A Year in Review: 2014

The US Federal Reserve called time on its $4.5 trillion bond-buying programme in October. However, Japan slipped back into recession in November, and Russia ended the year in crisis. Falling oil prices – more on this later – coupled with economic sanctions from the West have hit the value of the rouble. In the UK, the Scottish referendum ended up being much closer than some had expected, even though financial services companies such as Standard Life came out in support of the Union. The eventual 55 per cent “No” vote was greeted with relief by the financial markets.

 

In recent weeks, oil prices have dominated the headlines with the price of “black gold” down about 40 per cent to $60 a barrel due to shale gas production in the US and Opec members refusing to cut supply in response. Great for motorists, it has proved disastrous for oil exporters like Russia and fears are growing in the UK that up to 40,000 jobs could be cut next year across the industry.

 

Six banks were collectively fined £2.6bn by UK and US regulators over their traders’ attempted manipulation of foreign exchange rates. HSBC, Royal Bank of Scotland, Swiss bank UBS and US banks JP Morgan Chase, Citibank and Bank of America all coughed up. A separate investigation is continuing into Barclays – the self-styled “go-to bank”, presumably as that is where the Financial Conduct Authority goes to each time it fancies trousering a cheque. Added to that was the usual list of other raps on the knuckles – RBS paid out £56m in November for its IT breakdown, Lloyds £105m for Libor and Barclays £38m for putting client money at risk.

 

Investment bankers have also been busy doing deals. Carphone Warehouse and Dixons’ £3.8bn merger caught the spotlight along with Aviva’s shock £5.6bn move for Friends Life and BT’s £12bn tie-up with EE. AstraZeneca’s decision to rebuff a £63bn bid from US rival Pfizer evoked memories of Kraft’s pursuit of Cadbury’s. Pfizer was one of a number of US companies looking to lower their tax bills by moving abroad – a loophole US regulators have now closed.

 

Italy may contain some of the world's most beautiful buildings, but its economic statistics in 2014 were decidedly ugly. The economy had its third year in a row of contraction. Unemployment among young people is now a shocking 43%. Italy's Prime Minister, Matteo Renzi, is trying to stimulate employment by allowing firms to hire and fire more easily, but this prompted angry protests.

 

On January 1st, 2014 Colorado made history by becoming the first state in the US to allow for the sale of marijuana for recreational use, and in just four months, pot sales exceeded more than $200 million. Washington followed suit in July, and in November 2014, citizens in Alaska, Oregon, and Washington, DC voted in favour of joining them.

 

No story in 2014 represented a more violent collision between technology and pop culture than "Celebgate." Hundreds of private, often nude photos of celebrities including Jennifer Lawrence, Kirsten Dunst, and Kate Upton were stolen and leaked onto the internet, with users on Reddit, 4chan, and other sites rapidly redistributing and republishing them.

 

There are many ways you could chronicle Uber’s controversial, seemingly unstoppable rise in 2014, but here’s the one that might matter most: since it launched its ride-sharing platform in San Francisco, the number of taxi rides taken there has plunged 65 percent. That’s how fast, cheap, easy, and (usually) safe the service is - most of us would rather use the app than wave a hand at a passing car. If Uber has proven one thing this year, it’s that convenience is king - and its explosive growth continues unabated, despite an endless series of management issues that would leave less useful companies in a ditch.

 

Everything seemed to be breaking this year. In the early months, a nasty bug called Backoff started stealing credentials from register-side card readers, hitting Target, Home Depot and PF Chang’s along with half dozen other major retailers. By the time the dust settled, the damage was into the hundreds of millions — and that was just the beginning. Researchers found major holes in the basic protocols that keep the web secure: first Heartbleed, then Shellshock, then Poodle. Then, in November, the attack on Sony Pictures gave us the messiest and meanest corporate leak in living memory. Taken together, it’s been an important and painful wakeup call — we need to get past passwords, and get smarter about storing data.

