Workforce Planning in the Digital Age

Digital is plunging HRDs into numerous quandaries. How can they predict what new roles will arise and which will disappear? How can they train staff accordingly, and where will they find talent to plug the gaps? These questions are putting greater emphasis on data analytics and the role of strategic workforce planning.

“As well as the impact of a contingent workforce, we’re seeing a rise in remote working – which can potentially offer 24/7 online capacity. This approach to flexible working will change the nature of the workplace,” says Mark Spelman, Member of the Executive Committee at The World Economic Forum (WEF), who has spoken at a number of Criticaleye events on global changes to the workforce.

“We’re also about to move into an era in which everything is connected, online and real time. We’ll be in a hugely different place. I’m not sure our workforce strategies are focused enough on the exponential disruption of technology,” Mark adds.

In a world where digital innovation regularly makes the unpredictable a reality, how can businesses successfully plan their workforce requirements?

Find the right person for the right role

As Executive Director for People Advisory Services and Data Analytics at EY, it’s Nathan Sasto’s job to find practical solutions for tomorrow’s talent dilemmas. One of which is how best to access the gig economy – a pool of specialist employees who can drop into a business to deliver a specific, short-term project.

“The trend towards the gig economy is certainly one of the major impetuses we’re seeing from a client perspective. We’re doing a lot of work in financial services on this, helping them to understand which roles are feasible for them to outsource,” Nathan says.

Crisis, a charity that offers temporary accommodation and support to the homeless, is one of the many organisations to regularly tap into the community of temporary workers.

Jane Furniss, Criticaleye Board Mentor and former Deputy Chair at the organisation explains: “Crisis employs around 10,000 volunteers each autumn to run their Christmas events. Choice and having control over when and where they work is a huge factor in whether they come back to volunteer again. Because they aren’t paid, they need to feel engaged and be happy with the team they work with.”

Engaging an unpaid workforce means offering roles uniquely enticing to each volunteer – and that requires a lot of data crunching. Nathan knows all too well how complicated, yet rewarding, that task can be.

When he joined EY in 2012, Nathan’s first project was to plan the volunteer workforce requirements for the London Olympics. “They needed 70,000 volunteers to run the Olympic and Paralympic games, covering 3,500 jobs ranging from medics to drivers,” he explains.

“The HR Director at the time compared it to building a Fortune 500 company in three months and then tearing it down – that was the scale of the problem.”

To address this, Nathan and his team built an artificial intelligence-based matching system, comparing over 500 million data points on languages, skills, experience and preference to reach an optimal workforce distribution. He explains: “Once we were up and running, a HR allocation task that previously took 13 people one month to carry out, took a single person just four hours.”

Analytics such as this allow organisations to map their staff requirements against a pool of talent – be that internal or external – and do it in a way that caters to different personalities, desires and skills.

Train your staff to be digitally fluent

Another critical dilemma for HRDs is the need to re-educate the workforce for tomorrow’s employment landscape.

“One of the issues we face is in retraining for digital fluency. We must work out how to move people who were trained to work in one way into a digital world,” says Mark. “Half of the people coming into the workforce today will live until they’re 100. Life-long learning will be critical going forward. I’d argue that the ability to keep your top 30 per cent of staff will depend on your long-term corporate training.”

David Grounds, who supports corporate business leaders in his role as Relationship Manager at Criticaleye, says: “Continuous learning is becoming an economic imperative, it’s no longer enough to come into an industry with a qualification and think you’re the finished article. I see that need at a senior leadership level and right through the business.”

“While constant self-improvement has always been a worthy pursuit, the rate at which technology is changing the business environment means it’s now a priority.”

According to Nathan, a common problem is predicting where best to invest your efforts. “We talk about digital skills a lot but it’s quite a challenge to take that esoteric concept into practical measures, roles and functions,” he explains.

Again, data can help. Analytics capabilities similar to those used by Crisis and the London Olympics to map talent, can be employed to determine what skills will be required for newly developing jobs.

“Imagine all the available roles were on a platter and you could see what skills and attributes were needed for each – you could tell very easily which you’re suited to and what you’d need to do to move between those roles. That’s changing the vertical succession plan and really empowering people to plan their careers effectively,” says Nathan.

Address the fear of uncertainty

This kind of insight can help protect individuals from what the WEFs predicts will be five million job losses due to automation by 2020. HRDs must play their part in supporting staff through that uncomfortable process, quelling concerns and retraining where possible.

As Mark says: “When looking at strategic workforce planning we need to recognise that it’s not just about opportunity and the upside, it’s also about managing the fears associated with the downside.”

Jane warns that if businesses fail to address these insecurities they may see their talent drain away. “Fear of uncertainty about job security can lead some of your best people to go. You can end up with people who either don’t understand the change that is happening or aren’t able to get jobs elsewhere,” she says.

“Your worst case scenario is that you lose the really good people who can obtain jobs elsewhere, while retaining the not-so-good who can’t.”

These thoughts were shared during a recent Criticaleye Global Conference Call on Making Sense of Strategic Workforce Planning.

By Mary-Anne Baldwin, Editor, Corporate

Don’t miss our next Community Update on the importance of apprenticeships.

