THE FOUNDATION FORUM
WEDNESDAY 9TH APRIL 2014
This is a summary of an event we held in 2014. Held at One Alfred Place on 9th April, the evening's essay question was ‘Well done, you’re fired. Why growing a business means changing the team’. The speakers were FTSE 100 Group HR Director Andrew Harley (Ladbrokes plc), whose first job was changing the CEO, and whose previous jobs involved managing company-wide transformations for a bank and a telco, Board-level Executive Coach and Advisor Bernard Buckley, a HR specialist man hardened by the world of private equity and telecoms deals, and international Media Agency HR Director Liz Nottingham (Starcom MediaVest), tackling the twin challenges of creative young management and a fast-changing sector. The discussion has been summarised by Simon Caulkin, former Management Editor at the Observer.
Most executives avoid the fate of Vice-Admiral John Byng, who although heading a leaky and undermanned fleet was famously terminated in 1756 (‘pour encourager les autres’, as Voltaire put it) for failing to prevent the island of Minorca from falling to the French. But reward and sanction today can often seem similarly arbitrary. Ask cricketer Kevin Pietersen and David Moyes, lately and briefly of Manchester United. Of course sports teams like businesses need to evolve and move on, and sometimes drastic measures seem called for. But if management in the internet and social-network era isn’t about handling egos and managing transitions then it isn’t about anything much at all. How then should we look at Kipling’s twin impostors in terms of people? What are the rules for maximising success, keeping employees onside when the guard is necessarily changed, and minimising failure that turns ex-colleagues into sworn enemies and demoralises existing ones?
A bright, sometimes harsh, light was thrown on these tricky matters at April’s Foundation forum, self-explanatorily entitled ‘Well Done, You’re Fired – Why Growing a Business Means Changing the Team’. A masterclass in practical HR, it yielded news that – as so often in management – was both good and bad. The good news is that the answers are conceptually simple, more about direct communication and clarity on aims than spreadsheets and formal procedures. But that’s also the bad news. Simple doesn’t mean easy. Avoiding the issue by sheltering behind formal assessments and delegation are tempting alternatives to straight talk, close listening and relentless honesty. As a questioner noted, pervasive management jargon and English reserve don’t help. Managing transitions to benefit both the individual and the organisation takes courage and integrity as well as hard judgment, and thus can’t be faked. It belongs in the class of things that are both simple and hard.
Changing the team
The discussion that followed
A clear message, consistently repeated, has to be the common baseline for honest conversation on both sides. Without it, it’s all too easy for people to wait till the last five minutes to raise difficult topics, substitute busyness for thought, and to harbour unrealistic notions of their own irreplaceability.
Speaker Andrew Harley alluded to this in reflecting on the lengths bosses (and others) will go to in order to avoid having ‘the honest discussion’. Harley is a FTSE 100 HR director who has seen it all, including once being introduced as hailing from the ‘I hate people’ department to make the point that HR isn’t all about being nice but doing a tough job like any other function. He noted wryly that ‘the two words there are a bit of a clue; one is “honest” and the other is “discussion’, because very often people think, well, I haven't got to really talk to these people, have I? Or listen to them? Why do I have to have this dialogue?’
But of course they do, and part of the dialogue is about what success looks like – another surprisingly frequent lacuna. Don’t expect people to know unless you’ve told them, warned Harley – and don’t imagine telling them just once will be enough, either. A clear message, consistently repeated, has to be the common baseline for honest conversation on both sides. Without it, it’s all too easy for people to wait till the last five minutes to raise difficult topics, substitute busyness for thought, and to harbour unrealistic notions of their own irreplaceability. On the other side, when employees unaccountably fail to give their managers what they want, it may be because no one told them. This, underlined third speaker Liz Nottingham, is a particularly common failing in the, shall we say, less structured environment of the typical ad or media agency. In this kind of environment the challenges include temperamental creative directors who take professional pride in treating ‘process’ with contempt, and offices run by a 20-somethings so inexperienced that they don’t know what process is.
