Developing Future Leaders

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

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

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

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

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

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

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

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

The knock-on effect

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

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

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

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

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

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

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

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

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

By Dawn Murden, Editor, Advisory

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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.

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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.

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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.

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Listening to Tomorrow’s Leaders

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

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

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

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

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

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

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

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

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

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

Connecting with the customer

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

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

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

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

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

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

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

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

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

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

How to Support a First Time CEO

Stepping into the CEO role for the first time is a daunting task. You’ll face immense pressure to tackle widespread responsibility at a relentless pace. No CEO can do it alone and a first-timer in particular will need support in making that transition.

“The top job requires so many skills and leadership capabilities that just acquiring them − let alone using them − can seem overwhelming. Once you’re in the role, don’t expect that you can do everything yourself; a strong leadership team should be there to support you and give you time to reflect and decompress,” says Matthew Blagg, CEO of Criticaleye.

We ask leaders for their experience of being, or supporting, a first time CEO. Here’s what they had to say…

Get the Support of the Board

Ron Marsh, Criticaleye Board Mentor and Chairman at Polypipe

For a first time CEO probably the biggest challenge is having the confidence to drive through change in an organisation that they’re not entirely familiar with.

The chairman is there to support them in that, but also to challenge them and respond to their individual needs. He should be supportive without taking responsibility away from the chief executive. It’s more difficult for a NED to directly support the CEO as they don’t have routine interaction with them, but they should provide the sounding board for the chair and CEO to reach a solid conclusion that they can then back.

One of the things a chairman should look for in a new CEO is whether they are overworked – the hours they put in and the sheer effort needed for the job is immense; it can be too much for some.

The main concern is whether the chief executive is feeling lonely and isolated. That often happens when significant changes occur within the top team and at that point the chair should provide a little more help.

Look for Strategic Insight

Catriona Marshall, CEO at Hobbycraft

I joined Hobbycraft in 2011 as a first time CEO. I was heading into a major change programme in a very competitive market with high expectations from my private equity owners. I knew I would need the support of a good board.

The chairman’s role is very important – they maintain a healthy relationship with investors and the board. They should be supportive but also independent. You want them to point out the pitfalls and give you honest advice but also help you on how to get to where you want to be.

From a functional perspective, the CFO should be able to take on things like IT, the supply chain and property but I love to have a buddy on the strategy; someone who can understand the implications of a strategic question.

Getting a CFO who is technically good and commercially savvy is hard, but getting one who can also build a team is the real trick.

Find a Top CFO 

Ian Harley, Criticaleye Board Mentor and former Finance Director and Group CEO at Abbey National

The relationship between a CEO and CFO is the most important in any corporate entity because of the level of contact between them.

They should be complementary – with different strengths and talents – but it’s also very important that they are in locked step; they must move together on the big issues.

I spent five years as CFO to a very charismatic CEO, an ideas factory who sometimes spoke before he thought. When doing investor roadshows with him I’d need to catch those loose balls. My role was to be pragmatic. I also focused on the numbers because he wasn’t technical in terms of accounting.

When I was promoted to CEO I was lucky to be able to pick my own CFO. It was someone I knew from inside the organisation and had worked with for years. If you inherit an incumbent that’s potentially quite tricky – especially if they were a candidate for the top job, which is almost always the case.

Any CEO will have disagreements with the CFO but you must try to have them in private because stakeholders in the business will see the chinks between you and will worry about it, if not try to exploit it.

Create a Team with Complementary Skills 
Greg Morgan, Director at executive search firm Warren Partners

The energy and dynamism of the first time CEO can be a huge asset to any business, especially when well-supported and given the autonomy they crave.

When preparing for a first time CEO role the candidate should be open and honest about their relative blind spots – everyone has them. These could range from having a limited experience of operations, not having done M&A or being a novice in engaging with shareholders or the City. Individuals should involve themselves in situations that enable them to mitigate some of those blind spots.

Businesses that are committed to developing their people will encourage their ‘brightest and best’ to operate outside of their comfort zones and to seize every opportunity to broaden their skillset.

As a first time CEO, it’s no less important to flag where you’re going to need support – the business will not be expecting you to be the finished article; they will respect your honesty and candour and it will get them thinking about the make-up of the team you will need around you.

Potential implications for the business range from hiring or retaining a ‘heavyweight’ CFO to support the new CEO, or asking the chair to remain in the post a while longer.

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Connecting with China’s Consumers

Western businesses won’t break the Chinese market with ambition alone. It takes patience, research and knowledge of the market’s consumers. Understand the customer and you will know how to position, alter and grow your offering.

To think that China is a homogenous or static market would be a huge mistake. Criticaleye’s Global Conference Call, Understanding China’s Consumer Landscape aimed to drill down into the complexities of consumer behaviour.

