CEOs: learn from Mrs May, disband your inner circle today

Many CEOs have, like Mrs May, an inner circle. It’s lonely at the top. You need people around you that you can trust, to tell you the things you need to hear or, if you’re weak, what you want to hear.

There’s nothing wrong with these inner circles provided they are informal and counterbalanced by a board with a formal governance process and in which power truly resides. The issue here is the location of power, not just leadership style.

Mrs May, allegedly, relied on her inner circle to the exclusion of everyone else. The cost of this error will be high. But it’s not as if she didn’t know that her leadership style was a matter of concern for many. Indeed she revelled in her reputation as “a bloody difficult woman.”

And she was not alone in her approach. The ink is barely dry on The Chilcot Report which highlighted Mr Blair’s “sofa style” decision-making as a contribution to the errors in the Iraq war.

So why do many leaders persist in making this unforced error? The answer is that they have no incentive to change. They believe that their behaviour got them to the top, so why change it?

Mrs May didn’t become a micro-manager overnight. It’s part of who she is and how she got to be Prime Minister.  Her identity must be bound up with distrust of others. In that respect, she is typical of many leaders I encounter in the course of my work.

If the cause of the behaviour is easy to diagnose, the cure is less so. It demands behavioural change, and that’s hard unless it’s taken in small steps.

So, if you’re a CEO with high emotional intelligence (EI) and therefore the self-awareness to know that you are behaving like Mrs May or Mr Blair, and know you should stop it but don’t know how then here’s how:

Step 1: Assemble your full operating board and ask each member to acknowledge their outstanding behavioural weakness. Start with yourself. If some less emotionally intelligent members are struggling, play “the least likely to say” game. That will soon flush it out.

Step 2: Start trading behavioural change deals as in “I’ll micro-manage 10% less if you acknowledge your mistakes 10% more”. Then legislate for the breach of these deals.

Step 3: Announce that, in future, no major decision will be taken without full discussion by the entire board and at which meetings and by rotation one member will act as Devil’s Advocate with full permission to question the rationale for each decision.

“Pigs will fly”, I hear you mutter in response to these steps. Not true. This process works. I have facilitated it many times. It works because there is an incentive to make yourself vulnerable, to change and to move to a higher level of leadership behaviour. The latter is the real prize because it feels good and it makes you a better leader.

And let’s be clear, micro-managers don’t enjoy micro-managing. They find it exhausting, energy sapping and time-consuming. Most of all it hides latent greatness. One micro-managing CEO I worked with and who did reduce his meddling behaviour using my small change approach, reported that he had more time, a happier team and, I believe, developed higher levels of trust.

I’m sure that there’s a different, more trusting, softer side to Mrs May. One that we have not seen, although one hears that the 1922 Committee had a glimpse of it during her belated mea culpa. See what I mean about incentives?

If I had my way, every leader would have to spend a minimum of one year at Emotional Intelligence School (EIS). There they would undergo mandatory weekly psychotherapy to process formative years’ experiences; they would study psychology and behavioural science, and above all, they would have to pass a boot camp type test on the benefits of good corporate governance. That would teach them never to rely on an inner circle, ever.

Leadership has lost its meaning in politics and business

The exact outcome of the UK general election is, at time of writing, distinctly uncertain. But the fate of leadership as art and science in politics, and indeed business, is not. It’s losing its perceived value.

The security forces remain the last bastion of respect for the term. And that’s only because people won’t obey orders in extreme conditions unless they are properly led.

Many years ago a client, an ex Royal Marine, told me that during his training the men and women under his command called him “Sir” until one day they started to call him “Boss”. “Why?” He asked. “Only now are we truly ready to be led by you into a war zone”, they replied.

Politics and business are not war zones. But people still need to be led. They need someone to create an environment in which they can do their best work, to decide on strategy and to keep stakeholders happy. That’s what leadership is.

