Sterling Performance

Jess Stillman’s post on female executives’ perceived lack of vision has brought in a bagload of responses and some possible explanations as to why research might’ve arrived at that conclusion.

Another research report, another possible answer: gender consultancy Catalyst’s latest research suggests that it’s not women’s vision that’s falling short, it’s our leadership models.

These are, naturally enough, based on male traits (since there are fewer female leadership models to emulate). In a self-perpetuating cycle, leaders set the tone
and aspiring executives will aim to mimic those (usually male) leaders.

The company develops a talent pipeline that is inadvertently biased towards masculine leadership qualities. Other qualities are less valued because they don’t fit the stereotype — those who show “atypical” skills may be under-valued and under-used, a waste of potential talent, according to Catalys’s CEO, Ilene H Lang.

“Businesses restrict their own growth potential when women are unintentionally excluded from key training and advancement opportunities.”

There’s plenty of research to suggest organisations promoting women have superior performance. In the current economic climate, diversity of leadership could help the business outperform competitors and reach a wider customer base, but companies need to be aware of the ‘trickle down’ effect of bias and address it at root. You may have to consider whether your organisation is ‘institutionally sexist’.

Catalyst suggests companies take a fresh look at their business needs, targeting the specifics of each division, while looking at stereotyping that might exist.

• Ensure those at the top of the business appreciate how stereotyping can negatively influence performance appraisals, interviews and project allocation.
• Employees should be able to recognise and value ‘gender-neutral’ leadership characteristics.
• Look at best practice among other businesses — what are top diversity champions doing to ensure its opportunities are even-handed.
• Consider the language you use when talking about talent — do the words or phrases lean towards traditionally male qualities?

Smart companies will adopt what Avivah Wittenberg Cox’s organisation, 20-First, terms corporate bilingualism. In a recent blog, Cox also presents another fightback against the visionary question. Here’s her take:

“Women don’t arrive with answers, designed around their own truths. They are more modest than that. They still ask questions, are comfortable with ignorance – their own and other people’s. They are more interested in connectedness than power, in conversation than competition, in complexity than clarity. Or, as Serge Thill, a European coach, puts it: ‘Men are good at playing by the rules of the game. Women don’t think it’s a game.’ This is precisely the approach we need in these uncharted times.

(Photo: Lee Carson, CC2.0)

Should Sir Fred Goodwin get his pension? Let’s consider the facts. This time last year, the Royal Bank of Scotland was said to have some $3.8trn of assets. Today it shattered corporate records by announcing losses of £24.1bn. It is now over 80 per cent owned by the government, which has also created a new plan to insure toxic assets. It was Sir Fred’s blind pursuit of a dud acquisition (ABN Amro) that’s widely acknowledged as the source of RBS’s problems.

His appearance before the Treasury Select Committee was not quite contrite enough — he apologised, but then said he’d lost out from share devaluation too, only to have it revealed he’d earned £1.46m last year. (Crying all the way to the bank, so to speak.)

He refused to be the scapegoat for the banking industry’s failures. Yet he’s inadvertently become just that — he’s the poster boy for fat cats who get away with it.

So should Sir Fred, who’s just 50, lose his £650,000 a year pension — especially since he’s one of the people responsible for ensuring our pensions will be worth so little when (if) we finally retire?

Why he should keep it:

His poor performance and botched deal with ABN Amro should’ve been scotched by the board, whose members ignored concerns raised by F&C Asset Management and Legal & General. The chairman should’ve reined him in long before losses got so out of hand.

He contributed to that pension throughout his working life and has a contract that entitles him to the money. Morally, it may stink but legally, it’s unlikely that the RBS’s pension scheme includes any provision for poor performance.

What the law says: Matthew Swynnerton, pension partner at law firm DLA Piper, says it’s common for companies, particularly large enterprises, to include a clause in their pension schemes that could result in the forfeiture of some pension benefits. But there would need to be a ‘monetary obligation’ — an amount owed to the business as a result of criminal negligence or fraud.

The RBS is taking advice from the UKFI, the organisation set up to manage the government’s shareholding in the banks, on Sir Fred’s contract and it has asked Goodwin to give it up.

