the National University of Singapore.

What is One Belt, One Road?

Obor is all about the effort towards deeper Eurasian infrastructural connectivity from Shanghai to Lisbon. What China wants is more connectivity… All infrastructure projects in Eurasia serve the purpose of connectivity. Q3 2016 Dialogue

072-075_Dialogue_Q3_2016.indd 73

11/05/2016 12:55


strategy

74

To put China’s connectivity ambitions into financial terms, the China Development Bank has committed to investing $890bn in infrastructure projects attached to Obor, the Public Broadcasting Service (PBS) reports. It highlights that the new Asian Infrastructure Bank (AIIB) has an additional $100bn available for infrastructure investment. These dollars are being used to build connectivity between China and the rest of Eurasia. By comparison, PBS points out, the Marshall Plan amounted to approximately $130bn after adjusting for inflation.

What is so important about infrastructure and connectivity?

Infrastructure is a global public good. There are three mega-public goods out there: security, environment, and connectivity. China has put itself forward as the leading provider of the global public good of infrastructure and connectivity. It is doing so through physical infrastructure projects, such as Huawei’s telecom networks, and all of these things enhance a country’s connectivity. China’s vice premier, Zhang Gaoli, has urged neighbouring countries to consolidate the social foundation for connectivity. This comes as little surprise. All connectivity built in Asia serves China, even if it is built by China’s rivals such as Japan or the US. But what is China’s expected return on its own massive investments? First, and assuming China can deliver on such an ambitious vision, Obor has the potential to help put the nation’s production overcapacity to use. Connecting with more consumers can help increase demand. Another benefit could be increased soft power – as China puts its massive foreign reserves to work. eXPert VIeW

Dr Victor Fung, group chairman of Li & Fung group of companies Anyone who wants to benefit from the increased connectivity brought by Obor will need to learn about many new customers and markets. This process begins with understanding where these customers are, geographically. These are new geographies that represent a significant shift away from today’s dominant Organisation for Economic

AT A G L A N C E : T P P V E R S U S O B O R The scale of TPP and Obor varies considerably. traNs-PaCIFIC PartNersHIP

12

65

countries

800m 40%

O N e B e Lt , O N e r O a D

people

of global GDP is represented by constituent nations

Represents approximately one-third of world trade Negotiations lasted ten years and the agreement is now under review in partner countries

countries

4.4bn 40%

people

of current global GDP is represented by consituent nations*

Up to 3 billion new consumers in the next 30 years

Announced in 2013 by China’s President Xi Jinping

*Note that, today, each initiative accounts for roughly equal amounts of global GDP at 40%, while Obor will connect many new consumers moving into the middleclass over the coming decades. So, if China succeeds with its Obor ambitions, then TPP will likely pale in economic comparison.

Cooperation and Development (OECD) economies. Approximately 1.5 billion new workers in Asia and other emerging economies joined the global workforce over the past three-to-four decades. This created a relatively simple world where many companies outsourced production to the East and then shipped their products to consumers in the West. The latest figure shows consumption in OECD economies has dropped from 84% to about 70%; by mid-century, about half of global consumption will be

The sheer scale and potential of this initiative blinds us to important concerns

outside of OECD countries. The rise of 3.5 billion new middle-class consumers in the developing economies of India, China, Asean, East Africa, Middle East and Latin America is driving this consumption.

How does Obor connect China to non-OECD growth and consumption? As we head toward the middle of the 21st century, we will see that about half the world’s consumption will be in developing countries. And, looking further, they’re primarily in the countries linked up by the maritime Silk Road. So the maritime Silk Road is the key to the new consumption and the new markets in the world over the next 25 to 30 years. The overland Silk Road Economic Belt will account for approximately one-quarter of Obor’s

Dialogue Q3 2016

072-075_Dialogue_Q3_2016.indd 74

11/05/2016 12:55


strategy

economic contributions, with the Maritime Silk Road accounting for as much as 75%.

What initiatives do you see coming in during the first few years?

China’s first initiative will obviously be putting in good infrastructure, because without good infrastructure it is hard to trade. So we will see things like the activities of the Asian Infrastructure Investment Bank (AIIB) that would actually put in the roads, the railways, the airports, the ports and so on. But as soon as that is in, or even before, we are going to be starting to talk about trade deals – bilateral deals, multilateral deals and regional arrangements – and that will facilitate trade.

Trade compared to connections

Given that questions about Obor are asked while TPP is being ratified by participating countries, it is perhaps inevitable that we ask how Obor compares to TPP. In the simplest of terms, trade deals like TPP will become an important part of Obor. These agreements lower barriers and open up the flow of goods and services between partner countries. These flows will only increase as infrastructure projects related to Obor are completed.