Holding Up the Mirror

The criteria for what makes an effective leader is changing. If senior executives are serious about sharpening their leadership skills, they need to be open to receiving constructive, candid feedback from colleagues. It may be an uncomfortable experience, but taking the time to evaluate and assess personal performance is increasingly important.

According to Charlie Wagstaff, Managing Director at Criticaleye: “Leaders should not be precious when receiving challenge from their peers and colleagues. They need to welcome honest, open critique from those around them and factor it into their approach – ego and a reluctance to adapt are damaging traits.

“Openly discussing vulnerabilities and promoting frank dialogue will help you determine how to improve performance and engage your teams.”

Failure to do this could lead to stagnation, says Judith Nicol, Director for Leadership Services at Warren Partners. She explains: “If as an individual or as a team you don’t reflect and continue to develop self-awareness, you can’t improve your effectiveness. All you do is produce more of the same and it becomes your default position.”

360-degree feedback

At Land Securities, Chairman Alison Carnwath uses 360-degree feedback for the leadership team, including the CEO.

“If you want to provide a balanced view to a chief executive about how they are doing, beyond simply saying: ‘You’re doing a great job, keep going,’ you have to find tools to help you,” Alison notes. “My CEO absolutely wants to hear what his direct reports think about him, cogitate on that and talk to me about it. It gives him some hints as to what he could do better.”

As well as providing the chairman with a fuller picture on leadership performance, using such tools can make a good impression further down the organisation. “Most people say ‘yes’ to CEOs the whole time, so the opportunity to receive frank feedback is great. It also sends a good signal that they are willing to learn and be challenged,” Alison adds.

Handling sensitivities

Adopting this kind of approach requires a mature and open attitude. Alan Armitage, CEO at Standard Life (Asia), found that encouraging his leadership team to critique one another has helped them assess their own style and characteristics, as well as understand how they can best work together as a team.

The executives have to trust each other for this to work. “It’s easier to do when the team has had some successes and you’re wanting to take it to the next phase,” Alan says. “If there are conflicts or issues this could just antagonise the situation further.”

Last year, Alan introduced 360 feedback to his leadership team on a more regular basis. “I felt the team was mature enough to take direct feedback from others,” he explains. “We even managed to take into account some of the cultural differences they have versus a Western organisation.”

There has to be clarity on why you’re introducing new forms of appraisal. If it’s not implemented effectively, it can easily backfire and result in suspicion and unwanted politics.

Nicky Pattimore, HR Director at Equiniti, says: “I’ve seen organisations introduce it for development purposes but then suddenly it’s built into performance assessment, which creates distrust.

“There is often nervousness around these kinds of tools if they have not been used before. Being clear on why you’re using it and ensuring it’s done in a safe environment is important.”

It’s a point echoed by Judith from Warren Partners. “A lack of transparency is a killer. Right from the off you’ve got to be very clear about why you’re doing this, what good looks like, and crucially what information is going to be shared with whom, as well as what support will be given.”

While the success of using frank feedback in leadership development hinges on the attitudes of the chief executive and chairman, a strategic HR director who can guide its implementation is key.

By Dawn Murden, Editor, Advisory

Do you have a view on 360-degree feedback for leaders? If you have an opinion that you’d like to share, please email Dawn at: dawn@criticaleye.com

Don’t miss next week’s Community Update on how to create an effective audit committee.

Follow Criticaleye on LinkedIn

Taking the Top Spot

The learning curve for a rookie chief executive is notoriously steep. They will have to adjust to an unprecedented level of accountability as they assess the talent within the organisation, build strong relationships with the board and articulate a strategy that captures stakeholders’ imaginations.

Conventional wisdom focuses on making your mark in the first three months, but many CEOs will tell you it’s not so simple in practice. In most cases, the job is never quite as advertised, even if you are promoted from within.

Matthew Blagg, CEO at Criticaleye, says: “There is a lot to accomplish as a new CEO. While you should go in with a strong understanding of the business and what you hope to achieve, you will also have to spend a lot of time uncovering hidden truths and evaluating your team.

“You will need a strong network around you, including a leadership team that you can trust and collaborate with, and external confidants whose experience and knowledge you respect. Never hope to go it alone.”

Here, we share advice from a range of business leaders on the skills and actions new CEOs need to address.

Listen Before You Act                                                                                                                              

Debbie Hewitt, Chair at Moss Bros Group, advises new CEOs to spend time reflecting and listening to the board before taking decisive action.

Usually first-time CEOs have worked in the business before, which can bring its own challenges. They have a track record, style and approach that was conducive to a different role. As a chair, I always advise people to spend time thinking about how they will adjust.

Most new CEOs were previously commentators on what their predecessor didn’t do well. The natural inclination is to go in and fill the gaps as they see it, so I encourage new CEOs to think about the business, not what their diagnosis was under the previous leader.

It’s also common to want to jump in and make new hires or lose people they don’t think are right for the business, but I urge them to think first about the strategy and then build the team around it.

NEDs are an invaluable source of input – I recommend asking a lot of questions as it’s essential to get feedback on the leadership team from the board. Far too often new CEOs want to illustrate that they know the business and its problems, but actually once you’ve got the job it’s really important just to listen because the board has an impartial view of the business, your team and your predecessor.

When a new CEO is not used to working with NEDs they need to balance how much information to give versus drowning them in detail. Some CEOs worry that information will be used as a stick to beat them, but the board doesn’t need to hear about what’s going perfectly.

