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.

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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.

Essential Skills for 21st Century CEOs

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The scrutiny placed on modern business leaders is greater than ever before. The sheer speed at which decisions must be made and strategies enacted across an organisation, coupled with employees, customers and shareholders expecting ever more communication, means today’s CEOs must hone the skills needed to thrive in such a fast-paced business environment.

Chris Merry, CEO of professional services firm RSM Tenon, says: “People expect a lot compared to what they did ten years ago, in terms of what they get from the top of the business; what they are told, how they are told it and how frequently they are communicated with. It’s up to modern CEOs to rise to the challenge.”

If there’s one skill that has gained prominence it is the ability to communicate with aplomb, and to do so particularly in the harsh glare of the spotlight: both internal and external.

Ursula Morgenstern, a first-time CEO at IT provider Atos UK, comments: “The sheer public attention takes some getting used to. I walk in a room and everybody watches whether I smile, where I sit, to whom I talk. I had been a senior person at Atos for the last five years but the attention that is paid to the CEO and what I project is incredible, and it’s meant that I’ve had to learn to balance my natural informality that appeals to staff with the public persona that’s required of a CEO.”

Regardless of ‘persona’, keeping your head and remaining clear and firm as to your intentions is crucial. Andy Blundell, Chief Executive of outsourced customer marketing supplier Communisis, says: “It is important to be able to clearly articulate the company’s identity and growth strategy to any audience, very quickly… the CEO must set the tone in terms of work ethic and spreading the fundamental belief that the company will succeed.”

The need to connect via different media with teams that are dispersed across different countries presents additional challenges in terms of communication and engagement. “The emergence of multichannel communications has made the flow of information more immediate and unstructured,” says Mark Powles, CEO of Business Stream, a subsidiary of Scottish Water. “This puts a greater personal responsibility on the CEO to understand and respond to threats and opportunities when engaging with customers, stakeholders and staff.”

Naturally, all stakeholders will want to see the leader’s vision for the business and will hold him/her accountable for the decisions taken. In many cases they will also want to feel part of that vision. Therefore, while CEOs must still lead and make it clear where the buck stops it is also vital that they are seen to be inclusive and transparent in their leadership style and that, where appropriate, they invite others to participate in how the business is shaped and grown.

David Turner, CEO of outsourced contact centre company HEROtsc, comments: “Even if people don’t necessarily agree with the decisions you’ve made, as long as it’s done solidly and they can see the argument has been created, by and large you’ll get more people following you than not. For instance, I do a monthly blog about the business because it’s clear to me that people want to see what your opinions are, whether you have one, what you are trying to do with the business and where it’s going.”

Create a culture of leaders

Put simply, today’s CEOs cannot do everything themselves. More than ever, however, the organisations they lead must have a culture that allows for the speed and agility required to remain competitive. To be truly agile, CEOs must empower others.

“There’s a huge need for leaders to be able to create leaders throughout the organisation,” says Kevin Murray, Chairman of PR consultants Good Relations Group. “Those leaders have to be highly empowered to create that agility you need in companies. If something appears on a Twitter feed, within seconds you can have a global disaster on your hands. But, likewise, if you don’t respond to a customer’s complaint on a service delivery query appropriately and quickly, it could blow up to become a major issue for you overnight. That’s why leaders are now asking: how do I build an organisation that can respond at speed but also in the right way?”

Leaders must be confident enough to give others the power to take appropriate risks and encourage them to take responsibility. This boils down to trust. And trust comes from authenticity.

Jo Sellwood-Taylor, Founding Director at executive recruitment firm Mullwood Partnership, has conducted interviews with more than 100 leaders from a wide range of sectors and countries. “Our research found that what makes the difference between a good CEO and a stellar one is people leadership,” she says. “The world is more complex and to capitalise on it you need to create a culture of innovation among your managers and your workforce.

“Because the CEO role is very externally focused, the most important behavioural aspect is authenticity, being genuine and being very self-aware so that not only how you come across is suitable but that you also know what people you need around you to be effective.”

Chris adds: “People skills are the essence of what a CEO does. Interacting with people, trying to influence people and remove barriers. Looking forward over a longer time horizon than the day-to-day so you can see what the strategic path is, making sure you’ve got the right people around you to get that in place and managing and inspiring those people to deliver the strategy.”

