Sunday, April 28, 2013

How Effective is Your Corporate Social Responsibility Program?

Corporate Social Responsibility (CSR) is supposed to be an extension of an organisations strategy and intertwined with its planned sustainable growth – but how many organisations today take CSR seriously?
It’s not just a matter of how much money an organisation contributes to ‘social’ causes or the ‘flowery’ rhetoric found on websites or in annual reports since CSR is supposed to be a focused, integral part of your organisations strategy for sustainable growth. Which means if ‘money’ is being donated to seemingly worthy causes the organisation should be ensuring that those funds are being used to really add-value to their community and be able to articulate the real benefits that have been achieved by their donations.
The global financial crisis has brought misery to millions and in some cases has ‘encouraged’ or even ‘forced’ people to look after ‘number one’ – which makes solid, social sense, since you can’t help others if you have to worry about your own basic month-to-month survival.
At the corporate level – big profits are still being made and as many believe extortionate bonuses being paid for some pretty poor performance achievements in some sectors. The argument by big business is that they have to pay the bonuses to keep their talent – but some may argue whether they are sure this is the actual talent they want to keep for long term sustainable growth. 
CSR has always been about finding the strategic and budgeting balance that allows an organisation to ‘invest’ in improving its local community and its environment. It’s about having a real plan that is both long-term and consistent that can be tracked on a month-to-month, year-to-year basis to prove that the CSR strategy in practice is adding real value and having a positive measurable impact on their community.
There is a danger that your organisation has ‘lost the plot’ with respect to your CSR strategy and maybe it’s time to revisit it and re-focus your efforts based on real human and environmental needs, that will make a tangible difference to your community for the long term.
CSR is not a ‘nice to have’ and is a genuine strategic imperative in our global economy. Those that ignore it, as an unnecessary expense, do so with a purely short-sighted view of their business environment. Poverty and pollution are two key economic drivers that will affect medium to long-term business success – ignoring them now, for short-term benefit is not only a dangerous it’s blindly arrogant (and ignorant).
Faced with a complex business world some leaders approach it as visionaries, with an all-encompassing view of their business environment, appreciating that their communities hold potential customers and employees for the future. Where a secure, safe and ‘happy’ community infuses its way into an organisations culture – just as much as a deprived, unsafe and unhappy neighbourhood will eventually start to have a negative influence on employees, talent retention and business performance.
Other leaders feel overwhelmed by stakeholder demands and prefer a blinkered approach to their surroundings – where they can ‘con’ themselves into believing that if they can’t actually see the suffering in their communities then it doesn’t exist and can feel content maximising whatever profit they can in the short-term confident that this will keep them safe and secure until they can save up enough to a point where they don’t really care what happens to their tenure – as they can retire to some out-of-the-way place and live happily ever-after avoiding the ‘chaos’ they have left behind.
All organisations should have some form of value adding CSR strategy that adds real long term, sustainable benefits, that can be measured and celebrated. It’s not just the CEO’s responsibility – it’s down to the board and all stakeholders not just to ask, but to demand a genuine cohesive CSR strategy that is results driven.
There are a lot of people suffering in ‘our’ world and since we aren’t able to choose how and where we are born – we can at least choose how we want to help and support the communities we live in. Many people who are suffering aren’t doing it out of choice and are desperate to find work – and we should be trying to help – as a healthy community, breeds a healthy economy.

Sunday, April 21, 2013

What Kind of Future Leaders Are We Creating?