But the political leaders in the general election are not leading their teams. We never even see them in photographs alongside the very teams they will lead if they win. Instead they behave as if this is a presidential election. It’s not.

Mrs May or Mr Corbyn will, whether as HM Prime Minister or HM Leader of The Opposition, have to lead their cabinet or shadow cabinet. They will not be leading the people. They will be representing them.

But neither leader has properly led their team during the campaign. I fear they won’t do so in power either. And we, the people, will greatly suffer. It seems that the leadership lessons of The Chilcot Report remain unheard and unheeded.

The quality of leadership in business, as in politics, is in indirect proportion to the frequency with which the word is used.

Witness the derision with which the repetition of the phrase “strong and stable leadership” was received. A “strong and stable presidency” would have been a more honest slogan. And references to “the many and not the few” would ring true if we could believe that the work required to execute that hope will be led appropriately.

By way of contrast consider this quote: “Our experience has proven to us that when you get the people proposition right, execute it well, put your hand up when you make mistakes, are humble enough to see this as a continuous improvement process (you never get to where you really want to be but you are always striving for it), then that’s when you really engage the hearts and minds and energy of the workforce.” That’s Adrian Bettridge, Managing Partner of Baringa Partners which took first place this year in the UK’s Best Workplaces Large Category. And if he practices what he says, then his would be a useful model for good leadership.

I mentioned to a colleague that I was writing this piece about current examples of poor and good leadership and he said, “There has been a show of leadership from a rather unexpected quarter this week. A display of empathy, self-awareness, generosity and personal courage from a 23 year old American pop singer, Ariana Grande. She has behaved magnificently under extreme pressure and no doubt huge emotional strain. In behaving as she has, she has perfectly judged the moment and behaved selflessly in the manner of a great leader.” I think he’s a fan but, certainly, if a strong display of what used to be called “character” is a sign of a nascent strong leader then I agree with him that she is a good example.

Politics and business reflect the values of society. Increasingly, society is focused on individuals as opposed to groups. I like this focus on individuals because I believe that the uniqueness of individuals is under exploited in businesses. But, equally, businesses are groups of individuals and they need leaders. We can’t encourage individuality without also supporting how that individuality can thrive in a group. This balance is difficult to achieve but is what leaders must do if they want to achieve the best outcomes.

I feel gloomy about the prospects for good leadership in the new parliament irrespective of the outcome of the election. Hopefully people in business will take heed of the perilous state of leadership in politics and work to avoid it in their organisations by ensuring that everyone understands that leadership is a series of actions and not the human equivalent of a beermat folded and inserted under the wobbly leg of a restaurant table.

The Small Change Paradox: how to transform leaders, boards and work in the 21st. Century

Ideally your organisation should be comprised of leaders and followers who all share in an exciting purpose. And, if you’re a leader, your job is to create an environment in which the people you lead thrive in the service of that purpose. That’s the dream.

But we’re not even close.

The financial crash of 2008 put an end to any doubt, if any existed, that the world order had changed. Fundamentally, you’re on your own. There is no social contract. Yet organisations still cleave to human capital asset and human resource models as if they own “their people” by some sort of magical unwritten consent. They don’t.

Despite many attempts at modernising work theory, most organisations doggedly refuse to come anywhere close to leading the revolution necessary. That’s not because they don’t want to. They desperately do. Most people would love to change the system but they’re afraid of being the pioneer with the arrow in their backs.

They’re waiting for permission to change. And so they wait. And wait. But Godot never comes.

The answer to this dystopia is evolution, not revolution. It starts with you. If you are a follower and you change how you behave at work others will change too. This may seem like pie in the sky, which is why most people don’t attempt it. That and, of course, not wanting to “rock the boat”. But small change doesn’t cause big waves.

If you are a leader and you change how you lead, then the evolution will be even faster. Your career will yield more fulfillment and your organisation will improve in the process.

The term “Change Management” has been part of the business lexicon since the 1960s. Somewhere along the way this morphed into the now widely used term “Transformational Change”. This came to be used as shorthand for an organisation wide step-change or the fabled quantum leap forward.

