Three leadership lessons CEOs can learn from Gordon Brown’s autobiography, My Life, Our Times

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If you are a CEO or an aspiring leader wishing to improve your leadership skills, you will not waste time reading the recently published autobiography, My Life, Our Times, by Gordon Brown, former United Kingdom Prime Minister and Chancellor, if only to learn what not to do as much as what to do.

I attended the book launch chaired by Jonathan Freedland, at Westminster Hall with mixed feelings. I had not warmed to him when he was a leader but I admired his conviction. I left with the reverse view: I liked him more and was surprised to find myself shocked by his values.

The audience was partisan and clapped throughout. I didn’t, but I did find myself laughing out loud at his stories, his mirth and surprisingly engaging manner. It’s a shame we didn’t see more of that when he was in power. This point links to the first of three lessons.

He writes that he couldn’t do “touchy-feely” politics and never mastered the ability “to sculpt my public image in 140 characters”. Initially I misinterpreted this as an expression of regret and wishfully thought the statement contained in it an implicit warning to other would-be leaders not to repeat this error.

But it becomes clear that he believed that “what mattered was not what I said about myself, but what our government could do for our country”. Taken at face value this suggests a humility that places government or the organisation above its leader.

But it did matter what he said about himself because people buy people first and need to see the spirit of their leaders revealed if they are to follow them. I’ve never liked the phrase “touchy-feely”. In two words it seems to diminish the courage it takes to be honest.

Once I facilitated a leadership conference, having won the pitch to do so against a competing facilitator, on the basis of my manifest belief in clarity of feelings only to find that on the first day of the conference the boss warned me off making the event too “touch-feely”.

I had sympathy with his fear but wished he had had the courage to overcome it. I ignored his warning and proceeded to “do” touch-feely anyway and he was very happy with the outcome.

What concerned me about Mr Brown’s view was that he wasn’t regretting his attitude but regretting the fact that it didn’t work. The lesson for you as a leader, whether you like it or not, is that clear and frequent communication about you, your values and plans are not optional.

The second lesson is around his views about what he did and didn’t know at the time of the decision to go to war in Iraq. “Beyond questions of financing” he writes, “The Treasury had little involvement”. He’s saying he wasn’t in “the room”. When he said this to Jonathan Freedland in the Q&A session I was so shocked I could no longer laugh at his jokes. Why wasn’t he in the room? Who stopped him? Why didn’t he force his way in?

This is unacceptable behaviour. The Chilcot Report rightly called out the “sofa style” governance errors of the Blair decision-making process. That Mr Brown wasn’t on the sofa was as much his abrogation of corporate governance as Mr Blair’s.

The third lesson is one that acknowledges Mr Brown’s clear sense of purpose on matters he cared about. He cared about the poor and acted on their behalf. His belief in the importance of a health service “free at the point of delivery” was laudably unshakable, if weak in execution.

And few would argue that his intellectual rigor in dealing with the financial crisis in 2009, probably, saved the world from financial meltdown.

The lesson here is to have clarity of purpose. He rightly received applause in the hall for this. That said these successes don’t compensate, for me, his failure to confront himself, as we all have to do.

David Hare, in his review of the book in The Guardian, finds this aspect of Mr Brown’s character “endearing”: “Brown has in abundance what the rest of us have to some degree – a haunting ignorance of our own place in the picture. The fact that, to judge by this book, he remains unaware of this failing makes it all the most affecting”.

I disagree. It’s not endearing. It’s shocking and dangerous. Lack of self-knowledge is as human as it is ubiquitous. But leaders need to work hard at confronting their worst behaviour because it conceals their greatest asset: unique hidden potential.

Had Mr Brown been supported in accessing his inner “touchy-feely-thing” (sic) he might have realised that vision, conviction and intellectual rigor are not enough to lead any endeavor, successfully. He would have connected with his and our vulnerability and found a way to communicate in his brilliant, funny and engaging style the plans which people could have executed, not just ideas to cheer. And, had he done so, wouldn’t we all now be safer?

