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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!

Recently I was discussing the meaning of leadership and management with a CEO and how do describe the difference.  She uses a sports analogy that I thought was very good.

She  explained that leadership was a key skill to exhort, encourage and energize a group of football players before they started playing the game.  There are countless movies which portray leaders literally “exhorting their players to achieve the impossible” – I was told Al Pacino’s speech in Any Given Sunday is a great example so I checked it out.

Distil this to a business context and lead with the energy you feel comfortable with and  I believe this is a great definition of leadership. “I have a dream, you are part of a bigger enterprise and if we  all truly believe in the end goal we can achieve incredible things”.  Just say it in your own preferred manner and be authentic about it.

But, once they hit the football field it is all about management.  What is the plan of plays to win the game. You win a game of football by moving the chains forward.  The chains represent two measuring sticks attached to 10 yards of chain.  Ten yards is the required distance a team must achieve in four plays if they wish to retain the ball.  This allows the referees to accurately measure the yardage required if the distance becomes marginal before a play.  Teams that win focus on moving the chains forward – inch by inch, yard by yard – in order to achieve their goal.

This is only achieved with considerable planning.  The acquisition of the right talent, the integration and building of a team, clarity of everyones role on the team,  the development of the training process ensure the team is fighting fit, the planning of all the plays. There’s continual practice.  Practice, practice, practice until the plays are executed flawlessly.  There are truthful conversations about performance and the firing and hiring of replacement talent and finally the achievement of results so tangibly demonstrated each weekend.

Success in life as well as sport is achieved  by moving the chains forward.  It requires the tenacity and perseverance that builds unique success to those that will get the basics in place and then grind it out with passion.  Nobody ever said it was easy, but it can be superbly satisfying  at times.

Most companies suffer from a surfeit of leadership. What they need is management to ensure things get done. I mentioned this when talking to a group of senior managers recently who are accountable for the work of 2500 employees and received quite an energetic reaction.

I explained that this is because most managers have been told to lead their division or team. But to start with, most managers cannot define the difference between leadership and management. Leadership work is creating the company’s/department’s vision for the way ahead and engaging and enlisting their employees to help build this future. Management is the design and management of their employees’ environment to maximize their capability  to do their best work. Managers need to do both.

Leaders often don’t roll up their sleeves to do the slogging work of management.  They make a lot of noise but nothing comes down the stairs!  Nothing significant really changes to their employees immediate environment to enable employees to work more effectively and efficiently within the system they find themselves.

I believe that leaders who only focus on inspiring great work are not as successful as those managers who focus their efforts on helping their employees achieve the great work that they want to accomplish. Senior executives need to sharpen their senses to identify what prevents employees doing their best work. They need to be experts as removing these barriers.

Most of us arrive at work eager to contribute, create and be part of something successful. If our senior managers are effective, we will be able to continue with that enthusiasm and get our work done. Yes, I hold the top of house accountable for everything an employee experiences. For example, it is senior managers’ accountability to ensure that every employee is managed by a manager who will treat them with respect and can teach them and enhance their skills and confidence. To do this is not an act of leadership – it is an act of management. To make this happen will require the installation of company-wide assessment systems, frequent and truthful review of managers’ performance. To ensure fairness, all employees require clear goals and measurements against which they can be assessed. Removal from role will happen quite frequently at the onset of this process. These are the nitty-gritty tough aspects of management to get things done right in the company!

Leadership is often not the answer to solving the pain in a company. It requires management.

 

Executive assistants are the unsung heroes of the corporate workplace. Undervalued and all too often ignored, their contributions to the success of the people they support is incalculable – and yet usually forgotten.

How gratifying, then, it is to hear someone say, “I am where I am today because of my executive assistant.” That person recognizes the organizational efforts of their EA.

Over the years the titles may have changed – Girl Friday, secretary; administrative assistant; executive assistant; corporate secretary; office manager; administrative coordinator; even chief of staff – but the essential duties remain the same. The role exists to serve and support in every way possible senior business leaders. Without a capable person occupying this role, the executive will not be as organized and effective as they could be.

This relationship is exceptional and when successful, immensely strong and focused. The CEO has their own goals they want to achieve – and the EA’s all-consuming goal is to help accomplish them. The executive assistant values work and she values the work of her boss. Conversely, he knows that without her, he may not be able to reach his goals. There is no doubt that he values her work.

Nick Forrest

To paraphrase (badly) Jane Austen, it is a truth universally acknowledged, that the end of the year brings introspection.