An article by Hannah Richardson, the BBC education reporter, published on 15th April this year, mentions how “two-thirds of UK children feel under pressure to cheat at sports because of a ‘win-at-all-costs’ culture on the playing fields, a survey suggests. A quarter of the children questioned for the survey thought team mates would cheat frequently if they could get away with it. 90 per cent of the 1,002 8 to 16-year-olds said their team-mates felt pressure to win while playing sport. More than a third said they felt no remorse at winning by cheating.”
In a similar article in the Guardian, Richard Garner highlighted that “only 16 per cent felt their team-mates would feel guilty if they won through cheating, while 37 per cent believed their team-mates would not care while 5 per cent said they would be happy or proud if they cheated.”
This should be very alarming to all of us and is unlikely to be unique to the United Kingdom. If ‘we’, through the media, sports personalities, celebrities and other means, are encouraging children to cheat in ‘sports’ then we’re teaching them to ‘cheat’ full-stop. It’s a state of mind, which defines individual and group values, where people, in this case children, re-define the ‘rules’ of competition and will use any means fair or foul to ‘win’.
As we ‘fight’ corruption in the workplace, we must also stop and ask what ‘values’ we are openly or tacitly accepting and thereby teaching the younger generation on a global level, as some of these will be the leaders of tomorrow. If they believe that cheating to any degree is okay - as long as you’re not caught, and is just part of the ‘new rules of competition’ - then we mustn’t be surprised when cheating takes place in other activities, which could be from the classroom to the business environment.
Richard Garner reports how “a separate survey of parents showed that nearly two-thirds (65 per cent) believed cheating by high-profile sportsmen and women had led their offspring to believe it was acceptable for them to follow suit. Opinion is divided, though, on whether cheating has got worse in school sports in recent years, with 34 per cent of parents saying it has got worse and 36 per cent that it has not.”
This survey in 2013 follows on from a similar survey in 2010, and by the look of it not much has changed. Back in 2010, Aidan Radnedge of the Metro reported that "72 per cent witnessed cheating in team sports. And 58 per cent of 8 to 16 year olds say they would break the rules in team games compared with 13 per cent playing individual sports. 54 per cent of 8 to 16 year olds say they witnessed bad sportsmanship in every game they play.
Encouragingly, 67 per cent said seeing a sportsman break the rules to win would not make them do the same. Seven in ten say they would describe a sportsman who played unfairly as a ‘cheat’, with just 4 per cent saying they would consider them ‘cool’.
Meanwhile more alarmingly, in the 2010 report, only half of parents believe it is their responsibility to deal with their child’s unfair play – which is, or was, simply crazy.
If the development of leadership qualities is part nature and part nurture then we better get the nurturing bit right if we want to develop solid, strong and effective leaders for our future generations, in and out of the business environment.
Garner, R. (2013). Win at all costs: most children admit to cheating at sport. The Independent. [On-line:]
Radnedge, A. (2010). Child sports players are 'happy to cheat to win'. The Metro. [On-line:]
Richardson, H. (2013). Pressure to win 'turns children into sports cheats. BBC News [On-line:]

Sunday, April 14, 2013

What's Worse Than Making the Wrong Decision?

Effective organisations run like well-oiled machines, where each ‘cog’ in the organisation work efficiently as part of one massive operation to meet some predetermined objective or objectives. There are millions of combinations of management and operational processes that can be employed, and hence each ‘cog’ needs to know exactly what they have to do to contribute to the overall ‘plan’, what their parameters are, time lines, responsibilities etc. 

However the beauty of an organisational ‘machine’ is that it can change and adapt over time to stay effective and become the best it can be to meet changing objectives and challenges within its business environment. 

To be effective this organisational machine needs to make decisions, some will be strategic and more long term, made by management and executive teams; and others will be operational and made on a day-to-day basis as the needs arises, but within the overall strategic framework. 

An effective organisation is a ‘thinking’ machine where each ‘cog’ has a voice and specific, often unique, knowledge and input to ‘share’ with their organisation – this is where the culture is formed and innovative ideas developed that can change the course and performance of the organisation for the benefit of all their stakeholders.  

For a motivational, innovative culture decisions have to be made – some decisions may have to be made without or in advance of collecting all the data and facts – but decisions have to be made. Sometimes decisions will be wrong – but the advantage of making them in the first place is that it will give clarity and direction to a ‘problem’ - where through the implementation of the decision the organisation will quickly see that they are wrong and will adapt and change accordingly – well at least the well run organisations will….. 

The one thing worse than making the wrong decision is not making a decision at all! Although it may appear to the ‘decision maker’ that by not making a decision ‘they’ are keeping the status quo for now – without that formal communication process back through the organisation that says ‘No, not now’ or ‘No, and a reason why’ – the organisation and those that came up with the suggestions are left wondering and unsure of what is the best thing to do. 

Decision makers that don’t make and communicate decisions are often blindly unaware of the negative impact they have on the culture of their organisation, the confusion it causes and how it stifles innovation and creates disharmony and demotivation.

Employees at all levels should be encouraged to come up with ideas that will help the organisation – and it should be every organisations desire to create that kind of culture. But when they do decisions need to be made and communicated back – if it’s a bad idea, then tell them why – so that they know for the next time or maybe they have a counter suggestion – but it’s all part of ‘on the job’ development. If it’s a good idea, but it’s not appropriate now or the company can’t afford to implement it now – tell them and look for alternative ways to make the change. 

