A Meeting of Minds

Comm update_3 SeptemberLeaders that spend some of their valuable time on networking never look back. They’re willing to meet a mix of people, are keen to share their own experiences while also taking advice that could inform their own thinking on how to tackle business dilemmas. Fundamentally, they understand that a diverse network, where there is mutual respect, can only be a good thing.

Sir Ian Gibson, Chairman of supermarket chain Morrisons, says: “Networking is useful because it opens people’s minds and stops them becoming too internalised. It’s also good for appreciating what you’ve got, because every company [and]… management team will have challenges and issues to overcome and, seeing the way it works for others, provides an external reference which can be useful to validate ideas and ways of working.”

It forms an important part of leadership development for directors who are curious, always on the lookout for fresh insights. “The real purpose of networking has become clearer in recent years,” says Dominic Emery, Vice President of Long-Term Planning for BP. “Certainly my experience of it, in terms of understanding how other companies do strategy, which is primarily what I’m involved in, I’ve found extremely useful… [and] I’ve learnt an enormous amount from real practitioners about what works and what doesn’t.”

Paul Withers, Senior Independent Director at engineering concern Keller Group, comments: “What it does is give you other people’s perspectives. So, like I did, if you spend a lot of time in one company, there’s a danger that you get a particular perspective on how things are, how things might be and how things should be.

“But if you see different companies run in different ways, in different styles and you meet a mix of people who have their own particular approaches, you’re more flexible in terms of how you see possible solutions or ways through situations and that is good to have.”

Code of Conduct

If you’re to extract the full benefits from networking, there’s some basic etiquette to follow. Jeremy Williams, Chairman of design agency Assembly Studios, says: “For me, people selling their services at a networking event, particularly at the outset or in an insistent way, is a big mistake. My approach to networking is to look for opportunities to help others, be that by making connections, further introductions or recommendations.

“If you focus on the needs of other people rather than yourself, then you will add great value for them at networking events. I feel this approach is much more likely to develop into mutually beneficial, two-way relationships in the future.”

Neil Wilson, CEO of recruitment concern Stanton House, agrees: “When you’re networking, you have to go into it with a feeling of trying to help people, whichever way that might be, because then it could be reciprocal. But if you just go in and think: ‘What can I get from this personally?’ and don’t give anything back, that’s when I think it can go wrong. It’s a case of striking the right balance.”

A transactional attitude will be damaging, both for the person trying to sell and the organisation they represent. Liz Bingham, UK&I Managing Partner for Talent at professional services firm EY, says: “You can’t expect an immediate outcome, like another meeting, a piece of work, a job opportunity, whatever it may be. The problem with that approach is that the whole thing becomes more tactical than relational.”

According to Liz, it’s a misunderstood skill. “One of the challenges is that people view networking as standing around with a glass of something fizzy in your hand chatting, whereas the true value really does need to be better understood,” she says.

Quality, rather than quantity, is frequently cited as vital when building a network. Mike Greene, Chairman of online education company Bolt Learning, says: “I would rather meet one person a year who was hugely beneficial than a thousand of no value.”

In its purest form, knowledge, learning and diversity of thinking are what high-value networking can provide. “It works in a rather diffuse way,” explains Dominic. “You’re never quite sure what you can potentially offer until you get into the conversation. So you may have a superficial view that you’ll be able to exchange ideas about how strategy gets created in your company, but until you get to the conversation it’s not obvious where the giving and taking will be.

“So, I think if you go in there with some sense of what the purpose of the conversation is and then allow it to evolve, often it will result in a lot of common ground emerging very quickly.”

Not everyone is a networking natural but that shouldn’t be an excuse to shy away from it. With a little planning and effort, the benefits, both personal and professional, will soon become apparent.

I hope to see you soon.




Group Therapy for the Board


If the status quo within a business needs to be challenged then board evaluations provide the ideal opportunity to test assumptions. Executed properly, they will bring to the surface just how aligned members of the board are on strategy, where points of conflict may be lurking, and whether the senior team has the talent to drive the organisation forward.

