(Ronald Sewell) 12 Pillars of Bussiness Success H (BookFi) PDF

The 12 Pillars
of
Business Success
The 12 Pillars of
Business Success
How to Achieve Extraordinary Performance

from Teams of Ordinary People
Ron Sewell
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First published in 1996
Apart from any fair dealing for the purposes of research or private study, or criticism or
review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication
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© Ron Sewell, 1996
The right of Ron Sewell to be identified as author of this work has been asserted by him in
accordance with the Copyright, Designs and Patents Act 1988.
British Library Cataloguing in Publication Data

A CIP record for this book is available from the British Library.
ISBN 0 7494 2005 7
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Printed and bound in Great Britain by Biddles Ltd, Guildford and Kings Lynn
CONTENTS
Advisory/Production Team 9
Foreword 10
Author’s Introduction 12
The Most Important Book you will Ever Read 14
There has to be an Easier Way 15

Benefits of Flying with the Geese 18
The Pillars for Success 29
Changing ‘Mindset’ 29
Brainstorming Exercises or Projects 31
Pillar 1: Leadership 33
Re-engineering the Manager 33
Competitive Challenge 35
From Managing to Leading 35
A Liberating Philosophy 38
Brainstorming Exercises or Projects: 1 43
Pillar 2: Effective Followers and Missionaries 44

‘The Leadership Challenge’ 45
Missionaries 45
Teams 46
Commitment 46
Values 46
Pillar 3: Vision 48
What is a Vision? 48
Leader’s First Responsibility 49
American Survey 49
Shared Ambition 50
A Process 51
Questions to Ask 51
Live Management Tool 52
6 ᔡ CONTENTS
Examples 56
Pillar 4: Superior Philosophies 58

All ‘Stakeholders’ 59
Intellectual Assets 63
Self-employability 63
Projecting these Values 64
Conclusion 64
Pillar 5: Superior Strategies 68

Winning 68
Involvement and Understanding 68
Challenge 69
Understanding Environment 69
Redefining Context 70
What are your Objectives? 71
Long-term Positioning 72
Innovation 73
Clarifying Strategy 74
Owning – The Strategy 74
Competing Successfully 75
Optimising your Value Stream 75
Your People are the Experts 75
Commanding a Premium 76
Beyond Strategy to Purpose 76
From Strategic Intent to Corporate Purpose 77
Hard Results 77
Pillar 6: Collective Knowledge 81

Your Most Valuable Assets 81
Back to Philosophy 81
Eight Issues 82
Why Should People Bother? 91
Pillar 7: Winning Structures and Systems 93

Evolution not Revolution 93
Winning: Objectives Come First 93
The Global Threat 94
Importance of Organisation 94
CONTENTS ᔡ 7
Don’t Show Customers your Arse! 95

Front-line Entrepreneurs 96
Encourage Innovation 96
Lean but not Mean 97
What’s your Core Business? 99
Working Away from Organisation 101
Boundarylessness 103
Horizontal not Vertical 103
Processes not Tasks 106
Teams not Individuals 108
Ensuring you have Skills to Win 113
Value Adding Systems 115
The Organisational Dilemma 118
Creating a Winning Culture: The Right Social Architecture 121
Winning Means Change 123
It’s Back to Leadership 123
Time, the Essential Ingredient 124
Role of Head Office 124
Conclusion 125
Lean Thinking 126
Pillar 8: Building a Winning Organisation 128

A Strategic Activity 128
Attitudes: Foundation for Success 128
Competencies and Capacities 132
Recruiting the Best 133
Motivation by Superior Induction 137
Coaching Performance Regularly 138
Promoting the Right People 140
Demotion 142
Progress Independent of Promotion 143
The Integrity to Prune your Organisation 144
Building a Team 146
Pillar 9: Developing your Winning Teams 148

Too Little: Too Late: Too Few 148
Self-employability: Willingness to Compete 149
Building Competence 150
Creating Confidence 151
Developing the Capacity to Grow 154
8 ᔡ CONTENTS
Pulling Together: Cohesion 156

Creating a Learning Organisation 158
Leadership: Again 159
Pillar 10: Motivating a Winning Performance 163

Motivational Theories 163
Motivation is Emotional! 165
Creating the Desire to Win 169
Creating Winning Teams 174
Rewarding your Team for their Success 177
Conclusion 180
Pillar 11: Communicate to Achieve Extraordinary Performance 182

Leader’s Greatest Obligation 182
Communicating the Vision 183
Creating a Culture of Success 192
Creating a ‘Picture’ of your Organisation 198
Understanding your ‘Cultural Web’ 199
Conclusion: Communicate Endlessly 203
Pillar 12: Your Charter for Extraordinary Achievement 206

Why? 206
Advantage of a Charter 208
Six Cautions 208
Hewlett-Packard 211
ICL 212
Sewells International 214
Conclusion 215
Company Charters 218

Hewlett-Packard: the HP Way 218
The ICL Way 222
Sewell’s Colleagues’ Charter 231
References 251
Index 253
Advisory Team
Professor Jonathan Brown
Brian Coolahan, Former Managing Director, GE Capital Finance
Professor Stephane Garelli, IMD and Lausanne University
Bryan Gourlay, Sewells International Ltd
David Heslop, Managing Director, Mazda Cars (GB) Ltd
Daniel Jones, Professor of Manufacturing, Cardiff Business School
Richard Whipp, Professor of Human Resources, Cardiff Business School
Martin Wibberley, Personnel and Organisation Director, Sun Valley
Production Team
Aubrey McILrath
Julia Howarth
Kathy Luscombe
Gabi Facer – Kogan Page Publishers
Jennifer Gubbay – Kogan Page Publishers
Deborah Dawson – Kogan Page Publishers
FOREWORD
I feel very honoured to have been invited to contribute the Foreword to this
important book which I believe is a helpful extension of the views I have
been trying to proselytise for so long. All of us know that our businesses
will only succeed if we create an environment in which the entire company
is working together to a predetermined destination. Moreover, all of us can
recognise when every individual is contributing and when the leadership of
the team is moving effortlessly from individual to individual, dependent
only on the relevance of their skills and background, in order to deal effec-
tively with whatever problem the team as a whole is facing. The difficulty
lies not in describing the end result but, as so often in management and
business, in actually the steps which need to be taken in order to achieve
that result. I have long believed that one of the reasons business tends to be
regarded so poorly as a way of life is that despite the fact that the general
objectives are usually quite simple (indeed they have to be because they
involve the wholehearted collaboration of a large number of people) the
actual achievement of these objectives can be immeasurably difficult.
Ron Sewell’s book seems to me to answer a number of these questions
and it actually does show some of the things to which I believe any business
leader should be turning his attention. Leadership in business is like so
many other things in life. Positive investment is needed if you are to achieve
the pay off and positive investment means devoting very large amounts of
time to the processes through which business can be improved. One of the
difficulties is that we confuse dealing with the limitless number of immedi-
ate and fascinating tangible problems, with which we are comfortable and
familiar, with the actual management of the business. The reality is that the
job of the Chief Executive, manager of a department or leader of any group
of people is to create the conditions under which they can perform extraor-
dinarily. If you are successful in creating such conditions you will be con-
stantly surprised, not only by the capability of your people, but by their
commitment, enthusiasm and sheer ability to achieve the apparently
unachievable.
When the goal is so clear and the pay off so large is it not extraordinary
that so few business leaders are actually prepared to study what is needed
and then devote a proportion of their time to trying to manage the processes
of the whole organisation? Ron Sewell draws upon a vast gallery of busi-
FOREWORD ᔡ 11
ness people, academics and others who have contributed to this crusade –
indeed it truly is a crusade. There is no way in which Britain will obtain
competitive advantage over the peoples of the Far East, Europe or America
by being more Japanese, Chinese or whatever it may be than our competi-
tors. We have to find and devise ways in which we can release the capability
of our people and these capabilities are based almost entirely upon their
individualism, creativity and ingenuity. These are priceless national advan-
tages which in the past have stood us in good stead. The enormous range of
British inventions and innovations in political systems, trade unions, acade-
mia and so on have all contributed to moving the world ahead. What are
needed are ways in which we can create a new initiative and emphasis on
business leadership which will enable our people to achieve the world lead-
ership which alone will meet the overwhelming needs of our country and of
the new generations of our children coming along. I believe that Ron
Sewell’s book will be a real assistance in this quest.
Sir John Harvey-Jones MBE

AUTHOR’S INTRODUCTION
For the past 30 years I have acted as a ‘personal coach’ to senior executives
of companies, large and small, throughout Britain and overseas. To ensure
that my ‘coaching’ was well-informed, I have spent the past 30 years in
studying books and articles on outstandingly successful business executives
and the leading management ‘gurus’ of the day.
Thirty years ago I started my own business from scratch and built it into
an integrated consultancy, training and strategic information service. So,
when ‘coaching’ my clients, I was able to talk to them from the first-hand
experience I was gaining of building and running my own business.
To find the most cost-effective way of helping my clients, I progressively
developed a three-day ‘Workshop’ at which a dozen or so senior executives
could discuss the issues confronting them with their peers, while I acted as
the facilitator. From time to time I invited a leading ‘guru’ to give them
fresh insights. To provide a framework for these ‘Workshops’ I developed a
‘Management Consultancy Workbook’ which, with case studies and exam-
ples of best practice, could aid them in their syndicate discussions.
Arising from this, I have been invited to speak at conferences and semi-
nars from which has evolved a demand for me to set out in book form, the
concepts about which I talk. Hence this book, which I hope you will find
interesting to read, and helpful as you strive to develop your career, or to
grow your own successful business.
May I close by apologising to the females who read this book. My wife
and I built our business in partnership. We have had many women as clients,
and I respect the many outstanding females who hold senior positions in
business. But it can get tedious to keep writing him/her, he/she, so I hope
you can accept that though I have kept to the masculine throughout the
book, everything I say applies equally well to both sexes. In fact, part of the
reason for the success of many women in business is that they have the
empathy, the natural aptitude, to build The Twelve Pillars.
Ron Sewell
‘There is tremendous unused potential in our people. Our organisa-
tions are constructed so that most of our employees are asked to use 5
to 10 per cent of their capacity at work. It is only when these same
individuals go home that they can engage the other 90 to 95 per cent –
to run their households, lead a Boy Scout troop, or build a summer
home. We have to be able to recognise and employ that untapped abil-
ity that each individual brings to work every day.’
Percy Barnevik – ABB
Asea Brown Boveri has been judged Europe’s most successful company.
THE MOST IMPORTANT BOOK YOU
WILL EVER READ
If you are an executive, at any level, in any organisation, your success will
depend on your people. This is such a trite truism that you may be tempted
to say, ‘I know, so what?’
The reality is that you are likely to be working far too hard, far too long,
trying to keep on top of all the conflicting pressures of business today that,
with the best will in the world, you are unable to spend enough time on
your most important asset: your people.
It is not a question of adopting one technique; however good that tech-
nique may be. Over the past decades we have seen one technique after
another come and go. Research published in Management Today shows that
companies who have embraced ‘re-engineering’ have largely been disap-
pointed by its impact. As gardeners will know, no plant, however healthy,
will thrive if planted in the wrong environment. Similarly, no technique will
thrive unless the overall environment is right.
This is the simple message of this book. Your success depends on creating
an environment in which every single member of your team will feel totally
committed to your success.
The figure missing in most organisations is their team commitment index:
the extent to which each member of the team is fully committed to achiev-
ing the goals needed for the overall success of their organisation. This does
not depend on them: it depends on us. All too often we, as senior execu-
tives, are to blame. Percy Barnevik has created one of Europe’s most suc-
cessful organisations. He suggests that many organisations are only using
five to ten per cent of their people’s true capacity. As he says, ‘we have to
be able to recognise and employ that untapped ability’.
This book sets out the 12 ingredients, which I have called ‘pillars’, which
have to be present in your organisation to enable you to do this. It is based
on five years’ intensive research into the ingredients of success behind out-
standingly successful organisations, backed by the conclusions of the
world’s leading ‘gurus’.
It is important to bear in mind that although each chapter is dedicated to
one ‘pillar’, each is totally interdependent and, particularly when looking at
issues of motivation and communication, it is vital to take into account the
impact of the other 11 pillars.
If you can apply the 12 pillars, it will be the most important book you
have ever read.
THERE HAS TO BE AN EASIER WAY
You want to win: to have a successful organisation or business. To this end,

you probably work far too hard, far too long and under some considerable
degree of stress; particularly if you own your own business and are guaran-
teeing its overdraft!
You do not need me to spell out all the pressures of running an organisa-
tion but the end result is that there are never enough hours in the day.
In many organisations there is an underlying sense of tension. The boss is
working far too hard to spend enough time on team development and people
related issues. Even if his ‘door is always open’ people are reluctant to
interrupt because they can see the stress under which he is working.
Lacking guidance from the top, executives compound the problem by being
far too busy to spend time with their immediate subordinates who are frus-
trated by their ‘powerlessness’.
There is no one ‘big idea’ likely to provide a miracle cure with little or no
effort. The latest ‘fad’ by itself will not have lasting impact. (Many senior
executives have destroyed their credibility by chasing after the current
‘flavour of the month’ technique, often without being willing to devote the
time and resources needed to create the culture within which the technique
might stand a reasonable chance of success.)
We have two options. The first is to continue with the frustration of seek-
ing to drive the business with the stresses equivalent to seeking to ‘brushing
water uphill’.
The second option, The Easier Way, is to transform your organisation
into a team of individuals who, working together, can run the organisation,
16 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
Figure I.1 Managing
often achieving significantly improved results, provided you create the cul-
ture within which they can be successful on your behalf.
Ralph Stayer1 was a very successful business man. He had started his
organisation from scratch and built it into a very profitable organisation,
producing meat pies and related products. He grew to the point of employ-
ing nearly 400 people but by then he was experiencing the type of frustra-
tions we are discussing.
He concluded that he had created an organisation which was the equiva-
lent of a herd of buffaloes. Everyone took their lead from him: when he
turned, they turned. He decided that his only option was to transform his
organisation into the equivalent of a flock of geese. When geese fly in for-
mation, taking turns to fly ‘point’, they complete the journey 70 per cent
faster than any goose flying by itself. So, The Easier Way is to turn your
organisation into the equivalent of a flight of geese.
Hard results
The sheer competitiveness of business today means you cannot take risks.
You need hard results. Let’s learn from Ralph Stayer.
As he admits, Ralph Stayer built his business by being an autocrat. When
THERE HAS TO BE AN EASIER WAY ᔡ 17
he realised that he had to change his style for the company to progress, he
ordered his staff to take responsibility; he abdicated. Obviously, the
approach failed. He then realised that he had to create the conditions under
which his workers would start to demand responsibility. Once he started to
focus on the issues we will be discussing, the climate began to change.
A turning point came when his workers said that they did not want to work
at weekends. He passed the problem back to them. They realised that during
Figure I.2 Fly with the GEESE

the week they had a machine downtime of between 30–40 per cent for which
they were responsible. They got downtime to below 10 per cent and did not
need to work at weekends.
Line workers took responsibility for the quality of their products. The
team gathered data, identified problems, worked with suppliers and with
other line workers to develop and implement solutions, even visited retail
stores to find out how retailers handled the product. They took responsibili-
ty for measuring quality and then used these measurements to improve pro-
duction processes.
They owned and expected to own all the problems; rejects fell from 5 per
cent to less than 0.5 per cent. They asked for information about costs and cus-
tomer reactions and started to implement improvements. They came to own
and expect responsibility for correcting the problems that customers raised.
They took responsibility for selecting and training their own colleagues
and for dealing with performance problems. They fired individuals who
would not come up to the standards of their team. They developed a self-
appraisal scheme linked to a profit sharing scheme based on their perfor-
mance which was administered by a volunteer team of production workers
from various departments.
Progressively, the team began to make all decisions about schedules, per-
formance standards, assignments, budgets, quality measures, and capital
expenditures.
The crucial point is that as teams progressively took over the super-
visors’ functions the supervisors’ jobs disappeared. Ralph Stayer did not
cut out levels of management. He progressively developed his front-line
‘members’ until the supervisory levels of management became unnecessary.
In passing, supervisors who could only function in an authoritarian way left
the company. Most went into other jobs at Johnsonville, such as technical
positions.
The second crucial point is that as front line ‘members’ began to take
more responsibility, the need for staff functions changed. Thus quality con-
trol stopped checking quality and began providing positive support by
developing monitoring techniques and customer panels. The traditional per-
sonnel department disappeared and was replaced by a ‘learning and person-
al development team’.
Do you agree that to achieve such transformation would be well worth
while and is The Easier Way to achieve hard results?
BENEFITS OF FLYING WITH THE GEESE
Turning our organisations into the equivalent of a ‘flight of geese’ depends

on one person, you and I as chief executives. It will add a totally different
dimension to our work which will require extra effort on our part and possi-
bly extra stress. It will certainly require a long-term commitment. So, is it
going to be worthwhile? The answer must be a resounding yes, for four rea-
sons:
ᔡ Health
ᔡ Happiness
ᔡ Performance
ᔡ Survival.
Health
Having had a quadruple by-pass, I know only too well that ‘driving’ a busi-
ness, with all the stresses involved, including lying awake in the early hours
worried stiff on occasions, can damage one’s health. The Financial Times
once ran a feature on the increasing problems of ‘executive burnout’. The
style of life is no good for us, our families, or our organisations.
Happiness
Most of the executives agree that the ‘fun’ has gone out of business. We all
spend such a significant portion of our lives at work that it is vital to reintro-
duce fun. The Easier Way does this. For senior executives, being carried
along by a team of committed people is not only more enjoyable for us, but
an essential factor in gaining their commitment. Performance in every area
of your organisation will improve, which in turn will reduce stress and
increase happiness as everyone starts to feel involved as a member of a
‘winning team’.
Survival
Finally, we have no option. In today’s highly competitive environment com-

panies will not survive if they employ a ‘herd of buffaloes’. Every trade and
industry is facing increased direct and indirect competition. High Street
banks are faced with the loss of 95,000 jobs, according to one estimate, as
people like Direct Line Insurance start to provide lower cost banking ser-
vices via the phone. Customers are demanding more for less.
As a result, margins are under pressure and, to survive, we need to run
very lean organisations. Cutting staff is both negative and often counter-pro-
ductive as the remaining staff become demotivated. The only answer is to
seek vastly improved performance from a committed team of colleagues,

our ‘flight of geese’. Easier if we have an expanding organisation. Not so
easy if we are in a stagnant or declining market – but still the only effective
approach.
Performance
Let’s come back to improved performance.

We shut our small company down for half a day a month and hire a tem-
porary telephonist, so that everyone can discuss the progress and future of
our company. Every member of the team in turn has to stand up to give a
short presentation on how they are contributing to the company’s success.
When Alf, our lovable 70 year old ‘post boy’ gave his presentation, he came
up with ideas that saved us at least £10,000 a year on postage.
Peter Nathan employs just over 100 people at his Abbeyvale Bakery in
Devon. Having invested heavily to improve production, his packing depart-
ment became a bottleneck. Peter did not become involved. He put the issue
to Sue Stevens, the packing team leader. Her kitchen table became their
‘boardroom’. She and her team researched the different options, including
different equipment, and came up with recommendations that not only
solved the problem but achieved initial savings of at least £15,000 and
enabled one of the team to be transferred to other essential work. These sav-
ings are expected to increase as their ideas are developed still further.
One of Unipart’s ‘My Contribution Counts’ forums saved £86,000 on its
own while the total savings arising from all the forums in the group is now
£2 million.
At Premier Exhaust in Coventry, £300,000 was saved when front-line
workers designed and implemented procedures that made a third shift
unnecessary.
In one of his Annual Reports, Jack Welch of General Electric commented
‘Teams of hourly employees now run, without supervision, $20 million
worth of milling machines that they specified, tested and approved for pur-
chase. The cycle time for the operation has dropped 80 per cent. It is embar-
rassing to reflect that for 80 or 90 years we have been dictating equipment
needs and managing people who knew how to do things much better and
faster than we did.’
At another GE Division, when senior management explained the serious-
ness of the downturn in business due to the recession, the workers came up
with ideas which reduced production costs by 45 per cent. When they were
asked why they had not put these ideas forward earlier, they pointed out that
they had never previously been involved nor asked for their help.
It comes back to deeply ingrained attitudes. The manager of one Tarmac

plant, which had increased production by 40 per cent in six months, admit-
ted that he felt uncomfortable asking his front-line people for help. He
thought it was his job to know what was best. But as his Chief Operating
Officer commented:
Those working closest to problems have the best idea of how to resolve them.
As one example, innovative solutions from front-line colleagues helped to cut
the cost of a £10m tunnel at Heathrow by more than £500,000; a 5 per cent
saving which probably went straight down to the bottom line.
The Easier Way is to treat the people doing the job as the experts, and not
only give them responsibility for resolving problems but get them totally
committed to a continuous search for improvements. Nissan in Sunderland
have achieved world-class levels of productivity. Everyone is totally com-
mitted to the process of Kaizen, or continuous improvements.
Before we discuss how we achieve this level of commitment, let us stop
to consider why people react as they do.
Switching people off
In one of his books2, Sir John Harvey Jones wrote of the way in which large
organisations can, so easily, ‘switch people off’. Executives running smaller
organisations may delude themselves into thinking that, because they are
closely involved with their workforce, this does not happen to them.
Ralph Stayer’s medium-sized company was successful but he was unhap-
py about his workers’ reaction so he had an attitude study carried out. He
regarded himself as a caring, benevolent employer, involved with his peo-
ple. He was shattered when the results of the survey showed that his rank-
ings were no better than some of the industrial giants in his area.
He did not want to believe the results. He looked for excuses. The
methodology was wrong. The questions were poorly worded. He did not
want to believe that he had an employee motivation problem. The survey told
him that his people saw nothing for themselves in his organisation. It was
merely a job. He wanted them to commit to his company’s goals. They saw
little to commit to. The very things that had brought him success were creat-
ing a counter-productive environment. As he admitted:
I had been Johnsonville Sausage, assisted by some hired hands who, to my
annoyance, lacked commitment. The survey told me that people saw nothing
for themselves at Johnsonville. It was a job, a means to some end that lay out-
side the company. I wanted them to commit themselves to a company goal.
They saw little to commit to and, at that stage, I still could not see that the
biggest obstacle to changing their point of view was me.
At my seminars, I often ask people to complete the questionnaire overleaf.

The reality is that when we are so busy ‘chasing our tails’ to the point where
we have little or no time for people-related issues, we do ‘switch people off’.
There’s an old story about some stonemasons who were asked what they
were doing. One said that he was trying to get even with the bastard of a
supervisor. One was so disinterested that he didn’t bother to reply. One
replied that he was there to earn a living. The fourth explained that he was a
skilled stonemason responsible for dressing and shaping stone. The fifth
said, very proudly, ‘I am helping to build this cathedral!’
At my seminars I ask those present to estimate how many of each catego-
ry they have within their own organisations. Typical responses are:
% %
ᔡ I’ll get even 0–10
ᔡ Couldn’t care less 10–20
ᔡ Only work here 25–40
ᔡ Feel involved 15–30
ᔡ Truly committed 5–10
What percentages would you apply to your own organisation?
The challenge is to get to the point where the majority of our people feel
truly involved or enthusiastically committed. This depends on the style of
management or leadership we, and our team of executives, display. This, in
turn, depends on our fundamental beliefs about people which fall into two
categories:
ᔡ Transactional: This is the traditional view that the employee is being
paid to do a job, should do it when he is told, without challenge, and
without concerning himself with the how or why. It is often reinforced
by the strongly held belief that ‘rank has its privileges’.
ᔡ Transformational: This is based on the belief that we are making an
important investment in people which we need to optimise by trans-
forming their performance. So, our fundamental attitude to those with
whom we work is to say to them, ‘We have trust and confidence in your
expertise and commitment. We will share information on our vision,
goals and performance, to enable you to gain satisfaction and recogni-
tion for making a meaningful contribution to our joint success.’ The
underlying belief, as at Honda, is that ‘to lead is to serve’.
Let me tell you two true stories.
In one traditionally transactionally managed factory, only the Production
Director had authority to stop the line. This had to be kept going at all cost.
Inspectors at the end of the line rejected products not up to standard. (On
occasions this resulted in large areas of products waiting rectification.)
Figure I.3 Pushing ‘Workers’ uphill
One day the line stopped. The Chargehand called the Supervisor, who
called the Foreman, who called the Manager, who called the Senior
Manager, who called the appropriate Engineer. Since many were tucked
away in offices, ‘paper-pushing’ or in meetings, this took time.
While they were waiting, one of the men on the line had the temerity to
suggest a solution. Not only was his idea shot down, he was told in no
uncertain terms to leave his brains at the factory gate in future. Eventually
the expert came along, recommended the idea put forward by the worker,
and the line restarted with the workers seething with resentment at the treat-
ment given to their colleague.
At another factory, every worker has the responsibility to stop the line if
they spot a problem which would result in a lack of quality. One day one of
the workers stopped the line to point out a problem. Immediately, every
manager in the area arrived to see what they could do to help. They were
there within minutes. Firstly they apologised to the workers for the fact that
the problem had arisen. Second, they asked the workers how they thought it
could be resolved. One gave a suggestion. It was tried. It worked. He was
praised and congratulated for stopping the line and for putting forward the
solution.
The line resumed with a highly motivated team of workers, enthused that
their views had been taken into account. In passing, no inspection is needed
at the end of the line, because every line worker is his own inspector and, on
the odd occasion that something does slip through, the product is returned
to the workers responsible to rectify.
The five levels of reaction by the stonemasons previously referred to, are
typical of any worker, and will be a direct reflection of five different styles
of management or leadership (see Table I.1 overleaf).
There are some bloody-minded managers. Some, particularly those pro-
moted because of their technical skills, find refuge in pushing paper: they
become bureaucrats. If a manager takes a view that the workers are paid to
work, it is not surprising if the workers react accordingly. The fourth level,
where workers feel involved, is often created by executives who have an
underlying transactional style but demonstrate empathy and have some
charisma to get results from their people. The fifth level will only be
achieved by those who take the transformational approach of recognising
that ‘to lead is to serve’ and that is their responsibility to optimise the
investment that has been made in their major asset, their people.
You might like to use Table I.1 to record the number of your executives
who fall under each heading.
Hardest problem
The biggest problem you are going to face lies in changing the deep-seated
attitude of you, your executives, and of everyone within your organisation.
These influence the ‘culture’ of your organisation and they can be so deeply
entrenched as to create a real barrier to any process of change. These deeply
held values and beliefs are often described as the ‘mindset’ or, as the paradigm
(pronounced paradime) which is defined as a core set of beliefs and assump-
tions which fashion an organisation’s view of itself and its environment.
PILLAR 1: LEADERSHIP ᔡ 25
Table I.1 Five styles of management or leadership
The five levels of reaction of our colleagues will be a direct reflection Number of
executives
of the styles of management or leadership we, and our team of adopting
executives, display. approach
I’ll Get Even First level reaction is created by bloody minded

managers.
I Couldn’t Care Second level reaction is created by

Less bureaucratic, or preoccupied management.
I Only Work Here Third level reaction is caused by traditional,

transactional management.
I’m Involved Fourth level reaction is caused by transactional

leaders.
I’m Committed Fifth level reaction is generated by

transformational leaders.
In short, the level of reaction we generate is a direct Total no.

reflection of our style of management or our style of of
leadership. executives
Changing the paradigm of your organisation will be your biggest challenge.

It is a point we will come back to. Is it worth making the effort?
Hard results
The hard reality is that at a time when senior executives are worried about
increased competition and decreased margins, they are failing to optimise
on their major investment in people, whose direct and indirect costs are
often more than 50 per cent of total operating costs. Research projects con-
tinue to show that the majority of people, often more than 75 per cent of
those questioned, do not feel that their organisation is using their talents to
the full. A significant percentage, frequently as high as 50 per cent, admit
that they merely do just enough to keep their jobs.
Even people who their supervisors regard as good, loyal, hard working,
conscientious, committed people, are probably performing at only 50 per
cent of their potential. Any businessperson who only used half the space of
his expensive offices: only used half of his equipment and used only half of
his stocks, would, quite rightly, be regarded as a lunatic. Yet, through sheer
pressure of transactionally based work, many organisations are only using
half the potential of the people in their organisation.
Even a 5 or 10 per cent improvement would have a tremendous impact on
your business. There is no option. The Easier Way of unlocking the poten-
tial of your people is the only way forward.
Upturning your organisation
The way to transform your organisation’s productivity is to upturn it in the

way shown in Figure I.4. Everyone is smiling. Your front-line colleagues
are happy at being empowered. Your middle-line executives are happy to
revert to having a ‘hands-on’ approach of using their expertise to act as
coaches and facilitators; not paper pushing bureaucrats. Once the transfor-
mation is achieved, you will be a lot happier, healthier in yourself and
healthier in terms of the improved performance of your organisation.
Leadership
One thing you may notice

throughout this book is that I
do not refer to employees. I
think it sounds derogatory. I
recommend all my clients to
abolish the term. I like ‘col-
leagues’, a term which Asda
also uses. One client uses
‘member’. Honda, at
Swindon, use the term ‘asso-
ciate’. We must also get away
from the term ‘manager’, as I
will explain later. My clients
have been encouraged to use
terms such as leaders, coach-
es or facilitators.
Let’s look in more detail at
what’s involved by looking at
Figure I.5 overleaf. Figure I.4 Leadership
Figure I.5 Upturning your Organisation
At my seminars I ask those present to underline words they believe to be

significant. You may like to do this. The words frequently underlined in
respect to the first triangle are:
ᔡ Respected as experts ᔡ Authority to achieve goals
ᔡ Given all the information ᔡ Meaningful contributions
Words commonly underlined in the second triangle are:
ᔡ Dedicated ᔡ Coaching
ᔡ Supporting ᔡ Information
ᔡ Resources ᔡ Encouragement
ᔡ Achieves ᔡ Goals
When it comes to the last triangle the words typically underlined are:
ᔡ Inspire ᔡ Striving to excel
ᔡ Culture ᔡ Achieving shared vision
ᔡ Pride ᔡ A meaningful future
ᔡ Everyone is committed
These words touch on the all important issues of values, beliefs and attitude
which we’ll discuss later.
Figure I.6 Your space shuttle to achieve your vision

THE PILLARS FOR SUCCESS
Jack Welch, Chairman of GE, was once asked, ‘What do executives have to
get right if they want to revise and re-structure their businesses?’ He sug-
gested that the question ought to be geared to asking, ‘What ingredients do
you think people need to win?’
I like his word ‘ingredients’. Throughout this book I have substituted the
word ‘Pillars’ to represent the concept that every pillar has to be in place. I
have identified the 12 ingredients I believe to be essential. In Figure I.6 my
colleague Kathy has shown them in the form of a space rocket on the basis
that each section has to work effectively for the rocket to be successful.
Mixing my metaphors, if you want to bake a cake successfully, you have
to use all the ingredients in the right proportions. Similarly, if we want to
transform our businesses, we have to use all twelve ingredients in a totally
integrated manner. We are going to look at each ingredient but, before we
do so, let’s touch on three important issues.
CHANGING ‘MINDSET’
Earlier we discussed the need to change the culture of the organisation, to

change our mindset or paradigm. In Table I.2 I have set out the twelve pil-
lars of our transformational approach, and compared them with the typical
transactional approach. I hope you can recognise that we are talking about a
fundamental difference of approach in every area of the business.
Table I.2
TRANSFORMATIONAL APPROACH TRANSACTIONAL APPROACH
1. Leadership 1. Scientific management

2. Effective followers and 2. Managers and controllers
missionaries
3. Vision 3. Budgets
4. Superior philosophies 4. Expediency
5. Superior strategies, cascaded 5. Confidential business plans
throughout organisation
6. Collective knowledge 6. Managers paid to think: workers to
work
7. Designing superior organisation 7. Protection of ‘territories’
8. Building superior organisation 8. Delegated to personnel department
9. Developing superior organisation 9. Delegated to training department
10. Goal-related motivation 10. Bonuses and commissions
11. Communication of vision 11. Directives on performance
12. Culture (Charter) of change 12. Reluctance to change: ‘This is the
way we’ve always done things.’
THE STRATEGIC DIMENSION
But it is more than this. There is a strategic dimension to the 12 ingredients.

In the transactional approach, all 12 ingredients may be present but they are
not coordinated: there is no cohesive strategy (Figure I.7).
If most of your competitors are doing much the same as yourself, in much
the same way, then the only way of gaining a competitive advantage is to
get extraordinary performance from teams of ordinary people. The only
way to achieve this, is by ensuring that every one of the 12 ingredients is
perceived to be an essential, integral element of your overall strategy.
Figure I.7 The uncoordinated approach
The power of the new approach is shown in Figure I.8 overleaf. The
strategic holistic approach generates increasing power as each step rein-
forces the next.
Figure I.8 The strategic, holistic approach
BRAINSTORMING EXERCISES OR PROJECTS
Need to upturn organisation

ᔡ Do you agree on the need to move progressively from traditional,
transactional management to a transformational style leadership? If
so, what are the most important, immediate things you need to do?
ᔡ Are you ‘pushing workers uphill’? Looking at how you have marked
yourself on the charts on pages 23 and 25, what are the most impor-
tant things you need to do to take the brakes off your team?
ᔡ If you accept the concept of ‘upturning’ your organisation, what do you
and your executive team need to do to start easing your own workload
by giving far more responsibility to your front-line, customer-facing col-
leagues? Should you ask every executive to produce an action plan
showing the tasks they plan to delegate more effectively, and those
they intend to retrain?
1
LEADERSHIP
Ralph Stayer believes ‘People want to be great. If they aren’t, it’s because
their management won’t let them be.’
Whenever I give a speech, some members of the audience will challenge
my emphasis on leadership and my criticism of transactional management.
They accuse me of semantics. By so doing, they are demonstrating their
own deeply ingrained ‘mindset’. There is a significant difference between
transformational leadership and transactional management.
These differences were summarised brilliantly by John P Kotter3, whose
table is reproduced here (Table 1.1). John Kotter then teamed up with James
Heskett to write another book called Corporate Culture and Performance4,
which is well worth reading. One of their conclusions was that:
Excellent management, by its very nature, is somewhat conservative, method-
ically incremental, and short-term oriented. As a result, the very best manage-
ment cannot produce major change.
The two professors base their conclusion on extensive research but they may
be guilty of overemphasis. What we need are good management practices
which help us to optimise our performance by the quality of our leadership.
RE-ENGINEERING THE MANAGER
James Champy, co-author of Re-Engineering the Corporation5, pointed out

in the Financial Times that for ‘re-engineering’ to work, the role of manage-
ment has to change significantly.
Table 1.1 The difference between management and leadership
MANAGEMENT LEADERSHIP
Planning and budgeting – establish- Establishing direction – developing a

ing detailed steps and timetables for vision of the future, often the distant
achieving needed results, and then future, and strategies for producing the
allocating the resources necessary to changes needed to achieve that vision
make that happen
Organising and staffing – establish- Aligning people – communicating the
ing some structure for accomplishing direction by words and deeds to all
plan requirements, staffing that struc- those whose cooperation may be
ture with individuals, delegating needed so as to influence the creation
responsibility and authority for carrying of teams and coalitions that under-
out the plan, providing policies and stand the vision and strategies, and
procedures to help guide people, and accept their validity
creating methods or systems to moni-
tor implementation
Controlling and problem solving – Motivating and inspiring – energis-
monitoring results vs. plan in some ing people to overcome major political,
detail, identifying deviations, and then bureaucratic and resource barriers to
planning and organising to solve these change by satisfying very basic, but
problems often unfulfilled, human needs
Produces a degree of predictability Produces change, often to a dramatic
and order, and has the potential of degree, and has the potential of pro-
consistently producing key results ducing extremely useful change (eg,
expected by various stakeholders (eg, new products that customers want, new
for customers, always being on time; approaches to labour relations that
for stockholders, being on budget) help make a firm more competitive)
Source: John P Kotter, A Force for Change: How Leadership Differs from Management, Free Press
As workers take on more management tasks, managers must take on more lead-
ership tasks – holding a vision for the business, articulating it to workers and
customers, and creating an environment that truly empowers workers. Shedding
the traditional ‘command and control’ model for one of ‘lead and enable’.
Successful executives will be masters at getting people to work effectively
together, managing conflict, and being effective coaches.
In any empowered organisation, what is important is what is measured.
Measures must track people’s contribution to their team, and the team’s contri-
bution to the success [of the organisation].
Paradoxically, quality, practicality and relevance of the information provid-
ed to workers will need to improve significantly to measure the processes
needed to meet customer needs profitably.
James Champy ended his article by adding:

I am often asked whether workers will be able to perform in their re-engi-
neered jobs. When enabled and empowered, most of them can. The more seri-
ous question is whether managers can make the transition.
The more important question is whether we – as senior executives – can
provide the leadership and support they will need.
COMPETITIVE CHALLENGE
As a result of their extensive studies, John Kotter and James Heskett con-
clude that:
Without leadership, firms cannot adapt to a fast-moving world. If organisations
are going to live up to their potential, we must find, develop and encourage more
people to lead in the service of others. Excellent leadership from the top (is) the
essential ingredient. This leadership empowers other managers and employees
who see the need for change but have been constrained by the old culture. It also
helps to win over the hearts and minds of others who have not yet recognised the
necessity of major change. In many organisations today, providing this kind of
leadership is surely the number one challenge for top executives.
FROM MANAGING TO LEADING
You cannot overturn your organisation overnight. It takes time to change

deep-seated attitudes but I hope that you agree that achieving a transforma-
tional style of leadership is essential.
A personal friend of mine, John Mantle of Biggleswade, enrolled himself
and his entire senior management team on a Dale Carnegie leadership
course – one night a week for 12 weeks. He felt it was the best investment
he had ever made. The important point was that John, as Managing
Director, enrolled himself first and then invited his team to join him.
Bill Cullen, Chairman of Renault Ireland, took himself off for a week’s
course in Arizona led by Stephen Covey. Interestingly, before Bill went, he
had to get six of his colleagues to fill in a questionnaire on their perception
of his leadership style!
There is no shortage of leadership courses, videos, cassettes and books. It
is often possible to link in to the training activities of other organisations.
The Police Training College at Exeter runs a very cost-effective leadership
course which other organisations find worthy of support. South Devon
College will ‘franchise’ its courses.
The core issue is to recognise the importance of placing less emphasis on

managing and more on leading.
One guru stresses the need for self mastery, which he feels is about being
vision driven. The need to dream, to put the dream into a statement and
commit oneself to its achievement through the organisation.
Figure 1.1 highlights three key issues: competence, confidence and
commitment.
Competence
Every team (normally 25 people) at Nissan Sunderland has their own ‘mini
boardroom area’ in which is displayed the level of competence of every
member of the team in all the activities which have to be carried out.
Competence is assessed at four levels: (1) can do the work by referring to
the manual: (2) can do the work without referring to the manual: (3) has
enough competence to suggest improvements: (4) has the ability to train
others. I found it refreshing to see this focus on developing competencies to
the point where the team is charged with responsibility for making continu-
ous improvements.
Figure 1.1 Managing to leading

This is the objective: to develop people so that they can run the business
with the minimum of supervision. Companies such as GE and Rover set out
to give their people the additional competencies that they need to ‘manage’
themselves: skills such as decision making, inter-personal skills, including
assertiveness, and recruitment.
Confidence
It is not merely a question of competence, confidence is just as vital. People

need to feel confident if they start making decisions on our behalf; they will
be praised for getting them right, and coached and encouraged, not criti-
cised, when they get them wrong. As Tom Peters has said, we must praise
people for making mistakes. It is the only way they will gain both experi-
ence and confidence.
A very difficult step will be to transform our ‘managers’ from disciplinar-
ians into coaches.
Commitment
Finally, we have to gain the commitment of those we wish to lead so that

they become independent ‘entrepreneurs’ on our behalf. One client had over
40 ‘employees’. He was the one who lay awake at night worrying about the
business. He has not won over everyone but the majority are now ‘col-
leagues’ sharing his concerns and commitment to the success of their busi-
ness. Another client has over 700 employees. He and his top management
team used to do all the worrying and driving. Now, they have scores of
‘missionaries’ helping to transform performance.
Leadership values
Gaining this level of commitment comes down to the standards, the values,
we are prepared not only to set but to demonstrate. One of the best set of
values I have seen are those set out by Jack Welch of General Electric (GE)
(Table 1.2).
What do you think of them? Obviously, the reference to ‘global’ may not
be relevant to you and might be changed to the capacity to developing mar-
keting brains and marketing sensitivity. I will explain ‘workout’ later.
Perhaps point 4 is the biggest challenge, to ‘have the self-confidence to
empower others’. In GE, Jack Welch will give people a second, third or
even fourth chance if they fall down on performance, but people are
removed for having the wrong values, with violations of integrity being
totally unacceptable.
Table 1.2 GE leadership values
GE LEADERS – ALWAYS WITH UNYIELDING INTEGRITY:
ᔡ Create a clear, simple, reality-based, customer-focused vision and

are able to communicate it straightforwardly to all constituencies
ᔡ Reach – set aggressive targets ...Understand accountability and com-
mitment and are decisive
ᔡ Have a passion for excellence ... Hate bureaucracy and all the non-
sense that comes with it
ᔡ Have the self-confidence to empower others and behave in a bound-
aryless fashion... Believe in and are committed to ‘work out’ as a
means of empowerment ... Are open to ideas from anywhere
ᔡ Have, or have the capacity to develop, global brains and global sen-
sitivity, and are comfortable building diverse global teams
ᔡ Stimulate and relish change ... Are not frightened or paralysed by it
... See change as opportunity, not a threat
ᔡ Have enormous energy and the ability to energise and invigorate
others ... Understand speed as a competitive advantage and see the
total organisation benefits that can be derived from a focus on speed
A LIBERATING PHILOSOPHY
Sumantra Ghoshal, Professor of Strategic Leadership at the London

Business School, and his colleague Professor Chris Bartlett of Harvard,
wrote a brilliant series of three articles for the Harvard Business Review on
‘Changing the Role of Top Management’6, in which they stress the need for
a new leadership doctrine.
ᔡ Changing sources of competitive advantage:
from assets and resources to knowledge and creativity
ᔡ Changing moral contract with people:
from employment security to employability
ᔡ Changing corporate philosophy:
from organisation man to the individualised corporation
ᔡ Changing the role of top management:
from Strategy to Purpose
beyond Structure to Process
beyond Systems to People
from a Constraining Environment to a Liberating Philosophy
Figure 1.2 When you’re up to your arse in alligators
I like my cartoon (Figure 1.2). When you are up to your arse in alligators, it
is difficult to remember that your objective was to drain the swamp. Let’s
not get put off by their rhetoric. They make some valid, practical points
which we need to reflect upon as we consider our leadership role. They
argue that the most basic task of leaders is to unleash the human spirit
which makes initiative, creativity and entrepreneurship possible.
The personal effectiveness of a leader
For those of us who have started our own businesses from scratch, it is very
difficult. I started as a shy, introverted accountant. Len Lewis, of the suc-
cessful construction group, MIDAS, started his business having been a Civil
Engineer. Many businesses are started by people with a particular area of
expertise. Even Chief Executives of larger organisations tend to have risen
through the ranks of specialism, be it finance, technical or marketing.
To a very real degree, the success of the businesses we run is a reflection
of our ability to transform ourselves into effective leaders.
No company can succeed without a strong leader. What does this mean?
In Japan, senior executives, until now, have ruled their organisations with
a ‘rod of iron’ but – an important but – they have always known when to lis-
ten and when to delegate. Listening is a crucial element. For many execu-
tives, making the time to listen is the biggest problem.
Built to last
Built to Last7 is a fascinating book by James Collins and Jerry Porras

(Century, London) which is based on the research they carried out into why
some companies have survived successfully for decades, while their imme-
diate competitors in the same industry have fallen by the wayside.
They describe these successful organisations as visionary companies.
They say that visionary companies are premier institutions – the crown jew-
els – in their industries, widely admired by their peers and having a long
track record of making a significant impact on the world around them. The
key point is that a visionary company is an organisation – an institution. All
individual leaders, no matter how charismatic or visionary, eventually
die; and all visionary products and services – all ‘great ideas’ – eventu-
ally become obsolete. Indeed, entire markets can become obsolete and dis-
appear. Yet the ‘visionary companies’ they researched prospered over long
periods of time, through multiple product life cycles and multiple genera-
tions of active leaders.
One of their charts is interesting. It shows the rate of growth of the
visionary companies they analysed, against their comparison companies,
and against the general stock market (Figure 1.3).
One of the conclusions is that ‘A charismatic visionary leader is
absolutely NOT required for a visionary company and, in fact, can be detri-
mental to a company’s long-term prospect.’ As an example, they quote the
long-term success of 3M, though few people would know the name of its
Chief Executive. Their book goes on, in effect, to touch upon many ele-
ments of the 12 pillars we will be discussing but their crucial conclusion is
that:
The key difference, we believe, is one of orientation – key people at formative
stages of the visionary company have a stronger organisational orientation than
in the comparison companies, regardless of their personal leadership style ... in
fact, we became increasingly uncomfortable with the term ‘leader’ and began
to embrace the term ‘architect’ or ‘clock builder’. They argue that many senior
executives know how to tell the time (by reading management accounts and
statistics) but truly successful Chief Executives of visionary companies know
how to ‘build a clock’: by focusing on building their organisation.
Figure 1.3 Ratio of cumulative stock returns

to general market 1926 -1990
In fact, the theme of The Easier Way is for us to refocus our energies, to
transform our approach, to recognise that our priority task is to build a
‘visionary organisation’. They use the term ‘architect’ or ‘clock builder’. I
prefer to use the term ‘conductor’. We have to recognise that to be effective
we have to be a conductor orchestrating the efforts of every member of our
team, by spending time on the 11 pillars we have yet to discuss.
Example
I was very interested to read in the Strategy Plan of the South Devon
College that Dr Terry Keen, its Principal and Chief Executive, was expected
to:
Measurably demonstrate that he can:
ᔡ Provide employees with opportunities to develop their full potential.
ᔡ Bring into being, natural, self-motivated work units/teams wherever
possible.
ᔡ Create ‘customer thinking’ throughout the organisation.
ᔡ Make systems, methods and procedures work for the benefit of
employees, customers and suppliers.
ᔡ Obtain feedback on performance and practices and communicate these
findings.
ᔡ Guide the Corporation on strategic goals and targets and to be
involved in short and long-term planning.
ᔡ Delegate wherever possible.
ᔡ Educate and train in order to create a knowledge-based culture.
ᔡ Involve people as never before in order to tap ideas, creativity and
innovation.
ᔡ Plan for future challenges and opportunities.
ᔡ Relate to customer needs.
ᔡ Share all information in order to create greater efficiency and under-
standing.
ᔡ Support staff and practise an holistic approach to human relations.
ᔡ Place the College in a premier position, nationally and internationally,
by his continuing involvement in national and international
developments.
Later, we will touch on the issue of agreeing in writing the ‘key tasks’ we
expect from the members of our executive team and our colleagues. Our
most important task is to define our own ‘key tasks’ because the care with
which we do this will influence the long-term success of our organisation.
BRAINSTORMING EXERCISES OR PROJECTS: 1
From Management to Leadership