But don’t ignore suggestions – whether good or bad. Always have the courtesy to give face-to-face feedback – no emails saying ‘thank you for your suggestions’. Always recognise employees or stakeholders who makes suggestions that they believe can make a positive difference; and once you’ve ‘made your decision’ then have the courtesy to give them feedback – and if you can’t give them feedback for a few weeks or months – let them know you’ll get back to them within a certain time and why it might take that long. 

The worst kind of decision is ‘no decision’ – and it can destroy the fabric of an organisations culture cutting off feedback and ideas.

Sunday, April 7, 2013

Are Leadership and Accountability Mutually Exclusive?

I always thought that one of the criteria that made a leader, well a good leader, stand out from the crowd was their unwavering self-belief in taking real accountability for their actions, and setting the example for others.
Maybe it’s the exception, I don’t know, but there seem to be more and more reports of executives making serious errors of judgement or not knowing what’s going on in their own organisations, sometimes bordering on the criminal, yet seemingly oblivious to taking any responsibility whatsoever.
Take SSE, one of the UK’s six big energy groups that as Juliet Samuel reports, “has been forced to make a grovelling apology after being hit with a new record £10.5 million fine for mis-selling by Ofgem.”
Regulators found that at least 23,000 of its customers had been mis-sold products, netting a minimum of £4 million for the group.
Juliet highlights that “SSE had refused to settle with Ofgem, the energy watchdog, forcing the case to go to a hearing with the regulator’s top markets authority. That body handed down a stinging judgement on Wednesday 3rd April that found ‘failures at every stage of the sales process’, going right up to the top levels of the company, where it said that ‘insufficient attention was paid to compliance at board level.”
It’s worth highlighting as well that “SSE’s breaches of the rules by its phone and door-to-door sales force took place up until September 2012. They involved failing to include  the costs of all charges when estimating what a customer’s bill would be and making false statements about rivals’ price rises and providing inadequate estimates of customers’ energy bills.”
Yet no one has been fired and not a single executive has resigned. What does this say about leadership and accountability?
On the SSE website Ian Merchant their CEO, who is leaving this summer, but not because of mis-selling to 23,000 of their customers, has written a blog that states; “At SSE we try to do the right thing. We aim to put customers first, we attempt to be clear with them, and we strive to be fair in everything we do.  Today’s Ofgem fine makes it clear we have failed to live up to our own standards. On behalf of the whole company, sorry.”
But one has to ask if ‘sorry’ is enough? What has the Board and other stakeholders been doing during this case and what standards do they demand in respect of governance and operational leadership. The chairman, Lord Smith of Kelvin, has been bullish about SSE’s results, praising Ian Merchant for profit generation and dividend pay-out’s.
This is just one of a few instances of the relationship between leadership and accountability – or lack thereof - that were reported on the same day. For example, Patrick Hosking reported that “the Royal Bank of Scotland (RBOS) action group got over the start line on 3rd April when court proceedings were issued in the high court against Fred Goodwin the former CEO; Sir Tom McKillop, the former chairman; Johnny Cameron, the former investment banking chief; and Guy Whittaker, the former finance director. The group says that shareholders were misled about the financial health of the bank when it tapped them for £12 billion in fresh capital in the spring of 2008, less than six months before its collapse. Where the group represents 12,000 private investors and more than 100 institutional investors.”
Another example is Barclays, where Sam Coates and Katherine Griffiths, highlight how in a 236 page report (also published on 3rd April) by Anthony Salz, executive vice-president of Rothschild and a former senior partner of Freshfields Bruckhaus and Deringer, he found “an organisation fighting a war of attrition against regulators and its own directors. How Barclays was arrogant and aggressive over the past decade as it sought to avoid tax, evade regulation and protect huge pay packets for the 70 most senior figures.”
So are leadership and accountability mutually exclusive? No, they shouldn’t be. But Boards; Shareholders; Regulators; Academic and Institutional Bodies; and Advisors need to focus on what leadership really means for an organisation, its culture and performance. They need to start taking leadership much more seriously and implementing a no-nonsense approach to failings in taking real accountability. Otherwise bad leaders are going to keep making bad decisions simply because they can get away with it (and be paid a lot in the process).
What is also true in the 21st Century is that we shouldn’t be having debates about good and bad leadership – we should be having debates about good and great leadership.
Coates, S. and Griffiths, K. (2013). Barclays ‘too clever by half’ over tax, pay and rulebook. The Times, 04.04.13, p.41.
Hosking, P. (2013). Court fires starting gun at RBS claim. The Times, 04.04.13, p.44.
Samuel, J. (2013). SSE issue apology after record £10.5 million fine for mis-selling. The Times, 04.04.13, p.43.