Developing Future Leaders

It’s the responsibility of the Human Resources Director to push a CEO into thinking about leadership capability within an organisation. While there may be operational fires to fight and short-term targets to hit, a chief executive must set aside time to reflect on whether the mix of skills in a business is right for the strategy.

Attendees at Criticaleye’s fourth Human Resources Director Retreat, held in association with Legal & General Investment Management (LGIM), agreed that if a CEO is genuine about achieving long-term success, they must identify and develop leaders as a priority.

Andy Clarke, former CEO at Asda, told the audience that when he first stepped into the hot seat he prioritised staff development. “We needed new thinking and diversity, yet still had to develop a strong core of talent from within,” he said.

“I was also extremely mindful of the lack of diversity, so I managed to build a leadership team that was 50 per cent female. The level of debate differed – and I’m not just saying that.”

However, when two of those females were promoted, Andy realised there wasn’t a strong enough pipeline to continue that diversity. As a result, he spent a fifth of his time identifying and developing individuals both internally and externally.

“I did that in conjunction with the HR Director and it was impactful; we were a combined team,” he continued. “At the end of my tenure there was a much greater number of people coming up from within the company.”

Devyani Vaishampayan, Group HR Director at BSI, described how she is concentrating on the talent agenda as the assurance and compliance solutions company looks to double in size over the next two to three years: “The focus of the past was on operational execution – it’s why the leadership team has been successful – but we know we need more strategic skills within the business.”

She then advised: “You need to drive through a message to focus on the gaps that you see in regards to the forward strategy.”

The knock-on effect

As HR Director at Equiniti, Nicky Pattimore is also engaged in developing internal talent within the technology and investment services company. It floated in 2015 and the current leadership team are locked in with equity until October 2018.

“The board are now looking at future succession and we recognise that they can’t all be external appointments,” Nicky explains, noting that several people within the organisation have been identified as possessing senior leadership potential.

This ‘leadership group’ is expected to spend a quarter to a fifth of their time on some of Equiniti’s biggest projects, collaborating with those on the graduate and ‘rising stars’ programmes. “While this group work on these challenges, they must also look at their teams and use them to fill the gaps created when they step out of the day job,” she added.

During the course of the discussions, Charlie Wagstaff, Managing Director at Criticaleye, emphasised the importance of alignment between the CEO and HRD on this issue. “The HR director needs a comprehensive view of the capability within the organisation and how individuals can be upskilled for the future. To think only about the here and now, rather than the next phase of a business, is a mistake,” he said.

CEOs and senior executives have a responsibility to constantly improve their skills and knowledge, while also empowering and developing those around them. Benny Higgins, CEO at Tesco Bank. He noted: “The beating heart of any business is its people; they are the responsibility of everyone, not just the HR director.”

Matthew Dearden, former President for Europe at Clear Channel, built on this point and said: “Unleashing human potential is an inherent leadership responsibility. You can’t delegate or outsource that – although, you should look to the HR director for support.”

Problems occur when executives are overly egotistical, or become complacent because of success. “If you think you’re perfect, you’re done, because you’re doomed to never be better than you are today,” Matthew commented. “You need to embrace being imperfect and be honest with your colleagues, so you can support each other.”

Although it may take time, you should build people up to follow your lead and, eventually, take the baton from you. “You need to cherish, rather than worry about the fact that people are fine without you – that’s a sign that you’re building a good team and organisation,” Matthew concluded.

These views were shared at Criticaleye’s fourth Human Resources Director Retreat, in association with Legal & General Investment Management (LGIM).

By Dawn Murden, Editor, Advisory

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How I Led Change

Business transformation is complex and deceptively challenging. Various factions within an organisation will be intent on retaining the status quo, which is why over two-thirds of change programmes are doomed to fail. So how do you go about putting the odds in your favour?

Joe Berwick, Business Development Manager at Criticaleye, argues that, first and foremost, there must be alignment at the top. “Without a unified and cohesive team you won’t be able to deliver a consistent and meaningful change story to your staff, let alone execute the strategy with the precision and foresight it needs.

“Underpinning that is relational competence; the ability to develop deep trusting relationships and engage effectively on difficult and important issues. When this is properly nurtured it can unlock a team’s collective potential and mobilise change across the organisation.”

We spoke to a number of business leaders to find out what they’ve learned from the change programmes they’ve been involved in. Here’s what they had to say:

Rachael Brassey
Business Change Lead, PA Consulting Group

Complex change is like building a huge jigsaw without the picture on the box; while the overall strategy is clear, the view of the end state is largely unknown. Having led many business transformation programmes, I’ve found that assessing the nature of the impact and the organisation’s ability to change helps you determine the best approach.

