Category: Blog

McDonald’s UK HR Director, David Fairhurst, has recently pledged to continue to invest in training and recruitment (Personnel Today 22 July) to help the fast-food chain cope with the economic downturn. A brave statement, considering the widespread budget-cuts that are afflicting businesses as fears of a recession grow daily.

Here are a few myths (and truths) when it comes to organisational performance during troubled economic times:

* Myth 1: As jobs are cut and the talent pool grows, there are rich pickings to be had in the job market.

* Truth 1: In turbulent times it makes sense to encourage businesses to focus more than ever on engagement and retention. Negative media reports, budget-cuts, redundancies and poor performance figures can make employees nervous and insecure, and many may jump ship before they are pushed. When you consider that it costs over £7,500 to recruit and onboard a new employee (with several months passing before they are at full productivity), to keep hold of your best people is a no-brainer.

* Myth 2: Cutting back on engagement initiatives should save money and therefore help financial performance:

* Truth 2: No. Engagement and keeping people connected is absolutely vital. Research shows repeatedly that engaged employees perform better and are more likely to stay committed and energised. Good communication, training, managing expectations, ongoing assessment, listening / feedback, involvement in decision-making, incentive plans, motivation and flexibility is key, underpinned by strong leadership at every level. The direction of an organisation needs to be articulated clearly and simply – cutting out unneccesary complexity and detail – so it can act as a beacon for people to stick to during turbulent and changing times. And never under-estimate the importance of explaining WHY, as well as WHAT and HOW, so people can adapt to change more readily and understand why they are being asked to do so. However, cutting out the ‘nice-to-haves’ or short-term tactics that create good feeling of a very short-term nature is important. Keep people focused on the strategic priorities, give them the tools, skills and confidence to explore these at a local level on an ongoing basis, and recognise the contribution they are making.

* Myth 3: Cutting substantial training and development budgets will cut costs significantly and so help financial performance.

* Truth 3: Cutting back in this area will merely compromise an organisation in the long-term as it will create employees that are less effective and less likely to move up the ladder in terms of succession. Training will help keep an employee feeling valued, invested-in, and of course help to enhance skills that will improve their performance.

* Myth 4: Pay employees enough and they’ll stay:

* Truth 4: It is widely accepted that pay is not necessarily the uppermost factor in keeping an employee at work. Making employees feel valued and empowered to take on more responsibility and recognising those who perform well is just as if not more important, can boost morale and create a feeling of being in control of one’s future. Involving people in the exploration and discussion of strategic issues will keep people connected and feeling that they can have influence themselves, and will foster a culture of involvement and innovation that will help a company out-perform the competition.

A downturn is part of a cycle. Shifts in growth are part and parcel of what makes the economy tick. It is an ever-evolving, moving feast which can only change for the better in time. Companies need work harder than ever to optimise the use of their resources, whether human or financial, but always respecting and exploiting the collective intelligence of its employee base who are the ones who really know what’s going on at the proverbial coal-face. Senior leaders, be warned….use it or lose it. Cut communication, training and development and you may just find that your best people become your competitors. In the long-run, they could make all the difference to your organisation’s success.

Congratulations to my colleagues Glenn and Louise for coming up with a great idea at our summer social / team-building exercise this week.

While not wanting to be hypocrites (regular readers of this blog will know that we have an anti-management-speak campaign going on here) I now have to admit that we are guilty on occasion of creating our own jargon within the confines of 15. Percy Street. Certain words keep appearing in the conversation which are fast becoming Storytellers-speak and which must be eradicated at the earliest possible opportunity. I don’t think we’re as bad as the police (‘The officer engaged with the victim to ascertain the damage inflicted’ or ‘the suspect was apprehended as he exited the vehicle’), but I we must remember at all times to speak in as human a way as possible.

To highlight this wanton phraseology, two of our programme managers came up with a great game…StoryLingoBingo. Quite simply, identify the offending phrases or words (listed on a card) – those which are repeated to excess during our daily operations – and build them innocently and naturally into the conversation. The person who creates the phrase gets points out of three according to how contrived the sentence has been and how appropriate the words are at the time. The winner is the person with the most points. Great fun, very self-deprecating, and additional marks for those who can identify the source of the jargon in the first place.

On the subject of team-building, I would recommend that anyone wishing to try out Sumo-wrestling with inflatable Sumo suits takes care. It’s very hot, absolutely exhausting, and I have been rendered immobile having torn a couple of muscles in my leg. Rounders is a much safer bet.

