Thursday, 27 May 2010

1 of 5. Why change?

This is the first blog in a series of 5 on leadership and change.


Do not follow where the path may lead. Go instead where there is no path and leave a trail.
Harold R. McAlindon (also attributed to Emerson and others)

We all know and accept that today's business world is highly competitive. However the challenge we often have is that knowing and doing for the majority is a step too far. Short term thinking without planning is killing modern business. Yes we need to be adaptable, but adaptable and flexible in a controlled fashion are very, very different to knee jerk decision making. The way to survive is to reshape to the needs of a rapidly changing world. Resistance to change is a dead-end street for you and your organisation. Customers are not only demanding excellent service, they are also demanding more. If you do not supply it, your competitors will. Organisations are reshaping themselves to change quickly in order to meet the needs of their customers. The culture of business is becoming more controlling and less creative. The organisation's top leaders know they cannot throw money at every problem and that they need highly committed and flexible people.

As a leader, you need to emphasise action to make the change as quickly and smoothly as possible. 'Innovate or die'. This mantra has been repeated so many times - by the media, governments, business leaders, business professors, consultants and management gurus - that people have come to assume it is actually true. A light bulb overhead may signal a bright idea in cartoons and comic books, but in today's business world companies can't sit around waiting for creative bolts of inspiration. Long-lasting success requires a process of innovation that is predictable and consistent. However innovation is not an isolated programme of activities. It must be part of the fabric of the organisation and interwoven into each and every activity. Modern economies are being continuously challenged by changes in the global economic landscape. Generation of knowledge and the application of that knowledge leads to the rapid development of products, processes and services. The speed of these developments is being driven by more discerning customers and the increase in global markets.

Economies can no longer compete on wage levels, innovation is the key driver for competitiveness for today's global market.

Innovation in business takes six main forms:
• Leaders who embrace innovation
• People who are encouraged to innovate
• Product - new or improved goods or services
• Process - improved production or delivery
• Organisational - business practices, workplace and external relations
• Marketing - product or service design, packaging, promotion and pricing

Much more on innovation and its methodology and impact in a later blog in this series. However one of the fundamental problems with any new programme or right angle turn is that change is not always welcomed. In fact when you need to change, most organisations have gone past the point where they can change (more on this in the 3rd blog of the series on the Sigmoid Curve). Around 70% of change management projects fail to achieve any results at all. But in these tough times adaptability may be crucial to survival. It seems that if companies want change to happen in their organisation, one of the worst things they can do is call the projects they plan 'change management'. This is the conclusion of a recent McKinsey report that shows 70% of so-called change management programmes fail to deliver many of the results they expect.

In times of prosperity not achieving all change can be tolerated. The problem now, though, is that as the economy enters recession, we will once again see change management take centre stage. Worse still, rescue and realignment projects will not be about tweaking business processes. Change may be the key to a company's very survival. The recession is a punctuation point. Prompt action can save the day, but now everyone has to see the need for change and sign up to it.

Thursday, 20 May 2010

Harness culture or lose it

I was recently conducting a coaching session with a leader who has a demanding bureaucracy, who is not good with people, who blames others and who seeks power. I could not help but think about the impact he was having on his business slowing down. I did tell him to stop ‘being the best in the business’ and start ‘being the best for the business’.

I have done a significant amount of work with organisations to understand employee engagement and I often reference entropy as the angst or frustration that has been allowed to build up in the business. We often find four causes of cultural entropy:
•A lack of alignment between the organisational purpose and the individual understanding of that purpose
•A disconnect between the organisation’s values and behaviours as stated by the business leaders and the operating systems within the business
•A difference between the values of the group/teams and some individuals operating within them
•A leadership group that is dysfunctional in their stated values and the way they operate or behave.

We look to measure in many of the tools we use the levels of culture within a business and the cultural climate when assessing the dynamics of potential change and its implications for performance. Here are some of the dynamics we tend to include when assessing culture:
1. Uniformity. All cultures change over time, although the rate of change may not be uniform across (or even within) cultures.

2. Complexity. The direction of such change is always toward greater complexity. At some point--perhaps due to some triggering event--the rate of change (and, hence, the complexity of the culture) will steadily increase.

3. Increase. The complexity of a given culture, combined with the increasing rate of change, will eventually reach a point at which the culture will be unable to sustain itself in a coherent manner.

4. Entropy. The culture, no longer able to function effectively, disintegrates. In the greater scheme of its relations to other cultures, it is no longer able to interact as a unified state.

5. Absorption. The entropic culture's constituents, being human, require a certain amount of social structure or meaning in their lives.

I was reading Eric Beinhocker’s The Origin of Wealth and I was remembering the passage he uses from Proust “the real voyage of discovery consists not in seeking new landscapes but in having new eyes”. When we describe cultural entropy, we are typically referring to the amount of energy an organisation consumes in meaningless or unproductive work. Cultures can lose energy, too, which is why the Egyptians don't build pyramids any more. We often find that scale plays a very important role in entropy - roughly speaking, the larger a system or institution, the more opportunity for wasted energy. This applies to governments, corporate bureaucracies, large organisations, religious movements, green movements. Part of this is due to the fact that as a system becomes larger, a proportionally greater amount of energy has to be devoted to keeping the system alive rather than doing what the system is meant to be doing.