Why boards should use HBR’s list of Best-Performing CEOs in the World 2017 with caution

Sports podium

Harvard Business Review has recently published its annual Best-Performing CEOs in the World rankings.

Pablo Isla, Martin Sorrell and Jensen Huang are in first, second and third place respectively. Sean Boyd, Jean-Laurent Bonnafé and Ian Cook are placed 98th, 99th, and 100th.

Does this mean that your board should favour the first three over the last three as benchmarks for your CEO? The rankings suggest that you should. I disagree.

HBR has ranked CEOs using a weighting system, which favours financial performance over the other factors using an 80/20 ratio. “To calculate the final ranking, we combined the overall financial ranking (weighted at 80%) and the two ESG rankings (weighted at 10% each), omitting CEOs who left office before June 30, 2017”.

By two ESG rankings, they mean environmental, social and governance analytics as reflected in two scores: Sustainanalytics and CSRHUB. Directors who are shareholder-value merchants, red in tooth and claw, might wince at the inclusion of such wet factors. I argue the opposite: the weighting for the ESG factors is not high enough.

For example, Pablo Isla, CEO of Inditex, headquartered in Spain, is in first place while Ian Cook, CEO of USA based consumer goods company Colgate-Palmolive is in 100th place.

Let’s look at their comparative rankings: Isla scored 18, 76 and 142 for FINANCIAL, Sustainanalytics and CSRHUB respectively, whereas Cook scored 186, 167 and 89.

These suggest that while Pablo Isla outperformed Ian Cook in FINANCIAL and Sustainanalytics scores, Cook outperformed Isla in CSRHUB scores significantly. So what?

Let’s look closer at the providers of the ESG scores: “Sustainanalytics is a leading provider of environmental, social and governance (ESG) research and analytics that works primarily with financial institutions and asset managers and with CSRHUB which collects, aggregates and normalizes ESG data from nine research firms and works mainly with companies that want to improve their own ESG performance”.

CSRHUB is obviously the “softer” of the two ESG scores. Why has it the same weighting as the other ESG score? Why is governance, a crucial internal board matter conflated with environmental and social matters, both external issues?

Who decided on the 70/10/10 ratio? Why not 60/10/20? Or why not split out governance and give it a score of its own? Surely any board would link good corporate governance with risk reduction and maximizing opportunities?

Would you not be a tad miffed if you were Paul Polman, CEO of Unilever, ranked 82nd with a 177/168/17 score? His CSRHUB ranking of 17 comes as no surprise. He is famous if not infamous for his focus on non-financial performance factors. It was he who refused to report to the market on a quarterly basis.

Should he not be further up the “performance” rankings? He is, by all accounts in the financial press, trying to balance performance with developing capability and with ensuring sustainability in all its forms. But did his financial score suffer because of his CSRHUB score?

And what are we to make of his Sustainanalytics ranking of 168 against Pablo Isla’s score of 76? On which environment, social or governance (ESG) factors did he underperform his betters in the rankings?

Isn’t it the case that these rankings should be taken with a large pinch of sodium chloride? Should HBR not use just one crude financial performance score and not attempt to take account of the ESG factors at all or look again at how it addresses non-financial performance?

I have sympathy with HBR’s dilemma. Society is increasingly vocal on behavioural matters. It’s right that HBR should reflect this. But their rankings will continue to be flawed unless and until boards catch up with society and incentivise their people on behaviour as much as performance. This shift would be reflected in the rankings since these merely mirror back what boards value. What’s measured gets delivered.

In work I do with boards, I find that those whose financial performance is strong, often suffer from hubris. Perhaps HBR should include a hubris score in their next rankings. It would be useful, if not amusing, to see what that would do to the current list.

 

 

Confronting bullying on boards: how to get your colleagues to back you

boss and employee.

According to a recent Sunday Telegraph report, The Royal College of Surgeons in Edinburgh (RCSE) says there is an “endemic culture of bullying” in the medical profession. Research by the College found that one in six trainee surgeons are suffering “from battlefield-type Post Traumatic Stress Disorder”. Fear “was forcing junior surgeons to cut corners”.

