What CEOs and Operating Boards can learn from Mrs May’s #leadership in executing #Article50

In management speak, Mrs May has “executed on her deliverables”. Were she a CEO she would be claiming her bonus or at least the part payable on delivering the Article 50 milestone.

Although she is not a CEO and government is not a business, she is nevertheless a leader and shares that role with all CEOs and members of their Main Boards, Operating Boards and Executive Committees. For that reason her behaviour and that of her team in these historic times is akin to a live daily seminar on the dos and don’ts of leadership under intense pressure. There’s much to learn.

Mrs May has, in terms of my leadership model at least, intangible assets and liabilities. Her assets, according to observers, include an ability to focus, analyse and keep her word. The same observers note her liabilities as a tendency to make decisions on her own, her “Pinteresque” silences and not always building close relationships. Whatever the truth of these observations her role and any leader’s role is to understand what the people they lead need to thrive.

Leavers think she knows what they need and that she’s delivering it. Hence her polling numbers are still holding up. But there’s a danger that she’s delivering what they and her back benchers want, not what they need. Leaders must deliver what’s needed not what’s wanted. That’s why leading is lonely.  Leavers say they want “control back” but their need is to feel in control. There’s a difference. Mrs May is about to deliver the former because, almost certainly, there will be a hard Brexit. But they still won’t feel in control because total sovereignty in a globalised economy is a mirage. The control regained will be lost again in the essential compromises of international trade.

But the problem she faces is one shared by many CEOs which is that getting people to sign up to a shared long-term purpose which informs short-term strategy requires patient influencing skills and gentle persuasion over time – winning hearts and minds. This would involve a clear statement of shared British purpose over the next five to ten years. But no such purpose which addresses the needs of the vast majority of the people – not just the 37% of the population who voted Leave – has been articulated, nor will it. I have sympathy for her in this. It’s a big ask. But it can’t be ducked.

The lesson for CEOs and other leaders on boards from this scenario is that you must articulate a purpose which connects with the majority of your workforce. It’s surprising how many members of the boards I work with cannot articulate a shared purpose and strategy besides making money, which is neither. Making money is not a purpose, it’s an outcome. “Taking back control” is a slogan, not a strategy.

If you want to avoid the possible pitfalls that face Mrs May if she does not find a way of bringing people together – not just talking about it – and changing some of the behaviour of some members of her “operating board”, you might start at your next operating board meeting by going around the table and asking each member to articulate their understanding of the purpose and strategy of the business. Then ask them their personal purpose and strategy and how these are all interdependent. It should prove a useful exercise.

The question remains whether or not Mrs May will pick up the second part of her imaginary bonus in two years time. She still could. All she needs to do is to access her undoubted hidden asset, and one which most emotionally intelligent CEOS share but struggle to exploit, an ability to trust others more.

How unresolved issues between your board members are impacting your business, and what to do about them

Why not have a facilitated emotional intelligence workshop at the end of your next board meeting?

  • Your board meeting is finished, the agenda covered, and the minutes taken but what about the unresolved relationship issues that are never minuted? My clients tell me that these are the biggest barriers to effective boards and which effectiveness reviews don’t address.
  • The future of your business depends, largely, on the quality of interactions between your board members. If there are problems or a lack of clarity, they matter because they impact the bottom line. Your board is unique. So yours needs bespoke attention, not generic change management solutions.
  • We avoid these issues because they are difficult to address. My workshop provides a framework to address them, incrementally, safely and with a high chance of success in three steps:
    • Supporting the acknowledgement of the behaviour on your board you would you like to see changed and by whom
    • Exploring the positive impact on your business of the changes
    • Tools to assist the behavioural change
  • You may feel that people just don’t change or won’t on your board. But people can and do change behaviour if incentivised to do so.  What better incentive than knowing that if you change your behaviour, every other board member will do so too? It’s simple and it works.

For information on case study examples and costs, you can arrange an exploratory telephone call by  emailing me at cfenton@ciaranfenton.com or text me on 07966168874

Why non-banking CEOs and boards should bother reading The Banking Standards Board second annual review

Last week The Banking Standards Board published its second annual review which received page two coverage in The Financial Times with the strange headline: “Bankers battle with ethics versus career quandary”.

The headline was strange not only because it implied that there are circumstances in which career considerations could trump ethics but also because, given that the 2008 crash resulted from unethical behaviour, these shocking results should have been the headline, not the quandary they seemed to present.

As reported by the FT, some of the results of the Review based on a survey of 28,000 employees at banks and building societies are jaw-dropping: “more than a third fear negative consequences of voicing concerns…one in eight had seen instances where unethical behaviour had been rewarded…[a large number saw] a conflict between their organisation’s values and how it did business”.