Iain Robinson, Managing Partner of AMG and former Chairman of business travel company Reed & Mackay, says: “For me, the really important bit about any board evaluation is to make sure you have a good understanding of what is excellent about the board and its contribution to the future, and clearly where improvement is based on that historical evaluation, but I think that you have to be looking at the strategic plan and asking two questions: is it any good?; and is the team capable of delivering?”

It’s a case of jolting people out of their comfort zones. Andrew Walker, Chairman at engineering concern Metalrax, says: “The board evaluation is an opportunity to take a step back and reflect on how you do things outside of the normal day-to-day activities.”

Denise Jagger, Partner at law firm Eversheds, says: “It’s critical to include the board in an evaluation of the overall performance of individuals in the organisation. But the evaluation is more than just about people on the board, it’s looking at the shape of the board and whether you have the right mix of skills and experience.”

The UK Corporate Governance Code recommends annual board evaluations with a third-party facilitator brought in every three years. Bernard Cragg, Criticaleye Associate and Senior Independent Director at commercial property company Workspace, says: “I started off thinking: ‘Well, another box to tick that you have to put in the annual report.’ But I actually think it is a process that is very worthwhile as it can be creative and change behaviours.

“It can and should involve all people on the board and it may even be worthwhile to speak to some of the people beneath the board as well to find out whether they are saying: ‘Does the board add value or are they just there as a corporate governance guru?’”

It’s a chance to get under the bonnet of the business. Andrew says: “What you actually want is to get board members to write down what points they think are particularly concerning. The chairman should see that the process is being conducted but not dominate it, and the other members of the board should review the process.”

In a business that takes performance seriously, it’s the type of review that should, in some shape or form, exist across the whole organisation. Ian Durant, Chairman of Capital & Counties Properties, comments: “To be effective, you need to stop and ask yourself at various points whether everyone round the table shares the view as to how effective you are being and how you can be more effective, to look at decisions that have been made, how you got to them, how people contributed to them, and to ask yourself whether there are any steps you can take to be more effective.

“It’s an attitude of mind really. If you believe that you wouldn’t benefit from an evaluation then you’re probably being complacent, which never leads to the best of outcomes.”

Jamie Pike, Non-executive Chairman at the manufacturing company RPC Group, says: “If a board is functioning well, I’m not entirely convinced such evaluations will allow you to perform necessarily better, but for underperforming boards they are absolutely essential. There can be areas which people feel uncomfortable about, or perhaps don’t necessarily know how the board is performing, and this is where evaluations can help.”

The company secretary has a critical role to play in promoting dialogue and debate. Jamie continues: “The role has become increasingly important because he or she is the only person who sees everything that goes on in the boardroom who is not directly involved in it. They are the only objective observer on the board – everyone else is inherently conflicted in some way.”


Fresh approach

Bringing in an external party certainly creates an interesting dynamic. Bernard says: “A good external facilitator allows a full and frank exchange of views on a confidential basis and can be very constructive. They are not there just to be listeners, they need to be provocative and say some things that not everyone wants to hear. They need to do some research, too, to find out the history behind any issues in the company. The evaluation should also look at what the board has done well during the year.”

Andrew agrees: “An external facilitator can be really valuable when a board is split in its views and it needs a valued third party to help steer it through. Split boards do happen where you have NEDs and executives divided because you’re looking at opinions on the future; trying to get more data points will help clarify the confusion.”

So it’s important for the debate to be grounded. “The danger for boards is that you have an opinion fest and you become detached from reality,” adds Andrew. “Where I’ve found boards to be split it tends to be because of this, and then you have to puncture that balloon and get back to taking a view of what’s actually happening. That’s why you need to make sure that you’re getting the appropriate data points that allow you to test theories and opinions.”

