What's on the HR boardroom agenda
Q. What should leaders and HR professionals be bringing to attention in the boardroom to help steer the organisation for growth in 2012?
A. Leaders are caught between a rock and a hard place – preserve cash to protect against a downturn, or bravely invest for the future. Depending what happens in 2012 and beyond – and nobody knows – either of these could be sound advice. But make the wrong call, and your organisation will be left behind. As such, leaders and senior HR professionals should be ensuring that they continue to invest in and grow their top talent.
Through past recessions, we have seen talent investment neglected, and two years later the leadership team wonders why they have a hole in all of their succession plans and capability.
Brave organisations will invest in their best to drive future business growth. The last recession saw organisations cut to save and preserve cash, the challenge now is to invest in order to recover and grow.
Q. What challenges will leaders face in the year ahead?
A. The biggest challenge for the year ahead is that, as well as the business-as-usual challenges – sales, competition, technological disruption and opportunity, business growth, staff engagement, talent retention and motivation – leaders are also facing a highly uncertain and in some ways contradictory economic outlook.
Increasing regulation and political scrutiny of financial services means that the economic powerhouse that was once the City is being held in check, with knock on effects elsewhere. The crisis in the Eurozone shows no signs of being solved, and the structural imbalances mean that a default and Euro exit by one or more countries is a likely possibility – and we simply don’t know the effect that this will have on the markets and on confidence.
As a result, leaders are caught – conserve cash to protect against any downturn (which will be seen to be presciently wise if we head into a depression), or invest for the future through business growth (which will also be seen to be presciently wise if successful, but equally suicidal if not). As such, the stakes are higher than they have been for a long time for leaders, and the requirements of, and pressures on leaders are far greater as a result.
On top of all the external challenges, leaders therefore also face the inner challenge of sustaining and preserving themselves to be able to cope with the stresses and to navigate their organisations successfully through these testing times.
Role models
Q. How has the economy, MPs scandals and riots in 2011 affected the way people view leaders?
A. Whether we like it or not, senior leaders in any walk of life are seen differently from the average 'man or woman on the street'. This is not surprising, and when times are good, the vast majority of people are relatively happy to rub along with this as the status quo. As long as things are alright for them, they’re not too concerned if somebody senior is paid more.
However, this has all changed fundamentally with the economic downturn, and the way that the blame for this has been (wrongly) laid at the door of the bankers.
As people are forced to question their own decisions, their own consumption, their own lifestyles so much more, it is no surprise that they then also turn to do so for others. Ethics and values are squarely in the spotlight for leaders now, because people want to know – justifiably – that their leaders are feeling the same pain that is expected of them.
Famously, when Alexander the Great was crossing the truly inhospitable Gedrosian Desert (now part of Afghanistan), one of his aids found water and brought a cup to him. Alexander poured the water out into the sand in front of his troops, the clear message being that he would suffer the same privations that they would. It is difficult, if not impossible, to imagine modern business leaders doing the same. This is one reason why ethics and values will be so much more in the spotlight – and rightly so.
Q. What needs to be done to challenge traditional thinking and change behaviours?
A. When we recognise that most of what we now take for granted (computers, mobile telephones, the internet, ipads) has come about in the last 20 years, it becomes easier to recognise that things are always changing and so we don’t need to be so concerned about trying to resist change.
Traditional thinking comes when we are comfortable and slip into an easy groove that keeps us ticking along. Then something happens that upsets the status quo and even revolutionises our world. Often these seismic events are seen negatively, but they can also contain the seeds of renewal and opportunity.
Behaviour change has often been predicted on the idea of the 'burning platform' – that people will only change when they have something to run away from. However, we can also change through aspiring to the 'better future', where people change based on running towards something they want to happen.
The more leaders can create a vision of the future that people want to run towards, the easier it is to challenge traditional thinking and get people to change. The challenge is that most leaders fall woefully short in this task, and so the message is lost in translation and people are left uninspired about their future.
To create great vision, tap into what matters to you, find its emotional core, build a vivid picture of what will look and feel different, and then take people on the journey of what it will take to get there. People buy into emotion, to hope and aspiration, not always into rationality, or analysis and financial numbers.
Leadership traits of famous entrepreneurs
Q. What can we learn from examining the strengths and traits of Richard Branson, Steve Jobs, Jeff Bezos, Larry Ellison and Loic Le Meur?