Let’s not get into new year’s resolutions, which almost always begin with enthusiasm and end in ignominy. But it may be salutary to assess what you have learned from the past year, and celebrate, recalibrate and plan for the following year.

Find some free time and ask yourself these questions – and write down your answers.

The past year:

What were my biggest successes in 2014? What were my biggest setbacks? (Keep both to a maximum of three.)

What are my biggest strengths? How can I leverage these strengths in order to overcome challenges?

What did I learn in 2014?

What did I lose track of in 2014? (These could be relationships or commitments.)

The coming year:

Looking forward for 2015, what will make it a successful year for you? (You need to define success in order to set goals and know when you’ve arrived.)

What needs to be cleared up?

What relationships require your focus?

Having answered honestly the above questions, you may wish to revisit your answers at least quarterly during the coming year to measure your progress. And remember, success means many things to different people.

Happy holidays!

Nick Forrest

A friend told me this story.

He heads the IT department for the Canadian division of an international telecommunications company that has more than 60,000 employees worldwide. Four years ago, in preparation for a proposed merger, the executive management decided to divest itself of several functions. Accordingly, IT, facilities management and a few other bits and pieces were all outsourced.

My friend found himself working for a company to whom he felt no loyalty, reporting to a invisible and practically unreachable manager at the other end of the globe. His benefits and salary were cut, but in these difficult times, he considered himself lucky to have a job. So he soldiered on.

Two years after the outsourcing move, the telecom company reconsidered its decision. The merger had gone through, but the anticipated savings had never materialized. Worse still, due to the presence of a middle organization, IT projects proceeded at a glacial pace and duplications of work abounded in a confusing mishmash of divisions and functions. So the telecom decided to rehire all (well, almost all) of its IT people. Naturally, the clock reset itself for these people in terms of seniority and other benefits.

This month, my friend has just been informed that with a new CEO at the helm, the decision has been made to – surprise! – outsource IT yet again. The message from the top is that this is being done “to promote efficiency”.

If my friend still had hair (sorry, mate), he would have torn it out by now. Once again, the employees with the least amount of control over their working environments are having the stuffing kicked out of them.

My friend tells me, “Nick, I’m good at my job. I encourage innovation within my team. I bring projects in on time and on budget, with the resources that are allocated to me. But it often seems I do this despite hindrance from upper management. I know that they will do anything, absolutely anything, to save a buck. They don’t care about their employees, even though their website states, ‘Our people are our greatest asset’. They are disconnected from the reality of our business, and incapable of communicating with and supporting their employees. It’s like working for morons! My resume is up to date and if I can get something elsewhere, I am gone.”

Does this sound familiar? I’m sure many of you have heard versions of this sad tale. Maybe you have lived through something like it yourself. And I can’t believe, that with all the knowledge that we have, with all the management books that have been written, that the same mistakes keep happening, over and over again.

Next week in Part II: I’ll explore some of the reasons (and a different point of view) for this uncomfortable situation.

Nick Forrest

“It is easy for us to sit here and take potshots at CEOs who put their stock price and their shareholders before their employees.[…] But that’s their fiduciary duty. They have a duty to their shareholders, legally, before almost anyone else, and certainly before the employees. The employees are just assets.”

Reading David Berman’s recent article, “Greed still works“, in the Globe and Mail’s Report on Business I was struck by how many CEOs still don’t see the relationship they have with their employees as sacred. In the article, Berman interviews Bryan Burrough, the author of Barbarians at the Gate: The Fall of RJR Nabisco, a seminal book that explores the backroom deals that featured so prominently (and infamously) in the late 1980s’ leveraged buyouts.

It was a good read when first published, and it’s still a great book – pick up a copy if you haven’t already – but the above quote made me stop and think. Thirty years on the majority of CEOs still don’t appreciate the importance of the relationship they have with their employees. CEOs have a duty to provide an environment where employees can do their best work, which, in turn, helps to deliver value for shareholders.

In my recent conversations with CEOs and senior executives of large companies, all of them were crystal clear in stating that businesses exist to make a profit – no-one disputes that. But perhaps the “greed still works” title of the piece is misleading. What shone forth with every word spoken by the executives I interviewed were the strong links everyone had with their employees. These are critical to the success of any organization.

I’d argue that while many see employees as liabilities on the balance sheet, effective CEOs see them as key to the fulfillment of their fiduciary responsibilities to shareholders. Without productive, well-managed employees it is impossible for the core function of a business to operate.

Each and every executive I spoke with recognizes this. Employees bring value to the business, and the person at the top is accountable for providing a work environment that engages every employee.

Nick Forrest