The Key to Corporate Success - The Leadership Spine

In the UK we have just seen the closure of the mid season, soccer transfer “window”.  Traditionally this window, and especially the last day of it, provides a perfect opportunity for club owners and managers to participate in a spot of over-priced, panic buying in order to bolster their squads for the rest of the season, as they bid to either avoid relegation or enhance their promotion or league/trophy winning potential.

This season’s merry-go-round has been much calmer than normal but that hasn’t stopped the usual flood of media rumour and counter rumour as agents and clubs look to bolster their positions in the market.   Interestingly there is always constant argument between the pundits and commentators as to the merits and demerits of each individual player and their “fit” with the new club’s pattern of play and the likelihood of the player single-handedly delivering success.  However, one thing that is almost universally acknowledged by the pundits, is that the successful clubs are those that have quality leaders and that those clubs that are very successful have a “spine of leadership” (both on and off the field). 

Now when it comes to defining the specifics of what is meant by “leadership” or even a “spine of leadership” in the context of a football club, it is again a matter of great debate.  However, what is clear is that it is generally agreed that having a spine of leadership is about the creation of positive relationships between individual leaders that runs from the Boardroom onto the pitch.   It is therefore not just the quality of the individual leaders but also the quality of the relationships between the leaders that is the determinant of overall success.   A club will not be very successful if it merely has good individual leaders who are locked in constant ego battles and arguments with each other – it needs to generate positive, value adding relationships between the leaders.

Now, this concept of a leadership spine provides a rich theme for discussion and analysis when applied in a business context.   It really does suggest that the key to running an effective business is to ensure that you have “good” leaders deployed from the Boardroom, through the C-suite and out into the functions charged with the day-to-day delivery of the business.

Imagine an enterprise where, not only are individuals recruited at all levels based on a combination of their individual technical capabilities, their leadership capabilities and their ability to work as leaders up and down the organization, but also an enterprise where the development of positive bonds and interactions between the leaders at all levels is developed and managed.   These would be the enterprises that are truly investing in developing a leadership spine and sustainable success.

However, what I can quite happily say, without fear of too much contradiction, is the holistic view required to recruit and develop the leadership spine is as haphazard within the corporate enterprise as it appears to be within so many of the UK’s leading football clubs.  Why?  Well I guess it all gets a bit hard, particularly given the demands on both the senior executives/Chairmen to demonstrate success almost instantaneously.  Unsurprisingly it therefore becomes much more prudent to attempt to sign a single new messianic leader, who can deliver results from day one, rather than look to build a balanced, leadership team and ethic throughout the business.   With this approach the good news is that when it fails there is already a built in scapegoat to take the blame.

How to Reengineer the Corporate Vision & Values

Let me just come right out and say it.  I love the idea of a business that is inspired by an irresistible and worthy vision, that lives out a set of compelling, wholesome values and that is governed by a powerful customer centric philosophy.  And call me naïve if you like, but, I believe that businesses work best for all their stakeholders and are at their most sustainable when set up in this manner.  What is somewhat startling but also very reassuring is that the writers of pretty much all the leading business/management development literature over the last 40 years seem to agree with me too.  These researchers and authors also think it’s a great way to run a business.  Well that’s all fabulous news then – but there’s a hitch – this is not what I see in reality. 

So why (according to their customers and staff) are so few businesses operating in this manner?   In this blog I’ll be drawing on my 25 years of consulting experience to offer a rationale for why the quixotic dream of creating a powerful, uplifting and inspiring vision and value set so often evaporates in practice to be replaced with the energy sapping corporate flannel and mealy-mouthed doublespeak that is the daily diet of most employees.

Now before we all jump to conclusions and belabour the shortcomings of our corporate leaders I’d like to suggest that in order to deliver the kind of organisations we crave we have to be honest about the organisations we have and the visions and values that actually drive employee behaviours and customer outcomes.

