A new revolution?

May 9th, 2012

I read with interest and I am watching, like many, closely the shareholders revolution focused on boardroom pay.  Now the threat of legislation, along the Australian model of two strikes, is again being debated.  Perhaps this will make the old guard sit up and take note?

What we are not seeing discussed is the long term effect of such measures.  Large companies may seek to encourage investors from those countries where they are not fixated on boardroom pay.  Asia, India and America could benefit from this strategy at the expense of Europe and particularly the UK.  Those leaders taking up these key posts may be reluctant to do so unless the package is agreed upfront which includes a legally binding significant exit payment.  Surely this is no way to start a job by negotiating based on exit and not focused on performance?

 

Why have we got here?  I don’t believe that it is solely down to the recession and the fact that investors are seeing less return on their investments.  Could it be in part down to complacency, a lack of external strategic focus and not employing people at executive level with the right skills in communications and engagement?   I have run both plc and limited companies and have always seen and reaped the benefit of focusing on internal and external engagement.  It is my belief that boards need to be much more engaged than ever before on creating a proper informed dialogue with their investors and this includes the small independent shareholder. Too often I see boards and executives focus on the big investor institutions which have, in part, led to the smaller funder feeling neglected and isolated.

For those businesses which see this change of power, as the voice of the smaller stakeholder becomes more influential, as revolution the rewards will be great.  These organisations will not simply be looking to their legally/financially trained or regulatory focused company secretary for support.  They will be recruiting strategic highly competent and experienced communications professionals to board positions and focusing the board agenda to assess levels of engagement and stakeholder/investor opinion.  They will see the single small investors as a strength and promote them as advocates.  After all properly informed and engaged they will be able to defend the organisation, speak out for the good work it does and even, dare say, hold the board of the company they own as an example of one which deserves its remuneration package!

 

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An Own Goal?

April 18th, 2012

The BBC has reported this week that Marks and Spencer has admitted to running out of stock in some of its best-selling lines of womenswear, which has contributed to the firms drop in sales.

Like-for-like sales at M&S fell 0.7% in the 13 weeks to the end of March.  Overall on a same-store basis, a 1% rise in food sales failed to offset a 2.8% drop in general merchandise sales.

These are very difficult times for businesses.  Planning in such a difficult and mixed economy where the ‘r’ word is used liberally every other month by one or more industry leader the questions over investment/disinvestment and operational resources are fundamental to success.  The need is more than just to listen to the customer.  Now businesses need to be at one with the customer to enable them to be fleet of foot and predict trends.  Now Boards need to be closer than ever to the frontline.  From my experience if you ask the staff serving the customer and making the products how to improve they know the solutions.  They know what the customer likes and wants.

Businesses often fail to engage with their own staff – the Charted Institute of Personnel Development found that almost two thirds of UK employees are either only partly engaged or totally disengaged with their work.  If we look at one aspect of engagement – advocacy – whether staff talk well of the organisation to their friends, families and colleagues, there  is a greater engagement challenge for the public sector: Ipsos MORI found that in councils 33% would speak highly of their employer, compared to 48% in the private sector.  Shockingly, only 30% of staff in councils would speak highly of their services, compared to 57% in the private sector.  This, staff engagement, has not been a traditional topic in the Boardroom but it is definitely one which should be top of the agenda alongside customer experience, with financial performance following!

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It’s Good to Talk

April 16th, 2012

My morning surf of the Internet provided the fact that a sequel to the Joseph Kony 2012 mini-film has been released.  Until a few weeks ago when I was discussing social media and the latest from YouTube with a group of young people, I had only vaguely heard of Joseph Kony (for more information click HERE).  Leader of the Lord’s Resistance Army, widely referred to as the LRA, my knowledge had been gained thought the limited coverage on the national TV news.  The young people I talked to knew more about the issues and were more informed and engaged.  This has all been down to a 30 minute film on YouTube, which was hard hitting and direct.

