Interview with Patricia Seemann in the Sunday Times

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Nothing to lose but their chains

The corporate world has never been more uncertain. Bosses need to find ideas and insights from wherever they can

Unilever boss Paul Polman believes the traditional shackles of business must be shaken off

Shortly after Paul Polman was appointed chief executive of consumer goods giant Unilever in 2009, he made an announcement that shook the City: he scrapped both the issuing of guidance and quarterly reporting.

He wanted to remove the temptation to work only towards the next set of numbers and instead focus on the long-term future of the business.

This tallied with his focus on sustainability and environmental imperatives. Polman argued that leaders can make the right decisions on the biggest challenges facing the business world — and the planet — only if some traditional shackles of commerce are shaken off. “We have to look at these boundaries and say, ‘How can I move these boundaries so people start to behave differently?’

“In Unilever, I moved these boundaries by stopping quarterly reporting and guidance, by changing compensation systems [and] by working on different key drivers of the business. You see when you do that that people have more space to end up doing this right thing, but also it’s increasingly clear that that’s the right thing for business long term as well,” he said.

The chief executive, who was paid £10.4m last year, said businesses must have a purpose beyond delivering returns to shareholders. “If a business cannot explain what their purpose is beyond shareholders, for me I have a hard time understanding what their reason for being is and society will have a hard time understanding as well, and increasingly they will be rejected.”

Polman is one of the longest-serving chief executives in the FTSE 100, but not all leaders today have his foresight and ability to deal with what the Chartered Institute of Management Accountants (CIMA) has deemed “unthinkable” events.

“Since 2010, remarkable events have been happening with regularity,” said Noel Tagoe, executive director of CIMA Education. “Simply the speed at which things are happening in the business and economic environment; it becomes very difficult to predict and to handle. Organisations are struggling with it.”

A CIMA report, based on interviews with 50 corporate and public sector leaders, showed many leaders are found to be perilously inadequate at critical moments. Unthinkable events are often unpalatable, the report said, which can lead to bosses burying their heads in the sand.

Dealing with unpalatable realities is something Sir Peter Gershon, chairman of National Grid and Tate & Lyle, knows all about. Soon after joining the sweeteners maker, he and chief executive Javed Ahmed decided to write off “hundreds of millions” in investment in a bioethanol plant in America’s Midwest.

“The chief executive and I came to the view that actually the dynamics of the ethanol market had changed significantly [after the project had been green-lighted in the mid-2000s] and that the prospects for making attractive returns were very doubtful. We went to the board and said we should abandon this project, we should write it off,” said Gershon.

“That is an example of having to think the unpalatable: there is nothing very palatable about having to write off hundreds of millions of dollars of investors’ money. The only thing that is more unpalatable is the possibility, if you continued, that it might lead the company to a position where it is facing significant losses.

“There hasn’t been a day since we made that decision that I’ve regretted it,” said Gershon.

In this instance the chairman and chief executive agreed the course of action, but it can help to seek insights from elsewhere in the business.

Patricia Seemann, an executive coach and former board member at Zurich Financial Services, said the younger generation of chief executives were more comfortable in asking for insight from outside their immediate circle.

“Mainly the older generation struggles with that,” said Seemann. “They think, ‘If we all think the same thing, we can come to decisions more quickly and get on with it, [whereas] if we have diverse opinions in the room, it can make things a lot more messy.’ Most leaders have one huge weakness: tidiness.”

There is also a lot of pressure on leaders to have all the answers, even in today’s complicated world, she said. “There’s still this view, and it’s also from the employees, that the CEO should know everything and see everything.”

It can be helpful, too, to gain insights from outside the business and away from the leader’s sphere.

Seemann encourages clients to speak to employees lower down in the company. “For most of the problems companies face, it is very likely that somebody in the firm has done some thinking about it.

“One of the skills leaders have to develop is to find that person, or those groups, in their own corporations — and listen to them.”

Wanted: the courage to lead

Leaders are often found wanting in today’s complex business environment, said Paul Polman, chief executive of Unilever.

“The average tenure of a CEO is now 4½ years; the average lifetime of a publicly traded company is now 17 years. What you could conclude from that is that in many cases we have [leaders] who are not equipped to lead in today’s business environment.”

The qualities leaders possessed in the past may not be applicable in the future, said Polman. “The challenges we are seeing right now differ significantly from the challenges that were there 10, 20 or 30 years ago. We are living in a very interesting time when economic, environmental and geopolitical risks and technology revolutions are all coming together. Clearly some people have a hard time dealing with that.”

One of the most important character traits of a leader today is courage, he said. “If you want to have an opinion about things, you have to have a certain amount of courage.

“I work a lot on sustainable development goals and we are working on poverty alleviation, sustainable farming or climate change and I often find myself on panels with highly specialised people — who are sometimes also highly critical people. Sometimes it’s difficult as the CEO to be that knowledgable but you have to have the courage to participate.”

http://www.thetimes.co.uk/article/nothing-to-lose-but-their-chains-tb5zxb56j

 

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Welcome to our Haiku-oids, fragments of

Welcome to our Haiku-oids, fragments of insight, occasions for thought, permissions to feel.

