Can You Have the Perfect Team?

Following on from the 18th December, I found a great article by Saj-Nicole Joni and Damon Beyer (2009) where they remind us that “when Doug Conant left his job as president of Nabisco to take on the CEO role at Campbell Soup in 2001, he stepped into the wrong fight. Campbell was one of the world’s poorest performing food companies, and its managers were consumed by infighting over who was to blame. Conant understood that his immediate priority was to manage internal and external tensions the company was facing, while fundamentally rebuilding employee morale. In his first 90 days he set out to create what he called a tapestry of expectations, so everyone in the organisation could know where the company was going,” (p.54).

Interestingly, in an interview with Dianu Coutu, J. Richard Hackman the Edgar Pierce Professor of Social and Organisational Psychology at Harvard University mentions that “most of the time research shows that team members don’t even agree on what the team is supposed to be doing. If the leader isn’t disciplined about managing who is on the team and how it is set up, the odds are slim that the team will do a good job,” (p.100).

Hackman gives leaders five tips for how to build a team;

1) Teams must be real. People have to know who is on the team and who is not. It’s the leader’s job to make that clear.

2) Teams need a compelling direction. Members need to know and agree on what they’re supposed to be doing together. Unless a leader articulates a clear direction, there is a real risk that different members will pursue different agendas.

3) Teams need enabling structures. Teams that have poorly designed tasks, the wrong number or mix of members or fuzzy and unenforced norms of conduct invariably get into trouble.

4) Teams need a supportive organisation. The organisation context – including the reward system, the human resource system and the information system – must facilitate teamwork.

5) Teams need expert coaching. Most executive coaches focus on individual performance, which does not significantly improve teamwork. Teams need coaching as a group in team processes – especially at the beginning, midpoint and end of a team project.

Part of the problem with team performance is, as I’ve mentioned before, organisations seem to focus on individual performance much more than ‘team’ performance. Individuals are formally appraised, yet few teams get the same formal appraisal. Training and development programmes are developed around individual needs, yet rarely developed around ‘team’ needs. So until teams are appraised and developed as an entity, then one is unlikely to see optimal team performance – which implies suboptimal team decisions.

Richard Hackman highlights that ”the challenge for a leader is to find a balance between individual autonomy and collective action. Either extreme is bad, though we are generally more aware of the downside of individualism in organisations, and we forget that teams can be just as destructive by being so strong and controlling that individual voices and contributions and learning are lost. Where, for example, being a team player can be valued so strongly that individuals self-censor their contributions for fear of disrupting the team harmony” (p.105).

The ‘perfect’ team should be assessed by its output rather than how harmoniously it works together. A team should be looking for constructive input and to be challenged, so that it can consistently come up with the optimum solutions for the organisation. That will mean on occasion there will be strong disagreement about the way forward, not because a group or individual is wrong, but simply that there is often more than one business approach that will give the sought after outcome.

As Joni and Beyer state “it’s time to stop candy-coating what’s taught to executives and their direct reports. It’s time to stop pretending that conflict-free teamwork is the be-all and end-all of organisational life. It’s time to own up to the truth that the right balance of alignment and competition is what pushes individuals and groups to do their best. Let’s be clear; alignment is important, but the purpose of alignment is not harmonious agreement. It is to sustain an organisation’s ability to fight for what really matters, and to pull everyone together again once the fight is over,” (p.50).

References

Coutu, D and Beschloss, M. (2009). Why Teams DON’T Work. Harvard Business Review, Vol. 87, Issue 5, p.98-105.

Joni, S.A. and Beyer, D. (2009). How to Pick a Good Fight. Harvard Business Review, Vol. 87, Issue 12, p.48-57.

What Makes a Great Team Member?

It was 4am when the executive team eventually finished preparing for the group budget presentation that was to take place to the shareholders in only 6 hours’ time. They had started 16 hours earlier at midday – when the CEO had called his executive team together for what was supposed to be a final run through of the budget and the presentation. Yet as with many things in business things didn’t go to plan.

Now the sceptics will criticise an executive team that haven’t got their budget sorted out the day before the presentation to the shareholders – and you’ll be glad to know the executive team would be as critical as you, being very disappointed with their performance.

But this isn’t about the process but the team that I witnessed sticking together till 4am in the morning – 11 executives, 1 business analyst, 4 finance personnel and 2 executive assistants – all working together to get the job done. There was no ‘huffing and puffing’, no sulking, no angry words, just a group of people wanting to get the job done. It was very special to watch. Having woken up at 3am that morning to catch a flight for the meeting – I was definitely the grumpiest person there by 1am.

So what did each of them have that made them great team players that night? One thing that really stood out was the passion and the pride in the task at hand – they could have taken short cuts or simply finished earlier, saying enough was enough – and many teams would have, but they didn’t – they stuck it out. This highlights the need for discipline and patience: Where discipline allows the team member to focus on the task at hand and to see it through, without ‘negative’ distractions.

They clearly respected each other and though there were people there with different ‘pay grades’ that didn’t seem to matter as everyone ‘mucked in’ to get the job done.

The leader stayed calm and focused – not offering an easy way out – and the team followed him out of respect (and knowing that what was eventually presented would also reflect on them).

I’d suggest that it should be the aim of every individual within every organisation to support and develop a winning team culture. Operating in today’s business world, where we find ever increasing complexity and continual change in the competitive landscape, organisations need to rely on their executive, management and other related business teams for effective decision making, continuous improvement and sustainable growth.

It’s said that every winning teams requires;

 A common direction; a shared understanding of goals and values;

 Skills of interaction to solve complex and diverse problems;

 The ability to continually challenge themselves and expand their capabilities in response to change;

 Focus on team and organisational performance, above individual performance.

 The commitment and culture to develop a winning team.

But maybe one of the hardest things is to have a team where all the team members are all as dedicated as one another - and can all be relied on, when the times comes, to step up and support each other.

One can’t describe in words what I saw that night – it wouldn’t do justice to the team and all the individual members. But I will never forget get it, as it was a team working in perfect unison towards a required goal, at a time when they were all tired and had other things to do (like sleep). The outcome was a great success and though exhausted they all attended the budget presentation at 10am that morning – it was a five hour meeting, finishing at 3pm (as we’re talking about an organisation owning 60 subsidiaries in 17 countries in Europe). But the conclusion was that the budget was signed-off by the shareholders and the team went home for some well deserved rest…..

Are You Happy to Admit That You Don’t Know, What You Thought You Knew?

I remember some wise words given to me by the head of the South African College of Applied Psychology many years ago, when he told me that “it’s not what we know we know; or what we know we don’t know that causes us problems in life – it’s when we think we know things we don’t actually know, where the problems begin”.

Being able to be honest with ourselves about what we really know and what we think we know should not only a requirement of humility, but a genuine requirement of effective leadership in any role.

In fact most of the major leadership disasters through the centuries have been when the leader was too arrogant to realise that they didn’t really know, what they thought they did – leading them to make incorrect decisions that led to disaster. The worst fact behind the arrogance is even after the disaster – these individuals often wouldn’t admit they made a mistake. This doesn’t just relate to leaders in business, but leaders everywhere, including the role of parents.

