Monthly Archives: October 2011

Secrets of success (part 1)

 This is the good bit, faithful readers; this is what you’ve been waiting for; this is what keeps the airport bookshops in business.  I am going to share with you what it takes to be successful.  Be warned though, there are no shortcuts, no easy bullet points to follow and no mention of any famous person, living or dead or any of their utterances or homilies.  My views are not intended to be definitive or exhaustive.  What I am about to serve up today is one man’s humble experiences and thoughts that have come from a long career. Feel free to take from this what you will, discard what you please or laugh up your sleeve or simply tweet nicely together.  All I can say is that it worked for me.

Success is relative and I’m no Bill Gates, Roman Abramovich, Richard Branson or even Alan Sugar.  But, I’ve got a great family, we eat each day, we take holidays, I’ve got a pension plan and if you wish to find me on Linkedin you can see that I’ve done quite a bit of stuff and I’m happy with my achievements.

 To say I was an example of childhood poverty would rob my family of the dignity we had and the love I received. Anyway, the family life we enjoyed was in blissful ignorance of such socio-political concepts or median income reference points.  Certainly, a tin bath in front of the fire on Friday evenings never did any of us any harm and weekly bathing was still the norm in our street. However, despite the warmth of family life, I’ll be honest and say that if I had an ambition in my teenage years it was to get as far up the ladder as I could – so if I fell, I’d never fall as far back as my starting point.  Fear of failure became my driving force rather than simple ambition.

Looking back, I realise that the greatest gift bequeathed to me from my father was a love of reading.  Curled up tight in bed, I would listen intently to the stories he read to me.  Later when about seven or eight he delivered me one Saturday morning to the library to join the Young Readers’ Book Club. By age ten I had exhausted the junior library’s stock of books and once more my father took me in hand, across the corridor, into the hushed, enormous room that was the adult library.  Being years too young, my father had cleared the way with the chief librarian who nodded sagely at the sight of me and solemnly handed over my very own senior library tickets. Roaming the adult library was, for me, like being let loose in the biggest sweetshop in the world.  For hours I would scour the shelves for histories of war, of tortured victims, of great suffering and great escapes, arduous journeys and of adventure in far-flung places.  This love of reading has stayed with through life and been a powerful friend.

 Leadership qualities? I don’t know to this day if they are inherited or learned but I do believe that whatever you are born with can be improved with learning and application. What I’ve also learnt is that there isn’t one style that’s right for all circumstances.  The approach you need for a failing business is very different to that required for a successful and established company.  I got my first taste of leadership as patrol leader aged 12 in the scouts and must have done alright because two years later I became troop leader.  I got my first business to run at 29 and my second at 31.  These were both very successful (a start up and a turnaround) but what I quickly learnt was that I wasn’t an expert at everything  and needed to concentrate on building the right team to move forward.

 Hubris was lurking just around the corner to trip me up though and despite continued success in my third business, I demonstrated just how effectively I could screw up relationships with the overseas board.  Chastened, I licked my wounds and learnt how to objectively take stock of my weaknesses and set about addressing them in my next role.  Changing industries, I also learnt how to set about understanding its opportunities, how to build a team to meet the challenges and, critically, how to manage upwards.  Life became fun once more.

There’s probably more garbage talked about teamwork than even sex or football.  The ideal of the perfect, harmonious team, continuously subjugating all personal gain for the good of the team and the common goal is about as common as the perfect yummy mummy goddess (or the male equivalent, ladies).  Getting the job done and reaching the goals year in and year out is difficult enough.  Trying to spin all the personal plates and cope with each individual’s hopes and aspirations (however unrealistic these might be) and the vagaries of their personal lives is, frankly, not the easiest.  However, if you pick the square pegs for the square holes, ensure you delegate, support and reward appropriately then you aren’t going to do a bad job.  And if someone doesn’t work out (after the appropriate procedures and support) then let them go quickly and with dignity.

More on leadership and the qualities that have helped me in part 2 plus the importance of strategy and a few other important things.  Feel free to share your views.

Shouldn’t we care more for our elders?

