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How to develop shrewd senior leaders who will address northern Britain’s productivity challenge (and Covid-19 recovery)

In Uncategorized on April 6, 2020 at 11:17 am

ONCE UPON A TIME an organisation had supercharged leadership, new buildings, expanded vision, ‘wrong people’ fired, ‘right people’ hired, but, the toilets did not get cleaned. Then, by magic, they were sparkling. What, pray, made the difference?: “Management spoke to us,” said the cleaning staff. And so they lived happily ever after in the Land of Increased Productivity.

Covid-19: Our greatest strategic leadership challenge since the 1970s? UK premier Margaret Thatcher was a ‘declinest’, viewing post-war Britain as a failed state, and one needing her drastic surgery. Others viewed the transition from imperial power, establishment of the NHS and a welfare society, to membership of NATO and the European Union, as a great achievement of social economic transformation. The scale of the current crisis is still being calculated socially as well as economically. Is this decline of the Western model, a super-test of civic resilience, or further evidence some non-Western societies are better equipped for future trading?

This story is not quite true. But the truest bit is management action is oft presented as fairy dust. Sprinkle and productivity transforms. We love magical change. To portray northern Britain’s productivity crisis, however, gritty realism is our genre.

There is good news. Britain has a greater number of high productivity companies than France and Germany. The bad news is, we have a longer-tail of below-average companies dragging down the whole. Many of these are in the north. Northern leaders are focused and assertive, if not aggressive, but ‘like fairy gold, it will be dead leaves in the morning’ if we do not unpack this puzzle together as we head out of the EU.

How did we get here? Well, in 1960 the UK had the highest productivity in Europe. Over the next 50 years, our performance increased (yay!) but at a slower rate than our major competitors (boo!). And then slumped dramatically following the financial crash (eek!); down to 0.4% (from an annual average of 2.4% growth). Today we are 16% less productive overall than our G7 partners (leading advanced economies). And now with Recession 2020 via Covid-19 we are facing our greatest strategic leadership challenge since the 1970s.

Growth in finance and professional services was stellar up until 2007 but these stars are slightly less bright. The top performers tended to mask the wider picture. Now, even the most productive companies have also slipped out of the fast lane.

This then is a story of lost-momentum. Especially in northern regions. This is also a story of management and leadership, plus ye olde story of skills. More so, it is a riddle inside a puzzle. Certainly a whole region conversation. We can point to tendencies, the toxicity of control freak management, underinvestment, difficulty measuring the emerging economies, London, Brussels, low wage rates, fractured communities…  stop! You say.

There is no single solution, not even Boris Johnson’s infrastructure stimulus. No Sir Lancelot Spratt to come onto the Sick Man of Europe ward and bombastically order cod liver oil for all. As the picture is so contradictory. Hamletian ambiguity is with us. And returning to a Frankensteinian mechanistic management toolkit will prove lethal. When performance drops, the temptation is to run faster. Tighten the nut by all means, but you are still holding a spanner awaiting the next rupture.

Currently, the most productive firms are exporters. Businesses focused on local markets are part of the UK’s long-tail of underperformers. But, you might say, we all know businesses that are surviving despite the chaos. I can name a few high street top brands who still have pennies in the bank, but are dying before our eyes. Their management teams fiddle, destroying brand value. Pragmatic management can be prone to saying ‘cash is king’. But these poor performers lack the ability to stand outside of their institutionalised selves.

Under pressure, tunnel vision becomes a condition. Boardrooms are messy places and some senior figures will hammer contradictions flat rather than explore through dialogue. It is always a matter of time before loyal consumers become adulterous. Spotting their first flirtation is leadership’s responsibility. Cash then is not the same as value and does not signal loyalty. The opportunity for UK plc is to wrestle better with the amorphous notion of complex change along with the even more foggy notion of economic value. The company accountant and Finance Director, for all their virtuosity with balance sheets and investments, still need to be in an extended dialogue on value creation. Activity x rarely leads to profit outcome y.

This requires renewed imagination to conceive the complex web of value-adding activity. Science only first conceived of the human body’s network of blood vessels when the scientist pictured it as a possible interconnected whole prior to full dissection. Extending a glimpse into a 3-D hologram that is projectable onto the boardroom wall is as vital as any pithy bullet-pointed executive summary.

We have been guilty then of championing evidence-based-thinking. Just because it is visible? No, because, as T. S. Eliot said: ‘our modern eyes have been cut wide open’. We are dazzled by the bright glare of so-called evidence. A collective shooting from the hip. Bright data gets us through scrutiny sessions but not into the grey corners of long-term value. Of course any data from any source, are still tiny fragments of a whole, by definition. 0.01 is easily presented as 0.99 from under-pressure directors. Why? We have the tendency to prefer answers to questionsExplanation has become Caesar’s thumb. To explain of course is to close inquiry, and just when we needed to open up an extended search for new understanding. This is the weakness of our modern minds which prefer dialectics (systems thinking) than dialogue (holding competing logics in play).

