Three reasons why directors of UK businesses should change their leadership behaviour on the day Article 50 is triggered

CEO

On the day Article 50 is triggered, most likely 31st. March 2017, the context in which you lead if you are a director – CEO, COO, CFO, CIO, CMO, CRO, or NED – of a business trading in the United Kingdom of Great Britain and Northern Ireland, will change significantly and, probably, irrevocably.

You will not have experienced this context before. Nor will anyone else. At least this creates a level playing field. But on April Fool’s Day, only fools will deny that, as well as opportunities for some, the risks for all will be significant.

Competitive advantage will be with those who confront the leadership behavioural changes required and rise to the challenge. These need to be tried and tested before the 24-month negotiation period elapses not least because I believe a deal, acceptable to all, will not be in place at the end of the two-year negotiation period.

Why would any, or all, of the other 27 members of the EU not wait at least two years and one day to leverage maximum negotiating position?

For this reason prepare to witness, as Janan Ganesh recently wrote in the FT, Mrs May losing some of her “present swagger” as time progresses. In his view, and I agree with him, she has not managed our expectations well. Business leaders would do well not to replicate her error.

The Prime Minister has led us to believe, because she genuinely believes it herself, that we will thrive outside the EU and in the period running up to leaving it. If she’s wrong then your business, at worst, will die and at best will suffer, not least from enforced macro-economic change.

She has not prepared us for these possibilities. That’s why you should start reframing your leadership style now, for the times they are a-changing.

The first behavioural change I propose is that you should carefully manage, more than usual, the expectations of the people you lead.

It’s going to be a very rough ride, and you should spell out as starkly as possible the implications of the 24 month negotiating period and, separately, of Brexit itself on their lives and on your business, or the part of it, which you lead and in which they operate.

A lazy shorthand has entered everyday speech which conflates in the single word Brexit three related but distinct milestones: the outcome of the Referendum, the triggering of Article 50 and the day on which the UK leaves the EU with or without a deal.

Brexit means only the third of these scenarios. It’s not going to happen for another two years. Brexit, for the avoidance of doubt, has not already happened.

But the implications of the outcome of the Referendum on business have manifested themselves. Some have been positive and none, thankfully, as dire as the predictions.

But the negative impact so far has been very significant for many businesses and best summarised by the fall in the value of sterling which process, many people regard, as the only real oppositional force to Mrs May in the absence of a coherent Labour Party parliamentary strategy.

The fall in the pound is, as Mr Blair said in his fight-back speech, the market’s way of telling us we will be poorer after Brexit. Love him or loathe him as a leader, he is not wrong in calling out the fact that the media largely failed to cover a recent Ipsos Mori survey of senior executives, which found that 58 per cent felt last year’s referendum result was already having a negative effect on their business.

That sterling’s fall has been good for some businesses is no consolation to those for whom it’s a disaster. Even Mr Johnson’s infamous bus didn’t carry the additional strapline “ Vote Leave for a lower pound…”

This negative impact will significantly worsen from the day that Article 50 is triggered. Those who cry “Let’s just get on with it”, as if we are merely painting the spare room when in fact we are selling the house and leaving the neighbourhood, will find that “getting on with it” is not as easy as it sounds.

Your leadership task, therefore, is to create an environment in which the people you lead can thrive at a time of systemic stress, exacerbated by developments in The White House and the rise of the far right elsewhere.

The best way to do this is to allow time for people to talk openly at meetings about these issues. Why not put a “General discussion on Brexit and World Affairs”” on the agenda of your next board or team meeting?

Allow people to share and let off steam on these issues, irrespective of their voting preferences. They will thank you for it and will repay you with higher levels of performance than otherwise.

If you’re worried that turning your meetings into political debates is a recipe for hot-tempered anarchy, consider for a moment the danger of not doing so.

Your board and teams will comprise a mix of Remainers and Leavers – both unhappy and insecure for different reasons. We live now in a divided society. Therefore your business is riven with division, more than usual. This constitutes a business risk; not one you want to push underground. Some consultants are now offering advice on how to manage this development.

My second leadership change behaviour proposal is that you should have no truck whatsoever with people “having to do more with less because of Brexit.” This approach is the last refuge of the desperate. Understandable but doomed to failure from the get-go.

There are three flaws in a “do more for less” campaign. First, it creates both and anxiety and frustration which is bad for morale and therefore performance; second, it’s meaningless because it’s imprecise – how much more? how much less?; and third, it implies that previously Finance, IT, HR, Marketing, Sales, Operations and Legal were all, merrily, doing less for more.

The right answer is to tear up your current business plan altogether and rewrite it. This is what a rookie MBA graduate might do. I know this because of the work I do with LBS.

I have been a mentor for the past ten years on The London Business School Summer Entrepreneurship Programme. They use Professor John Mullins’ book “A New Business Road Map” as their core text. I especially recommend it for the Brexit context because it has a pre-business plan template, which flushes out all contextual issues, especially macro ones. You can’t get more macro than Brexit, except perhaps a world war. I wouldn’t rule that out either.