To put it all in perspective a good example comes from Donald Rumsfeld who said “reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know” and if that statement is clear enough he also said “Secretary Powell and I agree on every single issue that has ever been before this administration except for those instances where Colin's still learning.” – Absolutely classic and it’s scary to think that this comes from a former Defense Secretary of the USA, yet this shows the true extent of someone being too arrogant to admit what they really don’t know.

It was Confucius who said “real knowledge is to know the extent of ones ignorance” words of wisdom that should be part of everyone’s value set – yet does the pressure to appear successful encourage many people to ‘defend’ their ignorance rather than embrace it and learn from it?

One of the classic examples of leaders thinking that they knew something they didn’t is encapsulated in an 1876, internal memo within Western Union that read “this telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” Classic – a real example of arrogant ignorance sending an organisation down the wrong path.

Although this basic principle of being honest about what we only think we might know applies to everyone from teenagers to pensioners – the most important place for people to be honest about what they really know, and what they just think they know, is at the board level of organisations. These are the strategic leaders of the organisation, who should be identifying future opportunities and defining the vision and culture of the organisation. This will never be done effectively if, at this level, the strategic leaders are assuming things that they simply don’t know.

Today’s leaders need to be honest with themselves if they want to really optimise their organisations future growth and set the example for others to follow. The ability to be honest about what we do and do not know is not only a fundamental requirement for effective leadership, but a basic requirement in order to earn the respect of others.

It's a principle we all have the power to adopt immediately - since if we can't be honest with ourselves, who can we be honest with....

Who Really Wants to be a CEO?

In an interesting article in today’s UK Sunday Times, Eleanor Mills, writes that “it is viewed as the pinnacle of any aspiring executive’s career but, according to a new study a generation of corporate high-flyers are saying no to being the chief executive officer. Instead, say head-hunters, the elite of the business world are deciding to put their families first and walking away from the corporate life,” (p.5).

Eleanor highlights the report, Who Wants to Be a CEO in 2012?, in which MBS interviewed 40 high-profile candidates who had turned down senior executive roles, found that business leaders, despite being trained for the top in our biggest companies, are shunning the posts. The pressure to perform under the glare of the media spotlight is one reason for opting out, but lifestyle choices and a desire to avoid the stultifying demands of corporate bureaucracy – so called M&M’s (meetings and managers) – is another.

Her article goes on to say that “the trend is leaving companies with a problem. On the British high street New Look and Mothercare are on the hunt for a new chief executive. Both have been sounding out candidates for months, with no success,” (p.5).

Yet shouldn’t we ask more questions as to why this ‘migration’ might be taking place. Is it possible that with the current economic crisis and the attention of the media our CEO’s and potential CEO’s have been found wanting, in that they don’t have the overall skills required to be successful in the role. The media have always been there, as have big city business analysts, and a good CEO knows how to handle and work with these ‘partners’ – as not working with them is similar to waving a red flag at a bull.

The fact that our current CEO’s might not like this ‘intrusion’ is an unsatisfactory response especially from the CEO of a public company. In fact I’d go as far as saying they should welcome the attention of the media and city analysts and skillfully ‘use’ this attention to the overall advantage of their organisation.

Exhaustion has overcome many top executives who have either bailed or taken leave to recover – Antonio Horta-Osario, Jeffrey Kindler and Joseph Lombard to name a few. But why didn’t these CEO’s have the right team around them to support them – a CEO with the right talent throughout the organisation should never become totally exhausted and will have as much enjoyment as this new bread of CEO’s who are jumping ship for the ‘smaller’ organisation.

A new report by Lauren Leader-Chive on Generation X, would argue that “the definition of what success looks like is changing for this generation. However much money is on offer, if the price is the sacrifice of home time and prized hobbies – it’s not worth it to them.”

Yet while we have our ‘elite’ feeling the pressure and bailing, we see in the same newspaper just 14 pages further on, an article by Jack Grimston and Rosie Kinchen entitled, ‘graduates pay £100 a day to serve as interns’, where they mention that “university leavers desperate for work experience are being charged up to £100 a day by companies offering them internships,” (p.19).

So here we have the two extremes, supposedly the UK’s elite, feeling the pressure and bailing out of the top jobs and at the other end, our potential future leaders working either unpaid, sometimes for months on end, to gain experience and improve their chances of getting a ‘good’ job, or some making the decision to pay to gain experience.

I wonder what some of these youngsters would like to tell the ‘stressed’ CEO’s about real pressure. What we need is to urgently improve our leadership development, so we develop a pool of ‘potential CEO talent’ – individuals who know how to develop the right team around them to ensure the job gets done.

References:

Grimston, J and Kinchen, R. (2011). Graduates Pay £100 a Day to Serve as Interns. Sunday Times, 04.12.11, p.19.

Mills, E. (2011). City Elite Wheel Away from FTSE Highway. Sunday Times, 04.12.11, p.5.

What Does the Term ‘Accountability’ Mean to You?

Henry Ward Beecher (1813-1887) said “hold yourself responsible for a higher standard than anyone expects of you. Never excuse yourself.” I wonder how many political leaders, business leaders and even parents around the world hold themselves to a belief such as this.

Not meaning to be cynical but I see more and more examples of leaders stating they are accountable, until it comes the time to actually be accountable when, too commonly, a platitude of excuses spout forth and ‘we the public’ seem to swallow them every time.

Yet an anonymous source gives the following quote “when you blame others, you give up your power to change.” This is so true, as while one is blaming or misdirecting to avoid ‘ones accountability’ you lose that precious opportunity to be transparent and to implement the actions for change. Since as Dietrich Bonhoeffer (1906-1945) stated “action springs not from thought, but from the readiness for responsibility.”

In fact the truth may be in George Bernard Shaw’s words – “liberty means responsibility. That is why most men dread it.”

An interesting way to look at Accountability is that it starts with Action and ends with You: -

A – Action

C – Commitment

C – Culture

O – Ownership

U – Understanding

N – Non-Negotiable

T – Tenacious

A – Attainable

B – Behaviour

I – Integrity

L – Learning

I – Innovative

T – Talent

Y – You

It was Ronald Regan who said “we must reject the idea that every time a law’s broken, society is guilty rather than the law breaker. It is time to restore the American precept that each individual is accountable for their actions.” So with so many people talking about accountable, why is the principle still not being applied as the rule rather than the exception – why can’t society hold those in higher office, in politics and business, to account – it was my limited understanding that this was a cornerstone of the principles of democracy.

Finally Catherine Pulsifer, one of the authors of ‘Inspirational Words of Wisdom’, makes two great statements. First that “you are accountable for your actions, your decisions, your life and no one else but you.” And Secondly that, “we are accountable for our decisions in our personal life, so why shouldn’t we be just as accountable in our work life.”

Surely, until us grown-ups start being held accountable, how can we expect today’s youth – the future leaders of our world – to accept and even grasp the concept.

References

Henrik Edberg. 7 Timeless Thoughts on Taking Responsibility for Your Life.

Who Gave You the Best and Who Gave You the Worst Customer Service Experiences in 2011?