ᔡ Do you agree with James Champy that it is ‘time to re-engineer the
manager’? If so, how would you and your team set about doing this?
ᔡ Do you accept that you should not start this process of transformation
unless you are prepared to see it through over whatever time span is
needed? What steps do you need to take to ensure that there is a total
commitment to such a long-term enterprise?
ᔡ Do you accept that you cannot start to ‘upturn’ your organisation until
you have built the competence, confidence and commitment of your
front-line colleagues? If so, what actions do you need to take to ensure
that you enhance their competence, build their confidence, and gain
their commitment?
ᔡ Do you accept General Electric’s leadership values and the way in
which they assess leadership qualities? If so, how could you introduce
similar concepts into your own organisation?
ᔡ If you are a Chief Executive, do you accept that it is not necessary to be
a ‘charismatic leader’, but to focus your efforts on building an organi-
sation by acting as a ‘conductor’ orchestrating the efforts of every
member of your team?
ᔡ If you are a Chief Executive, have you set out in writing your own ‘key
tasks’?
2
EFFECTIVE FOLLOWERS AND
MISSIONARIES
I grew up on a diet of ‘the charismatic leader’. Hornblower was a prime

example of the naval officer always leading from the front, always leading
the dangerous missions himself – often to the dismay of his officers. Sadly,
too many entrepreneurs seem to model themselves on this style of ‘leader-
ship’ with all the stresses we mentioned earlier.
We have to create leadership at every level of our organisation.
It is a nonsense to believe that any one man or woman, however gifted, can
run a business single-handed. No one individual has all the skills needed,
nor a monopoly of good ideas. The only answer is to develop a team of peo-
ple of complementary skills, who know far more than we can hope to know
about their particular areas of expertise.
It comes back to the earlier comment that the people doing the job should
be the experts (Figure I.5). Bob Allen, Chief Executive of the American
giant, AT&T, once said:
I have never thought that I could be so knowledgeable and so current in our
business and market that I could make the decisions. I have always been an
advocate of shared decision making. In fact, I believe this is one of the rea-
sons why I am CEO.
One of the reasons for the outstanding success of the Gulf War was that the
correct military forces and the supplies they needed were in the right place,
at the right time. General Pagonis, who ran this brilliant logistical operation,
says that: ‘True leaders create organisations that themselves cultivate
leadership.’
PILLAR 2: EFFECTIVE FOLLOWERS AND MISSIONARIES ᔡ 45
‘THE LEADERSHIP CHALLENGE’
It has been pointed out that:

Leadership is in the eye of the follower
and
Followers make leaders powerful.
Effective followers are defined as being:
Well-balanced and responsible adults who can succeed without leadership;
they think for themselves, are energetic and assertive. They are committed,
focus their energies, and are courageous, honest and credible because they are
risk takers, self starters and independent problem solvers, they get consistent-
ly high ratings from peers and any superiors.
I find this thought-provoking. How many of us have really given serious
thought to the need to create effective followers, able to provide leadership
at every level of our organisation? It comes back to re-thinking the role of
Chief Executive.
Leaders in an organisation of ‘effective followers’ are facilitators of change,
conductors of the orchestra, rather than the square-jawed decision makers of
the past. They treat followers as co-equals, except in strict line terms. This fits
followers for one of their most important (although usually unstated) func-
tions: to keep leadership on the straight and narrow.
MISSIONARIES
In any organisation, people fall into four different groups, in varying pro-
portions:
ᔡ Adventurous, enthusiastic and truly committed people willing to go ‘the
extra mile’, and do anything that is necessary to make their company
successful.
ᔡ A core of people who don’t see the need for change, but are open to
persuasion.
ᔡ You are likely to have your fair share of ‘cynics’ who have ‘seen it all
before’ (and given the number of companies who have gone off at ‘half
cock’ on various issues, they may have done!)
ᔡ The ultra-conservatives, who tend to be insecure people who vehement-
ly oppose any ideas of change.
You are going to need the help of the first group: those who are truly com-
mitted. They should be your ‘missionaries’. This is what John Neill of
Unipart did when, after his ‘buyout’, he started to transform his manufactur-
ing division which everyone else urged him to close.
You will need to list those most likely to be willing to put in the effort need-
ed to create and sustain the momentum you need to generate. They should be
the ones invited to your initial ‘brainstorming’ sessions to talk through the
need for change, and how it is to be introduced. They should be the ones who
are invited to serve on any project team you form to get the process under
way. They can help you build up the ‘critical mass’ you will need.
TEAMS
We need to make greater use of teams of people committed to a common

purpose and performance goals for which they hold themselves mutually
accountable. The creation of teams facilitates the development both of
‘effective followers’ and of leadership at every level. We will return to the
need to base our organisation on teams when discussing Structures and
Systems (Pillar 7).
COMMITMENT
When people are respected for their ability to solve problems, they are like-
ly not only to come up with more creative solutions but to be far more
enthusiastically committed to taking the lead in making sure that their rec-
ommendations work.
VALUES
As one guru has pointed out, the power of leaders is that they deal with
values. His comment was that:
Values turn followers on. If followers feel more fulfilled by association with
someone who asks them to behave in ways and for reasons that make them
feel proud of themselves, that’s leadership.
PILLAR 2: EFFECTIVE FOLLOWERS AND MISSIONARIES ᔡ 47
Collective Leadership and Missionaries
ᔡ Do you agree that you need to create a broader acceptance of the

concept of ‘collective leadership’? If so, how do you do this?
ᔡ Do you agree that you need to encourage leadership at every level, in
every activity? If so, how do you do it?
ᔡ Do you agree that to help you in your transformation, you are likely to
need a number of ‘dedicated missionaries’? If so, how do you identify,
involve and motivate them?
ᔡ Do you accept that you need to create ‘effective’ followers, and if so,
how can you do this?
3
VISION
Whenever I use words like ‘vision’, ‘mission’, and ‘meaning’ at a seminar, I

am invariably heckled by derisory remarks about companies with meaning-
less, disregarded statements framed on office walls. These are pointless.
When discussing leadership, we referred to visionary companies: compa-
nies that are totally focused on achieving long-term success by building a
visionary organisation. Clearly, this requires a sense of vision. So let’s get
down to basics with another powerful statement from Jack Welch of
General Electric:
Workers who share their employer’s goals don’t need much supervision.
If workers need less supervision we, as senior executives, can be leaders,
not bogged down in management. We can have far fewer levels of execu-
tives to act as coaches and facilitators and thus do away with the need for
many levels of coordinators and controllers. Some organisations have
moved from 14 levels of management to four. So, how do we inspire our
colleagues to share our goals?
WHAT IS A VISION?
Warren Bennis8 says that:

A vision should state what the future of the organisation will be like. It
should engage our hearts and our spirits; it is an assertion about what we
and our companies want to create. It is something worth going for; it pro-
vides meaning to the people in the organisation, in the work they are
doing.
PILLAR 3: VISION ᔡ 49
Ralph Stayer was a good paternalistic ‘boss’ but his survey showed that his
workers saw little to commit to.
LEADER’S FIRST RESPONSIBILITY
Sir Peter Thompson explains9 that when NFC was first privatised, he and his
senior colleagues had long discussions with the Chief Executives of
Britain’s most successful companies. Sir Peter and his colleagues concluded
that the reason for the success of these executives was that they:
Had a clearer view of where they wanted their companies to go. They were
also more determined to get there. Some of them would not embrace the
word, but they all had a very clear vision for their business and most had
clearly articulated business values.
A conclusion reinforced by a DTI Study.10 Sir Peter went on to comment
that:
A company’s long-term vision can only come from the leader. If the vision is
totally shared, the leader has done his job. He has succeeded in getting every-
one to whistle to the same tune. But it is most important to recognise the need
for a vision and to be seen to be in the forefront of formulating and promot-
ing it. Strategy emerges from the vision – strategy is merely the way in which
the vision is realised. Keeping the vision bright and shining is [the leader’s]
most important job.
AMERICAN SURVEY
For their book, Leaders,8 Warren Bennis and Burt Nanus studied 90 of
America’s most successful businessmen and women. They concluded that
the first quality they shared was that they had created a focus of attention by
a clearly articulated and communicated vision. They explain that:
The visions these various leaders conveyed, seemed to bring about a confi-
dence on the part of the employees, a confidence that instilled in them a
belief that they were capable [of achieving the vision].
They add that the hallmark of successful executives is that:
ᔡ they develop a compelling vision of the firm’s future;
ᔡ they translate the vision into reality by concentrating on the keys to
success;
ᔡ they remain deeply involved at the heart of things, spurring the actions
needed to achieve the vision;
ᔡ they constantly articulate the vision so that it permeates every level of

the organisation, and its functions, taking the organisation where it has
never been before.
As Bennis and Nanus put it8:
If there is a spark of genius in the leadership function at all, it must lie in this
transcending ability, a kind of magic, to assemble – out of all the variety of
images, signals, forecasts and alternatives – a clearly articulated vision of the
future that is simple, easily understood, clearly desirable and energising.
Professor Jonathan Brown has had a wide experience of senior manage-

ment. In his view many of the CEOs who can articulate a vision, cannot
identify the ‘keys to success’. As I implied earlier, conventional manage-
ment accounts are too focused on ‘the bottom line’. What we need is to
identify the ‘top line drivers’ that are the key to achieving our vision.
SHARED AMBITION
When Sumantra Ghoshal spoke at one of my seminars, he used the phrase

‘Shared Ambition’, which sums up brilliantly what we are about. How do
we get as many people in our organisation as possible to share our ambi-
tion? We are not talking about a piece of paper on a wall, we are talking
about an active management process.
As Sumantra said, how do we create:
ᔡ a sense of possibility, that goes beyond ‘business as usual’;
ᔡ a sense of urgency, which will challenge under-performance;
ᔡ a sense of unity, with a common goal as a glue;
ᔡ a sense of personal responsibility, where self-discipline stems from
personal commitment;
ᔡ a sense of identity, which provides meaning to everyone’s efforts?
Sumantra’s final challenge to the executives at our Seminar was to stress
that:
The most basic task of leaders is to unleash the human spirit which makes
initiative, creativity and entrepreneurship possible.
We certainly cannot do this if we are bogged down trying to drive our busi-
nesses by being heavily involved in managing. We can only do this if we
can step back and start to act as leaders.
A PROCESS
Let me stress what we are talking about is not a sterile statement, which
remains unchanged, but an active management process. Indeed, you could
argue that if your communications are truly effective then everyone should be
aware of what you are trying to achieve, and you do not need a piece of paper.
In reality, this does not work. I once ran a ‘workshop’ for all the directors
of a large group. When we came to clarifying vision, great arguments arose.
We had to adjourn the meeting to allow tempers to cool. Yet these were the
members of a Board who had been working together for many years and
would have argued that they understood each other’s point of view. (As we
will discuss, the level of communication in many companies is not up to the
task of imparting vision).
When NFC was first privatised, Sir Peter Thompson ensured extensive
communication throughout the organisation on this issue. He held Sunday
meetings to talk to everyone. They were well attended. Jack Welch ensures
that at least one session is devoted to GE’s mission on every single manage-
ment course run within the organisation. Some 5000 people were involved
in one year. As Jack Welch explained:
We want 300,000 people with different career objectives, different family
aspirations, different financial goals, to share directly in our company’s
vision.
He adds that:
Good business leaders create a vision, articulate the vision, passionately own
the vision, and relentlessly drive it to completion.
QUESTIONS TO ASK
Warren Bennis8 says that the questions you should ask before drafting your
vision statement are:
ᔡ What is unique about our company?
ᔡ What values are true priorities for the next decade?
ᔡ What would make me personally commit my mind and heart to this
vision?
ᔡ What does our market need that our organisation can and should provide?
and finally, and most importantly,
ᔡ What do I want my organisation to accomplish so that I will be commit-
ted, alive, and proud of my association with it?
In short, what every business needs is total dispassionate analysis of how

we can gain a competitive edge (particularly at a time of stagnant or falling
sales!). A continuous updated and objective view of what is needed for suc-
cess is absolutely pivotal to the success of any business.
As we will discuss shortly, we need both superior strategies and superior
philosophies. We will only establish this superiority if these strategies and
philosophies are ‘owned’ by and committed to by every member of our team.
LIVE MANAGEMENT TOOL
Johnson & Johnson is one of the world’s foremost companies. They too
went through the phase of having a disregarded vision statement on the
walls. They called it their Credo. When Jim Burt was Chairman, he called a
meeting of key executives and challenged them. He said, ‘Here is the
Credo, if we are not going to live by it, let’s tear it off the wall. If you want
to change it, tell us how. We either ought to commit to it, or get rid of it.’
Whatever you evolve should be a living tool. It should be a basis of the dis-
cussion at the interview to see if applicants are on the same wavelength. It
should be very much part of the induction process. It should be used when
considering colleagues for promotion to see if they accept that it will be
their responsibility to promote this sense of vision. Let’s look at the
Johnson & Johnson Credo.
JOHNSON & JOHNSON CREDO

We believe our first responsibility is to the doctors, nurses and patients, to
mothers and fathers and all others who use our products and services. In
meeting their needs everything we do must be of high quality. We must
constantly strive to reduce our costs in order to maintain reasonable
prices. Customers’ orders must be serviced promptly and accurately. Our
suppliers and distributors must have an opportunity to make a fair profit.
We are responsible to our employees, the men and women who work
with us throughout the world. Everyone must be considered as an individ-
ual. We must respect their dignity and recognise their merit. They must
have a sense of security in their jobs. Compensation must be fair and
adequate, and working conditions clean, orderly and safe. We must be
mindful of ways to help our employees fulfil their family responsibilities.
Employees must feel free to make suggestions and complaints. There
must be equal opportunity for employment, development and advance-
ment for those qualified. We must provide competent management, and
their actions must be just and ethical.
We are responsible to the communities in which we live and work and to

the world community as well. We must be good citizens – support good
works and charities and bear our fair share of taxes. We must encourage
civic improvements and better health and education. We must maintain in
good order the property we are privileged to use, protecting the environ-
ment and natural resources.
Our final responsibility is to our stockholders. Business must make a

sound profit. We must experiment with new ideas. Research must be car-
ried on, innovative programs developed and mistakes paid for. New
equipment must be purchased, new facilities provided and new products
launched. Reserves must be created to provide for adverse times. When
we operate according to these principles, the stockholders should realise
a fair return.
World Wide Credo Survey
In fact, Johnson & Johnson carry out a regular world-wide study into the
effectiveness of their Credo. They explain that the questionnaire that they
circulate, should be a ‘reflection of your thoughts and ideas regarding your
company and your work’. I am grateful to Johnson & Johnson for permis-
sion to reproduce the opening questions of their questionnaire.
They also have a ‘credo challenge meeting kit’ to be used in running
‘credo challenge meetings’, which last one day, to allow enough time for
groups of individuals to discuss their Credo in some depth, and prepare
responses to the issues raised. The day starts with the showing of a video,
and then the relevant Company President, Managing Director, or division
Head, gives a presentation on the issues raised on the Credo. The meeting is
then broken into syndicates to discuss it, and prepare feedback reports to the
moderator of the meeting, who is described as ‘the challenger’. In short, the
Credo is regarded very much a working tool and, again, I am grateful to
Johnson & Johnson for permission to reproduce the opening paragraphs of
their discussion group questions.
Opening questions of Johnson & Johnson Credo Survey
1. Overall, how would you rate your COMPANY on meeting its RESPON-
SIBILITIES as described in this part of the CREDO?
1 Very Good 2 Good 3 Average 4 Poor 5 Very Poor 6 I have no opinion
Very Good Average Poor Very Not applicable/

Good Poor no opinion
How do you rate your

COMPANY on
2. Producing high quality 1 2 3 4 5 6
products and services
3. Constantly striving to 1 2 3 4 5 6
reduce costs
4. Maintaining reasonable 1 2 3 4 5 6
prices
5. Servicing customers’ 1 2 3 4 5 6
orders promptly
6. Giving suppliers and 1 2 3 4 5 6
distributors an
opportunity to make a
fair contact.
Johnson & Johnson Credo Challenge Meeting
The following questions may be useful in your discussions; however, feel

free to discuss any other Credo concerns you may have.
I. Is the Credo, in its present form, a viable philosopical guide in the day-
to-day operation of our business? Should it be changed or modified?
II. What is the intent of ‘Our Credo?’
A. What does it mean in terms of our day-to-day operations?
1. How is it implemented in our companies?
2. How is the effectiveness of its implementation evaluated?
B. Do the various levels of the organisation understand and accept
its intent?
C. How can we best communicate its intent to our employees?
D. How can we determine the actual level of understanding and

acceptance?
E. Is the order of priority accepted?

BRITISH AIRWAYS
vision
2000
British Airways’ vision for N Our attentions are focused on our cus-
the future is to build tomers, both external and internal, so
profitably the world’s that customer satisfaction and reten-
tion are our prime service consider-
premier global alliance
ations.
with a presence in all
major world markets. N There is a clear understanding of our
The alliance will have business strategy at all levels of the
company and we all understand how
as its hallmark superior
we are involved in that strategy.
levels of service, cus-
tomer loyalty, and ex- N Teamwork develops across all func-
cellent operational and tions.
financial performance, N There is a greater flow of information,
drawing on the comple- encouraging all employees to con-
maentary strengths and tribute their views.
shared values of all em- N Partnership prevails as a mechanism
ployees within the alli- for building commitment, with all
ance. employees participating in the running
of the business.
Every employee has a part N Individual potential is maximised as
to play in bringing about we grasp the new opportunities that
the wide range of changes become available.
that will be necessary if N High personal standards and business
this vision is to be realised. integrity maintain international
The vision reflects and respect for us.
encompasses the airline’s N We work towards developing the qual-
Mission and Goals. Re- ity framework throughout the airline
alisation of the vision ensuring that continuous improvement
would require that. . . . . . . . becomes our way of life.
Figure 3.1 British Airways Vision 2000 Statement

EXAMPLES
We have discussed the Johnson & Johnson Credo and I have shown the
British Airways Vision 2000. You need to study all the examples you run
across yourself.
I spoke once at a Conference of the NBS Bank of South Africa. They told
me:
Our vision is to empower creative leaders and staff who, in turn, produce
excellent results through outstanding client service.
You might debate whether it meets the criteria set out by Warren Bennis but
all the delegates to whom I spoke were highly enthusiastic, committed and
very complimentary about the leadership of their Bank. Outstanding client
service follows from really committed people.
Major condition for success
Let me end this discussion with one final comment from Warren Bennis8:
When an organisation has a clear sense of its purpose, direction, and desired
future state, and when the image is widely shared, individuals are able to find
their own roles, both in the organisation and in the larger society of which
they are a part.
This empowers individuals and confers status upon them because they can
see themselves as part of a worthwhile enterprise. They gain a sense of
importance, as they are transferred from robots blindly following instructions
to human beings engaged in a purposeful venture.
When individuals feel that they can make a difference and that they can
improve the society in which they are living through their participation in
their organisation, then it is much more likely that they will bring vigour and
enthusiasm to their tasks and that the results of their work will be mutually
reinforcing.
Under these conditions, the human energies of the organisation are aligned
towards a common end, and a major pre-condition for success has been satis-
fied.
So, let’s turn to that closely related pillar – Superior Philosophies.
Vision, Mission and Meaning
ᔡ Do you agree that to inspire extraordinary performance, your organi-

sation needs to provide a strong sense of meaning and value to the
work which your colleagues do by providing ‘vision’ of a worthwhile
future, a ‘mission’ to achieve medium-term goals, which provide
‘meaning’ to the contribution people make? If so, are you satisfied that
you are already doing so? If not, how do you intend to do so? How will
you involve as many people as possible in arguing through vision, mis-
sion and meaning statements?
ᔡ If you are a Chief Executive, how do you, your colleagues, and your
‘missionaries’ create not merely a vision statement, but a visionary
organisation?
ᔡ Should you establish, like Johnson & Johnson, regular Credo Surveys
and Credo Challenge Meetings?
4
SUPERIOR PHILOSOPHIES
A major five year study into the world’s automotive industry11 concluded
that the leading companies owed their success as much to their superior
philosophies as to their superior strategies.
Mentioning this fact at one talk I gave, one very frustrated senior execu-
tive exclaimed, ‘What has all this got to do with the bottom line?’ The short
answer is, everything.
Researchers studied 20 major American companies over a ten year peri-
od. They found that those with strong values and strong leadership at every
level of their organisations, significantly outperformed companies which
lacked values and leadership. The results are shown in Figure 4.1.
Figure 4.1 Impact of ‘Values’ on Performance

Source: Corporate Culture and Performance, John Kotter and James Heskett, Free Press.
PILLAR 4: SUPERIOR PHILOSOPHIES ᔡ 59
ALL ‘STAKEHOLDERS’
The theme of the study was that focusing just on one ‘stakeholder’ to the
detriment of the others, destroys long-term viability. It is only organisations
which integrate their approach to all stakeholders that truly succeed in the
long term. We need to focus on what Dan Jones calls ‘the extended busi-
ness’ or the ‘value stream’ of the business. Thus we need to focus on:
1. Suppliers
2. Dealers/distributors
3. Customers
4. Financiers and Shareholders
5. The Community
6. Competitors and
7. Colleagues.
Let’s look, briefly, at each in turn.
1. Suppliers
For years, vehicle manufacturers sought to drive down their costs by creat-
ing intense price-based competition among numerous suppliers. During the
design phase, potential suppliers were denied information which might have
helped them to produce more effective components. Once the model run
started, contracts would be cut or transferred.
Dan Jones and his colleagues on the MIT Study11 highlighted the way in
which the Japanese created a rational framework for determining cost,
prices and profits based on a contractual framework which built a long-
term, mutually viable relationship with a limited number of ‘first tier’ sup-
pliers. This was based on the interchange of information which helped
every supplier to optimise quality, productivity and profitability.
The first approach created a vicious circle of mutual distrust; the second a
virtuous circle of cooperation. Because it works, the second approach has
now been adopted by vehicle manufacturers world-wide.
Rover’s recovery owes a great deal to adopting this approach. One of
Rover’s executives, Ed Smith, explained that 80 per cent of the final cost of
components for a new car is determined in the design phase. If you don’t
involve the real experts – the suppliers – you lose the ability to influence
cost.
By treating its selected suppliers as ‘partners’ to the point of sharing very
sensitive strategic information years before the release of a new model,
Rover achieved what Ed Smith calls technical and financial breakthroughs
which would otherwise have been impossible. Note the phrase, ‘If you don’t
involve the real experts – the suppliers’ – an attitude which echoes our earli-
er point of our colleagues being the people who are, or should be, the
experts in the particular field of activity.
Similarly, the Somerfield supermarket chain has begun to cede responsi-
bility for reordering stock to its suppliers as part of a ‘co-managed’ invento-
ry system. Miles Clark of Somerfield describes it as a ‘significant step
towards the management of the supply chain as a seamless end to end
process’.
2. Dealers and distributors
Companies supplying products often use a third party to help them reach
the end user, be it an agent, wholesaler, distributor, dealer, or retailer. Again,
some companies create a vicious circle of mutual distrust by selfishly,
unethically, putting their own interests first. Some devise short-term tactical
measures to move their own stock which impact on their dealer’s margins
and credibility and may bypass their channel of distribution if they see the
chance of supplying a major order direct.
Equally, other companies, like the Saturn franchise in America, create a
virtuous circle of cooperation by leaning over backwards to build a long-
term partnership with their channels of distribution. Companies which can
share confidential strategic information with their channels of distribution
are equally likely to gain financial and marketing breakthroughs which
would otherwise be impossible. After all, those in direct contact with the
end users are gleaning important marketing information.
3. Customers
Customers are the life blood of every business but we can all tell horror sto-
ries of how badly we have been treated by front-line people; those who deal
face-to-face with the customer.
Tarmac has an annual award for the unit which has shown the greatest ini-
tiative. This year’s winner was the company’s South West of England con-
struction division, which increased turnover by almost 50 per cent and has
been winning one in three contracts, instead of one in ten as previously.
How did they do this? After asking customers what improvements they
required. The division held a day-long meeting for all 200 staff at a Bristol
cinema to discuss how to meet customer needs. Result: a dramatic improve-
ment in contracts secured.
4. Financiers and shareholders
Any proposal for a loan for a company with an excellent reputation for
superior philosophies, backed by strong values and beliefs, is more likely to
gain the support it needs. Equally, banks willing to reciprocate by sharing
information and advice and behaving in an honourable way towards their
customers, are more likely to build their business base.
Publicly-quoted companies are also beginning to find that their investors
are interested in ethical issues. A book, The Ethical Investor12, refers to the
Joseph Rowntree Trust as a ‘Good example of a Charity with a well struc-
tured, ethical investment policy.’ So, even blue chip companies are begin-
ning to recognise the need to project their philosophies more effectively.
5. The community
If the business develops a good reputation for the way in which it conducts
all its dealings and participates in local communities it can have commercial
and practical benefits, such as building up customer loyalty and even
improving relationships with all the local regulatory authorities, including
planning authorities.
Many large organisations are well known for their community affairs pro-
grammes, but even smaller companies can, within their local community,
establish a name and reputation by local sponsorships and other activities
which can build a highly favourable image in the community. One client,
David Hold, Managing Director of Dave Barron Caravans, paid for the
erection of numerous litter bins, each carrying his name. In fact, one client
got so involved with local sponsorships and became so well known that he
was able to reduce his need for advertising.
National Power makes part of their employees’ performance related pay
dependent on meeting environmental targets.
6. Competitors
There is no doubt that British Airways’ well-deserved reputation for the

way in which it turned itself round, primarily by pioneering many of the
concepts we are discussing, was dented badly when it appeared that some of
its executives had played ‘dirty tricks’ on their rivals at Virgin.
In fact, there is normally a great deal of integrity among members of the
same trade and industry. The feeling is that the greater the level of profes-
sionalism, the easier it is to compete fairly and honourably. Moreover, an
increasing number of industries are now becoming what are called ‘open
clusters’: shifting networks of companies with interrelated collaborative
arrangements depending on great integrity between all parties.
7. Colleagues
Let’s come back to the core issue. How do we really inspire all our col-
leagues to give of their best: to share our ambitions? Let’s take the extreme
view to make a point. How do senior executives expect their workers to
react when they see their organisations?
ᔡ Screwing its suppliers with almost vicious levels of mistrust and expe-
diency?
ᔡ Talking about being ‘in partnership’ with dealers but acting as if they
were an expendable nuisance?
ᔡ Treating customers as ‘punters’ and trying to provide as little as possi-
ble for as much as possible?
ᔡ Treating shareholders as idiots by milking the company of massive
salary increases and share option schemes?
ᔡ Blatantly seeking to cut corners and ignoring the adverse impact of its
activities on the community?
ᔡ Playing dirty with competitors?
The extent to which any organisation behaves in such ways can only debase
and demotivate its people. Even a reputable blue chip company that requires
its Purchase Ledger staff to duck, dive, lie and weave to avoid paying sup-
pliers on the due date, is requiring its people to behave unethically. It’s
hardly likely to increase their job satisfaction, their respect for their organi-
sation, and their motivation.
Conversely, a company which works hard to establish superior philoso-
phies and requires its people to behave honourably and ethically towards
every stakeholder, is far more likely to:
ᔡ attract and retain the most skilful suppliers, keen to use their expertise
in supplying the best products;
ᔡ attract and retain the cream of the ‘dealers’ better able to gain and retain
market share;
ᔡ attract, satisfy and retain an increasing number of customers, not least
by creating a positive awareness among the community at large;
ᔡ attract and retain the required degree of cost-efficient financial support;
ᔡ gain the respect and probably the cooperation of its competitors.
But, most importantly:

ᔡ Will attract and retain high quality, highly ethical people with
strongly held values and beliefs who, by optimising all their rela-
tionships with every stakeholder, will truly help their company to
achieve its vision.
Thus, people are highly motivated by working for a company that is highly
responsible, has superior philosophies, and strongly held values and beliefs.
Professor Mahoney of the LSE advocates the use of ethical codes of con-
duct which gives workers a sense of identity and promotes teamwork by
making clear that the same high standards are expected from everyone. In
his view:
Corporate responsibility creates a sense of satisfaction, of achievement, of
working together, not just to make a living or a profit, but to make a differ-
ence to society’s quality of life.
INTELLECTUAL ASSETS
The transactional view of workers being paid to work is fast becoming

obsolete.
As a leading British guru, Charles Handy, has pointed out:
It is now widely accepted that in ten year’s time, 70 per cent or more of the
work we do will require brain skills, not manual skills. When that happens, the
cliché that our people are our greatest asset will acquire a hard financial reality.
When Microsoft once topped the share charts, the New York Times comment-
ed that all there was to put your money on was the ‘imagination of the work-
ers’. No one can truly own that imagination except the workers themselves,
and they can walk out of the door at any time.
Shareholders can no longer be owners in any real sense of other people’s
brains, but only investors or, more accurately, backers.
So, the transformational approach of seeking to optimise the intellectual tal-
ents of people is the only realistic strategy.
SELF-EMPLOYABILITY
No sports team would tolerate a team member who did not pull his or her
weight: did not really ‘sweat blood’ to help the team to win. Similarly, no
organisation can tolerate a situation where, according to some research, 50

per cent of the workforce merely do just enough to keep their jobs. Again,
Jack Welch has some highly personal comments:.
Loyalty is an affinity among people who want to grapple with the outside
world and win. Their personal values, dreams, and ambitions cause them to
gravitate towards each other and towards a company like GE that gives them
the resources and the opportunities to flourish. The new psychological con-
tract, is that jobs at GE are the best in the world for people who are willing
to compete.
PROJECTING THESE VALUES
So, how do you project your organisation’s philosophies, values and beliefs to
everyone in your organisation? First, we have to live them in everything we
say and do. Second, we have to make the time to communicate endlessly on
these and related issues (yet another reason for getting ourselves off the tread-
mill of management). Thirdly we have to brainstorm and discuss them at every
conceivable opportunity. Fourthly, despite the difficulty, we need ‘in-company’
training sessions, or through special project teams, to seek to establish a state-
ment in writing. Finally, ethics must begin at the top of an organisation — it is
a leadership issue. We, as chief executives, must set the example.
Example
I am grateful to John Neill for permission to reproduce the Unipart

Statement of Values and Beliefs (Figure 4.2). Again, you may wish to
involve a Project Team in collecting examples and evolving your own
statement.
CONCLUSION
Your objective should be a very lean team of highly committed people, not
requiring very much supervision, for two reasons:
1. They share your organisation’s philosophies, values, and beliefs; and

2. They share your organisation’s goals.
So, let’s discuss the next Pillar, that of strategy.

THE UNIPART GROUP
The Unipart Group is a combination of People, Ideas and Assets which

exist for the benefit of its stakeholders.
The Group will strive to be the best in everything it sets out to do and will
only set out to do those things at which it could be the best.
The relationships and inter-dependencies between the stakeholders are
key to achieving this position and can be described by a set of codes (val-
ues) towards
អ The Employee as an individual អ The Individual as an employee
អ The customer អ The Supplier អ The Owner
Among the Company’s values nothing is more fundamental than its

respect for the individual.
The Group will create and maintain an environment in which individual
employees may contribute to and share in the fortunes of the business in
a fair and consistent manner.
Our employees are our greatest asset and as such they deserve:
អ To be informed of what their role and tasks are អ To be appropriately
trained and developed for the role and task required of them អ To be
allowed the opportunity to perform អ To be regularly counselled on how
they are doing and what their career potential is អ To be recognised and
rewarded according to their individual achievements អ To be managed
professionally អ To be given the willing assistance and support of their
colleagues អ To be given the opportunities to develop their career poten-
tial to the extent of their ability អ To be informed of what their company is
doing, and what its objectives are អ To know that we actively encourage
promotion from within the company អ To have their ideas and opinions
properly considered អ To not be burdened by those not willing to
contribute.
As Unipart respects its employees so we should expect our people to:
អ Support the Company, its policies, products and objectives in the world
market អ Constructively appraise errors or faults in policies or practices
អ Maintain within the Company all confidential information, plans and
strategies about the Company and its performance អ To take a positive
attitude towards their jobs and the resolution of problems and keep their
managers informed at all times in order that they may manage effectively
and avoid problems.
All of our futures are determined by our ability to satisfy our customers’
needs, who, whether individual, retail, wholesale or corporate deserve:
អ To have their needs understood and fulfilled អ An outstanding quality

of product and service which exceeds the express and implied promise
made when business is placed with Unipart អ To be clearly told the
details of the offer before business is accepted អ Frankness and integrity
from Unipart អ A positive attitude and approach to the resolution of diffi-
culties of all kinds អ To be listened to carefully at all times អ Our
demonstrable commitment to the continual developments of mutually ben-
eficial business relationships.
As we respect our customers, we should earn the right to be respected by

our suppliers, who deserve a Company which offers:
Synergy: through the opportunity of a long term business relationship

built on mutual aspirations.
Confidence: by clearly defining our requirements and maintaining a

good trading record.
Trust: by treating our suppliers with integrity and professionalism.

Ethics: through not using our position to the detriment of our sup-
pliers.
Challenge: by setting demanding performance requirements but assist-

ing our suppliers in meeting them.
We have a duty to build and maintain a Company which:
អ Provides an acceptable rate of return with a good track record which

gives an expectation of a continual growth in earnings អ Provides a read-
ily realisable investment brought about by consistent performance in meet-
ing commitment and forecast អ Provides a product or service which the
market place sees as a continuing need អ Does not involve itself in uneth-
ical pursuits អ Gives pride in ownership.
Figure 4.2 Unipart Statement of Beliefs and Values

Superior Philosophies
ᔡ Can you accept that strong values and beliefs, superior philosophies,
can have a tremendous impact on your bottom line? If so, do you feel
that you have devoted sufficient priority to defining and projecting
your own values and beliefs?
ᔡ Do you agree that to gain the benefit of great synergy, your values and
beliefs, your superior philosophies, have to be applied in all your rela-
tionships with your suppliers, dealers and distributors, customers,
shareholders, the community, even your competitors and – most
importantly – that it is the quality of your relationship with others that
determines the quality of the relationship with your colleagues?
ᔡ How successful do you feel you and your team have been in projecting
and communicating your philosophies?
ᔡ In the light of your answers to the preceding questions, what do you
and your team need to do to:
a) Define and gain consensus on your values and beliefs?
b) Project them effectively?
c) Gain the commitment of all your colleagues to these values and
beliefs, particularly in regard to their interface with all your
stakeholders?
d) Ensure they become the touchstone of all your actions and activi-
ties on a long-term, consistent basis?
5
SUPERIOR STRATEGIES
WINNING
We will only win at business by setting and achieving the right goals.
Agreed? The only way we can achieve our goals is by fully mobilising the
talents and commitment of our people. As Sumantra Ghoshal pointed out:
Employees don’t just want to work for a company. They want to belong to an
organisation.
INVOLVEMENT AND UNDERSTANDING
In the 1970s, strategy was the latest fad: the responsibility of boffins in
ivory towers. In the 1980s, strategy became more of a senior management
function. To survive the 1990s strategy has to be a front-line activity.
In very large organisations, the senior executives can lose touch with the
‘sharp end’ of the business. Andy Grove, the Chief Executive of Intel,
admits that his Board were striving to be a major player in both memory
chips and microprocessors but the people on the front-line recognised – far
sooner than the Board – that they had to retreat from memory chips to focus
purely on microprocessors.
One of the points made by Will Carling and Robert Heller in their book,
The Way to Win13, is that the younger, newer entrants to a team often have a
clearer perception of what is needed to win than the long-established
players.
Some of our people in their early 20s have provided us, at our monthly
company meetings, with penetrating insights which would have cost many
PILLAR 5: SUPERIOR STRATEGIES ᔡ 69
thousands of pounds to obtain from a top flight management consultant!

Indeed, it is doubtful if even the best of consultants would have been able to
get ‘under the skin’ of our business to provide such insights. How many
millions have been wasted by companies going to consultants for help on
strategy, when their own people are the best qualified; even if a consultant
helps as a facilitator? It has been said that consultants are often brought in
to prove to senior management what middle management already knows!
CHALLENGE
Strategic planning is about posing questions, trying the difficult feat of

looking at the organisation as from the outside to really understand where it
sits in its marketplace, and thus determine the best strategic options open.
Our colleagues, helped perhaps with the members of our ‘value stream’,
like the ‘stakeholders’ we have just been discussing, are the best qualified
people to do this.
UNDERSTANDING ENVIRONMENT
The key is to truly involve them in understanding the environment in which

you operate. I once ran a workshop for all 40 members of a local business. I
asked them to list all the changes that had affected their business in the past
ten years or so, under the headings of the ‘Five Agents of Change’:
1. Legislative and political
2. Demographic
3. Economic
4. Technological
5. Cultural
Teams comprising cleaners, operatives, clerks, sales and accounting func-
tions, came up with comprehensive lists of all the changes that had already
affected their business. I then asked them to project forward the changes
they saw affecting their business in future. Some of the answers were quite
staggeringly perceptive.
The third part of the exercise is then to ask them how they think the busi-
ness should react to these pending changes. It’s a marvellous way to focus
everyone’s attention to the need to respond to the inevitable changes likely
to affect them. Let me stress that these were ordinary front-line people.
An excellent suggestion is to create a game based on your business. For

this purpose, the ‘players’ can be regarded as:
ᔡ customers; preferably broken down into relevant segments;
ᔡ competitors;
ᔡ potential new entrants; these may be existing ‘players’ who provide
existing products or services in a totally new way, or totally new
entrants who come out with a highly innovative new product or technol-
ogy likely to overtake existing products or services;
ᔡ suppliers;
ᔡ substitutors; alternative players from whom customers may purchase
substitute products;
ᔡ complementors; players from whom customers buy complementary
products.
The ‘game’ is to create various scenarios of how each team sees each set of
players interacting. Successful business strategy is about actively shaping the
game you play, not just playing the game you find. Your own people are the
best people to play ‘your game’ though from time to time; appropriate
experts might be invited in to act as facilitators. You have got to find a way of
involving every member of your organisation in these types of discussions
and games. Arnold O’Byrne of Opel Ireland has a company-wide meeting
every six weeks. In larger organisations, discussions of this type should form
a major element of in-company training and communication activity.
REDEFINING CONTEXT
Theodore Levitt, in his classic report, Marketing Myopia14, made the obser-
vation that too many of us become preoccupied with what we think we are
selling, when the only thing that matters is what our customers think they
are buying. One of the great advantages of arguing through a mission state-
ment is that it should help to focus our attention on what our customers are
buying which, after all, is the basis of all strategic planning.
Edward Vaughan was a company involved in the ‘metal bashing’ indus-
tries of the Midlands that suffered badly during the recession. Their then
Marketing Director wrote a case study for an earlier book of mine. He
explained that arguing through their mission statement was primarily
responsible for ensuring that they, unlike many in their industry, did not suf-
fer the effects of the recession. He explained:
It changed our thinking about what we did – blending lubricants – into think-
ing about why we did it.
Rather than considering that we sell oils or chemicals, we now recognise that
we sell the means of improving manufacturing processes. This deliberate
recognition of the end benefit to our customers rather than the technical
processes with which we were involved, enabled our company to make sig-
nificant changes: in our products profile, the markets we serve, and the way
in which we position our company and its products in these markets.
Arguing through issues of this type should be an essential part of in-comp-

any discussions and brainstorms.
Your people should be going out to talk to customers, or panels of cus-
tomers can be invited in for cheese and wine type discussions, with teams of
your people. Everyone, from every department, should be encouraged to
look at everything they do from the customer’s perspective.
Ian Gibson, at Nissan, has encouraged the concept of ‘the internal cus-
tomer’. He encourages everyone to realise that unless they supply first-class
products and services to the next step in the process, the end customer will
not be satisfied.
WHAT ARE YOUR OBJECTIVES?
Every member of your team should understand clearly the goals and objec-
tives of your organisation and should appreciate the goals or objectives they
have to achieve to ensure the overall success of your business. Years ago,
Peter Drucker recommended that objectives should be set for:
ᔡ Marketing
ᔡ Innovation
ᔡ Suppliers
ᔡ Human Resources
ᔡ Physical Resources
ᔡ Financial Resources
ᔡ Information Resources, and
ᔡ Social Responsibilities.
Specific, quantified goals need to be set in all these areas, not as a bureau-
cratic exercise, but to establish the key yardsticks needed for key, top line
drivers crucial to the success of your business. (We will come back to ‘top
line drivers’ later).
TACTICS, OBJECTIVES AND STRATEGY
Table 5.1 makes the distinction between tactics, objectives and strategy,
which is another topic for ongoing briefing and brainstorming throughout
your organisation.
Table 5.1 The distinction between tactics, objectives and strategy
TACTICS OBJECTIVES STRATEGY
1. Immediate activities 1. Business destination 1. Method of achievement

2. Short term only 2. Long/medium term 2. Long term only
3. Can change often 3. May change 3. Should rarely change
4. Temporary 4. Invisible 4. Highly visible, strong,
consistent customer percep-
tions by correct positioning
Tactics are short-term reactions to immediate circumstances and should be

topic of regular briefings. Every team at Nissan starts the day with a 15 or
20 minute briefing. Your objective should be understood clearly by every
member of your team. Let’s stop at this point.
LONG-TERM POSITIONING
There needs to be a total preoccupation by your organisation on all the

processes involved in identifying, attracting, satisfying and retaining cus-
tomers. In other words, all your ‘marketing-related’ activities. Does every-
one in your organisation appreciate the need to be totally customer-driven?
Are you aiming at specific customer segments?
I once ran a weekend workshop for a company, broke them into syndi-
cates, and asked them to break down their customers into different seg-
ments. They eventually came up with 16 customer segments. They then
realised that their management information system did not give them any-
thing like enough information on the customers in these segments. When
we reconvened a few weekends later, various teams had searched for the
missing information and came up with the fact that 85 per cent of their sales
went to just four customer segments. They also recognised that they needed
much more clear-cut information on their customer segmentation; informa-
tion missing from their conventional management accounting approach.
Does everyone in your organisation know how you need to position your-
self to create the right perceptions in the minds of customers in the chosen
market segments? Do they understand the need to reinforce these percep-
tions, and not to weaken your customers’ perceptions of your products or
services.
Jan Carlzon, former Chief Executive of SAS, tells the story15 of how he
preached the need to look after customers. So everyone became ultra-
helpful, even to the point of delaying departures to find missing or late cus-
tomers. He then had to point out that his strategy was aimed at attracting
and retaining business executives who valued punctuality. Once this was
explained, everyone became committed to ensuring that planes left on time.
Jan Carlzon also explained that at one point the accountants had ruled
that planes should be towed from their hangars to the nearest departure gate
to save costs. This meant that the customers had to chase half way round the
airport to catch connecting flights. Once this was pointed out, everyone
recognised the need to place connecting flights in adjacent gates.
It is back to ensuring that everyone has the information they need to
understand how to satisfy their customers. More of your ‘marketing’ efforts
needs to be devoted to marketing yourself to your own organisation. One
guru claims that 40 per cent of the marketing effort should be directed inter-
nally, to the people in the organisation.
INNOVATION
Richard Pascale16 refers to the options of:

ᔡ optimising historic skills or
ᔡ metamising new opportunities.
One example he gives is that Western Union strove to become better and
better at sending telegrams when it ought to have seized the opportunity of
pioneering fax communications.
‘Change before you have to’, warns Jack Welch. At Nissan every member
of every team is totally committed to the Kaizen programme of continuous
improvements to the way in the product is designed and produced. This is a
fantastic achievement. Clearly it is a key element in producing a better
product at a lower price, which we must all aim for.
But remember the Edward Vaughan story. In their case it would have
been a mistake to focus purely on improving the ways in which they pro-
duced and blended their lubricants. What they had to do was to get out and
about and seek to improve the way in which they could help their customers
improve their manufacturing processes.
CLARIFYING STRATEGY
There are three other techniques which we can use to clarify the ways in
which you are going to achieve your objectives.
ᔡ Benchmarking is a way of establishing the performance levels of your
industry. You are not interested in average levels of performance. You
are interested in what the best people in your industry are achieving so
that you can seek to achieve or exceed the best.
ᔡ Best practice is a way of learning from other organisations on how they
do things better. Jack Welch of GE gives high priority to this activity
and in one of his reports explains how GE has benefited enormously
from a production technique first seen in a company in New Zealand.
ᔡ SWOT is a way of looking at the Strengths, Weaknesses, Opportunities
and Threats facing you and your direct and indirect competitors.
These three activities make ideal in-company development projects. In pass-
ing, if you don’t think you are big enough, then the students, undergradu-
ates, and even graduates of your local Technical College, University or
Business School, are often desperate for projects. When one client
approached his local college he got all 56 students placed at his disposal.
OWNING – THE STRATEGY
In too many organisations, strategy is seen as the preserve of senior man-

agement. People are seen as their greatest restraint. Indeed, it is the people,
not the executives, who are blamed when the organisation fails to imple-
ment its strategies effectively. Such organisations then waste vast sums
investing in ‘change programmes’ to help their people to cope with change.
It is a total waste of money.
It is more effective to involve as many people as possible in brainstorm-
ing the issues we have been discussing and the exercises I have suggested
which will bring to the surface the strategies to be adopted.
The late William Giles developed what he called the ‘Marlow Method’.
The Board set out the broad parameters of what they thought the strategy
should be. Each member of the Board then acted as mentor to a project
team composed of people from every sector of the business. Where relevant,
people from these first-level teams then act as mentors to a series of second-
level teams, helping to cascade the process throughout the organisation in a
way which expands the activity without detracting from the parameters
already agreed.
COMPETING SUCCESSFULLY
One study17 highlighted that the ability of a business to compete successful-

ly relies on:
1. getting widespread awareness of the environmental issues and competi-
tive forces facing the business; and
2. developing the competencies needed by the organisation and the leader-
ship needed to achieve clearly defined goals.
OPTIMISING YOUR VALUE STREAM
In fact, it clearly makes sense to really optimise the value of the ‘your
extended business; or ‘value stream’. When talking about suppliers, I men-
tioned the way in which progressive organisations share quite sensitive
strategic information. Your professional advisers, bankers and lawyers, and
your investors, may be ideally placed to give you invaluable information.
Involving people from your community, and from your industry, can better
help you to appreciate your environment. Once, Ford invited a leading auto-
motive journalist to sit on one of their committees.
Certainly you should seek out your most forward thinking, progressive,
innovative customers, since as they seek to respond to their environment,
they can help you to respond to their future needs. One senior executive
calls them his ‘lighthouse customers’ pointing the way to the future of his
business! It’s a good point.
YOUR PEOPLE ARE THE EXPERTS
Let me close with two stories which illustrate how perceptive your people
can be on issues of strategy.
A friend asked me to evaluate the viability of a £1 million new develop-
ment which he had spent a year planning. He had incurred high professional
fees and ‘taken his eye off the ball’ as far as the running of his business was
concerned. He had asked me because he had developed doubts, which were
justified. The project was not viable. My client then became very concerned
about the impact of the cancellation on his workers. Though they had not
been told directly, they had obviously become aware of what was in the
wind.
When he told them, they cheered. They had long since recognised that the
idea was not viable and were worried that he might go ahead. Had he involved
them from the start he would have saved himself a lot of time and money.
A different approach. Ralph Stayer’s1 factory was given the chance of a
major contract. If it went well it would transform his business. But if, by
overstretching his resources, it caused problems, it could be disastrous. The
conventional approach would have been to agonise over the problem in end-
less Board meetings. Ralph called a meeting of all his 400 plus colleagues
and put the problem to them. They asked for more time to think and for
more information. Eventually, all but a handful voted in favour of accepting
the contract. Because they were involved, they made sure it worked.
Isn’t this a prime example of gaining involvement and commitment?
COMMANDING A PREMIUM
I think it was David Ogilvy who once said, ‘A company with a price advan-
tage can be undercut. A company with a performance advantage can be out-
flanked. But a company with an emotional difference can potentially
demand a premium for ever.’
By ensuring that your people know what you stand for in terms of your
values and beliefs, and by enabling them to be involved with, and identify
themselves with, your strategies, you really can run a company with mini-
mum supervision. That surely must be the way to win.
BEYOND STRATEGY TO PURPOSE
Earlier, I referred to the marvellous series of HBR articles by Chris Bartlett

and Sumantra Ghoshal6, in which they argue for the need to move beyond
strategy to purpose. They reinforce the views of David Ogilvy. They say:
Clinically framed and contractually based relationships do not inspire the
extraordinary effort and sustained commitment required to deliver consistent-
ly superior performance. For that, companies need [people] who care, who
have a strong emotional link with the organisation.
When he spoke at one of my seminars, Sumantra gave the example of
AT&T which reinforces everything we have been discussing.
You cannot move from strategy to purpose, to creating a shared sense of
ambition, if you are bogged down in ‘management’. We can only do it once
we have rid ourselves of the day-to-day pressures of management to focus
on leadership.
EMBEDDING AMBITION AT AT&T