My third proposal is related to the second, and it’s to do with the importance of reframing personal and business purpose in the light of Brexit. To what extent has your personal career and life purpose changed in the light of Brexit? Have you given it any thought? Are you putting security and risk management for you and your family higher up your list of priorities?

Since your personal purpose and that of each of your fellow directors are interdependent with the purpose of your business, should you not discuss these openly and reframe your business purpose accordingly and in the light of your revised risk appetite?

Your job as a leader is to create an environment in which people thrive, grow your business and keep stakeholders happy. Many of these stakeholders will be employees who won’t be as rich as you are. They won’t have the luxury of adjusting their risk appetites as you do. So they will be stressed. More than you will. You should take care of them. It makes sense. Not just ethical sense, but business sense also.

This blog will be published offline in the next issue of Digital Business Magazine.

Ciaran Fenton

February 2017

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Want to talk leadership? Contact me through my website or call me on +44 (0) 207 754 0335

Piece by @M_Heffernan @FT today is worth reading because…

…it deals with the tricky issue of fixed behaviour in leaders and how this links to their formative years as eloquently articulated by Prof Carole Dweck author of Mindset and who talks to Margaret Heffernan about of her own mindset forming experiences in school.

The piece ends with the advice that “only by relinquishing one’s need to cling to the top spot can one truly lead or achieve”. I agree with this and add that the way to achieve this change of mindset is to acknowledge the shame generated  by the evens which created the fixed mindset.

“The danger of fixed mindset is not just a CEO issue. It can affect all employees, particularly those who work in strict hierarchies” she writes.

In my work helping CEOs and boards change their behaviour for better outcomes, and indeed in my work on my own development, I have found that when shame is diluted then more space is created to reframe one’s identity which is not entirely dependent on success, as framed by others.

Ciaran

“Narcissistic tyrants have long dominated the corporate world”: Why @NickCohen4 piece in The Observer (5 Jan) is a must read for #CEOs

CEO

Nick Cohen’s piece in The Observer (Jan 5) was mainly about Mr Trump but, to my mind, was also one of the best general essays on leadership I have read.

A flavour of the piece: “No one in the West has seen Trump’s kind of triumph…But look around your workplace…little Hitlers…They exhibit all the symptoms of narcissistic personality disorder…less likely to engage in the hard work of innovating…”

The core of his premise is that “compulsive liars can create compulsive believers”. Their peers “believe the stories,” these leaders tell about themselves.

This is all true but I part company with Nick Cohen in one respect: I believe narcissism is on a spectrum and is not a fixed point.

“People are on a continuum — there’s a range of narcissism,” W. Keith Campbell, Ph.D., head of the Department of Psychology at the University of Georgia and co-author of The Narcissism Epidemic: Living in the Age of Entitlement, explains in a HuffPost piece. “Most people are sort of in the middle, though some are more extreme than others.”

In my programmes, I won’t deal with those on the extreme. I can’t fix them. But Boards whose membership includes those around the middle can respond well to exhortations to make small changes in their behaviour.

One of their key traits is that they make everything personal. “If you do something to [the narcissist] that he doesn’t like, it means you’re against him, or you don’t understand him” explains Zlatan Krizan, Ph.D., an associate professor in the Department of Psychology at Iowa State University in the same HuffPost article.

My advice to board members who are struggling to deal with someone behaving like this is to refer every issue back to organisational purpose.

Instead of falling into the trap of constantly flattering them and feeding their narcissism it’s best to appeal to their sense of shared purpose if they have one. If they haven’t then you have a case to oust them, if you can muster the support to do so. Usually commercial self-interest will force directors to come together to face down a tyrant.

But it doesn’t have to get to that stage, and I propose you use three steps in arguing your case:

Step 1: Frame your challenge to the leader regarding wider purpose: “Do you still agree that our organisational purpose is x and our strategy for achieving it is y? They will struggle to push back on this without looking stupid and are likely to agree.

Step 2: “If our strategy is y then do you agree that our behaviour, in broad terms, to implement it should be z?” If you keep your description of the desired behaviour unthreatening in tone, they are likely to agree, and if they don’t, then you can legitimately challenge their logic.

Step 3: This is the tricky step: “Since you agree to purpose X, strategy Y and behaviour z can you see why those of us, including you, who behave contrary to that agreed target operating model need to amend that behaviour?
I agree that this is like walking on eggshells but many clients I meet spend many exasperating hours doing precisely that.

It’s no way to live. Nick Cohen believes that the solution to dealing with narcissistic people is to work hard on converting the people who support them. Once they are starved of that attention only the seriously ill will resist. And in that instance, you have a choice to quit and find someone less damaged with whom you can work and find fulfilment. Life is too short not to.