Get Your Team ‘On The Bus’                                                                                                                

Matthew Dearden, former President for Europe at Clear Channel, reveals how he got his team on side.

You need to be very clear on your expectations for performance, as well as the behaviour and values that will get you there. As a leader you will have some non-negotiable requirements – make sure people understand them and then bring in the team to agree the rest.

A polished appearance doesn’t necessarily equate to underlying talent. You have to figure out exactly who you need and show patience to those who possess real ability but are rough around the edges.

I found it useful to bring in a small number of external hires – partly because of what they brought to the team and partly because of the signal their appointments sent to the rest of the organisation.

Over the first year, about half of my senior leadership team changed. It was important to do that with respect and humanity. You need to have clear, honest conversations about the direction you’re going in. That will usually excite those who fit your needs, and those who don’t appreciate it will decide they should move on. That’s better for everyone.

I talked a lot about emotional commitment and used the question: ‘Are you on the bus?’ It became a motto, so when I took the top team away for an off-site trip, I hired a double-decker bus to take them to dinner. I acted as conductor handing out tickets for those committing to coming aboard. Some thought it a bit cheesy, but five years later they still talk about that magic moment of accepting the ticket and getting on the bus. It built a sense of drama and that’s critically important if you’re going to get people to come with you on a tough journey.

Create a Culture of Ownership                                                                                                      

Peter Sephton, CEO of The Parts Alliance, discusses the dynamics of being a new CEO under private equity backing, and how he created a culture of ownership.

One of the first things we did was to create a founder mentality by involving a wide group of people in defining and building our strategy. We branded it the ‘10 steps’ as it was designed to keep us 10 steps ahead of the competition.

We broke our business into divisions and introduced new performance management metrics with real-time updates throughout the day. Regional directors were assessed against those metrics so performance was highly visible. This was an important aspect of building a founder mentality.

I also took the opportunity to distribute sweet equity widely. One of the key advantages of being a PE-backed CEO is the ability to do this. Through this, behaviour changed as people realised they were in effect running their own business.

We kept a sense of ownership at a local level by deciding not to change the operating brands of the businesses we acquired. Local branding is critically important to your buy and build strategy – too many opportunities go wrong because of corporate arrogance and the ‘conqueror syndrome’.

Prepare Early For The Role                                                                                                                

John Goddard, Partner and Member of the Global Leadership Team at LEK, explains that CEOs typically have only six months to really make an impact, so early preparation is vital.

The CEO’s chair can be an uncomfortable place to sit. As well as more scrutiny and higher expectations, you will have limited time to make your mark in shaping the business.

It’s popular to say that the first 100 days are make or break for new CEOs, but we have a different metric: you have six months to fail and two years to succeed. In other words, you need to make significant progress in your first 180 days. If you do this convincingly, you’ll be given more time.

There are four very practical steps you can take before your first day: identify and address any gaps in your industry knowledge and how the business competes; start developing some strong relationships with the board — you will need them; find a confidant outside the business who can provide a broader perspective, such as a fellow CEO or a trusted advisor. Finally, begin to formulate a high-level narrative, which you will need to inspire confidence both internally and externally.

Some of the individual team members may resent you as the newcomer, a few may even have applied for the top job. They may be waiting for you to make your first mistake. A quick way to assess the team is to commission an external executive audit, but there is no substitute for spending time with them yourself.

By Mary-Anne Baldwin, Editor, Corporate

What are your experiences, thoughts or concerns about being a first-time CEO? If you have an opinion you’d like to share, please email me on maryanne@criticaleye.com

Don’t miss next week’s Community Update on the importance of 360 feedback as a leader.

Follow Criticaleye on LinkedIn

Unlocking International Growth

An organisation’s ability to expand internationally will depend on the talent and strength of its leadership. Problems occur when boards ignore questions on resource and capability, opting to plough onwards, bewitched by the promise of growth.

Turning away from obvious opportunity is tough, especially in the current economic climate. And yet carrying on regardless has sent plenty of famous retailers and consumer goods companies crashing into the rocks.

The priority for any business, after assessing the size of the prize in a new market, is to look at the human factor and ask: ‘Do we have the people to execute the plan?’

Giles Daubeney, Deputy CEO of recruitment concern Robert Walters, has seen the business grow over the past 25 years from a single office to 54, spread across 26 countries. “It’s no good having someone up on high calling the shots with no knowledge of the local market − you can make grave mistakes that way,” he says.

“The most important thing is to have the right person to do the job. Not having enough people is one of the biggest constraints to growth.”

For large organisations, there needs to be clear decision making between HQ, regional and local operations. David Comeau, Criticaleye Board Mentor and former President for Asia Pacific at Mondelez International, saw the latter company transform from a country-focused set of independent operating units into a category-focused global organisation. “I think a lot of people struggle with this pendulum swing between how centralised or de-centralised a company should be,” he says.

According to David, it was critical to make changes as rules and responsibilities were not clear. “For example, there was a brand manager for Oreo in Latin America who thought they were growing the brand globally, but there was also a brand manager in each country. We hadn’t addressed how the local teams would be involved or how the new order was going to run; it was difficult to accomplish anything,” he explains.