Boards, executive committee and function team members are no less susceptible to bullying behaviour.

Much of this behaviour in business results in a conspiracy of silence, even amongst businesses with in-house lawyers. For these General Counsel, their status as Officers of the Court does not prevent them from being subjected “to elevated ethical pressure”, as reported in a 2016 survey of 400 in-house lawyers by University College London.

The dire consequences of the abuse of power in all facets of life have recently come to light – in television, film, churches, sport, medicine, schools etc. – and their impact should prompt boards to act. But they don’t, because the people affected don’t come together to demand action.

If all trainee surgeons supported each other and refused to be cowed, as a group, the senior surgeons who bully them would quickly find that they can’t do their jobs without them.

In-house lawyers, bullied into silence by their corporate bosses, could form a tighter bond with each other and face down their oppressors.

Board members frequently humiliated – often by powerful CEOs, CFOs or Chairs – could stand up for each other at Board and ExCo meetings.

When I say this to clients, I’m told: “It’s easier said than done”. Indeed it is. It requires courage. Mustering courage is hard. But there are some small changes you can make in your behaviour, which can help.

First, improve your influencing skills with those whose minds and behaviour you are trying to change. In this regard, Professor Richard Thaler recommends persistence; knowing precisely the other’s point of view; having all of the facts; and that you try to intrigue the other party.

By this, according to Tim Harford in the Financial Times, “Prof Thaler realised that most of us are lazy. Most of us don’t want to think hard about our beliefs, or challenges to them. His solution was to make sure those challenges were simply too intriguing to ignore”.

One of my clients was a member of an ExCo, whose CEO was bright but had a short attention span. He was also given to the occasional ritual humiliation of his directors. My client noticed that those ExCo members who piqued his interest with ideas were the least humiliated and the most successful in pitching their proposals to him.

Second, find common cause with your fellows. When I ask clients – business leaders, lawyers or other professionals – why they don’t get together and confront bad behaviour, the answer I receive is that they are often too much in competition with each other to co-operate. But what if you and your colleagues realised the incentive in doing so?

Once I facilitated peace between two warring private practice lawyers on a partnership board. It turned out that, once they realised that they could help each other on their revenue targets, they could make common cause on issues at partner board meetings on which they had never previously co-operated.

Third, and perhaps the most straightforward change to make in your behaviour is to reframe your purpose, strategy and behaviour plan – if you have one – so that you have zero tolerance for being bullied or, indeed, bullying. By this I mean you make this behaviour as non-negotiable as you do with other behaviour decisions such as never behaving in a racist manner.

The respect you extend to others should be extended to yourself. You deserve not to be bullied as a matter of principle. If your purpose excludes living in fear, as it should, then your strategy and behaviour plan should support that objective. You might be surprised to find that your colleagues are more ready than you think to support you. Why not ask them?

7 Small Changes to Achieve Better Board Effectiveness, Conduct & Leadership

ChangeThese are the seven steps I use to facilitate better board effectiveness, conduct and leadership on main and operating boards, executive committees and senior function teams:

Step 1: Acknowledge uniqueness

You and your colleagues are unique individuals. No two board members are the same. If you behave as if they are you cannot expect to get the outcomes you want. If each board member is unique it follows that your board is unique. Why would you use generic processes for a unique situation?

Step 2: Understand uniqueness

At work, the components of your, and each of your colleagues’ uniqueness are their skills and experience, reputation and emotional intelligence. Whilst many share aspects of these, no two board members share the precise mix. Why, therefore, would you treat yourself and your colleagues as human capital assets?

Step 3: Understand emotional intelligence (EI)

The most important components of emotional intelligence are empathy, self-awareness and the ability to negotiate needs productively. All three are important. While organisations may perform well for a while without these in harmony in each director, research suggests that organisations that fail to foster these, often struggle to develop long-term capability. In which case, why would your board ignore individual EI problems, even if those colleagues with issues are delivering good results in the short-term?