 

2015 is going to be a tough year for many – when many European countries will continue to suffer from poor political governance and unemployment will remain high, especially among the younger generation. The outcome of the elections in the UK are not a foregone conclusion and the lack of a majority could bring a halt to the economic recover as political parties play games with the electorate for the sake of power rather than the sake of the economy. Governments will focus on the successes of the few, to make them appear more attractive than they really are and the gap between rich and poor will continue to widen.

 

The world needs to come together rather than fragment and it will take mature, gutsy leadership to bring some semblance of order in respect of the Middle East; Russia; and North Korea.

 

Due to the continued fallout from the recession many more small businesses will start and fail in 2015 and many families will need to recalculate their realistic expectations in respect of standards of living.

 

Yet established organisations will continue to grow and give stability to their ‘lucky’ workforce and employees will also recalculate their career path and look at staying with established organisations a lot longer than in the previous 40 years, becoming more risk averse when it comes to their careers and ‘moving around’.

 

 

Those Who Sadly Passed on to a Better Place in 2014 included;

 

 

Richard Attenborough - August 24. (29 August 1923 – 24 August 2014) was an English actor, film director, film producer, and entrepreneur. He was the President of the Royal Academy of Dramatic Art (RADA) and the British Academy of Film and Television Arts (BAFTA). As a film director and producer, Attenborough won two Academy Awards for Gandhi in 1983. He also won four BAFTA Awards and four Golden Globe Awards. As an actor, he is perhaps best known for his roles in Brighton Rock, The Great Escape, 10 Rillington Place, Miracle on 34th Street and Jurassic Park

 

Lauren Bacall - August 12. (born Betty Joan Perske; (September 16, 1924 – August 12, 2014) was an American actress known for her distinctive voice and sultry looks. She began her career as a model. She first appeared as a leading lady in the Humphrey Bogart film To Have and Have Not (1944) and continued on in the film noir genre, with appearances in Bogart movies The Big Sleep (1946), Dark Passage (1947), and Key Largo (1948), as well as comedic roles in How to Marry a Millionaire (1953) with Marilyn Monroe and Designing Woman (1957) with Gregory Peck.

 

 

Rubin "Hurricane" Carter - April 20. (May 6, 1937 – April 20, 2014) was an American middleweight boxer who was wrongfully convicted of murder and later freed via a petition of habeas corpus after spending almost 20 years in prison. Carter's autobiography, titled The Sixteenth Round, was published in 1975 by Warner Books. The story inspired the 1975 Bob Dylan song "Hurricane" and the 1999 film The Hurricane (with Denzel Washington playing Carter). From 1993 to 2005, Carter served as executive director of the Association in Defence of the Wrongly Convicted.

 

Oscar de la Renta - October 20. (22 July 1932 – 20 October 2014), was a Dominican American fashion designer. Born in Santo Domingo, he was trained by Cristóbal Balenciaga and Antonio del Castillo; he became internationally known in the 1960s as one of the couturiers who dressed Jacqueline Kennedy. An award-winning designer, he worked for Lanvin and Balmain; his eponymous fashion house continues to dress leading figures, from film stars to royalty.

 

Eusebio - January 5. Eusébio da Silva Ferreira, 25 January 1942 – 5 January 2014), was a Mozambican-born Portuguese football striker. He is considered one of the greatest footballers of all time. During his professional career, he scored 749 goals in 745 matches at club level and 41 goals for his national team, a total of 790 goals. Nicknamed the Black Panther, the Black Pearl, or o Rei (the King), he was known for his speed, technique, athleticism and his ferocious right-footed shot, making him a prolific goalscorer. He is considered S.L. Benfica's and the Portugal national team's most renowned player and one of the first world-class African strikers.

 

Nadine Gordimer - July 13 (20 November 1923 – 13 July 2014) was a South African writer, political activist and recipient of the 1991 Nobel Prize in Literature. She was recognized as a woman "who through her magnificent epic writing has – in the words of Alfred Nobel – been of very great benefit to humanity". Gordimer's writing dealt with moral and racial issues, particularly apartheid in South Africa.