LET’S GET REAL ABOUT OBOR There are a lot of ‘ifs’ and ‘buts’ involved in any realistic discussion about Obor. The sheer scale and potential of this initiative potentially blinds us to important concerns. The devil is in the detail. Privately, leading economists in the region are likely to share the following concerns: Are we seeing only dollar signs? The initial pool of $1tn or more will not lower the bar for funding infrastructure projects. Pragmatism and hard negotiations will rule the day, and the banks will continue to perform due diligence. Obor does not improve the odds that mediocre or risky infrastructure projects will be funded. 
 National interests or China’s interests? Nationalism has been on the rise across Eurasia for quite some time. How will economic and political leaders in any market balance this increased nationalism with Obor funding that, in effect, makes those leaders at least

By mid-century, about half of global consumption will be outside of OECD countries partially subservient? As Parag Khanna has pointed out, these investments serve China and are being funded for China’s benefit. Additionally, what will neighbours, such as Russia, think of China’s increased influence across the region? We know many countries are angry about China’s hardball tactics to claim most of the South China– Western Philippine Sea. The potential for pushback is significant. Does stability necessarily follow from investment? Many of the markets to be connected by Obor are quite volatile. Can we honestly assume that a bit of prosperity will usher in peace? Obor and some of the volatile markets it wishes to connect may well put to the test this assumption about peace following prosperity. Will good governance magically appear? In addition to questions about stability, corruption is an equally significant concern. Will parties accustomed to receiving money unofficially suddenly adopt transparency and full accountability simply because China wishes to invest in a power plant, telecommunication network, or railway? Such an assumption might seem optimistic.

So while a great story, there are reasons to think that the reality for Obor will likely differ from the ambition.

The connectivity-complexity trade-off Parag Khanna asserts that, “connectivity is destiny”. This is a play on the old adage that geography is destiny. Khanna says in his new book Connectography that the winners in the 21st century will be those who succeed at building connections through infrastructure and leveraging those relationships for long-term gain. Connectivity, however, is not a silver bullet. With connectivity will come increased complexity for business. Dr Fung says: “What we will really need to do is find out about the new consumers, along the Silk Road, what do they want to buy? How do we access them? And I think there is

75

really a tremendous opportunity for the creation of new approaches and new business models.” Multiply that statement by 65 countries, 4.4 billion people, emerging technologies, new business models, large numbers of small- and mediumsized enterprises (SMEs), and extremely diverse peoples. If Obor materializes, we will see a business world far more complex than today’s ‘build in the East and consume in the West’ model. Finally, and on the geopolitical stage, we cannot assume that large Western markets will simply do nothing. If Khanna is right about all the infrastructure ultimately serving China’s interests, it seems plausible that the West might reconsider its current approach. The US invests its resources into the mega-good of global security and often acts as the world’s police force. Meanwhile, China appears to look at that decision and, in effect, say “thank you for creating a safe world”. Into this relatively safe world, China then invests its reserves into infrastructure projects that serve the long-term interests of its government and people. Sooner or later the West may wise up. So while it is too early to predict whether Obor will achieve its grand aims, the narrative is inviting. But with greater connections will come a world that, for business executives, is likely to be a great deal more complex than today’s. There will inevitably be a need to improve our understanding of complexity and how to run a business in a deeply connected region. Additionally, business executives will need to learn how to leverage networks more effectively, work across many diverse cultures, and contribute to the pursuit of mega-goods while also delivering economic results. Perhaps the challenge to executives will ultimately prove just as ambitious as Obor’s aims. — Michael Netzley, PhD, is academic director, office of executive development, at Singapore Management University. The author thanks the Victor and William Fung Foundation for sharing the transcripts of Dr Fung’s keynote address and dialogue. Additional appreciation goes to Parag Khanna for sharing, in advance, thoughts from his forthcoming book Connectography. Some comments have been paraphrased in places Q3 2016 Dialogue

072-075_Dialogue_Q3_2016.indd 75

11/05/2016 12:55


strategy

76

The school of high performance Evidence from England’s network of academy schools is instructive when isolating the steps needed to boost performance, write Alex Hill, Liz Mellon & Ben Laker

Every organization faces two perennial conundrums: How do you advance from average achievement into the heady atmosphere of high performance? And how do you stay there? In this article we address the first conundrum. Next time, we’ll share some preliminary findings from our research into how to sustain high performance.

The Centre for High Performance

The Centre for High Performance (a collaboration between senior faculties at the Universities of Oxford and Kingston) aims to build a network of high performing organizations from different sectors, share insights between them and help their search for continuous innovation and improvement. It is intriguing how some organizations can achieve high performance and sustain it for several decades, even centuries, while others can only admire them from the sidelines. What is it that makes the difference? To answer this, we are working with global role models from a wide range of sectors such as the Royal Academy of Music, Royal College of Art, Royal Shakespeare Company, John Lewis, Nasa, and the New Zealand All Blacks rugby team. However, in this article, we focus on the world of education.