But meanwhile, we’re focusing on one (offensive) remuneration package, when we should be overhauling the star system of executive pay once and for all. Was it coincidence that the FSA published its latest code of practice on remuneration policies today?

How is the recession affecting business-to-business brands? Those with heritage — especially brands that made it through the Great Depression or have shown they can survive a crisis — will be looked upon more favourably, according to Stephen Cheliotis, chairman of Superbrands, commenting on this year’s ranking of the top 500 B2B brands.

The flight to quality will continue, according to Cheliotis, and while a brand’s not likely to be judged poorly on short-term financial results, one that falls out of favour in the current climate will have a harder time clawing its way back.

Take BA, once a regular in the top 10 ranking. Its reputation has been eroding for years and last year’s T5 fiasco just added insult to injury. It’s now rated at 36, having lost ground to rival Virgin Atlantic. So what? In a year of intense pressure in the airline business, when mergers are being sought and business customers are falling away, this loss of B2B custom is significant.

Survival brands will focus on quality and adding value, on reliability of service or product, and on distinguishing themselves from competitors. Those strengths can provide a degree of protection during a downturn and allow a business to grow more quickly during an upswing.

Overall, there’s more global representation in the top 10. But among the British businesses, the standout brands are all established organisations with a history of resilience, deal-making prowess, shareholder return and, in most cases, an underdog quality — (BUPA seems to be the exception to the underdog rule, but it’s older than you may think at 62).

• Rolls Royce is the ‘little engine that could’ in the face of industry pessimism and under-development in the UK.
• The London Stock Exchange may (undeservedly) fall out of favour next year when the full effects of the financial meltdown are reflected in the listing, but it’s a brand that remains respected among competitors and has held out for a worthy suitor. (That prince hasn’t come.)
• GlaxoSmithKline (which is over 140 years old in its various guises) has nine lives, an aura of intellectual rigour and a mixed reputation — its attitude to generic drug production in developing nations a particularly sore point.
• BP has come so close to falling from grace so many times since Lord Browne’s ignominious departure, it’s hard to know where to begin. Yet it remains a significant investor in low-carbon technologies and benefits from being the most accessible and apparently well managed of an unlovable group of oil giants.

The effect on financial service brands is not really represented in the listing this year — next year will be telling — but Cheliotis still sees big brands with a long history being the most likely survivors (not that heritage helped Lehman Brothers.)

How else will brands be affected? It’s easy to see how a recession could make consumers nostalgic (benignly) or nationalistic (’British Brands for British Businesses’).

But will the business community be swayed by national pride? If this year’s fast-rising brands are anything to go by, it’s possible.

Fast risers

Investors in People

ThyssenKrupp

The Fairtrade Foundation (currently celebrating Fairtrade Fortnight).

Eurotunnel

London City Airport

Special bounce-back award goes to: Compass Group.

Worried about keeping your job in the current economy? You need to stand out from your peers — and learn to manage your boss.

I discovered the importance of managing upwards when I picked an argument with my first boss. I was right, and then I was fired. It was a good outcome for all concerned. Learning from experience can be painful.

Instead, it is easier to ask bosses what they expect of teams. The answers from 2,000 bosses I have interviewed and surveyed are surprisingly simple. Here are five things bosses consistently expect from their teams, whatever the economic circumstances.

1. Hard work.Sorry, there are no short cuts. One-minute managing may be possible, but one minute working is not. In the real world, real results take real effort.
2. Initiative. Bosses want teams which take the initiative and make things happen. This is good news for people who do not want to be slaves to their boss, but want to have some freedom to think and act for themselves.
3. Intelligence.This is not about emulating Einstein. It is about being smart enough to deal with day-to-day challenges without always having to ask what to do next.
4. Reliability. Always deliver: if you make a promise, keep it. Bosses hate surprises, because they are rarely pleasant ones.
5. Ambition. The good news is that bosses encourage ambition. Ambitious people are more likely to make things happen than people with low ambitions, aspirations and achievement.

These may seem very low expectations, and they are. The reason that bosses picked these criteria is because they so often see people failing to leap these very low hurdles.

Curiously, these rules appear to be pretty much constant all the way from the post room to the boardroom. Unless you have a gold medal in incompetence, these are the rules which might just help you all the way to the top.

