Category: Corporate Strategy


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 www.howdareyoumanage.com

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

 

A key first step to managing large groups is to be clear on your strategy and be able to quote your Vision and Mission statement from memory. When talking with a group of 25 CEOs last week about how to manage large groups of employees a considerable number of these CEO’s,  to my surprise, could not do this.
I did not expect managers at this level to fail in this exercise.  But am I being naive? How many senior executives have their Vision and Mission statements memorized cold? How many are able to refer to it mentally as a guiding reference for all they do on a day-to-day basis?

The problem is many senior leaders regard their Vision and Mission as window dressing – something they need to have but do not really value.  Take some time to read a few: many are excruciatingly obtuse.  Yet these are the two statements
that are supposed to give context and direction (what businesses we can and cannot be in) for everything done in a company to achieve the strategy.  The apparent failure of CEOs and senior managers to know their Vision and Mission off pat could explain the poor performance of many household brand companies.

I think I stumbled on a real opportunity to improve alignment and corporate performance.  Knowing and understanding the Vision and Mission is the accountability of every manager in the organization.

Have you committed your Vision and Mission to memory?  What about your senior executive team? What role does it play in helping you manage large groups of employees?

Share your Vision and Mission below and I’ll send you a condensed version of How Dare You Manage? 7 Principles Every CEO Needs for Managing Large Groups of Employees.

Last week I read about the sad findings in Gallop’s most recent “State of the
American Manager” Report.  It’s an interesting – if depressing – read.  It got me thinking about the core skills of
management talent.   These are:

* Motivator
* Assertiveness
* Accountability
* Relationships
* Decision Making

According to the report, the majority of managers fail every one.  On the face
of it they do not look that complicated, so let’s examine them and try and see
where most managers are going wrong.

1. Motivator:  They challenge themselves and their teams to continually improve
and deliver distinguished performance.

You’d think that this capability should be found in most management candidates.
It is not hard to see if someone is interested in accomplishment and
improvement.  Just look at their past history and how they have improved
themselves.

2. Assertiveness: They overcome challenges, adversities and resistance.

Have you put someone in a role where they will be overwhelmed?  How big are they
for the role?  You need someone who can get the arms around their management
role.  If they feel overwhelmed they will find it hard to be assertive.

The choice to put them in a role is the sum of their manager’s discretion.
Often this discretion gets undermined by weak objective measurements that
enable shoddy thinking and poor choices.

3. Accountability:  They ultimately assume responsibility for their teams ‘
success and create the structure and processes to help their teams deliver on
expectations.

If you hold a manager accountable for the outputs of their employees you will
get the above.  There can be no “Teflon Management” if a manager is held
accountable for their team’s output.  “There is nobody else to blame for poor
performance so I had better get on with building the best team I can and support
them with the required structure and processes”

4. Relationships:  They build a positive, engaging work environment where their
teams create strong relationships with one another and clients.

All of us know and can judge if someone can build relationships.  How dare you
put managers in charge of people when they don’t like people!!!!   It just a
fundamentally flawed decision that builds dark satanic mills – awful places to
work.  It is unconscionable act of lousy management

5.Decision-Making:  They solve the many complex issues and problems inherent to
the role of thinking ahead, planning contingencies, balancing competing interest
and taking an analytical approach.

They need a brain to do this!  Do not put a manager in a role who is not capable
of handling the complexity the work.  They will be overwhelmed, unable to sort
things out and delegate effectively to their employees.  These employees will
also work out quickly that their manager is “too stupid” for the role and cannot
help or team them much if anything.  It raises the odds of them disengaging from
their work pretty fast.

The truth is that none of this matters much unless the CEO and their Executive
really engage and care about structuring work of their company and staffing it
with right management capability and holding them accountable for effective
performance.  And, while the five dimensions of effective management might
appear common sense, Gallup says that in a whopping 82 percent of cases
organizations choose fail to choose the candidate with the right talent for the
manager job.

This is an abdication of CEO Management.  It is a shame and creates a wasteland
of human talent as described by Gallop in their 2015 report. The sad fact is
that as ill equipped most managers in large organizations are, it starts with a
basic CEO skills gap.

Closing that gap MUST be the priority for the majority of large organizations.

