Monthly Archives: November 2011

Quiet leadership (secrets of success part 4)

Sometimes it’s not what you say that counts or even should be counted; what you don’t say can be incredibly more effective in producing the optimum result  Leadership still draws more opinions, words and books than almost any other subject in the world of business.  Effective leadership involves a variety of styles matched to the needs of the situation, the nature of the team and, not least of all, the makeup of the leader.  Yet despite this, the picture painted of the average leader is that of the powerful, thrusting individual, soundbite opinions flowing, forcing the direction towards the desired result.

Image courtesy of gsykeslight.blogspot.com

One of the great leadership learning experiences that took place during my mid career years concerned a situation that frankly gave me real pause for thought and sleepless nights up front. When I became managing director of one of the major firms in this particular industry, I joined the industry trade association and sat on the governing council (comprising some 16 CEOs of the largest members). I had been a little over-awed not only as the youngest member on council but being the only one who had not spent his entire career in that same industry, I had been talked down to and treated very much as the junior. So, having kept a low profile for the first couple of years was then astonished to be asked to take up the role of president.  At first I couldn’t work out what had raised my profile to warrant the appointment. But by the time I made my acceptance speech and took the chain of office in one of London’s oldest clubs and with a Government Minister as my guest, I had worked out what lay behind my appointment.

Long held, polarised and explosive views were held across the membership on a range of partisan issues.  The association (which set technical standards for the whole industry and ran a highly effective parliamentary lobby group) was facing a particularly critical issue at the time that threatened to pull the association apart.   I perceived that none of my largest competitors (which were and still are household names) wished to be seen to preside over an issue that could be a PR disaster for them.  On the other hand, there were a large number of member firms in the association holding the opposing view. An additional and uncomfortable fact was that the CEO of my largest UK competitor sat alongside my boss (our European President) on the board of a joint venture company in Italy.  I had already experienced the effects of some highly misleading information that had been fed to my boss via this relationship. Had I been elected as a scapegoat?  Was I being set up to fail?  Would the whole process be represented to my boss as a calamitous failure on my part?

Deciding on a policy of diplomacy for my year of office, I felt I had to ensure that all views on the subject should be heard and taken into account before a decision was made.  I had clear views of my own as to which route the association should take but reasoned that making these views known was only going to make my task harder.  And, anyway, I calculated that my company could exist equally well under whatever regime emerged.  Attempting to force my views on council was not going to work given my image as the outsider who was believed to know less of the industry than anyone else around the table. Therefore I decided that the process should take priority, be seen to be inclusive and fair and should lead to whatever the membership ultimately decided.

I ran my council meetings in the classic chairman’s style, ensuring all views were fully explored but never revealing a viewpoint of my own.  I found that by a policy of correct process, questioning and ensuring everyone’s’ opinions were sought, all relevant opinions and options could be uncovered.  I carried this process through to the wider membership travelling to regional meetings up and down the country where I again chaired the meetings to ensure that every aspect of the subject was explored and again never taking sides.  I also ensured that I held one-to-one meetings with the holders of the most entrenched views (large and small companies), always travelling to meet them in their own offices.  At the end of the year when the time came for a decision, the vote was almost unanimous with everyone feeling their view had been heard, considered and the right decision made.

One surprising and pleasing outcome for me was that several of those who had held some of the most rigid views at the outset felt able to cross over to the opposing side without losing face. Additionally, the few members who voted against the final decision, came to me and said that although disappointed they felt that the process had been fair and the decision was one they could support.

In the course of my career I have certainly been faced with a very wide variety of situations including those where I had to demonstrate clear and decisive leadership.  However, looking back I gain immense pleasure from my time as the industry association’s president because it gave me the chance to be a quiet leader; one who found that seeking out all views, really listening and trusting the team could, in those particular circumstances, produce a sound result (and one that has endured the intervening years).   It’s a technique I’ve returned to many times when the circumstances warranted and it has invariably worked.

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Secrets of success (part 3)

Reading in the press over recent daysof the firing of Olympus CEO Michael Woodford after just two weeks in the role reinforced my view that executive life can be hellish (see my earlier post Executive life – nasty, brutish and short?).  In the case of Woodford, this is clearly something of an extreme situation (now involving the FBI). However, executive tenure certainly doesn’t get much more bestial than this.

Image courtesy of Scientific American

Lloyds CEO Antonio Horto-Osorio leave of absence, reportedly suffering from exhaustion & stress since his recent appointment in March this year, was a different matter and one that brought back painful memories.  Back in my early career and flush with the success that I had running my first two businesses (as a distributor of high end Japanese products), I took on a third role which involved crossing the divide and working for a Japanese company in consumer electronics.  At first success continued apace and then I fell foul of circumstances, the sin of hubris and a lack of political skills, before the stress took its toll.