All great entrepreneurs have particular strengths for which we might recognise them, but equally, they are all exceptional at making the most of those strengths and making the most of the strengths of others. This was the subject of my talk at the Ideas on Stage Conference in Paris in November. I looked at a number of entrepreneurs and the Realise2 strength that might best describe them:
Richard Branson
Richard Branson might be best known for his 'Adventure' strength. He is prepared to take risks and step into the unknown – something that he does in his adventurous sporting pursuits as well as in business. Any entrepreneur has to be prepared to take risks and step into the unknown.
Steve Jobs
Steve Jobs is known for so many things, especially since the publication of Walter Isaacson’s excellent biography of him. Innovation, however, might be the one thing that draws his essence. Jobs was always looking for how to do things better, more simply, more effectively, more creatively. It was this unerring quest that led him to revolutionise six industries (personal computers, phones, music, digital publishing, animated movies, and tablet computing) when most of us would be happy with one. Entrepreneurs have to be able to innovate, to bring new ideas that solve old problems – even if we didn’t know we had those problems in the first place.
Jeff Bezos
Jeff Bezos is characterised by his 'Counterpoint' strength. He sees things differently to other people and is prepared to back his view of the world (even though it is very different). Entrepreneurs have to see things differently from others if they are going to create the future. In Bezos’ case, few people believed Amazon would ever amount to anything, yet Bezos did, because he saw things differently – and he was right.
Larry Ellison
Larry Ellison personifies the 'Competitive' strength. He is driven by the desire, and the need, to win. All entrepreneurs need to be prepared to compete, but Larry Ellison takes this to a whole new level. This competitive strength provides the drive and motivation to get things done, and this drive has to be at the heart of any entrepreneur who is going to make the distance.
Loic Le Meur
Loic Le Meur typifies a new breed of entrepreneur, at the intersection of technology, connecting people, and entrepreneurship. He exemplifies the 'Connector' strength, which is about connecting people with people, and people with ideas. As the founder of Le Web conference, he is at the hub of the European technology scene. Communications technology is all about connection, and there is a new generation of entrepreneurs like Loic who are using their connector strengths to seize opportunities through connecting people with people and people with ideas.
Empowering employees
Q. How can leaders empower their employees, teams, colleagues, peers to become more entrepreneurial?
The environment in which people work is core to entrepreneurship. Organisations usually say they value entrepreneurship and risk taking, but behave in quite the opposite way. I worked with one client where courageous leadership was the order of the day, but it wasn’t happening. When I asked why, people said that if you stand out, you get shot down. Actions will always speak louder than words.
To empower entrepreneurship, organisations have to be prepared to embrace and celebrate failure – and especially the lessons that emerged from it. They have to recognise that not everything they try will work. It won’t conform to a Gantt chart, or a tight cost-benefit analysis, or even a PRINCE 2 project management cycle. Entrepreneurship is messy, emergent and adaptive. Things may happen as much by luck as by judgement – but how people respond to these situations determine great entrepreneurship.
Being able to change course, drop something that didn’t quite work, and embrace a new reality are the hallmarks of great entrepreneurs, at the same time as sticking with things when they know they shouldn’t quit. Unfortunately, all of these things tend to be the opposite of what managerial organisations want – which is why some firms have incubator units far away from head office, where they can take advantage of the organisations resources while avoiding being crushed by its culture.
Q. How can leaders get the most out of their people?
A. At Capp our focus is on how leaders and managers get the most out of their people through realising strengths. Strengths are right for people, right for performance, and right for organisations. When people use their strengths more, they deliver results for themselves and performance for the business.
The evidence – from both business case studies and academic research – is clear. When people use their strengths more, they:
- Deliver higher performance
- Stay with the company longer
- Create more satisfied customers
- Deliver higher quality work
- Achieve their goals better
- Are more engaged at work
- Learn and develop faster
- Have more energy and vitality
- Demonstrate more resilience and less stress
- Feel more confidence and self-esteem
- Are happier.
With results like this coming from helping people to use their strengths more to achieve their goals at work, it's clear that this is one of the key ways in which leaders and managers can get the most out of their people.
Cultural fit - making the most of your talent
Q. What about cultural fit and personalities?
A. The question of cultural fit is also an important one. Different strengths will work best in different environments. If your strengths are about making a difference (for example, legacy, mission, service) then you will need to feel that the work you are doing is making a difference (and so the role of the leader’s vision in creating this for you becomes all the more important).