If you’re a manager Gallup’s latest “State of the American Manager” is painful
reading. Our profession is full of incompetent, overwhelmed managers who do not
care for the role they have chosen. As a result, they inflict pain and
suffering on those they are supposed to be managing. Only 35% of managers
are engaged, 51% are not engaged and 14% are actively disengaged.

In his introduction Gallup CEO Jim Clifton pulls no punches. “Most CEO’s I know
don’t care about their employees or take and interest in Human Resources”.  This
disinterest and disengagement costs the US economy $319 billion per year.

The report states that their research showed 1 in 2 – HALF of US employees left
their job to get away from their manager and improve their personal life at some
point in their career.  I can testify to that – it happened to me twice in my
early career. The report says that just 30% of workers are engaged in their
work and connected to their company.

I believe all employees have right when hired by a company to be given work that
grows their self-confidence and feeling of self worth. This is a common sense
and win-win for both the employee and the company. But, it requires managers
pay attention to their employees, manage them with respect, give them work that
interests them and enable them to learn and grow they will get higher levels of
engagement and quality of work.  It requires a framework for managers to acquire
the skills they need to manage large groups of people effectively.

The opportunity for improvement is massive. What CEO’s and their executives
think their management work is I do not know, but Gallup’s report suggests they
need to find out. And quickly!

This is a question I have asked hundreds of Chief Executives over the years. I’m always fascinated to hear how they describe CEO work.  Most can’t answer this question succinctly or clearly.  Many have “bits” of an answer. Few could describe a comprehensive integrated management process that can be communicated in a comprehensive manner to their senior executive team.

Another question I’ve asked repeatedly over the years is, “what is the difference between leadership and management?”.  It leaves most floundering. Many have been chief executive officers of large organizations for many years, managing thousands of employees, but the majority have clearly not taken much time to consider the difference.  These CEOs end up being neither a manager or a leader, to the detriment of their own personal performance and that of the organizations they spearhead.

Their failure to differentiate between leadership and management also means they cannot define clear expectations for either.  Predictably, without clear definitions, their senior executives manage inconsistently.  This, in turn, leads to a lack of clarity for front-line managers and employees.  It ends up becoming a vicious circle.

The problem is that when you take on the management mantle of CEO of a company, the assumption is that you have all of the skills necessary to do the job.  As the chief executive of an organization it is assumed that you have the training and experience to help your organization fly with the same level of confidence and expertise a 747 pilot sitting on the runway with a fully loaded plane of passengers preparing to take off. The reality is often very different!

A 747 pilot is prepared for the job.  They’ve gone through a process that, to reference Malcolm Gladwell, has involved thousands of hours of practical experience. They will also have piloted the plane as First Officer under the tutelage of the Captain on many occasions.  A new CEO, on the other hand, often has not had the hours of job-specific training, nor the extensive study of the theory, principles and processes they need to effectively manage a large group of employees.

Many CEOs also take over accountability for their ‘aircraft’ in mid-flight! They often take over when something has gone wrong, usually something serious.  Yet, they are then expected to diagnose the problem, fix it, file a new flight plan, change heading and land safely – often at a destination that was different from the intended one. They are expected to do all this while learning how to fly a plane they’ve never flown before.

Thank heavens a company never leaves the ground!

From my experience, part of the success of a new CEO is the ability to provide their managers with a philosophy, a set of principles, processes and disciplines, and demand they practice them to an exemplary standard with clear accountability. It is the only way to attain a level of performance within their organization that enables everybody to perform to their best work.

I define this process as the Craft of CEO Management.  A Craft, since the Middle Ages, has been the lifelong pursuit of mastery in a chosen profession. For chief executive officers the profession is CEO management. It presents an opportunity to choose a management philosophy, structure, set of principles, processes and disciplines and then practice using them for the rest of their career.

A Chief Executive must strive to be a master the Craft of CEO Management.  Mastery of the Craft represents the single greatest great opportunity for performance improvement for senior executives.  Those who take on the challenge; reflect on it; learn from it; and integrate all the management work of their company achieve higher levels of engagement and better results.

Those CEOs who avoid this essential management work are unable to execute their duties to the best of their capability.  The performance of their organizations suffers because they are unable to get the best out of the hundreds of employees they manage.

So, do you dare to master the Craft of CEO Management? Which philosophy will you choose?

Nick Forrest