ᔡ Capturing peoples’ attention and interest
...’Dedicated to becoming the world’s best at bringing people togeth-
er, giving them easy access to each other and to the information and
services they want and need – anytime, anywhere.’
ᔡ Engaging the Organisation

Strategy forum as a process of involving people in defining and inter-
preting the ambition and making it operational.
ᔡ Building and sustaining momentum
Tangible commitments and measurements of progress.
FROM STRATEGIC INTENT TO CORPORATE PURPOSE
In their HBR articles, Chris and Sumantra have a case study based on
Komatsu which, for many years, had the strategy of catching up with and
surpassing Caterpiller. By 1989, world-wide demand for construction
equipment was down, competition was up, and Komatsu’s profits were in
steady decline. Their President decided that they could no longer operate
within the confines of a defined objective.
After extensive internal discussions, people agreed that, rather than think-
ing of Komatsu as a construction equipment company trying to catch CAT,
they were a ‘total technology enterprise’, with an opportunity to leverage its
existing resources and expertise in electronics, robotics and plastics. A com-
mittee was appointed to examine how Komatsu could enrich its corporate phi-
losophy, broaden its social contributions, and revitalise its human resources.
The objective was to create an organisation to attract and stimulate the
best people. In the following years, sales, which had been declining, surged,
driven almost entirely by a 40 per cent growth in Komatsu’s non-construc-
tion equipment business.
HARD RESULTS
These, and many more case studies which could be quoted, demonstrate
that moving from strategy to purpose does ensure Hard Results; because it
taps into the collective knowledge of people, our next ingredient.
I am grateful to British Airways for permission to reproduce the truly
effective way in which they circulate their business goals (Figure 5.1).
corporate targets for

goals 1992/93
To be a safe and secure ៚ Undertook safety audits across all operational

Safe and
airline areas
Secure ៚ Targeted continual improvement of established
safety trends
៚ Continued to improve the security awareness of
staff throughout the company
Financially To deliver a strong and ៚ Continued to reduce departmental unit costs

consistent financial with gap closure
Strong performance ៚ Optimised traffic mix, yields and third party
revenues
៚ Improved the performance of the airline’s capital
assets
Global To secure a leading share ៚ Arrangements made for access to North

of air travel business American and Asia/Pacific markets
Leader worldwide with a signifi- ៚ Further presence negotiated in Europe
cant presence in all major ៚ Loyalty schemes developed in major markets
markets
Service To provide overall ៚ Heathrow and Gatwick improved as transfer

superior service and good points
and Value value for money in every ៚ Executive Club expanded to identify core custom-
market segment in which ers and track their travel
we compete ៚ Sustained improvement in punctuality of the
operation
Customer To excel in anticipating ៚ Managers involved in the In Touch programme

and quickly responding to ៚ Executive Club members recognised by Service
Driven customer needs and com- Delivery
petitor activity ៚ Mechanisms to encourage the innovation of staff
and respond to customers
Good To sustain a working ៚ Half the airline’s staff attended Winning for
environment that attracts, Customers
Employer retains and develops ៚ Assessed training requirements and developed
committed employees who quality programme
share in the success of the ៚ Developed improved performance and career
company management methods
Good To be a good neighbour, ៚ Key targets set from internal environmental audit
concerned for the programme
Neighbour community and the ៚ Increased communication/dialogue with local
environment communities
៚ Increased involvement in educational, community
and conservation initiatives
targets for long term

1993/94 targets
៚ Achieve progressively higher standards of safety To seek constant im-

៚ Lead the industry in responding rapidly to safety and security issues provement in the
៚ Provide a safe working environment for all employees safety and security of
៚ Comply with all security requirements at minimum inconvenience to the airline
customers
៚ Improve security awareness of all staff
៚ Focus financial management through business segmentation To generate operat-

៚ Enhance the strategic and business planning activities ing cash flow at 21%
៚ Improve asset performance including aircraft utilisation of traffic revenue
៚ Achieve expenditure performance improvements
៚ Maintain the net debt to total capital ratio below 70%
៚ Begin building the first effective global airline alliance To establish the alli-
៚ Implement Executive Club frequent flyer programmes fully and ance partnership as a
consistently world-wide substantial player in
៚ Agree and commit to financial targets for US Air co-ordination all 6 of the major
៚ Set up arrangements for successful Qantas co-ordination world markets
៚ Evaluate and determine the appropriate BA image world-wide
៚ Offer innovative services, consistency and value for money To plan and manage
៚ Instil a quality culture and drive continuous improvement the airline so that
៚ Establish challenging service quality standards which lead the industry key service delivery
៚ Improve BA’s punctuality to exceed competitors on 60% of sectors and schedule objec-
៚ Improve significantly the baggage shortlanded rate for passengers who tives are met cost
have transferred at Heathrow and Gatwick effectively
៚ Managers listen to customers and develop front-line skills To create such cus-
៚ Continue the rollout of premium products and prepare the shorthaul tomer satisfaction
relaunch that 9 out of 10 pas-
៚ Trial and evaluate an individualised service centre sengers would rec-
៚ Respond rapidly and positively to complaints ommend BA to a
៚ Track and understand customer defection to reduce its incidence friend or colleague
៚ Address the key issues raised by the Input Survey To raise employee
៚ Encourage a climate of openness, trust and two-way communication satisfaction on at-
៚ Develop integrated training and skill improvement plans traction, retention,
៚ Encourage employees to demonstrate initiative and participate creatively pay, communications
in generating practical ideas to the airline’s benefit and development
៚ Redesign the performance management system to provide direction and
wider involvement in achieving our business objectives
៚ Develop and communicate an agreed BA community relations strategic To ensure that BA’s
framework community and
៚ Increase level of investment in community relations environmental
៚ Increase employee and public awareness of BA’s environmental perfor- achievement is main-
mance tained at a high level
៚ Improve waste management particularly at Heathrow and Gatwick
៚ Improve aircraft fuel efficiency and energy consumption on the ground
Figure 5.1 British Airways’ corporate goals

Superior Strategies
Looking at our conclusions:

ᔡ Do you feel that every member of your team understands the environ-
ment in which you are operating and is willing to initiate the actions
needed to respond to change? If not, how do you ensure they do gain
this understanding and are willing to respond to change?
ᔡ Is every member of your team willing to take a proactive, positive role

in optimising all your relationships? If not, what do you need to do to
ensure that they recognise the need to do so?
ᔡ Does every member of your team appreciate the goals they have to
achieve if they are to be a member of your winning team? If not, how
do you ensure they do so?
ᔡ Is every member of your team aware of your strategies, willing to help

with both input and feedback, and, above all, willing to reinforce the
perceptions you are seeking to create in positioning your company? If
not, how do you ensure that they are? If you do not do so already, how
can you involve as many people as possible in creating and monitoring
strategy?
6
COLLECTIVE KNOWLEDGE
YOUR MOST INVALUABLE ASSETS
Your most invaluable asset, and mine, is the collective knowledge of every
single member of our team. They are and should be treated as the real
experts on the detail of the work they do.
It is not just them. Their husbands and wives, other members of their
families, and their network of friends, can be an equally invaluable
resource. One member of our team, Jayne McWatt, knew the Professor of
Statistics at Plymouth University, Graham Crocker. As a result of her intro-
duction to him, we were able to improve significantly the quality of our
own statistical and forecasting activities.
Remember our opening quotation from Percy Barnevik of ABB which
concluded: ‘We have to be able to recognise and employ that untapped abil-
ity that each individual brings to work every day.’
BACK TO PHILOSOPHY
We are back to our philosophy: the way we think about things.

It is now recognised that the West has been influenced unduly by the
notions of ‘Scientific Management’ set out by Frederic Taylor earlier this
century. He felt that workers could share in the prosperity of their organisa-
tions if they were told what to do, and how to do it, as a result of stopwatch
studies carried out by their superiors. This prompted one leading Japanese
industrialist, the late Konosuke Matsushita to comment:
We are going to win and the industrial West is going to lose: there’s not much
you can do about it because the reasons for your failure are within yourselves.
Your firms are built on the Taylor model. For you, the essence of management
is getting the ideas out of the heads of bosses and into the hands of labour.
We are beyond your mindset. Business, we know, is now so complex and diffi-
cult, the survival of firms so hazardous in an environment increasingly unpre-
dictable, competitive, and fraught with danger, that their continued existence
depends on the day-to-day mobilisation of EVERY OUNCE OF INTELLI-
GENCE, FROM EVERY MEMBER OF THE ORGANISATION.
Numerous British companies have reacted to this challenge successfully.
They have changed their attitudes, their mindsets. As at Nissan, it is the
front-line workers who are coming up with a continuous programme of
improvement. British workers have proved that they can be world-class,
when led with the right philosophies.
EIGHT ISSUES
There are eight issues which we will need to confront. They are:
1. Performance
2. Courage
3. Confidence of leaders and followers
4. Assertiveness
5. Contention
6. Openness
7. Learning organisation
8. Techniques.
1. Performance
The first very real danger is that performance may suffer in the short term.
The experience which you and I have gained is based on learning from mis-
takes we have made. If we start to delegate to our colleagues, they will have
to learn from their mistakes.
We now make each of our teams responsible for their own recruitment.
The first time our Design Team did so, they made a mistake. They chose a
very pleasant girl but one who came nowhere near their high levels of
competence. So, at the end of the trial period, they had the responsibility of
parting company with her. They made sure that their next choice was right.
PILLAR 6: COLLECTIVE KNOWLEDGE ᔡ 83
It came back to me. If I wanted people to recruit their own colleagues, then
I should have ensured that they received enough training. But it was the
team who suffered from the disruption, they gained experience, and now
that they are responsible for building their own team, they are far more
committed.
What is the alternative? It is upward delegation. No one takes any real
decisions because they feel the need to let the ‘boss’ cast his eye over it. He
becomes the bottleneck. People do not try hard enough because they know
that whatever they do will be amended. As William McKnight, the
apparently uncharismatic former Chief Executive of the highly innovative
company 3M, once observed:
The men and women to whom we delegate authority and responsibility, if
they are good people, are going to want to do their jobs in their own ways....
Mistakes will be made, but if a person is essentially right, the mistakes he or
she makes are not as serious in the long run as the mistakes management will
make if it is dictatorial and undertakes to tell those under its authority exactly
how they must do their jobs.
3M is a fascinating company. One of the main reasons behind its success in
innovation was that they developed an appeals process internally.
Previously, if you had an idea which you thought was commercially
exploitable, you put it to your boss who had the power to decide whether it
should be taken any further. Because most bosses actually want a quiet life,
in practice most ideas got turned down, particularly if they might be suc-
cessful because this meant that the good people who were working for the
boss might be moved away.
3M’s appeals process worked thus: if the boss turned down the idea, the
idea could be put to the boss’s boss. If, under these circumstances, the boss
was seen to be turning down good ideas, he was somewhat at risk himself,
so the balance of advantage politically inside the business changed to those
who put ideas forward from those who tried to restrict the flow of new
ideas. Apparently this extremely simple change had a dramatic effect on the
financial performance of the company over the years. It also changed the
culture completely; an issue we discuss later.
2. Courage
If you are the owner of your business, with your money at risk, it can take
considerable courage to accept this philosophy. Even if you are an
employed executive, possibly on a bonus scheme, it takes courage to let
more junior colleagues makes mistakes for which you bear responsibility
and which may affect your bonus adversely.
The bigger problem is that your organisation is likely to be under-per-

forming because you are trying to do far too much yourself. If you can
move your people up to the fourth and fifth levels of involvement and com-
mitment, then your productivity gains will far exceed the cost of mistakes.
Paul Layzel, former MD of BMW (GB), ran the company in an outstand-
ingly successful way. He accepts that:
My biggest mistake at BMW (GB) was in not realising sooner the need for
change so that our people lower down the organisation could contribute more
since that is where the greatest untapped talent lay.
If we are honest, most of us as executives will accept that it has been ‘our
biggest mistake’ also.
3. Confidence of leaders and followers
We have been used to holding individual executives responsible for the

results of their divisional department. We have trained them in traditional
concepts of management, planning, controlling, directing and disciplining.
We have paid them bonuses on their results. In all too many organisations,
they have been trained to act more as upwardly reporting ‘personal assis-
tants’ than independent entrepreneurs.
Your biggest challenge will be persuading them to drop their traditional,
transactional approach, which often meant that they would ‘shoot down in
flames’ any subordinate who spoke out of turn. You will need to give them
the confidence to adopt the transformational approach of positively seeking
and encouraging the views of the members of their team: to create ‘effective
followers’.
Equally, you face the challenge of encouraging their followers to have the
confidence to put forward their views. Many, who have been ‘shot down’ in
the past, may be reluctant to risk another rebuff.
4. Assertiveness
Under the transactional approach, workers were expected to leave their

brains at the factory gates. People were conditioned to believe that ‘it was
not their place’ to comment. We have to change this mindset to one where it
is the responsibility of people to comment: to stop the line: to come up with
their ideas.
One of the first things I did when I started my new company in Devon
was to run a series of training courses on assertiveness. The BBC have an
excellent video on the topic which we used. Everyone has to accept the
responsibility of speaking their minds. Every single member of our organi-

sation of equals must accept that they have a responsibility to be assertive.
As Jonathan Brown points out, it is important that a company actually
identifies processes that absorb the contentiousness and assertiveness that is
innate in virtually everybody and puts it to constructive use rather than
leaving it festering.
5. Contention
In many organisations, the culture is that you ‘do not rock the boat’.
Anyone who does so is treated as something of an outcast and runs the risk
of being ‘cut off at their knees’!
One of my most valued colleagues earlier in my career was Mike Binney,
a typical blunt, cynical Yorkshireman. By speaking his mind and challeng-
ing me to think through my thoughts, he was being far more loyal than
those who appeared to concur at the meeting but chuntered among them-
selves as they went down the stairs. Indeed, Abraham Zaleznick, a Harvard
professor, once wrote18:
I am constantly surprised at the frequency with which Chief Executives feel
threatened by open challenges to their ideas, as though the source of their
authority, rather than their specific idea, was at issue. The ability to confront
is also the ability to tolerate aggressive interchange. And that skill not only
has the net effect of stripping away the veils of ambiguity – characteristic of
managerial cultures – but it also encourages the emotional relationship lead-
ers need if they are to survive.
When Alfred Sloane was Chairman of General Motors, he would postpone

a decision if all the directors were in agreement! He felt that at that level the
issues were so complex, the options so open, that it was only after vigorous
contention on the opportunities, or dangers, that he could be sure that they
had explored all the issues, and were making the best judgement in the cir-
cumstances.
It’s the ability to shed outmoded knowledge, techniques and beliefs, as
well as to learn and deploy new ones, that enable firms to carry out strate-
gies. The ability to do so faster and more effectively than your competitors
becomes a priceless competitive advantage. This won’t happen without a
strong culture of contention. In fact, Richard Pascale16 believes that our
prime role as leaders is that of maintaining a constructive level of debate.
To do this we need dispassionate analysis of all the options.
6. Openness
If you are determined to transform your business, you will need to take pos-
itive steps to create what is called an ‘open organisation’. This is one in
which there is open, informed debate involving every individual member of
your team on every issue concerned with future threats and opportunities,
and with the consequences of current strategies. In Moments of Truth15, Jan
Carlzon, the former President of SAS, starts with four key quotations:
ᔡ ‘Everyone needs to know and feel that he/she is needed.’
ᔡ ‘Everyone wants to be treated as an individual.’
ᔡ ‘Giving someone the freedom to take responsibility releases resources
that would otherwise remain concealed.’
ᔡ ‘An individual without information cannot take responsibility; an indi-
vidual who is given information cannot help but take responsibility.’
By giving people the freedom to take responsibility, you are releasing an
invaluable resource, but they cannot take this responsibility without relevant
information.
He explains that in his drive for customer service, he wanted customers to
be able to pick up their luggage virtually as soon as they walked off their
plane. He started publishing a league table of how long it took at every air-
port served by SAS. The New York team of handlers were once shown to be
bottom. They were indignant. They set out to be first, gained authority to
knock down a wall, and rearranged the layout. They quickly shot up the
league table.
There is a tremendous competitive urge in most people. Isn’t this why
sport is so popular? When the local team wins, morale in the area goes up.
Morale in South Africa rocketed once their rugby team won the World Cup.
What a tremendous example of motivational leadership it was when their
President, Mandela, emerged wearing a No 9 Captain’s shirt. Everyone in
South Africa and in the stadium reacted with great emotion. So, the nub is
to:
ᔡ give people the freedom to take responsibility;
ᔡ give them the information they need to take responsibility;
ᔡ ensure total openness so that they can go beyond the figures to see the
context of the contribution they are being expected to achieve.
This may require a dramatic change of mindset particularly among middle
managers since, as Robert Heller writes in his latest book,19 ‘Information is
now power, but most top managers are reluctant to release it to the work-
ers.’ What a stupid, negative, recipe for poor productivity and commitment.
We must have total openness if we want to achieve Hard Results.
7. Learning organisation
One important way of optimising on the collective knowledge of your peo-

ple is to consciously create what has been called a ‘Learning Organisation’.
This is one in which everyone accepts responsibility for their own ‘self
mastery’ and, also, accepts the responsibility for helping to develop their
colleagues.
The first point comes back to the philosophy of making people responsi-
ble for sustaining their own ‘self-employability’. Creating an awareness that
they have the responsibility to keep abreast and ahead of developments so
that they are better able to do an effective job on your behalf.
The second point is important: creating a culture within which every
member of the team accepts responsibility for sharing information with and
helping their colleagues to improve their performance. In our small compa-
ny, everyone who goes on a course is required to give a presentation at our
monthly company meeting: to explain what they have learned; and to high-
light any ideas which could be adopted to improve our performance.
Every individual, or team, is required to give, in turn, a regular presentation
of what they are doing and why, how what they are doing helps their col-
leagues; or how their colleagues could help them to be more effective; or
maybe to give their colleagues a thorough briefing on a particular topic be it
marketing, selling, data processing, librarianship, or any of our other activities.
Some of our larger clients hold regular lunchtime or periodic early
evening meetings. There is tremendous value in, for example, your market-
ing team preparing a presentation on how they seek to position your compa-
ny, and its products, the market segments at which they are aiming and the
characteristics of customers in each segment, and the perceptions they are
striving to create.
Other departments and specialists can prepare presentations also. In
larger organisations, like Peugeot, internal videos are produced along
similar lines.
Creating a culture within which everyone accepts personal responsibility
for developing themselves, and their colleagues, is a tremendously powerful
weapon.
8. Techniques
We have agreed, I hope, that the collective knowledge of every single per-
son within our organisation is our single most invaluable asset and that we
can achieve the Hard Results of improved sales, improved productivity,
and react far more readily to change, if we ensure that we tap into this asset.
So, how many organisations have really thought through how to optimise
upon this invaluable asset?
I spoke recently at a conference of a very switched-on organisation. Their
Board of Directors had to accept that they had never once got down to dis-
cussing how to optimise upon their most important asset, the collective
knowledge of their people. Such activities as did take place had grown ‘like
Topsy’ rather than being the result of a carefully thought out strategy.
Let’s look, briefly, at a few techniques.
Treat people as experts

As we said earlier, the persons or the people doing the job, are the experts.
They should be the first people to be asked for their opinions on any issues
relating to the work they do and they are the people who should be involved
in your Kaizan programme of seeking for continuous improvements.
Stretch people
We have to stretch people by pushing as much responsibility on them as
possible, and by giving them demanding targets which ensure that they have
to use all their skills. Having done so, we must stop downward meddling
and upward delegation. If necessary, we must let people learn from their
mistakes or, hopefully, create the team spirit which ensures they go to the
relevant colleague for help and advice.
Hidden talents
One way or another, perhaps at the next appraisal interview, you need to dig
deep to discover the hidden assets of your people, particularly by question-
ing them on their spare time hobbies and interests. One client had a parts-
man who was a brilliant coach of a local sports team, for example. An
important question at every appraisal interview, which we will discuss later,
is what talents does the person feel he/she has that are not being used to the
full; with the supplementary question of how the team member concerned
feels that these talents could be utilised more effectively.
Discussion meetings/brainstorming
We shut down our small company for half a day a month. One client, with a
team of 120, holds two evening meetings of 60 people each, on a quarterly
basis. When Sir Peter Thompson was at NFC9 he used to hold Sunday meet-
ings on a regional basis for everyone in the area. They were always very
well attended. One way or another we need to create a mechanism for regu-
lar brainstorming sessions and open discussion meetings.
Hot Group
A Hot Group is just what the name implies. A lively, high achieving, dedi-
cated group, usually small, whose members are turned on by an exciting
and challenging task. More specifically, it is accepted that they should chal-
lenge existing organisational ‘correctness’ to help their companies to
achieve success in today’s highly competitive environment.
Project teams
What we are discussing is the total delegation of day-to-day management
issues, if necessary by creating a project team to solve a particular problem,
in a way which draws on the talents of everyone who gets involved.
Remember how Peter Nathan delegated his packing problem to Sue Stevens
and her packers (page 20).
Valentines
Cross functional teams need to be established to resolve interdepartmental
issues. At one point, Ford in America got each department, in turn, to set
out in writing the frustrations they experienced with other departments.
They were called ‘Valentines’. A meeting was then organised at which the
content of these ‘Valentines’ were discussed, openly and constructively,
with the other department or departments concerned.
‘Stakeholder’ panels
Involving some of your stakeholders, your suppliers, dealers, people from
your community, and in particular your customers (many of whom have
their own areas of expertise), is an important element of optimising the
value of what Dan Jones calls your ‘Value Stream’.
Employee involvement
A great success at Ford, when Don Petersen was at the helm, was transform-
ing its performance through the ‘Employee Involvement Programme’ which
Richard Pascale explains in great depth in his book, Managing on the Edge16.
There was a tremendous upswelling of initiatives from everyone at every level
and impressive gains in quality and productivity were achieved. I don’t like
the term ‘employee involvement’ but by whatever name it’s called, mobilising
everyone’s involvement must be the way to achieve Hard Results.
Workouts
This is the most dynamic of techniques which Jack Welch pioneered at GE.
A group of people from all levels and activities from within the organisation
Figure 6.1 GE Workout concept
hold an extensive discussion, which can last for half a day, or up to three
days. A senior executive sets the problem to be discussed. At the end of the
period the senior executive returns, and the syndicate chairman puts forward
the recommendations. In the process, team members gain confidence,
boundaries are broken down, and there is a speedy solution to the problems
being faced by the unit concerned.
Process mapping
A process map is a chart showing every step, no matter how small, that goes
into making or doing something. For example, every step can be mapped
from the time an order is received to the time it is delivered. It can be sur-
prisingly difficult. To do it effectively, suppliers, team members, dealers,
and even customers, must work on the map together to make sure that what
they think happens, really does.
GE found that when such a process map is finished, they have the ability
– often for the first time – to manage the process in a coherent way from
start to finish. The result of one process map was a 50 per cent saving of
time, plus a $4 million drop in inventory, resulting in an increase in stock-
turn to seven times a year. As importantly, by involving the people con-
cerned, it taps into their collective knowledge. It’s a valuable technique that
can be used in the smallest of companies. It can now be done on computer
using ATI software.
Today’s most valued work is done through a complex web of interactions
among highly skilled workers. The San Francisco office of Young and
Rubicon deployed a Lotus Notes version of Action Work Flow to redesign
their approach to creating advertising campaigns. Within months the firm
reported dramatic decreases in overtime, rush charges and rework, as well
as shorter cycle times and enhanced customer satisfaction. No other
approach to process mapping is as powerful.
Suggestion schemes
Last, but not least, let us not forget Suggestion Schemes. QED: Quid Each
Day, Quality Each Day is a proprietary scheme. At Walon, the logistics
company, it resulted in 570 suggestions from 450 staff, over 350 of which
were implemented successfully.
WHY SHOULD PEOPLE BOTHER?
Wouldn’t it be great if you could tap into the collective knowledge of every-
one involved in, or with, your organisation? It would be fantastic. It would
make a tremendous difference. But why should the people concerned bother
to make the effort?
Management insincerity or reciprocity
Ian Gibson, Chief Executive of Nissan Motor Manufacturing (UK) once

said:
The poor level of team spirit found among European workers is due less to
cultural factors than management insincerity in cutting back on hierarchy and
the perks flow from it.
Ian added:
Inadequate training of workers and managers to take on greater roles also
leads to lack of involvement. At Nissan we give shop floor workers continual
training over several years so that they are able to take on projects to improve
productivity, rather than passing the task on to an engineer sitting in an office.
In his recent book,19 Robert Heller concludes that too little has changed in
many company Board Rooms. We need total reciprocity, by working hard
on all the twelve ingredients we have been, and will be discussing, to create
a culture in which people will be ‘willing to bother’: keen to commit totally
to your organisation. Obviously it is more difficult when external pressures
may cause inevitable redundancies but involving your people is far more
likely to make you responsive and competitive enough to respond positively
to these external pressures.
The ‘Golden Triad’
In his marvellous case-study of Honda,16 Richard Pascale describes what he

calls the ‘Golden Triad’ of (1) Enduring Values, (2) Trust, and (3)
Empowerment, which he believes have to be in place before an organisation
can tap into the commitment of its people. In a powerful piece of writing he
explains:
Values and trust establish the pre-conditions that encourage individuals to
think, experiment, and improve. Once employees know what an organisation
stands for, and believes it is sufficiently trustworthy to warrant their commit-
ment and effort, they begin to truly extend themselves. If (leaders) provide
(their colleagues) with the tools, understanding and latitude to make a differ-
ence, great things are possible.
Coming back to the essential ingredient of leadership, Warren Bennis and
Burt Nanus8 write that what we should do, as leaders, is to:
Unite the people in the organisation into a ‘responsible community’, a group
of inter-dependent individuals who take responsibility for the success of the
organisation and its long-term survival.
Collective Knowledge
ᔡ Do you accept that your most valuable asset is the collective knowl-
edge of everyone involved in or with your organisation? If so, are you
tapping into this asset as fully as possible? If not, how do you set about
ensuring that you optimise this invaluable asset?
ᔡ Do you have the courage to accept that if you let people make their
own decisions, they will undoubtedly do things differently, and may
need to ‘learn from their mistakes’? Are you willing to let them go
through this learning process? More importantly, how do you ensure
that all your executives are prepared to ‘let go of the reins’?
ᔡ Do you accept that to release the knowledge of people, you have to
encourage a more assertive and contentious environment? If so, how
do you set about doing this?
ᔡ Do you agree that to ensure Extraordinary performance you have to
create an open ‘learning organisation’? If so, how do you set about
doing this?
ᔡ Looking at the suggestions given under the heading of ‘Techniques’,
which do you feel would be most appropriate to your own organisation
in terms of truly optimising the collective knowledge of every member
of your team, and how would you implement them? Could you and
your team come up with other appropriate techniques?
ᔡ To what extent do you feel you have created what Richard Pascale calls
the ‘Golden Triad’ of (1) Enduring Values (2) Trust and (3)
Empowerment? What actions can you use to build or reinforce the
‘Golden Triad’ in your organisation?
7
WINNING STRUCTURES
& SYSTEMS
EVOLUTION NOT REVOLUTION
Reorganisations are disruptive and are not always successful. I prefer evolu-
tion rather than revolution. Going back to the Ralph Stayer case study1, as
he progressively created the culture in which his front-line people demand-
ed more responsibility, the role of his supervisors changed. Instead of being
checkers and controllers, they became coaches and facilitators.
Nonetheless, in these brutally competitive days, with margins under pres-
sure, you have to accept that the structures and systems of your organisation
have a crucial impact on your success and, if you have the wrong organisa-
tion and wrong systems, can represent a real problem. So, let’s look, fairly
briefly, at a number of very important issues which you and your team may
wish to discuss.
WINNING: OBJECTIVES COME FIRST
Everyone agrees. Peter Drucker20, years ago, said first decide on your objec-
tives, and then design the organisation needed for their achievement.
Another guru, Alfred Chandler21, said ‘Structure follows Strategy’. We have
to optimise our existing organisation and its people; our most valuable
asset. But we will not survive unless we evolve strategies that help us to
achieve realistic, stretching objectives.
THE GLOBAL THREAT
When Stephane Garelli, a Professor who is also Director of the World

Competitive Report, spoke at one of our Workshops, he said bluntly:
Every day low cost
Every day low price
Every day low margin.
He stressed that the name of the game is the cost efficiency of structures
and systems. He quoted West German labour costs at $27.30, average EC
costs at $19.70, and the US at $17.00, whereas in the underdeveloped coun-
tries of Asia and South America, labour costs ranged from $5.00 down-
wards, with costs in the rapidly developing markets of China and India
probably lower than $1.00 an hour.
In these circumstances, there is bound to be a transfer of manufacturing
to these low-cost areas with Western organisations becoming merely assem-
blers. Rapid developments in Information Technology (IT) mean that it is
more cost-effective for some European companies to have all their cen-
tralised accounting processes carried out in India, while some American
companies have their data processed in the high unemployment areas of
Western Ireland.
As John Neill of Unipart once said, ‘Work can now be done almost any-
where by almost anyone, heralding new waves of competitive intensity,
unparalleled in the experience of many of today’s leading companies.’
Earlier, I recommended that you and your team should carry out a SWOT
analysis of your organisation. Depending on the business you are in, you
may well need to look at these global issues.
IMPORTANCE OF ORGANISATION
In their book, based on their world-wide study,11 Dan Jones and his MIT
colleagues give many dramatic examples of different levels of performance
from organisations in exactly the same business. The differences were star-
tling (see Table 7.1).
They also analysed the reason for such a significant productivity gap
between two factories. They concluded that 52 per cent of the difference
could be traced back to differences in sourcing, processing and manufactura-
bility but that the biggest reason for the productivity gap, at 48 per cent, was
superior organisation (though better sourcing, processing, design and manu-
facturability are themselves the result of better organisation).
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 95
Table 7.1 Differing performance levels
Company A Company B
Hours to assemble car 31 16

Defects per 100 cars 130 45
Assembly space per car 8.1 4.8
Average stocks 2 weeks 2 hours
So let’s accept that in these highly competitive times, we have to look hard
at our structures and systems.
DON’T SHOW CUSTOMERS YOUR ARSE!
Your core objective must be to identify, attract, satisfy and retain an increas-
ing number of customers in a way which optimises the resources available
to you.
Sadly, too many companies have been vertically driven, financially ori-
ented, and authority based, with the Chief Executive looking down from his
exalted position on apparent order, symmetry and uniformity, with an ever-
widening pyramid of divisions and departments. Those at the bottom of the
pyramid, the front-line executives, look up at a phalanx of controllers whose
demands soak up most of their energies and time. The result, as Jack Welch
puts it, ‘Is an organisation with its face towards the CEO and its arse
towards the customer!’
This is very true. How many times have you, as a customer, been treated
as if the organisation’s structure and systems were more important than
meeting your needs? Could this be happening in your organisation?
Your structure and your systems should be designed to exceed the expec-
tations of your customers. One of the great benefits of starting to draw
organisation charts as an upturned triangle, with the front-line, customer-
facing people at the top, is that it makes the important psychological point
that it is the people at the sharp end, at the customer interface, who are
important and that it is a function of middle and senior executives to support
them.
As Jan Carlzon puts it in his marvellous book15, it is literally their
millions of 15 second contacts with the members of his team which built the
reputation of SAS in the minds of their customers. Years ago, you may
remember, there was a training film called Who Lost the Sale?. In it the
switchboard operator, the receptionist, the van driver, the clerk, all played
their part. We have to create organisations in which everyone accepts

responsibility for ‘adding value’ to every contact they have.
FRONT-LINE ENTREPRENEURS
We have to drop our assumption that those at the top are the only entrepre-
neurs in the business.
As Sumantra Ghoshal points out6:
Few front-line initiatives survive bureaucracy’s smothering assumption that
top managers are the best visionaries for their organisations and are alone
responsible for leading their companies into new areas. Any bottom-up ideas
that survive the top-down directives are likely to be crushed in the documen-
tation, review, and approval processes that supply senior managers with the
information and feedback they need to operate as a company’s strategic
gurus.
Upturning your organisation will only work effectively when you recognise
that the role of the front line is transformed from implementors to initiators,
and when you recognise that our role as senior executives is to provide the
culture, the context, in which our front-line colleagues will feel free to use
their initiative and, hopefully, even be entrepreneurs on our behalf.
When Jim Maxmin was at Thorn EMI, he once worked out that if his ser-
vice people had had the freedom to negotiate with customers over warranty
claims, the total cost to the company would have been far less than the
bureaucracy which had been created in referring these claims back to Head
Office for verification and reluctant approval. But, as he pointed out to me,
it was not merely the cost, it was the customer dissatisfaction caused which
was the more important issue.
ENCOURAGE INNOVATION
One of the world’s most innovative corporations is 3M where a former

Chief Executive, William McKnight, believed that his company was best
served when senior executives trusted those with direct knowledge of the
market, the operations, or the technology involved.
His philosophy has rewarded 3M with thousands of breakthrough entre-
preneurial initiatives, so it is little wonder that belief in the individual is one
of 3M’s core values, as it should be in every organisation.
As Andy Grove, the Chief Executive of Intel admits, their most important
strategic decision was made not in response to some clear-sighted corporate

vision but by the decisions of front-line managers who knew what was
going on. We, as leaders, have to hold in high regard every member of our
organisation if we want the hard results that will follow from their commit-
ment to striving to excel on our behalf.
LEAN BUT NOT MEAN
As Julia’s illustrations portray, many organisations resemble a carriage

pulled by six blindfolded horses, kept on course by outriders, and whipped
fiercely by the coachman because they are uncertain of the road ahead
(Figure 7.1).
It was Dan Jones and his MIT colleagues who first introduced the con-
cept of ‘lean manufacturing’ which Dan updated in his more recent
Harvard Business Review article,22 with his colleague James Womack. They
write:
by eliminating unnecessary steps, aligning all steps in an activity in a contin-
uous flow, recombining labour into cross-functional teams dedicated to that
activity, and continually striving for improvement, lean companies can devel-
op, produce, and distribute products with half or less the human effort, space,
tools, time and overall expense. They can also become vastly more flexible
and responsive to customer desires.
No organisation can afford to miss out on these benefits. Lean does not
necessarily imply mean – in fact the reverse. People are more often
demotivated by slack, wasteful organisations. If the right culture is created,
people get far more of a ‘buzz’ from being given responsibility.
Your organisation should resemble Julia’s second illustration, a carriage
pulled by fewer, better motivated horses, needing only minimal guidance
because they can see the road ahead, and enjoy the exhilaration of their
performance. It comes back to our central theme that colleagues who share
your goals and your values won’t need much supervision.
Let me give you one example. I had three executives on one of my work-
shops. Each had broadly the same level of turnover, and were in the same
type of business. One had 38 staff, one 32, and the third only 18. Can you
imagine the difference in profitability?
Figure 7.1 The organisation culture

WHAT’S YOUR CORE BUSINESS?
In the past, those of us, myself included, who have built up their own busi-
nesses, have tended to measure our progress by the size of the organisation.
Rather than talking about turnover or profitability, it has been easier to say
‘I employ 70 people’, or whatever. In today’s highly competitive environ-
ment, this is no longer a valid approach.
Stephane Garelli sees an organisation with three elements (see Figures
7.2 and 7.3):
1. A compact core representing as small a team as possible of dedicated,
completely committed people, focusing on truly ‘adding value’ to the
unique expertise by which their organisation satisfies its customers.
2. An inner periphery of people on short-term contracts. BP advertised at
one point for an economist on a non-pensionable, three year contract. In
fact, this is a very sensible route for a small, rapidly growing organisa-
tion to take. Too many small companies have crippled themselves by
taking on, as full time employees, people whose skills were only rele-
vant to that stage of the company’s growth. Once the company expand-
ed beyond their competence, they became a hindrance. So, short-term
contracts for a particular short-term need, make sense.
3. An outer periphery of work which is ‘outsourced’. This is an increas-
ing trend among companies large and small. The Inland Revenue is
reputed to pay a billion pounds a year to EDS to manage its data pro-
cessing functions. BP Exploration has outsourced all its Information
Technology operations in an effort to cut costs, gain more flexible and
higher quality IT resources, and refocus the IT department on activities
that directly improve the overall business.
The American Management Association23 magazine once quoted a case
study on Tomima Edmar, an ex-IBM employee, who chafed at the amount
of time she ‘wasted’ on office politics, personnel issues, and countless meet-
ings. When she started out on her own, she determined to spend time on
doing business rather than managing. She grew her Topsytail hair care gad-
get to sales of $80 million, with only two employees.
The AMA article gives five reasons why people outsource:
ᔡ Outsiders are more efficient – 70%
ᔡ Focus on your own products – 45%
ᔡ Save costs of benefits – 42%
ᔡ Less investment needed – 41%
ᔡ Lower regulatory burdens – 21%
Figure 7.2 The core contracts, the periphery expands
Figure 7.3 The redefinition of jobs

It’s all too easy to slip into the trap of adding on activities. For example,
because my company produces a lot of information, we invested heavily in
desktop publishing. At one point it seemed logical to develop an internal
print operation. It then seemed a logical step to try to recoup some of the
capital outlay by selling print outside the business. This then became a dis-
traction. We sold it, and now subcontract all our printing.
At Walon, the Logistics and Distribution organisation, John Merry has
been very stringent in requiring every department or activity to assess criti-
cally the extent to which the services they provide, or receive, are truly
adding value. We all need to do the same. We need to have a lean organisa-
tion focusing on our particular strengths, make greater use of people on
short-term contracts, and wherever possible, outsource activities which are
not part of our core business.
Although problems can arise from its social aspect, more companies are
making use of short-term or temporary staff. It has enabled one company to
significantly increase its responsiveness while lowering its costs, but it can
also be counterproductive if taken too far; a loyal core of committed people
is vital. Problems can also arise when an activity is transferred into a new
company with the people transferred facing a real culture shock.
Increasingly companies will need to look outside for specialist advice;
sometimes in areas in which they do not have the expertise to judge the
competence of their advisors. It is one area in which mistakes can be
hideously expensive. Take care on this issue.
WORKING AWAY FROM ORGANISATION
Regarding the changing nature of work, Garelli suggested that in future far
more work will be done at home. Given the high costs of property it makes
sense.
Space in submarines is at such a premium that bunks are shared. Stephane
was talking of a company in Holland which uses a similar concept.
Everyone has the equivalent of a large left-luggage locker. They put all their
personal papers in this locker. If they come into the office, they take the
equivalent of a supermarket trolley, collect their papers from their locker,
and then go to find whichever desk happens to be empty.
Many of our clients at the Stephane Garelli meeting became very worried
by the new ideas he was explaining of ‘The Virtual Organisation’, where
work is done outside the traditional office structures. Charles Handy had an
interesting article on this point in the Harvard Business Review24. He
explains that executives need to move beyond the fear of losing efficiency
‘Does your firm realise that its most sensitive work is being handled by a 14
year old working on a vague promise of extra pocket money?’
Figure 7.4 Working from home
and the desire to impose checks and controls. Handy proposes seven rules
of trust:
1. Trust is not blind. It needs fairly small groupings so people can know
each other well.
2. Trust needs boundaries. Define a goal, then leave the worker to get on
with it.
3. Trust demands learning and openness to change.
4. Trust is tough: when it turns out to be a mistake, people have to go.
5. Trust needs bonding: the goals of a small unit must gel with a larger
group.
6. Trust needs touch: workers must sometimes meet in person.
7. Trust requires leaders.
All very valid points which apply to colleagues working inside and away
from our businesses. Obviously, it depends very much on the type of busi-
ness you are in. Many organisations already have significant numbers of
people out in the field. Certainly, most would feel that ‘being a member of a
team’ is a very important motivational factor but the overheads of running
an office are significant, so the concept of ‘hot desking’ is one to be borne

in mind.
BOUNDARYLESSNESS
Jack Welch, has written and spoken a great deal on the need for a ‘bound-
aryless’ organisation, in which everyone is responsible. He said in one of
his Annual Reports:
Our dream for the 1990s is a boundaryless company ... where we knock down
the walls that separate us from each other on the inside and from our key con-
stituencies on the outside.
In Jack Welch’s vision, such a company would remove barriers among tra-
ditional functions, ‘recognise no distinction, but ignore or erase group lev-
els such as “management”, “salaried”, or “hourly”, which get in the way
of people working together.’
Two other gurus25 developed the concept put forward by Jack Welch.
They write:
One of the premier challenges of ‘leaders’ is to design more flexible organisa-
tions. Companies are replacing vertical hierarchies with horizontal networks:
linking together traditional functions through inter-functional teams; and
forming strategic alliances with suppliers, customers, and even competitors.
(Leaders) are insisting that every (colleague) understands and adheres to the
company’s strategic mission without distinction of title, function, or task.
They add that:
The traditional organisation map describes a world that no longer exists ... In
the new organisation, subordinates must challenge in order to follow – while
superiors must listen in order to lead.
The last sentence is important. It comes back to the issue of leaders and
effective followers which are our first two ingredients. Let us look at some
of the issues that arise from this.
HORIZONTAL NOT VERTICAL
For years, businesses have been built on the basis of largely autonomous
functions, often referred to as ‘chimneys’ (see Figure 7.5). Individuals saw
their careers as moving progressively up their functional ladder; switching
from company to company, to move further up their particular ‘chimney’.
Figure 7.5 The dissipation of effort
You must be well aware of all the conflicts that have resulted from this type
of organisation. In one
notorious case, the peo-
ple in Design would not
meet or even speak to
the people in Engin-
eering on the telephone.
Their only contact was
through memos! It’s a
nonsensical way to run
an organisation. The
internal focus means that
nobody is really focus-
ing on ‘adding value’ to
the customer, their fail-
ure to share information
adds to cost and lowers
productivity, while the
people within the activi-
ties and their suppliers Figure 7.6 Internally focused
are ‘switched off’. interdepartmental conflicts and rivalries
We are back to the difficult issue of ‘mindset’, of deeply ingrained think-

ing. Our success will be based on creating very flat, horizontal organisa-
tions. Four immediate issues arise from the new approach.
Span of control
It became perceived wisdom at one point that an executive’s span of control

should be limited to five subordinates. One of Jack Welch’s initial actions
was to extend the span of control of most of his executives to 15 or more.
He argued that if an executive only has five people reporting to him, then he
has time to manage, to interfere. If he has 15 or more, he has no time to
manage, he is forced to lead.
The book Re-Engineering the Corporation5 refers to spans of control of
up to 30. When Larry de Monaco of GE spoke at one of our seminars, he
referred to one executive who is directly responsible for over 250 people.
Larry added that by Tuesday morning, the executive concerned is searching
for things to do!
Levels
Years ago it was not uncommon for organisations to have up to 16 levels of

management. Truly professional organisations, including Unipart and the
AA, recognise that even quite large organisations can be run on three, four
or, at the most, five levels.
Titles
It follows that there is much less scope for grand titles. Management Today
once referred to an American company which had abolished all titles.
Everyone, from the highest to the lowest, was termed an ‘Associate’, and
was expected to work diligently with colleagues, with only one objective –
how they could ‘add value’ for the customer and thus help their organisation
to succeed.
Progress independent of promotion
This raises a very important social and motivational issue. If there are fewer
levels and the organisation is more horizontally organised, then there are
only two ways of switching people on. They must feel a valued member of a
worthwhile organisation. They can see that their personal development is

enhanced by a broader, more rounded appreciation of, and involvement in
the total process, rather than limited specific tasks. Let us develop this point.
PROCESSES NOT TASKS
For 200 years, businesses have concentrated on breaking down work into
simple tasks on a ‘production line’ basis. This happens even in offices. The
approach incurs high supervision and coordination costs. Workers quickly
become bored and quality and productivity suffer.
Years ago, Peter Drucker20 was writing of a Direct Mail Fulfilment house
where one clerk slit open the letter, the next smoothed it flat, and so on. It
took some 20 steps to fulfil an order! The result? A high level of employee
and customer dissatisfaction. Peter Drucker advised the firm to make each
colleague totally responsible for their own group of customers. Motivation
and customer satisfaction rocketed. More recently, Michael Hammer and
James Champy took up this theme in their book, Re-Engineering the
Corporation. They write of the need for companies to virtually reinvent
themselves:
What matters in re-engineering is how we organise work today, given the
demand of today’s markets and the power of today’s technologies.
They argue that it’s not a question of asking ourselves:
ᔡ How do we do what we do faster? or
ᔡ How do we do what we do better? or
ᔡ How do we do what we do at lower cost?
But asking:
ᔡ Why do we do what we do at all?
In their extensive research, they found that:
Many tasks had nothing to do with meeting customer needs ... Many tasks
were done simply to satisfy the internal demands of the company’s own
organisation.
They add that:
Programming people to conform to established procedures remains the
essence of bureaucracy even now.
They argue that achieving a competitive advantage ‘isn’t an issue of getting
people to work harder but of learning to work differently’.
If you have not already read it, the book is well worth reading. Even better,
form one of the Hot Groups mentioned earlier, buy each member of the
group a copy, and get them to report back to you on how its principles could
be applied in your organisation.
The two authors raise numerous points.
ᔡ Combine several tasks into one process. The central issue.
ᔡ Abolish supervision. Let workers make decisions.
ᔡ Organise work concurrently, not sequentially.
ᔡ Create different levels of response: computerise the straightforward,
train confident people to deal with the 15 per cent plus of minor varia-
tions and only involve the higher level of expertise needed in balance of
the more difficult.
ᔡ Let work be performed more effectively elsewhere, delegating some
tasks to suppliers or even customers.
ᔡ Reduce checks and controls by training and trusting front-line people.
ᔡ Reduce reconciliations, particularly by integrating the whole process.
ᔡ Provide customers with a single point of contact.
ᔡ Use new technology to get the benefits of centralisation and decentrali-
sation.
ᔡ Create multi-dimensional work by creating teams of people with differ-
ent complementary skills.
ᔡ Move from controlling to empowering.
ᔡ Move from training to education (a point to which we will return).
ᔡ Measure results rather than activities.
ᔡ Change people from being protective to productive.
ᔡ Get managers to change into coaches and from score keepers into
leaders.
All these are very valid points and your Hot Groups should be able to come
up with interesting answers.
The two authors define ‘re-engineering’ as the
Fundamental re-thinking and radical re-design of business processes to
achieve dramatic improvements in critical measures of performance.
Fundamental questions are, why do we do what we do, and why do we do it
the way we do?
They define processes as a collection of activities that create an output of
value to the customer. One very basic example is order fulfilment which
begins when a customer places an order, ends when the goods are delivered,
and includes everything between. Typically the process involves a dozen or
so steps performed by different people in different departments. No one in
the company oversees the whole process and no one is responsible. Errors
are inevitable with so many people having to handle, and act separately on,
the same order. Hence the importance of having one customer contact point.
The book is full of fascinating examples. A Finance House discovered
that work which actually took only 90 minutes, often took more than seven
days because it was spread over five people. It slashed its seven-day turn-
around to four hours, without an increase in headcount, and the number of
deals handled has increased one hundred fold.
It is now accepted that most of the ‘Re-engineering’ projects completed
have only achieved modest improvements. As I said at the outset, no tech-
nique, however excellent, will work unless all 12 ingredients are in place. I
come back to my point of evolution not revolution. Your best first step
would be the exercise on ‘Process Mapping’ I suggested earlier. If you and
your team understand all the processes involved, and challenge yourselves
with whether every step is truly adding value to the end user/customer, then
this could be the way of easing into the re-engineering of your business.
What we are talking about is moving from the situation where different
individuals or departments handle a sequence of tasks, to one where a team
of people accept mutual responsibility for adding value to your customers
by handling the complete process from start to finish. This may require a
team to be composed of different specialists and thus require a different lay-
out, so that all the members of each team can work as close to each other as
possible. Unipart operates in this way, having an open plan office subdivid-
ed into teams of development, marketing, technical, administrative and
other specialists working together on specific products or projects.
TEAMS NOT INDIVIDUALS
We in Britain tend to pride ourselves upon being a nation of individuals