I watched the film with great interest only to find out I was one of a staggering 100 million viewers who watched it in less than one week!  It was nothing like the communications I have seen before which traditionally I would have thought would have captured young people in such an engaging way.  It was by YouTube standards long at 30 minutes, contained no humour and was very direct and to the point.  It had a call to action and invited everyone to make a difference.  It has made me think hard about the way in which we are reaching young people.

If we are to make a difference to young people’s health and life style, if we are to communicate and engage them then maybe we should look at what we are doing.  The no-smoking, stop binge drinking, eat healthier messages are largely falling on deaf ears!  Perhaps we should be looking more to social media, stop packing it pretty and start providing factual messages to reach those we so need to influence.

The new film is billed to provide more details and context to the Joseph Kony campaign, aimed at pressurising politicians to hunt down the notorious Ugandan warlord.  If the reaction to the first is anything to go by, this latest release will only add to the widespread debate and discussion and hopefully the much needed action to stop this movement!  I would recommend that everyone should join the debate and those responsible for communicate key messages to young people, stand up and take note as there is something for us all to learn.

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Rudderless!

February 10th, 2012

What a week for football, one which has ended with no manager and no captain for the much loved England Team – two of the most important leadership roles!  Questions continue to be asked as to whether the Football Association made the right decision when it stripped John Terry of the England captaincy while he awaits trial accused of racial abuse.  This led to Fabio Capello resigning from his job as England Manager and presents the FA will a dilemma with only four months to go as we gear up for Euro 2012.   

Singled out by  the popular vote for the England job is Harry Redknapp, who himself has had received a not guilty verdict following a five year probe.  Alan Shearer says that the Football Association should “move heaven and earth” to ensure Harry Redknapp becomes the next England manager.  “He understands players and players understand him. That is a perfect mix. I’d move heaven and earth to get him.” 

The question remains, will anyone have time to bring together disparate players, forge a team and engender a winning performance?  In business and in sport, in fact in all walks of life, the leader plays a significant role in the delivery of success.  If this is recognised, I often wonder why we focus so much on what they are paid and not on what they achieve?

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Betrayed

February 10th, 2012

This was the headline from the BBC report into Kent police officer Fran Croucher as she resigned in January.  Now she is standing for the position of Police Commissioner.  Accused and cleared of wasting police time, she resigned as she felt “betrayed” by senior officers. Ms Croucher commented that “It goes back to… police complaints not being dealt with effectively and the need for a police commissioner to hold Kent Police to account in this area.”  This highlights the difficult balance for senior managers and leaders everywhere when staff raise issues and voice concerns.

Having the right framework in place for staff at all levels to speak out, and for it to be challenged appropriately, is a very difficult balance but is one which is critical to ensure that the connection between Board and shop-floor/frontline is achieved.  My experience is that it is only by talking with staff,  actively walking to floor and for the brave, actually working on the frontline, can you make the connection needed to ensure the culture of openness and continuous improvement permeates and delivers success. 

There is much to be said for the employee share ownership model and many organisations have yet to grasp the opportunity that this presents.  In times of austerity, when many business are striving for efficiencies the forward looking are involving their staff as it is often on the frontline where wastage can be seen and great ideas germinate.  This can only work if staff feel supported and able to come forward without the fear of incrimination!

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Are we asking of our Leaders the right things?

January 13th, 2012

I have to say I was somewhat puzzled to read that Labour is urging City firms to “shake-up” and calling for major shareholders to have a bigger say in appointing company boards.  Previously running a large plc and now advising and working with companies both in the UK and the USA,  I have yet to meet one which does not take corporate governance very seriously.  Many have selected to adopt the Noland Principles and have rigorous processes for Board appointments.   Appreciating that the Research from the Institute for Public Policy Research (IPPR) suggests chief executives in 87 of the FTSE 100 companies took home an average of £5.1m in basic pay, bonuses, share incentives and pension contributions in 2010-11, there is no mention of the jobs or wealth creation they deliver.  In my personal experience major stakeholders are fully engaged with the companies in which they invest and are active in calling the Boards to account.

