What do Lord Rennard, former Barclays boss Bob Diamond and General Petraeus, former head of the CIA all have in common?

Answer – they all left their positions as a result of inappropriate behaviour.

All three were extremely clever and competent, able leaders, yet they all misbehaved in a way that cost them or at least contributed to their losing their leadership position.

It is interesting that moral courage, self discipline and trust are becoming more and more important in life as societal values change.  The common denominator in the News of the World phone hacking, the BBC and Jimmy Savill, the horse meat scandal, the Banks, the South African Police brutality stories is the same:  leaders are not being morally courageous in their behaviours and certainly not when it comes to exposing misbehaviour around them.

If leaders do not have the moral courage to do what is right organisational values mutate. Leaders need to have principles and stick to them they need to have the courage to do the right thing however unpalatable it may be. For to let one piece of misbehaviour go unchallenged is to lower their personal and organisational standards. And results, just judging by the cases above, have been typically disastrous.

A moral compass is essential at the top of an organisation as its leaders, once truly embedded in the organisation will control and influence what happens within the organisation. Once accepted a leader can take an organisation wherever they want with little challenge from within.  Whether they influence by word or deed they will be the ones who must be held responsible for their own behaviour and for the behaviour of those leaders around them.

When Lord Acton, expressed this opinion in a letter to Bishop Mandell Creighton in 1887: “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” he was absolutely right.  But now we have an insatiable media and the technology to match. Never more have society’s leaders needed that moral compass as the likelihood of being exposed for wrongdoing is so much greater.

In other words in today’s world, you’ve got far more chance of being found out.

SampsonHall

Good Leaders, Great Decisions

Sampsonhall.co.uk

The Royal Bank of Scotland’s five billion pre tax loss – the fifth annual loss on the trot – is hard enough to swallow.  So how does the bank’s head Stephen Hester sell the idea of paying £215M to its investment bankers?

Not very well is the answer.  With public hostility to the banks showing no sign of abating, when are the banks going to start living by the morals and ethics that most of us in our business and private lives abide by?

Not any time soon, by the sound of it.  Even more interesting, unless RBS faces any further punitive charges, it will return to the same high operating profit of £3.5 billion that it made this year.  Unless more procedural failings emerge.  Lets not hold our breath on that one.   Nor any suggestion of a change in the culture of the banking hall.

In our modern world when does an organisation really need to stand up for the values it expounds? Acknowledging that truth comes before trust; how can the leaders who were the exponents of much of the wrongdoing now inflict a different less profit oriented culture on those who follow them? Particularly if they are still using their obscene, outdated and questionable reward system that does not fit the value sets of current social corporate practice

Why should the tax payer continue to support a self perpetuating antiquated money oriented system that is not fit for purpose? It is as close in terms of risk and reward to drug dealing although the associated rich rewards come without the personal risk. Is this sustainable whilst those within that society struggle to make ends meet.

Is it not time for a serious look at what banking is and what it stands for? What does it deliver to society and how does its current culture, values and ethics really match those of the society it serves.

The imbalance in the Banking, corporate conundrum made up of shareholder profit, customer value and societal expectations that exists is down to poor, unethical leadership. Leaders need to be far cleverer in balancing their delivery appropriately in each of the contributory areas. Those leaders will also need to live by the values they expound. The Banking industry is at a crossroad it is up to its leaders to rise to the considerable challenge of changing the culture and leading it into a new age.

SampsonHall

Good Leaders, Great Decisions

Sampsonhall.co.uk

TURBULENT TIMES

I always say that you have two options at the bottom of a well drown or start climbing. Well many businesses currently sit at the bottom of that well. The events that have transpired over the last four years since the onset of the current recessionary cycle, evidence the turbulent times all organisations face. While uncertainty is troubling, it is also the time of greatest opportunity when business is most turbulent.

Humans are happiest in static times and yet if one looks at when the greatest organisations started, it was during times of upheaval and turbulence. Greats like Ford, Rockefeller, Carnegie and J.P. Morgan emerged out of the shift from an agrarian to an industrial society. Companies like Hewlett-Packard, Apple Computer and Microsoft emerged from the shift to an electronic society. This leap to greatness is made possible by the state of turbulence where the traditional paradigms and norms that govern business are shattered. Companies and whole markets are driven to seek out new solutions to their problems as they strive for competitive advantage brought about by the forces of change.