Yet again we have more terrible news of the failings in our much vaunted National Health Service.  The Care Quality Commission today reports on its findings into inspections at 100 acute NHS hospitals inEnglandand announces that fully 20% were not delivering care that met the standards the law says people should expect in terms of dignity and nutrition.  One in five hospitals failing to meet legal requirements in these basic areas despite the additional billions pumped into them over the last decade or so.  How can we spend so much and get so little in return? Why does such a large section of the caring profession get it so wrong?

Image courtesy of Nursing Times

As I’ve blogged before (‘No way to run a health service’ June 2011) I’ve had both first hand experience of our NHS, been married to a health professional and seen some of the failings at first hand. Now don’t get me wrong if you think that I’m someone who doesn’t believe in our health service; it has saved my life on two occasions. But that doesn’t mean that it is without blemish. Just consider, it employs c.1.5m people and, sure, not all of these are going to be up to scratch in the care stakes. But 20% of hospital failing to meet legal requirements? A sad but true story first.

A few years back my late mother was admitted into one of the major London teaching hospitals as she had suffered a fall. I travelled the long journey down to visit as soon as I got the news and what I found shocked me to the core. Mum was groaning in apparent and considerable agony some 20 feet only and in full sight of the nurses’ station where 7 or 8 nurses and doctors were doing various things (including sharing jokes). It transpired that mum had received no assistance to relieve herself since being admitted earlier the day before and clearly had been ignored. Any ‘profession’ that can permit this level of indignity to be visited on another human being has serious failings.

The National Audit Office in a separate report today finds that 80% of hospitals were in some financial difficulties and two thirds had weak leadership and management delivered poor quality care to patients. According to The Kings Fund, of the funds invested in the NHS under Labour somewhere over a third went on increased salaries “and the returns, in terms of better care, higher productivity are somewhat elusive so far”. So, despite an increase from £52.9bn in 1998 to £118.3bn in 2010, nothing much to show in efficiency gains. Now, if as a chief executive of a public or private company I had gone to shareholders and asked for this sort of percentage increase and then said I had nothing very much to show for it, what do you think my survival chances would be? Especially if I had incurred a far vaster liability in terms of ‘off balance sheet’ (in the form of PFI) commitments for years to come

Now to be fair, the Government had to pay for the effects of the EU working time directive for junior doctors and for sharply increased costs of criminal negligence claims. But who agreed to the former and who created the environment for the latter? Sure, the cost of drugs rises inexorably but the waste in the system is incredible. There is almost no other subject that gets politicians and the public rushing to their respective corners as the NHS. It’s curious but mention profit in connection with healthcare and it’s battle stations at once. The fact that a private company might be efficient enough to make a profit is anathema to the likes of the Guardian readers. But mention that an equal or far greater amount is being simply wasted and you get a shrug or, at best, hands wrung, eyes averted.

The adverse effects of shifting demographics have been known to governments for over 25 years and caring for our elderly is going to take more than a few platitudes. Democracy has failed us because, frankly, the political elite haven’t had the guts to tackle the issue of funding healthcare in a sustainable manner. Does it matter if the care my mother (or yours) receives or the dignity she is afforded came from a profit making organisation that didn’t waste the funds we invest from our taxes? The health professionals may be capable of delivering care but don’t kill them with targets. And just because we are talking of professions don’t fall into the trap of assuming they know how to lead a multifunctional team and manage vast budgets.

The NHS was, in fact, an all party wartime coalition effort (despite the fact it was a labour government that was in power to introduce it in 1948). We are now in the midst of a crisis in healthcare that has been decades in the making and it will take a great deal of time to come up with a sustainable solution. We need, somehow, to take control of the means of a solution out of the party political system.

Don’t we owe it to our elders to spend their final years with dignity? They brought us into this world; shouldn’t we try to make their passing as comfortable as we can?