(perhaps it is one of our problems when we strive to take part in team sports
at an international level?). Certainly, in business, the focus is on the individ-
ual. Job descriptions, pay schemes, career paths, performance evaluations,
focus on individuals. We feel uncomfortable if our career prospects depend
upon others.
Wisdom of Teams26 by Jon Katzenbach and Douglas Smith should be
essential reading if you are concerned to create a high-performance organi-
sation.
The Team Performance Curve
One of the crucial illustrations of this stimulating book refers to:

Figure 7.7 The Team Performance Curve
ᔡ working group
ᔡ pseudo-team
ᔡ potential team
ᔡ real team
ᔡ high-performing team.
Let’s look at each in turn, but first, what is a ‘team’?
A team defined
Katzenbach and Smith’s definition is that:

A team is a small number of people, with complementary skills, who are
committed to a common purpose, performance goals, and an approach for

which they hold themselves mutually accountable.
Small, because a smaller number of people are better able to work through
their differences to achieve their purpose.
Complementary skills are needed if a team is to be effective. So, you
might end up with a team from Design, Supply, Marketing, Sales, Delivery
and Administrative departments.
Purpose and performance go hand in hand. The specific performance
goal helps a team track progress and hold itself accountable; the sense of
purpose supplies both meaning and emotional energy.
Committed to a common approach requires team members to agree on
who will do what, what skills need to be developed, how continuing mem-
bership is to be earned, and how the group will make and modify its deci-
sions.
Mutual accountability, in which the teams hold themselves collectively
responsible for their team’s performance.
The two authors criticise many organisations for imprecise thinking about
teams, confusing it with teamwork, for example, and for the lack of disci-
pline in applying every aspect of their careful definition. They conclude:
We believe that the truly committed team is the most productive performance
unit (leaders) have at their disposal – provided there are specific results for
which the team is collectively responsible and provided the performance
ethics of the company demands those results.
Against this thought-provoking definition let’s go back to Figure 7.7.
Working groups
A working group relies primarily on the individual contributions of its

members for group performance. It is typically the committee formed by
the heads of each department whose bonuses may well be geared to the per-
formance of their own department. Thus, while they may liaise together to
resolve areas of friction and even brainstorm good ideas, they are essential-
ly concerned to protect their own activity. As the two authors point out,
rugged individuals – and there are many, especially at the top – cannot con-
tribute to real team performance without taking responsibility for their
peers, and letting their peers assume responsibility for them.
Pseudo team
The authors warn that there is a real danger that in trying to adopt a ‘team’
approach, people get diverted from their individual goals but are not willing
to commit to working as a real team. Hence their collective performance
drops.
Potential team
This is a team which is trying to improve results. But it requires more clarity
about its purpose and goals and more discipline in hammering out a common
working approach. Its members have not yet accepted collective responsibili-
ty. The authors add that such teams are to be found in many organisations.
Real team
This is a small number of people, with complementary skills, who are

equally committed to a common purpose, performance goals, and a working
approach for which they hold themselves mutually accountable. As shown
in the diagram, they can significantly improve performance.
High performance team
Even higher levels of performance can be achieved once the members of a

team get deeply committed to each other. Each generally helps the others to
achieve both personal and professional goals. The authors quote examples
of team members who paid for the training they felt they needed to keep up.
The authors describe how some team members tried to resign because they
felt they were letting the side down. Their colleagues refused to let them.
Instead, they provided the training, coaching and support they needed so
that they became truly competent members of the team. It would be great if
the same things happened in your own organisation.
THE WISDOM OF TEAMS

Summary of key lessons
A demanding performance challenge tends to create a team. No team

arises without a performance challenge that is meaningful to those
involved. In fact, teams often form around such challenges without any
help or support from management. Conversely, potential teams without
such challenges usually fail.
Leaders can foster team performance best by building a strong perfor-

mance ethic rather than promoting teams for the sake of teams. Real
teams are much more likely to flourish if leaders aim their sights on per-
formance results that balance the needs of customers, employees and
shareholders. Clarity of purpose and goals have tremendous power in our
change-driven world.
Individualism need not get in the way of team performance. Real teams
always find ways for each individual to contribute and thereby gain dis-
tinction. Indeed, when harnessed to a common team purpose and goals,
our need to distinguish ourselves as individuals becomes a powerful
engine.
Groups become teams through disciplined action. They shape a common
purpose, agree on performance goals, define a common working
approach, develop high levels of complementary skills and hold them-
selves mutually accountable for results. And, as with any effective disci-
pline, they never stop doing any of these things.
Source: The Wisdom of Teams by John Katzenbach and Douglas Smith, Harvard Business Press
Elite case study
One of their wide range of case studies mentions an American Regional

newspaper, The Democrat, which sought to resolve its problems – primarily
dissatisfied advertisers – by a reorganisation which failed. It then solved its
problems by creating a project team.
The team had a strong mix of skills (twelve of the best people from all
parts of the paper). It used their goal of eliminating errors to create the
name of Elite. Advertising accuracy, never before tracked, rose sharply and
stayed above 99 per cent. Lost revenue from errors, previously as high as
$10,000 a month, dropped to near zero. Advertiser satisfaction rocketed.
But the authors write that:
The impact of Elite went beyond numbers. It completely redesigned the
process by which the Democrat sells, creates, produces advertisements. It
stimulated and nurtured the customer obsession and cross-functional coopera-
tion required to make the new processes work. In effect, this team of MOST-
LY FRONT LINE WORKERS transformed an entire organisation with
respect to customer service.
We are back to our central theme. The front line can do it. I urge you to set
up a small team of people, buy them each a copy of this marvellous book,
and get them to research the basis on which high performance teams could
flourish in your organisation.
ENSURING YOU HAVE SKILLS TO WIN
Because most of us run a car, let’s use the example of a dealership. Most are
functionally organised with sales, service, bodyshop, parts and accounting
departments. What is, or should be, the role of a Sales Manager? It should be
to market (M) new and used cars through a good team of people (P), in a way
which achieves a financial result (F) based on good technical expertise (T).
If we then ask what are the key tasks of every other departmental manag-
er, we come up with the same three tasks of marketing, people and finance
based on sound technical expertise. But since sales, service and parts man-
agers tend to be promoted from salesmen, technicians and partsmen, they
are hardly likely to have these three skills. They have gained promotion
because of their ‘technical’ expertise.
Table 7.2 Functional or skills based?
Sales Service Bodyshop Parts Accounts Skills based
M M M M M Marketing coach
P P P P P People coach
F F F F F Database facilitator
T T T T T Team leaders
Functionally Based Approach
Looking at Table 7.2, is it logical to organise a dealership on the vertical,

functional basis, where all the managers lack the depth of expertise needed
in three crucial areas, or would you organise it on a horizontal basis, where
you still rely on the technical expertise of the departmental people by turn-
ing them into skilled coaches but ensure that they have the support they
need from a marketing coach, a people coach, and a database/information
facilitator?
Often this problem arises out of a misplaced sense of loyalty to the peo-
ple who have helped us to start our business. We want to promote them as a
reward. You may be lucky, you may have somebody with the capacity to
grow with you. Three of the people who first joined me in Devon at a junior
level have grown into valued senior colleagues. Equally, it is easy to pro-
mote somebody who is truly unable to cope, with the result that you block
out the possibility of recruiting somebody with the skills you need. It needs
very careful thought.
Figure 7.8 The customer focused business
Spearhead of your business
Looking at Figure 7.8, the spearhead of your business, of every business,

should be your marketing team. The core of your business should be a total-
ly integrated customer database, giving comprehensive profiles of every

customer, both individually and collectively in terms of the segments into
which they can be identified. The openings created by the marketing team
need to be followed up by the sales team and reinforced by the aftersales
team. The customer database and other essential information, including
financial information, should be coordinated by the ‘information facilitator’
(I would abolish the term ‘accountant’). Every member of the team should
be helped by a good coach, while the whole enterprise should be inspired
by and driven forward by a visionary leader.
To be successful, you have got to create a customer-focused, skills-based,
horizontal organisation – not, as so often happens, a technically based,
functionally-organised, vertical organisation.
The growth of our organisation will be related directly to the competen-
cies we can develop. Responsibility for developing these competencies
should be pushed down to our front-line colleagues. They should have the
challenge of creating the competencies they need, as a team, to achieve their
objectives.
Our role as senior executives is, first, to create the context within which
people can develop these competencies and then to ensure that they are
shared throughout the organisation by cross-flows of resources, knowledge,
and people.
VALUE ADDING SYSTEMS
When we were discussing re-engineering, did you notice the comment that
the research carried out by the authors found that ‘many tasks had nothing
to do with customer needs’? If data processing is geared towards providing
our front-line people with the information they need, fine. Too often our
data processing functions are geared to providing ‘wouldn’t it be nice to
know’ style information for bureaucratically-minded controllers.
Going back to ‘process mapping’, we have got to ensure that we provide
the front line with the information they need to add value to their customer-
facing activities, and that we, as senior executives, focus on measuring the
right results.
Nonsense of bottom line
Recently I sat in at the Board Meeting of a group of companies worried

about their lack of profitability. They spent several hours discussing their
‘management accounts’ which were not providing them with the answers
they needed.
It is a nonsense to talk, as some do, about being ‘bottom line driven’. The
bottom line is an ‘end result’. Fixed overheads are fixed. Variable overheads
vary with the level of sales. What matters is the ‘top line’. A friend became
a millionaire using a very simple formula. He had to make ten phonecalls to
gain an interview. From five interviews he would gain one sale. So his for-
mula was simple. Fifty phone calls, five interviews, one sale. Obviously, he
was selling a ‘large ticket’ item, but the principle is simple and applies to
every business.
What are the ‘Top Line Drivers’ of your business? How many phone
calls, or visits, do your sales team have to get to achieve a sale? How often
do you get invited to tender or quote for business and how frequently are
you successful? If your advertising is designed to get your potential cus-
tomers to phone you, how many of these incoming phone calls result in a
sale? Or, if you entice people into your showroom, how many are convert-
ed? How many of your customers do you retain?
In short, how much do you know about all your customer-related activi-
ties?
Customer-related measurements
Jan Carlzon15 has a very interesting cameo on the point I am trying to make.
For maximum efficiency and profitability, commercial airlines try to fill the
‘empty bellies’ of passenger planes with air cargo. So, SAS measured its
performance by the amount of freight carried and, typically, had a ‘yard-
stick’ on the percentage of space utilised, be it 60 per cent, 70 per cent, or
whatever. The kind of figures we have all seen.
But customers are not interested in space utilisation. They want prompt
deliveries to specified locations. Jan Carlzon ran a test. He arranged for 100
packages to be sent to various addresses throughout Europe. He admits that
‘the results were devastating’. All the parcels were due to arrive next day;
on average, it took four days.
He admits that SAS had caught itself in one of the most basic mistakes a
service-oriented business can make: promising one thing; measuring anoth-
er. They were promising prompt, precise delivery, yet they were merely
measuring their own cost-efficiencies. In fact, they had no system for track-
ing late deliveries.
He delegated the problem to the people at the front line. They devised a
QUALI CARGO system to measure the precision of their service. How
quickly did they answer the telephone? Did they meet the promised dead-
lines? Did the cargo actually arrive on the plane they had booked it on?
How long did it take from the time the plane landed until the cargo was
ready to be picked up by the customer?
I can only leave you with the question, Are your systems truly geared to
measuring effectively all the activities you undertake in relation to identify-
ing, attracting, satisfying and retaining customers? Or, are your systems
geared to providing your accountant with the information he needs for the
ritualised ‘post mortem’ on your monthly results (often bedevilled by argu-
ments on the basis on which ‘fixed’ costs have been allocated)?
Self measurement by front line
Let’s see the importance of your ‘Top Line Drivers’.

Charles Schwab became a millionaire running steel mills in America. He
once visited one of his furnaces and asked them how many ‘heats’ they had
achieved that shift. When they said six, he drew a large ‘six’ in chalk on the
floor. When the next shift arrived, they asked what it meant, and – to prove
they were better – they achieved seven, rubbed out their colleagues’ ‘six’
and proudly drew a large ‘seven’. Eventually the number of ‘heats’ achieved
grew to twelve. Charles Schwab doubled productivity by writing a number
in chalk on the floor!
How much scope do you have for devising similar, simple figures which
can be displayed easily in each location?
Visible management
The thing which most impressed me about my visit to the Nissan plant in
Sunderland was their system of what they call ‘visible management’. Each
team has its own ‘boardroom’ area, in which are displayed their crucial per-
formance yardsticks.
I took a close interest in some of the figures. I can’t forget my accounting
training. I pointed to some figures which appeared to be low. The executive
showing me around told me that I had committed a cardinal sin. The team in
that area had to be trusted to have enough pride to correct any area of under-
performance themselves. If management were to come round commenting
on poor figures, ‘creative accounting’ would take place, and the figures
would become meaningless. Leaders had to have enough trust and respect
for their people to accept that they were aware of the problem and would be
putting it right as soon as possible.
Nissan is achieving world-class performance in terms of productivity and
quality.
Progressive companies are adopting a technique called ABC: Activity,

Based, Costing, which has been described as the technique which ‘helps
companies become the one everyone else is copying’. The underlying prin-
ciple is as simple as Charles Schwab drawing a large chalk ‘six’ on the floor
of his steel mill.
Personalised information
This is the crucial issue. How can you provide your front-line people with
their own highly personalised information? Or, how can you personalise
existing information? One quick example. What is your debt collection peri-
od? It’s probably in your management reporting system as 60 days, 70 days,
whatever – yet another anonymous figure considered by ‘Head Office’. But
if Betty is the person in charge of collecting your debts, isn’t it better to
have a whiteboard note or chart on her office wall headed, ‘Betty’s Success
in Collecting our Money’. It comes back to how you can introduce concepts
of individualised, visible self management for the front-line people in your
organisation: those responsible for the ‘Top Line Drivers’ which will
achieve your Hard Results.
The third in the series of articles by Chris Bartlett and Sumantra Ghoshal6
points out that planning and control systems were once the tools that
enabled companies to grow. But the systems that allowed managers to con-
trol their employees also inhibited creativity and initiative. Today, they
claim the challenge is for leaders to engage the knowledge and skills of
everyone in what they call an ‘Individualised Corporation’.
They have conducted research into 20 high performing corporations.
They have concluded that systems, no matter how sophisticated, can never
replace the richness of close personal communication and contact between
leaders, coaches and front-line colleagues. In the successful corporations,
the leaders create an environment in which individuals monitor themselves.
It has been proved that, given the same information, incentives, and authori-
ty to act, front-line colleagues and coaches will reach the same decisions
that top level managers would have reached.
THE ORGANISATIONAL DILEMMA
Some years ago, a book appeared, Small is Beautiful27, which had a dramat-
ic impact. Its effects are still being seen today as industrial giants like ICI
and others start to hive off their activities. Small is Beautiful because it
motivates your front-line people and, as importantly, enables them to focus
on serving the special needs of a particular customer segment.
3M has achieved dramatic growth, not least by the ways in which it

focuses on innovation but by the way in which it then enables the people
who create the new product to turn it into a business unit for which they are
responsible.
ASEA Brown Boveri has split itself into 1300 separate operating compa-
nies on what is called a matrix structure. Thus the managers of each front-
line unit have to report both to a Regional Manager and to a world-wide
business head.
Percy Barnevik, Chief Executive, takes a dim view of complex, formal
business structures.
They tend to be slow, inflexible and bureaucratic. Worse still, such organisa-
tions create barriers between themselves and their customers, take initiative
away from those who need to exercise it, and attract and promote the type of
people who operate well in that kind of environment. We wanted to build an
organisation with the opposite characteristics. To be simultaneously global
and local, big and small, centralised and de-centralised.
To do this, Barnevik and his top management team have had to redefine key
organisational relationships and behaviours which has taken them several
years to accomplish.
Richard Pascale16 refers to the need for:
1. Fit
2. Split
3. Contend
4. Transcend.
Fit: This relates to the attempt we all make to ensure coherence and to
achieve synergy from a totally integrated organisation. This is not always
easy to achieve, as Richard Pascale points out. It can be achieved only by
ensuring that all twelve ingredients are blended correctly.
Split: To provide totally customised services to specific segments of our
customers can require teams of people dedicated to meeting specific needs.
You may have to find ways of splitting your organisation; though creating
separate subsidiaries can add to cost, not least in audit fees! You have to
develop new techniques for achieving synergy despite diversity. It may be
rather like managing one team playing rugby, while another is playing foot-
ball, another hockey, and yet another cricket, while every team is a member
of the same ‘club’ dedicated to winning.
Contention: is inevitable. Indeed, Richard Pascale feels it’s healthy in chal-
lenging your organisation to respond to its external competitive pressures.
Transcend: Is the ability which you, as the leader of your organisation, will
need to orchestrate these conflicting concepts of fit, split and contention. It
may require a totally different approach such as ‘Activity Based Costing’. It

will certainly require a totally different social architecture and mindset.
Federalism
Charles Handy is a highly respected guru whose books are always well
worth reading and I am grateful to the Financial Times for permission to
include a major quotation from one of his articles.
He writes:
Organisations could ultimately become a collection of project teams, harness-
ing the intellectual assets around a task or an assignment.
To the individual, the organisation will offer, not the promise of a planned
career, but a series of opportunities which one’s skill profile may or may not
fit. All the world will then, in a sense, be a stage: a sequence of teams with a
changing cast of performers, backed by a small continuing production team.
That will not be an easy or comfortable world, or even a very desirable one,
but the tide of technology and competition cannot be halted, even if you don’t
like the stuff it brings in with it. We must ride the tide, not fight it. The chal-
lenge for businesses will be to find ways to bind themselves to players on
whom they can depend for the future.
Good conditions of work and employment will not be enough, for there will
often be comparable ones around the corner. To be a ‘preferred employer’ it
would be necessary to make the vital staff into quasi-partners, with more
share ownership and bonus schemes, so that they share the future of the
organisation, good and bad, and to invest at the same time in the constant
regeneration of their intellectual assets, despite the possibility that the regen-
erated assets will leave.
It would not be unreasonable, for instance, to expect to invest the traditional
10 per cent depreciation (or regeneration) allowance of both time and salary
in the education and development of each individual. Keeping staff is one
thing, working them efficiently is another. Project leadership will become the
key to corporate performance.
To build a cohesive team out of the requisite mix of different roles and talents
is never easy, as any theatre director will confirm. Hierarchy cuts little ice
with stars, for as their leader you have only as much power and influence as
they allow you. Leadership in the world of people assets draws its power
from the people over whom it is exercised. It is a world where loyalty has to
be earned from the individual, not demanded. Do all this, and there is more.
A collection of project teams, no matter how well led and how well starred, is
not in itself an organisation. These teams have to be welded together to give
them the clout they need in the market.
The ‘intellectual organisation’ needs to be both small and big, local and glob-
al, tight and loose. It needs, in short, to be federal. Federalism is built on
shared power, compromise and negotiation. Unfamiliar, unpopular and hard
to make work, it is nevertheless the way all organisations are heading,
because centrally directed systems are too expensive, too often wrong, too
restrictive and too imprisoning for the human soul. When that human soul is
your key asset, you have to give it heed. To do that, and remain efficient, is
the leading challenge facing our organisations.
CREATING A WINNING CULTURE: THE RIGHT

SOCIAL ARCHITECTURE
Warren Bennis and Burt Nanus8 write:

The design and management of social architecture is one of the pivotal
responsibilities of the leader. Leaders who fail to take their social architecture
into account and yet try to change their organisations resemble ... King
Canute.
Leaders, Bennis, W and Nanus, B, Harper Row
You have to ask yourself what type of people you need to help you to
achieve your objectives: buffaloes or geese? You then have to ask yourself
what type of culture you need to create to get the best out of your people. In
their book, Bennis and Nanus give three types of social architecture, sum-
marised in Table 7.3.
Table 7.3 Three types of social architecture
Values/
Behaviour Formalistic Collegial Personalistic
Basis for decision Direction from authority Discussion, agreement Directions from within
Forms of control Rules, laws, rewards, Interpersonal group Actions aligned with
punishments commitments self-concept
Source of power Superior What ‘we’ think and What I think and feel
feel
Desired end Compliance Consensus Self-actualisation
To be avoided Deviation from Failure to reach Not being ‘true to
authoritative direction, consensus oneself’
taking risks
Position relative to Hierarchical Peer Individual
others
Human relationships Structured Group oriented Individually oriented
Basis for growth Following the Peer group member- Acting on awareness
established order ship of self
Source: Leaders, Warren Bennis and Burt Nanus, Harper Row

What type of social architecture do you feel you have at present? Which
of the three do you think will best help you to achieve your objectives?
The personalistic approach may suit a young boffin-type organisation, but
most should settle for the collegial style. In this, power, influence and status
are based on peer recognition which, in turn, is based on how competent
people are thought to be, and on their interpersonal skills. We are back to
our earlier discussion on assertiveness and contention. Warren Bennis and
Burt Nanus write:
People are expected to fight hard for what they believe in, but to fight in an
above board, open, clear and clean fashion.
The important point is that decision making is participative and based on
encouraging the flow of ideas across, up and down the organisation so that
all people who implement, or are affected by, a decision have a say. The
operating principle of such companies is to ‘strive for excellence’. It
requires a high level of interdependence among teams and individuals.
Mindset/paradigm
We are back to the critically important issue of the attitudes, the mindset,
the paradigm of your organisation. The two senior executives of the Kepner-
Tregoe management consultancy, which specialises in the human dimen-
sions of organisational change, summarise the fundamental difference in
mindset shown in Table 7.4.
Table 7.4 Differing attitudes
Mechanistic
organisation People-wise organisation
Defining principle A set of structures and A community of people

systems
Main thrust Efficiency Creating and deployment of
knowledge
Approach to change Re-engineer, and the Prepare people for change
people will follow
Time frame Do it now Do it forever
Competitive Business systems, People – their knowledge
advantage processes and and skills
structures
Impact Under-utilises human Diffuses responsibility
potential
Key job requirements Technical skills Critical thinking, intuition,
experience – and technical skills
Result Dependability Commitment
First we have to change our own mindset, second change the mindset of our
missionaries, and third change the mindset of our executives. In most organ-
isations, front-line people are only too willing to respond once they test the
sincerity of their leader’s values and beliefs.
WINNING MEANS CHANGE
Very few people like change. Sir Brian Wolfson once said, ‘The only people
who like change are wet babies’. But our customers are changing, our com-
petitors are changing, the environment is changing, the whole world is
changing.
To create and sustain your competitive advantage, you have got to find
ways of focusing people on change. Ideally, you must get them to initiate
the responses they feel necessary. It is your ultimate responsibility to inter-
vene directly to shake up operating units that may have grown staid or com-
fortable. The theme of Richard Pascale’s book16 is that ‘nothing fails like
success’. GM and IBM were once companies with a dominant market share.
They grew staid and comfortable. They are now having to fight hard to
recover lost ground. They have years of accumulated reserves to help them
survive the process. Smaller companies do not. You cannot afford to lose
ground in this way. You have to make sure you have a deliberate policy of
creating the social architecture, the mindset needed to ensure that you take
Jack Welch’s advice of ‘change before you have to’.
IT’S BACK TO LEADERSHIP
A friend of mine runs a group with over 100 subsidiaries. If he has one
doing exceptionally well, and one doing very badly, it’s a reflection of the
manager concerned. If he were to switch the two managers, the high per-
forming company would go downhill, while the results of the poorly per-
forming company would rocket upwards.
Robert Heller and Ian Carling make the same point in their book13. If you
take an interest in sport, how often have you seen a team languishing at the
bottom of the relevant table, shoot to the top when a new, more effective
leader is appointed?
In 1989, ABB acquired part of Westinghouse’s troubled power transmis-
sion and distribution business. It was a mature activity with an ageing prod-
uct line that generated only modest products and expected only limited
growth. Yet, within three years of being integrated within ABB, the unit was
behaving like a young growth company. Operating profits had doubled, and
with the help of its sister companies, the unit had developed a significant
new capability in microprocessor based relay technology. The General
Manager was the same man who had been running the business for
Westinghouse. But he has been transformed by ABB’s culture.
The result you get from your people, and your executives, rests entirely
upon the structures, the systems, and the cultures which you generate.
TIME, THE ESSENTIAL INGREDIENT
I had lunch recently with a dynamic young tycoon who is thoroughly enjoy-
ing the frenetic pace at which he is chasing his tail, acquiring companies
and developing his group. He is on a real ‘high’ but I warned him that he
was on a slippery slope to potential disaster.
As he was honest enough to admit, he did not have enough time to com-
municate his vision to the senior executives of the companies he has
acquired. While they were doing a sound competent job on their own, they
were not developing the dynamic growth which should result from the syn-
ergy which should be being established.
I told him that to really grow his business he had to devote at least 40 to
50 per cent of his time on communicating his vision, talking to and develop-
ing his senior executives.
Percy Barnevik’s fundamental objective in developing ABB’s decen-
tralised organisation was to modify the behaviour and transform the under-
lying values of all their people world-wide. To achieve that objective, he
and his top management team spent most of their time, for more than five
years, improving organisational processes designed to encourage entrepre-
neurship from those closest to customers: to integrate and leverage the
resources and capabilities developed in the front-line units into a company-
wide asset; and, most of all, to ensure ABB’s commitment to a continuous
renewal process.
ROLE OF HEAD OFFICE
If you now accept the importance of leadership, the role of your ‘Head
Office’ has a tremendous impact. It helps to set the culture, the social archi-
tecture, of your organisation.
The General Motors Headquarters in Detroit was notorious for its bureau-
cracy, for stifling dissension and blocking any attempt to adapt to increas-
ingly severe competition. One of the first things the new Chairman, Jack
Smith, did was to move his office to the GM Technical Centre ten miles
away to symbolise his desire to be close to the action. GM’s results are
improving.
CONCLUSION
Table 7.5 may help to encapsulate the points we have been discussing.
Table 7.5 Creating a winning culture
FROM TO
Top-down organisation Upturned organisation
Many levels Few levels
Narrow spans of control Wide spans of control
Tightly defined departments Boundarylessness
Teams of specialists and teams of skills Mix of specialists and skills in process
focused teams
Tightly controlled individuals Self-led, autonomous teams focused on

concentrating on tasks contribution
Line managers Coaches
Staff-specialists Facilitators
Directors Leaders
Excessive concern with titles and rank Concern to gain respect for contribution
to team
Achievement of budgets of department Achievement of customer satisfaction,

goals and vision of organisation
Large corporate power-broking Lean Head Office ensuring horizontal

Head Office allocating physical and integration of cross-organisation
financial resources of plans, coaching, technology and skills transfers
controls and information to aid process of continuous organisa-
tional learning
LEAN THINKING
In their book Lean Thinking,28 Dan Jones and James Womack stress the
need to optimise the ‘value stream’ of every process needed to satisfy cus-
tomers. Thus one example they give is that it can take between 300 and 400
days to make a tin can, though the actual processes only take three hours.
Every organisation involved has large warehouses full of the materials they
need and the products they produce. If every organisation involved could
operate their ‘lean thinking’ approach of looking at the efficiency of the
entire ‘value stream’, tremendous savings could be achieved by every par-
ticipant, particularly in warehousing costs.
Figure 7.9 Lean Thinking

Designing a Superior Organisation
ᔡ Is there any possibility that you have a traditional, bureaucratic bot-

tom-line driven organisation, with emphasis upon titles and depart-
mentalisation? The equivalent of our drawing of six blindfolded
horses? If so, do you and your team accept the need for change to the
equivalent to four clear-sighted, self-motivated horses? If so, how do
you set about starting the process of change?
ᔡ What style of ‘social architecture’ do you feel that you have in your
organisation at present? Is it appropriate? If you feel another style
would be more appropriate, how would you introduce the change?
ᔡ In your particular circumstances, do you need to concentrate on
improving the effectiveness of your ‘working groups’, or are you pre-
pared to accept the challenge of seeking to build ‘high performance
teams’? Do you need a special project team to look at how you
achieve this change (basing their work on The Wisdom of Teams)?
ᔡ Do you need the same, or a different project team, to study the book
on Re-engineering the Corporation, and to recommend to you how to
apply its principles in your own organisation?
ᔡ Do you need to break away from traditional departments, by creating
cross-functional teams focusing on value added processes or specific
customer segments? If not, how could you do so in future?
ᔡ Do you motivate all your colleagues by projecting your organisation in
such a way that they can see the importance and value of their own
specific contributions? If not, how could you do so in future?
ᔡ How relevant are Richard Pascale’s ideas on ‘fit’, ‘split’, ‘contend’ and
‘transcend’ in terms of creating a totally new mindset of the way you
and your team approach organisational issues? (Do you or a project
team need to study his book, Managing on the Edge, in greater
depth?)
ᔡ Have you created a ‘lean’ Head Office which seeks horizontal integra-
tion to ensure continuous organisation learning? If not, how do you
and your team intend to do so?
ᔡ Do you think ‘lean’? Should you establish a project team to study how
to apply the recommendation of ‘lean thinking’?
8
BUILDING A WINNING
ORGANISATION
A STRATEGIC ACTIVITY
If we accept that to gain a strategic advantage we have to focus on people,

then every activity related to building your organisation is of strategic
importance. But under the day-to-day pressure of striving to ‘manage’ busi-
ness, these strategically important activities are often perceived to be irritat-
ing interruptions amid all the other pressures.
There are nine activities to be considered:
1. Attitudes
2. Capacities
3. Recruitment
4. Induction
5. Reviews
6. Promotion
7. Demotion
8. Progression
9. Pruning.
In addition, there is the vital tenth activity of TEAM BUILDING.
These activities have to be carried out so thoroughly that not only do you
achieve hard results but, just as importantly, you have time for the real role
of the visionary leader.
ATTITUDES: FOUNDATION FOR SUCCESS
When Toyota started recruiting for their new plant at Burnaston, they were
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 129
overwhelmed with a flood of applications. For their initial screening they

totally ignored technical qualifications, looking only at the attitudes of the
applicants. Those they deemed to have the wrong attitudes were not consid-
ered. Those that had the right attitudes were then considered on the basis of
their technical qualifications and competencies.
Dentsu’s ten rules of the demon
Dentsu is one of the largest advertising agencies in the world and controls a
significant share of all advertising in Japan. Its guiding precepts were set
out by its Chairman, Hideo Yoshida. They focus on a successful Dentsu per-
son. Should you not evolve similar ‘rules’ for your own organisation?
1. Initiate projects on your own instead of waiting for work to be assigned.
2. Take an active role in all your endeavours, not passive.
3. Search for large and complex challenges.
4. Welcome difficult assignments. Progress lies in accomplishing difficult
work.
5. Once you begin a task, complete it. Never give up.
6. Lead and set an example for your fellow workers.
7. Set goals for yourself to ensure a constant sense of purpose. This will
give you perseverance, resourcefulness and hope.
8. Move with confidence. It gives your work focus and substance.
9. At all times, challenge yourself to think creatively and find new
solutions.
10. When confrontation is necessary, don’t shy away from it. Confrontation
is the mother of progress and the fertiliser of an aggressive enterprise. If
you fear conflict, it will make you timid and irresolute.
In Re-engineering the Corporation5, Michael Hammer and James Champy

make the point that in a reorganised organisation, colleagues should hold
beliefs such as:
ᔡ Customers pay all our salaries: I must do what it takes to please them.
ᔡ Every job in this company is essential and important: I do make a
difference.
ᔡ Showing up is no accomplishment: I get paid for the value I create.
ᔡ The buck stops here: I must accept ownership of problems and get them
solved.
ᔡ I belong to a team; we fail or we succeed together.
ᔡ Nobody knows what tomorrow holds: constant learning is part of my job.
This implies, of course, that we need to make far greater use of psychologi-
cal and similar tests to ensure we recruit those with the attitudes we require.
The Test Agency, near High Wycombe, once helped a major client by
testing all the organisation’s most successful sales people. Interestingly, the
one feature which all their top sales people shared was ‘conscientiousness’.
Building a profile in this way of the attitudes and competencies of your
more successful colleagues, can help to determine the profile of those you
need to recruit or promote.
Again, it is the ideal topic to be discussed extensively within your own
organisation, at in-company briefing sessions or in-company training cours-
es. Everyone should be well aware of the attitudes expected from every
member of the team.
Surveying attitudes
In 1992, Rank Xerox won the European Quality Award – the first year the
award was granted.
In their very impressive submission to the EFQM, Rank Xerox described
their ten year journey to become a quality company. They described how, in
1982, they had measured the performance of their business against four
measures. These were:
1. Growth – measured by market share.
2. Profitability – measured by earnings per share.
3. Customer satisfaction – measured by appropriate indices.
4. Employee satisfaction – measured by appropriate indices.
By the time they reached 1992, they reported that they learned that if they
concentrated totally on points 3, customer satisfaction and 4, employee sat-
isfaction, then points 1 and 2 seemed to take care of themselves.
As my friend Martin Wibberley points out, it illustrates the importance
that one world-class company gives to carefully measuring and acting on
customer satisfaction and employee satisfaction. In fact, the two are linked.
It has been suggested that in future, 40 per cent of the money spent on mar-
keting will be on ‘internal marketing’ to employees, on whom the success
of the company depends.
Martin points out that one of the most skilled retailers in the UK spends
almost nothing on advertising, but it spends hugely on ensuring employee
commitment. So, tracking corporate culture (an issue we have yet to discuss)
and employee attitudes and acting on results is an important strategic issue.
When Martin was with Allied Dunbar (from 1993–1995) they instigated
an annual measuring process (dubbed VIVA) to become part of an integrat-
ed programme of measuring the movement they wanted to make towards
becoming ‘market led’. I am grateful to Martin and to Allied Dunbar for

permission to reproduce a section of the questionnaire (Table 8.1).
Table 8.1 Extract from Allied Dunbar Employee Survey

My view and values Strongly Agree Disagree Strongly Don’t Don’t
agree disagree know care
1. I enjoy the company of people I work with 1 2 3 4 5 6

2. Allied Dunbar is one of the leading UK Financial 1 2 3 4 5 6
Services companies
3. My job makes good use of my abilities 1 2 3 4 5 6
4. I am learning through my present job 1 2 3 4 5 6
5. I am put in the picture about Allied Dunbar’s 1 2 3 4 5 6
Corporate plans and performance
6. I have confidence in the management ability of my 1 2 3 4 5 6
immediate boss
7. Allied Dunbar is committed to satisfying needs and 1 2 3 4 5 6
wants of consumers and clients
8. There is good cooperation among the people I work with 1 2 3 4 5 6
9. I’m proud to tell people I’m part of Allied Dunbar 1 2 3 4 5 6
10. People in Allied Dunbar can be trusted 1 2 3 4 5 6
11. I’m building the career I want inside Allied Dunbar 1 2 3 4 5 6
12. I get a fair reward for my effort 1 2 3 4 5 6
13. I am put in the picture about issues that directly affect 1 2 3 4 5 6
my work
14. I have confidence in the fairness of my immediate manager 1 2 3 4 5 6
15. My physical working conditions are OK 1 2 3 4 5 6
16. People in Allied Dunbar generally know what they are doing 1 2 3 4 5 6
17. Allied Dunbar has a clear set of corporate values or beliefs 1 2 3 4 5 6
18. Please list what you think Allied Dunbar’s corporate
values are:
19. Our team is well organised to achieve results 1 2 3 4 5 6
20. Allied Dunbar provides value for money products and service 1 2 3 4 5 6
21. I am encouraged to contribute my ideas towards 1 2 3 4 5 6
improving things
22. People in Allied Dunbar are generally energetic and 1 2 3 4 5 6
enthusiastic
23. Open and honest two-way communication is 1 2 3 4 5 6
encouraged around here
24. My manager has communicated clearly the results that 1 2 3 4 5 6
are expected of me
25. I feel that high achievers get appropriate recognition 1 2 3 4 5 6
and reward in Allied Dunbar
26. Allied Dunbar’s top management is capable of building 1 2 3 4 5 6
a successful long-term future
27. Allied Dunbar’s corporate values are relevant to future 1 2 3 4 5 6
business success
28. I get the support I need from other parts of the 1 2 3 4 5 6
organisation to do a good job
29. Allied Dunbar has a good range of products 1 2 3 4 5 6
30. I get regular and accurate feedback on how I’m performing 1 2 3 4 5 6
31. I’m committed to Allied Dunbar’s corporate values 1 2 3 4 5 6
32. It’s OK to confront issues in Allied Dunbar 1 2 3 4 5 6
33. I like Allied Dunbar’s approach to Conventions for top 1 2 3 4 5 6
sales achievers
34. People inside Allied Dunbar behave in a way which is 1 2 3 4 5 6
consistent with our corporate values
35. People inside Allied Dunbar are committed to helping 1 2 3 4 5 6
the Company achieve its objectives
COMPETENCIES AND CAPACITIES
If their attitudes are right, people can be developed. But, clearly, it is impor-
tant to ensure that they have the right level of competence in relation to the
team of people they will be joining. Given the discussion we have just had
on the need to rethink your structure, you may need to rethink the compe-
tencies you will need as you work towards establishing your lean, horizon-
tal, boundaryless, customer-focused organisation.
The authors of Re-Engineering5 raised the issue of moving from training
to education. As they point out, ‘training increases skills and competencies
and teaches employees the “how” of a job. Education increases their
insights and understanding and teaches the “why”.’
Earlier, we agreed that what we needed to do was to create ‘effective fol-
lowers’. You have to ask yourself whether each recruit has the capacity to be
developed into an effective follower.
‘Change agents’
Like most organisations, you are bound to have some long-established

‘characters’ with, perhaps, some deeply ingrained, irritating attitudes or
habits you may be unwilling or unable to move. This is not to say that, if
necessary, you should not reorganise and restructure, even if it does cause
disruption. But, quite definitely, every recruitment or promotion window
must be used by you to change your organisation.
The ultimate responsibility
Before we move on to other issues of building a superior organisation, there

is one salutary point to consider:
If the person was wrong to start with, we are to blame.
If the person was right to start with, but then failed to perform, we
are to blame.
So when we, or one of our subordinates, criticises the performance of one
of their subordinates, we all have to remember that they are criticising
themselves.
Our success depends on having the right people. If we have, then we have
no problems other than the pleasant task of coaching even better performance.
If we have a problem, the nagging concern of a poor performer, it is because
we have failed to spend enough time on all the issues we are discussing.
If you now accept that you will need to move your organisation from indi-
viduals performing tasks to teams performing processes, then you may have
to have a fundamental rethink about the type of people you wish to recruit
or promote, and will need to place far more emphasis on recruiting good
team players.
RECRUITING THE BEST
There are many excellent guides to recruitment so I do not want to take up

time unnecessarily.
First, let us re-emphasise the importance of devoting enough effort. I
once worked out that if a sales team leader were to achieve ‘top quartile’
results, he and his team could achieve a gross profit of nearly £1 million. If
he and his team only achieved ‘bottom quartile’ results, they would only
earn a gross profit of £0.25m: a difference of £0.75m. Assuming he was in
his post for an average of three years, this would make a difference of
£2.25m!
If a company were to spend this sum on any other activity, days, if not
months, would be spent. Yet the same amount of effort is not devoted when
recruiting an executive who could either make or lose the organisation
£2.25m.
When Toyota first opened its plant in Derby, some papers criticised the
fact that it spent an average of 14 hours interviewing each person. I did not
see why. It demonstrated great professionalism and a high level of ethics. It
is vital to your organisation to recruit the right person. Nothing is worse
than recruiting somebody who is not good enough to keep, nor bad enough
to sack. It is equally important for the person selected to ensure that they are
making the right decision for themselves and for their families. They should
not be put through the disruption of changing to a job for which they are not
truly suited.
Compatibility
In earlier sections, we have discussed the need for our colleagues to share
our vision, our values, and our goals. It follows that when we recruit a new
member of our team, these ingredients need to be discussed fully.
ᔡ Which of the applicants is most excited by your sense of vision: which
of them shares your values and beliefs? You need to spend time on this
issue alone.
ᔡ Which of them appreciates the strategies you are trying to adopt to
achieve your objectives? Can they appreciate them; more than this, can
they make comments about how they can see themselves adding value
to their achievements?
ᔡ Do they appreciate that they will be expected to be assertive and con-
tentious, would they be willing to speak their minds, and play their part
as an effective member of the team?
ᔡ Would they be willing to share their knowledge with, and learn from,
their colleagues in your open organisation?
ᔡ In short, how compatible are they to the ideals you are striving to
achieve?
We send all our shortlisted applicants a copy of our ‘Company Charter’ with
a covering letter explaining that we are willing to provide them with 110 per
cent support, provided they can promise us 110 per cent commitment. In
fact, we stress that they should not take their application any further unless
they are prepared to do so.
Competencies
When I was more actively involved in running seminars, I used to talk about
the eight hour interview. The executives on the course would express sur-
prise and ask why it should take so long. I then used to set them the exercise
of defining the questions they needed to ask to determine whether an appli-
cant was likely to achieve all the goals he or she would be set. Invariably,
they ran out of time in seeking to define these questions.
In the case of a Sales Manager, does he understand all the issues arising
from every aspect of identifying, attracting, satisfying and retaining cus-
tomers, including gaining referrals from satisfied customers? How good is
he at team building issues? Does he understand all the financial implica-
tions?
Collective approach
Recruitment should involve as many people as possible. Ideally, the team

needing the recruit should do the recruitment themselves. It should be a
team effort. The chauffeur who meets them at the station, the receptionist
who receives them, the secretary who gives them the initial tour of the
building, the people to whom they are introduced on the tour, everyone
should have an input. I am always amazed how otherwise sensible people
‘let their hair down’ with my Secretary or other front-line colleagues as if
they ‘do not count’.
Testing
In my view, it is absolutely essential that you get the best possible advice
from a professional organisation on the best type of psychological or other
tests to use to avoid the element of ‘double bluff’ which can otherwise creep
in.
Demonstrating an edge
How far can you get people to demonstrate whether or not they have the
edge over their rivals? Can you, in your advertisement, set an exercise along
the following lines:
Given your experience of the type of position for which you are applying, can
you set out the two, three, or four things which, in your experience, are cru-
cial to achieving success?
Can you send selected respondents some form of test? If we are seeking
an editor, we ask for copies of articles of which they are proud. If we are
seeking an abstractor, we send them a selection of articles and ask them to
abstract. What can you do to get people to demonstrate an edge?
Trial period
Everyone should join for an initial trial period. It should be a real trial peri-
od. It should be made plain that their performance will be reassessed at the
end of three or four months. Applicants should be warned that if they are
not up to par by the end of the trial period, then, while consideration might
be given to extending the trial, they will probably be asked to leave. You
cannot afford to carry people unable to achieve the competencies required
by their peers.
‘Working initially as’
The final point is that the contract of employment of any new colleague
should be phrased to say that they will ‘work initially as ...’, implying that
in a rapidly changing environment their roles will also change.
Supervision at Nissan
Peter Wickens was Director of Personnel at the time that Nissan was being
established in Sunderland. He wrote about his experiences in The Road to
Nissan29. The section of the book I found of particular interest was where he
described how they set about recruiting supervisors. They decided to do
everything possible to minimise the chances of making mistakes. They
therefore developed their own assessment centre, a technique whereby a
number of candidates undertake a variety of tasks so that their performance
can be judged by various people from different angles. Peter writes that:
There is no doubt that the assessment centre process is both time-consuming
and expensive. However, at the end of the process, when we have spent some-
thing over one hundred manager days selecting twenty-two supervisors, the
effect on the participating managers was like a conversion on the road to
Damascus. To them, now, there is no other effective method.
There is a cautionary note on Nissan recruitment advertisement: ‘Very few
people will reach our standards’, which has significant implications for
society as a whole.
MOTIVATION BY SUPERIOR INDUCTION
If insufficient time is taken on recruitment, even less is taken with induc-

tion. Often the new recruit feels totally demotivated by lunchtime on the
first day. Having taken a great deal of care to recruit people who share our
philosophies, and are committed to our strategies, it is vital that we turn
them into enthusiastic ‘missionaries’ when they join. We need to ‘fire them
up’ during a carefully structured induction programme.
It is the mark of a truly professional organisation that they are equally
concerned to provide in-depth induction to temporary workers. Thus the
Disney organisation has a high labour turnover but every new person is
inducted as thoroughly as if they were likely to remain with the company
for 25 years. MacDonalds do the same.
When Martin Wibberley started the Robert Bosch green field site in
Wales, he arranged a two-week induction programme. A cleaner, speaking
of his induction course, said: ‘It was the best fortnight I ever had – no one
has treated me like this before – I am involved and part of the organisation.’
What a wonderful quote. Wouldn’t it be great if every new recruit is given a
‘mentor’ to help them through their first few weeks.
At Lawrence of Kemnay, Elaine Creighton has developed a different one-
month induction programme for every department (Table 8.2). This includes
an effective set of exercises to make sure that new colleagues can find their
way around the business, transfer phone calls, in fact everything they need
to know to settle in successfully.
Table 8.2 Induction at Lawrence of Kemnay
Service Department On Job Training – Week One