The UK government introduced academy schools in England in 2000 with the aim of improving the standard of education. The academies are publicly funded schools that have either been turned into academies by the government, or else have volunteered to become academies as they were already high performing. Academy schools do not have to follow England’s national curriculum and can set their own term times – but they still have to follow the same admission, special needs and exclusion guidelines as other state schools in the country. They are directly funded by the government, rather than through the local council, and are run by an approved sponsor – usually a business, university, faith group or another school – which is responsible for managing and

Shutterstock

The academy schools test bed

Dialogue Q3 2016

076-077_Dialogue_Q3_2016.indd 76

11/05/2016 12:58


strategy

improving their performance. Our research was funded by Green Templeton College at the University of Oxford. It studied the experience of 160 academies after they were put into ‘special measures’ by English schools regulator Ofsted more than five years ago. This provided us with the rare opportunity to look at organizations that are regulated, documented and measured in the same way, provide a similar service, but compete in markets with different levels of competition and access to resources. This makes them very interesting, as it is easier to isolate variables and understand the impact of changing them. In many ways, it’s similar to eminent psychologist Geert Hofstede looking at IBM to uncover the core facets of cultural difference. By keeping his research inside a company with a strong and uniform culture across the world, he was able to investigate the impact of different countries’ cultures on a single organization.

There’s no silver bullet

Shutterstock

We’re sorry to have to tell you this, but organizations cannot be turned around with one simple idea or single action. But then you already knew that! Instead, our findings suggest that you should take a number of actions, in a defined sequence, if you want to turn around an organization quickly, using as few resources as possible. We call this ‘the performance ladder’. Some of the actions we suggest are ones you would probably expect, but others are not. More than this, the sequence of activities is surprising. We’ve shared our findings with a number of educational thought leaders all of whom recognize the ladder that we’ve uncovered, although they weren’t aware of it beforehand. As Professor Sir George Berwick CBE, pioneer of ‘teaching schools’, which train and develop teachers, told us: “You’ve got it!”

Our findings challenge popular myths; for example, more resources do not lead to faster improvement

77

NEXT TIME H O W TO S U S TA I N H I G H P E R FO R M A N C E The pursuit of sustainable high performance has been the holy grail for years, but many have only managed to identify ‘excellent’ or ‘great’ organizations that cannot seem to sustain this success over time. In 1982, Tom Peters and Robert Waterman published their seminal work In Search of Excellence, but two years later a Business Week article, entitled ‘Oops. Who’s Excellent Now?’ showed a third of the 43 ‘excellent’ companies were now in financial difficulty. Equally, Jim Collins published From Good to Great in 2001 examining the performance of 1,435 ‘good’ companies over 40 years claiming 11 were ‘great’. However, seven years later, Steven Levitt’s article From Good to Great… to Below Average found four of the ‘great’ companies were in trouble. Having to look backwards to predict the future will always be a challenge for anyone trying to understand how you can sustain high performance. We believe our findings will prove more reliable. We’ve chosen to study organizations that have kept their core offering stable for more than 100 years, have outperformed their peers for more than 20 years, and are admired by everyone. We have searched across the board, from business to the arts to sport. In our next article, we will share some of our preliminary and unexpected findings about how you can sustain high performance in today’s volatile world.

What you shouldn’t do…

As you’d expect, the quality and calibre of leadership is fundamental to the success of a school, as are facilities and rebranding strategy. But our findings challenge popular myths about how to improve schools. For example, reducing class size only creates a marginal improvement. Using a ‘super head teacher’ doesn’t create the right foundations for sustainable long-term improvement. It’s easier to turn around inner city schools as they operate in larger markets with greater access to talented leaders, teachers and students. You shouldn’t try to improve teaching first, you need to have the right structures and behaviours in place before you can do this. ‘Zero tolerance’ behavioural policies don’t work in the long term. Perhaps most surprisingly, more resources do not lead to faster improvement. The key is to complete the right steps in the right order.

What you should do…

Probably our most contentious finding is that having good customers – in this case, good students – changes everything. They are easier to serve, push you to perform at higher levels and are better adverts for your success after you’ve served them. Excluding poor

Our most contentious finding is that having good customers – in this case, good students – changes everything

customers is the fastest way to turn a school around, but most organizations are nervous of turning away revenue. This is the corollary in business of choosing which customers you want to serve and those you don’t. You must plan for a dip in financial performance before operational performance will improve, as you need to change your customers, structures and people. So don’t expect immediate success. When our full findings are published later this year, we hope they will help the UK government to refine its academy policy and review its Ofsted criteria to help it reach the highest possible standards of educational excellence. — This article is based on a presentation given by Dr Alex Hill at the 2016 Global Education and Skills Forum in Dubai, where the $1 million Global Teacher Prize was awarded Q3 2016 Dialogue

076-077_Dialogue_Q3_2016.indd 77

11/05/2016 12:58


78

news nation

The disunited kingdom A referendum over the UK’s continued membership of the European Union is fracturing an already troubled nation

gender gap

14%

Pay gap between full-time men and women

80%

EDINBURGH

Proportion of people working in care and leisure who are female

B E L FA S T

Proportion of people working in skilled trades who are female

DUBLIN

NETHERLANDS

CARDIFF

GERMANY

LONDON

Number of female chief executives in FTSE 100 index of leading UK companies

BRUSSELS

BELGIUM LUX

FAC T F I L E U N I T E D K I N G D O M Land area

Official languages

93,628 sq mi

English, Welsh

(242,495 sq km)