Instead of criticizing perhaps we should be putting our energy into asking these leaders what role they and their organisations are going to play in turning the tide on the horrific child poverty statistics released earlier this week by the Campaign to End Child Poverty?  All of the reports are highlighting that without a concerted effort this is likely to get worse and not better.  The Institute for Fiscal Studies recently warned a couple with two children will be £1,250 a year worse off by 2015 as families “shoulder the burden of austerity”.  It warns that tax and benefit changes outlined in the recent Autumn Statement showed the greater burden being placed on society’s poor, which “not only puts children’s wellbeing at risk, it carries economic risks too.”

We need our business leaders to generate jobs and especially support youngsters into work offering real jobs and training.  Perhaps a better focus would be to look at how they are achieving this, their strategy for job and wealth creation in the future, and what they and their colleagues are doing as part of their social commitment to their communities.

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The Power of Team

December 29th, 2011

On the week before Christmas I took time out to watch two very different, but equally inspiring programmes.  The first was The Sun Military Awards.  This programme highlighted just some of the outstanding bravery our men and women of the Armed Forces do on behalf of all of us every day.   Celebrities lined up to praise what were simply unbelievable stories of acts of heroism and all were reported in full in The Sun.  As each person singled out was invited to the stage their humility and modesty was clear for all to see.  Watching I was filled with both pride and admiration that, in arduous conditions, so many people sacrificed so much for their country. 

The second programme I sat down to watch was the BBC Sports Personality of the Year.  I have always been a keen sports enthusiast, especially for football and cycling so I was keen how Mark Cavendish as Britain’s first winner of the Tour de France green jersey (2011) would fare against some very tough competition.  As each of the stories was presented and we heard from each sports man their individual power of endurance to be the very best at their discipline.

What was so overpowering about the two programmes was the individual’s recognition of the team supporting and behind them.  They may have been voted the overall winner or have been singled out for extraordinary acts of bravery but each and everyone paid tribute to the team.  Perhaps that is why they individually are successful as they are skilled, dedicated, highly professional individuals who are outstanding in their role but also value and recognise the importance of the team.  Wherever we work and whatever we do we would do well to look at these examples and reflect how we are working with our teams, and that includes the family team.

Happy New Year!

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Smoke and Mirrors!

December 21st, 2011

LOCOG logoThe Department for Culture, Media and Sport last week has announce that it now estimates 23,700 security staff will be required at Olympic and Paralympic venues next summer, more than double the original estimate of 10,000.  Up to 13,500 of these will be military personnel, with some 5,000 troops supporting the police, up to 7,500 providing venue security and 1,000 will providing logistical support.  The previous week ministers revised the Games security budget from £282m to £553m.  This follows close on the heels of the announcement that the London 2012 Olympic ceremonies budget has been doubled to more than £80m.

The journey to host the 2012 Olympics began in 1997 when the world was in a very different place.  This is a long term project of both scale and magnitude.  Recent events over the last few years have made security a priority and to operate at anything less than full strength would be at best irresponsible. 

The Games in Beijing cost over 40 billion dollars and reportedly eventually exceed $44 billion, and at the time promised to become the most expensive Olympic event in history.  Each Games the judgment of success has been significantly swayed by the opening ceremony and not necessarily by the legacy left behind or the direct income attracted.  With the Beijing games attracting a reported $2 billion income, a fraction of the actual cost, the costs and expenditure of the London games becomes a hard sell.  Given the current climate where more nearly a third of UK households are facing fuel poverty and UK unemployment reached 2.64 million, the highest level since 1994, more needs to be done to promote the virtues of the Games’ legacy.  The major regeneration of the Stratford area, improvements to surrounding services and venues as well as to transport facilities, are not making the media headlines.  Organisers and promoters need to look at this issue if they are to ensure that the UK public is fully informed of the benefits if they are to prevent criticism and debate on cost verses benefit.