The direction of the board has to be examined. Where is the company going? How will it get there? These are the questions that have to be addressed if a fresh perspective is to be gained. Denise says: “Too many boards are reporting mechanisms for the CEO… clearly, the role of the board is to check the performance against targets, but… really, I believe 75 per cent of the meeting should be focused on future strategy, not past performance… The CEO should be able to trust the rest of the board sufficiently that he / she can come along with half-formed ideas or throw suggestions out for debate so that they can use their expertise to help form the strategy with a clear plan.”

Terry Stannard, Chairman of interior furnishings group Walker Greenback, says: “Many boards would have expected the economic conditions to have improved by now, so it’s absolutely important that strategies are kept up to date with the longer than anticipated lack of growth in our economy, the eurozone and elsewhere. Strategy needs to be continually assessed with the macro environment and the more micro-industry related factors affecting the company.”

Each board will have a slightly different take on this but, at present, not enough executive and non-executive teams are taking the opportunity to get away from short-term targets and challenges to discuss how the business is going to evolve and be even stronger in the years to come.

Christmas Drinks at The Gherkin

Criticaleye was delighted to welcome the Welsh Rugby Legend and Broadcaster Jonathan Davies MBE as our Speaker at this year’s Christmas Drinks Party. Jonathan reflected on the highs and lows of his outstanding career, shared inspiring and humorous anecdotes and tales of Rugby at its best.

We were at the top of the Gherkin to hear his stories and to meet him over drinks, canapés and jovial company.


Hosted by Matthew Blagg, CEO of Criticaleye, our Members had the opportunity to meet an interesting array of executives and non-executives from all sectors in a relaxed and informal environment.


The Future of Private Equity


The rules for creating a successful business haven’t changed since the crash of 2008, it’s just become a lot harder to get away with running a company badly. Criticaleye’s inaugural Private Equity Retreat brought together dealmakers from around the world to find out just how companies are being built in the right way to achieve lucrative exits.

A key theme to emerge was that many players within the private equity industry need to rethink their approach to value creation. At present, a large number of firms are stuck in limbo – they can’t sell their portfolio companies, or at least not for the price they need to create a return, and they’re unable to raise new funds.

Rather than question the validity of funding structures and the limited partnership model, it was felt that the issue was more to do with how certain PE firms worked with management teams. Wol Kolade, Managing Partner at ISIS Equity Partners, comments: “It’s not that something has gone wrong with the model – it’s the pace at which firms need to adapt. It is not just about the returns either, but how you made them and what the economic weather was like when you did it.

“If it was all concentrated between 2003 and 2007, then there will be an awful lot of questions asked, as a lot of people found it easy to make money around that time. But if you start being able to sell businesses in 2011, for example, and made good returns, that starts to differentiate you a bit.”

As banks revise their approach to providing credit, so partners across the asset classes, be that venture capital, PE or even the big buy-out houses, need to really understand what makes a successful business tick.

Mike Ellwood, MD of Corporate Banking at Santander, says: “The days of generating value through financial engineering have probably gone. If you want to create real value, it is now more about reshaping the model of the business.

“I have seen some of the mid-market firms begin to look at smaller businesses, with a view to growing them. It is harder work but there is more upside, rather than buying things which are ready-cut and need some form of financial remodelling.”

In many instances, debt will be needed but it was argued that a structural change, driven partly by political pressures and new capital requirements post-Basel III, is underway in the UK market where debt funding complements bank funding. “It is pretty tough for any of us [banks] in the mid-market to have an appetite much above a £25 million hold level,” continues Mike. “Finding enough providers to do deals when you want, say, £125 million or so of debt isn’t easy, so I think the emergence of funds to accommodate that market is something we need to watch over the next couple of years.”

It’s not a new proposition by any means (3i used to have a debt fund), but this, combined with the increased proportions of equity in most deals, does mean that a number of PE firms are re-evaluating exit strategies and their tactics for driving returns.



The importance of UK businesses expanding overseas has been stressed repeatedly since the credit crunch hit these shores. The fact is that now, in most cases, it will be even harder to sell a business unless you have demonstrated a scalable, international model for driving growth.

