Leaders in London 2006

Towards the end of 2006 I was lucky enough to attend the Leaders in London summit.  This article therefore consists of a series of “soundbites” that attempt to summarise some of the key points made by each of the speakers, followed by a synopsis of the themes that emerged from the event overall.

René CarayolAuthor, Broadcaster & Visiting Professor at Cass Business School

René spoke on a theme close to my own heart, namely that there is no standard template for leaders to aspire to, but rather it is individuality and “doing it your way” that makes for good leaders.

Great leaders are not without their faults and weaknesses, but what distinguishes them from others is their awareness of their weaknesses and their ability to build a team around them to fill the gaps.

Skills vs. Attitude – At Apple Steve Jobs recruited senior people on the basis of their skills.  When he went to Pixar he found none of the skills he needed existed, so had to recruit for attitude and develop the skills.  He learnt that skillsbuilding alone can make someone 50% more productive.  But attitude can make someone 50 times better.

Bob Geldof Musician, Businessman & Inspirational Humanitarian

Bob began by saying that he doesn’t consider himself to be a leader.  He said that with Band Aid he was only speaking for himself, but that people gathered round his vision.  However, in my opinion, humility and a strong drive to achieve your vision are two of the strongest traits of outstanding leaders.

Bob sees leadership as situational – We can get obsessed with looking back at the traits of great leaders such as Roosevelt, Churchill, Stalin and De Gaulle at the end of World War 2.  All were undoubtedly great leaders for their time, but today perhaps people would be better looking for leaders who are better able to bend and flex with society – Leadership needs to suit its times.

On working with others to achieve results, Bob said that he has eight offices in and around London but that he is not allowed in any of them as he is too disruptive.  He said he has to give way to the “enablers”.  His job is to have the ideas, theirs is to implement them.

A point the Bob made that I rather liked, that is that leaders need to be allowed to make mistakes but that they don’t have to learn from their failures.  All that matters is that they pick themselves up and get going again.

Renée Mauborgne Author & Professor of Strategy & Management, INSTEAD

Renée argued that organisations need to be far more innovative if they are to compete and survive in the market.

She points out that what many organisations regard as innovation is not very innovative at all because it is constrained within the boundaries of their conventional thinking.  For example, we invest huge amounts of time and money understanding customer needs, but this approach only sees existing customers, not potential ones.  Existing customers will also be the least creative.  They are likely to want a little more of this and a little less of that.  Non-customers, on the other hand, will be unconstrained by current offerings and therefore are likely to be more creative and provide insights into radically different opportunities.

For the most part, what we perceive as the boundaries of our industry or market are not boundaries at all, they simply represent a lack of imagination.

To successfully exploit new innovations you need a sound strategy, which Renée defines as being composed of the following 3 elements:

  • Value proposition: utility minus price
  • Profit proposition: price minus cost
  • People proposition: what motivates and engages your employees and partners

By aligning all three behind your idea you will successfully close the gap that will otherwise exist between innovation and performance.

Susan Greenfield Neuroscientist, Author, Broadcaster & Oxford Professor

The notion of what is leadership is changing.  In the past it was more structured and directive whereas in the future people will need to behave differently. 

One factor driving this is the screen-based generation.  Screen culture is a world of cut and paste and of constant flux.  For the generation growing up with this, truth is not delivered by the authors and authorities, but rather it is assembled by the audience.

Screen culture also provides a clue as to why people are probably becoming more short-term and reactive, as reacting in the moment is very much a part of the process.  For example, how often have you sent an email only to receive a reply within seconds?

For leaders to be successful in the future, they will need to recognise the differences this will have in the nature of the people they lead.  For example, attention spans are likely to be come shorter, risk –taking become greater and people will have a grater need for creativity in their work.

Richard Branson Entrepreneur

Virgin is made up of over 250 companies.  What links them is a central philosophy which is about taking on the big conglomerates, moving into their territory and seeing if we can shake them up a bit. 

With so many businesses, the marketing experts said we were stretching the brand too far.  Richard said that he agonised over whether the critics were right but he added that they have become fairly thick skinned and tend to ignore the critics.  The result has been that in time they have proved the critics wrong.

The Virgin approach is what Richard calls “Branded Venture Capitalism”.