Empathy is increasingly a prerequisite for successful leadership. Effective CEOs must have an innate understanding of what makes those around them tick, giving them the perspective needed to lead and influence teams and individuals and therefore judge situations with speed and accuracy.

Kai Peters, CEO of Ashridge Business School, says: “When working with business leaders we try to consider the strategic landscape and all of the normal business skills, but also the drivers and psychology of the individual, through 360-degree coaching and so on, and also the behaviour of others. In effect, two thirds of the work we do on leadership development is about psychology.”

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Build strength in depth

Trust and empathy are all well and good, but the talent needs to be there and it needs to be ready for responsibility. Aspiring talent must be nurtured to handle the pressure of the top role so that, when their turn comes, they are already comfortable with the spotlight and know what to do when it hits them.

Andy comments: “In a Plc environment it is traditionally only the CEO and FD who are routinely exposed to banks, advisors and investors. We’ve recently taken steps to change this by exposing other senior managers to, for example, an ‘investor day’. This is good for their personal development and investors like it because they see strength in depth – it sends a confident message about the organisation.”

Ultimately, certain skills required to lead an organisation in the 21st century are evergreen. But, while a CEO’s role will always be about setting a framework for direction and the goals to achieve it, those most effective in the role will be the ones that provide a context that allows for collaboration.

“We’re living in a radically transparent world where leadership is under scrutiny and is being challenged from every direction,” says Kevin. “A CEO’s tenure has been shortening all the time and even the smallest mistake results in resignations and people baying for heads to roll. It’s a harder job than ever and leaders must be much more inclusive in their leadership style if they are to succeed.”

Taking the Hotseat

Taking the Hotseat

“I have been a CEO in companies of all shapes and sizes; each time it's struck me that, once you cross the threshold, it’s quite a different world."

There’s no real bedding-in period for a newly appointed CEO. The new boss must come in, quickly assess the health of the business, the quality of the personnel and devise a strategy for moving forward. In many ways, the leader’s ultimate success can depend on the tone set and respect garnered in those first few months in charge.

Trevor Matthews, the CEO of insurance company Friends Provident, says: “I have been a CEO in companies of all shapes and sizes; each time it’s struck me that, once you cross the threshold, it’s quite a different world.”

In the beginning, it’s important to gain a true picture of the business – one that may have been glossed over during the hiring process. Some of the main areas to investigate include:

• Cash flow
• Where does the business make its money?
• Are key stakeholders happy?
• Is senior management effective and efficient?
• Can reporting structures be improved?

It’s also necessary to demonstrate that a change at the top has been made. Phil Smith, the UK and Ireland CEO of technology provider, Cisco, says that it’s vital “to be visible as people need to get to understand what your values are and what you are about; this will make them appreciate your approach to decisions”.

Darryl Eales
, CEO of private equity firm LDC, agrees: “In the first three to four months, I made sure that I was visible. It was less about issuing communcations and processes and more about just talking to people… It was a cathartic experience for me to hear what everyone across the company thought.”

The key is to be hands on. Steve Easterbrook, the President of McDonald’s Europe, notes that he wanted to avoid sitting down and trying to start from scratch. “I’d seen and heard enough about rewriting strategies and vision documents and mission statements and all the rest; I didn’t want to do any of that,” he says.

Value chain

Aside from meeting employees, a new CEO will often speak to the main stakeholders, such as suppliers and customers to establish a first-hand sense of how the business is perceived. Stuart Laird, the former CEO of support services giant, Jarvis, says: “Unless you take the time to understand what makes the business tick, you can make the wrong assumptions in the boardroom if you’re not careful.”

Matthew Dearden, CEO of advertising concern, Clear Channel UK, says: “I wanted to set the right tone as that is something that stays with you. I also wanted to check if there were any immediate fires that were going to hurt me if I didn’t deal with them. Having concluded that there weren’t, I had time to learn about the business and consider how to contribute better over the longer term. It’s an interesting balance of being respectful to what has been achieved in the past and also being clear about driving change for the future.”