(Image: Dumbledad, CC2.0)

Harvard Business Review’s right — financial risk management is tough at the best of times. The current crisis at the banks gives us a painful demonstration of what happens if businesses play with fire.

Risk management can become the business equivalent of sorting out your life insurance cover. Once you’ve completed the requirements and put a policy in place to ensure the continuation of all you hold dear, you sleep soundly in the knowledge that your life is in order.

But you don’t revisit your plan very often — or you ignore the warnings, as the banks did. If the risk managers start to get assertive, fire them for their negativity and their unfortunate habit of getting anxious.

I like the natural trustworthiness you find in the risk management business — people who tend to resist change and who need to understand the full detail of situations. They bring a needed discipline to the workplace.

Their reticence makes others explain exactly how a proposal will work in practice and demands that they get to the simplicity that comes from real understanding rather than convenience.

Most businesses have these people somewhere — they lean towards audit, health and safety and quality, but they can be anywhere. They tend to have worked for the business for a long time, know how things really work and won’t want to change employers unless you really hack them off or they feel more strongly about their chosen profession than any single organisation.

Clearly these are also the people who can drive me to distraction when implementing new ideas. I dare say the feeling is mutual.

It’s better to combine our intelligence rather than to argue who is right or pull rank, so that change management plans now include how to move forwards with the right balance of risk and return

Business is full of tough ethical decisions. Would I have been brave enough to be the first banker to say: “We’re going to pull back because our business is built on sand that may shift” — especially knowing that conversation alone might be enough to move the sand?  I’d like to think I so, but I will never know. This much I can predict: the current crisis has increased the odds of us all being braver about unacceptable risk.

(Photo: Phil_g, CC2.0)

Not everyone has to be ambitious, vying for the corner office or the powerful board position, right? Wrong. In today’s corporate world it is no longer acceptable to sit comfortably at middle management and wait for pensionable age.

I recently interviewed a 40-year-old executive who had reached a reasonable six-figure salary level and was cruising in his job.

Tom (let’s call him) had held his current role for five years and could do it standing on his head. Being a diligent and motivated individual he executed his duties exceptionally well. Every morning Tom got in at nine and left at five, having completed his to do list, confident in the knowledge he had contributed to the successful working of a business.

Tom had worked hard through his 20s and 30s and slogged through a part-time MBA to manoeuvre himself into a position where he felt he had acceptable work-life balance. Both he and his employer knew he was capable of much more.

His bosses were pushing to promote him, offering him interesting opportunities, often international postings sweetened with expat terms. Yet Tom was sitting opposite me in real fear of losing his job.

He knew his employer would not allow him continue indefinitely in his current position. It was upping the ante with almost monthly proposals about “what next”. He didn’t want to leave — and nor did his company — but when he was honest with his immediate boss about his career ambitions (or rather lack of them) he was told they were adopting an up or out policy. So should he leave, lie or lie low?

In the current market this may seem an outdated question but it’s a real problem for talented managers who do not want to rule the world. With business embracing talent planning in a much more meaningful way than ever, it is no longer seen as acceptable to settle into one role in middle management. If nothing else, direct reports will grow restless waiting to fill ‘dead men’s shoes’.

We are now working in businesses post-’War for Talent’. This has propelled structured organisational design to the forefront of corporations. The Toms in business need to adapt or lose out.

Most people approaching 30 worked through the dotcom bust and the most noticeable effect on their corporate behaviour is the amount of control they take in their own career development. Organisations are striving to put in place more and more sophisticated talent management systems to support this new generation. There is no place for self-satisfied middle management.

I found it hard to help Tom –I hate to see potential wasted, but likewise work-life balance is much discussed and not much valued.

Since we met Tom has been offered redundancy and has had to accept he may need to take a step down or work for a different type of business if he wants to secure his work patterns — it’s been a real blow to his pride.

The take-out for me is that you cannot rely on your employer to protect you. The up and coming generation is right. No-one owes us a living and if you want the big corporate jobs you need to play their game.

