Networking for success
Alistair Schofield argues that networking should be built into leadership programmes, while Rowan Gormley describes how it works at Virgin Wines.
Is it any wonder that filling senior level vacancies is so difficult? The speed of change and with it the competitive pressures of the job are increasing, concerns regarding corporate governance have brought with them additional work for the board and, when you do manage to fill a vacancy, the remuneration package becomes the subject of public debate among shareholders and journalists.
In this environment, a major concern is that we could well be heading towards a time when the number of vacancies exceeds the number of people who are both willing and able to take on the pressures of these demanding roles.If this situation were to occur (arguably it already has) external recruitment would only be an option for the most glamorous positions and for organisations that are willing to pay the most. For everyone else, they will need to have considered succession plans in place as well as highly effective programmes for developing, retaining and motivating high-potential employees.
However, if internal promotion is to become a more common route to the top, then we need to face up to the fact that individuals whose careers have followed this route will, by definition, lack management experience in other businesses or industrial sectors. Metaphorically speaking, they have followed a development path that makes them ‘tall and thin’ – many years in accountancy, say, or sales in a particular industry – whereas the demand is for a well rounded individual with knowledge of finance and markets, yes; but also of society, of technology and of how to get the best out of people.
Indeed this very issue was illustrated in a recent study by the Change Partnership at Whitehead Mann, which highlighted how nearly all of the development of business leaders has been in functional specialisms, despite the fact that most of their challenges relate to leadership qualities such as motivating staff or political skills.
As well as the tendency to groom individual specialists, a point highlighted by the Higgs report on the role and effectiveness of non-executive directors was the imbalance in functional composition of boards, with a preference for people with financial, operational and sales backgrounds while functional areas such as human resources, change management and customer care tend to be less well represented.
While most boards today are familiar with the “whole brain” theories of psychologists such as Myers, Briggs and Ned Herrmann in relation to their behavioural composition, perhaps the time is now right for developing a “whole knowledge” model for the board that identifies all the significant influences that are likely to affect the company’s performance and determines who should gain experience in those areas.>
This would also be helpful in moving the emphasis in board composition away from past experience towards an awareness of current trends and influences. It would also mean that training and development would be more widely recognised as an ongoing requirement for directors than at present.
However, for more junior people to develop this breadth of knowledge and experience as they rise within a business is very difficult; firstly because there is generally a tendency to measure performance within the narrow confines of the particular business unit or function; and secondly, because their network of peers naturally diminishes the higher they get.
To compensate for this contracting peer group and to provide points of reference outside the immediate confines of their own company, it is important that people develop the instinct to network as a good network of contacts is both an invaluable source of information and an important source of support to people in the more lonely echelons of management.
To describe it another way, as a junior manager in a large organisation a person is running a team within a company and their peer network is other managers within the company. As chief executive, a person is running a company within the economy and their peers network consists of chief executives of other companies. Moreover, as a chief executive we would expect them to have a large and diverse network of contacts.
So if we accept that at some point between these two management extremes a person needs to begin to network externally, why have I never seen it expressly stated in a management development plan? Indeed, why have I never even seen it expressly stated in a competency document or role profile?
I suspect that the answer lies in the fact that networking at more junior levels is regarded with distain. I recall that as a junior manager the mention of the word would bring expectations that you were looking for a new job or that you were simply entertaining friends at the company’s expense.
But if we are to successfully and repeatedly build directors and chief executives from our internal talent-banks, then we have got to get the message across that developing a network of useful external contacts is an important part of the job. Moreover, we need to recognise that a part of the HR department’s role is to teach them how to do it.
To this end I very much applaud the initiatives taken by companies such as Procter & Gamble and Microsoft to bring in external speakers to stimulate debate and challenge the process. However, the problem with these initiatives is that when the event is over, people return to their desks and the messages learned can easily be lost in the all too familiar haze of e-mails, telephone calls and correspondence. Furthermore, broadcasting messages in this way is something of a “scatter-gun” approach with the messages conveyed only really resonating with the few people for who they are relevant at that particular moment in time.
In considering this point I came to the conclusion that the solution was not as difficult it first seems. In reality there is very little that is completely new in the world and most of the challenges that you face will have been faced by others before. Most of the solutions are therefore already out there and the challenge is simply to find the people with this experience.
I therefore established Extensor as a knowledge-sharing network to enable senior people to tap into a wider pool of knowledge and expertise.
To achieve this Extensor provides its members with access to a panel of high-level contacts we call Associates. These people come from a wide variety of backgrounds, are acknowledged experts in their field and able to speak from personal experience on a wide variety of subjects. They include the chief executives of several large companies, people from the media, a professor of corporate governance, experts in business strategy, public relations, marketing, sustainable development and so on.
It is different from consultancy. The idea is not to give advice, manage projects or tell people what to do. It is simply to provide members with the opportunity to meet with people who have experienced similar things in the past and who can provide a valuable insight into what went well, what went badly and what they would do differently if they had their time again.
In this way, we provide senior business people with the same sort of assistance as if a friendly builder gave you some tips before tackling a DIY job at home. Besides saving money, this has the additional benefit that at the end of the process, the increased knowledge and experience you will have gained remains in your company and doesn’t leave with the consultant.
Virgin Wines are members of Extensor. Their CEO, Rowan Gormley, comments: ‘A philosophy that lies at the heart of Virgin Wine, and indeed in all of the Virgin businesses, is that we should be constantly comparing ourselves to best practise wherever it occurs and not simply restrict comparisons to our own particular market niche.’
‘Indeed, if it had not been for this approach, Virgin Wine would not exist today because when I started designing the business model, the Internet was in its infancy and there were no equivalent on-line businesses to compare it to.’
‘Now that we are an established, successful and growing business, giving our people access to external views and opinions is even more important that ever, as the biggest risk when you are being successful is complacency.’
‘We became Members of Extensor because we wanted access to their impressive collection of Associates and also because I was very taken by the ease with which we could access their services. It’s like being able to instantly convene a private seminar on the subject of your choice and at a time to suit you.’
Over time some interesting patterns have emerged in the use of Extensor’s services. For example, the service tends to be used the most by people who are also involved in some form of internal management development programme or an external MBA course.
This is likely to be because those people tend to be more receptive to hearing the views and opinions of others. It is obviously difficult to know whether there is a causal relationship here, but it certainly supports the view that development programmes are effective in broadening people’s horizons and therefore in preparing them for more senior roles in the future.
It also suggests that those individuals who are already demonstrating a commitment to personal development are those most likely to put themselves forward for such networking opportunities. This indicates a need for a systematic approach to leadership development by employers. Clearly there is a role for human resources managers here, to ensure that everyone heading for a senior role gains access to education, networking, coaching and so on, rather than the few regulars who volunteer for every course going.
Regardless of whether you believe a severe skills shortage in the boardrooms of UK companies is likely to occur, the fact remains that preparing today’s high-potential employees for their future responsibilities is becoming an increasingly important part of HR departments’ role. Whether as a standalone service, or used to complement an executive development programme, a formal network seem to be an interesting and useful way of adding an external dimension.>
As Extensor Member Dr Richard Leaver said: “Knowledge sharing is important because experience is something you have just after the time when you needed it”.