Population

64,716,000

GNI per capita

$38,160

Capital

Life expectancy

London

83 Women

Major religions

Christianity

79 Men

7

Source: The Fawcett Society

10%

IRELAND

EUROPEAN DISUNION

9

The number of minutes aspiring Conservative leader Boris Johnson gave Prime Minister David Cameron to take in the news that he was backing the ‘Leave EU’ campaign, before going public

6

Number of cabinet ministers from the governing Conservative Party who backed leaving the EU

130

Number of Conservative MPs pledging to defy the Prime Minister and campaign to leave the EU; 163 will campaign to stay in

Dialogue Q3 2016

078-079_Dialogue_Q3_2016.indd 78

11/05/2016 13:00


news nation

79

Your Dialogue

H O W W E L L I N T E G R AT E D I S THE UK? The extent to which British people interact with others from different social groups, compared to how much they would do so without social segregation. 0% = perfect social integration Class

Age

social scene

Follow us on twitter @dialoguetweets Follow the editor @brjwalker

Ethnicity

0%

-20%

Marieluise Maiwald @Marieluise_M Mar 16 In the battle of Humans vs. Machines, empathy will win it for the humans, writes @VlatkaHlupic in DialogueTweets

-14% -42%

-48%

-60%

How segregation is measured: Imagine that, in one area of the UK, 20% of the people living there are aged over 60. In a completely integrated society, 20% of any given person’s interactions would be with people aged over 60. If only 10% of a person’s interactions were with the over 60s, that area is half as integrated as it could be and gets an integration rating of -50%.

C A P I TA L G A I N S

Source: Social Integration Commission

-40%

Isabel Roser @iroser_RSE Mar 17 A shudderingly good account of why ‘glocal’ is the only viable future via @DialogueTweets David Montgomery @dmonty007 Mar 30 David Montgomery Retweeted Dialogue @theedgenhs “innovation can come from anywhere” Yup - it’s a mindset rather than a department! Inploi @inploime Mar 31 This is why learning in a sharing economy is a challenge for #HR departments via DialogueTweets. #recruitment

Disposable income per capita in London, versus the rest of the UK

+27.7% 2012

+27.6% 2011

+22.4% 1997

DIALOGUE IS BROUGHT TO YO U B Y… editorial board

SCOTTISH SPLIT

45%

 Proportion of people who voted for full independence in Scotland’s referendum in 2014

55%

 Proportion of people who voted to remain part of the UK in Scotland’s referendum in 2014

I believe today, as strongly as I ever have, that independence is the best future for our country…We will make that case positively and powerfully and we will do it in a realistic and relevant way, and in doing so, I’m confident that over the next few years, we will build majority support for that proposition. Scottish First Minister Nicola Sturgeon in 2016

Dr Liz Mellon, chairman Tom Albanese, chief executive, Vendanta Resources Michael Canning, chief executive, Duke Corporate Education Irene Dorner, former president and chief executive, HSBC US Professor Pedro Nueno, president, China Europe International Business School Karina Robinson, chief executive, Robinson Hambro Ben Walker, editor, Dialogue editorial

Ben Walker, editor Kate Harkus, art director Sarah Wild, chief sub-editor Miro Iliev, social media executive Jazz Berry, editorial assistant management

Martin Liu, publisher Niki Mullin, business development manager niki.mullin@lidpublishing.com Charlotte Hutchinson, communications executive

Disclaimer Copyright 2015 by Duke Corporate Education and LID Publishing Ltd. All rights reserved. Material may not be reproduced without permission of the publisher. While we take care to ensure that editorial is accurate, independent, objective and relevant for the readers, Dialogue accepts no liability for reader dissatisfaction rising from the content of this publication. The opinions expressed or advice given are the views of individual authors and do not necessarily represent the views of Dialogue. This journal is also supported by Knowledge Partners, including Duke Corporate Education as Lead Knowledge Partner. Whenever an author is related to a Knowledge Partner it will be noted as such. Dialogue takes every effort to credit photographers but we cannot guarantee every published use of an image will have the contributor’s name. If you believe we have omitted a credit for your image, please email the editor. ISSN 2053-4361 Printed by Pensord www.pensord.co.uk

publishing

Published in the United Kingdom by LID Publishing, 1 Adam Street, London WC2

Q3 2016 Dialogue

078-079_Dialogue_Q3_2016.indd 79

11/05/2016 13:00


80

REVIEWS

IN ASSOCIATION WITH

How to power up your team to boost its performance Through thoughtful role assignment, well-aligned goals and the avoidance of perverse incentives that lead to toxic competition, teams can be stronger than the sum of their parts, writes Ben Walker

Committed Teams Mario Moussa, Madeline Boyer and Derek Newberry Wiley bit.ly/ committedteams