“We worked with the countries to redesign the organisation and asked their opinion on the best way to accomplish what we were trying to do. Collectively, we designed a structure that would allow us to operate globally but still be effective on a local basis.”

This remains a hugely complex undertaking. Tom Beedham, Director of Programme Management at Criticaleye, warns: “It’s all too easy if you’re based in the head office to say: ‘These are our values and this is our culture.’ But the further out you go you may find the message has changed or the perception is different. Learning from peers about how to approach a new market before you enter will mean you are better prepared and can accelerate faster.”

GSK has been evaluating the make-up of management teams across various countries, explains Kris Webb, Senior Vice President of HR for Pharma across Europe, Emerging Markets, Asia Pacific and Japan: “We’re making decisions to ensure that what is happening in our businesses across the globe is aligned with the values of the whole company.”

Aside from the internal dynamics of organisational design, strategy and competency, companies must also navigate the risk of political volatility, currency fluctuations and rising labour costs – to name but a few. Yet the case for expanding internationally is evidently strong, not least because growth in many domestic markets remains challenging at best.

Mark Collings, Head of International for SME Banking at Santander, comments: “Businesses that trade internationally are more resilient than those that remain in their domestic market, and tend to see higher rates of growth.

“If you’re operating internationally you’re not dependent on one market, so if economic instability hits in one geography, you can rely on your presence in other markets to weather the storm. This can put you in a much stronger position and provide growth, even in uncertain times.”

Just don’t underestimate the importance of people and culture before moving into a new territory.

This article was inspired by the recent Criticaleye Discussion Group, Key Considerations for International Expansion, held in association with Santander.

By Dawn Murden, Editor, Advisory

If you’d like to share your experiences on international growth, please email dawn@criticaleye.com

Read more from Santander’s Mike Ellwood on the bank’s growth strategy

Don’t miss next week’s Community Update, which looks at the mistakes leaders make when communicating a company’s values.

Follow Criticaleye on LinkedIn

The Evolution of the Workforce

Evolution is typically energised by a single but significant change, the effects of which are radical but slow coming. Language, the ability to walk upright and the introduction of money each happened in pockets spread over land and generations. Yet now we’re being hit by numerous and instant technological changes that affect us worldwide, and employers are struggling to keep up.

“Due to exponential technological disruption, digital can completely transform a business within a year,” warned Nils Michaelis, Managing Director for Digital within the APAC Products Operating Group at Accenture.

Speaking at Criticaleye’s Asia Leadership Retreat, held in association with Accenture and CEIBS (China Europe International Business School), Nils went onto explain how another important factor — the consumer — has been a catalyst for the creation and evolution of many jobs, even among the top roles.

“A couple of years ago, the then CEO of Macy’s gave himself the title of Chief Customer Officer and was one of the first CEOs to do so. This got the whole company to rotate towards being customer-centric,” Nils explained.

From a leadership perspective, the difficulty lies in creating a talent pipeline that is able to deal with these changes. “As leaders, we need to turn our attention to how we bring the workforce together, and how we reskill them,” said Chris Harvey, Managing Director for Financial Services across APAC at Accenture, who led the keynote address.

However, in a Criticaleye survey of attendees at the Asia Leadership Retreat, only around half said their executive team are collaborative and 85 per cent said the behaviour of their executives can create silos.

While it’s a global business issue, it’s particularly important in Asia where talent is in dangerous demand, competition has led to high staff turnover, and many of the family and founder led businesses aren’t doing enough to train and promote talent. So, how can we progress?

From aptitude to attitude

For many business leaders, including Alan Armitage, CEO for Standard Life (Asia), the spotlight has turned from highlighting an employee’s functional aptitude to their attitude.

“I used to focus on the project plan, but realised more effort had to be put into behaviours and people,” said Alan. “We’ve put a strong emphasis on behaviours, both individually and collectively, especially on whether we have the right blend of individuals within the team and if they will work together in a productive manner.”

In her work with businesses both in the UK and Asia, Jamie Wilson, Managing Director at Criticaleye, has found that “high performing teams show collaboration, innovation, trust and the ability to handle the ambiguity of change”. She added: “It’s these traits that will see them through today’s fast-changing business environment.”

Alan recognises that in order to attract the best talent, Standard Life needs to offer its staff the opportunity to develop in a way that suits them. By doing this, the organisation will also reap the benefits of having a diverse range of skills across its workforce.

“The next generation have less affiliation to the company itself but more to those that develop their skills and brand at a personal level,” Alan noted.

“Every single member of our team has an individual development plan. Those plans need to be absolutely distinct from the individual’s day job and their performance-related plan. They are focused on where the individual would like to be in three years’ time. They need to be challenging and also outline the steps an individual needs to take.”

The fluid workforce

Leaders must acknowledge their workforce will be more fluid than ever before; that may mean hiring more people on a part-time or consultative basis, and also acknowledging that an employee’s development might result in them leaving the company.

This is something Criticaleye Board Mentor, David Comeau, realised back when he was President for Asia Pacific at Mondelez International. Rather than being afraid of the fluid workforce, he saw it as a way to improve the company’s reputation as an employer.

“People need to own their own career and development,” said David. “We realised people would leave the company, so we told them we would celebrate when they leave − but also when they return.”