Step 4: Understand the negotiation of needs

Experts tell us that if your ability to negotiate your needs productively and safely was frustrated in your formative years then you will have taken a decision to deal with that frustration in a manner that was appropriate at that time. However they also tell us that humans have a tendency to extend formative years decisions into adult life. Even those people who experienced little or no frustration in having their needs reasonably met in their formative years suffer when they encounter those that did or when they experience significant stress in later life. The productive negotiation of needs as between members of boards and teams is key to success. Why would your board not pay attention to creating an environment in which members’ needs can be negotiated productively, even if this involves painful confrontation of personal issues?

Step 5: Reveal hidden potential through small changes

Experts also tell us that no one escapes emotional pain. Everyone carries one outstanding emotional painful experience. By outstanding I mean more than all other painful experiences. We compensate for these in different ways but these strategies invariably hide our potential. If this is true, it means that your board’s hidden potential is more than the sum of the hidden potential of you and each of your colleagues. The route to revealing the hidden potential of each director is for each to negotiate small changes in behaviour with each other. In aggregate the sum of the small changes is greater that each in terms of their impact on board effectiveness and conduct. Conduct is observed behaviour over time. Why would your board not seek to reveal the hidden potential of each member over time?

Step 6: Share your personal purpose, strategy and behaviour plan

You and your board colleagues each have, or should have, a personal purpose or objective at work, a strategy to achieve it and a personal behaviour plan to implement that strategy. Some do this process intuitively; others plan it whilst others drift. The more these issues are shared openly between board members, the more likely it is that business purpose, and strategy and behaviour will be successful.

 Step 7: Make personal and business purpose interdependent

The tension between the personal purpose of each of your board members and the purpose of the business negatively impacts performance and the development of long-term capability. It follows that these are interdependent and if so it further follows that it is worthwhile paying attention to the interdependence of personal and organisational purpose. It also follows that not doing so increases organisational risk and reduces opportunities.

I use three well-known emotional intelligence tools to help directors implement these steps:

Tool 1: Feel/Need/Do?

Regarding specific issues or behaviour or exchanges at board meetings what do you feel?; what do you need in relation to that feeling?; what are you going to do to meet that need?

Tool 2: Are you selling or buying?

In almost every board interaction you are either selling or buying. Know which and know how.

Tool 3: Are you in Parent, Adult or Child mode?

In almost every boardroom interaction you and your colleagues will, at various times, be in Parent, Adult or Child mode. Do you know which you frequently occupy and when? Do you know how to get yourself and your colleagues into Adult-Adult mode?

The steps and tools above together constitute The Fenton Model® which is a registered trademark of Ciarán Fenton Limited.

Ciarán Fenton

October 2017

Fear culture: why every director should read ‘The Fear Culture’ chapter in Shredded

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If your organisation uses any form of a “rank and yank” performance management system you should read ‘The fear culture’ chapter in Ian Fraser’s Shredded – Inside RBS, The Bank that Broke Britain.

Fraser provides directors with excellent arguments as to why your board should close down these systems.

First, he quotes American management thinker W. Edwards Deming who said that these performance management programmes result in “conflict, demoralisation, lower productivity, lower quality [and] suppression of innovation”.

Who on your board would push back on you if you quoted this?

Second, he cites Phil Taylor, Professor of Work and Employment Studies at the University of Strathclyde, who wrote Performance Management and The New Workplace Tyranny (2013). He says, “an argument can be made that these performance management practices are not merely unjustifiable on the grounds of welfare, decency, dignity and well-being, but they may also be utterly counterproductive…”

Try quoting that your next board meeting and see how you get on.

Third, he quotes Ron Kerr and Sarah Robinson, both Business and Management lecturers who said, “Within RBS itself, Goodwin’s domination was maintained by economic violence. RBS’s internal culture has been characterised as a culture of fear”.

Fraser writes that Kerr and Robinson “argue that the leadership culture at RBS was quasi-feudal, in that exploiting people’s economic dependence and destroying their economic power lay at its heart”.

Imagine quoting that at your next board meeting. Surely a slam-dunk argument for your board to say ‘you’re right, we’ll scrap our performance management system tomorrow.’

Of course not. You and I know that the proponents of these systems on your board are in no doubt about the arguments against them.