Steve Parkin, CEO of Mayborn Group, a 3i-backed company which makes products for babies and toddlers, comments that six years ago 60 per cent of the company’s revenue came from the UK whereas 40 per cent was international. “By the end of this year, we will have reversed that completely,” he says.

By driving innovation, new product development and focusing on what he wanted from partners, initially in the US and then elsewhere, he has built a scalable business. “We negotiated in a way that most US businesses don’t do with their retailers. It was relatively anal in terms of details, but then we worked in partnership together to go and deliver the goals we set,” he says.

In the space of two years, the US now accounts for 20 per cent of revenue and by the end of 2015 Steve expects this to rise to 30 per cent. Having proven the model in a notoriously tough market, he is now looking to Asia and parts of Europe too.

For Andy Dunkley, CEO of Lee Cooper Brands, the mission of the Sun Capital Partners-backed jeans giant was very much of the turnaround variety. Since taking the hotseat in 2009, he’s completely reinvented the business model, driving an innovative international strategy which has seen the headcount cut from 2,500 to 12 key staff.

“There was a very clear message from all of the stakeholders within the business: this far and no further. Firstly, the board had to stop thinking that somebody else could solve their problems, which is a big issue for a lot of businesses that are in financial difficulty,” he says.

Drawing on his international experience, Andy has devised a licensing model that has seen him negotiate deals in countries as far flung as Romania, Taiwan, Turkey, China, and Russia. This year, Lee Cooper’s retail sales were £251 million and the company has seen overall profits for the past two years grow more than 20 per cent.

“There’s a great temptation to just survive when you’re in a turnaround position but that’s not enough,” he says. “What’s driven me on, and we’re yet to achieve it, is that I think we’ve now got a business that is marketable and we’ll get an exit for investors.”

Make the grade

In terms of viable exit routes, trade was seen by Criticaleye Members at the Retreat as the most desirable because of the higher strategic premiums paid, while PE firms continued to hunt for good secondary and tertiary transactions.

“The great thing about private equity is they are set up to do deals,” says Sangeeta Desai, ex-Chief Operating Officer at HIT Entertainment, which was courted by PE and trade buyers before being acquired last year by games company Mattel. “That’s their business and so they are very quick. They know how to conduct due diligence and they know what they’re looking for, which is very efficient and helpful to the process. It keeps the momentum going.”

It is, however, a nervy, tense climate for M&A where vendor expectations are disproportionately high. Corporates may be sitting on plenty of cash but they remain risk averse and, when opportunities do arise, the due diligence will be protracted and clinical. As for the secondary and tertiary market, there are plenty of PE firms with cash to spend, but they are selecting only the very best assets and therefore there is a competitive premium for those businesses too.

Quick wins will be hard to come by, bringing us back to the question of how to build long-term value. Kitty Hall, Founder and a Non-executive Director of geophysical contractor ARKeX, comments: “The best VCs provide wide-ranging support to their portfolio companies and, when it is a specialist sector fund, they can draw on a network of useful contacts within the industry. Sector specialists often have high-level relationships with customers, fellow technology companies and, importantly for the exit, the key corporate finance houses.”

Too often there has been a disconnect between management teams and investors. “One point of caution is where the individual venture capitalist does not personally have direct experience of running a business and the day-to-day operational issues the entrepreneur faces,” adds Kitty. “Potentially, they can focus too much on corporate matters… at the expense of the key elements of business building.”

For all this, there are firms that get it right and understand what the value proposition needs to be and, although the search for growth may be incredibly tough, it is important to remember that there are amazing entrepreneurs finding ways to thrive in this new reality.

“With all the doom and gloom, people are still growing companies by a compound annual growth rate of 50 per cent to 60 per cent,” says Wol.

Who Defines Company Culture?


The importance of company culture becomes clear when things go wrong and suddenly everyone is asking for the CEO’s head on a platter. A failure to innovate, poor governance and a lack of cohesion between divisions are all signs that something is rotten within an organisation. Putting it right isn’t easy, but change can only come from the top.