The term is now as ubiquitous as it is meaningless. Change is change. Transformation is different. In my experience organisational change comes from individuals changing their worst behaviour. That’s where the transformation occurs. Your worst behaviour is that behaviour which others experience as having the most negative impact on them and on the objectives of the organisation. And you don’t have to make big changes, just small changes in improving your worst behaviour and exploiting your best.

In general, there will be broad consensus on the exact nature of this behaviour. It’s easily discovered by playing the “Least Likely To Say” game with your friends. They will very quickly let you know what it is. If you are self-aware you will know before they tell you.

Your best behaviour is probably hidden from you as you read this. It’s what you’re capable of achieving given half a chance. If supported in making small changes to your worst behaviour your best will be revealed to you by you and from feedback from others.

This is an exciting prospect for you and for the organisation for which you work because you are unique and small changes in unique beings are highly visible and impactful. Uniqueness has never been celebrated but denied. Management speak reinforces this commoditisation of people: you’re a hire; a direct report or a leaver. You’re certainly not seen as unique.

But you are unique – check out your fingerprints – and your organisation is made up of unique people which makes it infinitely dynamic because each person can trade in unique behavioural change agreements. This means that you can agree to make small changes in your behaviour on the understanding that others will reciprocate. With this approach anything is possible. Leaders, boards and work itself could be transformed through small change at low cost, high return. What’s not to like?

Directors: Why your conduct should go to the top of your Risk Register

Conduct risk is now a familiar term in the financial services sector, not by choice, but because the Regulator has regulated conduct heavily since the Global Financial Crash. Not that regulation seems to have made a huge difference.

At least the Regulator has put the term “conduct” on the business road map albeit the effect is like a speed camera which slows us down in high risk areas but after those tell tale markings on the road, we all put the boot down.

However, the regulators of the conduct of those in the financial services sector do not own exclusive intellectual property rights to the term nor would they want to claim such rights. You are free to use it in your business and especially on your board without fear (save that some on your board may fear it).

This raises an issue regarding a related term that has achieved widespread currency in all sectors and that is behaviour or, rant alert, “behaviours”.

My rant is not about semantics, although there is a grammatical point to be made here: behaviour is a mass noun with no plural. The more important reason the accurate use of the word matters is because: how someone behaves is unique to them. This means how we behave as a group, for example a board, is also unique. It is why we should resist the seemingly “codifying” trend of using the word “behaviours” as if they can be policed like a charge sheet from afar.

The word behaviour reflects the complexity of human nature. “Behaviours”, on the other hand, suggests uniformity. For example, the precise nature of Mr Trump’s bullying behaviour is different that of Kim Jong-un’s although you might rightly argue that both could result in a nuclear holocaust.

But what is the difference between conduct and behaviour? It depends on the context. Conduct refers to the result of continual observation as in “Lucy received a Good Conduct Award last year” or “The conduct of all parties in the election campaign was shocking” or “The conduct of the Banks has improved/not improved since the crash”. Delete to taste.

Behaviour is about immediate interactions as in “Billy’s behaviour in school yesterday was unacceptable” or “The CEO’s behaviour when challenged at the last board meeting was outrageously bullying, to say the least” or “The Chairman was quick to call out unacceptable behaviour by some directors at the AGM”.

If a company’s Risk Register is a list of top and emerging business, legal and reputation risks which could affect outcomes, it follows that conduct by directors should go right to the top of that list because most risks and opportunities are forged in the crucible of boardroom relationships.

So what language might directors use to describe these risks? I feel just one entry at the top of the Risk Register would capture most issues:

Conduct Risk: The risk of systemic weaknesses in board decision making and governance due to the failure of each director to change their worst behaviour and exploit their best.

And how can this risk be mitigated, realistically? It’s simple: each director should trade a change in their behaviour for a change in another’s.

