How Do You Develop a Trusting Culture?

In an interesting on-line article, the boss of the Virgin Group, Sir Richard Branson, highlights how he is offering his personal staff as much holiday as they want. I can imagine the announcement in other organisations and a mad rush to the door, as people go home to pack, with a huge smile on their faces. It takes a huge amount of trust and belief in your people to make such an offer – as it’s the kind of offer that is hard to take back, without a major negative impact on motivation and morale, if you’ve got it wrong.

 

Branson says that his staff of 170 can "take off whenever they want for as long as they want". He added that there was no need to ask for approval, nor say when they planned to return, the assumption being that the absence would not damage the firm.

 

Now it’s worth noting at the outset that this offer, at this point in time, is only for his personal staff of 170, out of the more than 50,000 people employed by the company around the world. And I can’t help wondering what message it’s giving to the other employees around the world – some will think it’s just basic favoritism; others will be demotivated, believing that the signal implies he doesn’t trust them as much as his ‘near and dear’ – so even though exciting, the management of the roll-out and communication of such an inspiring idea has to be very well thought out and managed.

 

Branson said he was inspired by his daughter, who read about a similar plan at the online TV firm Netflix. "It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off," wrote the billionaire.

 

"The assumption being that they are only going to do it when they feel 100% comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business - or, for that matter, their careers!"

 

To have an organizational culture where you have certainty in your employees commitment to the business is definitely the exception and not the rule in the first part of the 21st century. The concept is innovative and exhilarating – but we will need to watch this space very carefully.

 

This kind of ‘perk’ has to be earned and cannot be simply given away by employers, not that I think many will be rushing to implement this. Since the media got hold of this concept from Branson, they’ll be many employees of other organisations who will be thinking what a great idea this would be – though they will have scant regard for the concept of ensuring their absence doesn’t damage the business in any way.

 

Branson added that he had introduced the policy in the UK and the US "where vacation policies can be particularly draconian". If it goes well there, Branson said he would encourage subsidiaries to follow suit. "We should focus on what people get done, not on how many hours or days worked. Just as we don't have a nine-to-five policy, we don't need a vacation policy," he wrote.

 

This business concept is entirely correct – yet there are still organisations that focus on the hours employees are at work and not on how productive they are. It still amazes me that they naively believe that time behind a desk equates to output – and it simply doesn’t.

 

Before being able to trust employees to take leave, both when they need it and when it is convenient to their jobs and performance; organisations have to allow employees to be more flexible in their work hours – focusing on quality outputs, performance, motivation and ultimately culture.

 

Only when both the leadership and the employees have been able to ‘trust’ each other to get the job done, rather than getting the hours done – will organisations be able to take the next step and allow employees to take leave when they want. Because they will already have a culture based around quality outputs – which is what business is all about.

Small Business: How Do They Optimise Risk?

A recent survey by the Confederation of British Industry (CBI) highlights how small businesses in the UK have gone on their biggest hiring spree since records began a generation ago in 1988, with 24 per cent of companies saying they were increasing staff numbers. This is fuelled by booming domestic demand that has delivered a fourth consecutive quarter of growing output and orders for small to medium sized businesses.

 

These figures will stoke some optimism in the UK, at least that the economic recovery is bearing fruit beyond London and the financial services industry. However export orders remained flat in the three months to July, which was worse than expected. The CBI said that the disappointing export performance may be a consequence of the strong pound, which has forced about a dozen quoted exporters into profit warnings in recent weeks.

 

Although about 31 per cent of companies said they were more optimistic about their business situation, against 11 per cent who reported being less optimistic. However the CBI sounded a note of caution that shortages of skilled labour were impeding companies’ growth plans. The proportion of companies citing shortages as a factor hampering output rose sharply, from 14 per cent to 23 per cent, over the quarter, reaching similar levels to the second half of 2007 before the recession, despite the unemployment being nearly 15 percentage points than in 2007 at 6.6 per cent.

 

I remember learning back in the 80’s that the last budget you should cut during a recession is your training and development budget and it seems surreal 30 odd year’s later that business doesn’t learn from the past. It doesn’t take a rocket scientist to predict that once a recession is over ‘your’ organisation is going to need to recruit ‘new’ talent to support its growth – just the same as it did during the good times.