Jeremy Small, Group Company Secretary of insurance company Axa UK, says: “It is clearly the domain of the CEO to show how people are expected to behave in the company. As we have seen from several corporate scandals, the leader’s behaviour is the key to establishing the culture of a business and may determine its fate. The extent to which the CEO either demonstrates particular behaviours or accepts them in others will establish the organisation’s culture.”

If strategy is to be executed effectively, then it’s essential to get this right. Chris Merry, CEO of professional services firm RSM Tenon, says: “The CEO has a crucial role in defining culture whether he/she likes it or not. It always amazes me that, no matter how large or geographically diverse the organisation, one person can have such a massive influence on its culture.”

That said, there are a number of other elements at work, both internal and external. Gary Kildare, Chief HR Officer for Global Technology at IBM, says: “There is no question that they have a significant role to play – but it’s my opinion that in today’s networked world, CEOs need to involve the whole organisation in setting the culture, and to think about including clients and other key groups as well. Everyone should identify with and feel that they can impact the culture.”

Matt Crosby, Director at consultancy Hay Group, argues that although CEOs may try to define culture, it’s the staff, especially those who are customer facing, who really create the mood of the business. “That’s not to say that CEOs shouldn’t define their target culture, as they absolutely should – we see intractable cultures that ‘eat’ the strategic ambitions set by the executive all the time,” he adds.

This is a crucial point, agrees Jeremy: “The biggest challenge facing any chief executive is to understand the culture that is needed for the company to achieve its strategic aims. Increasingly, this will lead to a transformation so that through its people the organisation can adapt to market developments, technological innovations and ever-changing customer expectations.

“The most significant shift currently is towards increased empowerment and responsibility; in many sectors, a command-and-control approach will no longer work as effectively as it may have done in the past. This change has been talked about for a while, but it now really seems to be underway.”


Be resourceful

If a shift is indeed happening, human resources directors need to provide CEOs with the necessary levels of support. Jackie Dubery, Director of HR and Corporate Services for the Agriculture and Horticulture Development Board, says: “You create the structure and allow people to work within it. It should define what’s happening in the organisation today, not three years ago. HR has an overview of every part of the business, so HRDs can offer a great advantage to the CEO to help them keep their finger on the pulse of the entire organisation.”

Adrian Gunn, CEO of recruitment firm Matchtech, says: “I can articulate where the business is going, what the short and medium-term business goals are, then the HR person has the strategic capability to understand the people strategy and have the practical skills to implement it.”

On a pragmatic level, it’s about ensuring pronouncements on ‘culture’ are put into action, rather than sounding like contrived platitudes about business performance which only inflames cynicism.

Gordon Headley, Chief HR Officer of Tullow Oil, says: “It’s an overriding role of HRDs to guide and direct people on [culture] and to nurture it. HRDs need to fully understand what the CEO has a vision for and what they are talking about, or else there will be a disconnect and people simply won’t get it.”

This is why CEOs must lead by example, otherwise they will be found out very quickly. Matt says: “The problem is that culture is slippery and difficult to change, and perhaps more so now than ever before, as staff have become wise to, and jaded about, ‘culture change’ interventions.”

M&A activity certainly highlights this scepticism. It’s a time when CEOs need to be at the top of their game in order to placate fears about the future, normally among staff in the acquired business, and to devise a plan for integration. Ian Bowles, CEO of Allocate Software, says: “We’re effectively eight companies that have come together over a four-and-a-half year period, so you can’t say: ‘This is the culture of the company,’ and everyone has to comply.

“I’ve set out five or six values that I thought were really important and discussed them with the management team. You then need everyone to ‘walk the talk’ or their behaviours will undermine the culture of the business. As we bring in new people, the collective culture evolves.”

From the CEO’s point of view, if the culture is right, then there should be less need to micro-manage and fight fires as people can be trusted to execute and behave appropriately. But it’s not something that they can afford to take their eye off either, and the onus is very much on them to ensure they keep ‘getting it right’ as the business changes.

