A favourite word of a US-based friend and business associated is “flummoxed”. I rather like the word myself. If you are as old as I am, you may recall a Monty Python sketch in which they attributed the characteristic of “woodiness” to certain words. The was a positive appellation. Flummoxed is a woody word.
I am flummoxed with what I see going on around me. Although I am a Liverpudlian by birth, I will avoid our natural inclination to ignore the golden rule not to speak about politics and religion. I am not going to slam-dunk popularism, nationalism or any other contemporary “-ism”, which suffix immediately makes a word “tinny” (see http://montypython.50webs.com/scripts/Series_4/23.htm).
Leadership performance and pay
What flummoxes me is that we seem to be experiencing a great many issues about organisational performance across all sectors. Despite everything that is said about leadership needing to be remunerated at a level to reflect their alleged talent, all does not seem rosy. When someone is paid millions of pounds to run a commercial business, or hundreds of thousands to run a university or a hospital, surely the talent they are meant to possess should see that enterprise purring like a well-oiled sewing machine?
What does a leader do? I see them “conceiving” a vision and sense of purpose (see later) for their organisation (or team or function). I see them “selling” this concept, persuading people to buy-into their idea, to follow them. I see them “realising” that original intent. They need skills, acumen, knowledge, experience. Additionally, they need to deliver the right set of behaviours for the moment. In terms of those three activities I just mentioned, the relevant behaviours concern their cognition, their influencing and their achieving. These three “clusters” of behaviours are underpinned by their manner of self-governance.
At the level of corporate governance, Bob Garratt wrote “The Fish Rots from the Head”. Entirely correct. The rot sets in through leaders failing to govern themselves adequately, compounded by weak cognition, salesmanship and being a solo not a team-based achiever. Consider the recent severe and justified criticism of Uber’s founder (see https://www.theguardian.com/technology/2017/feb/28/uber-ceo-travis-kalanick-driver-argument-video-fare-prices). This seems very much at odds with what is said in this leader from The Economist about Jeff Bezos, Amazon’s CEO – see http://www.economist.com/news/leaders/21719487-amazon-has-potential-meet-expectations-investors-success-will-bring-big?frsc=dg%7Cd . I sense Bezos is more rounded, more balanced than Kalanick.
Strategy, tactics and operations
Bezos is an outlier, a game-changer and I’m happy he’s earned his fortune. But have those operating in more prosaic CEO / MD roles who draw, at last estimate, over 300 times average workers’ pay? See this from Forbes in 2015, which is by no means the latest article concerning this matter – http://fortune.com/2015/06/22/ceo-vs-worker-pay/.
I’ve always felt that the CEO role was not a “here today, gone tomorrow” one because, fundamentally, it is strategic. Here lies a fascinating example of how a word can be overused and abused. Old hand that I am, I learnt that being strategic meant devising what was going to be done in the next, at minimum three years, more likely five to ten-year period, and realising that intent. Preparing next year’s budget is NOT a strategic exercise.
I think it was Peter Snow speaking on the 70th anniversary of D-day that brought home to me the difference between strategy, tactics and operations. Reclaiming the European mainland from Nazi occupation was the strategic aim. D-day itself was tactical in order to gain an initial foothold. The construction of the Mulberry harbours was operational as it allowed continuous supply of the troops who had taken the beachhead.
According to this piece from Fortune magazine, the median tenure of US CEO’s across the top 500 firms is less than five years. Admittedly, there are many exceptions of much longer duration, yet too long in the job can be counter-productive too. See http://fortune.com/2015/05/06/ceo-tenure-cisco/ and https://hbr.org/2013/03/long-ceo-tenure-can-hurt-performance respectively. So, which is it?
While not so fashionable now, I still rate Elliott Jaques work concerning the time impact of decisions made by people at different levels of the organisation. The cashier in the supermarket (as long as those positions remain courtesy of self-scanning and “click and collect) makes decisions that tend to be far less enduring than the ones made by the CEO.