The relentless executive churn

Yes, I have lost count of the numbers of executive CVs I have read and the interviews I have conducted as a result but it has given me a very broad insight into some of the issues behind the extremely high executive churn rate that continues to accelerate.   Reading CV after CV, filled with fine qualifications, great training and solid achievements you start to get a feeling that something is very wrong if all these people have been ‘let go’.  Sure, some industries come under attack from the onslaught of new technologies, recessions hit some companies selling discretionary items very hard and, OK, some companies are just, well, average or below.  And there are going to be a few genuine personal failures. But none of this really explains the sheer volume of executives ‘between positions’.  Why is this?

Of course, a percentage of the churn is due to those executives moving on proactively to the next step in their career.  I think that these are a minority, however.  Some years back when you advertised a senior role the vast majority of those who applied were very much still in post although available for the right move.  Gradually things have changed, though and over the last few years the vast majority of the increasing number of applicants for an advertised position is now ‘immediately available’.  This changing dynamic, which became established as a trend long before 2008, is a powerful indicator of the forces affecting executive careers. Why is this happening?  Is this trend going to continue come the much awaited upturn?

The top business schools and the major corporations certainly turn out highly skilled managers.  Numerically though, these executives are in a minority when viewed against the numbers on the job market each year (and this is what you would expect if these good performers at the second and third standard deviation of the average).  However, even these privileged ones can often find life difficult when trying to move into the next role for a number of simple reasons.

Although the initial training may have been broad, the actual roles they have held have often been deep, but narrow, functionally. Outside of the major corporations such narrow functional specialism at a senior level is a disadvantage.  As the age of the conglomerate has waned, the largest corporations have produced relatively fewer general managers with solid P & L experience.  So if you happen to be looking for a general manager, MD or CEO, there are going to be fewer candidates from the major corporations and, of those available, are they going to want, or be able to step down into a top role in a smaller company?  This latter point is critical, as my experience is that, although medium sized businesses cry out for professionally trained executives, few from major companies can actually make a successful transition into a smaller company.

So, what of the candidates from the medium sized firms?  I’d like to say that our smaller universities and business schools can turn out world-class business men and women.  They do, but experience shows that these people are the exceptions.  Unfortunately, business studies and marketing now number amongst the soft A level subjects and don’t seem to attract their rightful share of the brightest students, something that feeds into frequently inadequate university courses. Sad to report but I have interviewed marketing graduates who claim never to have been taught anything of segmentation.  And for many of our medium sized companies comprehensive executive training is something that they have always struggled to achieve (simple economics and the fear of losing the beneficiaries). Please don’t misunderstand my view; they are many excellent men and women who do well in our SME companies but when times get tough many find that they don’t have the breadth of training to guide them through.

The recruitment process should be a whole lot more successful in the 21st century.  Given what has been learned and taught about the management process over the last 100 years, we should be looking at a solid profession, if not a science.  But the reality shows that the process of selection, appointment and induction (now called ‘onboarding’ for those that didn’t know) seems as imprecise as ever.   The courtship ritual between candidate and prospective employer is just that, a ritual that owes as much to its mating counterpart as to science.  The employer writes the job description in glowing terms with emphasis on the wide scope and significant responsibilities the role entails (often without regard to the reality of the role or their own tendency to control freakery).   The candidate writes his finely polished CV full of all the sought after competencies and action verbs and tweaks the personal statement to mirror the demands of the role in question, confident that once they get the job all will be possible.  Certainly we now have the psychometrics to guide us, the intray exercises to study and the consultants to sift and advise but…it’s still a human making the decision.  The square pegs get the round holes (and vice versa) and the churn increases.

Moving firms and industries is difficult and research has found that success in one organisation is no guarantee that continuing success is guaranteed in the next.  Leaving aside the challenges of moving industries, or even just companies, taking up a new post is fraught with difficulties.  The old known and comfortable culture is left behind along with the reliable and competent team you steadily built.  But more worryingly, those carefully nurtured networks you could rely upon are gone, as are the known bad guys clearly identified through many a tussle for resources and patronage.  Instead, valuable time is wasted whilst you scope out the strengths and weaknesses of your new team and learn (often the hard way) who can be relied upon amongst your new colleagues for honest or objective opinion and support.