 

But it seems that after a recession many small businesses just simply aren’t ready to ‘adjust’ to the turnaround – albeit that theory and past practice tells you that the turnaround will come.

 

There seems to be this weird change that goes through the minds of many small business owners when times are tough – for some reason fooling themselves that ‘recession’ isn’t just a normal part of the cycle of business and local/global economies – and hence many don’t just become cautious they become totally risk averse.

 

For example, looking at the small business sector in the UK again – a study of the exporting habits of small and medium-sized companies found that some of the world’s fastest growing global markets were ‘severely underrepresented’. Where the study identified that British small businesses are more likely to export to New Zealand than China, prompting concerns that companies are missing opportunities.

 

Research from a survey of 1,000 small businesses by FedEx showed that small companies regard China, the world’s second biggest economy, as the most challenging country to trade with. Trevor Hoyle, vice-president of FedEx Express in the UK said “although UK SME’s are doing a good job, there seems to be a lack of awareness, and not only of the benefits to exporting, but to the resources available, which are plentiful if you know where to look.”

 

There is a huge difference when it comes to risk of being brave and being stupid – where having the courage to identify growth markets and going for them while others ‘ponder’ on the potential pitfalls can give you a significant competitive advantage as you develop contacts and relationships with your ‘new’ export market. China, for example, are going to buy from someone – so why wouldn’t you want it to be you?

 

References:

 

Hurley, J. (2014). Small firms held back by failure to see the big picture. The Times. 4th August, p.47.

 

Leroux, M. (2014). Small businesses hire staff at fastest rate since 1988 but need export help. The Times. 4th August, p.48.

 

Why Should Anyone Want To Be Led By You?

Robert Goffee and Gareth Jones asked this question in an article in the Harvard Business Review in 2000 and it’s just as relevant today as it was back then. Why should anyone want to be led by you?

 

Goffee and Jones highlight how they’d found over the last ten years that “if you want to silence a room of executives, try this small trick. Ask them this very same question and without fail, the response is a sudden, stunned hush. All you can hear are knees knocking. Executives have good reason to be scared. You can’t do anything in business without followers, and followers in these ‘empowered’ times are hard to find. So executives had better know what it takes to lead effectively - they must find ways to engage people and rouse their commitment to company goals. But most don’t know how, and who can blame them? There’s simply too much advice out there. In 1999 alone, more than 2,000 books on leadership were published; some of them even repackaging Moses and Shakespeare as leadership gurus.”

 

It seems in the 21^st Century a lot of people will claim to be great leaders and many more will claim they would be great leaders if someone would just give them the chance to lead – but do we ever really ask this very valid question? It’s simple, but brilliant – though of course it demands an honest answer as well.

 

Goffee and Jones discovered that inspirational leaders share four unexpected qualities – though I’d personally question why they’d consider them ‘unexpected’; 

• By exposing some vulnerability, they reveal their approachability and humanity.

• Their ability to collect and interpret soft data helps them know just when and how to act.

• Inspirational leaders empathize passionately and realistically with people, and they care intensely about the work employees do.

• They capitalize on what’s unique about themselves.

 

They suggest that you may find yourself in a top position without these qualities, but few people will want to be led by you.

 

The other problem with leadership is that it does come with power and it’s often the power bit that goes to the head and changes people for the worse. Seeing the power that comes with leadership as a ‘tool’ to do good rather than bad is a vital step in embracing effective leadership.

 

This ‘power bit’ is easily ignored – but it is both real and toxic. Most bad leaders get consumed by the power and what they can do with it – both good and bad; whereas effective leaders use the ‘power’ potion of their position for good.

 

As Goffee and Jones mention “all four of the qualities described here are necessary for inspirational leadership, but they cannot be used mechanically. They must become or must already be part of an executive’s personality. That’s why the ‘recipe’ business books, those that prescribe to the Lee Iacocca or Bill Gates way, often fail. No one can just ape another leader. So the challenge facing prospective leaders is for them to be themselves, but with more skill. That can be done by making yourself increasingly aware of the four leadership qualities we describe and by manipulating these qualities to come up with a personal style that works for you.”