 

Tony Gwynn - June 16. Anthony Keith "Tony" Gwynn, Sr. (May 9, 1960 – June 16, 2014), nicknamed "Mr. Padre", was an American professional baseball right fielder who played 20 seasons (1982–2001) in Major League Baseball (MLB) for the San Diego Padres. The left-handed hitting Gwynn won eight batting titles in his career, tied for the second-most in MLB history. He is considered one of the best and most consistent hitters in baseball history. He was a 15-time All-Star, recognized for his skills both on offense and defense with seven Silver Slugger Awards and five Gold Glove Awards. He was inducted into the Baseball Hall of Fame in 2007, his first year of eligibility.

 

Bob Hoskins - April 29. Robert William "Bob" Hoskins (26 October 1942 – 29 April 2014) was an English actor, known for playing Cockneys and gangsters. His best known works include lead roles in The Long Good Friday (1980), Mona Lisa (1986), Who Framed Roger Rabbit (1988), Mermaids (1990), Super Mario Bros. (1993), and supporting performances in Brazil (1985), Hook (1991), Nixon (1995), Mrs. Henderson Presents (2005), A Christmas Carol (2009), Made in Dagenham (2010), and Snow White and the Huntsman (2012). Hoskins received the prestigious Prix d'interprétation masculine, and won the BAFTA Award for Best Actor in a Leading Role and Golden Globe Award for Best Actor – Motion Picture Drama for his role in Mona Lisa, for which he was also nominated for the Academy Award for Best Actor.

 

P. D. James - November 27. Phyllis Dorothy James, Baroness James of Holland Park, OBE, FRSA, FRSL (3 August 1920 – 27 November 2014), known as P. D. James, was an English crime writer. She rose to fame for her series of detective novels starring police commander and poet Adam Dalgliesh.

 

Mickey Rooney - April 6 (born Joseph Yule, Jr.; September 23, 1920 – April 6, 2014) was an American actor of film, television, Broadway, radio, and vaudeville. Beginning as a child actor, his career extended over 80 years, making him one of the most enduring performers in show business history. He appeared in more than 300 films and was one of the last surviving stars of the silent film era, having one of the longest careers in the medium's history.

 

Jimmy Ruffin - November 17. (May 7, 1936 – November 17, 2014) was an American soul singer, and elder brother of David Ruffin of the Temptations. He had several hit records between the 1960s and 1980s, the most successful being the Top 10 hits "What Becomes of the Brokenhearted" and "Hold On (To My Love)".

 

Maximilian Schell - February 1. (8 December 1930 – 1 February 2014) was an Austrian and Swiss film and stage actor, who also wrote, directed and produced some of his own films. He won the Academy Award for Best Actor for the 1961 American film Judgment at Nuremberg, his second acting role in Hollywood. His parents were involved in the arts and he grew up surrounded by acting and literature. While he was a child, his family was forced to flee Vienna in 1938 when Austria was annexed by Nazi Germany, and they settled in Zurich, Switzerland. After World War II ended, Schell took up acting or directing full-time. He appeared in numerous German films, often anti-war, before moving on to Hollywood.

 

Shirley Temple Black - February 10 (April 23, 1928 – February 10, 2014) was an American film and television actress, singer, dancer and public servant, most famous as Hollywood's number one box-office star from 1935 through 1938. As an adult, she entered politics and became a diplomat, serving as United States Ambassador to Ghana and later to Czechoslovakia, and as Chief of Protocol of the United States.

 

Robin Williams - August 11. (July 21, 1951 – August 11, 2014) was an American actor and comedian. Starting as a stand-up comedian in San Francisco and Los Angeles in the mid-1970s, he is credited with leading San Francisco's comedy renaissance. After rising to fame as Mork in Mork & Mindy (1978–82), Williams went on to establish a career in both stand-up comedy and feature film acting. He was known for his improvisational skills. Williams won the Academy Award for Best Supporting Actor for his performance as Dr. Sean Maguire in Good Will Hunting. He also received two Emmy Awards, six Golden Globe Awards, two Screen Actors Guild Awards, and five Grammy Awards throughout his career.