Have you ever heard of the Microsoft e-reader? No, me neither, and that’s the problem. The truth is Microsoft beat Apple iPad to the punch by several years. Or, rather, it almost did. In 1998, the company’s innovation team produced an early prototype e-reader. It lasted little longer than a single utterance from Bill Gates. “I just don’t like it,” Gates said, thinking the concept a dud. In response, the innovation team was placed under the watch of the MS Office development team. Instead of coming up with bright ideas for products that could change the landscape of the industry, it was mulched together with developers who were used to daily software updates and quarterly reports. Ten years later, Microsoft had been completed outmanoeuvred by Apple, and analysts readily spoke of Microsoft’s ‘lost decade’. This salutary lesson is used by Committed Teams to highlight the problems of misalignment – that individuals in notional teams are pulling in different directions, are targeted differently and, thus, have radically different motives. As was the case at Microsoft, the misalignment went far further than product development. A punitive framework for staff who appeared in the bottom 10% of any department’s performance tables meant that intra-team competition was toxic. “People will openly sabotage others’ efforts,” one engineer told the authors. “I gave the appearance of being courteous while withholding from colleagues just enough information to ensure they didn’t get ahead of me in the rankings.” Aligning teams – or ‘checking’ as the authors term it – is the second step of the book’s ‘3x3’ framework to create higher performing

teams. Commit and Close are the first and final steps. A less grand way of describing the framework might be to summarize it along the lines of: say what you are going to do; check that you are ready to do what you say you are going to do; make damned sure it happens. Like most simple and straightforward strategies, this can be fiendishly hard to implement. This book makes a good job of pointing out just about everything that can go wrong along the way, even devoting an entire chapter to the seven common mistakes you are probably making. I found that I had made all of

Individuals in notional teams are pulling in different directions, are targeted differently and, thus, have radically different motives them at least once. I suspect most managers and leaders have ticked off the lion’s share of them. Given that getting teams to perform effectively is the key function of any manager, having a clear, practical and easy-to-read book such as this at hand is more than useful - it’s potentially essential. At the outset, the book explores the Ringelmann Effect: the phenomenon that shows humans naturally apply less and less effort to a task as more people are assigned to it. The effect is not immutable – through proper role assignment, well-aligned goals and the avoidance of perverse incentives, teams can be stronger than their parts. But, as the book says, you need to know the rules.

Dialogue Q3 2016

080-081_Dialogue_Q3_2016.indd 80

11/05/2016 13:02


REVIEWS

IN ASSOCIATION WITH

81

A revamp to transform your whole world Rewire comprehensively debunks the myth that companies can embrace difference through a few pet projects, says global head of diversity and inclusion at Novartis Pharma Renee Anderson

Rewire Chris Yates and Pooja Sachdev Bloomsbury bit.ly/rewirebook

Rewire’s authors, Chris Yates and Pooja Sachdev, open their book with their personal stories. That they have real-world experience of addressing diversity, personally and professionally, gives credence to the recommendations they make. The book takes the reader on a logical journey through a narrative that covers the why, what and how of improving diversity in any organization. The authors explain why current approaches to improving diversity are failing to work and explore need for change, proposing a new model. They outline how to act as an internal consultant to help your organization become more inclusive. At the heart of the case they make is the message that increasing diversity must be approached holistically or systemically. Given that many societies continue to treat women as second-class citizens, they recommend taking both external and environmental issues into account alongside internal issues, such as how the organization is structured and who is recruited.

Lack of progress in increasing diversity often comes down to intangibles: unwritten rules, habitual practices and faulty mindsets When organizations have effective policies and positive intent, but are still not making the progress they desire, they advise that the culture – the invisible rules that govern how work really gets done – needs to be tackled. Lack of progress in increasing diversity, they believe, often comes

down to intangibles: unwritten rules, habitual practices and faulty mindsets. This book could stand alone as a reference text. If you have forgotten the important contributors to the concept of ‘in’ and ‘out’

The authors say that their craft can be criticized as too modeldriven and complex… it becomes a self-fulfilling prophecy groups or one of the greatest pioneers of crosscultural research, it’s pretty much all here. It is also a wonderful call-to-arms for organizational development (OD) to be deployed in the service of diversity and inclusion, to help the approach be less fragmented. Yet the book has its weaknesses. Its content is so broad and inclusive, it can feel overcomplicated at times. The authors admit that their craft of OD can be criticized as too model-driven and complex and, in a sense, this becomes a self-fulfilling prophecy. While the book acts as a solid guide for the more experienced, newcomers to OD might feel inundated. Despite this, the book has a key strength – the authors exhort organizations to stop looking for a silver bullet to increase diversity. They argue cogently that isolated and piecemeal initiatives won’t work. Unless a holistic approach is taken, specifically tackling unseen barriers such as organizational culture, companies will continue to make slow progress. At Novartis Pharma, the holistic approach is the approach we have taken – and it’s working. Q3 2016 Dialogue

080-081_Dialogue_Q3_2016.indd 81

11/05/2016 13:02


82

REVIEWS

IN ASSOCIATION WITH

Discovery Path: The brilliant mind Delve deeper into our Focus topic with these smart reads. This discovery path features Marshall Goldsmith’s sharpest management writing, an insight into how women can lead for team excellence, insight on sparking your creativity, and the latest thinking from Joe Divanna.