(Photo: AckOok, CC2.0)

Tough times call for harsh tough bosses. I am for ever grateful to David X for showing me what it takes to be a tough leader. Here are his six principles of leading in tough times:

1. Stay in control. On no account let anyone do anything or spend anything without your approval. Make them get permission each time they want to waste money on the photocopier. If you let them think you trust them, they will only take advantage.
2. Delegate. Delegation is very trendy and dangerous. But it is fine if you only delegate the routine rubbish, filing and tea-making. If a project is going seriously wrong you can delegate that, and the inevitable blame, easily. Never delegate meaningful work: as the boss you have to take on all the most interesting challenges. If you let the team do the more challenging work, they may put you out of a job.
3. Pick good team players. A good team player does exactly what you tell them to do. If there is a setback, they will take responsibility for the failure. Demanding staff (bonuses, promotion) are selfish. Disloyalty is unforgivable.
4. Coach the team. Like delegation, coaching is also trendy and dangerous. So make sure you coach the team well. Whenever they make a mistake, make sure they never want to repeat such a mistake: be clear about your criticism and make it very public so that everyone else can learn from their folly. Some witty sarcasm and cynicism will deter people from further error.
5. Give direction. If your team is any good, they should understand intuitively what you want without you having to spell it out for them. And in tough times they should understand that your priorities and direction will have to change frequently. If they can not live with that, they really lack flexibility or team spirit.
6. Monitor progress. Make the team document and update everything on a daily basis: risk logs, issue logs, progress logs, activity logs, meeting logs, master logs and the log log. Review the logs. If there are any variations versus plan (which may have changed, see above) then give them plenty of coaching (see above).

In doing these things, there are a few things to remember:

• Trusting your team can only lead to disaster. They are fundamentally useless.
• You’re the boss, which means you are smarter than the rest of your team. Make sure they know that. If the team has any ideas, they must be bad ideas.  If they mention a good idea, it must be one that you were going to think of anyway, so it is your idea really.
• If anything goes wrong, it is because the team is incompetent. Only your brilliance and perseverance secures any successes for the team. Be clear about who deserves the credit and who deserves the blame.

Finally, remember to wear a flak jacket and watch your back. It is quite extraordinary how ungrateful teams can be for having a good boss in tough times…..

(Image: Andrew, CC2.0)

Customers are poor predictors of their own behaviour. Just ask Tesco. It spent a year talking to potential consumers on the US’s west coast, trying to understand their needs and motivations, before launching its Fresh & Easy store concept a couple of years ago.

Yet the stores are not performing as well as expected. Tim Mason, Tesco’s US chief, “has said its early market research was mistaken and it may make big changes to the stores,” told The Sunday Times.

No matter how much research a company does, managers who bring a
new business to market hold their breath as if they were NASA scientists watching a rocket launch. I know from my own experience that research and even early success is a poor predictor of longer-term performance.

Back in 2003, when I was working for Boots, I led a team that researched a new-style, city centre store. We piloted the new concept in London and our store immediately saw a double-digit growth in sales.

Believing we had found the answer I moved the project team on and a new team took over the work. The problem, however, was that much of our success was due to random factors rather than our own brilliance, and future stores failed to justify their investment. Less than a year later the programme was stopped.

My painful lesson from this experience was that creating an innovative product or business is, above all, an iterative process. It requires trial and error, constant review and refinement, as well as a willingness to remain open-minded about the solution. Customer research can only point you in a certain direction — it cannot give you the answer.

Innovation is not the job for a strategist but for those focused on action and learning. It is a hands-on, sleeves rolled-up, dirty business and not a theoretical exercise.

As any innovator will tell you, it is likely to be the 100th trial that gives you the answer — t is very unlikely to be the first. This means that you must start small, learn quickly and go from there.

The irony for Tesco is that it should know this, having taken several years to develop the Express line of stores.

Unfortunately for Tesco there are already over 100 Fresh & Easy stores on the ground in the US. Changing the offer significantly is now likely to be expensive, slow and very dirty.

(Image: Morville, CC2.0)

Remember McJobs? For the uninitiated, the McJob was a lowly position, often in the service sector, with few opportunities for career advancement. In the late 1980s and early 1990s, it was almost a rite of passage for graduates. It was perfectly possible to graduate with honours and still find yourself earning minimum wage (not that this existed then) as a shelf-stacker at Safeway.