“The primary purpose for reading and writing Haiku is sharing moments of our lives that have moved us, pieces of experience and perception that we offer or receive as gifts.” Rhonda Byrne

Haiku-oid Nr. 1

Knowledge workers

What do they work?

Decisions and choices

What do we pay attention to?

Which patterns do we see?

What does this mean?

What will work?

How much risk do we take?

Who needs our attention right now?

If everybody in your company made the right decisions, all the time – who could beat you?

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How to Stop Worrying and Learn to Love VUCA

Coming up with an effective strategy has always been considered the highest form of managerial art. Often, people actually believed they would implement it….

There are lovely methodologies. Basically they all work along the following lines: we are here, everybody else is there, we need to go to this new place, and this is how we will do it.

But now, we live in an environment our military friends affectionately call VUCA (volatile, uncertain, complex and ambiguous), which is a nice way of saying: we cannot be quite sure where we are; we cannot really know where everybody is; it is unclear who/what matters; it is unclear where the best place to go is; and we know that once we start moving everything is likely to change. Now, how is that for a mess?

Strategy: toss the map, bring in the thinking tool

We see two reactions: “Let us tidy up this mess and get on with it as we always have” – which everyone basically knows doesn’t work but is so alluringly tidy.

The other is “We can’t sort the mess, but were going to get bloody good at strategizing. In other words, our strategy is not going to be a roadmap, it is going to be something that helps us understand better, think faster and make the best decisions – whatever happens.”

Winning in a VUCA environment is a mind game at least as much as a question of good execution. Organizations must help their people to develop “supple thinking”, one that can anticipate shifts, creatively adapt and rapidly make powerful decisions.

How do you do that?

The US military certainly has had some very tough challenges in the past decade or so. To their enormous credit they have completely rethought the way they deal with strategy and which purpose it serves. And we think that this new approach is very appropriate for any large, complex organization.

You create a “strategic narrative”. Think of it as a vessel within which various strategies can be developed, tested and adapted. The narrative consists of:

The fundamental goals of the firm and the values it will hold itself to

Rich models of the current structure of the enterprise (with key variables identified, and assumptions stated)

A description of the systemic nature of the enterprise and its operating environment

A depiction of the key causal correlations between the firm and the systemic “currents” that impact the business

The purpose of the narrative is to help people understand the dynamic, non-linear, systemic nature of the business. It should prepare them for change, possibly even disruptions that will require shifts in the way they think about the business.

From the Top: Supple Thinking

Executive thinking provides the cues to the rest of the organization for how to think. That thinking is often quite rigid, locked into well-honed mental models about the business and how the “world” works. After all, this is the thinking that made those executives successful. These models usually have clear, linear and direct relationships – unfortunately, everything a VUCA environment does not provide.

This is why the dynamic modeling part of the strategic narrative is so valuable. It visualizes non-linear and often unexpected relationships. It heightens awareness about and improves understanding of the non-linearity of today’s operating environment. It helps executives develop supple thinking – thinking that can anticipate changes and adapt to them with ease, grace and power.

This is the foundation to making a firm a formidable opponent: fast, agile and resilient.

BUT, and this is a really big BUT

This will only work if leaders are willing to change. They have to

Be willing to systematically challenge assumptions. No more echo chambers, vigorously resists the temptation of group-think.

See it as one of their most important roles to foster mental agility so that the firm can recognize and integrate non- linear feedback mechanisms.

Take the issue of diversity – mental diversity – very seriously. Supple thinking relies on multiple perspectives and thought patterns.

Accept that once implementation starts, things change. Such is the nature of VUCA. Leaders have to be willing to adjust implementation as the non-linear feedback loops start kicking in – without appearing irresolute.

The development of the narrative is a highly iterative process. As members of the organization, consultants and experts interact, their understanding increases, leading to new insights, changing their views of the business. This cycle has to be repeated until knowledge and understanding are sufficiently rich and stable. “Strategic patience” is required for this process to be productive.

Once formulated, the narrative and plan must be sold to the organization and outside stakeholders, and stay in place long enough to succeed.

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What do you mean you don’t know Scrum and Agile? Wicked problems, Birkenstock and dishevelled, unsocial, brilliant geeks

At The 3am Group we are constantly scavenging for approaches to wicked problems. One of us likes to hang out in Silicon Valley and she always returns with a gem. Here is one:

Developing large-scale software is a wicked problem – and often results in massive budget over runs, disgruntled customers and huge delays, not to mention embarrassment. Remember healthcare.gov?

Scrum and Agile are software development methodologies which are used to run such wicked projects with great success. Indeed, some software developers are running their entire companies on the same principles. Take salesforce.com whose success is physically reflected in the construction of three skyscrapers being built simultaneously in down-town San Francisco. Its CEO, Marc Benioff was named the most valuable CEO by Forbes.

Now why would we, the 3am Group talk about software development? Because  Scrum and Agile are also highly relevant to addressing wicked problems in general.