As The Times publishes its Times Top 100 companies to work for, it comes as little surprise that the focus of this article by Sue Leonard is on the costs that can be saved by keeping your staff happy. And keeping your staff happy has as much to do with employee engagement and maintaining personal and career growth opportunities as it does paying them a good salary.

Dr Pete Bradon, head of research at Best Companies Limited, says ‘The figures are staggering,’ and ‘those who do really well on engagement have much lower staff turnover.’ When it costs an average of £7,750 to recruit a new member of staff (and even then it may be some time before they reach the pinnacle of productivity), suddenly the cumulative cost – and we’re talking millions of pounds for some companies – of losing a significant percentage of your people makes your eyes water.

This isn’t new news, of course. But it’s a fact. Senior managers will be nodding their heads wisely in their boardrooms, no doubt, on reading the evidence that has surfaced, yet again, that employee engagement should be seen as an investment rather than a cost. Yet we are constantly amazed at the attitude of many companies which purport to support employee engagement yet aren’t prepared to dedicate anywhere near enough financial resources to it.  As if it’ll just ‘happen’ on its own.

Why? Perhaps it’s because of risk, intangibility and the inability to correlate emotional connection directly with the concrete bottom line. The big problem with the term ‘employee engagement’ is that it can become a nebulous blur of all sorts of activity ranging from crucial, sustainable strategic communication and engagement in change, to one-hit wonders such as head massages, family fun days, Christmas supermarket trolley dashes round the office handing out mince-pies and ipods and so on. Not the best return on investment in the latter case I would say…and I think you can probably guess where we would recommend the money is spent.

Bosses should have a quick look at their staff turnover data, work out the maths, and then we might start to see a shift in dedicated resource. Once ‘employee engagement’ has been identified as a key driver for success, they can then start to take action. And a whole new industry in defining what type of ‘engagement’ activity is the most effective in this area is just waiting to be born…

Martin and I recently ran a couple of workshops at the CiB conference in Brighton, which focused on employee engagement. How I am beginning to resent that phrase ‘employee engagement’. I would much prefer to use the term ‘connectivity’. Perhaps that’s a subject for another day.

Anyway… what was interesting was hearing from the delegates what the key barriers are to getting strategic messages embedded in the organisation. In no particular order, these were what the common obstacles are:

• Management (don’t just think middle management either – the blocks can come from senior managers as much as the middle managers! In fact, when we referred to middle managers as being ‘the granite wall’, one delegate went as far as calling senior management ‘the brick wall’).

• Too many messages, and too much complexity

• Management speak and tone of voice – ‘corporate claptrap’ and jargon, and a fear of informality

• Complexity of the organisation (diverse and disparate audiences)

• Varying interpretation of messages

• ‘Too many cooks’, or too many decision-makers involved

• Lack of clear message from the top

• Truth and honesty (or lack of it) about failure

• Inability for people to see where they fit in / relevance

• The conflict between communications and senior managers

What was so interesting to me was the frustration that so many communicators feel at being unable to influence senior managers and be seen as strategic partners rather than simply tactical deliverers. How close – or how far away – are we to having a Communications Director on the Board? Will this ever happen, and what will change in organisations to create that shift? Will organisations ever appreciate the true importance of communication, or are senior leaders simply paying lip-service to it? Do communicators need to focus more on outcomes rather than process, and do those outcomes link to the objectives of the business?

Lastly, I’d like to finish with a story about something that happened this week, which goes to show that telling the wrong kind of story can come back and bite you in the proverbial butt! The Chairman of some publishing company I’d never heard of was trying to sell me advertising space as part of a new venture – a directory of business reports aimed at C-level executives. Now I’m always suspicious of people who give themselves high-brow titles when in fact they come from a tiny little company where the Chairman is equally the chief cook and bottle washer – or are merely salespeople selling advertising space. It really smacks of arrogance. Just your name will do, thank you very much. The cost of the space was only £5k, but it was £5k that I didn’t actually believe would add value in this particular case. He was doing a reasonably good job at trying to persuade me, nevertheless, but my decision to firmly decline was made when the individual concerned sympathetically and helpfully agreed that £5k was a lot of money…and for a reasonably small company it was like spending one’s own personal money. Like the £5k wristwatch he had bought himself the previous week.

Have a great weekend.