Moving back to Europe in April this year to set up a northern hemisphere operation I expected to be amazed by the level of service I would receive in countries like England, for example. Sadly that has been farthest from the truth and in many cases I’ve experienced 3^rd World service from organisations supposedly operating in 1^st World environments.

In my many experiences this year the organisation that gets the vote for offering the worst levels of customer service that I have ever received from any organisation in the world over the last 40 years is – VODAFONE UK.

Here you have a company that has probably grown so big that they don’t really give a damn about the customer as their volume of business is so high and where there approach, which seems to be based on ‘colonial arrogance’ is so outdated that I’m amazed they survive.

They have a CEO called Guy Laurence, at least in name – since he doesn’t have the courtesy to respond to couriered letters and complaints; though to be fair he’s probably so hectically busy building those vital business and strategic contacts on various exclusive golf courses and putting on the pounds in posh international restaurants, that ‘we’ the customer can be ‘delegated’ (i.e. fobbed-off) as a ‘bloody inconvenience’ – having probably not worked out yet that putting on the pounds, doesn’t go directly to the bottom-line of Vodafone, but just to his own bottom line.

What’s classic about this organisation is that the word ‘sorry’ has definitely become a ‘four letter’ word that they push out there under the complete misperception that this will ‘magically make the problem go away’.

What’s classic about this ‘ghost’ of a CEO, is you can actually contact him directly on line – campaigns.vodafone.co.uk/guylaurence/ – where he states “I’m Guy Laurence, the Vodafone UK CEO. I’m committed to ensuring we provide the best service possible and am therefore passionate about listening to our customers….” – nice try Guy, but you should try practicing what you preach.

So if you ever want to let off some steam and there isn’t a punch bag nearby, drop this man a line on my behalf….

Second on my list of the worst service providers would be another mobile phone operator called ‘Orange’ – maybe there’s something about the mobile industry we don’t know about. Here you have a guy called Sandeep Heer who’s the Strategy Director at Orange in London (at least in title) and he’s another one that seems to think the higher you get the less you actually have to do and couldn’t even respond to a simple email from a potential customer seeking a service provider.

Where do these people come from and worse still how do they survive in these positions of power, which they seem to misuse on a daily basis. It doesn’t say much for the major shareholders of these organisations that ‘rubber stamp’ these people who see customers as ‘uneducated peasants’ who are simply there to do their bidding.

When one gets rid of the trash – what’s exciting is that there are still many organisations and many unique individuals who take a real pride in offering exceptional levels of service. Having made a recent return trip to Cape Town via Dubai with Emirates – I have to say that I found their level of service absolutely outstanding. It’s not just one person, or one aspect of the business, but when dealing at any level there is a real desire to solve any problems and to give you that wow experience.

The main focus on offering service has changed over the last few years, from customer service and customer loyalty to customer delight. Organisations that fail to offer customer delight may think they are successful entities, with healthy bottom-lines, but they are unfortunately delusional, like our friends at Vodafone and living on borrowed time – their customers aren’t delighted, but also aren’t as stupid as the organisations think and are simply waiting for the right time to leave – and when they do they will never return.

Can the Death of Yueyue Bring More Humanity to Leadership?

Yueyue, which translates as “little joy” in Chinese, is the little toddler who sadly died in hospital after she was run over in the street, not once, but twice and then lay on the ground bleeding while eighteen people walked or cycled by and ignored her pain.

Eventually an elderly lady helped get the little girl out of the road. She said, “I walked up in a hurry to the child and heard her groan. I lifted her up and saw that one of her eyes were closed, that she had tears in her eyes, and she was bleeding from her mouth, nose and the back of her head.”

The shocking incident was caught on CCTV and has stunned millions in China and around the World, with many saying their society, which has enjoyed 30 years of rapid development, is rotten and immoral.

Li Xiangping, a professor of religion at Huadong University, asked “what prompted such a sad phenomenon? Officials? The rich? Or is it our own cold heartedness?”

What’s frightening is that many people in China are hesitant to help people who appear in distress over fears that they will be blamed. High profile law suits have ended up with good Samaritans ordered to pay hefty fines to individuals they sought to help.” Of course the leadership, The Communist Officials, have called for tighter controls over reporting the incident for fear of a public backlash.

How mad is this? But let’s not fool ourselves that this is an incident peculiar to China – as this could have been a story from anywhere in today’s world. The professor from China asked if it is cold heartedness and others ask if it’s the fear of being blamed – but who’s asking if this should even be acceptable, in the slightest.

Those reading this far may be asking, but what has this to do with business and leadership – and the answer is – everything. Leaders set the example and define the values and ethics for others to follow. When values become engrained they become part of our daily lives and our basic moral compass. If one can turn ‘values’ on and off, one set of values for when you’re at work and then another set for when you’re away from work, then you don’t ‘own’ those values and you are simply pretending to enact them through compliance.

One of the core attributes of effective leadership is creating a culture that is owned by the whole organisation – hence the greater the number of effective leaders in the workplace then the greater the change in ‘positive values’, both in and outside the work place.

There are still too many colonial leaders in the business world, living and enacting an outdated form of ‘poor’ leadership – maybe scared of their own fragile weaknesses – and using a form of colonial power to have their way (and hide their inadequacies).

The worst outcome for our future is that these colonial leaders are scared of real talent and ensure that their successors are as weak as they are – ensuring a further generation of inadequate leadership without the backbone to stand up and ‘fight’ for the values the world yearns for.

In my lifetime I have seen amazing progress in technology, medicine and science - all improving our knowledge, our health, and our understanding of the earth and our universe. But sadly as fast as this amazing knowledge has developed – we, the human race, don’t seem to have made much progress from our sad and barbaric past.

If we are going to ignore a child bleeding in the street, whether out of fear or cold heartedness, don’t we all need to take a real good look at our moral compass?

Are the E7 About to Take the Lead Over the G7?

They say the only place to go, once you’ve reached the top, is down. The G7 countries have been sitting at the top for some time now and maybe, just maybe, their time at the top is coming to an end and seven emerging markets are about to take over. History will tell us that no single nation has stayed at the top and, probably, all those that were there and then were knocked off their perch never saw it coming either – maybe something to do with the arrogance of dominating for too long.

Can you name the top seven emerging economies – that’s a good place to start? If you can it means you’re up-to-date with current trends and who’s driving the global economic recovery. If not, maybe, you’re still embracing a ‘status quo’ that is out of date and ignoring a scenario which may have a significant impact on the future growth of your own organisation.

The seven countries that make up the E7, as the largest emerging economies are – China, India, Brazil, Mexico, Russia, Indonesia and Turkey. It’s these seven countries that Michael Queen, 3i CEO, states will surpass the G7 group of the largest industrialised nations within five years from now; and he goes on to predict that these same seven emerging economies will be twice the size of the G7 by 2050, (Helen Power, The Times, 13^th October, 2011, p.48).

Unless the current G7 countries wake up to the fact that the world is changing, they will fall into the trap of many countries before them – of believing they are invincible (and being proved wrong).