What happens when that hard conversation fails to take place was graphically illustrated by Bernard Buckley, speaking from long experience as HR adviser in the unforgiving world of private equity and fast-changing telecoms. Mostly people get fired for their own poor performance, he noted, but sometimes it’s the organisation’s fault for setting them up to fail. The classic case (apart from the unfortunate Byng) is the brilliant salesperson who is promoted with fanfares to a managerial position only to be later quietly fired when they don’t measure up to the new and very different role. That’s a tragedy, a lose-lose that wrecks a career and deprives the organisation of an indispensable aid to growth. ‘This is really bad management by the whole organisation. That whole issue I put back on an organisation which is not thinking about what good looks like and putting people in situations where they're not fitted or not trained for them’. He described counterintuitive alternatives challenging us to think earlier and more proactively about organisation and people – in the example given the salesman, having outgrown their role, could have been asked to move on instead of being promoted and they would have done so a hero, full of confidence and ready to do something similar on a broader canvas – better for them, better for the organisations involved.
To bring the principle to life & make it tangible, Buckley described an intensive four-year change programme at Cable & Wireless. During the four year period over 50% of the executive and leadership team changed but the programme was an unqualified success. The exercise, he explained, took the company ‘through an acquisition, an integration, from there to recovery, and from recovery to transformational growth. The people who are great at integration and acquisition are usually not so good at recovery, and those who can handle recovery are not necessarily cut out for transformation.’ The key to managing this hard reality was to sit down beforehand and plan the likely outcomes, and equally crucially to set out those plans with every single executive along with the terms of engagement and disengagement. ‘We treated them with dignity. They knew what they'd be contributing to the business and what their share of the reward would be when their job was done,’ says Buckley, so there was no argument about pay-offs, and the straight talk and clear understanding created an explosion of commitment and energy for the company for the time they were there. Strikingly, ‘all of those people went on to bigger challenges and greater successes’.
‘How you treat people who are exiting from your business is way more important than how you recruit them’, he concluded. ‘As leaders we owe our people the same level of commitment, trust and investment [that we give to investors], so that when their time is up and when they’ve been successful, let them go while they are still a success’ Bernard Buckley, Executive coach
Steve Jobs, noted Buckley, subsequently remarked that being fired from Apple in 1986 was the best thing that ever happened to him, freeing him for one of the most productive periods of his life – not to mention for the second coming that brought the company back from its close-to-death experience in 1996. ‘How you treat people who are exiting from your business is way more important than how you recruit them’, he concluded. ‘As leaders we owe our people the same level of commitment, trust and investment [that we give to investors], so that when their time is up and when they’ve been successful, let them go while they are still a success’.
In the ‘creative’ industries, the preoccupations are slightly different. The HR role, said Nottingham, was a bit like being in charge of a ski chalet: ‘It’s our responsibility to make sure they're all there in the morning and that they're heading off to the ski slopes with the right skis and their own boots...They’ve all got a map, and they're all hopefully going to return in the evening in one piece because if they don’t or get lost it’s my fault.’ In such high-wire environments (newspaper offices are similar), the lack of process, and ‘management’ in general, is for much of the time a huge advantage, one of the reasons why they are such exhilarating places to work. When things kick off, however, not so much. ‘You get people who for all the right reasons are trying to drive their creativity and their product, they're trying to keep the clients happy. But in the area of management and leadership and feedback and the proper ways of doing things, they're pretty shoddy, which is where I get called in with a bucket to try and sort it out and prevent it getting to the employment tribunal.’ Matters are complicated by the fact that agencies, like media in general, are in the middle of profound change for which the endgame is not in sight. ‘So from a talent point of view we’re at quite an interesting point. As an industry we’re talking about future roles that we don’t even have titles for. I came across somebody a few weeks ago whose job title is “White Noise”. No, I don’t have a clue either.’ With a staff turnover rate approaching 30 per cent, she sometimes wondered who was firing who. ‘It’s incredibly difficult keeping these young folk...So keeping them, making sure our managers are trained in helping to keep people and doing our very best to keep our people engaged with clarity around what we want from them, these are key, really key.’