I’m in the middle of Allan Leighton’s book on Leadership, which is refreshingly honest and down to earth. It gives some fascinating insights from some of the captains of industry on the qualities of a good leader, illustrated through their own stories, drawn from their own experiences. Sir Philip Green, Surinder Arora, Stuart Rose, Jacqueline Gold, Richard Baker, Justin King, James Dyson….the list goes on.

What I love about this book is the sheer honesty of some of these leaders, including Allan Leighton himself. The stories told about their success demonstrate qualities such as self-belief, perserverance, getting close to your people and understanding the jobs they do, good communication, listening, acting on gut feeling, taking a leaf out of others’ book(s) (ie copying good ideas!), and constantly adapting to change.

But what jumped out at me was the humility of some of these great figureheads and business icons – unafraid to talk about the mistakes they have made and how they have learned from them. There are plenty of hints and tips throughout (‘Leadership Lesssons’), but it seems to me that one of the great qualities as a leader is to admit, publicly, that they don’t always know more than others, that they are not always right, and that sometimes you have to eat humble pie before moving on. The masses in the organisation will respect you all the more for it. We are only human, after all, and as Allan points out, you can’t lead a huge organisation at the age of forty having done it all yourself.

I couldn’t possibly pick out one quote that summarises all this… you will have to read the book. There is a lot about change, including Theory E (economically-driven CEO’s who focus on restructure, cost-savings etc) and Theory O (organisationally-driven CEO’s who focus on getting the best out of their people in times of change). There is also a useful checklist to identify how good or bad your organisation is (the 7 C’s test). All I would say, is that whatever your view of Mr Leighton and his approach to business, some of his advice is just basic, human and makes total and utter sense.

I wish I had been a fly on the wall at the recent Management Today lunch discussion between some of the UK’s top corporate leaders (Adam Crozier, Royal Mail, Sir Martin Sorrell, WPP, David Brennan, AstraZeneca, Val Gooding, Bupa, Lord Crisp, ex-NHS, Paul Coby, BA, Jane McKenzie, Henley College, Miranda Kennett, First Class Coach and Ian Powell, PwC).

Some refreshingly honest views were expressed on how to manage complexity. Whether you agree with how these leaders are managing their businesses or not, the debate demonstrates a great mix of past experience and learning, which I found a fascinating read. Ian Powell (PwC), hit the nail on the head when he said: “If you have a very complex organisation that you are trying to control, your messages from the top need to be absolutely crystal-clear. I guess all of you at some point, when you first get to any leadership position, think you have to be terribly clever and come up with a fantastic strategy; it happened to me. Then you realise about two weeks into it that you have to articulate that strategy about two million times over the next five years so that everybody understands it, and that it is simplicity that really matters.”

This rings so true for us. The business stories we tell for our clients hide layers and layers of complex financial modelling, processes, systems, plans, projections, insights and analysis, based on past experience, current reality and future vision. Even the most simple businesses add layers of complexity as they grow, yet the people who make it all happen cannot hope to understand the level of complexity that makes up the big picture. Which is why we focus on making it simple. People remember things if they are made simple and are joined up in a logical way, and articulating strategy just has to be done in a clear and simple way. Of course, those messages will create the start of a new level of complexity, but you have to start somewhere.

And then John Maeda has something to say in his book ‘The Laws Of Simplicity’….

To make anything simple, you need to apply ‘thoughtful reduction’; that’s why the iPod has fewer features than rival media players. Where you can’t reduce- and too much reduction destroys the value of your product – you have to hide complexity; which is why Google has almost nothing on its home page. But for your simplified product to succeed, it has also to appear more valuable than more complex products, something you achieve with classy materials and clever marketing; which is why Bang & Olufsen’s remote controls are heavier than you’d expect.

Right team….let’s look at our paper stock…..

Hmmmm, having a bit of writers’ block today, but I’ve found a great quote…

“Australian Aborigines say that the big stories—the stories worth telling and retelling, the ones in which you may find the meaning of your life—are forever stalking the right teller, sniffing and tracking like predators hunting their prey in the bush.”

Robert Moss, Dreamgates

Today is World Storytelling Day, which started in Sweden in 2003, and is a global celebration of the art of oral storytelling. It is celebrated every year on the Spring equinox in the northern hemisphere, the first day of Autumn equinox in the southern. On World Storytelling Day, as many people as possible tell and listen to stories in as many languages and at as many places as possible, during the same day and night.

Each year, many of the individual storytelling events that take place around the globe are linked by a common theme. The 2008 theme is Dream.

We are always delighted to hear of great business stories, so today’s the day for sharing them!