The common mistake when looking to reenergise an organisation with a new vision and values is to assume that the organisation does not already possess a very powerful raison d’etre and a dominant set of pervasive values.   They do.  The thing is that these incumbent elements are not usually the ones that have been developed as part of an executive away day and published in the annual report.   They are the “shadow” vision and values.  These shadows have real teeth and are the real behavioural drivers behind most of our organizational lives.  They are not written down and are most often illuminated on the drawing boards of the corporate satirists.  They are almost universal and are rewarded and encouraged in almost all organisations.  So, to be able to put in place the compelling vision and values we all want to see, we first have to shed light on the shadow vision and the shadow values, expose them for what they are and embrace them or change them where appropriate.

So let me deal first with the “shadow” vision.  The shadow vision is pretty much the same for all organisations and it is really simple.  It is as follows: “Make more money for the shareholders each month/quarter”.  Not surprising is it, nor is It complicated or difficult to understand.  How do I know it’s the real vision for the organization?  Simple - It is the subject that is discussed for the vast majority of the time in the vast majority of Boardrooms up and down the country.  It gets massively more executive airtime than customers, employees or any other corporate element and it is the subject of the greatest number of Board reports.   It’s also what executive reward packages are usually linked to.  Now leaving aside the rights and wrongs of the shadow vision, the failure to recognize it as the real vision of the organization is likely to create all manner of organizational inefficiencies.  Misguided employees will occasionally try and act in line with the “published” vision statements that often encourage innovation, courage, customer centricity etc and this will cause corporate chaos.   So to drive out the inefficiencies related to having two potentially misaligned visions (shadow and published) the organization needs to either be honest and declare the shadow vision to be the “published” vision or it needs to tackle the shadow vision and reengineer the workings of the business to better line up with the elements of a compelling “published” vision.

So let’s move onto the “shadow” values.   There are four main “shadow” values (although you can always find others) and they are well suited to supporting the “shadow” vision.  Again they are pretty universal in larger organistions and represent the concepts and behaviours that are truly valued by the organisation.   They are as follows:

1. Profit – This organisation values profit and encourages all its employees to make decisions and take actions that deliver the greatest level of profit this month/quarter
2. Predictability – This organisation values predictability and encourages all its employees to only make decisions and take actions that are in line with what was expected of them and previously forecast
3. Prudence – This organisation values prudence and encourages all its employees to make decisions and take actions that require no extra investment of resource and carry no risks that may adversely affect the delivery of predictable outcomes.
4. Propriety – This organisation values propriety and encourages all of its employees not to challenge the status quo and established ways of working as it can cause corporate embarrassment or attract adverse PR.  It particularly encourages all employees to ensure there is executive plausible deniability for any “off piste” actions they may wish to take in pursuance of the corporate vision

Again, leaving aside the rights and wrongs of the “shadow” values the fact is, that from observing the behaviours of employees in large organisations over the last 25 years, one has to conclude that they exist and are well supported by the corporate performance management systems.  They are also highly likely to be at odds with the “published” values.  So again, as with the shadow vision if we are to reduce inefficiency and direct our employees far more clearly then we have to admit they exist and either embrace them or reengineer the organization to support the delivery of different values.  Either way I’d like to make a plea that organisations stop confusing their employees by publishing values and visions that are not aligned to the behaviours that they would really like to see as it really cheeses me off.  

And before you right me off as a tree-hugging lunatic, I for one would be delighted to see “profit” as a value for most organisations.  Let’s put it out there and be honest – we value profit.  There I said it.  Now let’s work out what else we value.

To conclude, if you want your programme of re-envisioning the organisation and overhauling the corporate values to go well you will need to identify and deal with the shadow vision and values with as much passion and rigour as you employ to generate the new vision and values.  To fail to do this is to doom the programme to failure.  It’s the equivalent of putting on your finest designer suit or dress, all ready for a glamorous evening out, over the top of your gardening clothes.   Not a good look and a bit mad.