In the money markets’ frenzy to see continuously increasing quarter-on-quarter financial growth, can the CEO do the job they’re really paid to do? “One swallow does not make it spring”, goes the old adage. Should one quarter’s “stutter” be reason to jettison the CEO?
And, is that individual only to be judged on the financials? It’s like we’re besotted about speed, which if I remember my physics A Level correctly is simply a measure of rate whereas velocity includes some sense of direction.
The measurement dials
Simply trying to travel at warp-factor 11 strikes me as paying little heed to the contextual situation of 21st century life, namely the acronym of VUCA (volatility, uncertainty, complexity and ambiguity). What are the relevant measures here that enable a broader and deeper scrutiny of the CEO’s performance and, thereby, their worth to be assessed? Back in the 1990s, when I was working in strategic planning, the vogue was Kaplan and Norton’s Balanced Scorecard. Has that concept been traduced to the point where the only dial is the “speed-counter”, the proxy for bottom-line profit?
Customer service, climate and motivation
Having worked in customer service for numerous years, I’m not entirely certain this has got better; perhaps I have just got pickier? While much has been done to improve the service process, has the service “performance” of the humans involved got better? There’s a lot of show, frippery and filigree but is there substance; is it genuine? With everything so tightly defined, any deviation from the norm doesn’t seem to be handled too well. What are the leaders doing to equip their people with the confidence and knowledge to put things right? Great service is far less expensive than bad, which causes re-work the cost of which can easily destroy the margin on any one transaction or, more seriously, an entire relationship.
This removal of autonomy from the lower organisation hierarchy T-bones motivation. Dan Pink in his marvellous book “Drive”, describes three features that are required for personal self-motivation. These are purpose, autonomy and mastery. Purpose statements appear to me to be spewed out by the corporate PR factories. They’re piffle attempting to colour in nice pastel shades an underlying sharp-elbowed, “vantablack”, linear focus on profit. Why can’t honesty prevail? I’ll resist the temptation to turn off into the foothills of the dismal science and open a tangential discussion about the merits of Milton Friedman versus Kenneth Galbraith.
Is this creation of false-dawns within organisations at the root of the deterioration of organisational climate, defined as “how it feels to work here” This is different to the concept of culture that is defined as “how we do things here”. Conceived at the same time by the likes of George Litwin in the 1960s (see “A Causal Model of Organisational Performance and Change by Blake and Litwin in Journal of Managament, 1992, Vol. 18, No. 3, 523 – 545), we seem to have lost sight of climate and concentrated solely upon culture, i.e. process over people. Is this why so many organisations are now unpleasant to work in?
How much is the growing incidence of mental health due to deteriorating organisational climate? The latest report from Gallup about the State of the American Workplace reports only 33% of employees are engaged, i.e. from Pink there is no purpose, no autonomy, no mastery.
A female future
So yes, I’m flummoxed about why we’re hugely rewarding our organisational leaders to do what appears to me to be the wrong things. It seems we are at cross-purposes and that we’re racing along a road we believe to be straight yet is festooned with twists, turns and sharp undulations. Can we keep the car on the road or are we at risk of having a massive accident?
I am optimistic when I see the work bubbling out of marvellous social enterprises like World Merit (www.worldmerit.org) and Northern Power Women (www.northernpowerwomen.co.uk), both based in Liverpool. World Merit is led by Chris Arnold and a tremendous team. NPW by Simone Roche.
One of Chris’s team, Zita Luiten, recently wrote an article in Women in Leadership magazine, see page 10 at http://www.satsuma.eu/publications/WIL2017-spring/, about a trip she made to refugee camps in the Middle East. She spoke to many women in those camps who were demonstrating incredible leadership without the prospective reward of a 10-figure annual pay-cheque.
Zita made the following, powerful remark, “A leader is someone with determination, perseverance, resilience and merit but is also someone caring, honest and just. I have found these traits are in women leaders.”
By itself, that statement lessens my state of being flummoxed.