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Sunday, 28 November 2010

Prosperity With Morality? Of Course It's Feasible!

I attended a fascinating lecture this week on a long forgotten Victorian industrialist and philanthropist, one William Romaine Callender (1825-1876), mill owner, cotton trader, Conservative Member of Parliament and a dedicated supporter of his local community.

Cynics in this modern world would probably decry his type as patronising, condescending and paternalistic as well as other adjectives; typical, it would be said of the rich Victorians who looked upon philanthropy as a way to social acceptance.

It was a statement of his that struck me as being very significant.  He said, in essence, that prosperity was good provided it was tempered by morality.  At a time when many industrialists were driven by making money at the expense of those they employed, he stood out among his peers by, for example, encouraging the Trade Unions to be active in his businesses

Once again, Kenneth and Will Hopper's great book, The Puritan Gift, http://www.puritangift.com/ makes the point that the "great engines of growth", those companies in the USA which absorbed the values and ethos of the early settlers were the ones which were successful in every way.

Please note that with this ethos of "Prosperity with Morality" these great companies were successful, profitable, ethical and stable.   What changed in the USA and, by default here in the UK, was as the Hoppers say, the "cult of the so-called experts" who were parachuted into many of these great companies without any domain knowledge but with an insatiable lust for making money.

The usual list of failed (and often fraudulent) companies like Enron, Worldcom and so on can also include great names such as General Motors and General Electric both of which have been materially changed, and not necessarily for the better, by having been managed by "financial engineers" rather than by people who knew what they were doing and what these companies stood for in the great scheme of things.

In the end it's all a matter of culture and this is one area which has to start at the top and then be driven down into the business.  I recall an instance of a public company here in the UK which appointed a new Chairman, who after some investigation, decided that some expenses claims seemed to be excessive.  It transpired that the CEO, through the company, had rented four apartments, had a helicopter and private jet, and had employed his wife and nanny in the company though they never set foot in it.

No-one can tell me that the whole company didn't know of these antics and consequently took the view that if it's OK for him, then it's OK for me too.

So what's the answer?   It is perfectly feasible to achieve prosperity with morality and, in the end, far better for the well being of all the company's employees.  Remember that morality is an absolute.   There is no escape; like pregnancy, it can't be just a little bit moral or immoral.

The values must be set at the top, they must be visible and they must be driven so deep into the company that it is the only way that things are done by everyone without even thinking about it.  Easy?  Certainly not, but very satisfying and fulfilling, I would suggest.  Callender's attitude to business has much to commend it.

For further information visit www.maa-uk.co.uk and www.vistage.co.uk
To contact us, email to ivan.goldberg@vistage.co.uk

Sunday, 21 November 2010

From Experience to Expertise? Mentoring is the Answer!

I had the honour on Friday last of being booked to speak to a group of PhD students and staff at Salford University Method - Philosophy Friday in fact.  The subject was Turning Experience into Expertise and it sparked a great deal of interesting and scholarly debate.

The overall premise asked the question of what is needed to ensure that any accumulated experience is transformed into some form of expertise whether it be a child riding a bicycle after discarding the stabilisers and falling off a few times, or the expertise of highly trained specialists developed over a period of years of experience.

The point was made that experience without learning is a waste, and also that twenty years' experience isn't always what it seems.  It may, in fact, be one year's experience replicated twenty times. 

The general consensus was that unless the period of experience was accompanied by an auto-didactic approach plus a level of humility which allowed learning from others, then it is unlikely that true expertise would develop.

There were one or two really excellent questions.  One asked what is it that encourages the process of developing expertise out of the accumulated experience and the answer seemed to be that it must be accompanied by a genuine desire to learn.  That is, of course, almost self evident, but is it a formal process or an instinctive one?

Being clever after the event, I have realised that one of the processes which assists enormously is mentoring.   If developing expertise is a learning process then any help in encouraging and uncovering the gems of learning is to be welcomed.

The job of the mentor is not to advise or to criticise or to suggest: those are consultancy functions.   The mentor has to ask pertinent (and sometimes impertinent) questions to uncover what has been learned of value and to encourage the individual to develop and enhance the experience.  In conducting more than 3,000 mentoring sessions in the past few years, I have long ago realised that the client has all the answers: it needs careful questioning to bring them out.

It is also necessary to decide why the expertise has been acquired and developed.  In an academic environment, expertise can be developed for its own sake with no apparent purpose in mind.  In the environment which we in business ,expertise is usually specifically directed to bringing the greater good to the business, the individual and the community in which the business operates.