I term this tendency ‘sunshine leadership’, one that seeks to fix the weather, ignoring the vast ecosystem of contradictory data. Rainy days are not to be despised. This a shift in the image of future leadership. A chance also to refresh the national fish tank of intellect through which new senior minds are formed. Leaders who recognise the ecosystem’s complexity, collaborate, hold dialogue and craft new business models cut shrewder figures. When a leading North West CEO recently mentioned Danish philosopher Søren Kierkegaard (master of irony over chop logic) in the same breath as Friedrich Hegel (suggested father of modern systems thinking, if not modern thought generally) the sea state has clearly changed. The French champion their philosophers over their entrepreneurs, surely?

This is, of course, a story of post-war Britain. UK plc struggled to distribute its industrial largesse to the people who dug coal, built planes, and fought epic wars. The NHS and welfare state were hurried actions, part of the double movement of free-market societies. A correction to the turmoil of market revolution. However, post-war Germany and France invested in technical colleges while Britain invested in high-sciences. Its applied science vision evolved a middle management ethos that could translate concepts into products where UK management inherited a patriarchal and patrimonial legacy that was radically out of step with a liberalising workforce.

We conceived of beautiful concepts but could not convert them into durable products. New Jaguar motorcars sat beside the road with their owners puzzling at the engine’s failure, to discover later that the undertrained workforce had (folklore tells us) poured sand into the radiator as a means to communicating with untrained managers. A major failure of both irony and logic.

And British public and political life is going through this rupture still. Britain is torn between professional management (meritocracy) and continuity management (institutional). The UK’s slow rise of professional management and leadership capability is because at heart UK society still values continuity over change. Typical of a non-professional craft-based British model that served its industrial growth through to the beginning of the 20th century. I argue neither are silver bullets to increased productivity. Both have important offerings and should be kept in tension. We need our crafts, arts and sciences in healthy balance.

A fully modern meritocratic Britain is then on hold. The rise and rise of the professional politician/lawmaker is not addressing Britain’s performance on the world stage.

Productivity itself is a combination of business efficiency enabled by a nation’s institutional efficiency. Business will take the hit via its order book if we invest in grand infrastructure projects, but not schools, roads and rail (HS2 being a chimaera). Ironically and logically, productivity is a whole nation exercise and it is an exercise in creating a climate where the loos are cleaned because of a purpose well beyond management’s ingenious ‘employee of the month’ scheme. Tokenism, gimmickry, gestures are just that. The value of effort is measured by alignment to long-term outcomes. Business leadership and political systems being in a lively dialogue achieve this. We have seen this dialogue strained through over-regulation. But also we are looking for leadership that is capable of speaking into these issues. And often we continue to appoint leaders who are technically adept, pragmatic, excessively action-orientated but unable to hold dialogue overtime on evident complexity.

Leadership development activity that expands space for competing systems of thought, their ambiguity and ecology, is enabling. We can aid leaders to walk for longer, and more happily, in these dialogue spaces, renewing their capacity to lead into future economies. Such patient vulnerability is genuinely ‘strong leadership’; and tends to lead to creativity, with this shrewd figure seeking conversations that carry their message across an ecosystem.

It is true to say Frankenstein’s monster was erudite, intellectually sensitive and motivated. But dissolved when his myopic goal was thwarted. Hamlet cuts an even more flawed figure, and one moving into the shadows and out again. But, as Wilson Knight suggests: a ‘man almost supernaturally shrewd; he has ‘seen through humanity’’.

From Churchill to Covid to the collective good: in a media-saturated now a voice from elsewhere

In Uncategorized on March 31, 2020 at 5:32 pm

IN a media saturated moment here are some tangents that offer a ‘voice from elsewhere’. With the leadership space being dominated by the Immediate Actions of crisis leaders this is in the spirit of dialogue-on-the-margins which travels a little more slowly through this period. There is a suggestion here that a ‘dialogical approach’ is useful at this stage as we search for deeper understanding.

Link below:

https://www.dropbox.com/s/pjjup41v92bo9rs/Churchill%20to%20Covid.m4a?dl=0

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Avoiding organisational burnout whilst increasing your profits: through balancing leadership and management

In Uncategorized on December 5, 2019 at 10:20 am

ONE very successful CEO said to me that every now and then he enters his office, shuts the door, drops the blind and does nothing all day and then goes home.

As shocking as that is to a workforce who can’t do that, or can’t do it as easily, the truth is that often when a leader leaves well alone the organisation he or she is responsible for ‘gets on with the job’. That particular CEO has been known to arrive on the shop floor and do the opposite, which he regrets later. He says he can’t help himself. It relieves his stress. But not the company’s.