What’s interesting in this specific era is that one could argue that it appears as if the citizens of the G7 countries, seem to be more aware of the global environment than their business and political leaders around them, who seem determined to cling to a past state that gave them ‘power’ and refuse to see the need for change or maybe it’s simply they don’t know how to change.

Clever, forward looking organisations have been developing trade links with the seven emerging economies over many years – developing sustainable strategies and long-term relationships that will give them a competitive advantage as the global economy shifts its dominance.

Those organisations who can’t embrace the change are doomed to fighting for the local scraps of business with other arrogant post-dominant wannabe’s. What’s sad about this forthcoming scenario isn’t that these blind leaders will be brought down to earth with a thud, but the damage that they will do to their local communities in the process, through the creation of horrific levels of unemployment and deprivation, all through their blind arrogance.

However the good news is that the tide hasn’t completely turned yet and there is still scope and time for the G7 countries, or some of them, to make the required changes that will allow them to compete with the strong emerging economies and play a significant part in the next generation of global economic dominance. It will just take some humility and honesty, both by those in power and those ‘reporting’ events, like the media – who could through their constant desire for sensationalism, drive some of the G7 economies into oblivion, just for the sake of a story – and taking no responsibility in their role as the country declines, until they too are just a blast from the past.

The main message for organisations is to look after themselves through detailed strategic analysis, strategic formulation and implementation – seeking the ‘real’ opportunities in the global economy and being totally honest about their real weaknesses and the real threats on their business, both in the short and the long term.

Emerging from the next few years will be the truly great leaders within the G7 business environment – but don’t expect to be counting them on more than two hands….

Which is the Best Strategic Model?

Strategy is one of those business phrases, a bit like Leadership, that can be on everyone’s lips as a key business topic – but when you ask what strategy actually is, you can end of with a lot of fancy words and waffle, that doesn’t define anything - except that the person hasn’t a real clue what the subject is about.

First and foremost strategy is nothing without implementation – and that means effective, efficient and successful implementation.

Many organisations have ‘collections’ of strategic documents, analysing this and recommending that, which never get implemented – these documents are often either generated internally after a few nights away at a luxury conference centre or generated for a hefty fee by less than scrupulous consultancies that use the organisations knowledge to develop a ‘future’ that the organisation hasn’t  a hope in hell of achieving – because they’ve analysed a future state without matching the implementation requirements against the current skills, productivity, cash flow, and other ‘real’ constraints….creating a fictitious masterpiece.

When business people talk about strategy, why do they many only talk about the plan and not about the results of the implementation? Strategic planning without implementation is a waste of time and resource.

There are various strategic models that are ‘punted’ as offering the best approach to the ‘strategic processes’, including; Michael Porter’s – Five competitive forces that shape strategy; Strategic mapping models; Six Sigma (and the several variants of the programme) and the concept of Strategic herding which many follow blindly….

All of these models offer a valuable insight to the strategic process but none of them give a blue print for successful implementation. It’s assumed that organisations will take care of this last little bit themselves. But this last little bit is dependent on the leadership accurately recognising their skills and expertise, and accurately identifying what skills they may have to ‘recruit’ to successfully reach their strategic goals.

It appears obvious – but in practice is a lot harder than you might think,  as it requires the leadership to admit that they have developed the right strategic plan for their organisation, but that they don’t currently have some of the core skills they will need to reach their goal. This can prove to be the biggest stumbling block an organisation can have. Because they’ve developed the strategy, they often find it hard to admit they aren’t geared to achieve it – seeing this as a failure. All it means is that sometimes if you can dream it you’re going to need some other skills to achieve it.

For strategy to be truly beneficial it must deal with;

1)      The systematic identification of emerging opportunities and threats;

2)      Preparedness to meet change;

3)      Risk assessment and analysis;

4)      The specification of sustainable competitive advantage;

5)      Improved communication among executives, management and staff;

6)      Prioritising of strategies;

7)      Reduction of conflicts between individuals and departments;

8)      The involvement of all levels of management in the planning process;

9)      More appropriate allocation of scarce resources;

10)   Consistency of approach across the organisation;

11)   Developing and following through on a detailed, flexible implementation plan.

The primary responsibility business leaders have is to develop organisations that will be more successful tomorrow than they are today, (Harper and Glew, 2008). To the frustration of executives and employees alike, many firms get caught in a performance rut that prevents them from reaching their true potential.

Implementation has too often been considered a strategic afterthought, possibly because some consider execution less ‘glamorous’ than formulating vision and strategic content. In fact the main cause for executive job turnover is the failure to execute strategy. There is a big difference between formulating strategy and executing it.

Many businesses need to shift from relying on superior strategy to developing superior strategic implementation capabilities. Ineffective implementation can cripple a business, as the needed strategy goes wanting. So while we often think of the strategic planning process as a core competency, I propose that implementation expertise and capability is an equally important entity for creating and maintaining a sustainable competitive advantage.

“Effective implementation of an average strategy beats mediocre implementation of a great strategy every time” (Sterling, 2003).

Who Is Setting the Example for Corporate Reform?

Despite the efforts of national governments and international organisations to improve corporate governance in emerging markets, the response of the companies themselves has been underwhelming. Many companies ignore the initiatives - which primarily involve reform of boards of directors - or just pay lip service to them. Little attention is paid to the directors' qualifications, even when reforms are mandated, as they are in South Korea, where 25 to 50 per cent of a company's directors (depending on its size and sector) must now come from the outside. Could the problem be that the would-be reformers are focusing on the wrong reforms? (p.89).

Paul Coombes and Mark Watson mention that “over half (55 per cent) of the respondents in a recent McKinsey survey of private equity investors said that reform of the institutional context – reform driven by governments, local stock exchanges, and regulatory watchdogs - was at least as important as reform of companies. Within the institutional context, the two main concerns were weak enforcement of legal rights and the management of the economy,” (p.91).

What’s particularly interesting about this 2001 article is that they state that “the corporate-governance model usually prescribed is the one that prevails in the United States and the United Kingdom. Its emphasis on shareholder value reflects the environment in those two countries, where a very large, dispersed class of investors, with no prior connection to the companies listed on the public exchanges, insists on boards that are similarly independent. These investors also demand a high level of financial and business disclosure,” (p.90).

Yet we see ten years later that the governance models of the United States and the United Kingdom have not stood up to the test – and maybe it was assumptions like these that have let first world organisations and their external analysts, become over-confident about their ‘real’ operational control. In fact contrary to the article some emerging markets were enforcing credit controls prior to the global crisis – showing strong leadership, which though never spoken about, made these emerging markets much stronger than their first world counter parts.

It’s as if the first world economies really didn’t believe they could be affected by a ‘global crisis’ in such a catastrophic way, compared to their ‘lowly’ counter-parts around the world - proving once again that arrogance is the worst predictor of future success.

Going beyond the mistakes of some of the top organisations and their respective analysts – another question that seems to have been cleverly avoided is; ‘how have first world countries managed their success or rather failure?’ If a CEO or CFO allowed their organisations to accumulate a tenth (or even less) of the debt some first world countries have amassed – they would not only be fired but criminal charges would swiftly follow.