Analyse the nature of the impact. Change will often bring about a significant shift in behaviour, roles and responsibilities, organisational flow, processes and technology. A combination of any two of these creates conditions for complexity.

In 2007 to 2008, I worked on an international change project that affected thousands of people in 125 countries. I’d created a logical left-brained change plan and didn’t think as much about how to shape the delivery. I learnt to look at things from the perspective of those who had to adapt their ways of working. Let this – and not the programme objectives or the senior leaders’ views – steer how to deploy change.

I also discovered that feeling uncomfortable is good. I ran workshops in which we imagined we’d failed in every element of the project. We each took the role of different leaders and captured the lessons learned, ranging from the technical issues down to how people were feeling. This really helped us to fine tune our approach and make it more resilient.

Peter Horrocks
Vice-Chancellor, Open University and former Director, BBC World Service Group

Some years ago, when I was head of BBC Television News we developed a multimedia platform − so the newsroom you see behind the news readers, the way of working, the technology, the workflows, the culture, were all things I put in place.

The main problems were the people skills and existing culture; people thought of themselves as a TV or a radio person and we needed to make a case to move towards a much more holistic approach. There were a couple of thousands people involved and it took about a year.

Some of my fellow senior colleagues told me that to go in this direction would be to take leave of our senses. Lots of people believed that the audience wanted great radio journalism from us and we had great people in radio, so why confuse things. That argument was held at many different levels.

The key to achieving change was to get the most prominent people – such as the BBC’s former political editor, Nick Robinson and its former economics editor, Robert Peston – enthusiastic about it. That meant appealing to their natural instincts to get their stories in front of as many people as possible. If you can connect the strategic change to specific things in peoples’ lives that they want to improve or feel frustrated with, that can help.

Once people saw that the BBC’s most famous journalists were adopting a multichannel approach the scepticism fell. That was significant to delivering the programme on time and making 25 per cent savings.

Mel Rowlands
Deputy Group General Counsel and Company Secretary, Smiths Group

I’m lucky enough to have worked in a number of organisations during times of fundamental change. My experiences have included break ups and takeovers, working across both private equity and public companies, including those undergoing IPOs.

Over the years I think the biggest lesson I have learned is that you can read all the theory, but success is down to people, not process. In my experience organisations become very emotional places during times of change, successful leaders are those who understand that and are not afraid to deal with it.

I hate the phrase ‘buy-in’ as it suggests a paint-by-numbers approach – tick the ‘team on board’ box and then move ahead regardless. Long lasting change really needs the majority of the organisation sufficiently behind it.

Put yourself in front of people, get them to see your vision and understand why it’s important, answer questions, be patient and listen to suggestions.

It’s important that staff feel part of the change rather than having it done to them. That means not standing on a stage giving town hall speeches, but getting off the stage and running workshops − and certainly not allowing your managers to run things while you are too busy ‘driving things forward’ behind the scenes.

Paul Cardoen
CEO, UK, FBN Bank (First Bank of Nigeria Group) and former Deputy General Manager, Bank of Tokyo-Mitsubishi UFJ (BTMU)

At BTMU, I embarked − rather naively − on a change project trying to convert 2,000 years of traditional Japanese employee culture in a modern, international HR framework. In 2009, the bank needed to accelerate its international expansion and develop corporate banking operations overseas. I was brought in to lead a radical change.

My ambitious HR transformation plan did not disappoint; the President and a senior executive team who had worked overseas knew that BTMU needed to embrace this bold vision of reform or fail to achieve its strategic objectives.

The planning and approval process lasted up to one year during which time nobody challenged any of the reforms, so it came as a surprise that the company’s board of 32 Directors did not give it the green light. Their compromise was to introduce reform − but at a snail’s pace.

We got it wrong by not making a soft assessment of the gap between our ambition and the organisation’s starting point. We also ignored the silent behaviours and Japanese culture that puts importance on harmony and consensus. I didn’t spend sufficient time evaluating the emotional readiness for reform, especially of the Japanese senior leaders.

I learnt that the workforce must be diverse enough to support your views and that cultural assessment is as important as your business case. But my biggest mistake was to focus too much on what worked in my previous life with other banks; no two transformation projects are the same.

Mark Parsons
Chief Customer Officer, UK&I, DHL Supply Chain 

I’ve been through four major organisational restructures in my current role and three in my previous one. I’ve found that the benefits of an organisational redesign don’t come until a year out and even then it’s not predefined as it’s down to the behaviours of people. The changes you make only set up the opportunity for people to deliver, which is why it’s crucial to understand the culture.