 In the UK we kept revenues growing ever upwards supported by continuing brand building investment to which our Japanese parent company had committed.  Unfortunately, success in the intensely competitive US market eluded them, the losses there mounted and my investment was sacrificed.  Now, to be honest, there were aspects of the role that I had neglected (or didn’t recognise as important, believing that my rudimentary personal toolkit could meet all situations).  I increased my already long hours still further until I was notching up 90 hour / 7 day weeks whilst trying to fight what were intensely political battles with head-on pugnacity (believing that logic and rationality would prevail).  Late one evening, when I had crawled home exhausted yet again, I was interrupted by a call from head office in Tokyo demanding that I immediately  attend to a problem that had arisen.  I cannot remember the exact words I used but the gentle art of politics certainly eluded me that night.  I can remember the phone went down and I turned to the scotch.  I suffered what I can only describe as a breakdown and couldn’t work for weeks; something had to give and shortly after returning to the office I was fired.

Once the disbelief and anger phases had passed (God knows what I was like to my family during these weeks) the fog of tiredness and frustration lifted and I took stock.  Along with undoubted strengths, I realised there were some significant weaknesses that I had to overcome.  I had clearly moved up too far, too fast and still had much to learn in the arts of management and business.  I started the job search full of enthusiasm seeking positions in other industries, confident that the skills and experience I had were transferable. The next period was one of the happiest I had experienced for many years; the research and the job hunt were full time (but flexible) and I revelled in the time I had for exercise  It took me six months to find the right role, a level down (as marketing director) in the UK arm of a very large US industrial corporation where my experience was welcomed.

As soon as I joined my new company, I set about the process of filling the gaps in my skill set that I had identified.  My love of reading and learning made the task of acquiring these skills fun rather than a chore.  Having moved into the company as an outsider I also found my task easier as, when applying some new piece of knowledge or technique, no-one realised I was feeling my way along and accepted me as the expert.  We were at the time a World #3 behind GE & Philips and relatively new to the UK market, whereas competition was long established,  powerful and traditional but carrying the baggage of old mindsets and flawed strategies.  By a combination of detailed analysis, careful positioning and concentration on a tightly focused distribution strategy we were able to grow rapidly, doubling share in our major market.

A few years later I was promoted to run the UK operation and success continued for a couple of more years whilst we concentrated on the quality of our internal systems and processes.  However, by this time we were finding it increasingly difficult to compete with competition who were driving down the costs of production, feeding through into ever lower market pricing.  The business was already global with 90% of our UK production exported to the rest of the World and 85% of the ranges we sold in the UK being imported from our overseas factories.  Whilst our UK production facilities were new and efficient, many of the overseas facilities we had to rely upon were old, unproductive and located in European countries with impossible labour laws (something we have imported since!). Slowly and inexorably, our profits in the UK declined as I had to suffer far higher prices on our imports than competition.  I found myself under increasing attack for failing to overcome this structural problem.

Now having been educated to a very high standard by my employers (by the best US business schools) I was not short of an analysis of the situation; nor a prognosis.  Faced with the news that I was to face the company president on an forthcoming UK visit, I set about a robust analysis of the situation facing the entire company.  For those of you who are interested, my model was Michael Porter’s Five Forces and what emerged was the fact, clear as day, that our global industry was doomed to low profitability (for reasons too complex to go into here). Unless our ultimate parent company (a US telops giant) was prepared to invest heavily in new and fewer production facilities across the Globe, we were doomed.  On the day of my meeting, the US president sat quietly and asked pertinent questions, whilst my boss (the European president) turned puce and kept attempting to move me onto what I was going to do to meet the UK budget that year.  At the end, big US boss thanked me for the presentation and asked me to send him my full analysis.  Well, my name in Europe was shit from then on and I was accused of ‘intellectual arrogance’ and ‘executive burnout’.  What happened?  Profits continued to decline and 18 months later the US parent put the whole $2bn business on the blocks.  By then I had been ‘forgiven’ and moved to European headquarters in Switzerland.  When the sale finally went through, I lasted 10 days before ‘being let go’ by the new owners. Joy returned to my life.

So, whilst my burnout with the Japanese was real, as were my shortcomings (and the ulcers) the next outcome was far from the diagnosis my colleagues made at the time (rarely had I been so clear sighted).  The situation had elements of pure farce akin to the tragedy being played out across Europe today.  The entire senior European management frantically attempted to prove that the situation could be turned around if only everyone pushed harder.  Moral; when you’re in an existential crisis, face facts, learn afresh and do the right things (even if they are unpopular); don’t just keep repeating the same things and expecting a different outcome.

 This period of my career had been a rich learning experience.  From the Japanese I learnt the skill of attention to detail plus the need to recognise and manage stress.  From then on I attempted to minimise my own stress and trained my team to do likewise.  From the Americans I discovered a great commitment to learning and development from the very top and owe them for a fabulous management education. But the great pity was that offsetting these ideals and learning were the layers of middle executives serving out their time, defending their turf and resisting change at all costs. What a waste of investment, training, careers and shareholder return. More soon.