For Andy Bond, the former President and CEO of Asda, there were some tough decisions to make upon taking the helm at the supermarket giant. “The first 100 days were really about making sure the company understood the situation because we had become a little anaesthetised to the reality of life. The toughest part of that was making about 2,000 people redundant, which was not an enjoyable task but it had to be done.”

Fresh blood

It’s rare for a new CEO not to have to bring in some additional personnel at a senior level, which also sends a strong message to the other executives who will, in all likelihood, be attached to how things used to be.

Stuart comments: “You have to assess the management team around you, as they’re the people who will be essential for your success. Is it structured in the right way or do you need to change things around, bringing in people or generally restructuring things? I would be surprised if there wasn’t some form of change in the new regime.”

Matthew found this to be the case at Clear Channel. “I inherited a structure where I had an MD running all the current and market facing activities, and an FD who looked after all the other functions supporting him. I concluded that I wanted to bring in greater expertise for areas like business strategy, delivering change and HR,” he says, noting that this led to some individuals opting for pastures new.

Jo O’Connor, CEO of Tie Rack Retail Group, made a similar decision, quickly bringing in an FD and a head of HR, which she describes as “critical appointments”. But she’s found it equally important to address the mindset and culture of the senior team that is staying on. “My constant mantra is about personal accountability for decision making,” she says. “I continually talk about cause and effect, action and reaction. I will ask who is responsible for a decision.”

Pace of change

The toughest dilemma for a CEO during his/her first three months will be judging how fast to implement change. Andy acknowledges that he may have acted a little too dramatically when implementing his strategy for Asda: “If I had my time again in the context of how I’d manage my first 100 days, I would probably have been a bit more long-term in my thinking about what I needed to do. I think I was a little bit brutal and I would have liked to have had the chance to be a bit more long-term.”

Matthew comments: “Given that there have been aspects of the business that have pleasantly surprised with me with how good they were, but also parts where I think we can do a lot better, it’s been a challenge personally to find the balance between which people and functions to push hard on and to say to the team: ‘Look, I know you think I’m pushing too hard but I want us to go for it.’ Whereas, with others, I can see that pushing is not going to be so productive, so it’s better to back off a little.”

The trick is to pick the right battles. David Wither, CEO of wireless technology company, Sarantel plc, says: “There were areas where I felt I was able to contribute to the team and help out immediately. In some areas it took much longer and, in certain cases, it required the recruitment of new talent. In other areas I feel like my impact on the organisation has only now started to unfold after seven years at the helm.”

It’s an unforgiving, high-pressured environment and one of the prices of calling the shots is that mistakes will be made along the way. “Make your first decisions good ones as they will be massively scrutinised,” warns Phil. “If you hire or fire wrongly it could be fatal.”

David reflects: “If I had to do it over again, we would not have aggressively pursued the consumer market, where we had early success. Unfortunately, that success did not last and we had to change the strategy after about three years – that hurt!”

Board support

The board undoubtedly has a role to play in assisting the CEO. Stuart recalls that when he joined Jarvis he explicitly asked the board for assistance, particularly in engaging with new people to generate more business. “They responded very positively; it was just what they wanted to hear,” he says.

Conversely, Andy reveals that he felt quite isolated in the early days of his tenure as Asda was very much an independent subsidiary of Walmart, which effectively allowed him to run his own business. “I [didn’t] have a chairman, so it was an amazingly lonely period of time and I would really have appreciated an arm round my shoulder quite frankly.”

Still, no one takes the top spot under the assumption it’s going to be all plain sailing. Julian Roberts, Group CEO of insurance provider Old Mutual, comments: “It’s quite clear when you’re the group chief executive: there’s nobody else, it’s your decision. The idea of getting used to evaluating things quickly and making decisions quickly is something you need to do in the role. Maybe, if I had learned to do that a bit quicker earlier on in my career, then that would have helped me in this job.”

Bosses earn their corn from the decisions they make. If fundamental errors in judgment are made regarding operations and personnel in the first 100 days, then it’s going to be extremely difficult to deliver on strategy further down the line.

Essentially, business is about results. If success isn’t forthcoming then, as football managers throughout the sport are discovering at the end of another season, there can only be one outcome.

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon

Matthew

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