I reckon we’d all be reasonably ‘successful’ to the outside world, if every time we mismanaged our finances, we could simply borrow more – wow, what a life that would be. People are often critical of family or friends who mismanage their finances and ‘over-extend’ themselves – going for expensive cars or holidays when they can’t afford them. Yet not only is no one, seemingly, being held accountable for the debt crisis in these first world countries – worse still, without a care in the world, they will spend billions of dollars (or pounds) on wars around the globe – while their people back home are suffering.

What example does this set for the next generation when it comes to financial control – I can hear sons and daughters in the not so distant future arguing that they might be in debt, but would still like mum and dad to bail them out, considering they’ve managed their finances better than the US, Greece, Ireland, Portugal, Italy and numerous other countries.

So where are the leaders of the future who are going to put organisations and countries back on a ‘real’ sustainable path of growth and success, rising above the game playing both with their respective organisations or the lives of their citizens?

References

Coombes, P. and Watson, M. (2001). Corporate Reform in the Developing World. The McKinsey Quarterly, No. 4, p. 89-92.

Identifying and Curing Adult Syndrome?

We normally know who they are in the organisation or have torrid memories of ‘them’ when we first started our careers. We also know that adult syndrome has several types, but each type creates similar end results - lowered levels of productivity. After reviewing the symptoms listed here, you’ll hopefully find that you’re not infected, though unfortunately for some at the other extreme you may find that you are infected with more than one type. If this is the case, you may need to spend extra time working on the cure (Bobinski, D, 2006, 18).

Dan Bobinski defines, Type 1 adult syndrome as imagined understanding. “This form of the disease is carried by those who imagine that because they are adults, they should already understand what someone is saying before they say it. The condition is usually observed by others through the frequent repeating of the phrase 'I know.' It is sometimes referred to as arrogance,” (p.18).

Type I adult syndrome can be acute in people holding any senior position from executive to supervisory, and often where the promotion has solely been based on past performance.

Interestingly, this form of the disease affects people trying to hide something - mainly because they're afraid they'll look like idiots for not being omniscient, (ok, who had to look up omniscient?).

Dan Bobinski defines Type II adult syndrome as intentional deflection. “This type of the disease is all about self-preservation. It fools the observer by redirecting attention when the infected person doesn't know the answer, or doesn't want to know,” (p.18).

What is concerning about these two types is that they are far too common to be healthy for organisational and industry growth, in today’s global economy. The global crisis itself is,to some extent, due to adult syndrome and the current ‘mess’ in sorting it out has adult syndrome written all over it as well.

Babinski states that “curing adult syndrome is possible, but the treatment can be a tough pill to swallow. The best antidote is a large, thick slice of humble pie. Don't misunderstand, this is far from grovelling. It's just a dose of reality. Sadly, many deny humility's healing powers, viewing it as a weakness rather than a strength,” (p.19).

It’s worth noting what author Rick Maurer says that we need to be willing to be changed by listening to another person. This doesn't mean we desire to be changed, but rather that we are willing. It's a fine line of difference, but an important one. Misunderstanding this difference is why many continue to suffer from adult syndrome.

It’s unfortunate that with all the access people have to information and learning that organisations still ‘accept’ cultures that allow for the use of “imagined understanding” and “intentional deflection” – as both approaches are painfully obvious to the employees that have to deal with it on a regular basis and yet this transparent ‘stupidity’ appears to go unnoticed by the ‘user’, similar to the ‘King who wore no clothes’.

What organisations need are individuals, at all levels, who are clear and transparent about what they ‘know they know’ but who, even then, are willing to ‘listen’ to other points of view. But more importantly individuals who are willing to acknowledge what they ‘know they don’t know’, and are open to find the answers from those who have the knowledge, (regardless of that persons level in the organisation).

So as Bobinski states in conclusion; “bottom line, if we are willing to listen to someone else in a mind-set that acknowledges we aren't omniscient and we don't have all the answers, the symptoms of adult syndrome begin to fade away. Then reality comes to the surface, and working relationships become healthy,” (p.19).

References:

Bobinski, D. (2006). Adult Syndrome: Is There a Cure? Management Services, Summer, p. 18-19.

Who Should Decide Executives Pay?

How much should the Executive Team be paid and who should be involved in the decision? Executive pay has always been an emotive issue, but this issue is raising new concerns as the world comes out of a global recession and many workers are struggling to make ends meet - as John Cridland, the director-general of the Confederation of British Industry stated, "at a time of austerity, when everyone is seeing their income squeezed, executive pay is a particularly sensitive issue."

An article by Robert Watts sites a poll that was commissioned in the UK that found that almost half of the 2,000 people polled thought the annual pay of FTSE 100 chief executives was less than £1 million. When they were told that the true figure was almost £5 million, just 1% believed that such a sum was justifiable.

But who should be involved in the decision around executive pay - for most organisations in the public sector the board and shareholders are involved with pay decisions. These days organisations will undertake comprehensive surveys to benchmark their pay structures with other organisations - so it's not that boards are just coming up with a figure. Shareholders to have a significant vested interest in the performance of the CEO and executive team and hence shouldn't vote through unrealistic pay agreements.

In the UK, Vince Cable, the Business Secretary believes that workers should be given new powers to help decide how much their bosses should be paid - but I wonder how exactly that would work in practice. I can just visualise someone who hasn't been active in business for some time, sipping their single malt whisky in their private club, thinking that in a perfect world how great it would be for workers to determine their bosses pay. Imagining Joe from maintenance and Joyce from Reception, strutting into the board room and productively discussing the current global trends in executive pay and while puffing on their first Cuban cigar telling the CEO that they will have to cut their pay this year by 10% to be in line with their expectations.

Executive teams that abuse pay at the highest level aren't going to have their ways changed whoever you send in from the employee base. It is a culture that resides at the top and can only be changed from the top. These orgnisations use power and fear within the organisation and decide their annual pay rewards with little fear of being questioned. What's interesting, is those that moan about their bosses salaries, quickly change their tune if and when they rise to the same positions - then all of a sudden they 'cash' in on the cultural norm for this establishment.

Of course these organisations with the questionable ethical approach to executive pay are most likely to only invite those employees to join a pay review panel that are going to do as they are told - making a further mockery of the system.

It's not all doom and gloom, in Germany for example, supervisory boards set executives’ pay. Half the members of each board are lay staff, often trade union representatives.

The simple answer in a transparent organisation is that the executive pay should be understood and acceptable to all (or at least most employees). Where you need to legislate around executive pay - you actually need to change the culture as no 'forced measures' will get the required response.

Great organisations with great leaders have transparent pay and reward systems - poor organisations with poor cultures live in a world of secrecy. Change the culture and you'll change the approach.....

References

Watt, R. (2011). Cable may give workers a say in bosses' pay. Sunday Times. 4th September, p.10.

What Makes a Job Enjoyable?

What makes a job enjoyable and how many people actually get up every morning to go to a job they enjoy? The thought, for some, may be of money - but money in itself is unlikely to make a job enjoyable (though it may ease the pain).