The impact of this environment on ethical decision-making must be grave, making another crash a certainty, if not highly possible. Certain because the results were not front page news; certain because we have become immune to such behaviour and, above all, certain because permission to behave well in banking is still not ubiquitous.

If the banks are heading towards another crash – so be it. But you and your board can avoid risks just as grim by giving your directors and their team’s permission to behave ethically. How can this be achieved?

You could start simply, by announcing that there will be zero tolerance on your board for the three behaviour examples below:

– the rewarding of unethical behaviour

– experiencing negative consequences for voicing concerns

– failing to confront conflict between our values and how we do business

The first of these might seem obvious, but if as much as one in eight has seen instances of such behaviour in the banking sector, the chances are that some of that behaviour is happening in your business and without challenge.

And this will persist if you do not support the second rule by encouraging people to speak the truth to the powerful. Of course, the best way to ensure an ethical culture is to create an environment in which people feel that they can speak up on normal issues i.e. those which have nothing to do with ethics or the law.

If your people feel comfortable challenging you on normal business issues, then they are more likely to feel comfortable calling you out on bad behaviour.

My guess is that those banks where people are afraid to voice concerns are also afraid to voice just about anything else which might not meet with approval from on high. Where this becomes seriously mad is when people start assuming what will and won’t be approved and are wrong. Then you have a truly sick organisation of your own making.

Emotionally intelligent boards can create emotionally intelligent businesses that are more likely to make ethical decisions which are right in themselves and also reduce risks and increase opportunities.

One way of creating emotionally intelligent businesses is to have zero tolerance for shaming language. Shame is a great mental killer in business, especially amongst men. Guilt means I’ve done something bad. Shame means I’m bad.

Over the years I’ve observed shaming language at its worst in many contexts. Once I worked in an organisation where the “D word” was the shaming weapon of choice at meetings, as in: “Joe Blogg’s quarterly results were very disappointing, indeed.”

This would be said as if Joe was not in the room. He was of course and would die a thousand deaths in that boardroom and had nowhere to go because of kids, mortgage and all of that.

Another example of shaming language is when a powerful person is reasonably challenged on a strategy or routine issue by a less powerful person as in: “Joe Bloggs, I think we need a bit more light than heat on this issue”. Withering.

Have you ever been that Joe Bloggs? I have. And I can tell you that there’s nothing more certain to discourage someone from voicing concerns about ethical or legal matters if they are shamed for voicing concerns about issues that are perfectly legal and ethical and, please, remember where you first heard about the next banking crash and its causes, if you read it here first.

The May/Hammond U-turn is a lesson for all CEO/CFO relationships

“Budget U-turn raises doubt over competence for Brexit challenge” is the front page headline in today’s Financial Times. The FT doesn’t have a reputation for melodrama, so its reference to competence is worthy of our attention.

We need our Prime Minister and Chancellor to behave competently not only in the Brexit negotiations but also because we need them to be in sync generally, like in any CFO/CEO relationship.

In leadership terms, there were three reasons for the U-turn chaos, and these can easily occur in CFO/CEO relationships. They are also avoidable.

First, Mrs May and Mr Hammond did not have a shared purpose in respect of their budget. If they did, they would have together faced down their critics. They would have owned up in advance to breaking an election pledge on the basis that Brexit has changed the game and they would have “toughed it out”.

But the concern about their relationship is not the error – anyone can make a mistake – but it’s the manner of it. Mrs May has not understood that leadership is about convincing us that her vision is good for us.

In business and politics sometimes you have to ask for forgiveness, not for permission. We would have forgiven her for breaking an election pledge if she’d asked for our forgiveness in the context of a clear vision for the future. But she didn’t.

Consequently, she and her Chancellor were at cross purposes. His objective was to balance the budget, and hers wasn’t clear, save that we know what it’s not: it’s not Mr Cameron’s purpose. The problem with that position is that it was Mr Cameron’s manifesto that got her elected and one which, inconveniently for her, explicitly excluded tax hikes.

Second, if a CEO and CFO lack a shared purpose, it follows that their strategy cannot be right. Mr Hammond’s strategy was to pay for the social care problem by increasing taxation.

Mrs May’s strategy is to do whatever she feels is the right thing to do as she sees it irrespective of whatever has happened before, or whatever anyone else thinks. This is a common strategy amongst political and business leaders. It’s not always wrong and works in time of war, but we’re not at war.

An example of this strategy from my mother country was Prime Minister Eamonn De Valera who famously, or infamously in my view, said: “When I know what the Irish want I will look into my own heart.”

We all know CEOs who behave like this, and they can make life very difficult for everyone, especially, their CFOs. Their approach is not a strategy because a strategy demands conscious behaviour and this is unconscious behaviour. If it were conscious, they wouldn’t do it.