10 signs you've been drinking the Corporate Kool-Aid

Over the past few years I have had the opportunity to observe, in some cases at first hand, the falls from grace of a number of the UK’s most vaunted businesses.  This has not been a pleasure.   In fact it has been all too painful to watch.  However, as I have had the chance to reflect on these corporate “crash and burn” scenarios, there are a series of observable patterns, that indicate to the wise the likelihood that burning ambition and ego are about to take down another erstwhile corporate hero.  

So if there are observable patterns why does nobody manage to intervene?  I’m blaming the corporate Kool-Aid* (see below) – the ability of an organisation to delude itself over a long period of time by constantly reminding itself of its perceived corporate brilliance.  It is the creation of a self-destructive mass delusion on a grand scale, usually perpetrated by an unfettered charismatic leader and it really does happen.

The question that most participants and commentators alike have on their lips at the time of the crash and burn is almost always – “Why did we/they not see this coming?”   An overarching sense of bewilderment and betrayal can often pervade the thoughts of those involved.  As one senior executive told me, “When I finally understood the new information we were being presented with it was as if I was waking up from a dream and finally seeing the business for what it really was.  It was as though we had all been living in an alternate reality.”   This reported state of corporate trance is a common feature amongst the disillusioned executives and staff at the failing institutions.  So how does it occur?   How can we tell if we and the other corporate stakeholders are “Drinking our own corporate Kool-Aid”* and slowly anaesthetising and blinding ourselves to the malpractice and misbehaviour of our leaders and peers?  Is there a way to tell if we are on the path to wrack and ruin?  Well it’s not scientific but for me the list below gives a pretty good indication of whether or not your business is about to combust. 

N.B. If you have been drinking the corporate Kool-Aid you will simply believe that the warning signs below are misconceived and couldn’t possibly relate to your own fabulous corporate colossus.

10 signs you’re company has been drinking their own brand of corporate Kool-Aid.  Score 1 point for each statement that applies to your company.

     1)   Your company has just moved to a swanky new corporate HQ that is lavishly furnished making it look more like a 5 star hotel in places than an office.

  

     2)   Your charismatic CEO is now making multiple appearances in lifestyle magazines and on both serious business TV and the lighthearted breakfast TV “sofa”.

     3)   Your CEO deploys an autocratic style – it’s just how he/she works.  There are other senior executives around but they are mostly there to do the bidding of the CEO. Bidding that can often be idiosyncratic and whimsical.

     4)   Your company pays really well.  It probably pays better than many other similar companies (not, of course, that any company is at all similar to your unique enterprise)

     5)   Your company doesn’t use consultants or advisors.  It’s a matter of principle and an article of faith.  Your company has a unique culture and vision that simply cannot be helped by “old school” advisors.

     6)   Your company also has an “interesting” Board structure.  The Non-Executive Directors (if they are present) are probably friends of the founder or distant investors and may have little to no experience of the industry your business is in.

     7)   Your company is lawyered up.  You’re not sure what they do or what they are working on but they are always around having intense meetings with senior executives and there are lots of them.

     8)  Your company has a culture where everyone works really long hours but participates in the wildest corporate parties.  It’s a work hard/play hard philosophy and if you’re not up for it you’d better leave.

     9)   Whilst we are on the subject of benefits your company has a fabulous employee share scheme that you’d be mad not to invest your hard earned cash back into.   The business is going to make you a millionaire despite the fact you currently have a middle manager role in Finance.

     10)  Your company is a self-proclaimed innovative business.  Not a day goes by when the CEO or someone else in management doesn’t mention how innovative a company you are a part of.   Your company may only really have one basic product and a few variants but you are undoubtedly an innovative company.

If you scored 3 or less – relax – your company is just drinking good old still water

If you scored 4 or 5 - panic not – your company is just drinking sparkling water

If you scored 6 or 7 - review your options – your company is drinking something decidedly exotic

If you scored 8 or more – run for the hills – sell your stock and shred anything with your name on it – your company is drinking the Kool-Aid and is in for some serious trouble.

