The Blog

Mourinho directs his troops

Image, ‘Mourinho directs his troops’ copyright Flickr user Ronnie McDonald. Used under Creative Commons.

As a Chelsea supporter the team’s poor start to the Premier League season has been hard to watch.  Having won the Premier League title last season, this season the team stands at 15 out of 20 teams – something unheard of for a team of generally used to be in the Top 3.  They keep on losing and losing badly and the normal action of owners in the premier league when a team’s performance declines precipitously has been to fire the manager.

How things play out in the next month at Chelsea will determine how it will go for the next five years.

A common problem

As somebody who coaches CEOs on both leadership and management the challenges facing the club are commonplace within large organizations.  CEOs have big plans which they expect their managers to deliver.  Abramovich’s vision for the club is one of long-term domination of the game. He has also stated that they must achieve a Top 4 standing in this years league in order to be eligible for the Champions League Tournament the prestigious European Knockout competition for the top clubs.

As in many large organizations the problem is largely one of differing expectations and unclear accountabilities – the vision determines how managers manage, rather than management successes being seen as a means to the long-term vision and when things don’t go to plan the Chief Executive applies pressure on managers to perform, rather than trusting in the talent and creating an environment, in which they can do their best work.

This environment cannot be created while the threat of being shown the door hangs over every performance. Abramovich has demonstrated leadership and set to rest any suggestion that Mourinho’s future at the club is in doubt – at least in the short-term.  He then needs to allow his manager to manage the talent available to him in order to deliver both the short-term league success and the owner’s long-term vision.

Blame the manager

Chelsea have had 11 managers in as many years.  The Club’s board has never seemed to take a long term view and as a result appears despite the huge capital investments made in talented players, is incapable of building an organization with the long term potential to become a world class soccer club – a force to be reckoned with. Does Abramovich support a culture of deliver or die or does he create a culture that enables his manager – a manager with a huge track record of success and is loved by all the Chelsea fans – to be given space to address the challenges of his under performing players.

Chelsea Football Club is a business.  A large business with major capital investments.  Its employees need consistency and stability to deliver results.  Abramovich needs to ensure that the “current storm of losses” can be managed through.  His employees need consistency, stability and clarity if they are going to deliver results.  The last thing he should do now is throw his manager overboard.  He does that and yet again any possibility to build and implement a long term strategy is ashes.

Having done this the confidence this will be achieved, of both the manager and his players, should improve.  As a result, the on-field performances are likely to improve and.  This was unlikely while there was a question over Mourinho’s future.

I think this is the right decision.

Leadership & Management

Solving the problem at Chelsea requires both leadership and management. It requires Abramovich and Mourinho to work together, rather than independently. Turning things around on the pitch needs to be Mourinho’s accountability.  Creating a culture that allows him to do it requires Abramovich to demonstrate leadership.

So WinterKorn is gone and about time too!  As Harry Truman was so clear about, whatever happens “the buck stops here”.

What happened at VW appears to have been a complete breakdown in management accountability.  Managers must know what their direct reports are doing. Winterkorn, apparently, did not have his fingers on the pulse of his  organizations   How could such a large and long-lasting fraud be perpetrated in a company of seemingly such calibre. He clearly needed to dive and probe more.  Be more hands on.

It’s easy to say in retrospect, but an important lesson to the many other CEO’s who run large companies

My experience working with CEO’s is that many do not know how to manage large groups of employees.  Often they delegate this management work to HR or a COO and distance themselves – or worse – abdicate from their accountability to manage the company.  To manage a company is to know what is going on.

Where was Winterkorn!?  This diesel scam was too large and had been in place too long for a CEO to miss it, surely? Winterkorn was known as the engineers engineer, and to be hands on in development…the sudden transformation of the diesel engines performance to meet US specifications must have made him questions how at some point.  But what management processes and structure had he put in place to help him.  How did he allow a cultural dysfunction to grow and suffocate the integrity and ethics of a great company.

It is clear he did not concentrate on one of his core accountabilities: to manage his company.  He failed to build a structure of accountability ,where employees were managed and held to account to perform to negotiated goals with transparent measurements of success.  He did not build a set of required behaviours that were enshrined in policy for all employees to understand and hold them accountable to work within them.

Sadly for his employees, shareholders and customers he missed the management boat.  The costs speak for themselves!