When asked “what do you look for when recruiting talent?”  Richard replied “People who are good with people. If the person at the top cares about the person cleaning the floor and the people on the switchboard, then everyone comes alive. If the people at the top are not good with people, then it ricochets down and the culture of that organisation is miserable for everyone”.

As an example, Richard told a story about an employee who was stealing from the company.  Rather than firing him, he called him in and told him “we don’t do things like that.”  He went on to say that he became one of Virgin’s most loyal employees and has now been with the company for twenty-five years.

Scott Bedbury Leading Brand Expert and former Marketing Guru with Nike & Starbucks

Brands live in people’s minds.  You therefore can’t control them – you can only influence them.

A brand is a promise.  So what are you promising – the product or service and/or how you will make people feel?
When Starbuck’s started out it didn’t have a market.  Research showed that in 1995 only 2-3% of Americans could pronounce the word “cappuccino”.  The brand therefore needed to convey a message about how people would feel as people wouldn’t have understood the product.

To create this brand at Starbucks we trained the staff in the concept of The Third Place i.e. the relaxing place halfway between home and work where you feel you can linger.

Picking up Renée Mauborgne’s point about not talking to your customers, Scott explained that during his time at Nike they never pre-tested an advert on customers as that would lead them to be unremarkable.  This “just do it” mentality could obviously lead you to make mistakes, but the culture was such that mistakes were recognised as a requirement for meaningful innovation.  Indeed, if you didn’t make high profile mistakes you didn’t get promoted!

John Kotter Professor of Leadership at Harvard Business School

John Kotter spoke on the subject of, what he described as, A+ leadership.  To illustrate what he meant by this he gave various examples of the approach of leaders he admired.

Each story painted a picture of an individual whose character, purpose and vision took them far beyond the thoughts of most of the people they led.

He spent the most time talking about Konosuke Matushita, the Japanese founder of the company now known as Panasonic.  When Matushita was in his 80’s he was once asked how he had kept going for so long.  He listed four tenants to account for his success:

  • The willingness and ability to keep growing
  • A humble heart and an open mind
  • Big idealistic goals and beliefs
  • Through hardship we can be re-born stronger

As an example to illustrate this last point, Kotter told of a time when Matsushita spoke to a gathering of his workforce at the end of World War 2.  They were living in an occupied country, their inventory had been confiscated and the workers were demoralised and dejected.  Despite all of this, Matsushita stood before them and said “I’ve been thinking about purpose.”  He then described how taking the lead in quality, innovation and low prices would force competitors to do the same and “in 250 years would eliminate poverty in Japan.”  He sat down to a silence.  Then, one by one his employees stood up, some with tears in their eyes, and said “I think I could dedicate my life to this.”  In Kotter’s opinion, much of the “Japanese way” that conquered the world’s economy in the 1980s can be traced back to that moment.”

Alan Sugar Entrepreneur & CEO of Amstrad

Alan Sugar did not make a speech as in his opinion “speeches are boring”, so instead he answered questions from the floor.  The following are some of his more interesting answers:

On learning from mistakes: “I can guarantee that any of you would be happy to earn in the rest of your life 10% of what I have lost.”

On recruitment: “The challenge of recruitment is that CV’s only work for technical competencies.  Recruiting creative people is much more difficult.”

On leaders he admires: Rupert Murdoch. Philip Green. The late Arnold Weinstock. Richard Branson: What I admire about him is how he keeps his eye on the bigger picture and recruits lieutenants to manage detail. I’m a bit envious of that, in fact. One of my biggest faults is I know where the last nut and bolt is on what shelf or in what draw in all the factories. It’s not clever, but I can’t help myself.”

Larry Bossidy Author & Former Chairman & CEO of Honeywell & Vice Chairman of GE

Bossidy’s talk was on the need for organisations to be good at execution.  According to Bossidy, companies rarely fail because of a flawed strategy; it is more likely that if a company does badly it is because of their inability to implement the strategy.

To be executable, a strategy has to encompass more than simply the vision and the theory; it must take into account people, structure and operations in an integrated business system.  The people are crucial.  You need to excite them and to engage them with them at every level.