Unfortunately, once the corporate Kool-Aid is on the menu it is very difficult to persuade the organisation of the need to change.  Like the Titanic the business is destined to hit the ice-berg – it’s only a matter of timing.

That said, if you are worried about the corporate risks your business is employing or would like a diagnostic view and assessment then please do get in touch – I’d be happy to help.

*"Drinking the Corporate Kool-Aid" is a figure of speech commonly used in the United States that refers to a person or group holding an unquestioned belief, argument, or philosophy without critical examination. It could also refer to knowingly going along with a doomed or dangerous idea because of peer pressure. The phrase typically carries a negative connotation when applied to an individual or group. The phrase derives from the November 1978 Jonestown deaths where members of the People’s Temple, who were followers of the Reverend Jim Jones, committed suicide by drinking a mixture of a powdered soft drink flavoring agent laced with cyanide. Although the powder used in the incident included Flavor Aid, it was commonly referred to as Kool-Aid due to its status as a generic trademark. - Wikipedia

Getting the most out of your Innovation Investments - "Tell me what you want, what you really, really want"

Despite what they might claim, Innovators and entrepreneurs love having a good structured problem to solve.   They just do.  Give them a well defined, specific business problem, public challenge or domestic conundrum and they are in heaven.  They’ll instantly spring into action to figure out how to creatively build or combine multiple bits of tech and process that can work together to provide a suitable solution.

However, if you ask the entrepreneurial show ponies to “invent” new solutions to a very loose, broad brief they can often struggle to come up with a useful, marketable solution.   Now this strange, slightly counter-intuitve reality can often be a source of frustration for those business moguls and public leaders who invest heavily to build up and employ groups of innovators with the intention of enjoying a stream of wonderful and exotic innovations that add value to their endeavours.    They know they can’t micro-manage the innovators so they leave them alone.  They give them time, space, resources and bags and bags of freedom – the proverbial blank sheet of paper.   Unfortunately this type of relationship all too often fails as the solutions that get delivered just don’t scratch the itch.

So as a leader it appears as though the recipe for having a productive relationship wth your innovation team is to provide them with a series of clearly defined problems or challenges that they can deploy their talents against.   This of course is easier said than done.   Why?  Because by and large most of us are just not trained or practiced in the reflective, analytical and articulatory skills required.  When asked the classic Spice Girls question,  “Tell me what you want, what you really, really want?”  most of us respond with a bland “I don’t really know.”

In short the art of being able to identify and articulate real business or organisational issues in a concise and effective manner is a rare one.   As a result many of the less transparent aspects of business and public life are lagging behind when it comes to experiencing the latest wave of innovative digital transformation.   This is not because these areas are particularly impervious to innovation, its actually because the problems and challenges associated with them are ill defined and opaque.   Compare and contrast the number of apps that have been designed to help you find and book a restaurant (a clearly defined and well known challenge) compared with the number of technology solutions devised to help your local council collect and manage household waste (an ill defined and opaque challenge).   N.B. You will be in the majority if you have just read the last sentence and asked yourself the question, “So what is the problem with collecting and managing household waste?”  Honestly, I don’t know either, but I’m pretty sure there are some they’re just not known to me.

Ok, so before I tie us all up in logical loops the point is this.   We need to understand that a key (and much undervalued) aspect of the Innovation process is the ability to spot, analyse and articulate a challenge so that the creative types can do their thing.   The recent advent of “themed” tech accelerators suggests that finally we are waking up to the fact that working with industry segments to clearly articulate problems and challenges is generating a better return on investment when it comes to Innovation.   In my work with innovators and businesses I am now very committed to putting the work in to spot and articulate the real challenges of an industry rather than to merely assemble a group of the bright and the brilliant and instruct them to “do their innovative thing”.   So, when it comes to Innovation, creating a counter intuitive sense of focus and structure is definitely a good thing.