 

 

How Creative Should You Allow Employees to Be?

Xiaomeng Zhang and Kathryn Bartol wrote in a 2010 article 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. Considerable evidence indicates that employee creativity can fundamentally contribute to organizational innovation, effectiveness, and survival.”

 

Creativity doesn’t mean employees relaxing in their chairs, staring at the ceiling and coming up with ‘head-in-the-clouds’ creations that are of absolutely no use to them or the organisation – but they look good on paper. For creativity to take place, employees must take a mature approach to finding effective solutions. There are responsibilities and behaviours that must exist at the leadership level and the employee level for this to be a win-win for everyone.

 

Zang and Bartol define creativity as “the production of novel and useful ideas by an individual or by a group of individuals working together. For creativity to occur in organizations, managers need to support and promote it, as they are the individuals who are most knowledgeable about which employee work outcomes should be creative and they have considerable influence over the context within which creativity can occur.”

 

Some of the key behaviours that must be embedded within the organisational culture are; the ability for the leaders and employees to have meaningful and transparent people conversations; employees must be involved in the decision making processes and employees must be empowered to be creative in the first place. These three behaviours alone will have a significant impact on developing a truly creative culture in the organisation.

 

Studies also have provided evidence for a positive relationship between supportive leadership and creativity, and a negative relationship between controlling leadership and employee creativity (e.g., Amabile et al., 2004; Madjar et al., 2002; Oldham & Cummings, 1996; Tierney & Farmer, 2002, 2004). In considering broader leadership approaches, some studies have shown support for a positive impact of transformational leadership on employee creativity (e.g., Howell & Avolio, 1993; Jung, Chow, & Wu, 2003; Keller, 1992; Shin & Zhou, 2003; Sosik, Kahai, & Avolio, 1998), but others have produced contrary results (e.g., Basu & Green, 1997; Jaussi & Dionne, 2003; Kahai, Sosik, & Avolio, 2003).

 

Creativity should be taking place in all organisations; at all levels and all of the time – there should be an embedded mind-set that encourages and recognises creativity. There will be some industry sectors where creativity will be the norm, advertising been one, but creativity goes beyond the ‘product’ and looks at all aspects of the business.

 

According to Ahearne, Mathieu, and Rapp’s (2005) conceptualization, empowering leadership involves highlighting the significance of the work, providing participation in decision making, conveying confidence that performance will be high, and removing bureaucratic constraints. These behaviours are conceptually highly relevant to creativity. For instance, it is clear from the creativity literature that participation in decision making and perceptions of autonomy are vital preconditions for creative outcomes (Amabile, 1988; Amabile et al., 2004). Inherent in the combination of empowering leadership behaviours is delegating authority to an employee, so as to enable the employee to make decisions and implement actions without direct supervision or intervention (Bass, 1985; Jung et al., 2003). Given the nature of creativity, such delegation helps establish a work context wherein an employee is encouraged and empowered to explore diverse creative alternatives before (perhaps) settling on a viable creative solution (Amabile et al., 1996). Zang and Bartol define empowering leadership as the process of implementing conditions that enable sharing power with an employee by delineating the significance of the employee’s job, providing greater decision-making autonomy, expressing confidence in the employee’s capabilities, and removing hindrances to performance.

 

In an ‘ideal’ organisation, creativity is not something that has to get any special attention – employees are recruited not just for their skills and experiences, but for their instinctive desire to be creative and they then work in departments that have embedded behaviours that support a creative culture and better still have leaders who, not just implement but, recognise creative excellence.

 

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.

How Effective Has Your Corporate Social Responsibility Been This Year?