BLUE BOTTLE BIZ TOP FIVE

A Guide to the Project Management Body of Knowledge – Fifth Edition by Project Management Institute A Guide to the Project Management Body of Knowledge reflects the collaboration and knowledge of working project managers and provides the fundamentals of project management. bluebottlebiz.com/resource/a-guide-to-theproject-management-body-of-knowledgepmbokr-guide-mfifth-edition-english

100 Ways to Boost Your SelfConfidence by Barton Goldsmith Mojo Section I: You and Your Mojo bluebottlebiz.com/resource/ mojo The follow-up to Marshall Goldsmith’s global bestseller What Got You Here Won’t Get You There addresses the vital phases of gaining mojo (tough), maintaining it (tougher) and recapturing it after you lose it (toughest, but not impossible).

How Women Lead Success Strategy Six: Create Exceptional Teams bluebottlebiz.com/resource/ how-women-lead-the-8essential-strategies-successfulwomen-know Written by two women’s leadership experts, both also successful leaders, How Women Lead guides women in building a career on their own terms, gaining critical business management skills and advocating for themselves.

People – The New Asset on the Balance Sheet Introduction bluebottlebiz.com/resource/ people-the-new-asset-on-thebalance-sheet Job migration across international boundaries and jobless economic ‘recoveries’ are the latest disruptions in the

workplace’s human equation. To help policy makers, employers and employees address these issues, Joe Divanna and Jay Rogers propose a more rigorous approach to human capital. This book puts forth a framework for measuring, managing and negotiating issues of human business value.

Disciplined Dreaming Step Four: Ignite bluebottlebiz.com/resource/ disciplined-dreaming-a-provensystem-to-drive-breakthroughcreativity With established business models destabilized by the impact of technology and global competition, creativity and original thinking are becoming the only sustainable competitive advantages. Disciplined Dreaming is the crystallization of the author Josh Linkner’s techniques for idea generation.

The Innovation Killer Part I, Chapter 2: Groupthink bluebottlebiz.com/resource/ the-innovation-killer This book helps identify when to call in a collaborator, and why, where to find one, and how to start working with them. There are also strategies for turning yourself into a zero-gravity thinker when it’s impractical to bring in a true outsider.

When you don’t believe in yourself, everything is more difficult. 100 Ways to Boost Your SelfConfidence will help you change your life by changing the way you feel about yourself. Not only will you have faith in who you are, but your loved ones and colleagues will believe in you too. bluebottlebiz.com/resource/100-ways-toboost-your-self-confidence

The Secret Code of Success by Noah St. John Most people focus on the ‘how-to’ aspects of success taught by traditional self-help programmes, without addressing what productivity expert Noah St. John calls ‘head trash’– the subconscious, emotional roadblocks that prevent people from acting on their hopes, dreams, and ambitions. In this groundbreaking book, based on work with thousands of clients, St. John has created an approach that helps you achieve long-term happiness and success. bluebottlebiz.com/resource/the-secret-codeof-success

Madison Avenue Manslaughter by Michael Farmer The advertising industry has reached a critical point in its development. Growing workloads and declining fees have created a ‘recipe for disaster’. Michael Farmer‘s book offers the world’s first effective definition of “the real agency problem”. Once Farmer has defined the problem, he offers corrective solutions. bluebottlebiz.com/resource/madison-avenuemanslaughter

The Heart of Leadership by Mark Miller In this concise, easy-to-read fable, bestselling author Mark Miller describes five habits that underlie leadership character and determine success. bluebottlebiz.com/resource/the-heart-ofleadership

Dialogue Q3 2016

082_Dialogue_Q3_2016.indd 82

11/05/2016 13:03


REVIEWS

IN ASSOCIATION WITH

83

PIERS CAIN ON BOOKS

CMI’s management book of the year fully deserves its billing

A winning guide to leaner business Piers Cain is head of stakeholder relations at the Chartered Management Institute

Something big is going on. Things are changing radically but we don’t have a handle on what is happening beneath the bonnet, especially at the level of individual firms