Consider the summary of their principles by Steve Denning in Forbes ( 4/29/2011)

  • Organize work in short cycles
  • The management doesn’t interruptthe team during a work cycle
  • The team reports tothe client, not the manager
  • The team estimates how much timework will take
  • The team decides how muchwork it can do in an iteration
  • The team decideshow to do the work in the iteration
  • The  team measures its own performance
  • Define work goals beforeeach cycle starts
  • Define work goals through user stories
  • Systematically remove impediments

The pieces aren’t new. The “New” is in the linking of these elements and the rigorous follow-through.

Can’t believe this works? Consider the following:

“Teams using  [Scrum] have been unexpectedly productive. These were not just improvements where the teams were just slightly better than the norm. The best teams routinely obtain productivity increases of 200 to 400 percent, changes that are potentially industry-disruptive improvements” (Steve Denning (see link below)

Maybe Patricia needs to spend even more time in Silicon Valley.

Links:

http://www.forbes.com/sites/stevedenning/2011/04/29/scrum-is-a-major-management-discovery/

http://agilemanifesto.org/principles.html

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Why we always get the politicians we deserve | The New Daily

Our brains develop in stages. A baby doesn’t think the same way as a two-year-old and a two-year-old can’t understand concepts that are easy for a seven-year-old. We are not capable of logical adult reasoning until adolescence.

For five per cent of the population, brain development stops there. Some of these five per cent are in jail, others are highly successful (at other people’s expense).

Seventy per cent of the population make it to the next level of adult brain development, which is known as ‘socialised thinking’. It is characterised by “peer group pressure’, “group think” and an inability to comprehend and deal masterfully with rapid, complex change.

Paul Bongiorno: double standards dressed up as statesmanship – that’s politics

The four secrets to happiness known by older peopler

Technological innovation and scientific innovation have created global networks and hyperkinetic change on a global scale. We marry, shop and communicate globally as if we were in a small “global” village. We change our partners, jobs and bodies regularly. Mental illness is now the norm.

The average Australian has a 50 per cent chance of being afflicted with depression, anxiety, addiction or other debilitating illness. Our brains, designed for an era when change was slower and life was less complex, don’t cope well with rapid discontinuous change. Socialised thinkers block it out – pretending that they are in control and nothing really is changing.

Opposition Leader Bill Shorten tackling wicked problems in Question Time. Photo: AAP

Not so long ago, when our world changed more slowly, we had “tame” problems. We could state them and have a formula for solving them. We incrementally improved and could measure our success. Now we have “wicked problems” (a term coined in the 1970s by social policy researchers), which are anything but tame.

The war on terror is a “wicked problem”. We don’t know when it started. We don’t know who the enemy is. Different people see the problem differently. We don’t seem to have solved it. In fact, it seems to have evolved as we tackle it. Our attempts to solve the problem may have made it worse.

Other wicked problems include changing the health or education system, managing the economy, climate change, poverty, crime prevention and international tax avoidance.

Just as a small child can’t grasp a concept beyond their brain capacity nor can socialised thinkers comprehend or even see the full extent of “wicked problems”.

They break reality down into bits they can understand, much like blind men feeling different parts of an elephant: the man feeling the tail declares he has a rope; the man with a leg thinks he’s holding a tree trunk; the fellow with the tusk says he has a sabre.

When they discuss the nature of the object in front of them they are all too limited and blind to see the big picture and so miss the point altogether.

Similarly, socialised thinkers limit their view to a small part of any wicked problem. Failing to see and understand the whole means they can’t find a satisfactory solution.

Most people are at a socialised level of thinking or below. This is the mass market for which the media, education and political systems cater. The good news is that 25 per cent of people are at higher levels of thinking and can grasp and deal successfully with wicked problems. The even better news is we can all learn and grow in our brain capacity. Wicked problems, when handled masterfully, are a huge source of creative potential.

The bad news is that our political leaders tend to be socialised thinkers. We, the mass market, vote them in. We elect people we like, people like us, people we can understand. We then charge these people with solving an array of wicked problems that they can neither fully grasp nor comprehend. It explains why we’re always searching for a visionary to lead us, but they rarely come along.

And whose fault is that? Who do you think?

Margot Cairnes, an international change agent with a corporate consulting career spanning three decades, is the creator of the cloud-based training system, 12 Steps For Business (12SFB): info@12stepsforbusiness.com.au She writes regularly for The New Daily on management and leadership.

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“No one wants to spend the time to understand anything”

This is a recent quote from one of our CEO friends. How often to we see executives thrashing about instead of thoughtfully picking their way (and that of the firm) through the morass of wicked problems firms operate in today.

The high art of leadership consists (among other things) in knowing, sensing, almost smelling the right moment to move a group from thoughtful reflection to decisive action. When is our understanding good enough (it’ll never be perfect) to be able to move? when is a decision needed, if only to alleviate the anxiety that can so easily take over as people understand how wicked a problem really is? When does the leader best move from pulling his people into understanding the problem to pushing them out to address it.

Not only is this skill critical for the firm’s ability to thrive. There is little that will get your more respect and confidence from your people as a CEO. And there is little that will keep the power machinations in the C-suite in check as effectively as this skill. 

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