People have to make their own career decisions – ‘lead, follow or f*** off’ – and the same is true of organisations. The handling of such choices is never easy and sometimes exceedingly difficult. But shining through every presentation was the overriding need to do the simple things well: converse, and in conversation be honest, be direct, be consistent, be prepared, be timely, help managers and their people succeed and follow through. Understanding that it is impossible to predict how people will react to bad news (examples: fainting, hurling a filing cabinet out of a window, taking violent exception to not being made redundant) is another universal principle. Observing them scrupulously can turn a potentially dark and hostile episode into a positive human and organisational success. As Harley summed it up: ‘Ask, listen and converse – if we encourage our people to do that it’s amazing how many problems and filing cabinets through the window get resolved because suddenly we realise we’re human and people do want to carry on and have a normal conversation’.
The Foundation's view
The value of hearing different perspectives from people that have done it for real in a range of situations was never more powerfully made. We found not just new ideas, but a whole new belief system.
No one said it directly, but the subject of ‘terminating a contract’ or firing or moving someone on feels like discussing death. They are metaphors for killing people. No wonder we feel uncomfortable.
The ideas that struck us most strongly were three in number:
1. The power of an honest conversation to build a shared understanding of a situation and the options for resolution
2. Reframing the parting of ways from seeing the loss to seeing the gain. The idea of releasing people while they're still successful so they can go on to be more so, rather than consigning them to a confidence-sapping struggle to make an unsuited role work is a completely different way of thinking about this challenge
3. Using that belief to make the honest conversations happen with energy and proactively, perhaps even at the outset of a working relationship
For us, these examples turned an area that can feel very dark and very difficult into something natural, human and nourishing to the growth of people and organisations.
About The Foundation
We are a management consultancy working with all kinds of organisations to achieve customer-led success. This means tackling big organic growth challenges; growing faster, growing into new markets or fending off threats to growth by starting with what matters to customers and then making it work for the business as well.
The aim is to influence customer behaviour, but this is inherently tough. Why? Because people in any organisation naturally see the world from the inside-out, with colleagues close and customers distant, and lots of assumptions about how things work that aren't challenged.
We help clients look from the outside-in, re-connecting them with what customers really value (the problem they want to solve, not usually what the client sells), then finding new and better ways to create this value.
This means working both as expert advisors and facilitators. The issue with simply gathering outside-in information is that it lacks impact to get senior teams to tackle inconvenient truths in what customers want, and to believe their own organisation can be different.
By using ‘Immersion’, personal conversations with customers and leaders of organisations in other sectors who have tackled parts of their challenge, we help teams get around the natural and limiting inside-out beliefs that stand in their way. This helps them develop better answers for customers and new ways of achieving lasting success.
We answer three sizes of question:
Small – a new proposition or an improved customer experience
Medium-size – growing value per customer or improving retention (a sub-set of the former)
Large – creating customer-led business success, often by uncovering a true outward-looking purpose and the genuine belief needed for it to be acted on
Our clients include HSBC, JLR, O2, M&S and Ebay, with achievements including helping create Plan A at M&S, adding £100m of value to a Travelex travel money proposition, and giving Morrisons a competitive direction contributing to their return to growth.
Behind our work our most distinctive characteristic is our team and their outlook. Each individual is motivated to and experienced in crossing the border between the worlds of customers and business which often resist mixing well.
This link will take you to more information about us and our Forum events: http://www.the-foundation.com
Charlie Dawson (Founding Partner):
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Charlie Sim (Director)
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Anna Miley (Director)
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John Sills (Managing Director)
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