 

So the question still remains, whether you are currently in a leadership position or have ambitions to become a leader – why would anyone want to be led by you? Your honest analysis of this question on an ongoing basis will make you a better leader – as it will force you to first of all deal with the very basics of leadership and then allow you to become a better leader each and every day.

 

The overriding factor in all of this is honesty – if you answer the question with a ‘wish list’ rather than your own reality – you are doomed to fail and will lead from a position of complete denial. These leaders do exist – but they don’t have to. Leadership is a privilege – so embrace it with all of your being and try to be the best you can be and never forget the ultimate question – why would anyone want to be led by you?

 

References:

 

Goffee, R. and Jones, G. (2000). Why Should Anyone Be Led By You. Harvard Business Review. September.

 

What Has Change Got To Do With It?

It’s worrying how the word ‘change’ is now being used as a reason why organisations, or rather employees, won’t progress or transform – giving a reason for a host of ‘service’ providers, usually with the word 'consulting' in their name, to offer to support that change for an unreasonable cost - and worse still organisational leaders are falling for it.

 

We are all used to dealing with major changes in our lives – from learning to walk; our first days at school; our first days at work; getting married and of course having children, and getting old – these events along with many more induce huge change in our lives – change that we are not prepared for before the event (regardless of how much advice you get from others) – and yet in the majority of cases we adapt to the change pretty well.

 

As humans, change is actually in our DNA – we are used to adapting to changes in our environment – we always have been. In fact we have a natural pioneering spirit – which has made us what we are (or at least the better part of what we are).

 

But over the last few decades as many employees have become more and more cynical about their environment – both from a business and personal perspective – the ‘hawks’ that are constantly hovering, looking for an opportunity to make money out of a real or perceived weakness - have seized on the opportunity to make organisations believe that change is a ‘problematic event’ that needs outside help.

 

First of all – if you do get outside help – make sure they understand your business and your culture – before they even start to craft solutions to your problems. Many of the failures of change initiatives aren’t due to the organisation – but due to an outside influence, like a consultancy company, coming in with their ‘prescribed medicine’ that has no chance of working from the get-go, as it fails at the simplest level, in not understanding the culture of the organisation.

 

Amazingly, rather than apologising for their failures, these consulting firms use these failures to create even more myths about the difficulty of change – taking no accountability themselves for creating failures that never had to happen in the first place.

 

Secondly, ‘we’ need to stop creating myths about change that in themselves create a self-fulfilling prophecy that means change initiatives are doomed to failure before they even start – because organisations create false barriers and problems that simply aren’t true, but manage to create a perception of a huge insurmountable process without even thinking it through.

 

Anyone who has run a marathon, probably a half-marathon too, will know that if you start the race believing that you won’t finish – then you are pretty much doomed from the start. Marathons along with other sporting events are as much mental as they are physical, where belief before you start is a key requirement for success.

 

Organisations are changing on a daily basis – whether it’s products that are developing or their customer base; or it’s their people or systems – change is part of business. When organisations don’t use the word change – everything seems to run smoothly – but as soon as some ‘smartarse’ uses the word change – then a whole new set of behaviours click in – where leaders and their employees suddenly feel a weight bearing down on them and some ghost like resistance and panic sets in to the challenge ahead.

 

Employees at all levels need to stop believing in these mythical ‘ghosts’ that hinder change and start embracing change, as it’s a natural part of human development. Just look back over your lifetime, whether that’s just 16 years or 80 years; your environment will have changed considerably in that time.

 

So with that in mind you need to accept that it’s your approach to ‘change’ that defines the outcome – you decide whether change will work or if it won’t and if you decide on the latter then you must assume accountability for the failure.

 

Organisations and employees have been brainwashed for long enough – change is part of our environment – and it’s certainly part of our survival. So let’s get excited by change – as it links to innovation, customer service and competitive advantage (to name a few) – business principles that make you stand out from the crowd of competitive organisations.

 

The only people who want you to believe change is difficult are people who want to charge you a lot of money to actually show you that it isn’t J