As early as 1991 Deming and others were arguing against them. But as Ian Fraser notes: “…this did not stop rank and yank programmes being adopted in the UK across both public and private sectors”.

In my own work facilitating boards and ‘off-sites’ I have heard senior leaders challenge these programmes only to be told that ‘we must have some form of measurement’.

It’s as if a totally discredited system is better than none, in their minds. A zero-sum-game. They cannot imagine, as many companies who have ditched these vile programmes can, that trust is all you need to ‘performance manage’ anyone.

But what if there’s no trust? Surely, your board will argue, we need a system to manage people who don’t ‘behave’?

Your answer to this is that the board doesn’t need a system, it needs to up its leadership game to help people be what they can and should be.

Yeah right, you say. It won’t happen in my organisation. And you’re right, unless you and the people in your organisation who agree with you get together and lobby for change.

It’s not about speaking truth to power, a phrase I’ve never liked. It implies that the powerful never speak the truth and those who want to speak the truth are invariably weak.

You are powerful. You are a director. Just do it.

How Leadership 101 could win the next election for the Lib Dems

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It is the party conference season and the political weather is dominated by fog. Political fog swirls as both main parties offer different solutions but neither explain precisely how they will execute them. Opaque is the new clarity.

Cynics might suggest they do not know. A kinder interpretation is that politics in the UK has divorced itself from the meaning of the word leadership and, instead, aligned itself with the word personality, which is a different matter altogether.

Leadership is about helping people to perform at their very best, even to their surprise. Personality is about individual qualities. The latter is about being, the former is about doing.

And so Mrs May and Mr Corbyn, described as the leaders of their respective parties, have advanced their positions on the key issue of the day: Brexit.

But neither has set out how they are going to create an environment in which their ministers will be able to deliver on the solutions they espouse.

This should worry us all, irrespective of which side you support. What are you going to say in five years time if the people you voted for fail to deliver on what they promised?

That is politics, you might reasonably respond. Whoever, you might add, expects a politician to deliver what they said they would?

In normal times this cynicism might be justified but we are not in normal times.

Not in my lifetime – I’m 57 – have I witnessed a political event so profound as Brexit. I was too young for the Cuban missile crisis, the next nearest in my view. You may argue that there were other more profound events but you cannot argue that Brexit is not a game changer.

For example as I write, Monarch Airlines has gone into administration partly because of the brutal competition in the short haul market but also because of the fall of the sterling. The latter was a direct consequence of the Brexit vote.

According to the Office for National Statistics the UK economy is now the worst performing economy in the G7. On the eve of the referendum it was the fastest growing.

Moreover, the polarisation in UK society has become much more pronounced since the vote. Of this fact there seems to be no disagreement.

But even if you feel that a certain amount of pain is inevitable and you are still convinced that Brexit is the right thing to do, surely you must care that the policies you support are executed properly?

Are you sure that this will happen? Just because you believe the Leavers, whether hard or soft, are right does not mean that you can be confident that they are capable of implementing those policies.

This presents an opportunity for the Liberal Democrats because they are neither burdened with the cult of personality nor the weight of excessive ideology. But they are a force in UK politics, no matter how weak.

My advice therefore to Sir Vince Cable is the same advice I give to all CEOs who are in a potential turnaround situation and that is to focus on Leadership 101.

I acknowledge that politics is not a business and Sir Vince is not a CEO, but the principles of Leadership 101 apply in all organisations and they are ignored at peril. Sir Vince should take three turnaround steps:

Step 1: Announce that he will not be the next PM but that he is launching a nationwide search for the most talented team of new Lib Dem MPs, one of whose number will be the Liberal Democrat Prime Minister in 2022. Sir Vince will act as interim caretaker.

Step 2: The new leader of the Liberal Democrats will focus on leading its Members of Parliament in parliament and not on attempting to lead anything or anyone outside of the House of Commons.

Step 3: The new leader will create an environment in which new and as yet unknown MPs will be supported to lead public service departments, excellently, and will communicate to the electorate how, precisely, that will be achieved.