A CEO is accountable for all the behaviour and results of their company.  Today VW CEO Martin Winterkorn admitted that the company he is the chief executive of had mislead both regulators and customers. How is it possible for a global company fraudulently installing software in their cars to deceive their customers and regulators without the knowledge of the CEO?  This scam, due to its scope and scale, had to have the ear of senior management.

Volkswagen wants to be the largest automaker in the world, but how dare they have this aspiration when they get caught in such a sophisticated scam that is so stunningly deceitful. A company has an accountability to serve the communities it works and sells in.  It must demonstrate responsibility and care to this community.   When it breaks this bond of trust it loses it right to serve these communities.

Today VW launched a mea culpa PR initiative in the US.  The strategy being if you say sorry your customers will forgive you.   I believe this goes deeper….the company is sick and there must be consequences for this failure.  Winterkorn has, it is reported, refused to quit.  If the board is serious about ensuring this never happens again it needs to fire him when it meets later today.  Only then can they start a process to eradicate a culture, led by their CEO, that produced such duplicitous behaviour.

If they do not nothing will change.  How dare they fail to hold Winterkorn accountable for this scandal.

Reading @AndreaFelsted‘s piece yesterday in the Financial Times about Tesco one year in to Dave Lewis’ tenure as CEO, I was reminded of the piece I wrote on the importance of management in turning around the former UK retail heavyweight’s fortunes.

It is clear that Mr Lewis has failed to manage.  He destroyed the contract of trust by cutting thousands of head office jobs.

A CEO who cuts employees is an abject failure – his/her strategy did not work & employees pay the cost. Mr Lewis inherited this mess, so conveniently he can sidestep the strategy issue, but the fundamental problem remains: that he further strained the contract of trust while negotiating his compensation package.

Why would Tesco expect anything else from their employees but distrust, disconnection, cynicism and low morale?

Learn how to master the craft of CEO management at

When some of  your employees start referring to themselves as robots something is badly wrong. If the content of the New York Times article, “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace”, is even partly accurate Jeff Bezos and his management team have their work cut out to re-correct for the long term. Given Amazon’s drive to introduce more robots in to its workplaces and its 2012 acquisition of Kiva Systems – a startup that used robots to pick products at distribution centres – you have to wonder whether it is all part of Bezos’ grand plan. Bezos needs to quickly clarify and rebrand his companies human resource policies to ensure his staff that they will not just become cogs in his mechanized automated retail delivery processes as he ruthlessly drives for greater productivity.

I recently spoke with former Canadian Tire Acceptance CEO, Jos Wintermans about the mistake many CEOs make when looking to improve productivity

How an organization behaves is the sum of the structure, processes, policies and management practices employees find themselves in.  This starts with senior management. Amazon’s current culture is a fundamental failure of management.

In successful companies, employees are held accountable to behave in a constructive and contributive way within the communities they serve.  Employees who join these companies grow in confidence and self worth living a life that will benefit the communities they live in.  At Amazon this appears to have broken down.  Sure, there are many employees who will love this environment but overall the fanatical pursuit of productivity is coming at a cost that could derail the company in the long term.  Working there sounds dystopian.  The description in the article does not make it a friendly, kind or supportive place to work – unless you are a robot.  Bezos and his senior management team have created a detention camp with rules that pitch employees against each other and processes that enable them to undermine and deep six each other!  Does he truly understand the systemic impact of all his policies, and the behaviour it elicits from his employees in the workplace. I think not

The company’s “Anytime Feedback Tool”, for example, encourages employees to give positive feedback to peers but also enables what, according to the New York Times, “workers called a river of intrigue and scheming – making quiet pacts to bury the same person at once or praise another lavishly”. Its initial intent may have been positive – but it was also naïve, and sets up a system that erodes and undermines trust.  It is company-sponsored victimization.  Reading the New York Times article also suggests that meetings have become “gladatorial” – the sword of axe now being replaced by data wielded in an aggressive and relentless way to push your idea through to victory.

Alan Huggins, former CEO of Lowes Canada, and Vice President of International Operations at Lowes in the US explains that the CEO plays an important role in the creation of company culture

Effective management provides failsafes to ensure that this kind of behaviour doesn’t happen. The management systems, processes and practices at Amazon appear to create an environment for it to flourish.