Name:__________________________________
Be able to: Trainee’s Trainer’s

initials initials
1. Transfer a phone call from one department to another
2 Find out where the Yellow Pages/phone books are kept
in your department
3. Answer the telephone in your department in a polite and
courteous manner
4. Name the two telephonists
5. Know what number to dial to get through switchboard
6. Find out where to get a brochure on a new car
COACHING PERFORMANCE REGULARLY
I do not believe in the traditional, bureaucratic job description. The ‘psycho-

logical contract’ between the colleague and the company can be explained
in a Company Charter. Everything relating to the standard terms and condi-
tions of employment can be spelt out in a standard manner.
What every single member of our team needs is a straightforward, quanti-
fied explanation of the one, two or three ‘key tasks’ they and their fellow
team members are expected to achieve.
Sustaining performance
We have to create mechanisms by which we can sustain performance by

regular coaching. Hopefully, we can create a climate in which every team
member can receive on-going coaching from their peers, their team leader,
and from the organisation’s coaches and facilitators. Nonetheless, I fervent-
ly believe that every one of our colleagues deserves the opportunity of a
regular ‘heart-to-heart’ with their immediate team leader.
Creating the performance ethic
The objective is simple: to help each colleague to perform better so that

they can derive greater satisfaction from feeling a valued member of the
team. To thank and praise them for what they have done well. To ask them
what help they need from us to perform better. Are there some frustrations
we can remove? What are they doing to help themselves to sustain their
own ‘self-employability’: is there anything we can do to help? Have they
any talents which are not yet being fully utilised, and if so, what do we or
they have to do to stretch these talents to the full?
I do not see criticism as an element of any review meeting. Every execu-
tive has to accept total responsibility for the performance of his subordi-
nates. If they are underperforming, he has to reflect on what he has done, or
failed to do, to achieve the right levels of commitment and motivation. If
necessary, it is up to the appraiser to apologise for letting down his subordi-
nate. The objective is to build both confidence and competence: the under-
lying philosophy we should adopt towards every colleague.
This is not to say that there should not be straight talking. Issues of
underperformance need to be tackled head on. But if the right people have
been recruited, or promoted, then they should respond to positive coun-
selling.
Frequency
If we go back to the point with which we started, moving our colleague

commitment index from 50 per cent to near 100 per cent justifies a perfor-
mance review meeting every four months. Yes, I know it takes a lot of time
but it is the way to get hard results. It’s part of creating the open, learning,
contentious organisation.
Ranking
One of the things we developed during our monthly company meetings was
our Company Charter, which spelt out our Performance Review procedures.
We agreed that our colleagues should be ranked out of five in terms of com-
petence, and out of ten in terms of attitude. The rankings were then consid-
ered at the Board Meeting following the series of reviews. I felt them to be
of tremendous importance.
Many executives hate the process of ‘playing God’. Undoubtedly, it
reflects on them. If they give low marks, then they are clearly not develop-
ing their people. High marks are only acceptable if their activity is exceed-
ing its performance objectives. I was interested to see that Jack Welch of
GE and Sir Peter Bonfield, the former Chief Executive of ICL, both had to
take a very strong line on this issue with their own executives. Jack Welch
writes:
We had a long discussion about this in GE. How can you put a number on
how open people are, how directly they face reality? Well, they are going to
have to give the best numbers they can come up with, and then argue about
them. We have to know if our people are open and self-confident: if they
believe in honest communication and quick action. If the people we hired
years ago have changed. The only way to test our progress is through regular
evaluation.
Self assessment
There is certainly a great deal to be said for moving away from the hierar-
chical, military style, appraisals. I am advocating a much more collegial
approach, a two-way process. This leads on to the concept of self assess-
ment which Ralph Stayer has done with his team, as you will see from the
short cameo case study below1. Note the final paragraph of:
‘Workers invented it, administer it, revise it, and the person in charge is an
hourly paid worker.’
JOHNSONVILLE SAUSAGE COMPANY
Ralph Stayer’s 300 wage earners evaluate their own performance every
six months, assessing themselves on a scale of 1 to 9 in 17 specific areas.
Each member’s coach (immediate superior) fills out an identical form, and
later both people sit down together and discuss all 17 areas. In cases of
disagreement, the rule is only that their overall point totals must agree
within 9 points, whereupon the two totals are averaged to reach a final
score. If the gap is bigger, an arbitration group is available, but, so far,
has not been needed. The marks are then grouped into five categories of
performance, superior, better than average, average, below average, and
poor (those likely to lose their jobs).
The total pool of profit available is then shared between the workers,
average performers getting 100 per cent of the average share but superi-
or performers getting 125 per cent of the average share, while below
average performers may only get 95 per cent or 75 per cent of the aver-
age share.
Ralph Stayer admits that some people do complain but they then try to
help the individual concerned to improve his or her performance. Overall
satisfaction is high primarily because fellow workers invented it,
administer it, and constantly revise it in an effort to make it more
equitable. The person currently in charge of the Johnsonville profit-shar-
ing team is an hourly paid worker from the shipping department.
Upward assessment
Perhaps another more challenging technique is ‘upward assessment’ where

people assess their immediate supervisor. Clearly this has to start from the
top and work downwards.
When I met George Simpson, then Chief Executive of Lucas, he had just
had his ‘upward assessment’ carried out by his immediate colleagues as the
first step in cascading the concept throughout his organisation. It takes
courage but it can be an extremely worthwhile exercise.
PROMOTING THE RIGHT PEOPLE
Peter Principle
We are back to the Peter Principle, the mistake we all make in terms of not
devoting enough time to the act of promotion; with the result that we end up
promoting someone to their level of incompetence. The common mistake is
to assume that we know the person concerned. He or she may have worked
with us for some time. So, we assume that he or she will be able to take
over a much more demanding, or even a totally different job. You may have
seen that the word assume can be broken down into making an ASS of ‘U’
and ME.
Critically important task
If the success of your business depends on the attitudes and competencies

of the team members you recruit, its success depends even more on the atti-
tudes and the competencies of the team leaders, coaches and facilitators you
appoint. This is what happened at Ford in the late 1980s. Don Petersen used
the granting of promotion or the withholding of promotion as a potent tool
to build a team of executives willing to help him to transform Ford.
Leading change
We have agreed, I hope, that we need to abandon the transactional concept

of a ‘manager’ who plans, directs and controls. We need transformational
leaders willing to create effective followers. So, we have to think through
the attributes of those we wish to promote, as David Oldroyd of Ixion
Motor Group has done.
Table 8.3 Promotion: Defining attributes of a successful General Manager
Criteria Definitions
1. Low cynical views Open to new approaches

Not rely on the tried and tested
Not play the role of the negative critic
2. Low change uncertainty Low needs and reliance on structure
Flexibility in responding to change
Reduced need to minimise unpredictability
Lower levels of caution, reticence to shift
plans, etc
3. High self-confidence and self- Good personal morale
esteem Genuine self-confidence
Balanced stability and objectivity
Trial period
I have known people go home on a Friday to tell their wife ‘I have been
promoted’. When the wife asked what that meant, they have not been able
to tell her. They themselves have not been told. We cannot afford the situa-
tion where, because everybody is under pressure ‘managing’, people are
thrown in the deep end.
Leaders must ensure pre-promotion, induction, and post-promotion sup-
port. Everything possible must be done to ensure that it works, but it must
be for an initial trial period. It can be presented as part of the colleague’s
management development programme. If it works well, then he will be con-
firmed in the appointment. But if it does not look like working effectively,
then he must revert to his previous position until such time as he can be
given another opportunity.
One thing is certain, we cannot afford to leave people in any position in
which they cannot achieve the level of contribution needed if your organisa-
tion is to achieve its objectives.
DEMOTION
If we do make a mistake, the person concerned has to be demoted. We cover

this in our Charter.
You can be sure that the leaders of our company will be keen to provide every
effective form of help, coaching and counselling to ensure that you can han-
dle your promotion effectively and successfully. But it would be unfair to
you, your team, and to our company to allow you to retain your position, if,
in the event, you found that you lacked the confidence or the competence to
handle the work effectively.
In this event, you would be expected to relinquish your appointment voluntar-
ily until such time as you have gained the experience and training needed to
be considered for a future vacancy of the same, or a different nature.
CMG case study
The computer management group CMG is owned and controlled by its

workers. All decisions are made in a very open manner. People are promot-
ed and demoted at meetings of an appropriate committee. CMG is open and
frank about non-performance. In the words of one former executive, ‘The
process reduced the loss of face by encouraging honesty.’
An executive who is now a Managing Director suffered a demotion when

he was a more junior executive. He recalls:
It was tremendously disappointing at the time – but I had a big shareholding.
So, I wanted the company to do well. Not just me. I just didn’t know what I
was doing. Demotion was better than the sack.
CMG is a particularly progressive company. The executive’s reaction was
affected by being a shareholder. Nonetheless, every company must take a
similar tough line. The pressure on us is such that we cannot carry passen-
gers. We cannot afford underperformance. Above all, it is a betrayal to all
who are ‘working their socks off’ if they see that we are prepared to tolerate
underperformance by others.
PROGRESS INDEPENDENT OF PROMOTION
We have agreed already that we need a very lean organisation with very few
levels of management. One finance house cut its levels from fourteen to
four! We have to find a way of finding progression independent of promo-
tion and self-esteem independent of titles.
Empowerment
For your people to feel that they are ‘in charge’ of their own destinies, and they
can make a difference to how your company performs, is highly motivational.
Leadership at every level
Hopefully, you have agreed that the way forward is to work towards the cre-
ation of teams at every level of your organisation. This offers the opportuni-
ty of progression to a ‘team leader’ role. However, the authors of The
Wisdom of Teams26 comment that as a team develops, leadership becomes
shared across the entire team. We are back to our ‘flock of geese’, taking
turns to take the lead as and when necessary. So, teams become an invalu-
able way of ensuring leadership at every level.
Self development
Secondly, teams become a powerful agent for self development. At

Motorola, a member of one team, who could not read, asked to be replaced
so she would not slow down the rest of the team. The team insisted on
teaching her to read and went on to achieve its goals.
Just as importantly, team members often develop interchangeable skills.
One team started with seven men focusing on the seven activities of market-
ing, operations, sales, strategy, finance and planning. It was not long before
they were developing interchangeable skills which reinforced their mutual
confidence and capability and gave them greater flexibility than they would
otherwise have had.
Recognition
Teams exploit the power of positive feedback, recognition and reward. The
benefits of this extend to people at every level. Some teams showed great
sensitivity towards developing the shy members of their team. Successful
leaders would deliberately single out each team member for praise; tying
the compliment to a specific contribution the member had made to the
team’s objectives.
Rewarding knowledge
Tom Peters makes a valid point when he talks about the need to reward
knowledge. If we accept that our success depends on the capabilities of our
team members, then, as Tom says – we ought to reward those who enhance
their capabilities by becoming multiskilled.
Summary
In your lean organisation you will have to provide progression without pro-
motion by encouraging self development, the opportunity to gain new capa-
bilities, and with it, greater self-confidence, and by giving respect,
recognition and reward far more positively than has been the case in the old
transactional style of management.
THE INTEGRITY TO PRUNE YOUR ORGANISATION
Before dealing with this issue, let me quote Jack Welch of GE.
No one at GE loses a job because of a missed quarter .... a missed year .... or
a mistake. That’s nonsense, and everyone knows it. A company would be

paralysed in an atmosphere like that. People get a second chance. Many get a
third, or a fourth, along with training, help, even a different job. There is only
one performance failure where there is no second chance. That’s a clear
integrity violation. If you commit one of those, you are out.
Let me also clarify why repeated failure to deliver ... is unacceptable in our
culture. That failure hurts every (stakeholder) we deal with. It hurts employ-
ees ... [suppliers], ... the communities where we operate ... the shareholders
who have invested in us. It hurts the customers.
No one wins (with) lower performance standards. Everyone loses.
Integrity
I agree with Jack Welch. We need a standard of ethics, and we cannot toler-
ate those who break them. GE has policies on ethics which are clearly artic-
ulated and enforced. Each year, people in GE have to sign a statement that
they know of no wrong-doing, or have reported it. Jack Welch urges every
member of his organisation to take what he calls the ‘mirror test’, critically
examining their own actions for integrity. That test is tougher than it
sounds.
Performance
A large organisation, with nearly 300,000 employees, has the scope to find
somebody another job more suited to their talents. The smaller the organisa-
tion, the more difficult it can be to transfer people into an alternative job.
No organisation can afford to retain an under-performing colleague, and
we certainly can’t afford to carry an under-performing executive. As Jack
Welch says, they need effective coaching, counselling and development. It is
better to demote than to sack. But in the final analysis, someone who is
either unable or unwilling to make an effective contribution cannot be sus-
tained.
It is surprising how many companies hinder their progress by tolerating
under-performance out of a misplaced sense of loyalty. If a football team
had one player who was dragging down the performance of the team, the
other ten players would be quick to take him to task.
Hopefully, as we develop team concepts, the members of the team will be
the first to put pressure upon anyone letting them down. But if we, as lead-
ers, fail to take action, then the message we send is that we are not serious
about seeking Hard Results. The authors of Built to Last7 comment that in
their visionary companies:

Only those who fit extremely well with the core ideology and demanding
standards of a visionary company, will find it a great place to work. (Those
who don’t will be expunged.) There is no middle ground. Visionary compa-
nies are so clear about what they stand for and what they are trying to achieve
that they simply don’t have room for those unwilling or unable to fit their
exacting standards.
BUILDING A TEAM
It’s not easy
As we have seen, choosing eleven cricketers or footballers, or choosing 15

rugby players capable of beating their opponents, is not easy. It is not easy
to blend an effective team of people together to achieve the Hard Results
you need. It takes time – something you will only have if you transform
yourself from a manager to a leader.
Martin Bartholomew, Chief Executive of Lattelkom PTT, once got every
member of his team to complete the Myers-Briggs personality question-
naire. This takes about 20 minutes to complete and the results are fed back
by an Occupational Psychologist. Each person, they learn, tends to operate
as one of 16 types. Profiles were discussed privately with individuals and
then fed back to teams as a whole.
What Martin learned was that his organisation had too few practical
people for the work they predominantly did. So he kept this in mind and
redressed the balance as they brought in new people. Some moved to
more suitable jobs. They redesigned some jobs around the people. They
learned to listen more to each other and take advantage of different per-
spectives, especially in project teams. Martin felt that the organisation
became more tolerant and more assertive. Recruits are encouraged to
complete the questionnaire and they update the whole exercise from time
to time. He concluded:
Financial performance and customer satisfaction have improved. Staff
turnover, sickness and absentee rates are where we want them. People com-
ment favourably on the atmosphere. Formerly, they most certainly did not.
Building a Superior Organisation

ᔡ If you agree that your success depends on recruiting and promoting
people who share your values and beliefs, have you defined the atti-
tudes you need for those you recruit? If not, how do you do this? Can
you modify the examples given? Do you need to look for a different,
stronger set of attitudes in those you promote? Are you aware of atti-
tudes prevalent in your organisation?
ᔡ Do you very carefully establish the competencies you require in each
person to be recruited? If not, how would you do so in future? Can you
define the specific competencies needed in those you promote, bear-
ing in mind their need to be effective coaches?
ᔡ Do you now recognise that every act of recruitment and promotion can
be a way of introducing a ‘change agent’ into your organisation to
speed its transformation? Does this alter the way in which you tackle
these all-important activities? If so, how do you ensure that this is
recognised by everyone involved?
ᔡ Does every member of your team accept that when they criticise a sub-
ordinate, they are criticising their own ability to recruit/promote effec-
tively, or their inability to coach or coax performance? If not, how do
you create this awareness?
ᔡ Are you willing to push responsibility for recruitment down to the
teams concerned? If so, what training is needed, and how will you
ensure that the highest level of priority is given to all recruitment activ-
ities?
ᔡ Do you feel that you fire people up by the care you devote to induc-
tion, and the enthusiasm with which they are welcomed into your
organisation? If not, how can you ensure that this level of motivation is
achieved in future? Do you need a project team to evolve or improve
your induction procedures?
ᔡ Do you agree that if you want to create a performance achievement
culture you need to ensure regular coaching review are held on a tri-
annual or biannual basis? Do you feel that your existing procedures
are making a positive contribution to your success, and that they are
used to enhance performance? If not, how might they be improved? Is
this a potential project; particularly focusing on the introduction of self-
assessment or upward assessment?
ᔡ Have you created an environment within which people can make

progress, independent of promotion? If not, what actions do you need
to take to ensure that people can progress in this way?
ᔡ Do you maintain your values by terminating those unwilling to do so?
Are you prepared to sustain your ‘culture of performance’, finding
alternative positions, or dismissing those either unable or unwilling to
live up to the standards set by peers?
9
DEVELOPING YOUR
WINNING TEAMS
TOO LITTLE: TOO LATE: TOO FEW
Professor Peter Hall, then of Cranfield, once said that

In spite of enormous national investment in management training, the perfor-
mance of large sectors of British industry and business is not improving.’
He adds that much of the training has been what is called ‘maintenance
learning’, entrenching past behaviours. Or it has been a waste of time, par-
ticularly when more senior executives have not permitted the training to be
put into effect. His recommendations follow many of the ingredients we
have been discussing, and are based on the excellent diagram shown in
Figure 9.1.
An organisation can have a lot of well educated people who are not mak-
ing much difference to the way in which the business is run.
Learning must be supported by the right structures and systems. But
above all, learning must be driven by a ‘leader’ who demonstrates his total
commitment.
Peter Hall believes that:
(Leaders) must actually believe in management development and be able to
recognise the difference between management training and educational activ-
ities. The behaviour of top people must present a model of the behaviour
required to meet the organisation’s strategy.
For some years, I headed a significant training organisation. We found that

delegates were sent on courses with no effective briefing: they did not
understand why they had been sent. They would then get enthused by the
PILLAR 9: DEVELOPING YOUR WINNING TEAMS ᔡ 149
Figure 9.1 Effective training
course only to comment, sadly, that while it was great, their immediate boss
would not let them apply anything they were learning. Typically they pre-
dicted that the greeting on their return would be, ‘Right, now you’ve had
your holiday, let’s get back to work’.
Back to leadership
When we first started our business, we were very much involved in helping
our clients by, in effect, ‘training the troops’. Eventually we were able to
persuade our better clients, the ones with whom we wished to continue
working, that the first essential was to start with them and their senior man-
agement team.
Bill Cullen, of Renault Ireland, was right to take himself off to Arizona. It
all starts from the top. But let’s look at some of the issues involved.
SELF-EMPLOYABILITY: WILLINGNESS TO COMPETE
Jack Welch has written that ‘The new psychological contract ....... is that
jobs at GE are the best in the world for people who are willing to compete.’
The hard issue is that every single member of our team has the responsibili-
ty to ensure their continued employability. This must be stressed at the
interview stage, in the letter offering them their appointment, and at every
subsequent performance review meeting. You have the right, the duty to
your organisation, to say to people, to an individual, or to a team:
ᔡ This is the goal, or the goals, you need to achieve.
ᔡ Do you have a clear action plan on how you and your colleagues can
achieve these goals?
ᔡ Do you think you will need any more training or development to
achieve these goals?
ᔡ If so, can you organise this for yourself, or for yourselves?
ᔡ What help and support do you need from me, or your leaders? Tell us,
and we will provide it.
ᔡ Which of your talents do you feel we are not using effectively, and what
do we need to do to make sure that we do use them to the full?
ᔡ How do you visualise yourself progressing in our organisation; what do
you need to do, and what do we need to do, to ensure that you can
progress?
Contractual responsibility
In short, training should never need to be imposed. It should be demanded

by those who accept that they have a contractual responsibility to ensure
that they receive the on-going training they need to sustain their own self-
employability.
BUILDING COMPETENCE
Coordinating training
Winning implies a total commitment to training. At Nissan MM UK, Ian

Gibson explains that shop-floor workers receive continual training so that
they are able to take on projects to improve productivity.
In the Ritz Carlton Hotel group, the initial training process comprises a
two-day cultural orientation, a 21 day follow-up, a 60 day technical certifi-
cation, while their ongoing training process includes the daily ‘line-ups’ or
briefing sessions, workshops and process team meetings, and yearly recerti-
fication and reorientation.
Large organisations can employ skilled Training Advisers. In our small
company one of our colleagues, Jayne McWatt, is responsible for acting as
our Training Coordinator. For smaller organisations, the relevant Trade
Association can often provide advice, if not the training itself, geared to the
relevant NVQs.
As part of their own development programme, individual colleagues can
be asked to accept the additional responsibility of acting as a ‘training facil-
itator’ perhaps for a short period such as four months. For this period, they
take responsibility for organising in-company activities. Ideally, every
organisation should seek to have a full- or part-time ‘people coach’.
On-the-job coaching
As indicated earlier, one of the prime reasons for having a regular perfor-
mance review (ideally three times a year) is to be able to keep this issue of
performance improvement under constant review. It’s an excellent opportu-
nity for discussing training and development needs.
Having said all this, there is no doubt that the best way to build compe-
tence is by on-the-job coaching both from sharing knowledge with other
members of the team, and by having a first-class coach in the shape of the
team leader or, as at Nissan, the team supervisors.
CREATING CONFIDENCE
Learning from sport

When Will Carling spoke at a conference I was chairing, he told of the way
they prepared for the English rugby matches by building confidence. This
included producing a set of videos for the team and sometimes for each
player, showing them in their best light, pulling off their most fantastic per-
formances. The objective was to build confidence by stressing how well
they could play. The book which Will has written with Robert Heller13
makes interesting reading on a very important topic.
Positive thinking
Thoreau once said that, ‘The mass of men live lives of quiet desperation.’ It
is surprising how many people lack confidence because of low feelings of
self esteem. As a shy, introverted accountant with a stutter, I was greatly
helped by the book by Norman Vincent Peale, The Power of Positive
Thinking30. More recently, Anthony Robbins has taken over his mantle with
books and cassettes on the theme of unlocking the power which lies within
each individual.
Nightingale Conant, at Paignton, have a wide range of self-motivational,

confidence building tapes. I feel that every organisation should build up a
small library of books, tapes and videos on this all-important theme of
building confidence.
Executive review
One of the key skills you need from those you appoint as team leaders,
coaches or facilitators, is their ability to develop the confidence of their peo-
ple. It needs to be high on the list of the topics to be discussed at their regu-
lar review meetings. As we have discussed, developing assertiveness,
contention, openness and learning, are all factors in building confidence.
Involvement
Involving people is the key to developing your organisation. We have already

touched upon the topics on which they should be involved. Getting them to
debate and improve your statements of vision, mission and meaning. Asking
them to help evolve your statements of values and beliefs. Gaining owner-
ship of strategy by involving them in discussions on all the changes which
have, or might affect you: developing a game of all the participants likely to
impact on your business; and carrying out a SWOT analysis.
All exercises designed to help clarify the context in which your business
should operate. Involving them in discussions on your objectives and, in
particular, the concept of optimising the ‘value stream’ of your extended
business. Many of the techniques we discussed in terms of making full use
of the collective knowledge of everyone involved in or with you, will also
help to build confidence.
What other ideas can you think of to develop everyone’s awareness of the
issues which have to be confronted if your organisation is to win?
World class performance
John Neill of Unipart is dedicated to achieving ‘World Class Performance’.

He gives this his personal, total commitment; ensures the commitment of
his senior management team; and the funding necessary. He put his former
Personal Assistant, Sue Topham, in charge of a People Development pro-
gramme, and she has developed five on-going programmes:
1. You make the difference

2. Putting people first
3. Mark in action
4. My Contribution Counts
5. Our Contribution Counts Circles.
All are geared to encouraging and recognising the contribution of people.
The Awards are presented by John Neill as a real event. When the Queen
visited them she made some of the Awards, to the delight of the recipients.
It’s an impressive example of what can be done in-house by a committed
team member like Sue.
MBWA
Some executives display a real genius for walking into a situation where
something has ‘just gone wrong’. Thus they are ideally placed to ‘blast’
those concerned.
The objective of Managing by Walking About (MBWA), is, find someone
doing something right. I believe that the following paragraph should appear
in the job description of every coach and facilitator.
Your success depends on your ability to get the best out of every member of
your team. So, one of your most important tasks is to build their confidence
in themselves, and in you as their coach and supporter. You will only do this
by praise and encouragement. You will not do it by criticism even if you
excuse your actions by talking about ‘constructive criticism’. All criticism is
essentially destructive. You need to lead by example, by building competence
and by giving recognition for progress and achievement.
Let me give you two contrasting points.
Three salesmen were worried about the lack of showroom customers.
They met one evening over a few pints, and decided to totally reorganise the
showroom displays. Next morning, they all worked very hard, with great
enthusiasm to remodel the displays in a way which they felt would entice
more customers. At the end, like eager puppies with tails wagging, they
waited for their efforts to be recognised. Their boss had a cursory look,
muttered a few unenthusiastic words of praise, and criticised a missing price
tag. The salesmen felt, ‘Why did we bother!’
Their boss was worried and preoccupied, but he could and should have
been enthusiastic, praised them, and either ignored the missing price tag or
found some tactful way of saying, ‘I expect you missed off that price tag to
catch me out”.’
In their book on leaders8, Warren Bennis and Burt Nanus write:
Leaders with positive self-regard rarely, if ever, have to rely on criticism or
negative sanctions, whether they lead a large multinational company, or a

football team. Coach, John Robinson, of the Los Angeles Rams told us that
he ‘Never criticises his players until they are convinced of his unconditional
confidence in their abilities.’ After that’s achieved, he might say ‘Look, what
you are doing is 99 per cent terrific, but there is that 1 per cent factor that can
make a difference, let’s work on that.’
What an approach! Perhaps you, or some of the members of your team,
should seek permission to study some of the coaching techniques used by
the leading sporting clubs of your area? Above all, we have to create a cli-
mate of trust which is the foundation for self-confidence.
DEVELOPING THE CAPACITY TO GROW
It is equally important to think about ‘capacity’. This is the ability to

accommodate and react to change and accept increased responsibilities. It
could be held to be a function of ‘education’ but many people who left
school at sixteen have been found to have high capacities. They may well
have educated themselves, not least by applying their keen intelligence to
reading and collecting knowledge.
Continuing education
Allowing for this, we need to find a way of raising the capacity of our col-
leagues by encouraging either formal or informal educational activities.
Many American and British companies have found that they need to run
educational courses for their team members to rectify deficiencies in their
education; particularly as they seek to delegate more responsibility to their
front-line team members.
Lucas has a Continuing Education and Training programme open to every
member of its team. Small companies may be able to use the facilities of
their local colleges; preferably by getting some of the lecturers to come in
to run sessions for small groups of people.
The thinking organisation

Some of the companies within the Frost Group set out to create what they
called a ‘Thinking Organisation’ by teaching thinking techniques such as
Tony Buzan’s Mind Mapping31 and Edward de Bono’s Sixth Hat Thinking32.
They then meet in groups three or four times a year to generate new ideas for
the business using these techniques of ‘lateral thinking’. One small group
came up with an idea that is saving £70,000 a year. The pressures of business
are such that it is all too easy to develop tunnel vision. A technique which
encourages a group of people in the organisation to have fun developing new
skills must be good, and if it results in Hard Results, so much the better.
Corporations as universities
General Electric has a Management Development Centre which has been

described as the ‘Harvard’ of Corporate America. Unipart has created its
own university in liaison with Dan Jones. The Credit Accumulation Transfer
Scheme developed by the CNAA has enabled many companies to liaise
with local Education Centres to develop degree facilities. Lex has its own
MBA course. Even small organisations can do the same, encouraging col-
leagues to use the Open University or a correspondence course to gain
appropriate qualifications.
Specific skills
The priority task is to improve the skills you need to achieve your objec-
tives. Once, most of the training at ICL was generalised. Now more than 80
per cent is specific to the needs of the company. Moreover, while they still
use outside facilitators – of the calibre of Rosabeth Moss Kanter – there is a
greater emphasis on using their own staff. This must be right: you, and your
team, are the ones who truly understand what you are trying to achieve, and
the skills you need.
In-company presentations
We can all learn a great deal when we have to prepare and give a presenta-
tion to others. So at our own company meetings we require each team and
their leaders to stand up and make presentations. For some, it is the first
time that they have ever had to stand on their feet to speak in public. When
Karen spoke for the first time, she hung a large ‘L’ plate around her neck.
There are many opportunities for such presentations.
Your Accountant could explain your management accounts, and give a
lesson on profit planning. Your Marketing Executive can talk about your
market place. Your Sales Executives can not only talk about how your cus-
tomers are reacting to your products and services, but also give everyone an
awareness of how to sell themselves and their company. If you have a
Copywriter, he or she can give lessons on writing good letters. Virtually
every member of your team possesses a field of expertise they can share
with their colleagues. Alf, our ‘post boy’ gave a brilliant presentation.
Cascade briefings
Your company may be too large to close down for half a day a month. You
may need to use the principle of ‘cascade briefings’. In brief, an expert talks
to a group of his colleagues. Each member of the group then gives the pre-
sentation to another group, and so on, in turn, until the briefing has cascad-
ed throughout the organisation.
Cost-effective aids
Many organisations, such as Management Learning Resources, can provide

some very cost-effective aids. BBC television often runs management-relat-
ed programmes which can be recorded and used for in-company meetings.
Sometimes they issue ‘study packs’ to go with such programmes. Often,
large franchisers will provide videos and other training aids to their fran-
chisees. For a keen internal facilitator, there is no shortage of such aids, in
addition to being able to hire training videos from the many companies
which specialise in this field. Gower, and other publishers, have manuals
designed to help organisations run internal training courses.
PULLING TOGETHER: COHESION
Upturning your organisation allows a great deal of freedom and initiative.

You have to make sure that everybody still pulls together: that there is cohe-
sion. Let’s look at some of the issues which arise.
Strategy
The precise way of ensuring cohesion is for everyone to have a clear under-
standing of your objectives and be involved in creating the strategies by
which they will be achieved. Lord Montgomery made sure every soldier in
his command knew his objectives, since he had to rely on their dedication
and initiative to achieve those targets; despite the confusion of battle. We
need to do the same so our colleagues can cope in the day-to-day pressures
of business.
Disciplines
Rosabeth Moss Kanter, a world authority on change, points out that those to
whom we are delegating responsibility, and allowing to use their own initia-
tive, must operate within standard sets of disciplines if essential cohesion is
to be maintained. There are three important areas:
1. Problem solving and decision making
2. Quality in its widest sense
3. Communications.
Selecting the eleven best players for each position to play for England does
not – of itself – ensure a successful team. What is needed is a common set
of basic disciplines which gives the team the cohesion they need to excel.
When this quality is present, then the team can excel. The sum total of the
efforts of the players will be greater than the sum of the individual parts.
The same is true of your organisation and mine. We have to have a unifying
set of disciplines.
Honda’s rational thinking process
In his brilliant case study on Honda, Richard Pascale16 highlights the

emphasis which Honda puts on identifying problems. Co-founder Takeo
Fujisawa believed the most important trait of a good executive was the abili-
ty to ask the right questions. In the West we worship ‘answers’. In the East,
there is a deep reverence for questions. So in the West, we tend to solve
symptoms, in the East, they resolve the underlying problems.
In the 1950s Fujisawa learned of the Kepner Tregoe method. This teaches
a structure for thinking systematically and getting to the root cause of prob-
lems. (Studies show that only 12 per cent of decisions made in US compa-
nies are soundly researched and decided.) The methodology was licensed
and developed into the ‘Honda Rational Thinking Programme’. Honda
executives world-wide believe that it gets them beyond superficialities to
underlying root causes. It trains them to examine alternatives which provide
a stimulus for innovative, lateral thinking.
Toyota has a similar approach called the ‘Five Whys?’. Their executives
are trained to keep asking ‘why?’. It has been said that the biggest enemy of
effective decision making are the emotions of fear (including anxiety and
self doubt), anger and impatience. When we talk about fear, we come back
to the need to build self-confidence in all our colleagues and to adopt Tom
Peter’s recommendation of praising people for making a mistake. We also
come back to the vital need for dispassionate analysis.
General Electric routinely trains every new employee in decision making.

It is something you might like to consider, partly because it is important for
your front-line colleagues to have the skill of making sound decisions on
your behalf. It will also ensure the effective cohesion which is so vital.
Quality
Once more, Richard Pascale16 makes an extremely important point when he

writes, ‘Quality is not simply a desirable attitude, but an organisational dis-
cipline. Few concepts are more widely misunderstood.’ He explains that
when quality is defined as a systematic process or discipline, it links values
with strategy. He also adds that while many find it hard to get into a full
appreciation of strategy, the pursuit of quality has a great motivational
appeal. As he points out, ‘Everyone, at every level, can do something about
it, and feel the satisfaction of having made a difference. Equally “quality”
can be quantified and process tracked against goals.’
Communication
Ensuring cohesion requires a much higher level of communication both on

our part and on the part of our colleagues. Once I slipped up. On two sepa-
rate occasions I indicated to two colleagues what I felt we should do. They
both used their initiative and did the exact opposite. With hindsight, I
realised that I focused on what we should do and did not brief either of
them fully enough on why I felt we should act as I suggested. Equally, both,
while right to use their initiative, could have communicated their reserva-
tions to me more effectively.
It does emphasise that the whole process rests on a much higher level of
communication – a point to which we must return when we consider com-
munications as our eleventh pillar.
CREATING A LEARNING ORGANISATION
Our ability to learn
Richard Pascale16 writes about the eight specific factors which influence an
organisation’s ability to learn. These are:
1. The extent to which an elite group, or single point of view, dominates
decision making. Typically, Finance can exert too strong an influence
and has been known to discourage meetings by working out the cost of
the time of all the people involved. Do you have one department which
is too dominant?
2. The extent to which colleagues are encouraged to challenge the ‘status
quo’.
3. The way in which new members of the team are inducted and
socialised.
4. The extent to which information on performance, quality, customer sat-
isfaction and competitiveness is cultivated or suppressed.
5. The fairness of the reward system and the degree of emphasis on status.
6. The extent to which colleagues, at all levels, are given the freedom to
take responsibility.
7. The culture of the organisation (which we will discuss later).
8. The integrity of the ‘contention management’ processes; particularly in
facing hard truths and confronting reality.
In America, companies are beginning to develop what is known as ‘Open
Book’ management. The companies concerned totally open their books to
everyone in the organisation. This aims to make team members feel and act
like owners. Clearly, workers need to be trained on what the numbers mean.
But, as John Case, author of a book on Open Book management33 says, ‘it
fills in a lot of gaps’.
For instance, a colleague may be considered empowered if he has the
authority to stop an assembly line because of a perceived quality problem.
But with Open Book management he has also been taught to understand
what quality means to the bottom line, and exactly what the cost is of shut-
ting down the assembly line for a few hours. That allows him to make an
informed decision.
We have to be totally sincere on all these points. While Richard Pascale is
highlighting the eight specific factors which influence an organisation’s
ability to learn, I feel, as you might expect, that all 12 of our pillars have to
be in place before you can develop your winning team.
LEADERSHIP: AGAIN
At Unipart, John Neill has created their own university. Following the open-
ing of Unipart ‘U’ in September 1993, he committed six hours per week to
teach ‘The Philosophies and Principles of the Ten(d) To Zero Supplier
Relationship Programme’ to all employees. Since that time, many external
stakeholders have attended the course, including the Director-General of the
BBC, many of Britain’s business leaders as well as the Permanent Secretary
of the Treasury. Following his attendance on the course, over 60 Treasury

officials have also attended these courses. In addition, many of Unipart’s
Directors, Managers and employees at all levels, are now responsible for
teaching work related subjects in the ‘U’.
When British Airways initiated a ‘Putting People First’ programme for
every member of their organisation, Sir Colin Marshall, then Chief
Executive, visited 97 per cent of the sessions held. Kenneth Macke, the for-
mer Chairman and Chief Executive of Dayton Hudson spent 40 per cent of
his time on training-related activities. Jack Welch visits GE’s own university
on a regular monthly basis, and while he is there, he submits himself to
intensive grilling by all the delegates present, on any of the issues they wish
to raise.
We need time to develop a winning organisation.
Wasting or saving money?
Millions of pounds have been wasted on what I call ‘mid air’ training
which, because it was not seen as one of our 12 pillars, was not perceived as
part of the ‘psychological contract’ of total two-way commitment.
The way is to save money by having a much leaner, more competitive
team than your competitors, and by tapping into the collective knowledge of
all your people. I think it important to reiterate some of the savings men-
tioned in the Introduction. Alf saved us £10,000. Sue Stevens saved Peter
Nathan £15,000. ‘My Contribution Counts’ circles at Unipart have saved £2
million. The people at Premier Exhaust saved £300,000. On one Tarmac
contract, initiatives by the front-line people saved £500,000. It is truly a
matter of both saving and making money if you have a lean but totally com-
mitted, highly trained organisation.
This takes money. Nissan spends 14 per cent of its salary bill on training.
On average, workers will receive nearly 9 days of training a year ‘off-the-
job’ and 12 days a year ‘on-the-job’. The trainees will get an average of
over 60 days a year ‘off-the-job’ training. Continuous development pro-
grammes exist for every member of staff.
When Sir Colin Marshall spoke at one of our client briefings several
years ago, he suggested a minimum training budget of 5 per cent of sales.
As Charles Handy has pointed out, we need half the people doing three
times the work (Figure 9.2).
One final point. Don’t train people what to do (it’s called maintenance
training). Develop people to be aware of what has to be achieved, and let
them develop the competencies they need to achieve your objectives in the
best way possible.
Figure 9.2 The new productivity formula

Source: Adapted from Charles Handy
For example, Peter Nathan stopped training his team on how to produce a
Devon pasty. He ran sessions on all the relevant regulations which had to be
observed so that his team could both appreciate the boundaries within
which they had to work, and suggest ways in which they could meet these
standards more effectively. He explained to them the importance of achiev-
ing the right ‘yield’ from the ingredients they were using. These cost Peter
some £750,000 a year. If the team were over-generous and used, perhaps,
10 per cent more product than needed, this would cost a further £75,000 and
make a significant dent in net profitability. If they used too little, they would
lose customers and break the law. Awareness of all these and related issues
made Peter’s team far more aware and self-disciplined in terms of achieving
the right yield.
Like Peter, you have to demonstrate leadership.
The ‘bottom line’
To come down to earth we are talking about how we survive profitably in an

increasingly competitive environment. Two companies were in the same
highly competitive sector of the engineering industry. Their customers were
demanding more for less: higher quality at lower margins. Both companies
invested heavily to stay in the ‘game’. One concentrated on more automa-
tion. The second clearly needed to keep pace with advancing technology but
it doubled its investment in training – from £250,000 to £500,000. The first
company closed: the more highly trained and committed team at the second
gained new contracts and is continuing to grow, profitably.
Developing your Organisation
ᔡ Do you operate a system of self-led development? If so, do you need

to think through how to improve the effectiveness of your system? If
not, how do you and your colleagues feel that you can start such a sys-
tem?
ᔡ Does every individual and team have clearly defined goals, and the
responsibility, authority, information, competence, capacity, and coach-
ing they need to achieve these goals on your behalf? If not, what ele-
ments are missing and how can they be supplied?
ᔡ Do you have a plan for developing your long-term performance based
on stretching people’s goals, giving them additional responsibilities,
gaining greater acceptance for the need for self and team develop-
ment; and having an in-company ‘development facilitator’? If you
have, do you now feel that it can be improved? If you have not, how
would you and your team set about creating such a plan?
ᔡ If you accept the need to upturn your organisation and give your front-
line colleagues responsibility for using their initiative and taking deci-
sions, how do you ensure cohesion? By making sure they fully
understand your objectives, strategy and positioning? By ensuring the
application of key disciplines throughout the organisation, vastly
improved communication, and by leadership? Can you and your team
improve the effectiveness of these activities?
10
MOTIVATING A WINNING
PERFORMANCE
MOTIVATIONAL THEORIES
Douglas McGregor, in The Human Side of Enterprise34 wrote about theory

X and theory Y. Theory Y said that:
ᔡ Work is as natural as play if the conditions are favourable.
ᔡ Qualities of self-control, and self-motivation are present, and people wel-
come the opportunity to exercise them.
ᔡ Many people have the capacity for coming up with highly creative solu-
tions to organisational problems.
ᔡ People can be motivated by the sense of status and self-esteem, as well
as needing a sense of security and direction.
ᔡ Many people will be motivated to achieve clearly defined objectives, on
their own initiative, once properly motivated to do so.
Professor Herzberg35 said that good working conditions, by themselves, do
not motivate. People are motivated by:
ᔡ the opportunity of achievement
ᔡ recognition of that achievement
ᔡ interesting and challenging work
ᔡ genuine job responsibility
ᔡ some scope for advancement.
One of the diagrams to his book, shown in Figure 10.1, illustrates the point.
Achievement and recognition have a high impact on motivation, but for a
relatively short period. The work itself and achievement tend to have more
impact but, as you can see, it is responsibility that has the longest impact.
From Work and the Nature of Man

by Prof Frederick Herzberg (Staples Press)
Figure 10.1 The Motivation-Hygiene Theory

Comparison of Satisfiers and Dissatisfiers
PILLAR 10: MOTIVATING A WINNING PERFORMANCE ᔡ 165
The work of Frederick Herzberg was put into practice by one of his col-
leagues Bill Paul with the concept of job enrichment. One of ICI’s paint
products had shown no improvement in sales for some time, despite being
competitive in price and quality. Bill took one group of salesmen and gave
them a much higher level of responsibility, while the rest of the salesmen
continued on the old basis. Those with greater responsibility increased sales
by nearly 19 per cent, while sales of the rest of the sales force dropped by 5
per cent.
Carol Kennedy’s book, Guide to the Management Gurus36, provides an
invaluable shortcut to the ideas of these leading management thinkers. Yet,
despite all this research into motivation, Dr David Parsons, when at the
Institute of Personnel Management, said:
On most available measures, UK employees have lower levels of work moti-
vation and employer commitment than in other major developed economies.
New thinking is called for... a culture that facilitates and sustains more effec-
tive staff motivation is a critical success factor.
So, let us look at motivation under four headings: Motivation is Emotional;
Creating the Desire to Win; Creating Winning Teams; and Rewarding
Success.
MOTIVATION IS EMOTIONAL!
In a powerful piece of writing, Professor Noel Tichy – who has written a

book on Jack Welch entitled Control Your Destiny or Someone Else Will37
and who ran for two years GE’s Executive Training Centre – wrote:
Most organisations don’t know how to deal with emotion, so they try to pre-
tend it doesn’t exist. Corporations seem emotionally barren. Feelings, one
understands, are best expressed at home, where they won’t gum up the
machinery of scientific management. The emotional sterility of the business
environment is a cordon sanitaire around the fear, jealousy, resentment, rage,
longing, pride, ambition and God-knows-what-else that seethe in the human
heart.
Work, inevitably is an emotional experience; healthy people can’t just drop
their feelings off at home like a set of golf clubs. Yet management theory long
neglected this realm, and we are just beginning the search for ways to harness
the vast power of workers’ emotional energy.
Have you thought about motivation in these terms? Harnessing the vast
power of workers’ emotional energy? Richard Pascale once wrote16:
The Eastern perspective reminds us that the real organisation you are working
for is the organisation called yourself. The problems and challenges of the
organisation that you are working for ‘out there’ and the one ‘in here’ are not
two separate things. They grow towards excellence together.
Most people bring three kinds of needs to their organisational existence: a
need to be rewarded for what they achieve, a need to be accepted as a unique
person, and a need to be appreciated, not only for the function performed, but
also as a human being.
These two quotations provide a different slant to the way we should
approach motivation. First let us look at two problems.
Negative emotions
A ‘bad atmosphere’ demotivates. Negative emotions can exist. Insecure

people criticise: some play ‘politics’; ‘stirrers’ enjoy creating dissension.
Careful recruitment and, even more, careful promotion should screen out
such people. Building confidence removes insecurity. Creating an open,
assertive, contentious, team-focused culture should drive out antisocial
behaviour, or drive out the individuals concerned. They cannot be allowed
to disrupt.
Personal emotions
Many people have horrendous personal problems. One man’s wife is shat-
tered by having a baby with Down’s syndrome. A woman’s son is in a coma
following a motorbike accident. Another has a mother with Alzheimer’s dis-
ease. There is no end to the range of personal traumas. For some, their peri-
od at work is a blessed relief from the tensions and tragedies of their
personal lives. We have to show compassion. Insensitivity demotivates. We
have to get team members to be supportive, we may need to provide or
arrange counselling, but the team has to sustain its performance and achieve
its objectives.
Visualising success
We cannot motivate our colleagues unless we visualise them as being suc-

cessful on our behalf. Research has shown that teachers who have high
expectations of the abilities of their pupils get a 25 per cent improvement in
performance, compared to those who don’t. Equally, it has been proved that
gardeners who visualise getting good crops, get them. Golfers and other
sportsmen need to visualise success. So do we. We must:
ᔡ build on the strengths of people, and not be preoccupied by their weak-

nesses;
ᔡ look at the opportunities in the situation, and not the difficulties;
ᔡ visualise a successful outcome to a situation, rather than a disastrous
one;
ᔡ believe in our colleagues and anticipate their doing a good job on our
behalf.
Motivation starts with how we think about our people. Thoughts are power-
ful. People respond to our expectations. If we expect them to be successful,
they will live up to our expectations. If we expect them to fail, they will!
Pride
Robert Schaeffer38 wrote a brilliant article in the HBR on the theme of

demanding high performance. He quoted two Motorola workers who were
involved in a project for Nippon Telephone and Telegraph, who explained:
The customer came and told us that nothing except absolute excellence would
be accepted. The team was turned on by the challenge of doing something
that was considered impossible. People were challenged every day. There was
a strong drive to succeed. It was the most exciting time of my life.
Robert Schaeffer was recommending that leaders should have ‘clearly con-
veyed, ‘non negotiable’ expectations.’ He adds that, ‘if your subordinates
are like most, they will respond to the higher demand. They will be able to
accomplish what is expected – or most of it. And, despite a bit of testing,
most of them will enjoy a more result-oriented environment. Thus you will
be creating greater job satisfaction and mutual respect, better relationships
among all levels and a multiplied return on the organisation’s human and
material resources.’ It’s a very important point.
Champions
Tom Peters is right when he talks about the need to treat people as champi-
ons. We need to motivate, by actively projecting the concept that everyone
involved in your organisation are the members of a unique ‘Winning
Team’.
Recognition
As Sir John Harvey Jones2 has said, ‘people work for recognition as much
as reward’. You can see this every night on TV as the long list of credits for
people such as ‘Best Boy’, ‘Gaffer’ and ‘Grip’ roll out. Some of the
‘Employee of the Month’ type schemes can become hackneyed, but they are
still important to the people honoured. TMI have their ‘Double Bagger’
award. This is geared to recognise the person at the supermarket checkout
who, if you have a lot of heavy shopping, will take the trouble to put one
bag inside another to ensure the safety of your shopping.
Tarmac have their ‘Golden Arrow’ award scheme for the unit which has
shown the greatest initiative in improving their performance or in resolving
a difficult problem. John Lovering, Chief Operating Officer, has said that
the benefits of the many initiatives now stemming from front-line col-
leagues are, ‘being spread across the group. When they work well we all
win prizes through group bonus schemes based on the improved profitabili-
ty of all our businesses.’
Fun
But it’s not only the formal schemes, it is the more spontaneous acts of
recognition that count. Tom Peters is right, we need more of what he calls
‘Hoopla’. One telesales company encourages those who clinch a sale to
ring a bell and shout with exhilaration! In our small company, those who do
something special get a Mars Bar. From time to time, when everything has
gone well, everyone gets a Mars Bar. At one GE company, they offered to
provide free coffee and doughnuts to workers once the plant met its month-
ly production quota. ‘It sounds like a small thing,’ said the Plant Director,
‘but it proved how interested [people] are in being recognised for a job well
done. We dug the business out of the hole it was in, and the doughnut guys
got rich.’
A company called Successories, based at Paignton, have a range of mugs,
T shirts, caps, posters and other aids to create this type of ‘buzz’ in your
office or plant.
Meaning
Finally, an important motivator is to provide a sense of meaning. Many peo-

ple choose to work in lower paid locations because it provides meaning to
their lives. But if your company is providing a value-adding product or ser-
vice to its customers, then this should provide you, and your team, with a
sense of meaning. As Jack Welch once said,
People have the freedom to be creative, a place that brings out the best in
everybody. An open, fair place where people have a sense of what they do
matters. And where that sense of accomplishment is rewarded in both the
pocketbook and the soul.
His last point is important, motivation has to involve the ‘soul’ and the
pocket.
CREATING THE DESIRE TO WIN
How do we set about creating the desire to win? It is by focusing on the

other 11 Pillars of our formula. Let’s look at each in terms of their ability to
motivate.
Leadership
The essence of leadership is motivation. Jack Welch has what one close
associate calls, ‘an absolute desire to win’. One of his main goals as a
leader has been to stimulate positive emotional energy in his subordinates
so that they come to see themselves as winners. His secret? Noel Tichy
explains that
[He believes] in the principle of human equality [and] treats subordinates as
his intellectual and social peers, and rewards merit where he sees it. Welch’s
focus is on creating a team of like-minded people who believe in what they
do, and work better as a result.
One of his rules is: ‘Give your people every chance to identify with their
business. Their enthusiasm is your most valuable asset.’
All this sounds fine, but there is a problem. The leaders studied in the sur-
vey carried out by Warren Bennis and Burt Nanus8, put having a feeling of
‘positive self-regard’ high up their list of essential qualities. Many business
executives fail to motivate because they have low or negative feelings of
self-regard so they opt out and use financial incentives. Self mastery is vital.
Leadership at every level
Every leader, at every level, has to work hard to build up a strong feeling of
positive self-regard about themselves before they can motivate others.
Executives should be selected on the basis of their ‘positive self-regard’ so
that they are able, in turn, to support and coach the members of their teams.
Being a ‘team leader’ is a way of providing Herzberg’s motivating factors of
advancement, responsibility, more interesting work, recognition and

achievement.
Vision
Your long-term vision, your medium-term mission, and the sense of ‘mean-
ing’ should be powerful motivators if they are communicated effectively.
Everyone wants to feel that they belong to an organisation which is worth-
while and has a future. Again, Warren Bennis has an apt quotation: ‘People
talk about the decline of the work ethic. But what there really is, is a “com-
mitment gap”. Leaders have failed to instil vision, meaning and trust in their
followers.’
Do not be constrained by reality