We didn't really discuss this on Friday: perhaps the subject should have been Turning Experience into Expertise and then Taking Action.  With that title I think we would still be there!

For further information visit www.maa-uk.co.uk and www.vistage.co.uk
To contact us, email to ivan.goldberg@maa-uk.co.uk

Sunday, 14 November 2010

Revolution or Evolution? It's Your Choice!

The (relatively) new Chief Executive of Marks and Spencer, Marc Bolland, in announcing their excellent six months results last week, made the point that he intends to develop the business by evolution, not revolution.

An interesting point and one which seems to escape us from time to time.  There is a place for everything and certainly a place for a considered process where change is concerned.

In the case of a very large retailer, the decision must take into account the needs and wishes of its customers and particularly in an iconic business such as M&S.  There is always a need on the part of the business to decide on which sector of the market it wishes to go for and with a regular and devoted core of customers any change must be incremental. 

However, there are occasions when there is a need to take drastic action.  I recall a client telling me that some years ago, when he was promoted from Finance Director to Chief Executive, he decided to change the culture of the business from authoritarian to inclusive.  The former CEO was very much a "top down" manager and all decisions stemmed from the top.

Indeed, everyone in the business knew that if a member of staff went into his office, it was for chastisement, not praise or reward.

The new CEO was determined to change all that.  He shipped everyone out for a couple of weeks into temporary accommodation, had the place redecorated and made into open plan, and had a series of meetings with the staff to tell them that from now on, things were changing.

In general it was extremely well received but as he said: "In some cases, there was blood on the carpet".  Some staff members just couldn't cope with the change simply because they had been so steeped in the former culture that they just couldn't cope with the new freedom.

So, it's horses for courses.   Evolution or revolution?   Change always has an effect on a business and it needs some very careful thought beforehand.  Lee Thayer says that the big bang approach is necessary ion some cases, but there is no doubt that it requires a lot of careful thinking and planning.

The kai-zen or incremental approach is easier but slower.   An advantage is that you can spot how the changes  are being received and make amendments as necessary, an approach which is much more problematical in the case of a revolution.

So watch out for the evolution in M&S.  It could be an interesting time for this great retailer and the next six months results will give the clue.

For further information visit www.maa-uk.co.uk
To contact us, email to ivan.goldberg@maa-uk.co.uk

Sunday, 7 November 2010

Recession? It's Time to Diversify!

With all the doom and gloom mongers, especially in the media, telling us that we are in the worst recession since the dawn of time, and the only way forward is to cut costs and sack people and so on, it could be that some potential entrepreneurs may be feeling just a little uncertain about the future.

Consider the actual position.   Sure, the economy has contracted and the dreaded cuts are coming from the public sector, but in actual fact, the contraction is no more that around 8% which to a simple soul like me says that there is still 92% of the economy to go for.

More's the point, the cuts are not going to be immediate and the majority will be coming in the next two to  three years during which time, it is more than likely that the private sector will start to expand again and take up the slack.

As far as the SME sector is concerned, frankly what difference does it make that the available market is, for example, £500million or £460million when your turnover is just £2 or £3 million?   Market penetration for most SMEs is minuscule and realistically can almost be ignored.

It all comes down to an attitude of mind.   If we believe all the naysayers on the Today programme (have you enjoyed the freedom from that this week?) then it will be all about retrenchment.   By far, the best approach is to take a good look at what your business is doing and ask yourself whether there is a case for diversification to achieve growth in some other direction.  Walt Sutton calls it "discovering the rivers of cash" and that is one of the most important functions of the leader.

Ideally, of course, we should go for expansion in existing products into existing markets but that may not be easy in the current environment.  The next best approach is to introduce new products into your existing market where you are known and have credibility.   Innovation is the key here.

More difficult is expanding your business with your existing products into new markets and that is more difficult where you are unknown and have to create an image and a presence.  Finally, of course, there is the new products into new markets and that is in effect, starting a new business.

None of these are impossible but each new approach will require a concerted and concentrated effort to achieve success.   In the end, attitude will be the decider.

Finally one or two positive examples.  If you are looking for a good idea, consider what everyone wants and is consumable, that is, is a regular purchase.  A young woman recently started a new business selling tights (regular purchase) on the web and is now turning over in excess of £1million.

In the recession of the 1970s, two business started and are still in business.  One was called Microsoft and the other was called Apple.

It's all about attitude, remember.  As Henry Ford said: "If you say you can or you say you can't, you're always right"

For more information visit www.maa-uk.co.uk
To contact us, email to ivan.goldberg@maa-uk.co.uk