David explained that three-years ago the company launched a programme through social media that openly recognised employees who chose to develop their careers by moving on. “This allowed both us and them to promote their skills and success to those outside of the business. It’s helped their development while also getting the word out on the great things going on at our company,” he said.

Planning ahead

This kind of attitude teaches leaders to embrace, rather than fear, mobility and succession planning. Indeed, it’s an increasingly crucial way to manage tomorrow’s liquid workforce. “Succession can be a great exercise as it forces honest discussions about building the team,” said David.

Neil Galloway, Executive and Group Finance Director at Dairy Farm Group, said that “we’re increasingly trying to learn from exit interviews with people who we didn’t expect would leave the company”.

One of the things he discovered was that employees wanted to see there are opportunities for them to grow within the organisation. “In some cases, we had to create mobility through forced changes in order to make room for talent to move up the business. This has meant putting all roles − including mine − into a succession plan. It was a surprise to some that I was already talking about finding an internal successor within a few months of joining the group, but it sent a strong message,” Neil explained.

Although the requirements on your workforce – be they skills or entire roles – are both changeable and unpredictable, your employees will want reassurance.

“You need honest, transparent discussions with external candidates, so they understand the situation they are signing up for,” said Neil. “And you need to give colleagues candid feedback on their capabilities and potential, both the opportunities and limitations.”

These views were shared during Criticaleye’s Asia Leadership Retreat 2016, held in association with Accenture and CEIBS.

By Mary-Anne Baldwin, Editor, Corporate

Do you have any experiences of the changing workforce you would like to share? If so, please email maryanne@criticaleye.com

Read more from our interviewees as Nils Michaelis discusses the customer experience and Alan Armitage reveals how to motivate the executive team.

And, don’t miss next week’s Community Update on how to tackle international expansion.

Follow Criticaleye on LinkedIn 

Cracking Cross-Team Collaboration

As Managing Director of Strategic Development for the UK & Ireland at Experian, Steve Thomas has done a lot of work integrating a company that’s acquired 200 businesses over the last 15 years. Yet he was acutely aware that the structure they were brought into was not compatible with long-term success.

“We weren’t able to project growth from the divisions at the desired revenue,” he explains. “The four top opportunities across the group were cross-divisional. It was clear we had to work differently to achieve our ambitions.”

As with many businesses adapting to modern challenges, agile and collaborative working offered solutions, so Steve pooled some of his best talent into a cross-functional team. But in his efforts to change the business, he was struck with how to balance resources.

“The innovation team never suffered from capex or opex availability, but from resources. The people essential to the project were needed in other areas of the business so they didn’t dedicate enough time to it,” he explains.

Steve goes on to relate how the existing operations were also put under strain to perform at the same standards, yet with less means. “With leaders giving up people to the project, they felt they didn’t have the resources to do what they’d committed to, making meeting revenue targets more challenging,” he says.

Redefine the tribe

Gary Browning, NED and former CEO of Penna shares similar experiences. “I inherited a company that in 2006 was very siloed and almost set up to be internally competitive,” he reveals. “It was really difficult to get people to work together across divisions for the benefit of the client. We had people asking why they should allow their top person to go off and work on something that didn’t count towards their own results. It took a couple of years and huge amounts of investment to break down that mindset.”

Gary describes how the company had to “redefine the tribe”, encouraging people not to see themselves as a member of one of its divisions but of the whole company.

“Interestingly, we had more resistance the further up the organisation we went. The younger, more junior staff had a real desire to be part of the one tribe, but as you went up to middle managers, seniors managers and MDs, they wanted to keep ownership of their people, P&L and clients – that’s where we had to do the most work,” he explains.

Progress was made by creating a system that rewarded collaborative behaviour. “Previous management’s view was that to achieve collaboration, you should remove all measurements from a local level. They took out local P&L and had just the one measuring a £100 million business with no local KPIs. That may sound like a solution to breaking down silos, but it caused a huge problem in the business because we completely lost accountability. I put those measurements back in again, but it was into an environment where people already wanted to collaborate,” Gary explains.

“We did that in a number of ways: hard bonuses, soft rewards and spot bonuses. We launched an employee of the month scheme, but the only way you could be nominated was through behaviour, not sales. We promoted and recruited for behaviours and set KPIs for them. But we never totally cracked it – it’s incredibly difficult.”

Win over your divisional leaders

While Roger Edwards, Managing Director of the Municipal Division at Biffa, embraces the collaborative approach his company is taking, he is able to shed light on the impact cross-functional teams have on divisional MDs. Biffa’s lead agile team is working on a project that will transition customers to a digital platform, but it’s also applying a lower-burning collaborative ethos to ‘business as usual’.

“Having just successfully listed on the stock market it’ll be crucial to act for the greater good, because ultimately we’ll be judged on share price and not on divisional success. We need to create the mindset that it’s the company first and division second,” he explains.

However, being a divisional MD himself, Roger sees the challenges at a local level, in particular not knowing how long your team members will be gone if reassigned, how to hit the numbers without them, or whether to hire replacement resources in their absence.

So how can a company support its divisional heads? “If I let someone go for the benefit of the business, I want to know that it really was of benefit,” says Roger. “Communication on the milestones and success of the project are needed so that people can understand and support it.”

Communicate the rationale

Cross-functional teams can be a way to test and promote staff in areas they have the most potential, but you must be clear on what you’re trying to achieve and why.