Terry Keen, the Principal and Chief Executive of South Devon College, now
one of the leading colleges in the country, advised his new colleagues when
he joined the college: ‘Do not be constrained by reality’, when discussing
with them how to draw up their strategic plans.
It is an important fact that most really successful organisations today
began with visions that were out of proportion to their resources at the time.
Where the vision is shared and understood, it creates a sense of belonging
and purpose for colleagues and customers. Terry believes that leadership
and vision are linked directly, and are a necessary concept for enterprising
and innovative businesses. When a truly empowered workforce is estab-
lished, people do things they never would have believed they would do, or
would be able to do. Many of today’s successful enterprises owe their suc-
cess to linking leadership, vision and strategy.
Strategies
Commitment is reinforced when people are fully aware of the environment

within which their company operates; are aware of – and ideally – are
involved in the strategies to be pursued; and have a clear commitment to the
objectives, the goals, to be achieved. They are even more committed when
they have their own personal or team goals, a point to which we will return.
Philosophies
People are motivated when their organisation requires them to act with
integrity in all their dealings with suppliers, dealers, customers, sharehold-
ers, competitors and the community. Equally, the right sort of people are
demotivated when required to behave unethically or deviously. Of crucial
importance are the philosophies the organisation has towards its workers
and their emotions. An outline of the philosophies to be adopted is shown in
Table 10.1, though it is for every organisation to establish their own.
Collective knowledge
Any degree of ‘powerlessness’ corrupts. Conversely, for people to feel

regarded as experts, that their ideas are welcome, and their involvement
appreciated, and that the ‘collective knowledge’ of them and all their col-
leagues is genuinely perceived as the most valuable asset of the organisa-
tion, is highly motivational.
Most of us can win over people with whom we can develop a face-to-face
relationship. As we grow, it becomes increasingly difficult to have close
relationships with every member of our organisation. We have to find ways
of earning the allegiance of relative strangers. It has been said of Jack
Welch that he solves this problem by ‘acknowledging and respecting the
considerable power that even the most junior employee commands – the
power of independent thought.’ Your success will depend on mobilising this
power. If you do, you will have a highly motivated team of people.
1. Term ‘EMPLOYEE’ abolished: replaced by: COLLEAGUE

TEAM MEMBER
ASSOCIATE
2. Term ‘MANAGER’ abolished: replaced by: COACH
FACILITATOR
TEAM LEADER
3. Acceptance that:
ᔡ Most team members come to work wanting to do a good job and to
feel happy doing so: to have fun.
ᔡ People do not deliberately make mistakes but do so out of lack of
confidence based on lack of information.
ᔡ People who are NOT given information cannot accept responsibility.
ᔡ People who ARE given information cannot but fail to accept responsi-
bility.
ᔡ Self-control by individuals is indispensable if your organisation is to
be successful.
ᔡ The person doing the job is – or should be – your organisation’s
expert on how best the job should be done.
ᔡ Members of the team have the expertise, the willingness and the cre-
ativity to solve the problems facing their organisation.
ᔡ People are motivated by feeling a valued, respected member of a
team which they feel is making a measurable contribution to worth-
while goals which will contribute to the overall success of the organi-
sation, and thus helps to achieve a shared vision of a worthwhile
future for everyone involved.
4. Under-performance is the responsibility of leaders.
ᔡ If the individual was wrong to start with, then the leader made a mis-
take in recruiting or promoting him or her.
ᔡ If the individual was right to start with, then the leader failed to
induct, develop, coach or review effectively.
Superior organisation
For people to be on a ‘production line’, whether in the factory, or in the
office, is highly demotivational. Arthur Hamper, worked for nine years on a
GM assembly line. In his book Rivethead39 he describes the slow mental
disintegration of himself and his colleagues:
The clock sucked you on as you awaited the next job. It ridiculed you each
time you’d take a peep. The more irritated you became, the slower it moved.
The slower it moved, the more you thought. Thinking was a very slow death
at times.
You need to ask yourself, how far does the organisation, its structure, sys-
tems and ‘social architecture’ motivate or demotivate? As one example,
over-tight systems of checks and controls can demotivate. Conversely, peo-
ple involved in a process which they can see to be adding value for the cus-
tomer, have the comradeship of working as a valued member of a team,
perhaps with job rotation, but – above all – who are given genuine responsi-
bility for organising their own work, and are given the information they
need to do so, will feel highly motivated. Generating a feeling of trust moti-
vates. Peter Nathan’s ‘girls’ now know not only what they are doing but why
they are doing it.
Building organisation
People are motivated by being involved in building your organisation. They

should be able to recruit, or at least have a say in recruiting, additional
members of their team. As we saw with Ralph Stayer, they can be involved
in designing their own appraisal system, but above all, ongoing coaching
and support, reinforced by regular review meetings with their coach, which
praises them for their performance and reaches mutual agreement on future
self-development and has a significant impact on motivation.
Developing organisation
The opportunity for progress, independent of promotion, and – above all –

the challenge of self-development, is a very powerful motivator. We have to
work hard at building up people’s self-confidence and self-regard. It is
probably the most important motivational technique we can use.
Communication
All the above activities both rely upon, and are reinforced by, truly effective
communication. A point we have yet to consider.
Charter and culture
Finally, all these activities need to come together into a psychological con-
tract between the organisation and its workers. Ideally, all these ‘soft’
philosophies, and ‘hard’ structural issues should be hammered out into your
own ‘Company Charter’ and culture.
Summary
At the risk of being repetitive, it is vital to see how each of the 12 Pillars
impacts on motivation. You cannot consider motivation as an isolated
activity. It is the end result of focusing upon all the Pillars. Bill Paul
argued that higher pay may be sought as compensation for the lack of
interest and opportunity at work. He suggested that financially based
incentives encourage employees to seek higher pay instead of seeking
commitment to their work.
If you want to secure 110 per cent commitment you will have to
demonstrate 110 per cent commitment to the ideas we are discussing.
This leads us to a very important point.
CREATING WINNING TEAMS
‘A motivational technique that works’
Professors Edwin Locke and Gary Latham have carried out extensive
research, in many industries, and set out their conclusions in their book,
Goal Setting, a Motivational Technique That Works40. It is one of the books
which every executive should read. They state that goal setting led to an
average improvement in performance – in terms of quantity and quality of
output – of 16 per cent, with the better organisations achieving improve-
ments of well over 50 per cent. In one study, 900 supervisors were broken
down into one of three categories:
1. Stays on the job but does not set specific production goals.
2. Sets specific production goals but does not stay on the job.
3. Sets specific production goals, stays on the job to support and coach his
team.
They found that the third group of supervisors, those who set specific tar-
gets and stayed on the job to support their team, brought about significant
increases in productivity. Yet the two professors found that the systematic
and effective use of goal setting is the exception rather than the rule in most
organisations; because most managers do not know enough about the goal
setting process. The two professors say that,
Paradoxically, people do not do their best when they are trying to do their
best! ‘Doing your best’ is a vague goal because the meaning of ‘best’ is not
specified. The way to get individuals to truly do their best is to set challeng-
ing (specific) goals that demand the maximum use of their skills and abilities.
They found that:
ᔡ Stretching goals produce greater motivation than easier ones.
ᔡ Specific goals lead to higher performance than more general ‘Do your
Best’ goals.
ᔡ Feedback is essential and may of itself have additional motivating fac-
tors. We are back to Charles Schwab’s chalked figures on the furnace
floor.
Faced with a specific, challenging goal, people are motivated by a sense of
satisfaction from knowing what they are about. They feel a sense of direc-
tion. They gain a sense of accomplishment and pride in their ability to
achieve their goals which make their effort worthwhile. Moreover, they are
prepared to be persistent, and often work long hours if they are to meet com-
mitments. The three words direction, effort and persistent are important.
Goals that cannot be reached fully will still lead to high effort levels pro-
vided that partial success can be achieved and will be recognised. The moti-
vation to achieve long-range goals can be helped by setting a series of
shorter-term goals. Some people may be ‘switched off’ from too challeng-
ing a goal. Either they, or their supervisor, are lacking in self-confidence.
Confidence is a vital motivator.
‘Behavioural Observation Scales’
Locke and Latham explain their idea of ‘Behavioural Observation Scales’

(BOS). In this, the activities or behaviours needed to attain a goal are bro-
ken down. Thus, a salesman may have to make 50 prospect calls and
achieve ten interviews to sell one unit. So, measuring his willingness to
prospect and his ability to gain appointments may be more important than
achieving a unit sale; particularly if this then starts to involve other people
in the negotiation. The two professors believe that the advantage of a BOS
is that ‘individuals are given credit for trying for difficult goals, even if they
do not fully achieve them, since their score depends upon the degree of
attainment of the activities such as prospecting’.
Group or individual goals
Rensis Likert, well-known author and psychologist, argued that group goal
setting fosters a higher degree of cooperation and commitment than individ-
ual goal setting, and is thus preferable.
Gaining commitment
Ed Locke and Gary Latham explain that there are at least eight methods to
secure commitment from team members.
1. Support. ‘People whose boss behaves supportively had the confidence

and trust to set or accept higher goals (and thus achieve high levels of
performance) than those whose boss was non-supportive.’
You can prove this for yourself. Role playing exercises can be used
where some teams are ‘thrown in at the deep end’, while others are sup-
ported by an experienced coach. Invariably, the second group out-per-
forms the first. (In passing, in-company role playing exercises are a
marvellous low-cost way of developing people).
2. Instruction. If team members trust their leaders, and perceive the goal
to be fair and reasonable, then simple instruction and explanations will
ensure acceptance.
3. Participation. Provided trust is present, team members do not necessar-
ily have to participate in setting goals, though it can be helpful, but they
certainly need to participate in how these goals are to be achieved.
4. Coaching. Goals are accepted when team members are given the neces-
sary degree of coaching to gain the competence and confidence they
need.
5. Selection. Commitment depends on careful selection of team members,
especially those with the right attitudes.
6. Pleasure. Individuals within the team like to gain pleasure by pleasing
their leader; particularly one willing to praise and give recognition for
exceeding, achieving, or coming close to the goal, or even for making
the effort.
7. Feedback. Essential and often generates informal competition which
introduces an element of excitement, challenge and pride.
8. Action Plans. Every individual, or team, given a goal, should set out the
actions they need to take to achieve their goal in the form of an ‘Action
Plan’. This has a number of benefits. It:
ᔡ aids the search for more efficient methods;
ᔡ tests whether the goal can be achieved;
ᔡ develops a sound basis for estimating time/cost requirements and
deadlines for accomplishing sub-goals;
ᔡ identifies areas of coordination;
ᔡ may uncover unanticipated snags;
ᔡ determines resources needed;
ᔡ identifies reporting/feedback systems;
ᔡ identifies support needed;
ᔡ facilitates the process of true delegation.
Goal setting and stress
In my experience, it is the feeling of powerlessness, of not being informed,

of not being aware of what is expected, which is a prevalent source of stress
in most organisations. Setting goals can be a way in which stress is reduced,
and motivation increased. Ed Locke and Gary Latham write:
The challenge of overcoming obstacles can provide excitement and joy – it
can be the fuel that impels (people) to great achievements. When goals, espe-
cially difficult ones, are attained, the individual not only feels satisfaction
over a job well done but pride in accomplishment. If the task requires, as
most do, the productive use of the individual’s mind, success heightens self-
esteem. This is as true for the CEO who turns a declining company around as
it is for the unskilled, unemployed worker who masters his or her first job
skill. When people succeed, they feel an increased sense of efficacy; they
feel, in the context of their work, that they can cope, that they can master
reality. The conviction that they are competent lessens the threat posed by
future assignments and makes people more willing to take on challenging
tasks in the future.
Summary
The two professors endorse the theme of our discussion. They endorse the
importance of the ‘collective knowledge’ of every member of our team; and
reinforce the need to develop the right attitudes and behaviours. They point
out that ‘Careful attention to engaging in, and rewarding appropriate behav-
iours, can have a significant effect on the aspirations of individuals.’
Finally, they endorse our central theme that every member of a team has
to understand thoroughly the philosophies and strategies with which we are
seeking to establish our vision of a worthwhile future. In short, motivation
must be seen to be only one Pillar out of the twelve to ensure extraordi-
nary performance. In fact, provided pay is perceived to be fair, the motiva-
tional impact of the 12 Pillars is the most powerful, creative and cohesive
way of building a team. It is worth remembering a highly apt comment by
Frederick Herzberg:
If you want to motivate people to do a good job ...
...give them a good job to do.
REWARDING YOUR TEAM FOR THEIR SUCCESS
Performance Related Pay (PRP)
Research carried out by the Institute of Personnel Management indicates

that it is rather doubtful that incentive and profit-related pay systems moti-
vate. The Institute once studied Profit-Related Pay schemes covering 4.2m
workers in Britain. Its conclusion was that while PRP may motivate 20 per
cent of employees, it is at the expense of the other 80 per cent, while the
driving force in most firms was to reduce wage bills rather than to improve
staff performance.
Clive Fletcher, Professor of Occupational Psychology at Goldsmith
College, and co-author of the IPM report, said, ‘PRP programmes do not
change attitudes positively, but they can sometimes change them negatively.
Whenever I talk to managers, they all laugh when I ask if they are motivated
by money. They talk instead about satisfaction and achievement.’
However, Peter Nathan has found that PRP has helped him to lower his
gross wage costs while increasing his team’s net take-home pay.
An abdication of management
It is now accepted that incentive schemes are an abdication of management.

As Professor Michael Beer of Harvard has pointed out:
Managers tend to use compensation as a crutch. After all, it is far easier to
design an incentive system that will do management’s work than it is to artic-
ulate a direction persuasively, develop agreement about goals and problems,
and confront difficulties when they arise.
Financial incentive schemes do not last long before they need to be modi-
fied. They tend to focus on short-term performance. Salesmen pull forward
sales to enhance their commissions, executives enhance work-in-progress
and stocks to improve their end of year bonuses. Shortfalls in performance
then result in the next financial period. Dissension is caused when one
group, typically salesmen, can earn high commissions, while equally impor-
tant and hard working colleagues in other activities, cannot.
The Harvard Business Review regularly debates this issue. Let me give
you some key comments from earlier debates.
Against incentives
Alfie Kohn writes that, ‘I believe incentive plans must in some way fail,
because they are based on a patently inadequate theory of motivation.’ He
goes on to quote a survey among Human Resource executives which con-
cluded that, ‘At best, their incentive plans didn’t do too much damage.’
Professor Michael Beer of Harvard said:
A prevailing mythology today holds that pay can be re-designed to motivate
individuals to work differently. That’s simply not true. Pay is not the right
tool to effect change. Telling people you are going to change the compensa-
tion system rallies them around compensation when what you want them to
do is to rally around making teams work.
Professor Beer argues forcefully that organisations should change how they
work before they change how they pay, and should defer changes in pay. He
continues:
Workers resist formal changes such as pay redesign because they are per-
ceived as final decisions about new roles and responsibilities that haven’t
been accepted yet. Instead, change should be an organic process that evolves
as people learn and adapt to the new work structure.
For change
Professor Lawler of the University of Southern California is equally

adamant:
Major transformations in the way organisations operate require major trans-
formations in pay systems. The pay system is part of the very fabric of an
organisation; it is either against you, or with you. When it is against you, it is
like fighting with one hand behind your back. Therefore, despite the difficul-
ties .... it is important to try to align an organisation’s pay systems with its
management approach.
Capabilities, not numbers
Donald Berwick, an Associate Professor at Harvard Medical School, advis-

es strongly against numerical targets. He writes:
Payment by numbers invites expensive investment in internal gaining: man-
agers and employees will play by the numbers instead of improving their
methods. Results will be rewarded. This may feel good for a while, but the
underlying organisational competence will not progress. If we focus on the
capabilities that create results, we will get results that we never imagined.
His views are reinforced by Professor Lawler who recommends ‘skill-based
pay systems’. He writes:
Instead of reinforcing hierarchy, they reinforce skill acquisition and personal
growth. Skill-based systems also have the advantage of allowing organisa-
tions to pay outstanding individuals higher amounts of money.
‘Sweating the details’
Nothing is more disruptive and damaging than to spend a great deal of time
planning and introducing an incentive scheme only to find that it fails. As
one contributor to the HBR study commented, ‘There is no area of manage-
ment where “sweating the details” is more important than pay.’
Deborah Smith, Vice President of Human Resources at Xerox commented
that, ‘At Xerox, we have seen four critical levers can either facilitate transi-
tion or prevent progress. If anyone is neglected, the change process will not
occur effectively.’ Her four levers were cohesion, communication, training
and reward. She agrees that:
Pay is one of the many tools that can be effective in bringing about change.
Making sure that recognition and reward are tied to the desired end results and
behaviour needed to achieve those results, can increase the likelihood that
goals will be met. Whatever compensation programme is designed, it must be
integrated into the company culture and have the support and understanding of
employees. It should balance both group and individual recognition to rein-
force teamwork and encourage individual innovation and creativity.
Expanding on her first point, Deborah Smith refers to the need for ‘A com-
mon set of values, a common approach to problems, and even a common
language to overcome functional barriers.’ All points we touched on earlier
when discussing the need for cohesion. Ideally, whenever a new scheme is
to be introduced, a dummy run should take place, calculating what people
would be likely to earn if the scheme were to be introduced.
Involvement
You will remember that Ralph Stayer’s workers designed, introduced and
operated their own incentive scheme. Similarly, a team of technicians at
Motorola developed their own pay programme and brought their plans to
the executives in charge of compensation. Though these executives had
some reservations, it was approved. Rightly, they felt that ‘ownership’ of the
plan was important. It worked.
Colleagues as shareholders
An increasing number of organisations are now taking the issue of team

member involvement to what they regard as its logical conclusion, by
involving them as shareholders. Both NFC and Unipart are organisations
with a significant measure of employee shareholders. CMG, a computer
software company, has an impressive employee shareholder scheme. Over
the years, employees have invested over £50m.
CONCLUSION
Motivation cannot be discussed in isolation. It should be the end result of

getting the motivational impact of every one of our twelve Pillars right.
Once this is done, then the motivation technique that works is to set specif-
ic, stretching goals, provide the feedback – and above all – provide the sup-
port needed. Pay must be perceived to be fair, and the question then is, what
role, if any, should incentive compensation play? If we are genuine about
involvement, then our front-line colleagues should be involved in this dis-
cussion but I like the recommendation that ‘If we focus on the capabilities
that create results, we will get results that we never imagined.’
Above all we want to motivate people so they should look forward to com-
ing to work, because it can be fun, and they have the confidence, competence
and capabilities to ensure successful outcomes, to be part of a ‘winning team’.

Motivating Superior Performance
ᔡ Do you and your colleagues view motivation as a way of harnessing
the vast power of your colleagues’ emotional energy: by accepting
their personal emotions; visualising success; generating pride; treating
them as champions; providing recognition; having fun; and – above all
– generating a sense of meaning? If not, what actions do you and your
team need to take?
ᔡ Have you created an absolute desire to win, giving your people every
chance to identify with your business, and use their enthusiasm as your
most valuable asset? If not, what actions do you and your team need
to take?
ᔡ Does your organisation demonstrate reciprocity? Do you generate an
environment that demands a great deal of your colleagues but, equal-
ly, goes to great lengths to take them and their ideas into account? If
not, what actions do you and your team need to take that ensures
genuine reciprocity exists?
ᔡ Have you created a winning team: does everyone know the goals they
have to score? Do you have an eight-point plan for gaining both com-
mitment and achievement? If not, what actions do you feel that you
and your team need to take?
ᔡ Do you need to set a project team to study, and come back to you with
recommendations on how you can apply the principles set out in the
book by Edwin Locke and Gary Latham?
ᔡ Are you effective in rewarding your team for their success? Are you
using potentially divisive financial incentives? Do you and your team
feel that you could create a more integrated approach to both non-
financial and financial rewards, which give emphasis to developing the
capabilities you need for your long-term success? Is this a topic worthy
of creating a special project team? How far could you delegate this
task to the people themselves?
11
COMMUNICATE TO ACHIEVE
EXTRAORDINARY
PERFORMANCE
LEADER’S GREATEST OBLIGATION
It has been said that ‘A leader’s greatest obligation is to preach’. He or she

has to focus primarily on four areas:
1. Communicating the vision so that it is understood clearly and people
are highly motivated to play their part in its achievement.
2. Creating the culture to translate intention into reality.
3. Creating a symbolic ‘picture’ of the organisation.
4. Breaking through your ‘Cultural Web’.
To set the scene, let’s look at a case study, summarised from an HBR report.
THE PURPOSE AT THE HEART OF LEADERSHIP

When Kye Anderson was thirteen, her father died of a heart attack. The
result was a single-minded career in medical technology which led to her
starting her own company to develop and sell innovative systems for diag-
nosing heart and lung disease. At one point, she had two weeks to build a
system to save the life of a baby who could not breathe on his own when
he slept. But, when sales started to climb to $10m she was persuaded that
she lacked the financial and managerial expertise to carry her business
from ‘exuberant adolescence’ to ‘profitable maturity’ so she stepped aside.
But, while the bottom line improved, focus on logistics and management
had ‘put out the fire in people’s guts’. The company was losing its way.
So, after an 19 month ‘sabbatical’ Kye Anderson came back. She picked
new board members who could act as her ‘mentors’. She reasserted her
original ‘core values’. With help, she put together a statement of higher
purposes, mission, eight values, and three strategies. She writes:
11: COMMUNICATE TO ACHIEVE EXTRAORDINARY PERFORMANCE ᔡ 183
When mission and value statements talk about filling unmet diagnostic
needs, about improving the quality of patients’ lives, about maintaining
competitive advantage through quality and innovation, about profit,
human dignity, ethics, cost consciousness, cost effective medicine, about
listening to customers, patients, and employees – and when these values
are spelled out under a banner proclaiming, as a higher purpose, ‘to pre-
vent heart and lung disease, the leading causes of death and rising
health care costs’, the result is a guide to behaviour, to planning, and to
problem solving.
In a key sentence, she concludes, ‘I’ve been able to trace back every
difficulty I’ve ever encountered at Medical Graphics, trivial as well
as serious, to violation of one of these principles.’
Kye Anderson realised that a leader’s greatest obligation is to preach,
and she began to spend much of her time communicating with her own
employees about the purpose, mission, values, and strategy that could
carry the company into a billion dollar primary-care market.
Abridged with the permission of the Trustees from Harvard Business Review, reprint
92301.
COMMUNICATING THE VISION
Leaders are only as powerful as the ideas they can communicate. They
inspire their followers to high levels of achievement by showing them how
their work contributes to worthwhile ends. It is an emotional appeal to
some of the most fundamental of human needs – the need to be impor-
tant, to make a difference, to feel useful, to be part of a successful and
worthwhile enterprise.
This quotation from Leaders8 by Warren Bennis and Burt Nanus, serves as a
very powerful challenge to those of us responsible for leading our organisations.
Personal commitment
Kye Anderson concluded her ‘First Person’ article in the HBR by saying:
When I came back, I began for the first time telling people the story of my
father’s death. To my surprise, nearly everyone I worked with had a similar
story. It turned out that all of us were in it for something more than money,
and for 10 years I had let that sense of higher purpose go unexpressed and
unfulfilled. It may be difficult, even painful, for an entrepreneur to expose the
private emotions that drive him or her, but it is an indispensable piece of good
entrepreneurial leadership.
As Kye Anderson says, it can be difficult, even painful, to expose the private
emotions which drive us. I had a very disrupted childhood which left me
extremely introverted, loath to communicate my private feelings. Initially
this hindered my progress in my business. Once, I told a long-established
colleague about my background. His response was that he felt cheated by not
having known earlier. He was enthused by our ‘heart-to-heart’.
Truly successful executives project their vision with almost missionary
zeal. Undoubtedly you can think of many examples for yourself. Tom
Farmer of Kwik Fit is constantly visiting every one of his depots to talk to
staff on duty. It was once said of Jan Carlzon of SAS that whenever there
was a group of people having a chat, it was highly probable that Jan was
one of them. When Sir Colin Marshall was at British Airways, he took
every opportunity to talk to his staff on the planes, and at the terminals. He
took an interest, asked questions, and expressed appreciation. He focused
on things that people are doing right.
But as we said earlier, no one person can do it all by himself. Just as there
has to be leadership at every level of the organisation, so, too, must there be
communication at every level, indeed, throughout the organisation.
Extensive participation and consultation
When I went to Japan with a client once, he, his assistant, and I, found our-
selves facing nearly twenty Japanese executives. They involved everyone
likely to be affected by our discussion so that they would know how to
react. Sir John Harvey Jones, in his fascinating book, Making it Happen2
writes on this theme:
Those of us who have worked with the Japanese and who admire their busi-
ness achievements, as I do, know how long it takes the Japanese to reach a
decision. One is lulled into a totally false sense of security by the apparently
endless debate and the thoroughness of the involvement of people at every
level of the organisation in the decision, because when the action stage comes
they move like greased lightning.
Some years ago we licensed a process to build a paraxylene plant to the
Japanese ....We were simultaneously building an identical one in the UK and
we had each taken the decision to go ahead at the same time. After four
months we were already breaking ground and priding ourselves on being well
ahead of the Far Eastern opposition who were still endlessly debating items
of the design and equipment. Imagine then our chagrin when not only did
they complete their plant seven months before us but also it worked at first go
while ours suffered the usual teething troubles and only achieved its flow-
sheet some three months after start.
‘The Japanese get their commitment in the process of discussing the

“How”.’
The Machine That Changed the World11 gives a different dimension to this
point. When Japanese vehicle manufacturers start to design a new model,
hundreds of people are involved to resolve all the potential problems.
Nothing is allowed to move forward until somebody accepts commitment
for resolving the problems. So thorough is this process that as it develops
fewer people are needed. In the West, we used to do the reverse. At the
beginning of the design process, fewer people were involved. Difficult
issues were deferred. The people initially involved did not accept responsi-
bility. The result was that more and more people were needed to resolve
problems as the process developed.
The process of communication in Japanese factories was such that they
could practise simultaneous engineering, doing many differing functions
concurrently. In the West, at that time, we tended to do them in sequence.
Now, as a result of the work of Dan Jones and his colleagues, the West is
racing to catch up. We realise that the more we involve those who are actu-
ally going to be involved, the more likely it is that the task will be complet-
ed successfully.
In a marvellous chapter on ‘Setting the Direction’2, Sir John Harvey Jones
emphasises:
[Setting the direction]...can only be accomplished by hours of talk. We have
found that this sort of discussion requires a certain amount of structure, but a
great deal of flexibility, and is best carried out [outside] our normal working
environment. We wear sweaters and jeans, we do not keep minutes of what
individuals say, we do tremendous amounts of work on flip charts, we form a
lot of our conclusions ‘on the run’. The outcome of perhaps three days’ work
is often no more than 10 points on a flip chart, and we would consider that a
good rate of striking. The discussions are always ... highly informal and we
encourage each other to produce ideas, no matter how fanciful.
We find the process simultaneously tiring, frustrating and rewarding, when at
the end of tussling with some problems, we reach a shared view and a com-
mitment to that view, which is usually of a different order to that which we
can achieve by any other means.
Involvement in decisions
In his book Sharing the Success9, Sir Peter Thompson writes that his objec-
tive was to make NFC employees the best informed workforce in the UK.
He set an example from the top by making sure that they had an open com-
municative management style. The Head of Communications was required
to attend all executive Board Meetings and to prepare a broadsheet of items

to be communicated down the line. Subsidiary companies then added any
items of interest from their own management meetings and passed the infor-
mation down to the Branch Manager. Branches added their information, and
this became the basis of the briefings. He also states that:
Any policy issue was always passed down the line for discussion before a
decision was taken on high. It was slow, but it then made implementation of
the policies that much easier.
AWWA
Jan Carlzon15 tells the story of how, earlier in his career, he took over a loss-
making subsidiary of SAS called Linjeflyg. He summoned all the staff
members from throughout the country to a meeting in the main hangar. He
climbed a tall ladder and addressed the crowd from 15 feet off the ground.
He said:
This company is not doing well. It’s losing money and suffering from many
problems. As the new President, I don’t know a thing about Linjeflyg. I can’t
save this company alone. The only chance for Linjeflyg to survive is if you
help me – assuming responsibility yourselves, share your ideas and experi-
ence so that we have more to work with. I have some ideas of my own and
we’ll probably be able to use them. But you are the ones who must help me,
not the other way around.
He explains that their reaction was fantastic. Once upon a time, the concept
of MBWA, Managing By Walking Around, was popular. I feel it should
become AWWA – Asking When Walking Around. The emphasis needs to be
on debriefing, releasing expertise, gaining intelligence. It really does boil
down to a willingness to turn round and ask a question such as:
‘What do you think?’
‘How do you suggest we tackle this?’
‘How well are you achieving, or making progress towards your goals?’
‘How can I help?’
At one plant where management had been seeking desperately for a solution
to uneven work flows without success, one of their welders gave them the
solution.
Debriefing sessions
Many progressive organisations hold regular briefing sessions. But Richard

Pascale16 believes that – even if subconsciously – too many executives are
still influenced by the Frederick Taylor concept of getting ideas out of the
brains of executives, and into the hands of workers. Our new approach must
be to get ideas out of the brains of our team members so that, collectively,
we can evolve more effective, successful strategies to gain a competitive
advantage.
So, if you already hold ‘briefing sessions’ for reasons of psychological
emphasis, can I suggest that you now call them ‘debriefing sessions’ and
deliberately restructure them to allow time for your team members to report
on progress, and on what they have learned. Wal-Mart does this weekly to
ensure essential feedback from customer-facing staff.
What to communicate
Ann Ferguson, formerly Head of Group Communications at ICI, in discus-
sion with each of the businesses within ICI, identified six key areas which it
was felt important for the group to reinforce. At the time, these were:
1. The values of ICI, what it stands for.
2. The ICI Group objectives and strategies.
3. The member’s role in achieving these objectives.
4. How each member contributes.
5. Business performance.
6. Policies and changes.
It is interesting to note the focus on values, objectives, strategies, goals and
contribution. The topics she emphasised are equally relevant in smaller
organisations.
A structure of communication
Both MBWA and AWWA are easier to handle in a small organisation. The
larger we become, the more important it is to have a structure. I am grateful
to Mike Judge of Peugeot for permission to reproduce the schematic of their
communication processes shown in Table 11.1.
Peugeot executives believe, rightly, that nothing is worse than for their
team members to receive information from the media, or from third parties,
before they receive it from the company itself. They have a ‘red document’
which ensures that everyone is told of any newsworthy development before
the media. When Peugeot first started, they used external experts to make
videos. Now they use their own staff. They have reached a high standard
and their videos have already been used.
Unipart also produces superb videos, using satellite communications to
project them to every location.
Table 11.1 Peugeot Talbot Motor Co Ltd employee communications
METHOD PURPOSE RECIPIENTS SPEED FREQUENCY
COMPANY CHARTER The Company Mission and All employees.

Vision Statement outlining the
broad objectives of the company.
COMPANY Managing Director calls monthly All employees. Within 72

OPERATIONS Operations Committee meet- hours
NEWS ings. of operations
Operations Committee consists committee
of 25 functional Directions. meeting.
BRIEFING MEETINGS Briefing document contains
details of meeting subject matter,
eg productivity, quality, financial
information, sales figures.
Every employee receives briefing
document and those in manu-
facturing receive manufacturing
bulletin as well.
Line management also receive
background information, and
adds local working area news.
Production is stopped whilst
managers/supervisors give ver-
bal presentation of the briefing
document to employees.
All employees are free to ask
questions at briefing meeting
and receive either immediate or
subsequent replies.
URGENT To get very urgent information to Distributed to Information As required.

INFORMATION all employees before the media. functional reaches all
COMMUNICATIONS- (Known as ‘red documents’). heads, line employees
IMMEDIATE management same day as
DOCUMENT and supervisors. document
Then given ver- preparation.
bally to all other
employees
MANAGING Conveys news which is less All employees Information As required.

DIRECTOR’S urgent than that carried by ‘red either: verbally reaches all
REVIEW document’ but, which will not from supervisior employees
wait for inclusion in the next or posted on within 2 – 3
Peugeot Talbot Times (known as notice boards. days of prepa-
‘green document’). ration.
IN HOUSE Local newspaper for employees Copy for each Normally dis- 10 issues
NEWSPAPER giving a blend of employee, motor employee – cir- tributed to all per year.
‘TIMES’ COLOUR industry, company news. culated to com- employees
TABLOID Promotes and reports on various pany dealers. within 1 – 2
employee sports and social events, days of prepa-
employee communications, retire- ration.
ments, appointments, etc.
Table 11.1 (contd)
COMPANY Often preceded by a video pre- Management. 2 – 3 weeks Twice a

OVERVIEW sentation of major topics of cur- year.
rent interest, eg new model Senior Trade
MANAGING launch, analysis of past perfor- Union represen-
DIRECTOR’S REVIEW mance, future business plan. tatives.
Managing director’s presenta-
tion takes the form of either
one evening meeting of all man-
agers or a number of smaller
meetings with group managers.
The presentation is also made to
Trade Union reps at separate
meetings chaired by managing
director.
COMMUNICATION The company produces, entirely Identified Within one As required.

AND TRAINING in-house, videos dealing with groups of week of film-
VIDEOS specific subjects, eg quality, employees. ing.
facility and operating changes.
Pensions Scheme administration.
These are normally shown to
employees as an extension of
briefing meetings where there is
the opportunity for questioning.
ANNUAL REPORT Report on performance of the All employees, Within 2 weeks Annual.
company in the past year, financiers/bank- of publication.
including the accounts. ers, media, sup-
Explanatory video and simplified pliers, local
explanatory documents also pro- community.
duced.
LOCAL Provide snap-shot of what hap- All manufactur- Distributed to Weekly.

OPERATIONS NEWS pened ‘on plant’ the previous ing supervisors. all manufac-
MANUFACTURING week. turing supervi-
SUPERVISOR’S Production achieved in each sors in one
BRIEF area - quality, appointments, day.
targets.
Gives detailed information relat-
ing to all work areas.
MANUFACTURING Employees meet manufacturing 25–30 manufac- Weekly.

FORUM personnel manager and other turing employ-
managers to discuss issues of ees are picked
concern outside formal negotiat- at random from
ing machinery. the payroll com-
There is an open agenda, any puter.
issue can be raised.
NOTICE BOARDS Used to display up-to-date Notice boards Distribution to As required.

details on such matters as pay are sited all notice
negotiations, job vacancies, throughout boards 1 – 2
fire/safety regulations, sporting plants and days.
and social events. offices.
Table 11.1 (contd)

IN HOUSE RADIO In-house radio station for Ryton Ryton and Immediate. Broadcast
Plant covering the track areas. Canterbury daily.
RADIO RYTON Tapes prepared at Ryton Plant Street shop
also played at Canterbury Street floor employ-
factory. ees.
Broadcasts – anything from
music to sports results.
Provides instant means of com-
munication on non-contentious
items.
PUBLIC RELATIONS/ To promote launch of new car All employees. Within one As required.
MARKETING and emphasise commitment to week of print-
PUBLICATIONS Coventry. ing.
AGREED MINUTES Jointly agreed minutes of negoti- Management, Immediate. During

ations on pay and conditions Trade Unions, negotia-
containing TU submissions and notice boards. tions.
company offer.
DIRECT CONTACT The company communicates Appropriate Distributed by As required.

directly with the employees by group of mail to
mail, primarily when faced with employees. employees’
a potential or actual dispute but homes or
also on other occasions. handed out.
It’s also what we do
It’s not only what we say, it’s what we do. Jan Carlzon15 writes that, when
he travelled by plane, he made sure that all the fare paying customers were
seated before he took whatever seat was available. In the plane, he asked his
cabin staff to make sure that the fare paying customers were supplied with
the papers or magazines they wished, before he took his selection. He
believes that this was the only way that he could live the philosophy of
‘putting customers first’. Yet all too often, in many businesses, executives
who are saying one thing do the opposite in practice.
Communicating the vision: at every level
While it is the primary responsibility of the leader, he or she cannot do it all

by themselves. Help is needed at every level of the organisation. The Body
Shop have created what are known as ‘Charter Working Groups’, which
focus on the eight important areas of communication, integration, appraisal,
recruitment/induction, training/development, social events, fund raising and

motivation.
Under the last topic of motivation, the aim of the working group was
defined as being ‘to encourage staff and develop their realisation of their
importance within the workplace and their role and contribution in the suc-
cess of BSI’. One of the ideas to develop from the motivation work group was
the DODGI awards. DODGI stands for the ‘Department of Damn Good
Ideas’. The team concerned states that they intend to continually review exter-
nal success stories of motivation and adapt or extend these for themselves.
‘Swim better!’
It remains the responsibility of the leader to communicate his or her vision.

For an organisation going through a process of change, when people may
feel threatened or insecure, it is even more important. Jack Welch faced this
problem during the period when he was introducing massive changes at
General Electric. He explains: ‘I was intellectualising the issues with a cou-
ple of hundred people at the top of the company. Quite clearly I was not
reaching hundreds of thousands of other people.’
The message they heard – ‘swim better!’ – wasn’t much help. It took time
for Jack Welch to find a way of opening a dialogue with GE’s whole work-
force. He began a process – still very far from complete – of winning the
large mass of employees over to his way of thinking. He explains:
It’s not that I changed. We just expanded the reach of our communication. We
refined it, got better at it, and it began to snowball. If you have a simple, con-
sistent message, and you keep on repeating it, eventually that’s what happens.
Simplicity, consistency, and repetition – that’s how you get through. It’s a
steady continuum that finally reaches a critical mass.
What communication is not
In one speech, Jack Welch says:

We’ve learned a bit about what communication is not. It’s not a speech .... or a
video tape. It’s not a Plant newspaper. Real communications is an attitude, an
environment. It’s the most interactive of all processes. It requires countless
hours of eyeball-to-eyeball back and forth. It involves us all in more listening
than talking. It is a constant, interactive process aimed at (creating) consensus.
It takes a tremendous amount of time.

Sound business decision

No organisation has the time to tell all its employees exactly what to do but
like any CEO, Jack Welch needs his workers to further his goals. He needs
people who not only understand GE’s objectives but sincerely believe in
them. Only when everyone is on the same wavelength does ‘liberating’ peo-
ple, as Jack Welch puts it, become a sound business proposition. This is the
ultimate objective. To get every member of your team so committed to your
vision, your objectives, that they can use their initiative to act as indepen-
dent entrepreneurs on your behalf.
To reinforce an earlier point because it is important, we need to ensure a
culture in which everyone has the competence to take decisions – on a simi-
lar sound approach, with rigour and lack of emotion – which help them to
help their company succeed.
CREATING A CULTURE OF SUCCESS
We all have to be aware that every organisation develops its own ‘culture’.
This is a tremendously important, even vital issue. Kotter and Heskett4,
break it down into two elements.
ᔡ Shared values: important concerns and goals that are shared by most of
the people in a group that tend to shape group behaviour, and, that often
persist over time even with changes in group membership.
ᔡ Group behaviours: common or pervasive ways of acting that are found
in a group that persist because group members tend to behave in ways
that teach these practices to new members, rewarding those who fit in
and sanctioning those who do not.
They point out that group behaviours, being more visible, are easier to
change. Shared values, being invisible, even subconscious, are far harder to
change.
Unadaptive cultures
Like human personalities, corporate cultures result from the interaction of

temperament and experience. Over time, their dictates slip from the con-
scious to the subconscious. People cling to once useful beliefs and patterns
of behaviour as if no alternative existed. John Kotter and James Heskett, in
their book Corporate Culture and Performance4, explain that when
organisations fail to adapt to changing circumstances, it is because they

have what they describe as an unadaptive culture.
In their view, it is the prime reason for business failure.
Paradoxically, the wrong culture often develops from great initial success.
The strong culture that such companies generate can easily become arro-
gant, inwardly focused, politicised and bureaucratic. Common examples are
IBM and General Motors, both of whom initially achieved market domi-
nance. But, in an increasingly competitively and rapidly changing world,
they were overtaken. Their culture unquestionably undermined their
economic performance. Jack Smith is beginning to change the culture of
General Motors. IBM is back into profits.
How many companies in your own trade or industry do you know of with
unsuitable unadaptive cultures?
Nothing fails like success
A section of Richard Pascale’s book16 starts with the challenging sentence

that ‘Nothing fails like success’. He points out that a high proportion of
companies once in the Fortune 500 Listings have now disappeared, or
slipped badly. He writes that ‘99 per cent of managerial attention today is
devoted to the techniques that squeeze more out of the existing [ways of
doing things] and it’s killing us. Results may be positive and profitable in
the short run but ... are fatal over time.’ He adds that ‘What is disheartening
is how slowly we are closing the gap between ourselves and our ever-
improving global competitors.’
Inherent conservatism
Many other writers confirm the inherent conservatism of most organisa-

tions. Professor Zaleznik18 says: ‘Out of this conservatism, organisations
provide succession to power through the development of managers rather
than leaders ...... this ethic fosters a bureaucratic culture.’ He continues,
‘Leaders tolerate chaos and lack of structure. Managers seek order and con-
trol. In my experience, seldom do the uncertainties of potential chaos cause
problems. Instead, it is the attempt to impose order on potential chaos that
makes trouble for organisations.’ In short, focusing on what we have always
done, and the promotion of managers who seek to impose order, can result
in an Unadaptive Culture. This can be death to an organisation.
Table 11.2 Adaptive versus unadaptive cultures
Adaptive Unadaptive
Core values Most managers care deeply Most managers care mainly
about customers, shareholders about themselves, their imme-
and employees. They also diate work group, or some
strongly value people and product (or technology) associ-
processes that can create use- ated with that work group. They
ful change (eg leadership at value the orderly and risk-
every level). reducing management process
much more highly than leader-
ship initiatives.
Common Managers pay close attention Managers tend to behave

behaviours to all their stakeholders, espe- somewhat insularly, politically,
cially customers, and initiate and bureaucratically. As a
change where needed to serve result, they do not change their
their legitimate interests, even strategies quickly to adjust to or
if that entails taking some risks. take advantage of changes in
their business environment.
Source: Kotter and Heskett, Corporate Culture & Performance, Free Press
Kotter and Heskett’s conclusions (Table 11.2)

Paraphrasing the conclusions of John Kotter and James Heskett, they are:
1. Unadaptive cultures are widespread and stem from initial success.
Unadaptive cultures that inhibit strong long-term financial performance
are common. They develop easily, even in firms full of reasonable and
intelligent people. They tend to emerge slowly and quietly over a period
of years, usually when the company concerned is performing well. They
can be enormously difficult to change because they are often invisible
to the people involved, because they help to support the existing power
structure in the firm, and for many other reasons. The result is that
they encourage inappropriate behaviour and inhibit change to
more appropriate strategies.
2. Corporate culture will be an even more important factor in determin-
ing success or failure in the future. In a world of increasingly dramatic
change, companies that do not change their culture will face severe
problems of survival.
3. Establishing a flexibly appropriate, adaptive culture is an essential
ingredient for long-term success, and for the achievement of the
organisation’s vision.
Benefits of strong culture
I strongly recommend that you get a small team of your people to study
Kotter and Heskett’s4 book in detail. It is invaluable, not least for its case
studies. In their chapter on ‘Strong Cultures’, the two authors underline the
importance of the twelve Pillars we have been discussing. Again, slightly
paraphrasing their remarks, let me give a few examples.
Strong cultures provide needed structure and controls without having to rely
on a stifling formal bureaucracy that can dampen motivation and innovation.
They quote one CEO as saying:
I cannot imagine trying to run a business today with a weak or non-existent
culture; why, people would be going off in a hundred different directions.
Tandem Computers is said to have no formal organisation chart and few for-
mal rules, yet workers keep off each other’s toes and work productively in
the same direction because of the unwritten rules and shared understanding.
This culture is maintained because top management spends consider-
able time in training and in communicating the management philoso-
phy and the essence of the company, because achievements consistent
with the culture are recognised on bulletin boards as ‘Our Latest Greatest’
and because rituals such as the Friday afternoon ‘Beer Bust’ symbolise that
culture. All this makes workers feel like they belong to an exclusive club.
Most develop great respect for and loyalty to that ‘club’, a feeling which
often translates into long hours of hard, productive work.
Strong cultures help business performance because they create an unusual
level of motivation. They make people feel good about working for their
firm, have greater commitment and loyalty and feel that their work is more
rewarding. Involving people in decision making and recognising their con-
tributions are two examples quoted.
Enhancing culture
Let’s look at the two authors’ ideas for enhancing culture.