 

 

The secrets of success (part 2)

The achievement of something desired, planned, or attempted is the definition I like of the word success.  It doesn’t matter if you set out to conquer Everest, gain that place at the top of the sales league or, merely, be pleased that you have raised a happy and harmonious family.  Not all of us can be the next Steve Jobs, anyway. One of the ways that psychologists divide the human race is based on something they call the locus of control.  Those who believe that it is the external world that controls them (leaving these people at the mercy of whatever the World throws at them) contrast with those who believe that we are each in control of our own destiny. Success is whatever it means to you and my personal belief is that it is controlled by what you do to make it happen, not by others and not by events.  Belief in myself and what I could achieve by my own means played a strong role in achievement in the success that was important to me.

Image courtesy of Career Assessment Goddess

Extensive sales training taught me the skills to ascertain and understand customer’s needs and how to influence; extensive marketing training and experience taught me how to achieve these things on a macro scale.  But of all the classic business skills, it was a deep understanding of the concepts of strategy and their application that helped me most throughout my career.

For just one example, 13 years ago my business partner and I bought a niche engineering business with a wide and very traditional customer base.  Following detailed analysis of our capabilities, market needs and trends, we constructed our strategy.  We invested heavily in new equipment, training and systems and focussed on being problem solvers to a small number of carefully chosen and technically demanding industries.  It took a great deal of time (with the aid of a great team) but we gradually built a highly profitable new customer base providing solutions no-one else could supply and we even succeeded in building large sales to China. Traditional customers and competition gradually declined.  Earlier this year, after 13 years, we sold to a great US corporation, with a kindred strategy, who are continuing to invest and doing well.

But what of all those personal qualities that business leaders and entrepreneurs are supposed to possess?  How did I stack up against these?  Well, the short answer is that I haven’t got a clue. I’ve never been interested in what makes other people successful and have only followed my own beliefs when it comes to leading others.  I do know a lot about myself, though, having been on the receiving end of much psychometric assessment and subsequently gaining wide qualifications and experience in this area.

Two, seemingly contradictory characteristics have served me well.  If I really want something or set out to achieve a goal, I just don’t give up (for example, it took me two years to find and buy the engineering business I referred to above, despite countless obstacles and setbacks).  On the other hand, if my analysis of a situation informs me that further effort is counterproductive, I waste not an instant more on it.  Illogical?  Not to me.  If what you set out to achieve is a goal logically and rationally arrived at and a good match to your competencies, despite being an extremely difficult challenge, why give up?  Nevertheless, if new information comes to hand or circumstances change substantially, it is downright foolish to continue flogging the beast that has breathed its last.

Competition has always been a spur to me and many has been the time when I simply had to do more and better than those around me. But more important has been a desire for personal achievement, simply stretching myself to do what I believe I could be capable of.

Of all the techniques that a leader can use, one of the most vital is to obtain 360° feedback.  Having experienced this vital information (at my own instigation) on several occasions, I learnt a great deal about how I was perceived as a leader.  A truly additional, insightful experience was my participation in Looking Glass Inc (a complex management simulation exercise) during an intensive general management training programme in the USA.  The experience started with each of us 30 or so participants being allocated a role in Looking Glass (I drew short straw as company president).  Following a detailed briefing we were each given formidable in-tray that afternoon which we worked on late into the night.  The next morning at 7.30 we went to our desks and ran the company, monitored throughout (even during our phone calls and by reference to every piece of paper upon which we even scribbled) by a team of observers.  The following entire day was spent in an intensive de-briefing which covered every aspect of our performance including both the quality and quantity of the decisions we made.  The most insightful aspect was the giving and receiving of face-to-face feedback from all of the 10 members of the team I had been allocated.  Of the things I learnt from that incredibly realistic experience the most important was to learn that whilst I did and said the things the team expected of a leader, they all conveyed in different ways that they felt I was not being open enough with them.

Shortly, after I returned, I was made CEO of the UK operation. One of the first actions I took was to instigate a company wide climate survey and found that the number one issue was a distrust of management, with a widely held belief that employees were not being consulted or informed on key issues.  Following discussion amongst my senior team, we agreed that I should speak to the entire company, share the results and ask for volunteers to join teams, to address each of the key issues (they had all recently been trained in problem solving techniques).  On the day of the meeting I made the assembled employees a number of promises; I would not hear any of the findings or recommendations before they did and I would agree to any recommendation the teams made so long as the cost did not exceed our local country budget level, or contravene international corporate policy (if a recommendation did, I undertook to sell it to our company president.

I seemed to hold my breath for the next month, staying away from any of the employee meetings and not quiz any of my direct reports as to progress. We assembled in the staff canteen on the day the results were due and the atmosphere was, well, electric.  Had I or my own team screwed up?  Would the employees pressure for unrealistic changes?  Would my team leaders have handled the process democratically?  One by one each of the four teams presented their analysis and their recommendations.  I need not have worried.  The changes requested were surprisingly modest and reasonable and after asking further questions I was delighted to say “OK, go ahead and implement everything and you will all receive regular feedback on progress.”  I learnt that together we could build a much more decentralised style of management that went on working, enabling us to make significant progress.  It also taught me a lot about trust and it allowed me to empathise more with the feelings and views of the entire company.

There’s a lot more to come on this theme but this post is long enough!  More soon.

Why not share your own thoughts on what drives success?