Third, the U-turn exposes the lack of clarity regarding their respective roles. It is very common for CEOs and CFOs not to adhere to their role definitions and with dire consequences.

The primary role of a CEO is to create an environment in which others can do their best work. This role includes “having the back” of the CFO, whose role is to “own the numbers”. To Mr Hammond’s credit, he did try to own the numbers, but his CEO didn’t have his back. His days are now numbered, and so are hers, but for different reasons.

CEOs and boards: how tension between directors can be put to good use to improve performance

Frustration in the boardroom

I constantly hear stories of tension between board members causing exhaustion, frustration and even depression. The bullied feel humiliated, the eager unheard and the anxious unsupported. Slights, real and imagined, are harboured; baseless assumptions inform action, or worse, inaction. Unconscious behaviour abounds.

My clients tell me that the most significant barrier to working productively together are “personality issues”. They feel hopeless that the conflicts, which frequently simmer under the surface, can’t be fixed.

Unacknowledged personality issues hurt the bottom line

Some directors I meet are blissfully unaware of these issues; others are not but shy away from these problems because they don’t know how to deal with them.

But the costs and opportunity costs to the business of not confronting behavioural issues are incalculable. I would be a very rich man if I had a pound every time a director said to me “If only we would do x, we could save y cost or avoid y risk or generate z revenue”. Why don’t you?, I ask. “He/she/they won’t wear it,” they assume. Delete as appropriate.

Behavioural issues are notoriously difficult to address. So, we avoid them. But what if there was a way to address them, incrementally, safely and with a high chance of success?

Least Likely To Say

Your business could outperform its targets, get more done and with happier employees if every director, without exception, improved their worst behaviour. Let’s call it their DWB – Director’s Worst Behaviour. No one I’ve worked with fails to understand what this means and what impact it has.

By worst, I mean that outstanding behavioural weakness that we all have and that drives everyone else on the board mad because it adversely affects them but which we struggle to acknowledge, let alone change.

I find that a good way to get an accurate list of the individual DWBs on a board is to facilitate an exercise, at a plenary session of the board, called “Least Likely To Say” preceded by a series of 1-1 sessions with each director to build trust.

In this exercise, each director tells each colleague what they are least likely to say. For example, the micro-manager is least like to say “Just get on with it, no need to check in with me”; the person who talks over people: “What do you think?”; and the solo player “How can I help?” And so on.

This exercise rarely fails to generate the embarrassed laughter of recognition which we are more familiar with in the company of true friends, who rarely let us get away with anything. In my experience, the degree of consensus on the DWB list surprises no one. If done with a light touch and kindly, the impact can be pleasantly cathartic.

Moreover, by avoiding the shaming language often used in board rooms directors can encourage colleagues to confront tricky behavioural issues which they otherwise would bury.

People don’t change, do they?

“This is all pie in the sky”, I hear you say. “Leopards don’t change spots. It’s dog eat dog in the boardroom. People just don’t change. This stuff won’t work on our board.”

Agreed, if you use traditional change processes. That’s because either they don’t work or if they do, they don’t last because, under pressure, everyone tends to revert to type.

But people can and do change behaviour if incentivised to do so. And what better incentive than knowing that if you change your behaviour, every other board member will do so too? It’s simple. It works. I’ve witnessed it.

Small Change

In my Small Change Programme, I focus on helping each director to acknowledge to their board colleagues their worst behaviour – i.e., their DWB. Then I support each to agree and implement, over a period of six to nine months, an unwritten behaviour contract undertaking to change just ten interactions in every hundred about that behaviour. That’s just 10% change, hence small change. But even small change is hard to do, and so my programme is designed to help CEOs and boards do it.

For example, one micro-manager I worked with undertook to micro-manage ten times less out of every hundred interactions.

The micro-manager, who proceeded to change his behaviour as agreed, courageously acknowledged that never being allowed to fail in his early years was probably the cause of his behaviour, and was pleasantly surprised at how more motivated his team was, how much more time he had and what new things he could do with the time released from his micro-managing. No wonder he did, given how much time he had wasted micro-managing.

Free Offer

I’m offering a free one-hour telephone or video workshop on my Small Change Toolkit to help you start the process yourself. The toolkit is a set of concepts and models which you can take away from the one hour workshop and use with your colleagues. I offer this as an incentive for you to engage in a conversation with me with a view to persuading your board to sign up for my Small Change Programme, but if you don’t, that‘s fine too, you still get your free workshop.

If you would like to arrange a free one-hour telephone or video Skype workshop with me, please email me on cfenton@ciaranfenton.com or call me on 07966168874. You can read more about me and my model on http://www.ciaranfenton.com

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