Marc Epstein, Adriana Buhovac and Kristi Yuthas highlight in a 2010 article how “executives recognize the importance of social and environmental responsibility, corporate sustainability, but they seldom implement it successfully. The challenge lies in how to actually integrate sustainability into operational and capital investment decision making and implement it successfully in large, complex, for-profit organizations.”

 

The global financial crisis has put the brakes on Corporate Social Responsibility (CSR) in many organisations, and even many of the ‘big boys’ have struggled to focus on effective CSR – where the success of CSR can be measured in the local community. 

 

Epstein argues that, to improve the sustainability strategy implementation process, managers should carefully identify and measure key performance drivers included among the various inputs and processes. The drivers of the model include:

 

• External context (regulatory and geographical),
• Internal context (mission, corporate strategy, corporate organizational structure, organizational culture, and systems),
• Business context (industry sector, customers, and products), and
• Human and financial resources.

 

Before you can ‘give back’ you have to be secure yourself – that’s regardless of whether you are an organisation or an individual, that’s why it’s often ‘mature’ organisations and individuals who are in a real position to give back socially. SME businesses must be sure that their CSR initiatives, however well-meaning, add to their sustainable growth; otherwise both they and the community they are trying to help may suffer in the medium to long-term.

 

Recently, the Foundation for Applied Research (FAR) of the Institute of Management Accountants (IMA®) sponsored a research study to examine how leading corporations integrate economic, social, and environmental impacts into day-to-day management decision making. The research focused on four companies:

 

1. Nike, the world’s leading designer, marketer, and distributor of athletic products and clothing;
2. Procter & Gamble (P&G), one of the world’s leading branded consumer products companies;
3. The Home Depot, the world’s largest home improvement specialty retailer; and
4. Nissan North America, a unit of Nissan Motor Co., a leading global auto manufacturer.

 

Epstein et al highlight how “in all four companies, there are fewer conflicts for senior and middle managers in balancing social, environmental, and financial performance because these conflicts are resolved higher up in the organization and are well integrated into the informal systems. Upper management has bought in to the benefits relating to sustainability. Thus people are able to make certain trade-offs because they know their leaders will be supportive. Corporate responsibility is one of Nike’s nine strategic priorities. The CEO and other company leaders support CR intensively and consider it an enhancing element in reaching strategic goals. In fact, leadership engagement is number one. ‘Making a sustainable decision that negatively impacts margins is not so wrong, but they have to inform me because we can offset this somewhere else,’ one vice president explained.”

 

All four of these organisations are seasoned, mature businesses where corporate social responsibility adds to their ‘business value’ by allowing them to be seen actively supporting the communities where they work, hence this is a win-win for everyone involved. But don’t forget that these are profit driven organisations and everything they do ultimately links back to their corporate strategy and meeting their stakeholder requirements and expectations, many of which are financially driven

 

Epstein et al highlight how “companies sometimes consider social impacts more difficult to measure than financial results because they’re often intangible, hard to quantify, and difficult to attribute to a specific organization, and they have a long time horizon. This difficulty often presents obstacles to producing compelling evidence of impact and mission achievement.”

 

Both common sense and years of research tell us what we already know – that supporting local communities where you do business can do nothing but help your businesses sustainable growth. It’s the identification of effective corporate socially responsible projects and then the effective implantation of these projects so that they really make a difference on the ground that distinguishes ‘good’ CSR from the rest. Hopefully next year organisations around the globe can put a little more strategic thought into CSR and identify the win-wins that many businesses and communities need.

 

As Epstein, Buhovac and Yuthas conclude “an organizational culture supporting sustainability decisions can inspire and motivate employees to take sustainability obligations seriously. In addition, in their recruitment and development practices, companies may seek to create in their employees a passion and commitment to sustainability. This leads to contributions that are good for society, the environment, and the company’s bottom line.”

 

References:

 

Epstein, M.J., Buhovac, A.R. and Yuthas, K. (2010). Implementing Sustainability: The Role of Leadership and Organisational Culture. Strategic Finance, Vol. 91, Issue 10, p. 41-47.

