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

Executive Decisions on Diversity

For the first time in the history of the London Stock Exchange, there are no all-male boards in the FTSE 100. This landmark improvement in gender diversity is both significant and encouraging, but the bigger, and worryingly overlooked, challenge is getting more women onto executive committees.

Indeed, of the 2,028 executive directors on FTSE 250 boards, only 25 are female. Lord Mervyn Davies of Abersoch, Vice Chairman of Corsair Capital and Non-executive Deputy Chairman of Letter One, who set the initial target of 25 per cent female representation on FTSE 100 boards by 2015, acknowledges “the debate has moved on very quickly to how we get more female representation at executive committee level”.

His latest goal is for at least 33 per cent of roles on all FTSE 350 boards to be held by women by 2020. To meet this target, and to make a genuinely positive impact on diversity, a greater gender balance must be sought at the executive level.

In fact, Lord Davies believes diversity should permeate right throughout all businesses. “Whether it be a major Plc or small SME, talent management and succession are two essentials,” he adds.

The ‘big E’ role

Every month, Jane Simpson, Chief Engineer at Network Rail, (whose board has three women, all of which are NEDs) gets a call from at least two headhunters asking her to apply for non-executive director roles, but what she really wants is an ExCo job.

“It’s frustrating because many women at my level can’t get that ‘big E’ role,” she continues. “A lot of women are saying that’s the glass ceiling now, yet we can all get NED jobs.”

A history of patriarchy has affected the views and values of men as much as it has women, whose confidence can be in short supply. “I look behind and there are some really good women coming through, but I have to invite them to apply for roles and sometimes really persuade them,” says Jane.

“The problem is often not a lack of talent but a lack of support in the ecosystem,” says Jamie Wilson, Managing Director at Criticaleye, who chairs the company’s Women in Leadership events both in the UK and Asia.

“How well the board and leadership team embrace and actively encourage diversity from the top-down will be reflected in the talent they are able to retain. The long-term success of a business hinges on this.”

Joëlle Warren, Executive Chairman of search firm Warren Partners, sees this issue play out in practice. She explains: “We haven’t got a problem getting 30 per cent of women for non-exec roles, we can do that. Yet we have a real problem getting 30 per cent of women on the shortlist for some ExCo roles, because the population of women in the level below is so small.

“That means we’ve got to persuade the CEO to appoint a woman from a smaller pool, or at least to look at women whose CVs look different to the men’s.”

Jane Griffiths, EMEA Company Group Chairman at Janssen, the pharmaceutical division of Johnson & Johnson, notes that appointing women to the board isn’t enough – a longer-term plan is needed and succession is a big part of that.

“Unless the women on the non-executive boards can do something about gender diversity throughout the company, the issue needs to be targeted at the executive level,” she reasons.

“It’s not as though it’s going to take on a life of its own. You have to keep on working at it – every team you put together, every training course must aim to have equal representation of men and women to get those numbers up.”

Clearing the path

The question of organisational support is an important one. Jo Whitfield, Vice President of general merchandise for Asda Money and Asda Mobile, and the most senior woman in trading at Asda, says: “In retail we have a great deal of women join us at a junior level but that gets less and less as they work up through the organisation. So we focus most of our women in leadership programmes around where in that pyramid it starts to leak; my reflection is that we have to start at the bottom.”

This is why Jo is an ambassador for the charity Girls Out Loud, which provides coaching and career advice to teenage girls, often from disadvantaged backgrounds.

While such programmes undoubtedly bring diversity to big businesses, the consensus is that significant change calls for a holistic approach. Laura Haynes, Chairman at brand consultancy Appetite and Co-Chair of the UN Women UK National Committee, says: “One of the challenges with trying to achieve greater gender equality is that it will not be solved simply by setting up a women’s network, so senior management can tick a box. You must go deeper to policies, processes and culture.”

Nonetheless, Laura is encouraged by the seriousness with which this is being viewed. “The question of gender is one that is really vexing the boardroom and executive committees everywhere now,” she says. “This topic is hitting my in-tray at an extraordinary rate.”

Liz Bingham OBE, Managing Partner of Talent for the UK & Ireland at EY, says she “hasn’t been aware of any glass ceilings other than those I put in place myself,” yet she agrees there’s plenty of work still to be done.

“It’s a real worry that we declare victory too soon,” Liz warns. “There is a perception that we’re there already, whereas research EY released at Davos at the beginning of the year says [gender equality] is going to take another 80 years at the current rate of progress.”

This is despite evidence that diversity is good for business. A review by EY of its own firm found just that. Liz explains: “We looked at 5,000 EY UK audit assignments and discovered that the audit teams that were gender balanced were more profitable projects; we had higher client satisfaction and team engagement scores.”

This proves that it pays to have a mixed team, but women must be seen as being there on merit, which itself is a complex issue. Joëlle says: “I think we all have to talk about what ‘on merit’ means. On whose scale? There is a tendency to over-value certain kinds of experiences. They then talk about fit. Fit with what? If it’s fit with the culture we’ve always had then nothing’s going to change.”

For Laura, the problem is not just getting women on boards, it’s about ensuring they’re heard. She illustrates her point by summarising a joke she recently heard: “There’s four people in a boardroom, three men and one woman. The chairman says: ‘That’s an excellent suggestion Miss Triggs. Perhaps one of the men here would like to make it.'”

It raised a knowing chuckle among her colleagues, yet the message is serious.

This article was inspired by Criticaleye’s recent Women in Leadership event, hosted by EY. 