While Amazon has been hugely successful on paper my worry would be it has built a culture, and a way of doing business, that is dangerously short-sighted when it comes to its employees.  With this implacable pursuit of productivity – who working at Amazon can feel they have any long term security? Most managers lack the skill to implement this strategy effectively and will continually find themselves in a Catch 22: letting employees go they think are rather good, and unable explain the reasons for their firing other than the “system made me do it”.

Mr Bezos is in danger of creating a meat-grinding machine full of highly capable employees who fail due to the system they find themselves in. Some of the policies described in the article and and the behaviours they have manifested would make the STASI proud. That is not the recipe for a successful company long-term – whether or not your employees are robots.

Mr Bezos needs to step back and do the following:

  • Understand that it is his work alone to build an environment where all his employees can do their best work.  He does not delegate the creation of this strategy to HR.  It is the most important work he has on his plate at this time given the huge number of employees he now has and success of his company depends on how effectively he leverages this asset
  • Understand that CEO management requires him to integrate, and align the  structure, processes and policies he needs to put in place in his workplace to create the positive behaviour he wants.
  • Identify and root out all the processes and policies that presently propagate distrustful and manipulative behaviour amongst employees
  • Build a management team around him who understand his revised people strategy and value its philosophy and importance of implementation
  • Be very thoughtful about productivity enhancements and their impact on the larger workforce
  • Never forget humans are not extensions of machines.  Amazon has an accountability to better the communities his employees work in

Jeff Bezos’ pursuit of ever increasing productivity and innovation balanced with high morale and employee growth is not a new challenge.  But if he is going to be really successful he needs to make it his own work and not delegate it to lieutenants armed with data and HR – as many of his peers do.

About the author

Nick Forrest has spent more than 30 years working with senior executives of large organizations helping them better manage large groups of people.  He is a keen scholar of military leaders and an avid collector of Penguin Classic paperback books.

One of the highlights of Management Today’s coverage of its #MTLive event recently was hearing from Andy Street, CEO of UK retailer John Lewis Partnership.  Street is, by the publication’s measure, Britain’s most admired business leader.

Reading his comments and, subsequently, a series of articles written about him it’s not hard to understand why he is most admired. But he is, first and foremost, a Manager not a Leader.

In one Management Today piece Street attributes his success to strength of the business model he inherited; a business model created by the founders son in 1929 and adhered to ever since. Street is the steward of this model.  He is accountable for creating and executing a plan that allows the company to prosper.  And, prosper it has.  While many UK retailers have struggled in difficult trading conditions and increased competition from low-price retailers John Lewis’ premium business has weathered the storm better than any other.

How has it done this? Andy Street says he thinks it is in large part down to the culture of the organization. “People trust organizations because of a sort of total peace around the organization. So we want to be perceived as an organization that’s a good employer and has a fair approach to pay, for example”, he told the publication.

John Lewis are renowned for their staff’s morale and engagement. This requires clarity – everybody must know what they are accountable for. This requires direct, truthful, conversations; sometimes difficult ones. This also requires transparency. But, most importantly, it requires management.  Most companies struggle to create a culture where employees are engaged and inspired.  The most common cause is not a lack of a leader – somebody pointing the way – but the lack of a Manager.

The Partnership in the John Lewis name means that all employees share in the profits. You might think that having partners might make direct truthful conversations about corporate and individual performance – and applying consequences – in a transparent way difficult. But, says Street in his #MTlive interview, it makes them easier.  Management and employees at John Lewis are able to have direct truthful conversation that are accepted and understood by all – and this produces significant competitive advantage in innovation, customer engagement and strategy execution.

Creating and maintaining this culture doesn’t happen by accident: it starts at the top – with the CEO and senior management team. Creating it is easy; maintaining it is incredibly difficult. It requires continual management.

I believe Andy Street should be recognized as Britain’s Best Manager – a far greater accolade in my book than the one already bestowed on him. He doesn’t just point the direction, he manages the organization to ensure it achieves its goals for the benefit of every single employee.  I call it CEO management.

Dear Dave,

I know, ‘Every Little Helps’, but that doesn’t include employees pension contribution and pay!

You have too rich a compensation package for the results you’ve achieved so far Dave. Nobody is worth £4m for six months work – especially the six months you’ve had.

Your employees will only thrive under quality management that is fair and respectful. If, as the papers speculate, you’re after their cash, while you and your board squabble over million-pound claw backs and lucrative pay packages the optics will look awful. Not to mention the impact on your employees’ morale.

DON’T DO IT, DAVE! Please.

Nick Forrest

CEO, Dare To Manage