Are We Developing Effective Future Leaders?

William Maxwell highlights how “many of us are paying an unprecedented price for the rightsizing of the 1990s and the resulting abandonment of leadership development. We seem to be struggling to find capable, caring, C-suite leaders. In some cases, we see corporations seeking ‘boomerang’ CEOs and luring other C-suite executives out of retirement,” (p.5).

 

Although there has been a deluge of theories and research on leadership development one has to ask just how much of a real difference all this work has had ‘on the ground’ inside organisations. For example Googling leadership development will give you 84,500,000 responses, that’s over 84 million, so one would be excused for thinking that there must have been a positive shift in leadership in the last few decades.

 

Yet if one looks at the different groups on Linkedin focused specifically with leadership you’ll find over 90% of their discussions are focused criticising the current lack of effective leadership around the globe and on finding ways to improve leadership – even with over 84 million suggested ways of improving leadership out there already. So what is the real problem – it seems employees accept that their leadership can be significantly improved and there are plenty of solutions to choose from – so why aren’t we making progress?

 

Maxwell suggests that “the problem runs deeper, however, to the roots of leadership development throughout organizations. Just think about it. If we can reorganize companies, merge, acquire, or dispose of others, and compete globally, then why can't we develop better leaders? The reason is simple. We think that it is someone else's job or that we can buy C-suite and other leadership talent. Some might argue that I exaggerate the current leadership situation, but the subject does merit greater dialogue.”

 

Maxwell mentions one word at the end – ‘dialogue’ – and in the last twenty years one thing I have found inside companies is that they very rarely sit down and openly discuss leadership issues. I’ve found that 99% of employees know what makes a great leader. Get them in a room – ask them the very basic question – and they will fill a flipchart with the right behavioural traits and skills a great leader needs.

 

If you then ask them how many of these traits and skills they apply on a constant basis, day-to-day, all will admit that they don’t apply them constantly – and this is where the problem with leadership lies. It’s not that we need any more theories or research – we all know what it feels like to be led by a great leader – the problem is found on the day to application and implementation of the traits and skills we all agree should be there.

 

Maxwell reminds us that “we are accountable for developing the best leaders possible and, without question, the time is now for a ‘leadership renaissance.’ Several books on leadership preach leading by example, being role models, and inspiring our people. Inevitably, many of us do not embrace or demonstrate the challenge. After all, being visible, accessible, and accountable can be time-consuming and frightening.”

 

One of the quickest and simplest solutions you can implement today within your organisation is to get your leadership peers together and having an open and honest discussion about leadership in your organisation. What’s working and what isn’t – how much you all really know about the effect your style has on your staff and on your internal customers. Discuss leadership experiences you have recently had – both good and bad – share stories and ask questions. You’ll be amazed what you will learn and how this simple discussion over a cup of coffee can reignite your leadership in the right direction – where as a group you will start defining and learning effective leadership in your organisation. It takes guts and courage to start these dialogue series – but you’ll be amazed of the impact just talking about effective leadership can have on everyone; and over time you will start to have a sustainable influence on changing leadership and the organisation for the better.

 

Maxwell mentions that “yes, we think someone else should take responsibility for developing our future leaders. Only our respective C-suite teams can do something about developing tomorrow's leaders. The research is compelling. Change, driven and led from the top, truly transforms and sustains any business.”

 

So you can start today – start actively asking yourself how effective is your leadership – learn not just to manage by walking around – but learn to lead by walking around too. Learn from your staff and your peers and most importantly regularly have transparent dialogue about leadership in your organisation. This will have an immediate impact if you have the courage to question just how effective your leadership is and if you have an overwhelming desire to grasp the opportunity you have been given to become the best leader you can be.

 

References:

 

Maxwell, W.J. (2006). Leaders developing leaders. Human Resource Planning, Vol. 29 Issue 4, p.5-7.