Friday, 14 May 2010

Groundhog Day Leadership

I was reading articles recently on how to become an effective leader and I came across tips on how to improve my leadership skills. I was particularly struck by the Google search on leadership which found me a 150 million ways to improve my knowledge/skills. If there is that much advice, how come we are not the masters of the art, and why is it that we get it wrong so many times? We have role models. We have authentic leaders, we have transformational leaders, we have charismatic leaders, we have transactional leaders and even in blackswan we have True Leader programmes. I ask myself regularly as someone who teaches the art of leadership, and practices the art in my own business, can leadership be truly taught, are there a set of skills/knowledge that once you grasp it means you can lead? My answer is that we are always looking for fast solutions that change little and cost a lot.

Ask yourself a question: in the history of your business how much has been spent on leadership training, and I will confidently predict that you are no better led today after this significant investment than you were prior to the training. Is this because leadership cannot be taught or leadership is being taught in the wrong way? Or is this because perhaps we are heaping skills and knowledge without the behaviour change onto people who are incapable of absorbing the information or deciphering the data or implementing any actions that have sustainability? I often use the example that leadership training is like putting people into a car with no steering wheel but a lot of power, and then asking them to go really, really fast.

There have been so many programmes on leadership and this is not just confined to the business world. Many of the programmes I see about leadership are largely a matter of technique or a set of skillsets that are being taught. My view is that alongside these programmes we need to embed a sense of urgency, a sense of toughness, a true set of values and beliefs together with the personal wisdom on how to apply them appropriately. These are tough times and we need leaders with passion, conviction, and a willingness to take charge and lead us to a better and more engaged place. I often use the example that leaders lead bullet-filled battle charges without looking back to see if the troops are following. My belief set tells me that if a leader has to confirm loyalty then they are already in trouble.

What we now need is a whole new way to help leaders meet the new business horizon head on, programmes that prepare the mental toughness to form the challenges and the vision and operating style that engages and motivates the organisation in a trusting and authentic way. We now need leaders who are driven to lead to step forward, to take control and to guide organisations through these unchartered and choppy waters. The challenge is that many of our models and most of our experiences are built upon traditional methodologies for a world that no longer exists, and so we drive forward using the rear view mirror to guide us. The ‘next practice’ leadership programmes need to deliver results that create a leadership ethos and capability that has toughness, entrepreneurship, chaos management, innovation and trust at its core.

Too often we love our programmes so much we do them again and again to the same people with slight variations. So we say that this manager has 15 years experience; no he doesn’t - he has one year’s experience 15 times over. And he will continue to have that same year’s experience over and over again - Groundhog Day Management. We can see the results. We witness the damage. Let’s make sure we learn the lessons.

Thursday, 6 May 2010

East Meets West

For an Irishman abroad it’s difficult to go anywhere where there is not an Irish pub to rest and recuperate. The same is true in China. However I am not sure they fully get the Irish thing yet. In my many travels there I have seen the pace of change in China continuing to accelerate.

However as international commerce roars into China, what many investing companies are not recognising is that we are blinded by the enormous population and opportunity and some are not equipping themselves for some serious challenges.

China lacks qualified talent to meet many of the demands of foreign employers. A common misperception about China is that there is a limitless pool of workers from which companies can draw. But the pool doesn’t look quite so full when a company starts searching for key people with high levels of technical expertise in a given industry, management ability, education, language skills or experience working in the global economy. As organisations have experienced in many other emerging markets, this acute talent shortage drives high attrition rates and creates an environment which makes it easy for skilled workers to hop from one job to another.

Over the next few years, global companies in China must change their HR strategies to enable them to keep pace with surging market competition and with changing employee needs and profiles. These are some thoughts from recent travels upon some priorities our clients are grappling with.
• Structuring a Total Rewards Balanced Scorecard
• Building an employer brand which fosters employee engagement
• Creating an HR function with the edge to be innovative and transactional
• Building the next generation of leaders
• Dealing with Talent Segmentation
• Developing HR with regulatory changes in mind
• Aligning engagement and productivity
• Investing in Leadership Trust

Bill Gates was quoted as saying, "The only asset that Microsoft has is human imagination." Where we deal in People Process and Innovation, this is now becoming more and more of a reality.

Tuesday, 4 May 2010

A lack of rainbow in management

There are people who talk about diversity and ethnicity with a self righteous indignation and I wonder sometimes what drives them. I was at a recent leadership planning meeting with a group of high powered HR people who scared me in their self righteous condemnation and damnation of my view that we are all intrinsically racist and that many of us are now even aware of it. I am shaded by my West of Ireland upbringing where the first time I saw a turban it was worn in a manufacturing unit I was being asked to run in the UK and where my curiosity about all things Punjab first appeared. I was 30. I would love to say that as the father-in-law and grandfather of what some inappropriately call non ethnic Anglo Saxon, that I was not racist. I try very hard not to be. I look to learn and grow in becoming more tolerant and understanding. However my shaped experiences and prejudices are things that I need to constantly unlearn.

In this room of HR the views of an elite, 90% primarily white, audience was that what I was saying, believing and trying to do, was unacceptable in their eyes. We should all start from the premise that there is so much we do not know. There is so much ingrained into my psyche that each day I have to say to myself, “today I will become less racist and I will try to learn more about my prejudices.”

I feel happy for those who can preach from a high moral position and look down and frown upon us lesser mortals whose whole ethos is to get better. They must be so blessed I wish them well.

 
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