That’s it. If Sir Vince carries out those steps his party will win, unless of course someone in the other two parties wakes up to the fact that they are ignoring Leadership 101 and beats him to it.

Leadership: why directors should not imitate Mr Mourhino and Mr Ferguson

Soccer players in action on sunset stadium background panorama

Jose Mourhino is the current manager at Manchester United Football Club and Alex Ferguson is a former manager of the same club. Both are famous. To some, that’s an embarrassing understatement.

But not everyone knows and loves football. I don’t love it. But that doesn’t mean I don’t like it or understand it.

A client recently sent me a link to an article about these two managers because he felt that I would be interested in the story from a leadership perspective. He was also clearly assuming that I had no interest in it from a football perspective.

To be fair, he has grounds for this assumption: he knows from our sharing of respective life stories that I was not sporty at school, was always last pick in playground footie and my nick name was “four eyes”. You get the picture.

But in my advancing old age I’m now getting tired of the assumption by friends, colleagues and clients that I know nothing whatsoever about football, rugby and cricket. The reverse is the case.

I’m a veritable walking-encyclopaedia of sporting trivia. Why? Because I get invited to major sporting events where, because I’m not deaf, I have to listen to endless punditry and I pick things up.

I’ve also spent a lifetime in pubs with blokes, quietly nursing my pint, whilst they willy waggle about their sporting knowledge as in: “ …no mate, you’re wrong..t’was the Forwards wot won it”. Occasionally I would get a sideways pitying glance but never asked for my views.

I would quietly think things but not say them: a) t’was hardly the Backs that won it for them b) why the necessity to collapse into Estuary English? The speaker was posh and had a First from Oxford and c) the Forwards, er, need the Backs.

I know lots about sport, actually: I could bore for England on “the slope” at Lords; I know, because I’ve been told a million times, exactly why England won the Triple Crown a million years ago – t’was because they were made to watch dots move on a laptop.

And, because I’m a closet Arsenal fan – I can’t come out because you have to be following a club ”man and boy” to have any street cred – I know and indeed agree that their forwards have an irritating tendency to “fanny around” the goalmouth.

But I will never be taken seriously on sporting matters. Indeed one mate was so outraged with envy when he heard that I was invited to a major rugby international he said that “I had no right to be there; that I know nothing about the game and that I simply do not understand that sport is tribal”. Yeah, tribal. I let it pass.

I enjoyed the game but didn’t lie awake reliving each phase.

I also know a bit about leaders in sport. Enough to know that they are poor models for leadership in business.

I read Alex Ferguson’s first book and concluded that he was a genius at understanding and nurturing world-class football talent. But for me he was not a leader business people should emulate and for three reasons.

First, his context was exceptional. Most leaders are not dealing with uniformly world-class talent and in the public eye.

Second, and to state the obvious, managing a football team is not the same as running a business and Mr Ferguson did not run the business side of the club.

Third, and I may be wrong, but I got the impression that he used persuasion techniques that would not entitle him to membership of The World’s Top 20 Emotionally Intelligent Leaders.

I also know a few facts about Mr Mourinho. He too is a talented football manager but I won’t be sending any of my leadership clients to sit at his feet and learn how to lead. A resolutely unsmiling persona works well on the touchline, but not in the boardroom.

The link that my client sent to me was to reported comments by Jose Mourinho saying that the Club had not evolved since Alex Ferguson’s departure and was stuck in time. My client was making the point that organisations need to evolve too.

I agree with this and also agree that one personality can dominate an entire organisation, even after they leave. Culture is reflected in conduct which is observed behaviour over time. And it takes time for behaviour to change. And in that, football and business are alike.

But just as the rules of football don’t apply to business, neither do the rules of business apply to football. And this applies to the timings of the departure of leaders. In business they should serve short terms, develop and then make room for others.

Sport is different. And in this regard I believe that Arsene Wenger has been right to hang in there. He is the Obama of The Premiership. He believes in the supremacy of people being the best they can be over winning. And, despite what my mates say, winning isn’t everything. But what do I know?

http://www.ciaranfenton.com