At Invensys, we tried to put an ERP system into a business basically run by spreadsheets and that ripped the organisation apart because the culture was anathema to the use of standardised software.

The most successful change programmes I’ve been in are ones that had a very simple and central message that people up and down the organisation understood. Large change programmes with lots of moving parts usually end in compromise.

Pace in its own right can be detrimental to a change programme, you need consistency of speed and for it to match the rate at which employees are willing adapt. We implemented a new organisational structure which got stuck at middle management. This reduced momentum and although changes were taking place, the perception that it was going to fundamentally transform the business was lost.

By Mary-Anne Baldwin, Editor, Corporate

These insights were shared during Criticaleye’s recent Global Conference Call, Leading Complex Change.

Would you like to share your experiences of leading change? If so, please email maryanne@criticaleye.com.

Read up on how to tackle the four steps in change management, and learn how emotional communication can help you lead change.

Also, don’t miss next week’s Update on whether a chairman should mentor their CEO.

Follow Criticaleye on LinkedIn 

Listening to Tomorrow’s Leaders

The founders of Snapchat and Airbnb were aged 21 and 26 respectively when they launched their companies. This shows when it comes to disrupting a market − or creating entirely new ones − age is merely a number. What are corporates doing to capture the ideas of their outstanding young talent?

“We thought you could only get value from people after they’d been in the business for five to ten years, but we’re breaking down those perceptions,” says Dominic Samengo-Turner, CEO of Jardine Lloyd Thompson (JLT) Asia, a subsidiary of the JLT Group.

Reflecting on the way the company changed its approach to career development 12 months ago, Dominic continues: “We take our quality graduates after a year and put them with senior executives as an executive assistant. Their thinking and observations then start to influence the business in a more informal way.”

The success of this now means the company is taking it to another level. “We [then] put that generation in junior management positions of influence. We’re creating new management roles that didn’t exist before so that they can add value to the business,” he says.

This is hugely valuable to JLT which, as a legacy business, has a number of employees whose length of service spans two to three decades. Dominic explains: “We don’t need [millennials] to have deep, technical competence – the older generations have that. We need to help facilitate the operational running of the business. We feel we’ll move much faster than originally thought.”
Seeking new perspectives 

Different voices, views and generations need to be heard at board level; this is something John Brisco, Senior Vice President, Chief Information Office and Chief Operations Officer at Manulife Asia, welcomes.

“Many boards today have a very traditional make-up of constituents who quite rightly have thorough industry and career experience. However, the pace of change driven by data and digital innovation… means there may be a requirement for the make-up of a modern board to have a new mix,” he says.

“There may have to be a wider dispersion of board constituents, that may involve millennials but it could also involve 35 to 40 year olds, who I would say aren’t represented on boards that well. I would ask: ‘How can boards expand their thinking, what type of skillsets do they need and how can they make sure that age isn’t a barrier?’”

In light of this, John is currently exploring the advantages of an advisory board – made up of a range of individuals from millennials to entrepreneurs – to support Manulife’s Asia-based leadership team.

“It will independently challenge us on our ideas. Some will come from an entrepreneurial mindset, others from a consumer background or technology mindset. That will create a healthy tension,” he says.

Connecting with the customer

The notion of millennials on the board may be a step too far for some, especially in the context of a regulated environment.

Romana Abdin, CEO at diversified healthcare company Simplyhealth, says: “The role of a director in the boardroom is to challenge, critique and support; I don’t think many millennials would possess the experience and gravitas to make that kind of contribution unless they are supported through coaching and mentoring. It is our responsibility to develop the outstanding leaders of the future.”

Yet Romana agrees that the onus is on the board to seek a fresh perspective. “Our board spent a day being customers by visiting different retailers and bringing those experiences back into our organisation,” she comments. “It’s about understanding the aspirations and behaviours of all generations, including millennials… It is only by understanding customers and their lives that we can be valued and valuable.”

According to Charlie Wagstaff, Managing Director at Criticaleye: “Boards, executives and HR functions need to think about how to blend talent of all ages.” Indeed, the belief that all the best concepts come from the top of the organisation is outdated.

“Leaders need to ensure a company’s employees reflect the diverse customer base it’s targeting and welcome the fact that ideas can come from anywhere within the business,” Charlie notes. “Each organisation will have its unique set of challenges, but diversity of thought is hugely important.”