ᔡ Context: Leader(s) are able to put across that increasing competition at a
time of rapid change, requires change. This could involve lowering costs,
creating higher quality, being more innovative, attracting and sustaining
financial support, and being able to recruit the right calibre of people.
ᔡ Leadership: The CEO and his senior colleagues provide effective lead-
ership by communicating in words and deeds a new vision and a new
set of strategies and then motivating many others, their missionaries, to
provide the leadership needed to implement the vision and strategies.
Kotter and Heskett4 make a point that leaders must distinguish between the
ability to identify the values needed for their organisation to be adaptive,
from the more specific practices needed for day to day performance. They
must communicate endlessly about these core values and behaviours, which
should change rarely. But they should ensure that ‘specific practices’ are
changed as appropriate, and that new systems or new executives do not
undermine the core values and beliefs.
Effective leaders will not tolerate arrogance in others, and remind people
often of the need to serve the best interests of their customers, and all their
other stakeholders.
They keep their own egos under control. They make room for other egos.
ᔡ Values: Everyone develops a high regard for leadership at every level,
particularly leadership and other processes that produce change.
Everyone cares deeply about the people who have a stake in the busi-
ness – suppliers, dealers, customers, shareholders, the community and
competitors.
ᔡ Behaviours: Because everyone is focused on meeting the needs of their
customers, they are quick to recognise changes in their competitive situ-
ation. They are then willing and able to devise new strategies to contin-
ue to satisfy customers, and other stakeholders, even if changes must be
made in culturally ingrained behaviours. They take part in providing the
leadership needed to create and implement new strategies and practices
and seek to develop and promote those who share their core values.
Collective knowledge
In the above paragraph, I am paraphrasing Kotter and Heskett. Their recom-

mendations involve all the ingredients we have been discussing. I would
like to highlight one to which they do not refer specifically. I am convinced
that tapping into the collective knowledge of everyone involved with us, is
likely to be the biggest and most powerful way of creating, and sustaining a
performance-enhancing culture.
Consider this most telling quotation by G Hamel and C G Prahalad in
their HBR article, ‘Strategic Intent’41: ‘The ability to absorb, process and act
upon data from the environment systematically at all levels of the firm has
been demonstrated in the most chilling fashion by Japanese companies.’
Note their comment ‘...at all levels of the firm’.
A culture of loyalty
Excessive loyalty to individuals holds back many organisations. As ever,

Jack Welch has some highly pertinent remarks on this point.
GE had an implicit psychological contract based on perceived lifetime
employment. People were rarely dismissed except for cause or severe busi-
ness downturns. This produced a paternal, feudal, fuzzy kind of loyalty. You
put in your time, worked hard, and the company took care of your life. That
kind of loyalty tends to focus people inward.
But given today’s environment, people’s emotional energy must be focused out-
ward on a competitive world where no business is a safe haven for employment
unless it is winning in the market place. The psychological contract had to
change. People at all levels have to feel the risk-reward tension.
My concept of loyalty is not ‘giving time’ to some corporate entity and, in
turn, being shielded and protected from the outside world. Loyalty is an affin-
ity among people who want to grapple with the outside world and win. Their
personal values, dreams and ambitions cause them to gravitate towards each
other and towards a company like GE that gives them the resources and
opportunities to flourish.
It comes back to the hard issue of employability. I hope you will agree that
it raises very important issues of culture. Tom Farmer, Chairman of Kwik-
Fit set out his views on his organisation’s culture.
A CULTURE OF INTEGRITY
‘The right culture will mean that an act of dishonesty becomes a

betrayal of oneself and one’s colleagues’
(reproduced with permission of The Financial Times)
I have always believed that most people are fundamentally honest and,
provided they are given the proper opportunity and recognition, they will
of their best. While there have been occasions when I have been disap-
pointed, it is a view that has served me well throughout my life. With the
correct recruitment policy and people it is the only approach that you can
take when running a business, whatever the scale.
Honesty is an intangible quality for which it is impossible to legislate. You
can have as many rules as you want but if people choose to break them
then there is little that you can do to stop them. It is the responsibility of
management to create an environment which reduces temptation by hav-
ing adequate controls which are sound but not stifling.
The most effective deterrent is to build within the company a culture

based on pride in one’s job. Not only will this improve the quality of the
service or product offered, and produce profit, it will mean that an act of
dishonesty becomes a betrayal of oneself and one’s colleagues. This cul-
ture must stem from the top down and the attitude of management
towards their people is a vital element in its creation.
I have found that the best results are achieved by treating people as you
would wish to be treated. People must be provided with a decent working
environment and all the facilities they require to do their job. A proper
pay scheme must be in place which reflects their contribution and every-
one should have the opportunity to share in the profits they help to cre-
ate.
Everyone should know what is expected of them and should have received
sufficient training to enable them to be fully skilled in that task. There
should be opportunities for everyone to develop to the best of his or her
abilities; the promotion prospects and training programmes within the
company should encourage ambition.
CREATING A ‘PICTURE’ OF YOUR ORGANISATION
Worthwhile exercise
If you organise an evening meeting of your staff, or hold regular training cours-
es at an in-company training centre, there is another exercise you can develop
for yourself. Get those present to make a random list of all the values and prac-
tices they can think of. Then, get them to express each value or practice they
have listed in terms of extremely positive and extremely negative quality. Then
get them to design a questionnaire along the lines of our example.
Having done so, get each individual to rank each quality out of five. Thus,
a high degree of trust would rank 5, positive mistrust would rank 1, with
grades of trust or mistrust in between these (see Table 11.3).
To the extent that any replies from the members of your team fall short of
your idea, you have a clear indication of the areas in which you need to take
action. It may be that you need to improve your communication. It may be
that you have not yet put all your philosophies into place. Or it could be that
some of your executives are not walking, talking and living your values in
the way in which you had hoped.
Table 11.3 Creating your own culture map’
5 4 3 2 1
High degree of trust 5 4 3 2 1 Positive mistrust

High degree of loyalty/ 5 4 3 2 1 Sense of insecurity and
security 5 4 3 2 1 disloyalty
Initiative applauded 5 4 3 2 1 Conformity essential
Learning encouraged 5 4 3 2 1 Learning discouraged
Sense of equality and respect 5 4 3 2 1 Status and ‘kow-towing’
Candour and openness 5 4 3 2 1 Secrecy and dissembling
Ethics and integrity 5 4 3 2 1 Expediency, low ethics
Executive empathy 5 4 3 2 1 Executive arrogance
Total
More detailed exercise
A more detailed exercise would be to get a small team of people to go

through this book marking up each point they feel impacts on your culture.
A few examples:
ᔡ Focusing on leaders rather than managers.
ᔡ Focusing on top-line rather than bottom-line.
ᔡ Being contentious rather than compliant.
ᔡ Being assertive or saying nothing.
ᔡ Building confidence or being highly critical.
In fact, this could become a regular exercise whenever you have any group
of your people together. First, it would emphasise and reinforce the trans-
formation needed, and second, it would indicate the areas needing priority
attention. Most importantly, it would open up the organisation to debating
the key issues confronting everyone involved with your organisation.
You may wish to investigate techniques of this type but let’s look at the
fourth issue, that of understanding the ‘cultural web’ of your organisation.
UNDERSTANDING YOUR ‘CULTURAL WEB’
Gerry Johnson is Professor of Strategic Management and Director of the

Centre for Strategic Management and Organisational Change at Cranfield
School of Management. He writes42 on the way in which the deeply held
mindset – he uses the term ‘paradigm’ – of executives can inhibit change:
There is likely to exist at some level a core set of beliefs and assumptions
held relatively commonly by the managers. This paradigm is essentially cul-
tural in nature as it is the deeper level of basic assumptions of beliefs that are
shared by members of an organisation that operate unconsciously and define
in a basic ‘taken for granted’ fashion an organisation’s view of itself and its
environment.
At its most beneficial, it encapsulates the unique or special competencies of
that organisation and therefore the bases by which the firm might expect to
achieve real competitive advantage. However, it can also lead to significant
strategic problems.
The examples of this are common. Executive teams who discount com-
petitor activity or changes in buyer behaviour as aberrations; who per-
sist with outmoded practices or dying declining markets or competitor
substitution; management teams that choose to ignore or minimise the
evidence of market research, the implications of which question tried
and tested ways of doing things. Ask any manager who has found it
frustrating to use apparently objective evidence to persuade a manage-
ment team of their need to change their way of thinking or their
behaviour.
He explains that this mindset, or paradigm, acts as a filter for all the infor-
mation that the organisation processes, and thus defines a way it reacts to its
environment.
Figure 11.1 Strategy development – A cultural perspective

Reproduced courtesy of Professor Peter Johnson
The ‘cultural web’
This mindset, or paradigm, lies at the centre of the cultural web of an organ-
isation as shown in Figure 11.2. This cultural web can be used as a conve-
nient device for a culture audit which Gerry Johnson uses frequently as an
exercise to allow managers to ‘discover’ the nature of their organisation in
cultural terms, the way it impacts on the strategy they are following, and the
difficulties of changing it.
In his paper, he gives three case studies: a manswear clothing retailer, a
consulting partnership, and a regional newspaper which – with the permis-
sion of him and his publishers41 – is reproduced as an example (Figure
11.3).
Figure 11.2 The Cultural Web of an Organisation

Figure 11.3 How Managers Define the Cultural Web – One Case Background
Company C is a regional newspaper business operating in a market in

which it had enjoyed long-standing dominance with its local evening
newspaper. It now faced increasingly competitor pressure from free news-
papers and entry by competitors historically based elsewhere. Moreover a
changing local population meant less traditional loyalty to the newspa-
per: and longer term developments of media alternatives for the public
raised both strategic opportunities and possible threats.
The need was for a substantial short-term rethink of competitive strategy
and longer term rethink of the direction of the business. Yet the culture
audit undertaken by the managers revealed a taken-for-granted view that
their paid-for daily newspaper ‘would always be around’, and that the
local community somehow needed them. Moreover the technology, struc-
ture and routines of the business did little to promote strategic thinking:
the business was necessarily run on short term deadlines – hours not days
– the ‘macho’ self image of those running the business, and the vertical,
hierarchical ways of doing business, prevented a free flow of ideas across
management boundaries.
Suggestions by some younger managers that the prime purpose of the
business was to create an effective advertising medium (the main source
of revenue) were set aside given the dominant belief that ‘we are a news-
paper’; a view reinforced by the symbolic significance of the presses, the
associated technical jargon, street distribution system and the stories
linked to news gathering and coverage.
Table 11.4 Managers’ definitions
Paradigm Rituals and routines

We are in the newspaper business ‘Slaves to time’ to meet deadlines for
Our paid-for daily will always be there publication
Readers will pay for news ‘Product’ developed in hours and
Advertisers need newspapers minutes, not days and months
Long working hours common
Ritualised executive meetings at senior
level
Power Stories
The parent company – a newspaper group Macho personalities and behaviour
The autocrat CEO Scoops and coverage of major events
Departmental rivalry between production, Stories of the past
commercial and editorial departments Major errors in print
The defeat of the unions
Table 11.4 (contd)
Organisation Symbols
Vertical, hierarchical system with little Symbols of hierarchy: the MD’s
lateral communication and much vertical Jaguar, portable phones, car-parking
referral spaces etc
The ‘press’
Autocratic management style Technical production jargon
The street vendors
Control systems
Emphasis on targeting and budgeting to
achieve a low cost operation
The cultural audit
Gerry Johnson makes the valid point that it is important to expose that
which is taken for granted. He writes, ‘One way in which this might be
facilitated is to undertake the sort of culture audit which helps to make
explicit that which is taken for granted and to generate managerial debate
about the cultural barriers to change that exist.’ One division of the fast
growing Emap Group carries out a regular ‘culture audit’ of each of its
operating units. Former Divisional Managing Director, Colin Morrison,
finds it an invaluable tool. (When it acquired my company we came top or
second in most of the headings).
In fact, it is the ideal complement to the type of ‘Staff Attitude Survey’
we discussed earlier.
Basis of communication strategy
The more you can bring to the surface these unspoken assumptions about
the values and beliefs of your people, the more effective will be your debate
on these issues. It can truly serve to open up your own organisation. It is the
first step to truly effective communication.
CONCLUSION: COMMUNICATE ENDLESSLY
As we have seen, your culture can be your stumbling block or your launch
pad. Which it is, depends upon you as the leader of your organisation. Your
success depends upon your ability to articulate your vision, your values and
beliefs, and your strategies. It requires you to give a significant amount of
time to communication: to communicate endlessly.
You have to take the lead by initiating highly participative discussions on
all twelve of the ingredients we have discussed. As Jack Welch observed,
communication is not a set of techniques, but a process, an attitude, a total
ambience of highly participative, assertive, contentious, challenging, two-
way communication in which every individual is treated as an equal.
Clauswitz observed that, once battle is joined, Generals have little con-
trol. They have to rely on the commitment and ability of the ‘lower ranks’ to
use their initiative in attaining their objective. One of the reasons that
Montgomery was highly acclaimed was the thoroughness with which he
personally briefed his troops before every battle. He drove around in a Jeep,
told those he met to gather round, and spoke to them man-to-man. His
belief was:
The leader must have infectious optimism ... the final test of a leader is the
feeling you have when you leave his presence.
While every single ingredient we have discussed to date is important, they
will count for nothing unless you, and every leader at every level of your
organisation, can achieve this degree of infectious optimism.
BRAINSTORMING EXERCISES OR PROJECTS
Communicating to Ensure Superior Performance
ᔡ If you are Chief Executive, do you spend enough time on communica-

tions, bearing in mind that some successful executives reckon to spend
40 per cent of their time on this essential activity?
ᔡ Do you and your team feel that the level of communication in your
organisation is at the level needed to achieve extraordinary perfor-
mance? If not, what actions do you and your team feel are necessary
to reach this level? Are you happy with both your formal and informal
structure of communications, and is this reinforced by the actions of you
and your senior colleagues?
ᔡ Do you feel that you are effective in communicating your vision: is
there a sufficient level of participation and consultation: involvement in
decisions: AWWA, and debriefing sessions? If not, what actions do you
need to take to encourage this level of involvement?
Creating a Culture of Success

ᔡ Do you feel that you have created a culture of success which is highly
adaptive to the rapidly changing environment in which you operate? If
not, how do you feel that you and your team need to set about creat-
ing such an adaptive culture?
ᔡ Do you feel that your culture provides structure and controls without
stifling bureaucracy which dampens motivation and innovation? If not,
how do you set about creating such an empowering culture?
ᔡ Is your culture based on the recognition that your continued existence
depends on the day-to-day mobilisation of every ounce of intelligence
so that you are able to absorb, process and act upon data from all lev-
els of your organisation? If not, what actions do you need to take?
Creating a ‘Picture’ of your Organisation

ᔡ Do you need to set up a series of in-company meetings, discussions
and perhaps competitions to draw a ‘picture’ of your organisation and
create your own ‘culture map’? If so, how would you set about doing
so?
ᔡ Should you get a project team to study Professor Gerry Johnson’s con-
cept of a ‘cultural web’ and carry out the type of ‘cultural audit’ he
recommended?
12
YOUR CHARTER FOR
EXTRAORDINARY
ACHIEVEMENT
WHY?
Why should you expect your suppliers not merely to deliver their goods and
services, but to work in a partnership with you, making sure that you get
precisely what you want when you want it and, if necessary, by helping you
to resolve any emergencies you may have? Why should they have that extra
commitment to use all their expertise and knowledge to help you to improve
your existing products and services, or help you to be innovative in
developing new products or services?
Why should your executives ‘sweat blood’ for you, work long hours, and
lie awake at night worrying about their contribution to your success?
Why should every member of your team commit themselves to an extra-
ordinary 110 per cent effort, to doing their best to achieve their goals, and
thus help your organisation to achieve its goals?
Why should those, like your distributors or dealers, who help you to get
your products to your end user customer, give priority to positioning and
projecting them to achieve or exceed the market penetration you desire?
Why should your competitors help you, even share information with you,
and generally be supportive on issues of concern to you?
Why should your shareholders invest in you, on occasions waive their
dividends and, when asked, reinvest further sums?
Finally, why should the community within which you operate be
supportive to you and help where appropriate?
PILLAR 12: YOUR CHARTER FOR EXTRAORDINARY ACHIEVEMENT ᔡ 207
Quality of relationship
It’s not just money (though the financial relationship has to be fair and real-
istic). The reason why customers, suppliers, executives, team members,
competitors, shareholders and your community either do or don’t sustain
their involvement is the ‘quality’ of the relationship they experience in their
dealings with you.
If you think about the type of organisations with which you prefer to deal,
it is likely that they project a strong sense of ‘identity’. They seem to have a
strength of character which is normally reflected in the sum total of all your
relationships with all the members of the organisations with whom you
deal, or come into contact.
The extra dimension

This almost indefinable ‘extra dimension’, this sense of ‘identity’ comes, in
my view, from all the ingredients we have been discussing together. In par-
ticular, it comes from our sense of vision. As Warren Bennis and Burt
Nanus8 put it:
...a clearly articulated vision of the future that is at once simple, easily under-
stood, clearly desirable, and energising.
So, we all face three vital challenges:
1. Vision: How do we establish and project?
2. Hearts and minds: How do we win the hearts and minds of every mem-
ber of our team?
3. Reputation: How do we create the right perceptions of our position in
our market place?
Argue through
Starting first with our philosophical base:
ᔡ What are our philosophies and principles?
ᔡ Most importantly, what are our values and beliefs?
ᔡ What sense of meaning do we provide to those who work with us?
ᔡ What is our mission?
ᔡ Finally, what is our vision?
Turning to our strategic base, how do we define and quantify our objectives?
ᔡ In particular how do we intend to optimise upon the ‘value stream’ of
our business, all our relationships with all our stakeholders?
ᔡ What are our business goals?
ᔡ What are the strategies by which we intend to achieve our goals?

ᔡ How does this relate to our vision?
It’s not a question of worrying too much about brilliantly crafted words. Sir
John Harvey Jones2 is right – if all you end up with is some bullet points on
a flip chart or whiteboard, that’s good enough initially. What matters is that
you have a highly participative argument, involving as many people as pos-
sible, and start to reach an understanding and agreement. In a small compa-
ny this may be enough. In larger companies, it may help to formalise the
argument into a series of statements on each issue, which can then be incor-
porated into a charter.
ADVANTAGE OF A CHARTER
To evolve a written charter can have a number of advantages. It can help to

establish more effective relationships with all your stakeholders.
It can:
ᔡ clarify your relationship with your suppliers and dealers;
ᔡ become the basis of your psychological contract with every member of
your team;
ᔡ be shown and become part of the recruitment and induction of new col-
leagues, and an essential reminder to those you consider promoting;
ᔡ become part of your marketing platform, being given, as appropriate, to
customers, and being attached to the major quotations or tenders you
may need to submit;
ᔡ be the basis of your public relations activities; particularly in the com-
munity at large.
So it can be of tremendous benefit to set down in writing a succinct explana-
tion of all the ingredients which drive you and your team to achieve extra-
ordinary performance. However, several issues need to be borne in mind.
SIX CAUTIONS
1. Credibility
At a Strategic Planning Society conference, Professor Andrew Campbell of

Ashridge gave a significant warning. He mentioned the example of a
Commissioner of the Metropolitan Police who worked hard to produce an
attractively presented, hard covered booklet, setting out what he felt to be the
philosophies and principles on which policing should be based.
Unfortunately, when the policemen ‘on the beat’ read it, he lost all credibility.
In their view, it did not relate to the realities of their experience in their day-
to-day work. Thereafter his effectiveness as Commissioner was undermined.
2. Participation and ownership
As Bill Quirk of Synopsis Consulting said at the same conference:

There can be no commitment without ownership....
There can be no ownership without participation.
There has to be a high level of participation before people will accept owner-
ship and, until they accept ownership, we cannot expect effective commit-
ment. Sir Peter Thompson of NFC9 went to a tremendous amount of effort to
involve people in every significant decision, in the formulation of his mis-
sion statement, and even, at one point, commissioned MORI to do a survey
of every shareholder/worker. I like the comments made by Richard Pascale16
on this issue (see below). There is truly a no pain, no gain dimension.
Experience teaches us that an effective statement of vision, values, and

guiding principles cannot be hammered out by the public relations staff
or the human resources personnel department. Nor do they blossom from
crash efforts of an executive task force. Values are truly a ‘no pain, no
gain’ proportion. If top management doesn’t agonise over them and
regard them as a never-to-be-broken psychological contract between
themselves and employees and society, such statements are little more
than empty words. But if hewn from discussion and introspection, values
come to be internalised as honoured precepts of behaviour. They serve
like the North Star – valuable guiding lights that orient an organisation
and focus its energies.
A key ingredient in this quest is choice of language. Many well intended
efforts to draft statements of vision, values, and guiding principles bog
down in platitudes. The same weary words appear: leadership, superior,
teamwork, excellence, highest standards, rate of return. The challenge is to
use fresh language that inspires and connects.
One of the pitfalls awaiting those who craft lofty vision and value state-
ments is that they overreach. Swept away by rhetoric that stresses person-
al concerns and the company’s commitment to society, they ignore the
imperative to survival. So doing, they set themselves up to charges of
hypocrisy when times get tough and the company’s enacted behaviour
doesn’t square with its espoused values.
3. Realism
Richard Pascale16 is right on his last point. There has to be realism. As Jack
Welch has said, ‘No company can offer security, only customers can.’ In
one of his Annual Reports he focused on the need for every member of his
team to realise that they had to justify themselves by the quality of their
contribution. In our recruitment processes, we make it plain that we
want 110 per cent effort from those who join us, and try to discourage
those who demonstrate any reluctance at this stage of the processes.
4. Language
Richard Pascale has a brilliant command of language. As a Professor, he

should do. However, I once read that the intellectual age of the average TV
addict is equivalent to a 14 year old. The American Army has spent vast
sums applying cartoon techniques to its manuals because of the low educa-
tional levels of its recruits. Millions read Sun and Mirror type newspapers
which focus on short, simple words, sentences and paragraphs. We have to
do the same.
5. Presentation
In Moments of Truth15 Jan Carlzon describes the way in which he revitalised

the then loss making SAS airline. A key element in his strategy was to
change attitudes. He distributed a little red book entitled Let’s Get In There
and Fight to every one of his executives and team members. This gave, in
concise terms, the vision he was striving to achieve. He writes:
By defusing responsibility and communicating our vision to all employees we
were making more demands on them. Anyone who is not given information
cannot assume responsibility. But anyone who is, cannot avoid assuming it.
Once they understood our vision, our members accepted responsibility enthusi-
astically which sparked numerous, simultaneous and energetic developments in
the company.
The entire company – from the executive suite to the most remote check-
in-terminal – was focused on service. As you can see from the illustration
on page 215, he used the cartoon format dramatically and effectively.
6. Vibrant
While your values and beliefs should be changed rarely, your mission state-
ment certainly needs to be updated regularly. British Airways and NFC have
both changed their statements over time.
But if you do make the effort, it’s got to be an on-going activity. It should
be part of every recruitment, induction and promotion process. It should be
the test of every decision taken. When his colleagues ask him a question
about how far they should go to satisfy customers, Mike Snowdon of
Snowdon Honda in Paignton refers them to their mission statement.
Examples
Clearly, it is easier to demonstrate the concept with practical examples, so I

am very grateful to the senior executives of Hewlett Packard and to Sir
Peter Bonfield, when he was Chief Executive of ICL, for giving me permis-
sion to reproduce their ‘Charters’. As explained, we spent some time at our
monthly ‘Company Meetings’ arguing through our own charter, and while
we feel that we can still improve this, you may find it helpful to use as a
basis for your own deliberations.
HEWLETT-PACKARD
In 1957, Dave Packard and Bill Hewlett set out in writing the specific com-
mitments they wanted to establish between their company and their employ-
ees. They called it ‘The HP Way’.
PRINCIPAL OBJECTIVES OF ‘THE HP WAY’

1. The commitment to help employees share in the company’s success
through a generous stock option programme.
2. Job security based on satisfactory performance.
3. Recognition of individual achievement.
4. Maintaining a climate that helps people gain a sense of satisfaction
and accomplishment from their work.
5. Fostering initiatives and creativity by allowing individuals freedom of
action.
Since then, HP has developed the following strategy:
1. Getting the highest return out of the company’s most important
asset, its people.
2. Getting the best output from a given technology.
3. Giving the customer the best performance for the price paid.
Members of HP are under no misconception that profit is Hewlett-Packard’s

number one objective. This is reinforced in a tangible way. Every six
months, a proportion of the profits is distributed back to team members. The
half year results for one recent year resulted in every team member receiv-
ing 7.5 per cent of his or her gross earnings for the previous six months, a
significant contribution to income.
Trust, respect and personal dignity are still there, together with the con-
cept of a ‘single status’ company where team members are encouraged to
let management know what they think. The creation of a leaner organisation
has sharpened up the Corporation to the need to be more assertive.
One night, a friend was taken into one of the Hewlett-Packard offices.
Despite the fact that it had gone 11 pm, the offices were still brightly lit,
and there was a fair sprinkling of people working at their consoles. He
asked if it was a night shift. ‘No’, was the reply, ‘people work whatever
hours are necessary to achieve their objectives.’ There can be no finer ver-
dict on the impact which ‘The HP Way’ has upon the members of the organ-
isation.
The Hewlett-Packard ‘Charter’ is reproduced on pages 218 to 221.
ICL
Sir Peter Bonfield took over as Chief Executive of ICL at a time of trauma
in the British computer industry. It is a tribute to him that ICL remains a
major player, albeit a member of the Fujitsu organisation. In giving a ‘Key
Note’ speech to a major conference, Peter Bonfield explained that:
To develop our organisational capability we needed more than just a struc-
ture. We also needed a statement of the type of company we wanted to be –
our beliefs and behaviours. This we encapsulated in a booklet called ‘The ICL
Way’. It is a statement of how managers and (team members) are expected to
behave. The ICL Way gave us a basis of a shared vision for what we wanted
ICL to be.
In effect, though he does not use the term, it could be described as their
‘Charter’. I wish I could reproduce the full text of the speech made by Peter
Bonfield to which I have referred. It would make a brilliant case study. Sir
Peter Bonfield’s key point is that he recognised that ‘Our human resources
are a prime source of competitive advantage in our fight for market
share.’
ICL’s ‘Charter’ is reproduced on pages 222 to 230.
PRINCIPAL OBJECTIVES OF ICL
Confidence: We had to instil confidence into our people. We needed to

devise a system to communicate to all our people that change is part of a
continuing process and that we would equip them to handle and meet the
changing demands. This provided the overall rationale for our major
training and education investment based on the realisation that in our
business – a global business – our people must be as good as the best of
our competitors world-wide. So, not only was there a heavy initial invest-
ment in bringing people up to a basic level of competence, but there is an
ongoing investment to ensure that they keep pace with the best of our
competitors.
Strategic vision: We need to get [our people] to see their activities in the
context of our international competitors and not to compare themselves
with internal standards and colleagues, not, indeed, just to guess how
they had done the previous year. To achieve this strategic vision we set up
a programme of intensive education and training of the top 200 execu-
tives, starting with the Board, using a team of external world class acade-
mics, the best we could find, including Rosabeth Moss Kanter.
Marketing skills: To be a market-led company, we clearly needed to
understand marketing and have marketing skills widely spread through-
out the company.
Core training: We developed a series of training modules for executives
at different levels within the organisation designed to support the organi-
sation we needed to be. And, specifically, ICL’s business strategies.
We also have another major cultural training programme for all [col-
leagues] based on quality of the way of life – all our people are involved.
Managing for performance: I have placed intense focus on a
‘Managing for Performance’ programme. An intense focus on the objec-
tive setting, appraisal, and counselling role [plus] a much more focused
linkage between individual performance and individual pay progression.
The whole system depends on the successful and comprehensive
implementation of the appraisal process. To ensure implementa-
tion we had to come up with some different approaches which
focused managers’ minds on the fact that the appraisal system is a
vital tool in managing people.
Sir Peter Bonfield, Chief Executive ICL
SEWELLS INTERNATIONAL
As explained we have been arguing through the creation of our own

Company Charter (shown later). Some of the headings are:
ᔡ We need you ᔡ You will be developed
ᔡ We will demonstrate our ᔡ You will not be ‘thrown in at
commitment to you the deep end’
ᔡ You will be important ᔡ You will know where you stand
ᔡ You will be appreciated ᔡ You will be an individual
ᔡ We will want you to stay
But we make it clear that, in return, we expect total commitment.
CONCLUSION
Let’s go back to the opening questions. Why should you expect:

ᔡ extraordinary performance from your people;
ᔡ extraordinary loyalty from your customers; and
ᔡ extraordinary support from all your other stakeholders?
The answer must be because you have transformed your organisation by
the quality of your leadership, by optimising every ingredient we have
discussed.
But, you won’t reap the rewards you deserve unless you project your
achievements effectively. In a small company, you may be able to do this
with some bullet points on a flip chart or whiteboard, but I suggest that as
you grow, you will need to formalise a ‘Company Charter’.
So, as Jan Carlzon put it in his booklet:
‘LET’S GET IN THERE AND FIGHT’
Figure 12.1 ‘Let’s get in there and fight!’

You might like to use the following questionnaire as a basis for discussing
your priority attention areas.
Figure 12.2 Questionnaire

Your Charter for Success
ᔡ Do you have a formal, or informal ‘Charter’ which projects your vision,

helps to win the hearts and minds of every member of your team, and
creates the right perceptions in your market place? If not, how do you
recommend that you set about establishing such a Charter?
COMPANY CHARTER
Hewlett Packard: The HP Way
Organisational Values
HP’s values are a set of deeply held beliefs that govern and guide our
behaviour in meeting our objectives and in dealing with each other, our cus-
tomers, shareholders and others.
ᔡ We have trust and respect for individuals. We approach each situa-
tion with the understanding that people want to do a good job and will
do so, given the proper tools, and support. We attract highly capable,
innovative people and recognise their efforts and contributions to the
company. HP people contribute enthusiastically and share in the success
that they make possible.
ᔡ We focus on a high level of achievement and contribution. Our cus-
tomers expect HP products and services to be of the highest quality and
to provide lasting value. To achieve this, all HP people, but especially
managers, must be leaders who generate enthusiasm and respond with
extra effort to meet customers needs. Techniques and management prac-
tices which are effective today may be outdated in the future. For us to
remain at the forefront in all our activities, people should always be
looking for new and better ways to do their work.
‘The principles of the HP way are still the basis for how we operate.’ John
Young, 1988
ᔡ We conduct our business with uncompromising integrity. We expect
HP people to be open and honest in their dealings to earn the trust and
loyalty of others. People at every level are expected to adhere to the
highest standards of business ethics and must understand that anything
COMPANY CHARTER : HEWLETT PACKARD : THE HP WAY ᔡ 219
less is totally unacceptable. As a practical matter, ethical conduct can-

not be assured by written HP policies and codes; it must be an integral
part of the organisation, a deeply ingrained tradition that is passed from
one generation of employees to another.
ᔡ We achieve our common objectives through teamwork. We recog-
nise that it is only through effective co-operation within and among
organisations that we can achieve our goals. Our commitment is to
work as a world-wide team to fulfil the expectations of our customers,
shareholders and others who depend upon us. The benefits and obliga-
tions of doing business are shared among all HP people.
ᔡ We encourage flexibility and innovation. We create a work environ-
ment which supports the diversity of our people and their ideas. We
strive for overall objectives which are clearly stated and agreed upon,
and allow people flexibility in working toward goals in ways which
they help determine are best for the organisation. HP people should per-
sonally accept responsibility and be encouraged to upgrade their skills
and capabilities through ongoing training and development. This is
especially important in a technical business where the rate of progress
is rapid and where people are expected to adapt to change.
Corporate Objectives
HP’s corporate objectives are guiding principles for all decision-making by
HP people.
Profits To achieve sufficient profit to finance our company
growth and to provide the resources we need to achieve
our other corporate objectives.
Customers To provide products and services of the highest quality
and the greatest possible value to our customers, there-
by gaining and holding their respect and loyalty.
Fields of Interest To participate in those fields of interest that build upon
our technology and customer base, that offer opportuni-
ties for continuing growth, and that enables us to make
a needed and profitable contribution.
Growth To let our growth be limited only by our profits and our
ability to develop and produce innovative products that
satisfy real customer needs.
Our People To help HP people share in the company’s success
which they make possible; to provide employment
security based on their performance; to ensure them a
safe and pleasant work environment; to recognise their
individual achievements; and to help them gain a sense
of satisfaction and accomplishment from their work.
Management To foster initiative and creativity by allowing the indi-

vidual great freedom of action in attaining well-defined
objectives.
Citizenship To honour our obligations to society by being an eco-
nomic, intellectual and social asset to each nation and
each community in which we operate.
‘Improvement is accomplished by better methods, better techniques, better
machinery and equipment and by people continually finding better ways of
doing their jobs and to work together as a team. I will never see the day
when there is not yet room for improvement.’
Strategies and Practices

HP’s values and objectives guide us in forming our strategies and practices
and in managing a dynamic business in a changing world.
Management by Wandering Around: An informal HP practice which
involves keeping up to date with
individuals and activities around
the entity through informal or
structured communication. Trust
and respect for individuals are
apparent when MBWA is used to
recognise employees’ contributions
and to listen to employees’ con-
cerns and ideas.
MBWA Might Look Like: A manager consistently reserving
time to walk through the depart-
ment or to be available for
impromptu discussions.
Individuals networking across
the organisation.
Coffee talks, communication
lunches, hallway conversations.
“The HP way, when you really come down to it, is respecting the integrity
of the individual.” Bill Hewlett, 1987
Management By Objectives HP’s practice of participative man-
agement. Individuals at each level
contribute to company goals by
developing objectives which are
integrated with their manager’s and
those of other parts of HP.
COMPANY CHARTER : HEWLETT PACKARD : THE HP WAY ᔡ 221
Flexibility and innovation in

recognising that alternative
approaches to meeting objectives
provide effective means of meeting
customer needs.
MBO is Reflected In: Written plans which can be traced
through the organisation.
Co-ordinated and complemen-
tary efforts, and cross-organisa-
tional integration.
Shared plans and objectives.
Open Door Policy The assurance that no adverse con-
sequences should result from
responsibly raising issues with
management or personnel. Trust
and integrity are important parts of
the Open Door Policy.
Open Door May be Used To share feelings and frustrations
in a constructive manner.
Gain clearer understanding of
alternatives.
To discuss career options, business
conduct, communication break-
downs.
Total Quality Control A management philosophy and
operating methodology to improve
quality and achieve customer satis-
faction. TQC efforts to offer the
best possible products and services
to our customers are supported by
our value of achievement and con-
tribution.
TQC Encourages: Continuous process improvement
using scientific methods.
Universal participation in quali-
ty and customer satisfaction.
Meeting or exceeding internal
and external customer expecta-
tions.
COMPANY CHARTER
The ICL Way

What is the ‘ICL WAY’?
First, it’s an attitude to business. Second, it’s an attitude to people.

Our attitude to business arises from our determination to succeed in the
international marketplace by applying information technology to provide
high-value customer solutions for improved operational and management
effectiveness. Our acceptance of that challenge places certain distinct com-
mitments on all employees and managers – commitments which are essen-
tial strands in the ICL WAY.
Our attitude to people is created by the fact that we are in a knowledge
industry. Our business success will therefore be led by people first and
products second. We are no longer mainly selling boxes of computer equip-
ment. We are mainly selling creative solutions to business problems. If we
are to be successful, to excel in all we do, to win rather than merely com-
pete, then the full capabilities of all ICL people must be realised and
released into action. That is the business of our managers, who are expected
to cultivate employees’ skills continuously and systematically.
The ICL WAY therefore consists of:
ᔡ Seven basic commitments expected of every man and woman in the
company.
ᔡ Ten Management obligations laid equally upon every manager for the
full development and application of our business strategies and personal
skills.
The following spells out these commitments and obligations as simple and
practically as possible for the guidance of everyone in the company.
By following them with consistency and determination we shall create and
COMPANY CHARTER : THE ICL WAY ᔡ 223
‘everybody wins’ pattern of growth and success, providing good results for
the company and a rewarding and satisfying working life for everyone in it.
Commitment to Change
Every part of our business has changed, is changing and will continue to
change.
We no longer sell just boxes and products. Instead, we sell business solu-
tions, consultancy services, knowledge and creative thought.
We must be able to manufacture flexibility, providing systems which
reflect the constantly changing needs of our customers.
In these and many other ways our business has been fundamentally
affected by change in the last few years.
Success in our company now depends on each individual’s willingness to
accept change as something valuable, something to be welcomed, some-
thing to be responded to with energy and resourcefulness.
Our business is change. Our opportunities arise from change. To succeed
in today’s markets, we have to predict, manage and exploit changes in tech-
nology, in software, in manufacturing techniques, in marketing and selling.
Therefore ICL managers and employees have to be able to respond fast and
effectively to all the risks and challenges of change, and to adopt new atti-
tudes and practices willingly and creatively whenever the situation
demands.
‘Adapt to Succeed’. That’s not just an empty catch-phrase. For our com-
pany and everyone in it, it’s now an everyday fact of business life; the abili-
ty and willingness to adapt is now essential to us all, simply because no risk
plus no change equals no business.
Commitment to Customers
Our business objective is to apply information technology to provide high-
value, high volume solutions to customer problems. That is now the driving
aim of the entire company and everyone in it.
We cannot begin to achieve that aim until all our thinking is directed
towards the marketplace, towards developments that are taking place in the
marketplace, and towards the evolving business needs of our customers.
Only by concentrating on these can we anticipate and plan the integration of
future technology and future market needs. And only then can we set in
motion our own programmes to meet those needs with brilliantly conceived
solutions and the finest possible service.
The overriding importance of the needs and expectations of our cus-
tomers should condition all our thinking and govern all our planning. We
are now a company driven by the business needs of our market. We all have
to become steeped in the concept that ‘there is nothing too good for our cus-
tomers’.
We owe them 100 per cent quality, 100 per cent reliability and 100 per
cent service. Our ‘zero defects’ standards illustrate this commitment to our
customers. We cannot be satisfied with less.
All work units within the company also have to adopt the same attitude
towards their in-house ‘customers’. Staff people towards their field cus-
tomers; development divisions towards the sales force that will market intel-
ligence; these too should adopt an attitude of 100 per cent service.
The customer matters most, and comes first in everything we do. We must
never allow our own problems to distract us from understanding and solving
his.
Commitment to Excellence
ICL’s sights are now set on world success. That demands excellence in
everything we undertake. And excellence will be achieved only by adopting
‘can do’ attitudes and the highest levels of co-operation and team-work right
through the company.
Yes, we can build systems that are outstandingly reliable, easy to use and
economical to service; systems that can plug in and perform with minimum
start-up time.
Yes, we can enable our customers to eliminate unnecessary computing
complexities and to treat their ICL systems as a solid, hard-working, non-
temperamental piece of office equipment.
Yes, we can deliver business results which are not just better than we as a
company achieved last year, but which are better than the best in the market.
Excellence is an attitude which never accepts second best, never over-
looks a need, never allows an opportunity to slip. It is also an attitude which
recognises the complex nature of our business and the need for team-work
and integration. ‘Can help’ is as important as ‘Can do’ , and our commit-
ment to each other is an essential part of our commitment to excellence.
Every new task demands that we set and agree standards of excellence,
define the ways in which those standards are to be met, and then go on to
achieve them without compromise.
Only by doing that day in, day out, can we expect to make real progress
as individuals or as a company in the highly competitive world markets of
the future.
Commitment to Team-Work
Team-work is vital to ICL, simply because it improves our performance in
two crucial ways.
First, we are under constant pressure to raise the levels of skill and
resourcefulness that we offer our customers. Team-work helps us to raise
our individual standards by sharing talent and by improving each other’s
creative performance.
Second, our business is now so integrated that no individual can look
after every aspect of a major task unaided. We have to work closely with
others in order to harness all the skills the job requires.
Even when formal team structures are absent, we have to get into the way
of talking to each other and working together whenever it would improve
individual performance to do so.
Effective team-work produces results which are far superior to anything
the individuals concerned could achieve working in isolation. To secure this
1 + 1 = 3 return, our team-work must be based on the need to heighten the
capabilities, competence and contribution of each individual. ICL wants all
its employees to express their opinions, to challenge the illogical, to suggest
better ways of doing things – and we expect managers to respond positively
when they do.
ICL accepts its obligations as a company to provide individuals with a
high degree of freedom to do their job and to develop their own individuali-
ty and contribution to the full, within the context of real achievement
through team-work and co-operation.
Commitment to Achievement
ICL is an achievement company. Recognition, rewards, promotion and
opportunities for career and job development depend absolutely on results
delivered.
Performance is the way forward – for every individual and for the compa-
ny as a whole. It is therefore vitally important that every individual has a
clear understanding of his or her work objectives and responsibilities,
because performance will be measured against them. It’s down to managers
to make sure that those objectives and responsibilities provide maximum
opportunity for the development of individual talent and to operate the com-
pany’s recognition and reward systems on their achievement.
Achievement in ICL does not merely mean crude numbers. It isn’t just
volume of sales, for example, or manufacturing through-puts. We care just
as much about the quality of the sales, the standard of the manufactured
products.
All employees are asked to find ways of adding value by eliminating low-
value tasks. Qualitative objectives help us to ensure that the time spent on a
task is consistent with the value that will result; for we can no longer afford
to spend excessive time on low-value activities.
We therefore have to define the criteria for the success of any new task
before starting work, and also define the steps which will enable us to meet
those criteria as time efficiently as possible.
Outstanding performance on a low-value task is a waste of talent and rep-
resents poor achievement. Outstanding performance on a high-value task is
high achievement and contributes to real progress for all concerned. That’s
the difference.
Commitment to People Development

Our commitment to achievement demands a commitment to develop our
skills and abilities in every possible way.
We are a people company. Our main strength lies in the quality and skill
of the people who work here. So real progress will come about only by con-
stantly developing and improving our skills. Development of this kind –
people development – is one of the basic requirements for business success.
The company will constantly aim to provide you with responsibilities and
objectives which measure up to your abilities and ambitions – and ideally
stretch them a little too. The company is determined to satisfy your need for
personal growth and job satisfaction, and to create the supportive environ-
ment which enables you to achieve them.
However, individuals have to make a good deal of the running. The most
rewarding development is self-development and employees are expected to
help themselves by pushing their managers for guidance, for opportunities,
for appropriate formal training and for new kinds of work experience.
The opportunities are all there within the company, but it’s up to individu-
als to seize them and to respond flexibly when new demands are made on
them. Real growth will come to those who are willing to adapt, to learn, to
enlarge their horizons and to tackle new challenges. We have to think for
ourselves, find our own chances and set clear objectives for our own person-
al development.
Managers carry a corresponding obligation to respond to and encourage
employees in every possible way, for the company’s success in the future is
closely bound up with the success and personal growth of everyone working
in it.
Commitment to Creating a Productivity Showcase

Would you be proud to invite prospective customers in to see how you do
things in your job? Do you have demonstrations there of leading-edge
applications of our own information technology? Is your department a pro-
ductivity showcase for the company’s skills and products?
Another fundamental part of our business policy is to make ourselves a
showcase for the latest and best applications of information technology. We
must be seen as the kind of profitable, efficient, high productivity company

that our customers would like to become themselves. We must be able to
offer practical, working demonstrations of the finest equipment, systems
and business solutions, so that we can more easily go on to sell those solu-
tions in the market place.
Everyone is encouraged to accept innovation, seek improvements, and find
ways of applying ICL technology to the problems of their own departments.
All our systems and all aspects of our performance should be of ‘show-
case’ standard – a standard which gives customers something to strive for. It
will also keep us constantly on our toes as we strive to improve our own use
of information technology solutions.
The showcase attitude means that we should always be ready to open our
doors and say to the world: ‘Come in; look; see how it should be done; this
is how technology and talent can work together to create the finest business
solutions; this is the ICL WAY, the way of excellence, the way of innova-
tion, the only way we know.’
Once this attitude has taken root and found practical expression in every
division and every department of the company, we shall have something
solid and truly valuable to show and sell to the world at large.
The Ten Obligations of the ICL Manager

The commitments of the ICL way will happen only if we make them hap-
pen. As we said in the introduction, their implementation rests to a large
degree on ten management obligations.
The ICL manager is accountable for creating and maintaining a business
environment which supports and translates into practice the attitudes
expressed in the seven commitments.
These ten obligations are an integral part of every manager’s job. They
will play a major part in the assessment of successful management perfor-
mance in ICL.
1. Business Manager: People Manager