In the Sunday Times dated 21st August, John Harlow wrote an article describing how in the next twelve weeks, a US government agency will make the first decisions, about flying mankind to the nearest inhabitable planet and whether we leave the solar system in giant tankers or personal ‘space yachts’, in deep sleep or frozen embryos.

Does this sound like an enjoyable and exciting job?

The government department called the Defense Advanced Research Projects Agency (Dapra) will seek to draw up ground rules for exploration and colonisation of worlds beyond the solar system. Depra is not ‘science fiction’ and is currently testing driverless cars in the Californian dessert, remote-controlled mechanical insects for crowd surveillance and thought-activated prosthetic arms.

One of the people who is employed for Depra is Regina Dugan, a Director, who will oversee the first meeting to define the first steps towards this interstellar adventure. At first this may seem an adventurous and exciting job, taking away the day-to-day monotony that many employees endure. Yet the decisions that have to be made go way beyond science, and include the missions destination, the legal ramifications, the sociological impact and the philosophical issues. Questions like ‘who should travel – should it be a small team of scientists or a cross-section of humanity.’ What about religion, law and order etc – and do we want them to represent a current fixed vision of humanity or to be free to create something else out there?

This is likely to be a thankless task – as it will be impossible to please ‘all the people’ that will have an opinion. Though appearing exciting, this could well be a highly stressful job and not that enjoyable at all. It’s the kind of job that looks exciting on the surface but where you are being set-up to disappoint the masses (who will need someone to blame) and you will never actually know the results of your decision – good or bad.

It seems to be human nature to look at other peoples job’s and feel envy for the excitement, adventure and challenges the job appears to offer – yet what we see on the surface, can often hide the real day-to-day role and accountabilities that truly define the job in totality.

Defining enjoyment in the work environment can prove problematic, unless one can fully empathise with the whole business environment and understand ones day to day responsibilities in respect to ‘the whole’. It’s in this area that some managers lose the plot - by not ensuring that all their employees understand the importance of their role and how their contribution, however minor they may perceive it, adds to and supports organisational success.

An organisation should be a cohesive unit of individual parts, which through effective strategy and leadership, work like a well oiled machine to optimise the organisations performance and ensure continuous improvement and sustainable growth. Any one of these individual ‘parts’ that is not working, as one, with the rest of the organisation will guarantee a sub-optimal solution – which in itself will impact the potential ‘cash’ that is available to be ‘shared’ by the organisation, whether as salary increases, bonuses, or both.

Management could do a lot more to make the less than attractive jobs more enjoyable to those employed in these roles. It’s a simple fact that though the job might not pay much, might not require university degrees and doesn’t in itself hold great responsibility – someone has to do it, and a motivated employee is much more productive than a demotivated one.

Simply put, your organisation won’t function without them – regardless of how many qualifications and years of experience your executive team has – so be smart, and try to make all jobs in your organisation enjoyable to do – you’ll be surprised by the positive impact on performance.

References

Harlow, J. (2011). Stock up your fridge, ET – we’re coming to stay. The Sunday Times, 21st August, p.7.

What Makes a Good Boss in Unsettling Times?

In an interesting article in the Harvard Business Review, Robert Sutton wrote that “when people – independent of personality – wield power, their ability to lord it over others causes them to (1) become more focused on their own needs and wants; (2) become less focused on others’ needs, wants, and actions; and (3) act as if written and unwritten rules that others are expected to follow don’t apply to them. To make matters worse, many bosses suffer a related form of power poisoning: They believe that they are aware of every important development in the organization (even when they are remarkably ignorant of key facts). This affliction is called “the fallacy of centrality” – the assumption that because one holds a central position, one automatically knows everything necessary to exercise effective leadership,” (p.44).

But does this mean that everyone who has any form of organisational power thinks like that – and does it also mean that they are unable to control their ‘power thoughts’ over the needs for effective leadership - for if so, we are in for a rocky ride in the leadership dimension….Fortunately not, as there are good bosses who respond to the needs of their people in unsettling times.

Sutton highlights how followers devote immense energy to watching, interpreting, and worrying about even the smallest and most innocent moves their superiors make. This is something we’ve long known about animals; studies of baboon troops show that the typical member glances at the alpha male every 20 or 30 seconds to see what he is doing. And although people don’t check what their boss is doing two or three times a minute, this tendency is well documented in human groups, too. As the psychologist Susan Fiske puts it, “Attention is directed up the hierarchy. Secretaries know more about their bosses than vice versa; graduate students know more about their advisors than vice versa.” (p.45). Related studies also show that when people down the pecking order feel threatened by their superiors, they become distracted from their work. They redirect their efforts to trying to figure out what is going on and to coping with their fear and anxiety – perhaps searching the web for insight or huddling with their peers to gossip, complain, and exchange emotional support. As a result, performance suffers.

The importance of predictability in people’s lives is hard to overstate, and has been demonstrated in numerous studies. The most famous is Martin Seligman’s research on the signal/ safety hypothesis. Seligman observed that when a stressful event can be predicted, the absence of a stressful event can also be predicted. Thus a person knows when he or she need not maintain a state of vigilance or anxiety. Seligman cites the function of air-raid sirens during the bombing of London in World War II. They were so reliable a signal that people felt free to go about their business when the sirens were silent. The hypothesis was bolstered by studies in which some animals and not others were given a warning in advance of a shock. Those that were never warned lived in a constant state of anxiety. (p.45)

During overwhelming times, a good boss finds ways to keep up a drumbeat of accomplishments, however minor. The organizational theorist Karl Weick shows in his classic article “Small Wins” that when an obstacle is framed as too big, too complex, or too difficult, people are overwhelmed and freeze in their tracks. Yet when the same challenge is broken down into less daunting components, people proceed with confidence to overcome it. (p.48)

Compassion can and does take many forms. At its heart it is as simple as adopting the other person’s point of view, understanding his anxiety, and making a sincere effort to soothe it. (p.48) Compassion is most important when it helps people retain their dignity. (p.49)

Bosses who increase predictability, understanding, control, and compassion for their people will allow employees to accomplish the most in a time of anxiety – and will earn their deep loyalty. A manager who provides all four will be perceived as “having people’s backs.” That’s a good phrase to keep in mind when you know your people are feeling vulnerable, because it will inform all your actions, big and small. (p.49)

So are you a Good Boss and are you being responsible in terms of what your people may lack the most in unsettling times: predictability, understanding, control, and compassion.

References

Sutton, R. I. (2009). How to Be a GOOD BOSS in a Bad Economy. Harvard Business Review, Vol. 87 Issue 6, p.42-50.

What Do Shareholders Really Want?

In a 2010 article in the Harvard Business Review, Roger Martin asks the question “have shareholders actually been better off since they displaced managers as the centre of the business universe? The simple answer is no. From 1933 to the end of 1976, when they were allegedly playing second fiddle to professional management, shareholders of the S&P 500 earned compound annual returns of 7.6%. From 1977 to the end of 2008, they did considerably worse – earning real returns of 5.9% a year. If you modify the start and end dates of the two periods, you can produce performance numbers that are at parity, but there’s no sign that shareholders benefited more when their interests were put first and foremost,” (p.60).