We are well beyond the realms of management and informed creative thinking and decision-making can greatly enhance leaders’ ability to lead. Positivity is key and rather than mourn the loss of business or bemoan internal changes brought about by recessionary pressures or from intensified market competition, leaders need to exploit the new opportunities that present themselves in the prevailing market conditions. One thing is certain: organizations are not going back to the business models that governed them prior to 2007. They are seeking new ways to enhance productivity and profitability, and therein lies the opportunity for any leader who wishes to seek it out. However, each should acknowledge that in times of turbulence, the ability to anticipate problems, situations and opportunities dramatically increases their chances of success. The Sampson Hall Gordian model allows leaders to make informed decisions about their future and the Sampson Hall strategy model enables them to plan in a world of uncertainty. Both are key to an organisations survival in these modern economic times.

If leaders wish to take advantage of the turbulence in their markets they must apply informed creative thinking skills based on reality and yet forward looking to the future. They must step ‘outside the box’ and think imaginatively and yet not naively. Positivity is key and yet credibility is essential. Rigor needs to be applied from a futuristic perspective. The Sampson Hall tools stimulate a shift in thinking that allows leaders to design and develop new solutions to address their workplace and organisational problems. Not only do the tools help with the current position but they enable organisations to understand where they are and how much further they have to go. They identify potential by pinpointing available but oftentimes hidden opportunities. These tools will help the creative thinking process in an organisation, they will allow leaders to take informed decisions whilst understanding and mapping the possible consequences of their decision s and the future problems that they may come across along their path to success. However these tools will only suit organisations that have genuine ambition and the desire to remain competitive amongst their peers. Organisations that have used them do not look back.

Does your organisation or business need to change? If it is not producing the required profit, productivity and or other performance outcomes required of it then the answer is most likely yes. If change is required, specifically what needs to change and why? If planning change be mindful the easiest change to implement will not necessarily be the best change, especially when considering the desired effect alongside longevity and sustainability. If you are going to implement some form of organisational change, do so cognitively in a considered and reasoned way. Know and understand your organisation or business culture within the complexities of the situation and environment, mitigate associated risks and prioritise actions and resources required to effect change.

Culture, by definition, is the collective of ideas, customs and behaviours of a group; organisational culture can be defined as the basic assumptions and beliefs that are shared by members of the organisation. The challenge in understanding and dealing with organisational and business culture is the reality and difficulty of changing the shared behaviours and beliefs of a group of people. When considering organisational change, culture is ‘king’ and will prevail irrespective of structural and functional developments if not addressed specifically. A leader, whether established or newly appointed, can implement structural and functional change within an organisation with relative ease (not necessarily easily). An externally appointed leader, initially at least, will not be readily accepted by the culture of an organisation and will need to work hard to achieve the required level of trust which engenders followers. Combine both factors to a change management or organisational change initiative and the associated problems are likely to be exacerbated. (If you doubt this consider how many external CEO and MD appointments are terminated within 12 to 24 months).

Strategic development and the change it necessitates can arise, develop and evolve accidentally and deliberately in different ways. Significant change within or of an organisation or business is most often a result of executive level, strategic decision making aimed at achieving some defined effect(s). Understanding and knowing the development process of a strategy and the different perspectives of strategic development is important in implementing effective change. The leadership view will most usually differ to that of the organisation’s cultural view and if an organisation is subject to political pressure or pressure from significant interest groups then the process of strategic development becomes more complex again. These processes and perspectives are not mutually exclusive and coexist to some extent in all businesses and organisations.

If organisational change is to be effected and implemented successfully the following key issues need to be considered:

Developing strategy and implementing change in a complex, dynamic environment, especially where innovation and flexibility are required, is very difficult and traditional practices, structures and models may not apply or be the most appropriate.

What is the leadership and management knowledge and experience within a complex, political and cultural organisational context? If an organisation or business wants to acquire the capability to change and adapt in order to succeed, it needs to consider how best to develop and grow its leaders from within.

We have entered the age of empowered individuals. Leaders use potent new technologies and harness social media to organize themselves and focus interest on their agendas and activities. Most are ordinary people with access to new information tools that can virally create large global audiences for their messages.

The more traditional hierarchical institutions of modern developed societies, whether they are governments or companies, are not prepared or ready for this new social power or leadership as the riots in London and the recent occupy campaigns in cities around the World exemplify.

This power has resulted in the emergence of a new dynamic form of leadership and new styles of leader – they are individuals who do not hold formal positions of authority, they operate and influence at every level within society virtually – top, middle and bottom. They are interested in political, social and organisational change. They challenge the status quo of the traditional institutions and the established concepts and practices of leadership. The speed of action of such groups implies revolution although given the pace of modern life it may just reflect more rapid evolution.