“Most people fear change and won’t want to go into the unknown without reassurances,” says Charlie Wagstaff, Managing Director at Criticaleye. “Communication is always central to that, but you must also create an environment in which team members really feel they are better off for the work they are doing. That means finding what people are good at and growing them in the area of the business most suitable to them.”

Carol Peckham, Vice President of HR Transformation for the UK & Ireland at DHL Supply Chain, also argues for clarity on the responsibilities of those people. “For me, you have to understand where the critical talent pool is so you can use it on priority projects, rather than always asking colleagues to do things on top of their day job, which tends to be the norm in a lot of organisations,” she says.

“We’ve been looking at cross-divisional talent sponsorship so we’re talking very honestly about what each individual needs to do to develop their own careers across DHL. We’re also recognising people who proactively move colleagues around the organisation.”

It’s a slow process at DHL, where leaders have taken a gentle approach to agile working due to concerns about resistance. “There are more ideas coming through and we are only at the beginning. Ultimately, there is a fine balance that needs to be addressed. This type of approach requires agility and the right behaviours to adapt at speed, but at the same time you need to bring colleagues with you and allow them to see the benefits of working across divisions,” Carol explains.

These insights were shared during Criticaleye’s recent event, How to Bust Organisational Silos.

By Mary-Anne Baldwin, Editor, Corporate

Do you have a story you’d like to share on cross-functional working or agile teams? If so, please email maryanne@criticaleye.com

Don’t miss our next Community Update, which provides practical ways to improve diversity.

Beware the Lazy Thinkers

“The rise and fall of empires is dramatic in the consumer and industrial technology space,” says Andy Griffiths, CEO of the Consumer Appliances Division at Glen Dimplex. “Getting teams together to continuously challenge and reappraise your market, which changes every day in this digital world, is fundamental.”

This continues to be a central challenge for companies across myriad sectors, whether they’re in B2B or B2C. “You have to get away from the running of the business because it can be intellectually lazy. Studying this month’s figures, working out this quarter’s results – that’s not interesting,” continues Andy, who is also former President for the UK and Ireland at Samsung Electronics.

“You need to challenge yourself and your teams to something longer term. You’ve got to do it realistically and for as far as you can see. Normally that’s between two and five years.”

Anita Chandraker, Head of Digital at PA Consulting Group, agrees. She warns: “Beware the lazy thinkers – there are many of them out there. It’s also important to take accountability for tomorrow, because too many people are looking at today. If no one is accountable for innovation, it won’t happen.”

There are very real difficulties for organisations in achieving this, from resetting KPIs to developing a tolerance for failure. “Leaders must put the right framework in place so that individuals and teams can share ideas,” comments Alison Mills, Relationship Manager at Criticaleye. “Setting up cross-functional teams that include a range of individuals with varying skills and experiences could be one way of doing this.”

For Andy there is a simple, yet crucial, point that boards and executive teams need to bear in mind: “The last thing you ever want as a start point is a bunch of clones marching in one single direction going off doing the same things.”

In most cases, a shift in mindset is required. Kevin George, CEO at passenger ferry company Red Funnel Group, reflects on his experiences at British Airways when his team were first tasked with inventing a flat-bed business class seat.

“To come up with a seat that would lie flat and be economically viable just seemed impossible,” he explains. “But it was a question of overcoming that mental barrier and finding a way of doing it.”

When BA created the fully reclining seat in 2001, Kevin said it broke new ground in the airline industry. Now, almost every international airline has adopted them.

From incubation to execution

Those organisations faced with the prospect of having to relearn the art of innovation need a clear understanding of who will be responsible for generating ideas, and who delivers on going to market.

On that point, Anita noted the client challenges highlighted in PA Consulting Group’s ongoing research into innovation. “Certainly the data shows that the biggest challenge companies face is the ability to scale up once they’ve got a good idea,” she said.

There will be serious questions about investment, resource allocation and the risks around how to integrate a new product or service into an organisation.

This is why it’s vital to reflect on the structure, what the levels of accountability and oversight should be, and how this all runs in parallel with ‘business as usual’. David Hollander, CEO at Aqualisa, a UK-based shower manufacturer, comments: “Coming up with new concepts is the easy bit; it’s almost all about execution. That’s where management plays a big part in driving fledgling ideas, presenting visible confidence, allowing time to discuss and evaluate the viability of an idea. Then, it’s about enabling the processes needed to see it through.”

At Aqualisa, David says the company is preparing to launch a new product and different teams are fully involved, working on a collaborative basis: “Our R&D and marketing teams are closely linked. R&D may work to develop a new product in response to a marketing imperative, but equally it can be the other way round. They are led by a Brand and Design Director, who oversees both teams.”

According to Andy, proper thought should be given to creating teams for different stages of the innovation process: “It’s relevant to keep your good thinkers thinking, and have your good doers doing. That, in a consumer market is a more natural segmentation of skills, because you have end users who are continuously demanding, as well as a bunch of competitors agitating your business.

“The innovation team, once they catch their breath post-launch, need to come back to the table two or three months later and start again, using some of the data from how the last project landed.”

That’s the Holy Grail for any business when it comes to innovation – how to keep that cycle going. One great idea and seamless execution won’t guarantee success. Rather, a winning approach lies in the ability to empower those within an organisation to do it time and again.

