Looking Back on 2014

Comm update_31 DecemberWhen reflecting on some of the central themes to be discussed by Criticaleye Members over the past year, be it digital, the changing consumer, an ageing population, innovation or culture change, it’s abundantly clear that successful senior executive teams understand the need to be collaborative, curious and open to new ideas and insights. How else can they be expected to navigate complex and fast-changing global markets?

Steven Cooper, CEO of Personal Banking at Barclays, said: “The environment that leaders need to create, I think, is changing. They need to be much more inclusive, more visible and they need to be engaging with a broader spectrum of colleagues to create partnerships.”

It’s a point echoed by Andy Clarke, CEO of retail concern Asda: “If you turn the clock back only ten years, the pervasive style of communication for leaders was very much tell-and-do. It’s a dying style of leadership today; you have to operate with a level of openness to challenge that you wouldn’t necessarily have seen a decade ago.”

A CEO has to look to build a team that can thrive in a business environment where strategy is far more dynamic and agile. “The most common thing to do in the world of strategy in business these days is to complain about the V.U.C.A. world we live in – so everything is volatile, uncertain, complex and ambiguous – and then say that because of this it’s impossible to do strategy,” said Roger Martin, Criticaleye Thought Leader and Academic Director of the Martin Prosperity Institute at Rotman School of Management.

“But if an organisation doesn’t understand it has to make choices about where to play and how to win, it might as well not do strategy. That’s why more than eighty per cent of all strategic plans are pretty much useless.”

A numbers game 

The strategic implications of a multigenerational workforce is certainly an area that requires careful thought. Mark Purdy, Managing Director (Economic Research) and Chief Economist at Accenture, commented: “We’ve recognised that there’s a major trend around ageing and increasingly organisations are thinking about this, but maybe what we haven’t recognised is that we have a lot of millennials in the workforce too…

“[T]he successful organisations are going to be defined by their ability to bridge the gap between the ages and capitalise on the inherent strengths of both young and old.”

It’s leading to new ideas on how technology can reshape working practices, from home-working to hot-desking and job-sharing. Vanda Murray, Criticaleye Board Mentor and Senior Independent Director at manufacturing company Fenner, said: “Businesses need to invest in IT to enable flexible working, which may be from home or any remote location, as it is now expected that we are all ‘connected’ wherever we are.

“There are huge benefits to businesses that embrace more flexible working patterns and practices. It helps recruitment and retention – in particular those workers with family commitments – be it younger children or elderly parents. Young mothers often find they cannot balance work and home life without this flexibility for example.”

The way digital continues to change organisations has been another area of debate and discussion for executives. Bal Samra, BBC Commercial Director and Managing Director of BBC Television: “Digital disruption is inevitable so business leaders need to recognise it, collaborate and foster a culture of learning within the organisation so that more is understood with every new project.”

One of the biggest risks for companies is to do nothing with digital. If you’re not constantly testing, learning and evolving, you will be left behind. Simon Johnson, Group Managing Director for UK & International at publisher HarperCollins, said: “Innovative digital leaders are those who are completely obsessed with inventing things and with customer experience… They also need to create the right culture internally, encouraging the people within the business to think more like a start-up.

“This might mean starting-up a skunkworks for innovation, for example… or setting up new business units in direct competition with legacy ones.”

The question of how organisations can excel at innovation remains fiercely debated, especially as new business models emerge. Neil Stephens, Managing Director for the UK and Ireland at food company Nestlé Professional, comments: “The narrative I always put around the need for breakthrough innovation is that the customer is constantly changing and they are always eager to find new ways to enrich their lives…

“[That’s why] we are trying to bring our customers into the innovation loop as early as possible so that, by the time we go to market, we already have customers who are attuned to the opportunities and who have been part of the process from the beginning.”

George Yip, Criticaleye Thought Leader and Professor of Management at China Europe International Business School, observed that Western companies need to learn how to innovate faster and take more risks, whereas Chinese organisations need to learn how to innovate in a more formal way. “Being pragmatic about the kind of innovation companies do is the key to achieving profitability in the digital age,” he said.

If a business has any hope of performing to the highest level, it needs the best people. Creating a culture that attracts and retains those individuals and allows them to flourish is perhaps one of the biggest tests confronting senior executive teams.

Rudi Kindts, Non-executive Director for technical recruiter Matchtech and former Group HR Director for British American Tobacco, said: “We don’t know what the future will look like, so I think increasingly the skills required to be a successful leader will be around agility, curiosity, being able to work in teams and having an acute awareness of the environment around them and themselves.

“What is for certain is that leaders need to build organisations that are able to adapt to the future [and be flexible].”

For CEOs, it’s a case of asking more of the Human Resources Director. Steve Varley, Chairman and Managing Partner for UK&I at EY, explained: “A key benefit of the HR Director is to help leaders understand the link between the inputs and outputs of an organisation.

“Effective ones do two things: they understand the business model – how the business makes money – and, secondly, they work hard to build relationships with the CEO and the board.”

Doug Baillie, Chief HR Officer for consumer goods company Unilever, said: “When I came into this role three years ago, the first thing I did was to get key senior business leaders into a room together and ask them what they expect from HR.

“From this, the choice that came to me was clear: do we, as HRDs, want to be the ones laying the road for the journey ahead or are we content to just fill in the cracks as someone else lays out the path? Actually, I don’t differentiate between a HR Director and a business leader.”

The bottom line is that CEOs need to be great communicators and collaborative if they’re to be good at leading change. As Glen Moreno, Chairman of publishing and education company Pearson, said: “It is extremely rare today for a new leader to come into an organisation with a mandate for business-as-usual. That wasn’t always true. There were times when companies had locked market share and there wasn’t much of a technology challenge, nor was it global.

“It’s all changed now and there are virtually no maintenance jobs anymore because companies are either in trouble when a new CEO comes in, or they clearly need to rethink their position on what they’re already doing.”

I hope to see you soon

Matthew

www.twitter.com/criticaleyeuk

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