Maybe 2015 was the year when those of us living in Western, industrialized countries came to realize we might not be on the winning side. We see long-term stagnation in Europe and the relative decline of the US – although, despite its rivals catching up, it remains the economic superpower. For many people, the promise of technology is turning sour. Pundits talk of many whitecollar jobs being eliminated by robots in the next couple of decades. Standards of living are declining for many. In other words something big is going on. Things are changing radically but we don’t really have a handle on what is happening beneath the bonnet, especially at the level of individual firms. Frugal Information: How to do more with less lifts the lid and gives a clue as to why. Its authors, Navi Radjou and Jaideep Prabhu, winners of the CMI Management Book of the Year, bring a perspective that spans India (where they were born), Silicon Valley, and Europe. Both are associated with Judge Business School, University of Cambridge. They take a global outlook. What do we mean by ‘frugal innovation’? According to Wikipedia: “Frugal innovation, or frugal engineering, is the process of reducing the complexity and cost of a good and its production. Usually this refers to removing nonessential features from a durable good, such as a car or phone, to sell it in developing countries. Designing products for such countries may also call for increased durability and, when selling them, reliance on unconventional distribution channels.” This definition suggests that frugal innovation refers to small, innovative experiments or a strategy advocated by unworldly NGOs. But it is being embraced by global giants such as Unilever, Renault, Aetna, SNCF and Saatchi & Saatchi. This book explains what is changing in the business world and how disparate trends are coming together to transform how business is done – and provides a framework for thinking about it. The

authors claim that six interconnected strategies are key to success: Engage and iterate. Research and development must be transformed to focus on the customer, both at the front end of the innovation process (greater engagement with the customer) and at the back end (continually improving the product). Flex your assets. In other words, create a frugal supply chain thus saving money, resources and time. Create sustainable solutions. Make sustainability a strategic objective using new approaches such as cradle-to-grave and collaborative consumption. Shape customer behaviour to support a more sustainable approach to consumption. Co-create with ‘prosumers’. These are customers who are so motivated and empowered that they become involved in the creation of frugal products and services, straddling the traditional boundary between supply and demand. Make innovative friends. Collaborate with diverse external partners: suppliers, universities, venture capitalists, startups. As with any good book, this one provokes new questions – the authors provide insights for those at the top of the organization determining strategy and business culture and also, to some degree, insights for those at entry level. But what about those in the middle who have to make these new strategies work? What technical skills, attitudes and abilities will be needed at middle-management level? What do we need to do to equip them to survive and thrive in the future? The changes in business that the authors describe will impact everyone’s working life. This book is a useful springboard for thinking about what has already changed and what it will mean for us all. Recommended. — Frugal Innovation: How to do more with less Navi Radjou and Jaideep Prabhu, The Economist bit.ly/frugalinnovationbook Q3 2016 Dialogue

083_Dialogue_Q3_2016.indd 83

11/05/2016 13:08


bbb-ad-dialogue-traced.ai 1 06/11/2015 13:46:23

C

M

Y

CM

MY

CY

CMY

K


REVIEWS

IN ASSOCIATION WITH

A wonderful romp through the wacky language of the globe English is illogical, eccentric and complicated by baffling etiquette. This brilliant guide for non-native speakers decodes the accidental global tongue, writes Ben Walker

I once managed a global team. Around 80% of the management problems I faced were down to misunderstandings between colleagues, and around 90% of those were caused by the written word. Rarely was it bad grammar that led to hostility between staffers – much more often, emails were grammatically correct but worded in a way that native British English speakers found impolite. One day, one of my London staff refused to speak to an overseas colleague until she apologized for being rude to her. The overseas staffer had no idea that she came across that way. It’s darkly comic that English has become the world’s lingua franca. Not only is the tongue deeply illogical, the English obsession with politeness is so embedded in the language that even using it correctly can lead to alienation. “Native English writers and speakers can be supremely irritated by one-word or one-line messages that some non-native writers see as supremely efficient,” writes the author Fiona Talbot in Outstanding Business English. Oh how true! She warns that even addressing a recipient simply by name (Rebecca) without an accompanying salutation (Hi Rebecca) is risky. It is. English speakers are easily offended by their own language. Talbot, an Englishwoman, clearly loves her mother tongue while being acutely aware – perhaps, endearingly, slightly proud – of its idiosyncrasies. She elegantly intertwines the fundamentals of English grammar with the complex etiquette that surrounds the language, creating an enjoyable

book that entertains just as much as it informs. For all its challenges, English is an extremely rich language, commanding a much larger lexicon than many of its counterparts. Yet, because of this, non-natives keen to impress can sleepwalk into trouble. Stick to plain, polite English, Talbot advises, avoid obscure words and clichés, and you won’t go far wrong. You might even end up writing better English than the natives. Just remember Talbot’s simple rules – much of the language’s spirit and good intentions are lost in translation. — Outstanding Business English Fiona Talbot LID Editorial