By Dawn Murden, Editor, Advisory

This Community Update includes insights from a recent Discussion Group: How to Create a Successful Innovation Team

Would you like to share your thoughts on innovation teams? If so, please email dawn@criticaleye.com

Interested in finding out more about cross-functional teams? Then don’t miss our Community Update next week on breaking down organisational silos.

How to Strengthen the Leadership Team

Should the leadership team shift every time an organisation encounters change? It’s a question many CEOs and boards grapple with, because it’s certainly not clear cut. One thing we do know is that every business needs a complementary team of individuals to lead it to success.

Of course, the context will differ for each company and will also constantly evolve. Indeed, over half (53%) of respondents to a Criticaleye survey said that they are either going to replace members of the senior leadership team or overhaul it entirely.

Here, a number of executive and non-executive directors reveal four questions to pose when assessing the leadership team:

1) Do you understand what’s needed?

It would be futile to evaluate the leadership before you know what mix of skills you require to execute the strategy.

Robin Murray Brown, Partner at executive search firm Tyzack Partners, comments: “The most frequent strategic error, in my view, is failing to anticipate future leadership needs. All too often, organisations tend to think about what has worked in the past, or to try to correct current weaknesses rather than working out what leadership qualities are required to deliver their strategy.”

According to Howard Kerr, CEO at UK business standards company BSI, the chief executive and the board must look at strategy, structure and people – in that order – to assess what’s needed.

“If you’re not clear what leadership capability you need to support your strategy, you will fail,” he adds, frankly. “The strategy has to be absolutely pinned down and clear. Not just from a design point of view, but also execution. Who do you need to make it happen?”

2) Is the CEO driving it with the right support?

Effectively assessing the senior executive team calls for a number of constituents. It must be led by the chief executive, while the support of the chairman, board and HR director will be critical.

Anne Stevens, Criticaleye Board Mentor and former Vice President for People & Organisation for Rio Tinto Copper, says the most challenging aspect of strengthening the team can be persuading the CEO of its importance. “You have to coach and support them to take an objective look at their team, their attributes and where to develop them. The HR director has a key role to play in making sure the CEO is comfortable with the approach and prepared to take action where required.”

For David Parry-Jones, Vice President and General Manager for Northern Europe at software company VMware, the HRD and chairman should both act as agitators, pushing the issue to the forefront of the CEO’s mind.

He explains: “CEOs can sometimes get wrapped up in quarterly reporting or annual cycles of the business and lose sight of stuff that may help them in two or three years’ time. The chairman’s role is to look over the horizon to see what’s coming.”

The chairman’s role is also fundamental in assessing the CEO. Alison Carnwath, Chairman at Land Securities, says: “A non-exec chairman of a Plc should require that leadership capability assessment and development be brought to the board regularly for discussion, but only the chair will really assess the CEO.”

3) Can the leadership team be developed?

If the path or direction of the business changes, the leadership team must be reviewed; it may then become apparent that there are gaps. The question is whether you change the team, develop them, or apply a combination of the two.

But ambitious leaders need to feel they can progress. “There needs to be more focus on development,” argues Jamie Wilson, Managing Director at Criticaleye. “Just because someone has reached the higher echelons of their career doesn’t mean they should stop learning.”

On that point Kevin Barrett, Operations Director at Howden Joinery Group, notes: “The CEO should demonstrate their own personal skills and outline what’s missing around the table. They should then ask: Do we buy those skills in, or does someone want to put their hand up and develop them?”

It’s down to the CEO to lead by example. “I sit down once a quarter with a coach for half a day and talk about my leadership strengths and weaknesses. I’m very reflective and get a lot of feedback from people,” Howard says. “That makes it harder for people to push back on their own development.”

Unfortunately, some leaders may feel they are beyond that. Anne notes: “I found a clear link to those who were keen to learn about their own strengths and development and strong employee engagement. The more resistant leaders, typically, were the ones who needed the most development.”

Reticence may lead to difficult exit decisions. Chris West, Vice President for Commercial Operations at Asda, comments: “It’s better to address things quickly than hope they will get better over time. Focus on what’s probable versus possible.”

4) Are you over-promising on succession?

Every company should be preparing internal talent for future roles, as well as providing continuous development. However, you should think twice before committing anyone to a specific role too early, such as the CEO role.

“That’s a mistake organisations make, they lock themselves in and feel they can’t go back,” Anne continues. “Inevitably, if the business does take a different direction or adopts a new strategy, you end up having to manage a very difficult conversation and the subsequent fall out.”

According to Kevin, there’s a fine line between leadership development and succession; they need to be in balance. It might be more effective to develop someone, rather than bringing in the next person. “You can get sucked into succession planning, so much so that you do it at the expense of leadership development,” he says.

One suggestion for avoiding this pitfall is to focus on a much broader set of leadership skills, rather than being driven by roles. “If you’re specifically developing someone for an ‘as is’ type of role there is a high chance of failure,” Howard says. “You should be preparing people for the ‘to be’ state.”

That’s why the whole leadership team – plus another 100 employees – at BSI have been through a leadership challenge programme. It’s based on methodology developed by the CEO, HR and an external facilitator. It studies an individual’s strengths and weaknesses related to three elements: strategic thinking, relationship building and operational execution.