Culture, after all, is one of the most important intangible assets that a business possesses and, rightly or wrongly, if things are judged to be slipping, the quickest way to make a difference nowadays is to replace the CEO.

Ignore at your peril.

A New Generation of NEDs

If the requirements to be an effective NED have changed, it’s because the role demands the ability to add genuine value to a business, and that the expectations around performance have increased markedly. The net outcome of this means enhanced levels of commitment in order to do the job well, along with greater risks, not least in terms of reputation.

Contrary to what many may think, there is much to be welcomed here. Lynn Drummond, Non-executive Director of technology business Consort Medical, says: “There is almost a generational shift happening, and with that a more positive reaction to the greater responsibility. There is lots of expectation around NEDs now and of course that means preparation, networking and solving business issues, rather than just accepting things that come in the board pack.”

Ian Durant, Criticaleye Associate and Chairman of property developers Capital & Counties, says: “[There is] more public and political scrutiny of public company governance, more active shareholder attention, a harsher regulatory environment and a greater understanding of the risks involved [since] the financial services collapse… Time commitments for Remuneration and Audit Committees have increased substantially, and for a NED to contribute successfully overall, more time is required to be spent with the business.”

It’s a popular sentiment among Plc NEDs. David Shearer, Senior Independent Director of media concern STV Group, says: “A consequence of the economic, regulatory and business environment is that the amount of time and work outside the boardroom has increased substantially across all sectors, though particularly in financial services regulated entities. The degree of scrutiny to which board members are being subjected both by regulators and the City at large has increased as has the need for directors to keep themselves up-to-date.”

Choose wisely

The level of media, political and shareholder scrutiny means that prospective roles, especially in higher profile sectors, need to be judged more carefully. If something is perceived to go wrong, the dangers and liabilities may not be commensurate with the rewards.

Aleen Gulvanessian, Partner at law firm Eversheds, comments: “The risks, particularly reputational, have increased greatly. You are not going to get the most experienced and best qualified people to take on the most challenging NED and chairmanship roles in the financial services sector. For a number of them, especially if they have had 30 years of brilliant executive service, why would they put that reputation on the line for not a lot of money?”

While a chairman may receive what’s deemed to be a reasonable remuneration package, a growing chorus of voices are suggesting that the time and commitment needed to perform the role is not reflected in the amount earned. Robert Drummond, Chairman of clean energy business Acta, is passionate on this subject: “It’s about the overall skill and experience of the individual and with that the ability to stand up and be counted during testing times.

“Given what’s required to make a good quality NED, I do believe they have to be paid more. There must be a situation… where they are capable of earning the sort of salaries that attract the best people.”

The current mood and antipathy towards executive pay suggests that NEDs are going to remain on the same pay grade for a while yet. Besides, as David says, “full financial independence” is important as ultimately a NED has to be prepared “to resign as the final way of making a point”.

What is absolutely certain is that there is no shortage of motivated and experienced individuals looking to develop a portfolio career. John Allan, Chairman of Dixons Retail, tells Criticaleye: “Boards are more conscious of having a strong team of non-executive directors and the contribution that they can and need to make… I still meet a lot of people who want to become NEDs. I don’t think the liabilities issue is frightening most people off.”

This is where another change is occurring – the range and variety of people currently looking to take on NED positions. It’s well reported that boards are under pressure to address the gender balance, but as businesses look towards new markets to achieve growth a broader mix of skills and know-how have to be found.

“In structuring a board there is a need for a broad variety of skill-sets which can change over time, so as part of the board evaluation done annually the chairman should always ask the question: is the board fit for purpose?” says David.

The blend has to be right. John comments: “There is more focus on finding women, and on non-executives from outside the UK, and from outside a conventional business background. There is a lot of talent out there and maybe people are spreading the net a bit wider because they want to create greater diversity, in the broadest sense, not just in terms of gender within boards.”