The world is changing and potential leaders now have phenomenal access through modern technology to potential followers; but are we really seeing the emergence of a new ‘grassroots leadership style’ or just a virtual reaction to current geo-political and economic issues and imbalances on global organisational and social stages?

This new technological advantage neuters traditional power and law enforcement and quickly turns virtual agendas into reality and action on an unprecedented scale. What we are seeing is the emergence of a new type of social leadership, irrespective of position or power or authority – relational rather than hierarchical. The concept of a fluid collective responsibility with time relevant ‘liquid leadership’  that builds, fades and morphs – where leadership comes to the fore at the top, centre, or edges of an organisation be it virtual or real. Leadership based more upon time relevant expertise, knowledge, and relational connection. It is a transient relationship where power is virtual and yet influence is real – a matter of permissive leadership with influence presiding over old fashioned traditional enforced authority, control and autocracy. Speed is of the essence and speed creates a phenomenal advantage for these new free running leaders. Accordingly, social power or the ‘power with’ rather than ‘power over’ provides the collaborative advantage even on the global stage. Witness the Arab Spring. This new leadership can be momentary and omnipotent, as powerful and transient as it is weak and ineffective. Predictable-maybe sometimes, yet surprise brings potency and it’s this new leadership’s unpredictability in terms of uptake or influence that can make it difficult to control.  A popular cause and the means of unfettered communication are at the heart of this new leadership. Alliances fostered in an information age where national agendas are undone by social perceptions.

This  new leadership has a precedent; it is  similar in shape to the old terrorism of Al Qaida and Osama bin Laden. Where a religious and social agenda created a fanaticism that spawned martyrs by the thousand. Where social agendas pampered to by a sensationalist press created a myth of omnipotence. Perhaps the new anti-establishmentarianism will be seen as  the new terrorism when viewed from an old fashioned state government perspective

This new leadership comes and goes dependent upon the social situation and leaders come and go dependent upon the relevance of their expertise and the access they have to social media and the scale of their audience. This new form is so dynamic it resembles a ‘liquid leadership’ of a group coalesced by only a  social strategy or  popular agenda.

These new groups herded together by social conscience or injustice often present a preferred response  to those transgressors they oppose. Their preference is for action, to engage, not ignore; work with each other, not against to resolve issues  by whatever means whether the establishment likes it or not.

Business needs to understand this new dimension of leadership, if it does not it will miss out on an opportunity. It needs to harness the social and economic power this new form of leadership affords  For to understand and develop a new business leadership culture based upon influence and empowerment will bring with it a quantum change to the  long established way leadership is currently practised using some of the somewhat antiquated autocratic leadership theory.

Well we are in the doldrums economically; however we are not going to remain there as the human requirement to drive forward to seek better times begins to take effect. Quite simply when you are the bottom of a well you have two choices drown or start climbing and I believe that we are now beginning our ascent. So as we emerge into a brave new world that will be very different from all that has gone before how are we preparing for it?

Most businesses are anchored in the world of current balance sheets, reducing overheads and expenses, laying off staff and acquiring investment. All of which can have a severe negative impact on a business and its ethos,   few have had the sense to take stock of their position strategically and seize the moment. A former Prime minister who lived through harder times once said:

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”. – Winston Churchill

So how do we seize the current moment for sure the economic recovery will be slow and for sure the competition will be tough and getting tougher and better. So how do you stand out as an organisation that gives added value?

People buy from people, people do business with people so the answer is there: Develop your people in preparation for the new world, develop your people to take your organisation forward, develop your people to show that you care and are prepared to invest in their futures as well as your own. Customers not bosses are the ones who ultimately pay wages unless you are fortunate enough to have found a generous benefactor.

I am constantly amazed at the lack of preparedness of UK companies to train their staff to gain competitive advantage. UK companies normally train to conform to legislation. A bout 80% of training is paid for by government subsidies and the popular belief is that government funds training. Unfortunately most of this training is below NVQ level 3.  Companies don’t train when they are busy- because there isn’t the time and don’t train when they are slack – because there isn’t the money. Yet if an organisation wants to recover or better its market position in the face of improving competition now is the time to train. Now is the time to give staff the tool set and the culture to provide an organisation with the competitive advantage. Particularly in a future world that is quickly looking very different from the one that took us to the current recession. We have to do something positive to seize the opportunity.