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What a Week!

December 12th, 2011

Last week saw the top US military commander, Gen Martin Dempsey, adding to the commentary about the European crisis.  Voicing his concern about “the potential for civil unrest” as Europe’s financial crisis continues to unfold; one could be forgiven for thinking they were watching an adaptation of a Jeffery Archer novel!

Gen Dempsey said it was unclear if the latest steps taken by EU leaders would be enough to hold the eurozone together as 26 of the 27 EU countries forged a tighter fiscal union.  Only the UK refused to sign up to a new treaty, citing national interest.  His concern is born out of the fact that the US military has more than 80,000 troops and 20,000 civilian workers in Europe, many of which are based in Germany.  Not to mention the international project to develop the F-35 Joint Strike Fighter aircraft which potentially could be put in jeopardy if European national defence budgets were cut.

So what of the UK?  The anger of European commentators has been widely reported at the UK’s decision not to join a tax and budget pact to tackle the eurozone debt crisis.  Many Germans are outraged by British Prime Minister David Cameron’s move.  Alexander Graf Lambsdorff, head of the Germany’s FDP group, part of the European Liberals, goes as far as to say it was “a mistake to let the British into the EU”.  Writing in the Italian La Repubblica newspaper, Alessio Sgherza says that the summit “sank… because of the old but still unresolved division between… pro-European and Eurosceptic states”.  Meanwhile Daniel Cohen-Bendit, joint leader of the Greens in the European Parliament has labelled Mr Cameron “a weakling”.  Yvan Duvant, writing to the BBC from Olargues, in France, says that as the UK is slowing down the move towards EU integration, it should leave the union altogether: “What’s the point of keeping this country in the EU? The British people should put pressure on their government to quit. Maybe the British would do better without the EU. Europe will definitely do better without the UK.”

These are very stark comments for businesses and especially our financial sector.  Being seen as part of the problem and not part of the solution is at best unhelpful and at its worst it could severely damage international trade with what is the UKs largest trading partner.  Even the British Bankers Association warned that the Government could now find it harder to secure the best deal for the financial services sector on an ongoing basis.  In a time of such uncertainty and a climate of hostility what will count are personal relationships.  British businesses are going to have to work even harder with their customers in the eurozone if they are to ensure that the national decisive approach is not translated into an anti British goods and services campaign, where those businesses in the eurozone actively seek to buy from within their own community to the detriment of the UK.

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It’s a Cold Wind!

December 5th, 2011

Last week we heard that yet again the prison population had hit an all-time high – 88,179, unemployment amongst the young is growing with UK unemployment rising by 129,000 in the three months to September to 2.62 million, as youth unemployment rose above a million.  The jobless total for 16 to 24-year-olds hit a record of 1.02 million in the quarter and female unemployment was at its highest for 23 years.  Friday’s High Court Ruling that the Government’s proposed changes to pensions are lawful will not just have implications for public sector workers but also for those in the private sector – meaning less money for the majority.  UK construction is slowing, manufacturing is reported as shrinking and more of us are facing fuel poverty.  What is needed now more than ever is a clear vision and strong leadership. 

The leaders of our country need to take stock.  Have they the right skills, right support and clarity of vision to deliver?  Perhaps they should look to some of the most successful global companies for expertise and ideas as currently we seem very short on schemes with the same themes being pushed without the overall vision being articulated.  Why should local people worry about what is happening in Europe or if the Government has a big debt?  The message is at best complicated and the current reactive approach is leading to even more confusion and despondency.  Let’s get a clear narrative which provides a picture of where we are going and how we are going to get there so that we can all understand with an outstanding leader driving us forward.  Remember to lead you first have to have followers and to do this you first have to gain their confidence, trust and support!

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