Good management then can be a beautiful thing. And leadership can be very costly. But good managers are sometimes as rare as a completely dry day in Cumbria. When you have one cherish them. As good management remains the zone of efficient profits, effective communication, service quality, sustainable change and settled human relations.

I say this because organisations, from businesses to churches, last only 30-40 years on average. An organisation is born, grows, plateaus, and either grows again or declines and dies. And leader-founders whose drive is the source of the ‘birth phase’ are prone to throttling it at the plateau stage: ‘The seeds of demise are frequently sown during periods of success’. But what I term ‘the small town leader or entrepreneur’ can learn early to delegate daily operations to their staff. And sometimes this simplified but not simplistic truism remains ‘the art of leadership’. And who better to leave it alone to other than: the gifted manager. Who should be rewarded for their profit potential.

When I say leadership is costly I mean that as an organisation grows, both in scale and value, it’s able to produce more from less. And this is the moment when leadership must give way and enable management systems and practices, as boring as that is. And humans need boredom as unrelenting novelty is damaging (note the often failed but fashionable ‘change programmes’).

When a family firm employs its first agent (manager) it buys the manager’s ‘general management’ skillset. The General Manager takes the passion (blood, toil etc) for the organisation’s mission and converts it into a set of processes that gradually reduce the need to interrupt the leader (who periodically should be up the mountain top surveying the surrounding landscape). It allows decision-making to turn from the leader-founder out towards procedures and their managers, and then further to the administrators, who are diligent bureaucrats, and likewise often beautiful creatures.

The Western world in its relative success is run by faithful bureaucrats. During the now faltering Arab Spring one protestor spray-painted on a wall: “We need institutions!”. Evolution is less brutal than revolution. The French Revolution still rolls on of course. As Macron is finding. It’s fashionable to knock bureaucracies. But business success is reliant on its state’s institutional efficiencies. From banking to taxation. And business leadership is reliant on instituting its core values through good policies and systems.

The leader delegates to management, management to administration. And the world goes round. The firm expands its capacity. You all know this but it is worth rehearsing as 96% of the UK’s businesses are micro-businesses. And most want to grow. And relying on the first stage rocket fuel of leadership or entrepreneurial spirit is a costly exercise.

What management has sometimes been able to do in its 100 history is re-capture the core values of a functioning human society. When it doesn’t ‘managerialism’ arises. This is where systems serve themselves not the mission. Of course much of our organic society was ripped up by industrialisation and urbanisation which gave rise to the ‘modern society’. And management as a profession is in some self-reflection. Is it an exercise in modern progress (modernity = building a free society via capital owning individualists) or aiding ancient institutions (tradition = restoring an ordered, natured pastoral society based on solidarity between the generations). This is a paradox for later discussion.

Of course currently we want both: ancient and modern. A loving home, supported by ancient institutions within a law-abiding safe society, but with the freedom to escape via technology. We probably can’t have both in their fullness which the Brexit debate has discovered.

So, leaders then are required to establish good governance frameworks. They either hand over decision-making authority to appointed managers or potentially restrict their organisation’s longevity. The American corporation boomed in the early 20th century in large part to their exemplary ability to delegate responsibility as part of the impressive American management ethos. For professional management is very much the vision of the American corporation. Britain, renowned for its inventive spirit, struggled to form an egalitarian society and engage its workforce in adaptation. Its social fabric tore in the 1970s as it recognised too late its economic model was long dead.

In response, British management has followed its American counterparts into business school classrooms to place the art and craft of practice alongside the science of organisational study. British managers have over the decades begun to discuss ‘strategy’ and ‘leadership’ through the lens of the theoretical as well as the lens of experience and pragmatism. All lenses are needed to compete.

What this academic contribution won’t do is limit the impulses of leaders to either have the arrows of decision making pointing in towards them or out towards the members of the organisation. The role of the leader-founder is to recognise their consciousness might be 100 feet wide and their colleagues’ consciousness 50, but once you combine and collaborate with colleagues’ thinking it forms a much greater whole.

If our bi-weekly refuse collection relied on an entrepreneur’s ability to manage it we will have the streets piled high. Human society needs ritualised practices that require institutionalisation of the organisation. As dull as that sounds. But this is where the tension between leadership and management lies. My own ritual of teeth cleaning every morning and evening is done in an unconscious back of brain fug of unthinkingness. Such ability to pass front of brain activity to the rear (I know that’s not scientific) means human energy is conserved and my frontal lobes can get to work on new thinking. And so the organisation that constantly has to think and discuss its regular activity will burn out. Often because of a leader’s need to be at the centre of activity is a deeply personal one. The leader who recognises their role is a servant of the wider good will happily give away responsibility all day long. Usually to the grey-suited general manager. Who are beautiful things.

First published for University of Cumbria: https://www.cumbria.ac.uk/blog/articles/avoiding-organisational-burnout-whilst-increasing-your-profits-through-balancing-leadership-and-management.php