As that same Prime Minister said:

“For myself I am an optimist- it does not seem to be much use being anything else” Winston Churchill

Businesses appear to have a lifespan and it is only very powerful and agile businesses that survive through a paradigm shift. A fine example of failure is the American rail road businesses who believed they were invincible in the rail business rather than flexible in the transportation business! Woolworth’s once one of the UK’s strongest retailers suffered in the same way. So why do businesses only last so long?

Look at football clubs,  the only ones recently who have had longevity are Manchester  United and Liverpool although Liverpool’s glory days were  along time ago. Are Manchester City and Chelsea future proof or just riding on the crest of a wave provided by a rich benefactor. What are the ingredients for longevity?

Having a strategy is key to longevity as it defines an organisations destiny, Key to strategy is vision which is an ability to assess where to position now for the long haul whilst identifying where the long haul leads. Vision is key in any strategy and unfortunately as businesses get entwined in the economics of the here and now vision is rarely evident in organisations. With vision comes risk management,  an organisation has to identify the threats that will challenge it on its journey and manage those challenges until they are small enough to deal with. Talent management is another key part of strategy particularly the development and retention of high performers. Organisations that map out their destiny using strategy shape themselves and their environments to achieve. Businesses that don’t have a strategy will hit the wall.

When businesses are small and easy to control processes are less important,  however as a business grows processes become more and more important as they allow leaders and managers time to focus on strategic rather than tactical issues. Time spent in the weeds reinventing the wheel is ill spent time and costs businesses, however if processes are put in place and control delegated senior members of a business can begin to map out and shape the future of a business. Small businesses that remain without processes remain tactical, waste time and hit the wall.

Review and renewal are key to development just look at the Manchester United story when players such as Paul Ince, Roy Keane, Eric Cantona and David Beckham were sold or moved on to be replaced by fantastic talents. Manchester United are not afraid of renewing when necessary without sentimentality. So should a business be when necessary after all a business in only in business to satisfy its customer’s needs rather than its worker’s needs. Businesses need to know that they match their customers needs and regularly review their relevance. Businesses that are too internally focused and sentimental will hit the wall.

How do people develop as leaders without the benefit of experiential learning? I meet so many coaches who claim to develop leadership within their coachees who have never been in leadership positions themselves. Their experience is based on learning from books and not in practice. I believe that three key attributes of a leader which cannot be developed without experience are developing trust, managing risk and exercising judgement.

An effective team has to trust its leader and trust each other if they are going to be cohesive in their disposition. How does a leader earn the teams trust without developing  that trust through experience. Team members must identify their leader as trustworthy before they will trust them. It is the same with other team members. Trust has to be earned and it has to be earned through experience it cannot appear on order.

Leadership is about recognising risk and mitigating it as far as is possible. But like most things in life managing risk comes from experiencing life and experiencing risks. What risks are worth taking and what are not? Leadership  and the management of risk are about the future they are therefore more of an art than a science as they cannot be prescribed. Risk management is about experience and the gut feel developed through the hard knocks of life.

Risk is exercising judgement and making the right calls comes from learned wisdom which is a combination of classroom and book aided learning and experiential learning and it is this rich combination that informs the great leaders. The combination and the ability to associate current circumstances with knowledge that allows the great leader the wisdom and judgement to effect change within an organisation in the right way at the right time.

Leadership can be learned from a book but it is  a brave leader who reaches judgements based solely on non experiential learning. Most great leaders I have met and come across stretch their leadership through the combination of   non experiential and experiential learning mixed with the ability to hone their leadership through reflection and pre emption of the issues that will challenge their leadership.  You can’t be a leader without feeling it! You can’t be a leader without learning as you experience it!

How important is leadership in relation to success? Some modern academics argue that success can happen without top level leadership. For me one 0f the key ingredients to organisational success is top level leadership. We have all seen successful organisations driven by the philosophy and drive of one key individual fail as that individual is replaced by someone else. We have all seen organisations that seem to carry on in perpetuity  as leaders come and go. So what makes the difference? Richard Branson,   Larry Page and Sergey Brin, Bill Gates  and last but not least Steve Jobs all run or have all run globally important successful organisations in recent times. However  Barclays, McDonalds, Disney and BP are also all successful  global companies that have broken the shackles of  an individual’s leadership style and competence and still preserved their status.  TESCOs after Sir Terry Leahy  and now under Phillip Clarke are still in leadership transition that will bring  many challenges particularly with consolidation after such rapid Global growth. The way that Phillip Clarke takes the organisation forward will be fascinating as we enter challenging  financial times throughout the world apart from Brazil of course.