Michael Crompton, General Manager for Asia at Criticaleye, said: “Understanding the consumer is so important. The company − its brand, its product or service and everything it stands for − has to match the desires in the marketplace. Work out what people are passionate about and appeal to that. Also consider product differentiation depending on whether you enter a basic, mid-range or premium market.”

Here are some of the key points to emerge from the call:

Foreign vs Home-Grown 

David Comeau, former President for Asia Pacific at Mondelez International, which owns brands, including Oreo, Chips Ahoy! and Belvita, explained that you can’t just export a Western idea and hope that it’ll stick.

“It’s not simply about bringing a product or idea to China, it’s about how we understand what the Chinese want and do it in a way that feels home-grown,” he said.

To tackle this, David gave his Chinese team the freedom to tailor the brand communication and new product pipeline to suit the market. “We gave them ownership, we set them creating messaging around the brand that made sense to the Chinese consumer so it felt home-grown,” he said.

Remember you will be competing against a rising number of domestic brands, many of which are enjoying growing customer loyalty.

Anne Stevens, Criticaleye Board Mentor and Board Trustee for charity Over The Wall, reflected on the market changes that have occurred since she was Vice President for People & Organisation at Rio Tinto Copper, where she led the people strategy and practices across the Americas and Asia Pacific.

“There has been a rapid amount of change in a relatively short space of time; businesses and products are now viewed differently. In particular by millennials and younger Chinese consumers,” she noted.

“Previously, we saw a lean towards Western products, for example Prada and Burberry in luxury fashion, but now there’s a move towards local brands. Leaders need to stay on top of these changes and tune into what the market is telling them.”

Take Advantage of Trends 

A taste for domestic brands is not the only consumer trend in China and understanding more of them helps you position your product or service.

Chris Riquier is Board Director at Foxley, a platform for website design and online marketing; prior to that was CEO for the market research and market information group, TNS Asia Pacific, where he gained insight into the Chinese market.

On the Conference Call Chris noted some trends that Western companies have done well to adapt to; one of which is the growth of domestic tourism, which outdoor clothing company The North Face has taken advantage of. “Previously, their advertising in China was very much directed at Western experiences such as trekking in The Alps, now it’s directed at urban Chinese who want to experience rural China.”

He also explained that uniqueness and self-expression are of growing importance among Chinese consumers. “Individuality is an intoxicating taboo that is growing within the marketplace and according to research, 64 per cent of consumers within Beijing and Shanghai agreed with the statement: ‘I don’t like it when I see others wearing the same clothes as me,” he shared.

Understand the Channels 

According to Iñaki Amate, Group Director for Greater China at Fjord, Western companies often underestimate the power of digital platforms in China, especially those on mobile.

“It’s important to understand why people behave as they do and why people in China consume media in a different way compared to other markets,” he said. “Always test before you enter, and not just segments; create the persona of the different users before you create the products and services. In a market like China, which is so broad, it may sound challenging but you need to go one level deeper.”

Take the pervasive WeChat, for example. While it is similar to an instant messaging platform like WhatsApp, it also has a payments platform, meaning consumers can order food, taxis, manage their money, sort utility payments, pay traffic parking tickets, check the weather – it has a long list of uses and owner Tencent is constantly developing it.

Chris said: “I come back to a Western market and see the messaging apps we have; they seem positively archaic compared to China. Brands have to be aware of this if they are going to connect with consumers.”

When David was at Mondelez he realised the company had to adapt to the rise of ecommerce in China. “We saw other companies [start] on [nothing] and grow unbelievably quickly – for example, we saw a Chinese nut company called Three Squirrels go from zero to more than 200 million sales online. We weren’t growing like that,” he explained.

That’s when Mondelez started partnership discussions with companies, including internet service portal Tencent and the ecommerce company Alibaba, to develop the business’ online mindset.

“That was a huge win for the organisation in terms of incremental growth. A lot of growth will come from those channels as consumers develop stronger online habits; this is happening elsewhere but China’s leading the way,” said David.

Partnering isn’t a Necessary Evil 

There’s often a presumption that China plays by different rules. One of these is that you must join forces with a Chinese entity to get your business off the ground, but this is not always the case.

Chris at Foxley noted that it’s difficult to make a generic statement about partnering and the best course of action, be it a joint venture, M&A, investment or going in alone. “It’s contingent on what market you are going into, your company and products or services,” he said.

“Apple is an example. Where it has strong products it’s going in alone; where it feels less able to compete it’s going down the partnering or investment route – for example, it has invested $1 billion in the app-based taxi company, Didi Chuxing, which is Uber’s main rival.”

If you’re going to form a partnership, be it via a joint venture with a commercial partner or another type, it must deliver discernible value and include clear roles for those involved. “Partnerships in China need to be seen as a good thing. It’s a real chance to create a ‘one plus one equals three’ scenario,” David adds.

Read more from Chris Riquier, or find out how to organise your leadership team in Asia 

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