Ciaran Fenton

February 2017

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David Beckham’s gentle Desert Island Discs interview was chilling in one respect and one that CEOs and boards might note…

Hit the cross bar

Last weekend David Beckham was the special guest on the 75th edition of Desert Island Discs, a popular BBC radio programme in which guests pretend that they are being cast off on a desert island and choose their all time top favourite piece of music and book for company. This format lends itself to revealing moments.

There was one such moment, chilling in my view when he was talking about his father who he described as “a bit of a taskmaster”.

From an early age, David would practise football in a local park with his father and a goal with no net. “Hit the cross bar, hit the cross bar,” his father would say “for hours and hours”.

David played for a local youth team on Sunday mornings, and his dad would pick apart “every single detail” of his game afterwards. He was only seven years old. On one of these occasions, he recalled blurting out “I’m really sorry, I didn’t mean it”.

Chilling

The chilling moment, for me, was when he said that the first time his dad told him he’d done really well was when he got his 100th cap for England. “It made me emotional.”

I bet it did. One hundred caps it took, rendering taskmaster a very generous epithet indeed. David Beckham didn’t criticise his father. In fact, he defended him using the classic “tough love” defence.

He did this using the same, consistent and gentle tone of voice he used throughout the interview except once, when referring to his father’s approach to child-rearing he said: “if [children] can do better…they need to know”. His voice cracked on the word need, betraying less belief in his father’s methods than perhaps he let on.

It was the first hint of acknowledgement that there might be a mid-point between being brutal on a child in the service of a greater need and acceptance of impact of that brutality. I use word brutal deliberately. Let’s give bad things bad names.

You may well argue that the end justifies the means and you may be right. David Beckham has done very well indeed, by any standards. And he credits his father in particular with building in him “this work ethic”. So what’s not to like and what is the connection to CEOs and Boards?

The issue here isn’t about passing judgement on David Beckham’s father. Armchair psychologists may wonder about the connection between his father’s “failure” to succeed in professional football himself. They may make a connection between this and his obsession with David’s success.

If David feels this is true, he certainly doesn’t betray it. In fact, he said on the radio programme that he believes his father “gave it all up for me”. No greater love…

But who’s to know what his father’s motives were? And why wouldn’t we take him at his word? It doesn’t matter. What matters is what we can learn from him.

Leadership lessons

As students of leadership, the only reliable lessons we can take from this story is that success comes at a cost, decisions taken in formative years impact later years and it’s probably best not to take exceptional examples as role models.

Even David Beckham went further than hints in the interview as to the personal emotional cost, even if reluctantly: “At times it is upsetting for any child…to be pulled up…I’m a lot softer [with my children] than my dad was with me.” I found these understatements quite moving. My guess is, and it’s only a guess, that he suffered much more than he concedes. I’ve always held the view that tough love is an oxymoron.

But it’s the connection between decision making in formative years and later behaviour that CEOs and boards might find useful in their assessment of their success and their leadership of others.

While not on the same scale, many CEOs and board members that I have worked with over the years share David Beckham’s core storyline: utterly driven to march to, or against, the drumbeat of their formative years.

I advise CEOs and board members how to confront early decisions, assess the extent to which they are still marching to that old drumbeat and then to decide whether they want to fashion not just a new beat, but a new drum and sticks – the whole drumkit. Then they can create an environment in which the people they lead can do the same.

One CEO acknowledged that because he was never allowed to fail as a child, he trusted no one, and that was why he had a reputation as a micro-manager. One of his directors acknowledged that he never took responsibility for mistakes probably because he too suffered from the silent killer of peace of mind: shame.

Guilt means I did something wrong; shame means I am bad. The latter is a pestilence, which stalks our boardrooms. Shaming language at board meetings is ubiquitous and is the enemy of business growth. How can people be what they can be if they are made to feel ashamed?

The CEO I mentioned committed to my small change programme and agreed to reduce his micro-managing behaviour by 10% – that’s just a reduction of ten interactions in very hundred. That’s small change, but it’s very hard to do, and it requires a stretch. This CEO was so competitive that, true to type, he reported that not only had he micromanaged ten times less but that he had “doubled that to 20% less!”.

And I believed him because he said that his team were happier – no kidding; and he said had more time – surprise, surprise. I asked him what was he going to do with all this recovered time previously spent micro-managing? He didn’t answer, but my guess is that now that he could trust more, he could risk more, and business growth is all about managing risk.

The great names in sport, music and film achieve greatness because of specific drivers and behaviour. We can learn from these. But we shouldn’t forget that their greatness is exceptional and their behaviour not necessarily the best model for ours.

That said, I wonder if David Beckham’s interest in and his dogged creation of his own fashion brand was his way of taking back control of his life. If so he deserves to be called a great model in more ways than one.

Ciaran Fenton

February 2017

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Want to talk leadership? Contact me through my website or call me on +44 (0) 207 754 0335