Organisations are all different and all have leaders who serve them in differing ways  but success and leadership are linked and here are a few leadership aspects that ensure the maintenance of success within an organisation.

Key to any successful organisation is understanding of its current position. How many organisations truly know where there current position vis a vis competition, product life span and commercial risk. Without a leader focused on understanding the bigger picture in terms of risk, succession and positioning an organisation can only have a short lifespan.

All businesses have an ethos/culture  and it is important that if relevant that culture is preserved after all it is what got you there in the first place. Organisations that have a successful and relevant culture need to preserve it through induction procedures for new employees,  succession plans to ensure those who have grown up within the organisation who understand its doctrine are its future leaders as they preserve the continuous inspiration afforded by that ethos/culture.

Every organisation needs a vision and the vision must be owned by all within the organisation. Vision is not the sole province of senior executives they are the custodians but for vision to be effective it must be owned by the people within. If it is it will generate self sustaining pulling power to drive the organisation to the achievement  of its vision.

Within the vision  are objectives which whist being aligned to the overall vision they must also be challenging and rewarding to those who are responsible to achieve them. They must be timely and measurable and they must be clearly understood.

Goals  within  objectives are simply tasks to fulfil and as tasks they also need to be inspiring and achievable. They also need clear boundaries and controls to keep them on track and the desired end state of the task  must be easily recognised.

Now risk and leadership are particularly closely linked particularly in the more frugal times. A leader needs to know what are the true risks the organisation is taking; what are the warning signs and what are the implications should the worst case come to fruition. There are plenty of  recent examples of when this did not happen Zavi, Woolworths, RBS and then lets look at the US banking collapse in 2010 with 20 banks closing in two months with well over 100 closing in the year. Risk has moved up the leadership agenda and needs to be considered and understood at the highest levels.

Leadership is about the art of the possible it is not the science that management is as it is far more futuristic in its doctrine. It is about the use of experiential learning to influence and motivate people for the future and the challenges that brings. Management is a science and therefore based in the present and based on sound evidence. Lets take targets as an example managers set targets to motivate and control performance. Leaders understand where the organisation is and ensure  continuous improvement through effective inspiration, motivation and judgement.  Both are required in an organisation but for me the manager is the policeman for the leader, the person who keeps people on the successful track set by the leader.

Small to medium size enterprises are beginning to collaborate more and more. Such collaborative enterprises are beginning to challenge some of the bigger commercial organisations as co-operative ventures NISA, Mole Valley Farmers, The Co-Op are all examples of successful mutual collaboration. Now with customers becoming more and more environmentally sensitive and more concerned with the local impact of the big five supermarkets there is a growing opportunity for local collaborative work to truly challenge organisations with a large environmental footprint.

So if SME’s wish to collaborate what are the key tenets of effective collaboration. After all  collaboration is simply working in a leaderless team!

Vision as ever is vital and it must be common. A shared and well communicated vision will hold a collaboration together and empower those within it to achieve.

Trust Collaborators must trust each other. If they don’t collaboration wont work. Trust is two way and trust is important when there is no leader to arbitrate.  Trust allows the collaboration to be honest and forthright in its  internal challenges without fear of dissolution. Trust  also breeds respect and respect ensures that listening to and comprehending each other’s point of view is  part of everyday life.

Communication is the essential life blood of collaboration and it has to be effective without  a leader to interpret messages. Communication in the early stages makes for stronger collaboration. That early communication is important in establishing members expectations and boundaries. For collaboration will crash without all those involved understanding each others expectations and boundaries. The most important part of communication is honesty in terms of being honest in what you will do and not what you may do! It is also vital to communicate any change in your intentions- for to announce that you haven’t done something on the day you promised to deliver it it breaks trust!

Clear Responsibility and Ownership boundaries are enhanced by clear delineation of responsibilities, they make for effective work and control and ensure accountability within an organisation. Ownership of issues and tasks has to be clearly understood by all those involved. And all those involved have to be prepared to accept responsibility and accountability.

Results Without outcomes which match or exceed expectations no collaboration can survive for long as members look to others to satisfy their ambitions.  A collaboration and the individuals must focus on results.

Well its easy really when you know how. Then why is it so difficult for SME’s to achieve successful long term collaborations? Follow these simple principles and suddenly many doors and avenues of opportunity are opened.