“My philosophy for leadership development is to build, rotate and change,” Howard says. “You’ve got an organisation stuffed full of really smart, ambitious people who want to learn and develop, give them opportunities, don’t let them atrophy.”

 

This article was inspired by Criticaleye’s recent Executive Breakfast Briefing: How to Strengthen the Leadership Team

By Dawn Murden, Editor, Advisory

Would you like to share your thoughts on developing leadership teams? If so, please email dawn@criticaleye.com

Don’t miss our Community Update next week on innovation.

Follow Criticaleye on LinkedIn 

How I Changed My Leadership Style

Guiding people and situations is not a one-size fits all game; leadership styles must evolve to suit the environment and people around them. As such, a good leader will be responsive, adaptive and open to feedback, all of which takes excellent emotional intelligence.

“Leading a team largely comes down to engagement. Get people inspired enough and they’ll follow you on whatever journey you wish to take them,” explains Tom Beedham, Director of Programme Management at Criticaleye.

“Of course, complexity comes when leading teams of different personalities, cultures or geographies – but it’s your job as a leader to read the room. Regular feedback on your leadership style can help with this.”

Here, we ask business leaders how, and why, they’ve adapted their leadership styles over the years:

Caroline Rainbird
Director, Regulatory Affairs
Royal Bank of Scotland

I reflect a lot on the styles I come across in other individuals, and try to incorporate those I have an affinity with into what I do. For example, I’ve been influenced by leaders who have listened to me and adapted their approach.

I try to have a very open, inclusive and affiliative style. I want to make it clear to people that while I have views and opinions, I don’t know everything and want to hear their ideas.

When I took on my current role, I was not a subject matter expert and had a lot to get through. I needed to engage with the experts around me but they didn’t work at the pace I wanted. I realised I had to slow down in order to go faster and modify my approach in an engaging way.

As a leader, it’s really important to role model behaviour but also to show that you’re adapting and learning yourself. I choose people in the organisation who I trust to get feedback on how my leadership style lands, because if it’s not working I need to know and to modify it where I can.

Across the bank, we’re rolling out a new and consistent approach to leadership. One great part of this is continuous observational feedback and coaching, under which I locate the skills I can work on to improve my leadership style. I then work on that skill until it becomes authentic and sustainable. It’s being rolled out from the top, throughout the organisation.

Alastair Lyons
Chairman
Admiral Group

Early on in my career, when I was a CFO, I asked my then Chair of Audit whether I was capable of stepping up to the role of CEO. He told me yes, but only if l learnt how to leave the office without checking if the windows were open. I was known for my detailed approach and had to learn to let go.

My leadership style as a chairman has also developed over the 16 years I’ve held the role across different businesses. I now have a much greater focus on the strategic, rather than operational,elements. I’ve also developed my ability to communicate both internally and externally, and understand the importance of really knowing the mindset of all stakeholders, including what is not said as much as what is.

In my view, a good chairman needs to be a chameleon and able to adapt their leadership style to fit the particular situation. I enjoy deciphering how to work with people, understanding the person, what their strengths are, what their fears are, and how they like to interact so that I can properly engage with them.

Those I’ve found hardest to work with have very set ideas on how to get things done and resistance to input, mixed with a strong belief in their own importance. That kind of person I find difficult to relate to.

Gary Kildare
Chief HR Officer, Europe
IBM

If there are aspects of your personality that you don’t like, you can certainly make adjustments to them. However, it’s important that you’re natural; don’t spend time trying to be something you’re not.

I think the same is true in leadership – being a leader can be tough enough without trying to fake it. Also a message often has more impact when delivered in a natural style.

There are many examples of people having to behave in a particular way because circumstances or situations demand it, but it’s not something they can do long term. Ultimately your true mettle will show through and it’s often at points of high pressure.

What you should focus attention on is changing your unproductive or negative habits, such as micro-managing, inspecting, checking and reviewing. Over time this will change your behaviour.

We all need feedback but it must be constructive, just being told what you do wrong won’t help. You must also decide how much stock you take in others’ opinions, while being open to change. I’d hate to be like an actor on opening night who celebrates the good reviews but completely ignores the bad.

Margaret Rumpf
General Manager, Hong Kong & Macau, Emerging Markets & Asia Pacific
GlaxoSmithKline

Everyone has comparable expertise by the time they are in a senior executive role, but what distinguishes someone above the rest is their ability to communicate, inspire and engage different people across the organisation. That means being able to adapt ones leadership style to suit the relevant audience.

I think it is incredibly important to know – and adapt to − who you are influencing, their perspective and the reason why they would buy into your message. It sounds really simple, but I see too many people trying to drive their own agenda and then asking why people haven’t followed in their direction. This takes time and effort.

I ensure the key message is clear and consistent no matter who I speak to, but how I frame the idea will be different depending on the audience. I also look at my circle of influence to ensure I cover everyone, not just those above me.

By Mary-Anne Baldwin, Editor, Corporate

Would you like to share your thoughts on changing leadership styles? If so, please email maryanne@criticaleye.com

Don’t miss our next Community Update, which will deliver highlights from Criticaleye’s Non-executive Retreat 2016, held in association with Santander.

Follow Criticaleye on LinkedIn

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