The problem with traditional change programmes is that they lack the right soft incentives to attract directors who value only hard returns.

The feeling that the person who winds you up most on your board might change their behaviour if you change yours is often enough.

This approach might have prevented defeat software being included in cars; false accounts being created in banks or a myriad mis-selling scandals avoided.

But these are the big stories. What about the thousands of board meetings going on up and down the country today where poor conduct prevails because of unchecked behaviour? And what of the cost: real and opportunity cost?

These are the stories which lead to creating that great Yorkshire understatement: “trouble at t’mill”.

And how stressful, and damaging and awful to the individual director a troubled board can be. And worst are those who say: “That’s not us”. When I say, “How do you know?”

I propose every board appoints one director as official “Devil’s Advocate” at the beginning of every board meeting. Each director would get a turn. Their job at that board meeting with the agreement and full mandate of their colleagues would be to challenge everything, bar nothing.

This step would help reduce conduct risk and might even surface some opportunities which otherwise would have remained buried.

There’s nothing more positively cathartic on a board than the removal of fear.

WHAT NASCENT CEOS CAN LEARN FROM PRESIDENT ELECT MACRON AND BY OBSERVING HIS FIRST 100 DAYS

The significance of Emmanuel Macron’s success cannot be overstated in political terms, and much has been written about this. But much also has been written of his leadership skills and, from this, nascent CEOs can find many useful tips. They can also watch and learn how he exploits, or not, that special honeymoon period – his first hundred days.

President Elect Macron’s outstanding leadership quality is his ability to empathise and to demonstrate it clearly while at the same time disagreeing with an opposing view. CEOs must do this on a daily basis.

Empathy is one of the three cornerstones, in my view, of emotional intelligence. The other two are self-awareness and the ability to negotiate needs, productively.

Capacity to connect with what other people are feeling and to communicate that to them is at the heart of empathy. This is not about “feeling your pain”. You can’t feel someone else’s pain. That’s impossible. This phrase is often used in management speak and qualifies as mumbo jumbo.

To empathise and then to disagree requires courage, confidence and clarity of purpose. Emmanuel Macron demonstrated these qualities best when he visited the soon-to-close Whirlpool appliance factory near Amiens during the election campaign. He had the courage to meet with workers angry with him and his policies and who had been courted by Mme. Le Pen only a few hours earlier.

He listened to them. He acknowledged their anger. And then he explained why he wouldn’t be doing what they want him to do, which is to prevent the closure of the factory.

He said he couldn’t do that. Mme Le Pen had said she would nationalise it. She also talked broadly in terms of closing borders, whereas he talked about the importance of keeping them open.

This was a high-risk strategy for him. The situation could have backfired. But “The Battle of Whirlpool” will go down in election history for good reason: he demonstrated rather than asserted his competence to lead.

Now this young President Elect must deliver on his promises. This is a daunting task especially as he has to build a legislative party from the ground up. This task is similar to that facing many CEOs who have secured PE backing for their rapid growth ventures. Success can be his/hers and theirs if they follow three First 100 Days rules for leaders:

First: They must communicate what they intend to achieve in their first 100 Days. This should be crystal clear and, most of all, achievable. The mistake many new CEOs make is that they overpromise and under deliver in their honeymoon period when followers merely expect them to demonstrate that they are capable of executing in the future. That’s all.

Second: They must manage their Relationship Grid carefully.  This is a tool I have developed to help leaders manage their relationships. On this “grid” or spread sheet they list and rank their 20-30 key relationships business and family, including a vision of success and failure for each relationship after one hundred working days.

They track these using a Red, Amber, Green (RAG) dashboard. Invariably, some “amber” and “red” will relationships emerge during the first hundred days. Red means a relationship is in serious trouble, amber that it is heading that way and green that all is well.

The challenge is to know how to manage the amber and red relationships effectively. Get these wrong, and they will struggle because everyone is watching them. Their first hundred days will be judged as much by the manner in which they handle these challenges as their delivery of successes.