One may be asking why Martin is looking at these specific years and that is because modern capitalism can be broken down into two major areas, the first, managerial capitalism, began in 1932 and was defined by the radical notion that firms ought to have professional management. This period is noted for the famous work by Adolf Berle and Gardiner Means who published their paper entitled “The Modern Corporation and Private Property”, which stated that management should be divorced from ownership.

Then in 1976, the second era of modern capitalism started, when managerial capitalism was strongly criticised by Michael Jensen and William Meckling in their paper entitled “Theory of the Firm: Managerial Behaviour, Agency Costs and ownership Structure. This paper, which Martin highlights has become the most-cited academic paper of all time, argued that “owners were getting short changed from professional managers, who enhanced their own financial well-being rather than that of the shareholders. Stating that managers were squandering corporate and social resources to feather their own nests,” (p.60).

There seems to be a lot of criticism about ‘fat cat’ organisations and their ‘greedy shareholders’ – but how true are these comments in reality. Many institutional shareholders are responsible for pension funds and similar investment vehicles. These portfolio’s aren’t short-term in nature, in fact far from it, these institutional investors are looking for long-term sustainable results – and short-term gains followed by a big loss doesn’t instil confidence in these investors.

Also similar to customer theory, many individual shareholders have unrealistic expectations in respect of investment returns – some are looking for a quick profit for themselves with little concern for the long term interests of the organisation. Wanting to get in and get out with a quick profit – where in this instance the focus of the investor is purely self-interest.

So why is it that companies that don’t focus on maximising shareholder value deliver such impressive returns? Because, says Martin, their CEO’s are free to concentrate on building the real business, rather than managing shareholder expectations. Martin’s article highlights how, back in 1997, just after the IPO, Research in Motion (RIM), makers of the Blackberry, made a rule that any manager who talked about the share price at work had to buy a doughnut for every person in the company. In 2001, the COO mentioned RIM’s surging stock price and was subsequently actioned with buying 800 doughnuts for the employees - apparently he had to make special arrangements to have that many made and delivered. Either way there hasn’t been a recorded infraction of the rule since then, (Martin, R, 2010, p.64).

What organisations want are shareholders who seek an investment that is in the interests of both parties and not the shareholder that has only their self-interest at heart, especially if it’s short term self-interest. These short-term focused investors will never optimise sustainable organisational performance, which is more likely to give greater returns over the long haul and will have little interest in strategies that optimise anything beyond this years returns. A short-sighted view that is likely to lead to long term disaster.

As Martin concludes “managers like profits as much as shareholders do, because the more profits the firm makes, the more money is available to pay managers. In other words, the need for a healthy share price is a natural constraint on any objective you set. Making it the prime objective, however, creates the temptation to trade long-term gains in operations-driven value for temporary gains in expectation-driven value,” (p.65).

References:

Martin, R. (2010). The Age of Customer Capitalism. The Harvard Business Review. Vol. 88, Issue 1, p.58-65.

Are First World Leaders Above the Law?

I overheard a young boy ask his mother for more pocket money the other day. When she explained that she couldn’t afford to give him more, I heard the young man say “but Mum, can’t you just raise your debt ceiling?”

If a Financial Director managed an organisations finances like some first world governments have managed there’s – not only would the individual be fired, but they would also face criminal prosecution and most likely jail time. Are political leaders above the law and if so, aren’t they then exactly the same as the dictators we abhor and vindicate around the world.

First world citizens are beginning to look like puppets, being the easiest bunch of people to be pushed around and dictated to by the very people they ‘democratically’ vote in to power every few years. In the West we have been taught to expect Third World countries to need financial assistance on an annual basis as they try to ‘build their economies’ in order to be able to compete with the First World masters of economic ‘best practice’. But First World countries are showing themselves to be fraudsters when it comes to financial management – and while their own finances get into deeper and deeper trouble, they are still prepared to spend money they don’t even have on an odd war here or to support another country there – with apparently no one to answer or account to. That can’t be right and can’t be democratic, surely?

I have often heard criticism of today’s younger generation for not being responsible – often as a general comment, rather than anything specific – but who’s showing them how to act responsibly. Can we really blame this generation for not being financially astute, when all a country has to do when they need more cash or get into financial trouble is simply to raise their debt ceiling and borrow more cash. What a life – wouldn’t it be great if we could all do that?

Daily, First World countries are seeing an increase in individuals and families suffering from poverty - being made homeless and needing food donations – yet many of these countries are prepared to spend money beyond their shores for no immediate benefit – while leaving their own citizens to suffer. Until you’ve been homeless you can’t underestimate the negative impact this has on individuals and families - the shame, the desperation, the sadness – which can even lead to the ‘head of the household’ committing suicide, as the stresses just become too unbearable.

Many of the political ‘policy makers’ within our First World community sit in their fancy private clubs, sipping their 50 year old whiskies making decisions, with no semblance of understanding of the impact their ‘simple’ decisions have on the lives of the very people they have been put in ‘power’ to help and support.

As much as there appears to be a lot of debate and criticism of the lack of good and effective leadership in business around the world, we actually need these less than perfect business leaders to help gather citizen support to hold their political leaders to account and if necessary to prosecute them as well. These indefensible arrogant and self absorbed politicians need to be held responsible for their actions – since through their decisions, they set the very foundation for their countries organisations to be successful in the global business market, where they can create ‘real’ wealth and employment opportunities.

There still appears to be a dreadful colonial arrogance to political leadership in the First World that can only have a negative impact on the optimal development of our future leaders across all spheres of human interaction. It’s time only true experienced professionals were allowed to lead nations and develop countries….

Are You Empowering Creativity in Your Organisation? Two Key Drivers for Success

Xiaomeng Zhang and Kathryn Bartol (2010) state that “given increasingly turbulent environments, heightened competition, and unpredictable technological change, more and more managers are coming to realize that they should encourage their employees to be creative (Shalley & Gilson, 2004). Considerable evidence indicates that employee creativity can fundamentally contribute to organizational innovation, effectiveness, and survival (Amabile, 1996; Shalley, Zhou, & Oldham, 2004),” (p.107).

Organisational ideas, in respect of opportunities and threats, can come from any level within an organisation and often some of the best ideas come from the most unusual sources. It’s a myth that the leader is solely responsible for ‘idea generation’ and creativity. Leaders want a culture that encourages creative ideas, which then allows the strategic leadership to assess and prioritise these ideas in respect of ROI, time frames, diversification and other key strategic drivers. To get the culture of idea generation, leaders need to empower all employees to be creative

Zhang and Bartol highlight that “creativity refers to the production of novel and useful ideas by an individual or by a group of individuals working together (Amabile, 1988; Madjar, Oldham, & Pratt, 2002; Shalley, Gilson, & Blum, 2000; Zhou & Shalley, 2003). For creativity to occur in organizations, managers need to support and promote it, as they are the individuals who are most knowledgeable about which employees work outcomes should be creative and they have considerable influence over the context within which creativity can occur (Shalley & Gilson, 2004),” (p.107).