If you were a BA or MA Hons, you did this job ‘ironically’ (misusing the English language as you went) and with zero commitment. There was an unspoken understanding between employer and employee: there would be no exchange of loyalty on either side. Benefits and job security were often non-existent, as was any spark of interest from employees.

So it feels like “deja vu all over again” when unemployment figures start creeping up towards two million and car manufacturer BMW summarily lays off 850 employees. Former trade minister Lord Digby Jones’s plea to save manufacturing echoes earlier calls to salvage, well, UK car manufacturing during the 1990s recession.

This time around, fast-food outlets and supermarkets are thriving, while skilled jobs with career promise (or without a uniform) are growing scarce. Fast food chain KFC looks set to open enough franchises to employ some 9,000 and Julian Goldsmith’s latest post tells of a stampede to get to the front of the job queue at Tesco in Liverpool.

Does this herald the return of the McJob? Possibly. But there are a couple of reasons to think it’ll be different this time around.

First, Gen Y and ‘Echo Boomers’: their energy, sense of entitlement, approach to work as a learning experience — this has ‘burning platform’ potential. I know that’s been said before, but the collision of the Millennial mindset with the current economic upheaval may at last force through workplace changes that have been bubbling under for a decade.

Employers are very different, too. There seems a more equitable exchange between employer and employee than in the early 1990s. Great employers are recognised by the media. Regulatory pressures and the ‘war for talent’ have raised the possibility that the old ways of working may not always be the best. Training and career progression opportunities are far more common — and actively championed as a recession-resistant tactic by the likes of McDonald’s.

What’s not different is our attitude to entry-level service jobs: they are still seen as the dead-end option.  Lord Jones was ostensibly expressing concern for UK skills when he wrote: “I discovered worrying signs that whatever new jobs are created are likely to be low-paid and low-skill…”.

But he also reveals how little service jobs are valued. They are still seen as demeaning and low-skilled, offering neither the prospects nor the inspiration for advancement beyond the lowest rung. But there’s no real need for this tradition to continue, is there? At the most enlightened end of the service scale, John Lewis Partnership or Timpson are proof that you can create careers from low-skilled starting points.

You could argue the opposite — that hard times herald the return to a pile-em-high, sell-em-cheap attitude to people, that the glut of talent hitting the labour force will devalue skills. Or simply that it’s always going to be more economically sound to train less, churn more in certain jobs. It’s perfectly possible for the McJob to live on in spirit. It may never have gone away. But I think we’ll have to come up with a new name for it.

UK high street closures are having a big impact on the low-end job
market, but they could have a surprisingly beneficial effect on so-so
standards of service in UK shops.

January sales are up by 1.1 per cent on a like-for-like basis compared to
this time last year, according to the latest British Retail Consortium figures.
But this was driven by growth in food as non-food, especially clothing and footwear, fell away.

As shoe retailer Stylo and sportswear brand JJB Sports fight to salvage anything from the administrators, Tesco is rumoured to be planning a rival to online fashion success story ASOS. More telling is the fact that its multi-storey Liverpool store was inundated with job applicants on opening.

Retailing has long been plagued by more jobs than there are people to fill them. As a result, staff churn rates have in some cases been over 100 per cent per year. That means most of the people employed in a store this year have no idea what was going on there last year. The potential consequences for strategy continuity and cost of training aren’t difficult to figure out.

With a dearth of retail job opportunities, existing staff may think twice about moving on and think more about what they can do to keep their store in the black and off the blacklist.

Fraud and wastage  — usually the work of disgruntled staff — may be on the wane. In the past, fraudulent employees might have found new jobs with ease. But it may be more difficult for organised criminals to place their own people in retail businesses now there are much fewer job vacancies.

Meanwhile, smart college leavers joining the workforce are unlikely to be satisfied with a job that goes nowhere and offers no prospects chances to learn. Retailers that want to differentiate their service should recognise this as an opportunity to buck the high-churn trend and invest in employees.

The upshot of the recession, for those retailers that manage to stay afloat, could be stores that are more secure and staffed by experienced workers who are committed to making them a success — which any retailer worth their salt will agree is one of the cornerstones of good retailing.

(Photo: Andallthatmalarkey, CC2.0)