There’s no doubt that there are some supremely talented millennials out there. Evan Spiegel, CEO of mobile app Snapchat – estimated at a net worth of $2.1 billion – is just one of them. He knocked it out of the park early in his career but there are others waiting to make their impact.

Most millennials can’t be expected to lead a complex legacy business today, but they are the leaders of tomorrow. By giving them a voice, you can harness perspectives that better represent your customer base, allow you to innovate and and look to the future.

How are you bringing up the best talent in your business? If you have thoughts to share on this topic, please email dawn@criticaleye.com

This was inspired by Charlie Wagstaff’s blog on millennials – read it here

Don’t miss next week’s Community Update on how to successfully lead complex change.  

Model Behaviour

Media-friendly entrepreneurs or Silicon Valley tech gurus typically spring to mind when discussing role models in business, yet it’s often an entirely different breed who really inspire or rouse ambition in others. The best role models are emblematic of what’s good about an organisation and show that with the right skills and values, people from all backgrounds can rise to success.

Michelle Scrimgeour, who is currently Chief Risk Officer at M&G Investments, recalls how, in the early stages of her career, the asset management company she worked for had a number of high-profile, successful women − including the CEO. “It was important at that point in my career to see that,” she says.

“If you’re in a minority, at all levels in the firm, it’s good for there to be role models… If you’re a woman and you’re looking across an organisation and you just don’t see women at the senior or middle tier and rising ranks, I think it’s probably quite soul destroying.”

Phillippa Crookes, Relationship Manager at Criticaleye, agrees: “Role models are incredibly important in helping you define who you want to be in business, and inspiring you to achieve those goals throughout your career.

“For me, seeing successful women in senior leadership roles is vital in motivating career ambitions.”

That said, the ability to raise aspirations goes beyond ethnicity and gender. Liz Bingham OBE, Managing Partner of Talent for UK & Ireland at professional services firm EY, explains how the first Partner to manage her nurtured both her confidence and ambition.

“Technically, he was very able, had great client relationships and was very effective at leading and inspiring teams. In particular, he was a role model for me because he came from a very ordinary working class background, as had I,” Liz says.

“That is quite unusual in professional services − he’d left school at 16, whereas I left school at 18. That meant neither of us went to university. He worked his way up through an environment that is quite tough for people from that background, without coming from either a public school or, certainly, having a university background. He was incredibly inspirational in terms of showing what could be achieved.”

For Stephen Chu, philanthropist and former CEO of the Hong Kong-based Hui Xian Real Estate Investment Trust, finding a role model is down to a mix of “happenstance and chemistry”. He met his, Dr. Li Ka-Shing, founder and Chairman of Cheung Kong Holdings, while working at the company. It’s a similar story of effort over education.

“He started out his career as a plastic flower salesman with very little formal education and through hard work, determination and business savvy became the richest man in Asia with an estimated net worth of $34 billion.”

Real values

The responsibilities of leaders are multiplying. Not only should they inspire individuals, they also have a duty to reflect societal values and the company ethos.

Paul McNamara, Group Chief Executive of financial services concern IFG Group, comments: “Everyone is a role model and should see themselves as such − they can be a good role model or a bad one depending on whether their behaviours live up to the desired values of a business, team, or even society.”

To this end, it’s crucial that leaders instil good standards and ideals. Stephen says: “It is paramount that role models and leaders reflect the core values of the company, and society as well. Often these people are the ‘face’ of the company and they are responsible for its image.”

Adam Chamberlain, Sales Director at Mercedes-Benz Cars, confirms that role models can be found at all levels: “One of the things you try to do is identify best practice in a different context. In my past job, I had a peer who was particularly good at certain aspects of their position, so I think you can [learn] various things from different people.”

It is up to the CEO and senior executive team to set the right example, which means demonstrating behaviours that don’t simply emphasise targets and profits but promote a wider understanding of how business should be done.

“The reality is, the more senior you get, the more you are a role model − whether you like it or not,” says Michelle. For this reason, leaders should stay mindful that not only are they being watched, they are possibly being mirrored.

From a CEO’s perspective, role models ought to support succession planning by finding and enabling those with potential. So, it is important that companies have a diverse mix of people who are able to coach, mentor and inspire others, regardless of background.

Michelle adds: “Part of the leadership role is to nurture the pipeline and help develop the people who are going to be the future of the company, who are going to come up with fresh ideas and innovations − who are going to work together to solve problems.”

It’s something that should be ongoing. As Stephen puts it: “The best role models are constantly trying to improve the performance of the company and their colleagues.”

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