If your strengths are about doing things differently (for example, counterpoint, creativity, improver, innovation), then you will relish an environment and culture that allows this and even rewards it, but you will be stifled by an environment that crushes this and demands conformity (as many managerial organisations do).
If your strengths are about being organised and having accountability (for example, adherence, detail, order) then you will relish a role where this allows you to play to these strengths.
Interestingly, these strengths may be less influenced by the broader culture, since people with these strengths as counter-cultural for their work environment may nonetheless find that they have an important and valuable role to play that complements the work of others.
Q. What tools can employers use to make sure their business is fit for purpose and they have the right talent in place?
A. We use Realise2, our online strengths assessment tool, to help people identify their strengths and work out what to do with them to deliver their best performance. Realise2 assesses 60 different strengths and classifies them into realised strengths, unrealised strengths, learned behaviours and weaknesses. Learned behaviours are often the 'aha!' moment for people, since these are the things we do well but don’t enjoy. When we have a language for these, and for our strengths, it helps us to be more conscious and deliberate in our choices about which strengths we are going to use to help us achieve our goals.
You can use strengths to attract the right talent in the first place, where you have the right people in the right roles, so that they deliver the right results.
Growing the business
Q. How should leaders of business be looking to grow their organisations?
A. Sustainably. A really interesting analysis by Jim Collins and Morten Hansen in Great by Choice showed that organisations that succeeded consistently over many years did so through acting sustainably and consistently. They didn’t grow ridiculously fast in the good times (when other organisations did), but equally they continued to grow through the bad times (when other organisations didn’t). This combination, over time, meant that they had the discipline, focus and resolve to continue to grow and become what Collins and Hansen described as great organisations.
Sustainable growth will look different for different organisations, but it is essentially about finding the balance between risking everything and risking enough that will make a difference, but still allow protection and prevention if things go wrong.
Q. Who should be driving the business forward?
A. Driving business forward is the responsibility of every employee of that business, but first and foremost the responsibility of the leaders. Statutory directors have a fundamental 'fiduciary duty' for the company of which they are a director – to hold the business in trust for future generations.
One of the most critical ways in which they exercise this duty is through ensuring the sustainability of the business and its viability as a going concern. So directors especially, and leaders generally, hold the senior responsibility for driving the business forward, but their role is then to translate this into a vision for the employees and inspire them with a forward direction towards what the desired future looks like.
Passion, innovation, creativity
Q. How do I know what changes I need to make to my business?
A. The starting place is to ask yourself where you want to be relative to where you are now. Next ask yourself what is happening externally that is likely to impact on you as you try to move from your current state to your desired future state. Assess your capability to make the transition in relation to strategic intent, customers, products and services, people and talent, technology, and geography. Work out which are the most important capabilities to focus on to enable the change, then focus on them, relentlessly. As you move forward, remember to keep your head up and watch for what is changing – sometimes you might need to change with it, sometimes you won’t. The wisdom is in knowing which change is which.
Q. Why are passion, innovation and creativity important in business, where should that drive be coming from?
A. Passion, innovation and creativity are what give us the drive to do things differently and create the future. Nothing ever stands still, and without these at the heart of our organisations, over time we will be left behind. Passion, innovation and creativity reside in every one of us to a greater or lesser extent. How much they are realised depends on the environment and culture in which we work, and the encouragement we are given. Too often organisations are focused on getting the job done today – which is of course important – but equally we need to keep one eye trained on what is coming down the line and will happen in the future.
The drive that comes from passion, innovation and creativity comes from getting the right people in the right roles, doing the right work. It comes from building an environment and culture that enables and inspires them to do their best, rewarding them for the results that they achieve. Through all of these, leaders are climate engineers who set the tone for 'the way things are done around here', and so they carry more responsibility than most for both demonstrating and enabling the drive that will make the difference.
HR delivering the results
Q. If I take some of your advice on-board, what typical results would I expect to see in terms of ROI?
A. When people use their strengths more, they deliver results for themselves and performance for the business. The evidence – from both business case studies and academic research – is clear. When people use their strengths more, they:
- Deliver higher performance
- Stay with the company longer
- Create more satisfied customers
- Deliver higher quality work
- Achieve their goals better
- Are more engaged at work
- Learn and develop faster
- Have more energy and vitality
- Demonstrate more resilience and less stress
- Feel more confidence and self-esteem
- Are happier.