Third: most importantly, they must show without fail that they know how to support the people following them to help them be as good as they can be. This requires, almost counter intuitively, a willingness to be honest about their own flaws so that their followers don’t fear exposing theirs. They need to know.

Let’s see how Monsieur Macron manages his first hundred days. He has made a great start.

 

Three steps to unblocking road blocking behaviour on your board of directors

Last week The Times reported that the term “roadblock” was used to describe a surgeon at the centre of a shocking medical malpractice case in the north of England.

Colleagues, apparently, had to “work around” him and concerns about his behaviour were either ignored by him or buried by others. The case reminded me of how prevalent this story is in business.

Although the roadblock cases we all witness on boards may not be as devastating as that one, they can nevertheless cause grievous harm to people and businesses.

But what can you do? These are often bright, effective and key people in the business. They may be robust in their dealings with colleagues but charming with clients and, crucially, they deliver results.

Challenging them is difficult. They are powerful and don’t use, shall we say, Queensbury Rules during difficult exchanges. In short, they bully.

It’s not easy to tackle this problem but it’s not impossible. In fact the issue itself is simple: how to deal with bullying behaviour. The problem is in mustering the courage and enlisting support to deal with it. I use a three step approach in my programmes which I hope you find helpful.

Step 1: Ensure that each director, including the “roadblock”, has a shared, and agreed, understanding of the objectives and strategy of the business.

More often than not, I find there isn’t such a shared understanding save that everyone wants to make as much money as possible. That doesn’t count in my book. That’s like breathing. It goes without saying.

Ask each director to come up with a more sophisticated objective than making money and a strategy to achieve it. The outcome can be surprisingly positive, productive and unifying. At the very least it will clarify any misunderstandings.

It’s crucial to ensure that the “roadblock” signs up to the strategy too. Don’t move to the next step until they do. You may find that this process leads to some softening by the offending director. Or not.

Step 2: Check that there is unanimity amongst all the directors on the roadblock issue. Unless everyone is saying the same things, the problem could be something, or someone, else.

If there is unanimity then agree that everyone on the board not only has the right but also the duty to call out the behaviour on the next occasion it arises. Then, crucially, the person who does call out the bad behaviour must be backed by the others.

This is not about “ganging up” but an important step in reinforcing the agreed approach in dealing with the roadblock which is about always coming back to business strategy and objectives, not personality differences. This is good corporate governance, not corporate politics.

Step 3: Is to make a small change in how everyone deals with the roadblock at board meetings. The principle here is that the other person won’t change unless you change first. A commitment to small change in behaviour, over time, is easier to secure than so called “transformational” change which is a lesser spotted occurrence than some commentators would have us believe.

On the next occasion and at a fully attended board meeting – ideally an operating board meeting, not a main board meeting because procedures tend to be more formal there – when roadblocking behaviour occurs, then one director must muster the courage to enquire how that behaviour helps implement the strategy to achieve the agreed objective. I say “must”, intentionally.

The response is likely to be a strong, if not brutal, push back or to obfuscate or both. Each director should in turn ask the same question or otherwise indicate that they back the questioner. It’s as simple as that, even though it may not feel that simple.

Unless you have chosen the wrong battle to fight or someone lets you down in the room, this approach should work, over time. You will find that on each occasion the other party is challenged to explain the link between their behaviour and business strategy to which, after all they have signed up, they will struggle to maintain the roadblock behaviour in the face of such ongoing unity of purpose.

If their behaviour is unconscious they may even see the light. On the other hand, if they are successful narcissistic bullies they will try everything to bully their way out of the challenge.

If every director sticks to their guns and quietly and calmly return, each time they are rebuffed or traduced, to the agreed business purpose and strategy the other party will have to relent, ultimately.

And if they don’t then the directors have a choice: either to remove the roadblock or become part of it themselves. Sadly, too often the latter is the case but it doesn’t have to be so, if everyone has each other’s backs.