There are 6 priorities for a good execution leader.  They are:
   1.   The leader needs to know the business inside out
   2.   Everyone must be realistic
   3.   Set clear goals. Simple is clever. Simplicity equals intellect.  Companies with 10 goals have no goals.
   4.   Reward the doers
   5.   Coach your people
   6.   Know yourself.  The higher up the organisation you go the less honest people will be in their appraisal of you.

You need to encourage robust dialogue

The basic requirements for good company leaders are:

  • Authenticity
  • Self-awareness
  • Self-mastery (to embrace new ideas and renew yourself)
  • Humility (Arrogance is a cause of failure.  Humility is not thinking less of yourself, it’s thinking of yourself less)

We don’t think ourselves into new ways of acting; we act ourselves into new ways of thinking.
People who get wound up in their profession ultimately become bores!

Daniel PinkAuthor, Journalist & former Speech Writer for Al Gore

Dan’s talk centred on the contents of his book A Whole New Mind. 

The brain is made up of two halves; the left half is responsible for more structured and logical thinking and the right for more creative and holistic thinking.  We use this as a metaphor to describe the way businesses need to change in order to compete in a changing world.

The change that Dan identifies is a mover from the “Information Age” into the “Creative Age”, where right-brained thinking will become relatively more important.

The three factors driving this change are; Abundance, Asia and Automation. 

Abundance means that we have already got everything we need so, to sell us more stuff, manufacturers have to make their goods objects of desire, to appeal to the right side of the brain.

Asia and Automation.  If a task is logical and routine, the low costs of labour in Asian markets combined with the advances in computer and robotic technology mean that it can most likely be done faster, better or more cheaply elsewhere or by a machine.  This means that a lot of western jobs are under threat.  However, the jobs that are almost impossible to automate and that are less easy to offshore are the more creative right-brained tasks. 

Therefore, as a result of these three A’s, western businesses need to become more right-brained if they are to thrive and survive.

Colonel Tim Collins Army Colonel made famous by his speech to troops in the eve of the Iraq war.

Being in command of an Army at war is a lonely place to be.  No one can really tell you what it is going to be like.
No plan survives the first five minutes of a battle, as a German general famously said.  The enemy doesn’t normally know the plan.  They don’t know where they are supposed to stand.

Working with the local people and listening is hugely important.  At one time we were considering the best way to extinguish the oil well fires.  The Americans were flying in experts from Texas at huge cost.  In talking to the local people they said they could put the fires out (“after all, we started them”).  Within a matter of days all the fires in our area had been extinguished.  I asked them why they had not put them out before.  They replied; “no one asked”.

I believe it’s useful to understand what I call ‘two up’ – I think myself into the shoes of my boss’s boss and think what does he want from my boss, which leads me to better understand what my boss wants from me.

Wars are usually the result of some form of failure.  You should therefore not set out to defeat the people.  You should seek to defeat the spirit of failure – the people are just the symptoms of failure.

Ricardo Semler Maverick creator of the world’s most unusual workplace.

A lot of business processes ensure consistency and routine, but at the expense of freedom and creativity.  For example, it took just 2 people to create Microsoft.  Today they employ 25,000 engineers, but how different is Windows today compared to what it was 10 years ago?

At Semco we take the opposite view – we remove process to create freedom.  On the manufacturing side this may have reduced productivity (actually I don’t know whether it has as we don’t bother measuring such things) but it has increased flexibility. 

As an example of where flexibility may be better than process, Gillette wanted to know how to develop their products.  It employed two people from NASA and spent more than $600m on research and … wait for it … they decided to stick a third blade between the two existing ones on their razor!  Weeks later a cheap rival came out with a 4-blade razor.  Why did Gillette spend $600 million to get to the same place as their imitator?

Why did Kasparov keep beating the computer at chess?  The computer could plan more moves ahead and could analyse every option in a fraction of a second, but Kasparov had intuition – yet intuition is the one thing most businesses ignore in their people – they are only happy when they can see a plan.

Furthermore, once you have killed intuition with a plan, you then stick to it.  In business you have the right to be wrong provided you are precisely wrong, i.e. on plan!