Attend the next event, at which Laura Haynes, Chairman of Appetite and Co-Chair of the UN Women UK National Committee, will discuss the challenges of achieving gender equality targets in the workplace. This event will be hosted by Mel Rowlands, Deputy Group General Counsel and Company Secretary at Smiths Group.

By Mary-Anne Baldwin, Editor, Corporate

Do you have a view on this subject? If you have an opinion that you’d like to share, please email Mary-Anne at: maryanne@criticaleye.com

https://twitter.com/criticaleyeuk

 

Unconscious Bias: The Enemy Within

Unconscious bias reinforces the inequalities that exist in organisations. From the wording of a job advert to choosing who gets a promotion or big project to manage, the opportunities for people to progress can be dramatically restricted due to unwitting assumptions. If senior executives are committed to creating diverse workforces, then steps need to be taken to increase awareness levels of the psychological shorthand individuals use to define others.

Jane Griffiths, Company Group Chairman for EMEA at Janssen, the pharmaceutical division of Johnson & Johnson, says: “The biggest threat to a business like ours is ‘group think’… Innovation is our life blood: if we don’t have the diversity of people, we won’t drive innovation, which ultimately affects our business’ success.”

In order to create the right mix of talent, board-level executives must lead by example. Jamie Wilson, Marketing & Innovation Director at Criticaleye and Head of Women in Leadership, comments: “Recognising and addressing the barriers that unconscious bias can place on an organisation’s ability to diversify its talent, from the top down, will be crucial if boards are serious about building fit-for-purpose, high-performing teams.”

It’s a case of thinking differently about the qualities required to lead successfully. Jane says: “People have a tendency to gravitate towards those who are like them or have common interests. I honestly believe much of this is unconscious but our role as leaders is to hold the mirror to ourselves and our teams to challenge that.”

Stuart Steele, Partner for Human Capital Advisory at professional services firm EY, argues that the first step has to be to ensure that everyone understands how their biases affect decision making: “Do I think we’ll change their behaviour for every minute of every day? No. However, if we can change their behaviour, or at least influence it, at a point in time when they’re making key decisions, particularly decisions which impact an employee’s progression or development… that’s a significant step forward.”

In practice, this means acknowledging that bias may exist around, among other things, class, gender and race. Naomi Gillies, Head of Future Planning and Sustainable Development for retail group the John Lewis Partnership, comments: “We have recognised that by focusing on unconscious bias… we can improve the performance of our company.

“As an organisation we run a number of development courses on unconscious bias which remind the senior leadership team of the role it plays in their daily decision making. Personally, when I’m recruiting, it reminds me of the importance of balance within the team.”

The trick, as ever, is to ensure that what’s discussed on training courses actually becomes reality within the business. Margaret Kett, Partner for Human Resources at executive search firm, Tyzack Partners, says: “It could be coaching, either one-to-one or group, but there needs to be something to embed the unconscious bias training into the organisation…

“It’s the same with diversity and inclusion, it can’t be a standalone agenda. It’s got to be embedded into the core of the organisation. Some are going so far as to link a proportion of bonus to the demonstration of inclusive behaviour.”

Taking a stand

In order to break what may have become a facsimile approach to recruitment, it makes sense to think beyond the standard job specs. Margaret comments: “You have to pose the thought-provoking question: does the new incumbent honestly need to have industry experience or could we look for candidates from further afield and develop them – really pushing organisational boundaries.

“Does the person we are seeking necessarily need to have an engineering degree? Because, by insisting that everybody does, you are excluding all these people who may well be superb at the role despite not having a degree in engineering.”

Anne Stevens, Board Trustee at UK children’s charity Over the Wall, recalls one particular multinational she worked for where she decided to hire a deaf candidate. “I can’t tell you how much pushback and questioning of my judgement I got when I hired him,” she comments.

“He turned out to be one of the most successful business analysts I ever recruited, but at that time it was seen as taking a real chance. It took a lot of courage because there’s pressure on leaders to try and get people who fit into the existing cultural norms. You’ve got to be a bit more innovative, creative and also courageous about this stuff.”

However, there’s no point addressing your recruitment strategy if you don’t have a culture which allows diversity to flourish. Jane Furniss, Criticaleye Board Mentor and Senior Independent Director of the Solicitors Regulation Authority (SRA) where she chairs the Equality and Diversity Committee, comments: “As a young woman I was often ‘complimented’ for thinking and behaving like a man. I didn’t want to be a pseudo man but to be accepted as a competent woman.

“It won’t make your organisation more diverse if you recruit some ‘square pegs’ and then proceed to shave the edges to make them fit your round holes. Companies need to embrace the differences and capitalise on how they can improve and develop as a result.”

Graham Maundrell, HR Director at specialty polymer chemical business The Vita Group, comments: “You need to create a platform for a diverse group of people to be effective and successful, otherwise all you do is create guaranteed failure.

“That, to me, comes back to the nature and the mix of the people at the top, and their commitment to building a diversified workforce.”

For Serge Colin, Group HR Director at Lafarge Tarmac, if this shift in culture is going to be achieved executives must be both role models and vocal proponents for change: “Executive leaders’ commitment… to developing an inclusiveness framework and work environment is essential; the crucial thing is for them to communicate it as a business case.”

And that business case, says Margaret, is crystal clear: “If you’ve got diversity high on the strategic agenda, and you allow that to be transferred to operational activity… then commercial benefits will inevitably follow.”

I hope to see you soon.

Matthew

https://twitter.com/criticaleyeUK