Stop and listen

As for the qualities required to be a good NED, by and large they remain the same. Nicola Mumford, Non-executive Director of Harbour Ligation Funding, says: “The challenge for the new type of NED, who is reading all of the papers and getting well and truly stuck in, is to maintain independence and a bit of distance, as the more information that you have the more you’re likely to delve into the detail. It takes quite a lot of skill to take it all on board and step back afterwards, and that wasn’t such an issue when the information wasn’t at hand.”

John says: “The really good non-executives learn how to challenge without being aggressive or confrontational. There can’t be a stand-off in every board meeting between the non-executives and management; the ability to make a point, ask a question and raise a challenge without actually provoking a confrontation is actually a very important interpersonal skill which the best non-execs have in spades.”

The fundamental quality to being a good NED is flexibility. Roger McDowell, Chairman of engineering company Avingtrans, comments: “The role of the NED is changing only at the pace that business at large is evolving. So if you pick any of the trends that are happening in business, for example the increased internationalisation, then clearly this is something that NEDs have to keep pace with.”

In terms of actual governance duties and legal responsibilities, as defined in the Companies Act, there have only been modest changes recently. The day job for these highly experienced individuals is simply about knowing when to roll their sleeves up and get involved, and when to keep their counsel.

But to say that it’s business as usual would be a mistake. The range of qualities and level of involvement in understanding an organisation have grown since the financial crisis, which makes the role of the NED both more interesting and fulfilling for individuals and more important for healthy decision-making on the board.

These days, no business can afford to be the victim of ‘group think’ in this day and age.

The Power of Networking

Building and nurturing a strong network of contacts is increasingly a key leadership skill. Learning from those outside normal circles of business interaction can inform and enlighten a leader’s ability to tackle the challenges faced by their organisation and surmount personal leadership obstacles. Indeed, the ability to identify and nurture truly valuable relationships is frequently what distinguishes leaders from managers.

Today’s business environment dictates it is no longer enough to network with other executives in the same industry as you. The challenges that face you at the top of the tree require access to cross-sector, cross-region and cross-functional information, because you never know from which source a solution may spring. A platform to ask questions and talk to other leaders is crucial.

Susan Pointer, Director of Public Policy & Government Relations EMEA at Google, says: “For me, networking is about consciously taking the time to listen to the views of others, to test, scrutinise and then either add rigour to your own views or adapt them based on new knowledge or insight gained.”

Leap of faith

In their article Leveraging Your Links, INSEAD professors Herminia Ibarra and Mark Hunter define three distinct categories of networking, each of which has a role to play at different stages of the leadership transition: operational, personal and strategic.

While the ‘operational’ represents the essential connections leaders need to perform functional tasks in their day job, personal networks provide the platform for individual development, allowing leaders to acquire the necessary skills, experience and contacts to build and leverage their personal brand.

David Kneeshaw, Chief Executive of international fund managers, Royal London 360°, agrees: “Personal networking is as much about enjoying the environment as it is about pursuing an objective. Simply being away from the desk, with its attendant minutiae and narrow urgent focus, creates a more open space in which to talk and share ideas. The result is a sense of perspective and rejuvenation of the mind. Networking should be about giving and enjoying, not just taking, to be a worthwhile experience.”

Strategic or business networks tend to require engaging and interacting with leaders from different walks of life, sometimes industries that might seem entirely leftfield, in order to find innovative ideas that can be invested back into their business. Initially, the crossover of each can sit awkwardly for some leaders.

Ian Bowles, CEO of AIM-listed Allocate Software plc, says: “I used to be in the camp which believes that personal lives and business lives should be kept very separate and I confess to not being very good at building networks. I have seen it for too long as something that other, higher profile leaders did, and felt that I was simply too busy. I now realise that networking is not necessarily about someone looking for something, which has challenged my previous perspective, and I see the increasing need, importance and power of leveraging networks.”

It’s no secret that networking necessitates stepping outside one’s comfort zone and into the unknown. In many cases, this may require a wholesale re-evaluation of one’s outlook towards networking.