85

APPS FOR LEADERS: DO.COM

Do.com is the app that kills pointless meetings, writes a thankful Perry Timms

Meetings are often overlong and laboured. Participants rarely attend them with a spring in their step. Time-stealing, back-to-back activities, with insufficient time given over to noting down the actions agreed: lousy meetings have become a common bugbear for workers. Do.com is an iOS-only app and integrated suite of functionality. It is designed to hold meetings to account. Starting from a helpful ‘manage your diary’ standpoint, it provides a series of application program interfaces that connect the app to whatever calendar you’re using. As well as managing the diary element, the app has some really useful additional features: real-time stats on how much of the day is taken up with meetings and a ‘zoom in’ to the next one on your list the ability to track cost-based information on your meeting time (billable to client or tracked for internal use) a function that allows you to take notes in meetings and share them (and other notes) with participants without leaving the app the facility to schedule follow-up meetings before departing the existing meeting; one tap to invite all attendees Many of do.com’s users report significant reductions in meeting times, better action and follow-up reliability, and attention to meeting times in terms of cost and purpose. Synchronizing across iPad, iPhone and Apple Watch, this app makes us mindful of meetings – what they’re for and how to keep them as focused as possible, and helps us to achieve better outcomes. — Do.com — Perry Timms is an independent HR/OD practitioner, speaker, writer and CIPD adviser on social media and engagement. Tweet him @PerryTimms Q3 2016 Dialogue

085_Dialogue_Q3_2016.indd 85

11/05/2016 13:09


86

last word

karina robinson

Behind the headlines forecasting apocalypse, much of the world is quietly pulling itself together

The outlook is not as bleak as you think Karina Robinson is chief executive of Robinson Hambro

liberalization continues apace under the A tsunami of pessimism envelops the preposterous state banner of ‘actualization’ Western world. The cauldron of war and of the system ­– capitalism in all but name. death in the Middle East, the refugee Lifting sanctions after a 15-year crisis, Islamist terrorism, Donald Trump’s standoff with the Islamic Republic of Iran is ascent, increased chances of Brexit, already leading to economic opportunities Brazil’s implosion and global economic for Western countries. The theocracy’s 80 uncertainty, to name a few. million population, including an educated Having recently returned from middle class, offers massive trade potential. Colombia, I beg to differ. Perspective is all. And there are other countries whose There, a historic agreement is being forged situations are less clearly positive, but between the government and the Farc, where potential exists for transformation. the Marxist terrorist organization that has At a global economic level, controlled much of the country’s interior commentators focus on the negatives, for 50 years. Though a deadline has been yet a record low oil price and low missed, US Secretary of State John Kerry commodity prices benefit consumers recently gave impetus to the talks, while and manufacturers the double-digit growth and rock-bottom of tourism reflects Now we have inflation helps shoppers optimism. and homeowners. There is more reason high employment Economists spent much to be upbeat when and stationary prices. of the 1980s and 1990s you look around the Employment is at a record saying unemployment globe at once-isolated high in the UK, while the was the price paid for nations now re-joining low inflation. Now we the international US has had six years of have high employment community. In uninterrupted job gains and stationary prices. November 2015, Employment is at a Argentina voted out record high in the UK, while the US has the government of Cristina Fernández had six years of uninterrupted job gains. de Kirchner – a wealth-accumulation Both governments note the need to include machine dressed up in a wafer-thin veil of the working poor in the good fortune by populist left-wing ideology. New president raising the minimum wage. California just Mauricio Macri’s centre-right government agreed to raise the minimum wage from $10 is dismantling Kirchner’s dismal legacy by to $15 by 2022. Capitalism needs consumers slashing currency and trade controls and who have the income to consume. normalizing relations with the rest of the On a multinational level, December’s world, including awkward creditors. Paris climate agreement is groundbreaking: Much more dramatically, Cuba and Iran 195 countries adopted the first universal, – associate and full members respectively legally binding global climate deal to limit of what George W Bush dubbed “the global warming. The accord is a pathway to Axis of Evil” – are heading back into the achieving other deals on other global issues mainstream. President Barack Obama’s such as water scarcity. historic visit to ‘communist’ Cuba in I could go on, talking about medical March marked the end of an enmity that and scientific advances, gay marriage, or was a remnant of the Cold War. Changes the Starbucks and Googles of this world in Cuba were already well on their way, realizing they need to pay tax. Then again, with pragmatic president Raul Castro gentle reader, perhaps you have already sending officials to the West to learn how had too much of a good thing. to run his own country better. Economic

Dialogue Q3 2016

086_Dialogue_Q3_2016.indd 86

11/05/2016 13:11


ORGANISATIONS NEED TO CHANGE THE GAME TO SURVIVE. This new organometric, The GC Index, is the first to assess an individual’s proclivity to contribute and make an impact to an organisation, role or project. All regardless of personality, gender, race, age, level or ability to ‘play the game’ and climb the corporate ladder.

A FOCUSED IDE

THE STRATEGIST

THE GAME CHANGER

SEES THE FUTURE

TRANSFORMS THE FUTURE

THE PLAY MAKER ORCHESTRATES THE FUTURE

THE IMPLEMENTER

THE POLISHER

BUILDS THE FUTURE

CREATES A FUTURE TO BE PROUD OF

TAS K

FOCUSE

D

FIND OUT IF YOUR ORGANISATION HAS A GAME-CHANGING TEAM WITH WWW.THEGCINDEX.COM www.thegcindex.com

powered by www.eg1.co.uk


LL SMAOKS:

BIDIEGAS

BO

ConciseAdvice2016_AD_dialogue_OL.indd 1

11/05/2016 10:25

Dialogue Q3 2016