What’s interesting is that it’s often assumed that everyone wants to be creative, (given the chance), where theoretical arguments have suggested that psychological empowerment, in turn, makes a critical contribution to employee creativity by positively affecting an employee’s intrinsic motivation (Amabile, 1996; Spreitzer, 1995), but empirical evidence of such an effect has been lacking (Shalley et al., 2004). This connection is important because, conceptually, intrinsic motivation is considered to be a well-established predictor of creativity (Amabile, 1996; Shalley et al., 2004).

Two key drivers influencing the development of an effective creative culture are firstly, the empowerment role identity, which is the extent to which an individual views him or herself as a person who wants to be empowered in a particular job. Then leader encouragement of creativity refers to the extent of a leaders emphasis on an employee being creative and actively engaging in processes that may lead to creative outcomes. (Zhang and Bartol, 2010, p.108)

Zhang and Bartol’s research found that “empowering leadership has the capacity to positively influence employee psychological empowerment, an element of importance in affecting creative outcomes. However, managers are likely to find differences in the extent to which employees wish to be empowered - that is, identify with an employee role that includes empowerment. Hence, managers may find that their empowerment efforts are more successful in engendering cognitions of psychological empowerment in those who view empowerment as part of their role identities. Indeed, evidence suggests that managers do not attempt to empower all employees to the same degree, at least at a given point in time (Forrester, 2000; Yukl & Fu, 1999), a strategy supported by our empowerment role identity findings,” (p.123).

One implication is that, when empowerment role identity is low, leaders may need to expend some time gradually increasing empowerment behaviours so as to encourage employees to begin to view empowerment as part of their role identities. Fortunately, role identity theory suggests that adding role identities is possible through such a process, particularly over time (Stryker, 1980).

Zhang and Bartol's research results suggested that “creativity gains may be boosted if an employee is willing to spend the time and effort necessary to thoroughly identify a problem, search for extensive information, and generate multiple ideas from different perspectives - that is, engage in an effective creative process. Fortunately, our findings also indicate that a leader can play an active role in encouraging such creative process engagement by elucidating to a follower the need for creative outcomes, spelling out what their organization values, and explaining the elements of an effective creative process, such as the one we have considered here. Training employees in creativity-relevant methods or processes is likely to enhance such efforts,” (p.123).

The research is interesting in that it reminds executives and management that not everyone wants to be ‘creative’ to the same degree as everyone else; and it can be dangerous to assume everyone wants to be treated in the same way. As Zhang and Bartol highlight the process involves three key drivers for success: psychological empowerment, intrinsic motivation, and creative process engagement.

The optimum solution for an effective creative culture is understanding, at the individual level, the importance of; the empowerment role identity and the leader’s encouragement of creativity. Understanding the effect of both and optimising both for each employee will give the organisation an effective creative culture.

References

Zhang, X and Bartol, K.M. (2010).Linking Empowering Leadership and Employee Creativity: The Influence of Psychological Empowerment, Intrinsic Motivation and Creative Process Engagement. Academy of Management Journal; Vol. 53 Issue 1, p.107-128.

Regret and Disappointment: Do Customers Respond Differently?

One might think that there is little difference between regret and disappointment yet the reference point for regret is external (encompassing both the chosen option and the foregone alternatives), whereas the reference point for disappointment is internal (encompassing only the chosen option). Disappointment generally leaves one powerless with a tendency to want to get away from everything and not wanting to do or have any association with the outcome (Zeelenberg et al. 1998). Regret, on the other hand, involves feelings of responsibility and results in not being able to get away from such an experience (Das and Kerr, 2010, p.172).

Neel Das and Anthony Kerr explain that “regret is experienced as a result of a comparison between what is and what might have been, where regret may arise as a result of an unfavourable decision-making process or an unfavourable product choice. The important notion to appreciate is that an unfavourable decision-making process is separate from an unfavourable product choice, and individuals may experience regret from either one or both,” (p.172).

Further Marcel Zeelenberg and Rik Pieters suggest that regret is a cognitive emotion, in that it “contains all the elements typical of emotional experiences” (p. 6) such as a sinking feeling, thoughts about opportunities lost, and thoughts about mistakes made and the desire to correct them, if given a chance.

From a customer perspective Das and Kerr state that “only highly involved consumers are likely to adopt a long-term motivational perspective in terms of decision making. In contrast, consumers with low involvement are likely to take a short-term decision-making perspective and not separate an action relating to a decision into separate phases. In other words, highly involved consumers are more likely to separate the source(s) of regret, whereas less-involved consumers would simply recognize that the regret emotion exists without distinguishing the particular source(s) of the emotion.” They furthermore highlight how “regret is viewed as a cognitive emotion; where high need for cognition individuals have a greater tendency to think elaborately on relevant information, compared to low need for cognition individuals,” (p.175).

So what does this mean for customer behaviour and what can organisations learn from understanding the principles of regret and disappointment. Kowalski (1996) describes consumer complaint behaviour as behavioural expressions of dissatisfaction or unfavourable attitudes directed toward an individual, a situation, or an object. Using the disconfirmation paradigm as his basis, Kowalski expressed that complaint behaviour reflects dissatisfaction from an exchange generated from a negative disconfirmation of expectancies. Yet existing regret research in marketing has found no effect of regret on consumer complaint intentions (Tsiros and Mittal 2000). Research has shown that although satisfaction affects complaint intentions, the effects of regret are mediated via satisfaction (Tsiros and Mittal 2000). Essentially, one may be satisfied with the product but may experience regret when a foregone alternative is perceived to perform better than the chosen product. In such a situation, it is not likely for one to complain to the manufacturer (of the chosen product) about another product that is perceived to outperform the chosen one. Switching to a better-performing product in the future is the likely outcome, (Das and Kerr, 2010, p.177).

Also another important factor is that ‘responsibility’ is an important precondition for regret. The more responsible one feels for the decision action, the more regret one is likely to experience subsequent to an unfavourable result (Zeelenberg et al. 1998; 2000). While responsibility is likely to drive the feelings of regret, it may also help consumers adjust their behavioural intentions accordingly. Das and Kerr explain this by stating “regret arising from the decision-making process may be looked upon as an outcome of procedural accountability, and regret arising from the product choice a result of outcome accountability,” (p.178).

In conclusion it should not surprise us to find that the greater the intensity of the regret experienced, the lesser the likelihood of repurchasing the product and the greater the likelihood of switching to a different product in the future.

But what is really interesting is that neither Tsiros and Mittal (2000) nor Zeelenberg and Pieters (2004) found any effects of regret on complaint intentions; which is something organisations need to be aware of in respect of their strategy towards customer service and customer loyalty. Just because your organisation hasn’t had any complaints doesn’t mean the customer is happy with the product or service.

So how are you going to find and retain those customers that regret their purchase from you and next time will buy from one of your competitors?

References

Das, N. and Kerr, A.H. (2010). "Woulda, Coulda, Shoulda": A conceptual examination of the sources of post-purchase regret. Journal of Marketing Theory & Practice; Spring2010, Vol. 18 Issue 2, p.171-180.

Zeelenberg, M. and Pieters, R. (2007). A Theory of Regret Regulation 1.0. Journal of Consumer Psychology, Volume 17 Issue 1, p.3-18.