Category: Strategy


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.

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.

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.

Last week Gord Nixon, President and Chief Executive Officer of the Royal Bank of Canada, announced he was stepping down after thirteen years of service. This generated considerable discussion in the media as to the timeliness of his decision.  Is this too early?

Mr. Nixon has been a very successful CEO, producing results for the bank well above the TSX average and cementing its position as the dominant Canadian bank. He took the job when he was 43 and since then has quietly transformed the bank, adhering to his vision.

Here is the issue for me, given the size of the bank, its 54,000 employees and the amount of capital invested. Gord Nixon has created forward momentum similar to that of a fully laden oil tanker steaming through the ocean. It will take a lot of energy and distraction to change this direction. Stepping down now is not, I believe, in the best interest of employees or shareholders.

As RBC is a sizeable organization, its CEO should have developed a strategy that looks out 30+ years, and this should become a rolling 30-year plan. Mr. Nixon has only been implementing this strategy for 13 years, and implementing it very successfully. The bank is now garnering the rewards of his strategy. Figuratively, why rock the boat? Employees thrive in an environment that provides them with consistency and clarity. Mr. Nixon is obviously providing this. He should be given another four years to protect his thousands of employees from the distraction of adjusting to the ideas of a new CEO, instead of remaining steadfastly focused on implementing the current strategy.

Nick Forrest