Niall Trafford, COO and Director of Sustainable Development at the built environment experts, BRE Group, says: “A network necessarily must extend outside the familiar boundaries of your own organisation no matter how big. It takes work, time and a degree of determination operating sometimes outside of one’s own comfort zone. Getting back what you put in is not always in equal measure nor should you expect it to be. In time, the experience becomes natural and pleasurable as you learn new things from wide ranging experience and skills. Expect the unexpected and have fun.”

Practice makes perfect

Many executives perceive networking as too much hard work, often with very little immediate or tangible payback, yet it is a developed skill that requires a lot of practice.

Chris Merry, former CEO of investment banking group, Matrix, says: “The notion that networking isn’t work is often a hard one to grapple with and therefore there’s often a sense of guilt about doing it during working hours. You have to work at building and constantly managing your networks. And you can’t just switch it on when there is a crisis. It’s one of those things that you don’t know is important until it IS important.”

With busy schedules, it is all too easy to stay within self-reinforcing circles. The challenge, and the opportunity, is in taking the time to reach over to and participate in new circles.

Susan says: “This broadens the mind and in turn leads to better informed decision-making. Often, too, it creates unexpected alliances and new constructive approaches to addressing an existing challenge built on incorporating the expertise of wider disciplines and experience.”

Bob Emmins, Group Finance Director of ABF Ingredients, a division of Associated British Foods, says: “Until about five years ago I always looked for the payback from networking. I’ve learned that the trick is not to expect a benefit. If you go in with an open mind you will usually come away with some interesting insights. When something doesn’t come naturally, it is useful to have regular ‘reminders’ of what one ought to be doing. Increasingly one often finds one’s own behaviour changes and what was outside one’s comfort zone starts to move within. For me, networking is one such area.”

Long-term payback

At its heart, networking is about forming business relationships that will stand the test of time. Of course, executives don’t invest time and energy into networking without the expectation that they will get something back. But relationship building is a long-term investment.

Steve Richards, Chairman of private equity-backed online personalised gift service, Getting Personal, says: “A career as a non-executive, for example, is very much a long-term project, and you’ll need to invest time in it. Some opportunities take years to come to fruition. Extending your pipeline will require some aggressive networking, rubbing shoulders with contacts through services afforded by the likes of Criticaleye. Only now am I starting to realise the benefits.”

Chris says: “As a CEO, you realise quite quickly the importance of your network, particularly when you consider you’ll only be in your current role for three to five years. If you have worked hard at it, networking really pays off after the age of about 40 as that is when you’ll begin to see the fruits of those relationships you have cultivated. Your network can help to shape your career, so the earlier you start to build it and engage with it, the more useful it may prove in the long run.”

Based on conversations with our Community of Members, Criticaleye outlines the following as crucial steps on the path to building a powerful business and personal network:

  • Forget the ‘what’s in it for me’ mentality: the most valuable contacts are those where the relationship is mutually beneficial
  • Be real: insincerity is obvious and ugly, so be yourself and talk about what you are passionate about
  • Look for opportunities: you can make contacts everywhere, so don’t underestimate the value of a chance meeting
  • Marketing opportunity: strong relationships will create loyal, long-term customers
  • Practice: honing your relationship building skills is crucial and there are always opportunities to practice
  • Support: you will be able to call upon strong relationships during good times and bad

Fundamentally, leaders don’t know what they don’t know. Only those with strong and trusted relationships will have access to the information they need to be successful. The most effective c-suite executives have exceptional networking and relationship-forming abilities and can call on the right people for advice at a time when it is needed.

Lynda Gratton, Professor of Management Practice at London Business School, says: “Building networks, especially those outside your organisation, is increasingly a key leadership skill. A good networker juggles a diverse range of knowledge flows and the value lies in building reciprocal relationships that enhance this flow.”

The business world today is more and more about making links, collaborating and sharing insights to move your business forward. At Criticaleye, we strive to create the channel that will enable this process to happen, providing a genuine way for senior executives to link into the latest business insights in a friendly but structured environment.

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

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