One of the saddest aspects of this churn is that executives aged 50 and over find it extremely difficult to gain a new role at their old level (if at all).  Despite excellent qualifications, extensive training and relevant experience, companies seem to turn their back on these executive elders.  Why?  The accepted wisdom is that older people are less committed, have less energy, take more time off sick, find it harder to change and are not team players.  The truth?  A substantial research project carried out in theUS some years back (and published in the HBR) looked at this issue in depth and found the received wisdom diametrically opposed to the reality.  The real reason that restricted older people from getting back into employment was simply that younger managers and executives just hated the idea of employing someone who knew more than them.  A consequence is that youth and inexperience is favoured over experience.

The good news is that many executives go on to build their own businesses, frequently as consultants, non-executive directors and business coaches, passing on their valuable experience and knowledge to others.  But it’s still a waste.

Corporate life is more demanding than ever, but I recommend that the generation moving forward in the corporate ranks take time out to prepare for the day when the churn hits.  Our Chancellor is constantly being urged for a plan ‘B’ to meet changing circumstances; my advice to younger executives is to do likewise and prepare for self-sufficiency.

Executive life – nasty, brutish and short?

For anyone with ambition the classic assumption is that the career path will proceed in a nicely linear fashion from bottom left to top right.  Either you join a major company and start the climb up the greasy pole or you make well-timed moves across a series of organisations.  And for a number of years this is the pattern that occurs.  The promotions come along, you get your first team to run, your phone starts to ring with callers that announce themselves “Hi, I’m Alan (or Amanda or whoever) from xyz, we’re executive search consultants; can you speak?” You move for the next big job at board level and so it continues.  For a while.

Executive tenures are getting shorter. Average CEO tenure in the US  is now reported to be  around 6 years but with one survey across the whole of North America claiming a drop to just 30 months. Here in the UK, a recent survey showed the average executive time in role down to only 2.3 years, a decline of 15% over three years.  Life in the executive suite can clearly be short and may even be downright nasty and brutish given the stresses that build rapidly in such short periods.  Why does this carnage occur?  What are the implications for business?  What are the effects on a team when the leader changes so frequently?

Non performance is clearly the quick answer and the one usually offered (along with “It didn’t work out”).  However, if the average period of tenure is down to as little as two or three years, then something is sadly & badly wrong in the executive development and recruitment process.  It has been claimed that it takes an average of three years to reach peak performance in a role, so if they are failing before this time we get a flavour of just how sub-optimal the processes at play are.  So, what is happening here? Are we really turning out a generation of sub-standard executives?  Or are the short-term pressures so great that most firms don’t have either the patience or the understanding to give our new hires the time to perform?  It’s hard to believe that in the late 20th and early 21st century we were failing to turn out professional managers but is it really possible?

There can be few executives nowadays who have never been ‘let go’, never felt the shock of being fired, never had to live through the process of selling themselves to a new employer, and often into a new industry. My time in business tells that the average executive is going to face a more bell curved career path rather than the nice 45 degree slope we all imagine.  Having put in some years of training, development and hard work with a major firm, the odds are against the ‘out-placed’ executive finding a role in another of the main competitor companies.  So, a succession of smaller companies and smaller roles follow.

Just the views of one man based on some of life’s personal ups and downs?  Not  quite.  Apart from my recruitment responsibilities in the companies I have worked in and owned, I have had some interesting and  more insightful experiences.  The two businesses I started from the ground up with a colleague were firstly focused on assisting outplaced executives into their own businesses and the second recruited the very best men and women for our own business coaching and mentoring startup (which became a very successful venture). We saw thousands of CVs and interviewed many.  Leaving aside, for the moment, whatever brought these people into having their careers interrupted, the overriding impression was of the terrible waste of talent.

The loss of the economic output of these (and countless other outplaced executives) to the business community and the wider economy was, simply, tragic.  Had they really failed?  Or were other less obvious forces at play? Luckily, we were able to work with some of the very best in our own business, in turn helping business owners and their teams across the country.  Getting to know these men and women well, and their fantastic qualifications, skills and experience only served to make me shake my head more at the waste.

What are your experiences of this dispiriting process? Have you made it through to a better career?  In a future post I’ll be looking at some of the reasons I have found for the ever shortening period of executive time in post.