When you move away from process, the people become much more important, which is why we invest so much time in recruitment.  The recruitment processes used by most companies are like blind-dating – it’s a silly process.  At Semco we start by getting people top define the role requirements.  Then we invite anyone who might be affected by the new appointee to get involved with the recruitment process.  This will involve subordinates of the role, colleagues from other departments and so on.  All of these people will spend time with the candidates and will have a vote on who we appoint.  The process takes a lot of time but as a result, attrition is less than 1%.

We still measure things like growth, profits etc.  But we also place a lot of importance on employees having a good life.  For example, we have recently introduced the “Retire A Little” programme.  We say, don’t save your ambition to climb a mountain until you are retired and too old, take time off and do it now.  We therefore offer employees the opportunity to buy their Wednesdays back off the company so that you can do the things you would have otherwise had to wait until retirement to do.  And then, when you have reached retirement age, we will employ you on Wednesdays to retain your experience and to provide cover for the people in the Retire A Little programme.

Of all the companies that have visited Semco, I don’t think any of them have adopted more than a few of our ideas.  I believe that this is because it requires the bosses to give up control, and that scares them.  At Semco we recently had a cocktail party to celebrate the ten-year anniversary since the last time I made a decision.  I don’t need to make decisions because the workforce are closer to the action and can make better decisions than me in a more timely fashion than me.

When asked how he would like to be remembered, Semler replied:  “A while ago I was taking a walk in a Boston cemetery.  For the first half of the walk I was thinking, how would I like to be remembered?  For the second half of the walk I was thinking, why would I like to be remembered?”

General Colin Powell Former Us Secretary of State.

Our greatest weapon in the defence against terrorism is our openness.  We lose that if we start to shut ourselves off from the world.  They can’t change who we are.  Only we can do that if we follow the counsel of our fears.

Leadership doesn’t get the work done – followership does that.

Don’t motivate your people, inspire them.

You will know you’re a good leader when your troops will follow you if only out of curiosity.

On Gorbachov and perestroika:  Gorbachov did what all good leaders should do.  He looked at reality and didn’t turn away.

A good leader must deal with poor performance and failure.  When you do, the good followers are watching. If you don’t deal with it, they won’t think you are serious about high performance.

Management may be a science but leadership is an art.  I have never yet seen an environment where you can be a consistent Type A or Type B leader.  

Tim & Ricardo (previous speakers) both provided vision & took care of their troops in very different ways.  No one way is right. Different situations call for different types of leadership.

In leadership you’ve got to find your groove.  What works for me may not work for you.

The essence of leadership is to be trusted.  Even if they don’t know how you will achieve something, if they trust you enough, they will follow you

If people don’t bring you their problems then either they don’t think you can solve them, or they don’t think you care.

I can fool a General any time, but you can’t fool a Private, they’ll see right through you.

My three rules for leadership are:  

  • Convey purpose and vision to everyone
  • Look after your troops the best you can
  • Ensure that everyone trusts each other – You’ll know when they do.

On peace, stability, terror and the new World order:  In my youth the battlefield was clearly marked out.  The old battle between East and West meant that we all knew who the enemy was and what to do.  Perestroika and Glasnost changed all that.  I recall a meeting with President Gorbachov when he accused the US of not doing enough to help.  I sat back and made it clear that I still saw him as a Commie and the USSR as the enemy.  Gorbachov smiled and said “Mr. Secretary, I am afraid you will need to find yourself a new enemy.”

Obviously terrorism is a new threat, but the fact remains that the world is a much better place than it was.  The battlefields of my youth have been replaced by the economic playground of the present.

Synopsis

The following is a summary of some of the common themes that emerged during the summit:

Humility.  Virtually all of the speakers spoke of the need for leaders to be genuinely humble.

Influence rather than direction.  Most speakers referred to the need to inspire people to want to do things, rather than telling them what to do.

Creativity.  Everyone referred to the need for greater creativity in one way or another.  In some cases this related to the need for innovation in the product offerings, in others it referred to more creative work practices.  However the common thread was that the processes of the past are unlikely to provide the solutions to future challenges.

Challenging.  Another common theme was the growing need to challenge the conventional ways of doing things.  Whether this is in the way you market your products or your approach to recruitment, the pace of change is such that we need to be constantly asking whether the current way is the best way.  Ricardo Semler said that at Semco everyone is expected to ask “why?” three times of any process or decision

About the Author
Alistair Schofield is Managing Director of Extensor Limited.