Why CEOs and directors, unlike Mrs May, should actively encourage dissent on their operating boards

Mrs May continues to present students of leadership with excellent material on the dos and don’ts of modern leadership.  Her speech this week announcing the General Election was another great contribution to that canon.

The strongest part of her speech, and one that CEOs would do well to emulate, was her absolute clarity of purpose. This is no “Theresa Maybe” as The Economist described her at the start of her premiership. Love her or loathe her, you can be in no doubt that she wants as hard a Brexit as she can negotiate. That’s her purpose. No maybe about it.

CEOs who don’t convey this level of clarity on their own purpose go on to struggle to articulate a credible strategy and as a result their implementation plans are weak and risk-rich from the outset.

But then Mrs May needlessly threw away this early advantage.  Had she been a client of mine, I would have insisted she maintain that level of clarity in all aspects of her speech because it pains me to see leaders score avoidable own goals and she scored a veritable hat-trick, all of which CEOs can learn from.

Her first own goal was when she said that the reason for calling an election was because “…there should be unity in Westminster, but instead there is division.” It is bad enough that this was a huge lie  – everyone knows she called it for party political reasons – but it was the underlying disregard for opposing views, so well known to directors who have to work for bullying CEOs, that will have done her damage.

Rafael Behr put it well in The Guardian: “The democratic process is being requisitioned not to air competing opinions but to dispense with them.”

She could easily have just stuck to the line that she wanted a stronger negotiating hand via a stronger majority. No one would have blamed her for that. But like many CEOs with low EQ she confuses dissent with an attack on her identity and so she attacked her dissenters, who are elected and one could argue, paid to dissent, just as NEDs are on  main boards or divisional directors and function heads are on operating boards.

Her identity, like many CEOs, is tied up with being right. Any questioning of that is forbidden because to question is to undermine and that casts you, in that most damning of all verdicts, as “not a team player”.

In my corporate career I experienced and witnessed brutal treatment of dissent on many boards and executive committees. On one ExCom I was warned on arrival that new people were easy to spot because they were the ones smiling. No one, I was told, smiled again after receiving their first humiliating and public slap down. So I didn’t smile. I still got slapped.

The reason this behaviour doesn’t benefit Mrs May or CEOs is that they, ultimately, are the losers. Mrs May lost many floating voters who share Rafael Behr’s views. In addition she lost her moral authority with Tory MPs who agree with Rafael Behr but are afraid to speak out. Later when she needs their support when things get rocky for her, as they surely will, she won’t have it.

CEOs lose badly with this behaviour because it negatively impacts the ROI on their wage bill, especially to directors who are usually highly paid.  This ROI is already affected by the standard behaviour of any employee – director or not – to leave, daily, a significant part of themselves and therefore their value at Reception because they feel it’s unsafe to bring it in.

No amount of HR sponsored “bring your whole self to work” campaigns will change this unless the “invitation” from the CEO is there to do so. But in situations where slaps are administered for daring to be yourself, CEOs and HR Directors should be under no illusion that their ROI plummets drastically and they won’t even know what they’re missing. This is one of those own goals that’s barely visible, because it happens so fast.

The well documented behaviour of advisers in The Oval Office during the Bay of Pigs fiasco is a good example of the dangers of not encouraging dissent. The problem was that no one spoke up because the agenda was controlled. Therefore there was no room for dissent. This contributed to what was an historic disaster for American foreign policy in the 20th century.

I believe CEOs should open every operating board meeting with the same announcement each time: “I need to hear people disagree with me and with each other, constructively. If you don’t you’re not doing your job and if you’re not doing your job you’re of no use to the business.”

If Mrs May had announced an election saying she wanted a stronger mandate and that she welcomed a stronger challenge within and without her party at this difficult time, then that would be a sign of courageous leadership and she, and we, might get not just what we want but need.  But to complete her hat trick Mrs May missed that too and she and we will suffer, needlessly as a result.