ICL managers must meet the challenge of being effective business (opera-
tions) managers and effective people managers.
Management success in ICL is about optimising results not just achieving
targets. It is an ICL belief that unless a manager is an effective people man-
ager, his business results must fall short of the maximum attainable.
In our industry in particular managers must understand that profits are
made by people, not by products. Consequently they must effectively man-
age, invest in and develop their people if they and ICL are to enjoy long-
term success.
2. Direction
Managers must have detailed knowledge of ICL’s objectives and strategies.
They must understand them in relation to the Information Processing indus-
try, to our competitors, customers and products.
These objectives and strategies must be effectively communicated to all
employees. They must provide the basis for determining sub-unit objectives
and work priorities. All employees must clearly understand their individual
responsibilities and the standards required for the successful completion of
tasks.
The performance of all staff must be regularly assessed by way of
reviews, formal performance appraisals and informal one-on-one discus-
sions. These two-way assessment processes help to maintain standards and
to encourage adaptability in our ever changing business environment.
3. Strategic Thinking
The greatest challenge facing managers arises from their responsibility for
identifying changing long-term business needs and for planning effectively
to meet them. In our industry in particular, predicting, managing and
exploiting change are key demands calling for foresight, judgement and
leadership of the highest order.
Managers are expected continually to identify future opportunities, to
monitor and communicate risks, and to take corrective action to avoid
excessive exposure.
By analysing the critical long-term issues which confront the business, a
manager can establish for his team a clear vision of the future. He can also
develop the strategies upon which that future will be secured.
4. High-Value Outputs
Achievement in ICL is about output, not input or effort. More specifically it
means high-value output . . . output that creates a demonstrable inpact on
our business results.
ICL managers must ensure that the work tasks and actions of their staff
reflect this basic principle. Managers are obliged to identify and eliminate
sub-standard performance and ineffective work situations. High perfor-
mance of a low-value job provides a poor return for the individual and the
company.
5. Team-Work
Success in a knowledge industry such as ours depends upon an effective
sharing of the talent we have in the company.
Through their leadership, ICL’s managers must stimulate team-work as a

means of obtaining better results. Team-work is achieved by developing
individual talents, building on the ideas and know how of the team and
gaining commitment by way of listening, involving and communicating.
Leading by example, being seen, being involved, providing common
understanding and direction are essential elements of a manager’s role in
developing the co-operative team-work attitudes which are essential to
obtaining the best results.
6. Development
The achievements of a manager are dependent on the achievements of those
for whom he is responsible.
ICL is committed to developing its employees to the full extent of their
potential. Managers must first ensure that optimum use is being made of
current skills and that individuals are given tasks which ‘stretch’ them in
their existing jobs. They must then agree development and career progres-
sion plans with their staff and rigorously monitor the implementation of
those plans to make sure they are effective. International and inter-division-
al opportunities must be considered as a way of accelerating career and per-
sonal development.
ICL can offer almost unlimited job opportunities. It is the manager’s task
to match the needs of the business with those of the employee in order to
stimulate the fastest possible growth for both.
7. ‘Can do’ Attitude

ICL managers are required to set the pace and lead by example. Their ‘Can
do’ attitude to tackling tasks must be infectious, influencing others to adopt
the same willingness and positive approach.
The successful manager thinks in terms of opportunities rather than prob-
lems, uses his initiative to pick up ‘loose balls’ and willingly volunteers rel-
evant skills to help others to achieve their objectives. When a commitment
is made it is invariably carried through.
Such an attitude is essential if we are to meet the challenging, constantly
changing demands of our industry.
8. Innovation
Innovation is the key to managing change and to meeting our commitment
to excellence, Managers must consciously strive for improvements in their
personal and work unit performance
They must exploit modern management techniques and information tech-
nology as ways of eliminating low-value tasks and increasing output of
high-value activities.
It is the manager’s obligation to set the framework for creativity . . . a

clear understanding of the need; freedom to challenge the traditional and try
out new ideas; and encouragement provided by a supportive team-work
environment.
9. Difficult Issues
Recognising difficult issues and facing up to them quickly is a basic obliga-
tion, essential to every effective manager. By openly and constructively dis-
cussing problems as soon as they arise a manager can dramatically reduce
the risk of negative impact and more severe long-term effects.
To ignore or hide problems is poor management; the ICL WAY is to con-
front and resolve them.
The effective manager walks his office and workshops, talks frankly with
his people, listens, counsels, communicates, understands; he is able to elim-
inate problems before they can do us harm.
Positive action of this kind creates the atmosphere of openness and trust
necessary for an enjoyable and productive work environment.
10. Self Measurement

High performance objectives will be realised only if accompanied by an
equally strong commitment to self-assessment. Managers must continually
challenge and appraise their own management actions and the way they as
individuals, and their work units, contribute to the business results.
A manager must measure his own effectiveness as a people manager, for
his ability to provide leadership is particularly important. Time must be
allocated to people management in order to create the balance of attitudes,
commitments and business effectiveness which constitutes the ICL WAY.
SEWELL’S COLLEAGUES’
CHARTER
OUR CULTURE
Our culture relates to the way in which we will deal with everyone who
comes into contact with our company; recognising that these relationships
depend on the reactions of every member of our team.
Customers
Every colleague is expected to appreciate that ‘customers really do come
first’.
Every customer, or their representative, will be treated in a friendly, cour-
teous manner and with the utmost of integrity, and – should we fall down in
any way – the justified complaints of customers will be resolved expedi-
tiously and honourably. We will always put ourselves out for our customers.
We will make it simple for them to deal with us. We will ensure that we
respond immediately to any request and no customer should ever need to
ask us a second time for our help.
Confidentiality: Where clients and subscribers give us confidential infor-
mation, we will honour the basis on which the information is given to us.
Our Company has only one purpose, one objective. It is to identify,
attract, satisfy and retain an increasing number of customers profitably.
Colleagues in our marketing and database activities are helping to identi-
fy customers.
Colleagues in our sales activities are helping to attract and retain cus-
tomers.
Colleagues in our research and library activities are helping to satisfy cus-
tomers by the quality of the information that they receive. But equally, col-
leagues in accounting, administration, mailing and despatch activities are
helping to satisfy customers by ensuring that they receive their services

promptly, with hassle-free administration.
Finally, the quality of the information produced and the level of pleasant-
ness which we can achieve in all our relationships with all our customers,
will help not only to retain them, but to ensure they recommend our services
to their friends.
We recognise that some of our colleagues may have chosen to work in an
administrative role because they are shy. However, all that we require is for
colleagues to be pleasant and friendly and, where appropriate, to ensure that
a customer’s needs are met by a qualified colleague. We are prepared to
arrange for individual training, while relationships with customers will be
discussed at our regular monthly colleagues’ meeting.
Suppliers
Vital ‘partners’: We cannot sell right, unless we buy right, therefore suppli-
ers are equally important ‘partners’ in the success of our company.
In particular, we already make extensive use of information technology,
so it is vital that we build relationships which ensure that we keep abreast of
any technology which can help us to enhance the quality of the services we
provide to our customers.
So, every colleague will go out of their way to establish friendly relation-
ships with suppliers and deal with them in a courteous and ethical manner.
Any problem between the company and its suppliers will be raised imme-
diately, in a positive, constructive manner, and resolved to the mutual bene-
fit of both parties. Credit terms and other trading relationships will be
honoured and any variations in the agreement which become necessary, will
be resolved by discussion.
All relationships
Every colleague should recognise that all relationships are important,

including, the community in which we are based, and the industry in which
we operate. Everyone can make a real contribution to our success by being
open, friendly, helpful and courteous to everyone with whom they come
into contact.
COLLEAGUES’ CHARTER
Our commitment to you
We need you: Our Company will not succeed unless it has the right, dedi-
SEWELL’S COLLEAGUES’ CHARTER ᔡ 233
cated team of colleagues. It is the sum total of the contributions from each
individual in every department which will make our company successful.
Two-way commitment: We recognise that this involves a two-way com-
mitment. If you are going to give our customers, your colleagues, and thus
our company a 110 per cent commitment, then we have to be equally com-
mitted to you.
You will be important: You will be an important member of our team
doing a worthwhile, vital job. Your colleagues, and our company will
depend on the commitment with which you apply yourself to the ‘key tasks’
assigned to you.
You will be appreciated: You will be appreciated, and thanked whenever
you do a good job, make an extra effort, or come up with an idea. You may
even get the occasional present of a bottle of wine, a box of chocolates, or a
drink at the pub to show our appreciation of that little extra effort.
We feel that as the person carrying out the particular duties under your
control, you are the expert. We shall consult if any other activity infringes
upon you, and – as the expert concerned – we will look to you to make rec-
ommendations about how the tasks for which you are responsible could be
simplified or improved.
You will be an individual: We use first names throughout our company.
On your birthday, you will receive a card signed by all your colleagues and
we will have a small get-together to present you with a birthday present.
At Christmas, we will have a party to which you, and your partner, will
be invited.
If you have any personal problems, we will do our best to help and sup-
port you.
You will be a colleague: As a colleague you will be treated as an ‘equal’
with the quality of your contribution the only basis on which you will be
assessed. Your ‘status’ will depend on the level of responsibility you accept.
You will be developed: We will do our best to develop your confidence
and self-esteem and, also, to help you to improve your competence.
In addition to our in-company discussions and development activities, we
will consider seriously any request, from any colleague, for any training
which they feel will either help them to carry out their existing duties more
effectively, or to assume greater responsibilities. We will consider, for
example:
ᔡ Paying for one subscription to an appropriate professional or vocational
association.
ᔡ Paying for a subscription to an appropriate trade or professional maga-
zine (in which case, we will expect the colleague concerned to draw our
attention to any interesting articles which we might be able to quote in
our own publications).
ᔡ Making a loan to pay for a correspondence course or set of evening

classes, aiming at a particular examination on a basis that the loan will
be written-off by us once the programme of study has been completed.
ᔡ Sending colleagues to trade and similar exhibitions which will extend
their awareness of products and services which may be of benefit to
them in their work.
ᔡ Giving serious consideration to sending a colleague on an appropriate
external training course or courses.
ᔡ Sponsoring a colleague for an appropriate long-term programme of study
leading to a recognised qualification on the basis that, while the bulk of
the study will be carried out in the colleague’s own time, the company
will be helpful in making allowances for the time being spent in this way.
You will not be ‘thrown in at the deep end’: The fact that you are reading
this company manual is an indication of our commitment to making sure
that you understand what is expected of you, and the environment within
which you will be expected to work.
You will be given every assistance to ensure that you understand what we
expect from you, and how we expect you to contribute.
Your ‘key tasks’: In particular, your job will be explained fully to you,
and you will be given, in writing, the two or three ‘key tasks’ together with
the performance standards relating to these tasks on which your contribu-
tion to our company will be judged.
You will know where you stand: We feel it important that every colleague
should have the opportunity of knowing, on a regular basis, where they
stand with our company. It is important for you to have a regular opportuni-
ty of a frank, open, and undisturbed discussion with your immediate superi-
or. Therefore, once every four months an appraisal meeting will be held
between you and your immediate superior. This discussion will be based on
the following points.
ᔡ What were your three main achievements in the previous four months?
ᔡ What successes, or difficulties, did you experience in seeking to achieve
your key tasks?
ᔡ Do you feel that your superior was as helpful as possible in assisting
you to achieve your key task, or did he or she inadvertently fail to pro-
vide you with all the help you needed?
ᔡ Have you introduced any improvements in the way in which you
achieve your key tasks, or do you have any ideas for improvements
which you would like your superior to support?
ᔡ Where relevant, how would you rate the performance of those reporting
to you, and how far have you been able to help all those reporting to
you to progress and develop? How many are now ready for promotion?
ᔡ What do you regard as being your three most important tasks in the next
four months?
ᔡ How will you measure your success in achieving these tasks?

ᔡ What aspect of your work interests you the most (because you feel
more confident and competent), or the least (perhaps because you feel a
lack of confidence or competence)?
ᔡ Are there any areas of your job in which you could improve your per-
formance? If so, what action do you need to take to achieve these
improvements, or what help or additional resources do you need from
your superior, or the company?
ᔡ Do you feel that your present job fully utilises your abilities, training
and interests? If not, which of your abilities could be used more fully?
Would your job have to be changed; and what benefits would result
from such a change?
ᔡ Looking to the future, what kind of work would you like to be doing
within the next few years. Perhaps with a more responsible position, or
something entirely different such as ...?
ᔡ If you would like a more responsible job, or something different, what
steps have you or could you take to equip yourself for such a job, and
what additional training and help do you feel you would require?
The intention is to provide you with a regular opportunity for a frank, two-
way discussion with your immediate superior with a few simple objectives:
ᔡ To praise you, and to thank you for the things you have done well.
ᔡ To help resolve any areas where we can be more effective in the support
we give you.
ᔡ To help you derive greater satisfaction from feeling that you are going
to be helped to make progress and thus enhance your contribution to
your team’s success.
We will want you to stay: If you are doing a good job on our behalf, we will
want you to stay. If for any reason there are issues which you feel that you
cannot raise with your immediate superior, you can talk in confidence to his
or her immediate superior.
However, we recognise that, as a small company, we may not be able to
offer you the longer term career progression which your talents deserve.
This will probably emerge at your regular Appraisal Interview. In this
event, we will work with you to agree upon your future career, and do our
utmost to help you with introductions and recommendations to find a post-
ing which will give you the prospects you wish.
Salary: We undertake to do our best to pay you a fair and realistic salary
which, as far as possible, will be equal to, if not above, the ‘going rate’ for
the job in the area, or in your profession.
This will be transferred by credit transfer into your own bank account not
later than the last Thursday of every month.
Your salary will be reviewed on 1 July each year.

We hope that, on the basis of your three appraisal interviews, the commit-
ment you have demonstrated, and the extent to which you have achieved or
exceeded your key tasks, we will be able to show our appreciation by an
appropriate increase.
Merit reviews: In addition to your annual review, if you are seen to be
putting in an above-average effort, resulting in above-average results, you
will be eligible for a ‘merit’ review to show our appreciation for your efforts
which could result in an increase in salary, or an appropriate bonus or pre-
sent.
Profit scheme: You will be eligible to join our Profit Scheme which is
based on the extent to which we achieve or exceed our monthly income tar-
gets. These figures will be discussed at our monthly company meetings, so
that every colleague can understand how gaining and retaining customers
impacts on our profitability.
Additional benefits: In addition to the foregoing, after one year of com-
mitted service, your total remuneration package will be reviewed with you.
Depending on your personal circumstances, and your level of contribution
to our company, consideration will be given to:
ᔡ A contribution, on your behalf, into a pension fund of 2 per cent of your
salary.
ᔡ Inclusion into our private medical, BUPA scheme.
ᔡ Inclusion in a permanent sickness scheme, and ‘death on service’ policy.
Holidays: In addition to statutory holidays, every full-time colleague has a
holiday entitlement running at the rate of one and two-thirds day’s holiday
for every completed month of service, making an annual total of 20 days.
Your commitment to our company
110 per cent effort: We need your contribution to the success of our compa-
ny, and your contribution is only going to be fully effective, if you make a
110 per cent effort.
Quality of contribution: As mentioned earlier, we operate on the basis of
being a team of equals (with varying levels of responsibility), where the
quality of the contribution being made by our colleagues is all that matters.
Stressful responsibility: We accept that our approach may have a certain
level of extra stress. We expect every colleague to accept total responsibility
to think through every implication of what they are doing and, most impor-
tantly, to accept ‘ownership’ of any problems or potential problems, and
comment constructively on how you can improve your contribution.
It will be particularly for you to liaise with all the other departments in
our company upon whom your work may have any impact by communicat-
ing any information which would help them carry out their work more
effectively.
Open style: To provide the support needed by colleagues, a totally open
style of management will be adopted throughout the company and – in par-
ticular – by everyone in a supervisory or management position.
A weekly senior management meeting will be held to resolve day-to-day
tactical issues and the senior managers present at this meeting will then
report back to their own departments to keep them fully informed.
A monthly meeting will be held with every colleague present. (We will
employ a ‘temp’ to man the switchboard.) At these monthly meetings, all
colleagues will be briefed fully on how far we are succeeding in achieving
our objectives; particular on key issues such as customer retention and new
business conversions.
These monthly meetings will also be devoted to training sessions on sub-
jects of interest to every colleague.
Responsibility for development: We expect you to accept total responsi-
bility for seeking to develop your confidence and competence in the way
you carry out your work, and thus be able to improve the quality of your
contribution to our success to gain promotion.
We expect everyone in a supervisory position to recognise that their ‘key
task’ is to develop those colleagues for whom they are responsible.
Everyone in a supervisory position will be judged on how well they develop
people, and thus prove themselves worthy of further promotion.
Assertiveness: We expect you and every colleague to be assertive. We
expect you and every colleague to have enough confidence in yourself to be
positive, while at the same time understanding other people’s points of
view. It means being able to behave in a rational and adult way. It means
being able to negotiate and reach workable compromises. Above all, it
means having self respect for oneself, plus respect for your colleagues.
As one example, if overloaded with work, don’t build up resentment and
eventually ‘blow a fuse’. Discuss the problem openly and honestly with
your immediate superior, ideally coming up with positive and constructive
ideas on how the problem might best be minimised.
(Note: one meeting of all our colleagues was devoted to a training ses-
sion on assertiveness, and the subject will be covered again in future meet-
ings.)
Admitting mistakes: In many organisations there is a ‘conspiracy of
silence’ so that mistakes are hidden from more senior management. It is
said that we all ‘learn from experience’ but this experience is gained by
making mistakes.
You are likely to make mistakes from time to time. You will not be criti-
cised for making a genuine mistake, or misunderstanding a particular issue,

but it will be regarded as a serious breach of contract for you, or any other
colleague, not to immediately own up to the mistake or understanding and
to ensure that the consequences are minimised as quickly as possible.
It will be regarded as a breach of your contract if, at any time, you delib-
erately withhold any information from management which is relevant to
exploiting opportunities, resolving threats, or is in any way relevant to the
smooth, successful running of our company.
Vigorous debate: Nobody has a monopoly of good ideas. As indicated
earlier, you are likely to have the most expert understanding of what is
involved in your own special contribution to our company. We expect you to
take responsibility for striving to take advantage of every possible area of
improvement which will improve the quality of your contribution, or to
draw attention to anything which could be done by others which would help
you to improve the quality of your contribution.
In short, you and every colleague has a responsibility to put forward any
idea which you feel can help our company, and equally, has the responsibili-
ty to criticise constructively anything which you deem to be hindering com-
pany progress.
Provided these constructive criticisms are put forward with sensitivity to
the feelings of others, they should be made without fear, since everyone
must accept that they are being made in the best interests of our company.
There is seldom ‘one right solution’ to the increasingly complex problems
facing businesses. We need to be able to argue vigorously about the options
open to us, and to select the most favourable after debate, with everyone
feeling free to be passionate about the opportunities and threats they may
see from different courses of action.
Team spirit: We intend to do our best to encourage an enjoyable working
atmosphere proven to encourage a good ‘team spirit’.
The most pernicious habit which does most to destroy team morale and
spirit is where one colleague fosters animosity, or seeks to create problems
for another colleague by criticisms behind that colleague’s back. It is your
responsibility to sustain team morale and team spirit and to ‘shoot down’ or
report to a senior colleague, anyone creating a ‘bad atmosphere’.
(In the unfortunate event that we find a colleague back-biting, gossiping and
‘stirring’ this will be regarded as a breach of their condition of employment.)
Flexibility: In any team game, everyone has a position. In a football
team, there are those who primarily attack and others who defend, but – on
occasions – everyone will get involved in defending, and at other times, vir-
tually everyone may be thrown forward into an attack.
Similarly, while you have a defined position, we expect you and every
other member of our team to be totally flexible. For example, even if your
work does not normally involve answering the telephone and dealing with
customer queries, if you hear the phone being unanswered, it will be your
responsibility to answer the phone and deal with the caller or, if you can’t,
to ensure that you get all the information needed so that you can brief one
of your colleagues to return the call.
If we have a particular problem, we expect you and everyone else to rally
round and, if necessary, adjust your own working arrangements to help to
resolve the problem.
We are a small, highly reactive company. While we have done our best to
define the organisation we need to be effective, and the role you must play
in this organisation, we need to grow, to react to the market place, and to
take advantage of advances in technology. We may therefore need to change
your role in our company as you progress with us.
We accept the responsibility to ensure that you are fully aware of, and are
trained for any new position. However, we expect you to respond positively
when such changes become necessary.
Positive attitude: We expect you, as one of our colleagues, to be totally
positive in your attitude to your work, to your colleagues, and to our com-
pany. We will regard your approach, your attitude, as of critical importance.
We are seeking to take a totally positive approach by striving to ensure
that you can enjoy and derive satisfaction from the contribution you make to
the success of our company. However, we must make it plain that every
point raised is, in effect, an implied term of your contract of employment
with our company.
Evaluating your contribution
Knowing what you are expected to achieve: The only way in which you
can make an effective contribution to the success of our company is by
understanding what you are expected to achieve. It is therefore our respon-
sibility to agree with you, in writing, your key tasks. It is your responsibility
to ensure that you understand these key tasks. Prior to your appraisal inter-
view, you should review thoroughly these key tasks.
Because we are a fast-moving company, it is your responsibility to go to
the appraisal meeting with a clear understanding of precisely what may
have changed for the better or for the worse, so that you can discuss with
your superior the impact of these changes, and agree on any changes needed
to your key tasks.
Evaluating your performance: As explained, to help you to improve your
contribution, your performance will be evaluated three times a year. This
will be done under two headings:
ᔡ Your attitude to customers and colleagues.
ᔡ The competence with which you carry out your duties.
Of the two, we regard attitude as more important, since lack of competence

can be improved by training.
Attitude: Your attitude, and the attitude of colleagues, will be marked
under the following ten headings:
1. Customers: That you handle all customer contacts in a friendly, helpful
manner, and that you follow through to ensure that any requests made
by the customer, or promises you make to the customers, are honoured,
if not by yourself, then by the appropriate colleague.
2. Colleagues: That you make a positive contribution to good ‘vibes’ in
our offices by being cheerful, friendly, cooperative and constructive in
all relationships with all your colleagues.
3. Creative: That you think creatively about your work and show initiative
in seeking to improve every aspect of your own duties, particularly
where they interreact with those of other colleagues in other depart-
ments. In particular, that you are ‘forward thinking’ seeking to antici-
pate opportunities which can be exploited, or potential threats which
can be minimised.
4. Assertive: That you are prepared to contribute in a positive, constructive
manner to all discussions with colleagues and at departmental and compa-
ny meetings and thus demonstrate your commitment to the company and
its success. And, above all, to do so on an enthusiastic basis which adds to
the enjoyment of those attending the meeting, or working with you.
5. Responsible: That you are prepared to act responsibly by accepting
‘ownership’ of any problems which arise; to admit any mistakes you
make and to be conscientious in caring for what is good and in the best
interests of our company.
6. Profitability: That you are concerned about the profitability of our com-
pany and seek every opportunity to gain extra income, or to control
costs, even down to the basics of switching off unnecessary lights and
not wasting supplies.
7. Time Management: That you manage your time effectively, by arriving
for work, and returning from lunch on time, do not waste time, are pre-
pared – if necessary – to put in an extra effort, including working late to
finish an urgent project: and while communicating effectively with col-
leagues, do not waste time unnecessarily, nor accept or make personal
phone calls in office hours (unless of an emergency nature).
8. Pride: That you take pride both in your own personal appearance and in
the appearance of your work area, and the furniture, equipment and fur-
nishings of your work area.
9. Self-improvement: That you are committed to improving yourself so
that you can better carry out your current duties, and also qualify your-
self for enhanced responsibilities in the future.
10. Reliability: That you are consistent in displaying a positive attitude and
approach to all the preceding points so that you are an honest, trustworthy
and valued member both on your own immediate team and our company.
Grading for attitude: Your attitude in these ten important areas will be
graded as under:
Above expectations 1 Acceptable ½ Unacceptable 0
We expect you and your colleagues to gain full marks under every heading
since we are working hard to establish a team with total commitment.
In theory, a mark of five or above would indicate a generally acceptable
level of behaviour but, in practice, any point on which only half a mark is
given would suggest that your attitude needed boosting.
It will be, frankly, unacceptable if you were to receive a nil mark against
any one of these ten points and we would ensure that you received appropri-
ate counselling to establish whether or not there are any personal circum-
stances giving rise to the unacceptable attitude or attitudes.
(If after investigations, counselling and coaching, attitude were not to
improve, then it is unlikely that the person concerned would continue to be
a colleague.)
Technical competence: You and every colleague will be given three or
four ‘key tasks’ to achieve. As explained earlier, a key element of your regu-
lar appraisal discussion will be:
What have been your three key tasks, and how well have you achieved them?
and
What will be your key tasks in future, and how will you judge whether or not
you succeed in achieving them?
Prior to your appraisal, you will be responsible for revising your own ‘key
tasks’; discussing them with your superior at the meeting; and agreeing
with him your revised key tasks.
Grading for competence: It follows that you will be rated primarily on
your performance in achieving your ‘key tasks’. You will be given one of
the following ratings:
Transforms nature of job by total mastery so consistently
exceeds in performance of ‘key tasks’. 5
Well on top of job, and always achieve key tasks. 4
Reasonably confident, and normally achieves key tasks,
but needs further training and support in specific areas. 3
Lacks full confidence/competence and therefore does
not always achieve key tasks. 2
Were you to gain only two points, we would need to discuss whether you
can come up to standard by further training, coaching and counselling in the
hope that you would be able to come up to performance within the next four
month appraisal period.
Team membership: No cricket team can afford to include a player whose
consistent failures in batting, bowling or fielding lose the team its matches.
Similarly, no business team can continue to employ someone who lets down
their colleagues.
Even if you were to achieve high scores on your attitude, because you are a
‘nice’ person, like any other team, we have to achieve results. So, we would
not be able to retain any colleague who – by failing to achieve their personal
key tasks – was letting down the overall performance of our company.
But, we do accept the responsibility, in such instances, to make sure that
we do our utmost to provide training or other support (or even, if it can be
done without disrupting the team, a reallocation of duties) before discontin-
uing team membership for the person concerned.
Collective responsibilities
Individual and collective responsibilities: Within these broad guidelines, it

is important that every member of our team is aware of his or her personal
contribution. These we will consider shortly.
However, every colleague within our company must accept responsibility
to do everything within his or her power to help every activity within the
company. The following are merely indicative of the ways in which every-
one is expected to exercise their collective responsibility.
Editorial: Anyone who sees an interesting article, or hears an interesting
radio or TV item should ensure that their editorial colleagues are aware of
it, or give them the relevant information for them to follow through.
Library: Similarly, it would be appreciated greatly if anyone coming
across any books, reports or other information likely to be relevant to the
library, brings them to the attention of the librarian.
Marketing: Every colleague has the responsibility for helping to identify,
attract, satisfy or retain customers, so anyone coming across any form of
market intelligence which will better help us to understand our market place
should bring it to the attention of their marketing colleagues.
Sales: Every colleague, however introverted, or involved in administra-
tive work, must accept that our company will only succeed if every enquiry
is converted into a sale. So, the telephone must be answered promptly, cus-
tomers must be assured of our interest in meeting their needs, and full
details of their query, name, address and telephone number, must be taken
down and passed through to the sales department. No colleague must abdi-
cate his or her responsibilities at that point. They must follow through to
make sure that the customer does get what he or she wants.
Accounts: Every colleague must ensure that where they supply any prod-
uct or service, that they inform their accounting colleagues immediately and
ensure that they are provided with all the information they need to invoice
both promptly and accurately.
Administration: Finally, every colleague has to ensure that they play their
part in the smooth administration of our company. By ensuring, for exam-
ple, that:
ᔡ messages are recorded accurately and received by the person for whom
they are intended;
ᔡ inter-departmental paperwork is processed promptly and received by
the person responsible for taking further action;
ᔡ all relevant information is punched and filed neatly in clearly labelled
files so that another colleague can find the information easily whenever
necessary; and
ᔡ all desks, drawers and cupboards are kept equally neatly, again for ease
of reference and retrieval of information by colleagues.
Environment: Most of us work hard to keep our homes attractively present-
ed, and spend both time and money on home improvement. Equally, we
want to provide an attractive environment within which our colleagues can
work, and which our customers can enjoy visiting.
We therefore expect every colleague to treat their work areas, desks,
chairs, carpeting and other facilities with the same degree of care as they
would extend to their own furniture at home. Where accidents happen they
will be reported immediately, so that appropriate action can be taken to
clean or repair the resource concerned.
Similarly, every colleague is on trust to ensure that all equipment is always
in effective working order, that it is maintained regularly as appropriate, and
that failure in the equipment is promptly drawn to the attention of a more
senior colleague so that it may be repaired or replaced as appropriate.
Strategic issues: Finally, every colleague who has even the germ of an
idea on how our company might be more successful should draw it to the
attention of a more senior colleague, or raise it at our monthly colleague
meeting, and thus help senior management to devise more effective tactics
and strategies to secure overall success.
Collective success: But, we must return to the point that it is the ability of
each individual to achieve their key objectives which constitutes to the suc-
cess of their team, and, by the teams cooperating together to achieve their
objectives, our company can be successful.
BUILDING OUR ORGANISATION
Introduction: If we are to build the best organisation, every colleague must

be aware of the importance of:
ᔡ Recruiting new members of our team;
ᔡ Inducting new colleagues properly;
ᔡ Appraising existing members of our team;
ᔡ Promoting from within in a manner which is fair to the person being
promoted; and
ᔡ Dismissing those who after being given every opportunity fail to make
the grade.
Recruitment
Important task: Building a successful organisation depends very much on

the skill and care with which new colleagues are recruited. Colleagues
entrusted with recruitment must recognise that they are being given a very
responsible task and they must ensure that they receive enough support and
training to carry out the task effectively.
Organisational review: Prior to any new appointment, or to the replace-
ment of an existing colleague, both the department concerned and the senior
management team will review the organisational implications, particularly
if there is an opportunity of redesigning our organisation so that it is more
effective.
Key tasks: Prior to any appointment, key tasks will be prepared (or exist-
ing ones revised). This will be discussed thoroughly at both a departmental
and a senior management meeting.
Advertisement: If necessary, professional help will be obtained to draw-
ing up an advertisement which sells our company to attract the right appli-
cant, and explains fully the key tasks which the successful applicant will be
expected to achieve.
As far as possible, those responding should be set some simple task along
the lines of asking them to indicate, in their application, how their previous
experience would enable them to contribute effectively to our team.
Preliminary interview: Every application will be acknowledged as a mat-
ter of courtesy.
As far as possible, any applicant with potential will be given the courtesy
of a preliminary interview. The aim will be to determine their attitude and
general suitability against the job description.
Letter from Chairman: Any applicant deemed worthy of being short-
listed will receive a letter from our Chairman. They will be loaned an
abridged copy of this company manual for them to decide whether they
wish to take their application further.
Shortlist interviews: Anyone who then wishes to proceed will be given a
copy of their key tasks.
The interview will then be a mutual discussion on the extent to which each
applicant feels qualified to achieve the contribution expected from them.
Only when both the applicant and the interviewer, on our behalf, are sat-
isfied that the applicant has a reasonable probability of being able to
achieve the tasks set out, will the process be taken any further.
Staff introduction: Every applicant who reaches the final shortlist will be
given a conducted tour of our company, and be introduced to every col-
league throughout our company. They will spend some time talking to the
colleagues in the department for which they are being recruited. The views
of these potential colleagues in the department concerned will be sought as
to the likelihood of any applicant settling in well in their department.
Psychological test: Every ‘approved’ shortlist applicant will be given an
appropriate psychological test. The results of the psychological test will be
discussed thoroughly before any decision is made on which applicant is to
be successful.
Criteria: Those interviewing on behalf of our company must appreciate
that to build our company we must recruit high quality staff. Those in a
supervisory role must not be deterred from recruiting an applicant they
deem to be as good, if not better, than themselves for fear of losing their
job. It is only when they recruit somebody able to take over their job, that
we will be able to consider that supervisor as available for promotion.
(This does not mean that we should seek to recruit people who do not
meet our predetermined ‘personality profile’.)
Induction
Vital, first impression: We all appreciate the importance of ‘first impres-

sions’, so it is vital that new colleagues gain the right first impressions of
our company.
Every colleague is therefore expected to play their part in communicating
our vision, mission, values and objectives, though we hope that the recruit-
ment process – described above – will have set the scene effectively.
Welcome: It is the responsibility of the new colleague’s immediate supe-
rior to ensure that they are on hand to greet their new colleague on their first
morning. If necessary, they should arrange to arrive earlier than usual to
make sure that the new colleague is not kept waiting.
On arrival, they should have an initial chat with their new colleague over
a cup of coffee, and familiarise them with the layout of the building and
other information which may be deemed helpful.
Company manual: As noted above, each new colleague will be sent their
personal copy of our ‘Commitment’ binder and asked to read this prior to
their arrival.
The next stage for the supervisor is to spend as much time as may be nec-
essary in talking the new colleague through the contents of the binder,
stressing our vision, mission, goals and culture and making sure that the
new colleague appreciates thoroughly all that we are striving to do.
Contribution: Particular attention will be given to that section of our
manual which describes the contribution expected from the post which he
or she will be occupying, and a thorough discussion will take place on the
‘key results’ section of his or her job description.
Departmental welcome and introductions: By this time, it would be
appropriate to take a coffee break. This is an opportunity for every member
of the department to join in a general discussion on the department’s mis-
sion, followed by each member of the department explaining how they per-
sonally contribute towards achieving departmental objectives.
Senior executive welcome: A new colleague will then be taken to meet
the most senior executive present on that day. Ideally, he or she should meet
the Chairman and Managing Director, but if they are absent, he or she
should meet the most senior director present. (The Chairman and Managing
Director will always make a point of greeting the new colleague as soon as
they return to the office.)
Mentor: Prior to the arrival of any new recruit, and based on the know-
ledge gained during the interviewing process, a mentor will be appointed
for the new colleague concerned. As far as possible, an existing colleague
will be chosen who is most likely to be able to form a rapport with the new
colleague.
On the first day, it will be the responsibility of the mentor to take the new
colleague out for lunch (at the company’s expense), and thereafter to contin-
ue to help in every way possible to ensure that he or she settles down well
in our company.
Initial training: After lunch on the first day, the new colleague will be
told how we intend to ‘play them in’ to their work, by being introduced to
each phase of the work in turn, and should any formal training sessions be
needed, the programme for such training will be discussed and agreed.
Progress meetings: During the first month of employment, the superior
will have a short weekly meeting with the new colleague to ‘touch base’
with them, review their progress, and assess any additional training needed.
Review meeting: After ten weeks of employment, a thorough review meet-
ing will be held for the new colleague to assess whether or not they wish to
continue with our company, and for the superior to review whether or not we
feel that he or she will be able to make a worthwhile contribution to our com-
pany’s success. If necessary, a more senior director, if not the Managing
Director, will join this review meeting so that in both the interests of the col-
league concerned, and our company, the correct decision can be made.
Appraisal
Company procedures: A report setting out the procedures we adopt in car-

rying out appraisal interviews will be given to every colleague, and be kept
by them in their personal ‘Commitment’ binder.
Training: Prior to the first appraisal interview, this appraisal procedure
will be explained thoroughly to every new colleague.
We have already devoted a number of colleagues’ monthly meetings to
the question of appraisal. Where appropriate, some of the training question-
naires and other aids we have used in these earlier training sessions will be
explained to a new colleague also.
Promotion
Self-development: No company can stand still; it has to get better in quality

and quantity. So, growth is inevitable and will give you the opportunity for
self-development and enhance your contribution to our success. You will
certainly grow in stature and you may become eligible for promotion to a
more demanding and challenging position.
A really thorough appraisal interview will then take place between you
and your immediate superior where your competence and confidence to
handle every aspect of the job will be discussed thoroughly.
At the end of this meeting, you will be joined by an appropriate senior
director so that both you, and your immediate superior, can test the conclu-
sions you have jointly reached with the director concerned.
It is very important that great care is taken over any promotion, and we
will be particularly interested in discussing with you (when your time
comes to be considered for promotion) the extent to which you need further
training.
Management review: Any recommendations for promotion will be con-
sidered thoroughly at the weekly meeting of the senior management team,
and be confirmed or otherwise by the monthly meeting of directors.
Trial period: Any promotion will be for an initial trial period of six
months. An appraisal of performance will be held after the first two months,
and a further appraisal meeting will be held after the first five months.
Where deemed appropriate, these post-promotion appraisals will be
reviewed by a more senior director.
Demotion
Relinquishing position: Your superior and your directors will be keen to

provide coaching and counselling to ensure that you can handle your pro-
motion effectively and successfully.
It would be unfair to you, your team, and to our company, to allow you to
retain a position if, in the event, you found that you lacked either the confi-
dence or the competence to handle the work effectively on our behalf.
In this event, you would be expected to voluntarily relinquish your
appointment until such time as you had gained the further experience and
training needed to be considered for any vacancy.
Dismissal
Letting down the team: No cricket team can afford to include a player
whose consistent failures in batting, bowling or fielding lose the team its
matches. Similarly, our team cannot continue to employ someone who con-
sistently lets down their colleagues and thus hinders our company’s growth.
Attitude: We regard a positive, constructive attitude as the most important
quality, since if you have this attitude, we can help you by coaching, coun-
selling and training. But in our judgement, should you develop the wrong
attitude and be unwilling to respond to the efforts we will undoubtedly
make to help you adopt the right attitudes, we would be unable to allow you
to continue to be a member of our team.
Competence: However, no matter how good your attitude may be, we,
like any other teams, would not be able to continue your employment if you
were consistently unable to achieve your personal key tasks.
We would do our best to help you find alternative employment more suit-
ed to your own talents and circumstances.
Developing our organisation
Strategic objectives: It is the responsibility of the Board of Directors, aided

by everyone, to evolve the strategic objectives of our company and to set
out, in writing, realistic marketing and business plans.
Every colleague will attend a company meeting at which our strategic
objectives will be debated. You can be sure that you will understand what
we are trying to do, and therefore how you need to contribute to our suc-
cess.
Key tasks: Once the strategic objectives have been agreed and explained,
the key tasks, or key contributions expected from you and each of your col-
leagues will be redefined in consultation with you.
Key performance indicators: We will not be able to assess whether or not
we are achieving our objectives unless we measure our progress regularly. It
is possible to measure our selling effort both weekly and monthly, and to
produce accurate monthly management accounts.
You, in common with all your other colleagues, will receive any manage-
ment information you need to assess your progress towards achieving your
key results.
If you are, or become a member of our senior management team, the
weekly and monthly sales information will be discussed at the weekly man-
agement meeting.
If you become a director, you will be involved in a thorough discussion of
our monthly management accounts.
In short, you may be assured that if you need any information to help you
to be more effective to measure your contribution, we will provide it, in
addition to providing you with the general background as to the progress
arising from our monthly management accounts.
Job improvement plan: Your four-monthly appraisal interview will, as
explained, be based on a discussion on how successfully you have achieved
your key results in the previous period, and how you intend to achieve your
revised key results in the next period. The results of this discussion will be
communicated to you in writing.
Where appropriate, you and your immediate superior may decide that you
need a formal ‘job improvement plan’. This sets out the:
ᔡ key tasks to be achieved;
ᔡ next review date;
ᔡ appropriate ‘key performance indicators’ which will help you to see
whether or not you are achieving the improvement needed;
ᔡ ideas, agreed by you with your superior, as to how best you might
achieve the improvement on which you have both agreed.
Company development: We hold a monthly meeting involving every col-
league of our company. You and your colleagues are free to put forward any
topics to be discussed, or training to be undertaken at these monthly meetings.
We accept responsibility for ensuring that these meetings are worthwhile
and that you, in common with your colleagues, have the responsibility of
contributing to the success of these meetings by joining in wholeheartedly,
taking part in any team exercises, and participating in the open discussion
session.
From time to time you, as an individual or in partnership with your
departmental colleagues, may be asked to give a presentation to the meeting
on some aspect of the work you do, and the systems or equipment you use
to achieve your objectives.
Self development: As indicated, the purpose of your regular appraisal
meeting is to help draw up any programme of support or training you need
to be more effective in developing yourself, and thus enhancing your contri-
bution to the company.
Achieving success: We can only be successful if every member of our
team understands all our objectives – particularly our marketing objectives
—and the strategies by which they will be achieved; given all the changes
taking place in our industry. You will be involved fully in discussions on the
way we wish to position ourselves, our strategies and business plans. This
will enable you to both understand and play your part in achieving our
objectives.
You, in partnership with all your other colleagues, will be expected to
participate in discussions on these issues at our monthly meetings.
Redesign of organisation: Revising and refining our strategies may mean
that we then have to redesign our organisation, so the growth of our compa-
ny is a constant process of:
ᔡ striving to set realistic strategic objectives;
ᔡ defining the organisation we need to achieve these objectives;
ᔡ building the organisation on which we have decided; and
ᔡ developing our organisation so that, by achieving our original objec-
tives, we have a platform for growing and expanding our company to
better serve its customers, and to provide better opportunities for you
and all our colleagues.
In a nutshell: We can only succeed if you and every other member of the
team is fully committed. You can be sure we will do everything we can to
help you succeed.
REFERENCES
1. Stayer, Ralph (1990) ‘How I let my workers lead’, Harvard Business Review,
Nov.
2. Harvey Jones, Sir John (1988, Collins, 1989, Fontana Paperback, 1994, Harper
Collins), Making it Happen.
3. Kotter, John P (1990), A Force for Change, Freepress, New York.
4. Kotter, John P and Heskett, James (1992), Corporate Culture & Performance,
Freepress, New York.
5. Champy, James and Hammer, Michael (1993), Re-engineering the
Corporation, Nicholas Brearley Pub, London.
6. Barlett, Christopher and Ghoshal, Sumantra (1994, 1995), ‘Changing the role
of top management’, Harvard Business Review.
7. Collins, James and Porras, Jerry, Built to Last, Century, London.
8. Warren, Bennis and Nanus, Burt (1985), Leaders, Harper Row, New York.
9. Thompson, Peter (1990), Sharing the Success, Harper Collins, London.
10. DTI (1994), Winning, DTI, London.
11. Womack, James, Jones, Daniel and Roos, Daniel (1990), The Machine that
Changed the World, Maxwell Macmillan Int.
12. Sparkes (1995), The Ethical Investor, Fount.
13. Carling, Will and Heller, Robert (1995, Little Brown, 1996, Warner), The Way
to Win – Strategies for success in business and sport.
14. Levitt, Theodore (1962), Innovation In Marketing, McGraw Hill, Maidenhead.
15. Carlzon, Jan (1987, 1995), Moments of Truth, Harper Row, New York.
16. Pascale, Richard (1991, 1996), Managing on the Edge, Penguin, London.
17. Pettigrew, Andrew and Whipp, Richard (1991), Managing Change for
Competitive Success, Blackwell Publishers, Oxford.
18. Zaleznik, Abraham (1992), ‘Learning leadership’, Harvard Business Review.
19. Heller, Robert (1995), The Naked Manager for the Nineties, Little, Brown and
Company, London.
20. Drucker, Peter (1954), The Practice of Management, Harper Row, New York.
21. Chandler, Alfred (1962), Strategy and Structure, The MIT Press, London.
22. Womack, James and Jones, Daniel (1994), ‘From lean production to the lean
enterprise’, Harvard Business Review, Mar/Apr.
23. Garrett, Echo Montgomery (1994), ‘Innovation and outsourcing = big success’,
Management Review, Sep.
24. Handy, Charles (1995), ‘Trust in the virtual organisation’, Harvard Business
Review, May/Jun.
25. Hirschhorn, Larry and Gilmore, Tom (1992), ‘New boundaries in the bound-
aryless company’, Harvard Business Review, May/Jun.
26. Katzenbach, John and Smith, Douglas (1993), The Wisdom of Teams, Harvard
Business Press.
27. Schumacher, E. F. (1973), Small is Beautiful, Blond & Briggs.
28. Jones, Daniel and Womack, James (1996), Lean Thinking, Simon & Schuster,
London.
29. Wickens, Peter (1987), The Road to Nissan, Macmillan Press, Basingstoke.
30. Peale, Norman Vincent (1963), The Power of Positive Thinking, World’s Work.
31. Buzan, Tony, Mindmapping, BBC, London.
32. De Bono, Edward, Six Thinking Hats, Penguin, London.
33. Case, John (1995), Open Book Management, Harper Business Books, London.
34. McGregor, Douglas (1960, 1995), The Human Side of Enterprise, McGraw
Hill, Maidenhead.
35. Herzberg, Friederich (1966), Work and the Nature of Man, World Publishing.
36. Kennedy, Carol (1993), Guide to the Management Gurus – Shortcuts to the
ideas of leading management thinkers, Century Business, London.
37. Tichy, Noel and Sherman (1995, 1996), Control Your Destiny or Someone Else
Will, Harper Collins, London.
38. Schaeffer, Robert (1991), ‘Demand better results and get them’, Harvard
Business Review, Mar/Apr.
39. Hamper, Arthur (1992), Rivethead – Tales from the assembly line, Fourth
Estate, London.
40. Locke, Edwin and Latham, Gary (1984), Goal Setting, a Motivational
Technique that Works, Prentice Hall, London.
41. Hamel, G and Prahalad, C. K. (1989), ‘Strategic intent’, Harvard Business
Review.
42. Johnson, Gerry (1992), ‘Managing strategic change – strategy culture and
action’, Long Range Planning, Vol 25, No.1, Elsevier Science Ltd.
INDEX
ABB (Asea Brown Boveri) 13, 14, 81, 119, 123-4 cohesion 156-8, 180
Abbeyvale Bakery, Devon 20 colleagues, employees as 26, 37, 171, 232-43; and
ABC (Activity Based Costing) 118, 120 superior philosophies 62-3
accountability 110 collective responsibilities 242-3
accountants, as information facilitators 115 Collins, James and Porras, Jerry, Built to Last 40, 145-6
Allen, Bob 44 commitment 19, 37, 43, 46, 236-9; ways of obtaining
Allied Dunbar, employee survey 130-1 175-6
American Management Association 99 communication 14; and cohesion 158; creating ‘picture’
Anderson, Kye 182-3 of organisation 198-9, 205; of vision 51, 56, 183-92
appraisal interviews 88, 138-9, 235, 239-42, 247, 249 community, company relationships with 61, 62, 206-7;
assertiveness 84-5, 92, 122, 237 formed by leadership 92
assessment, self 139-40; upward 140 Company Charters 214-17; Hewlett Packard 218-21; ICL
AT&T 76 222-30; Sewell International 214, 231-50
attitudes 128-31; difficulty of changing 24-5; surveys of competence, assessment of 36; building 150-1; and
130-1; see also motivation capacities 132-3; development of 36-7, 43, 75, 233-4
AWWA (Asking When Walking Around) 186, 204 competition 25; competitive advantage 30, 106; competi-
tive urge 86; conditions for success 75; direct 19;
banks, phone services 19 indirect 19
Barnevik, Percy 13, 14, 81, 119, 124 competitors, relationships with 61-2, 206-7
Bartholomew, Martin 146 confidence 37, 43, 175; creating 151-4; of leaders and
Bartlett, Chris 38-9, 76-7, 118 followers 84
Beer, Michael 178-9 confidentiality 231-2
Behavioural Observation Scales (BOS) 175 conscientiousness 130
benchmarking 74 conservatism of organisations 193
Bennis, Warren 48, 51, 56, 170 consultants 69
Bennis, Warren and Nanus, Burt, Leaders 49-50, 92, contention 85, 92, 122, 129
121-2, 153-4, 169, 183, 207 coordination of strategy 30-1
Berwick, Donald 179 core business 99
best practice 74 cost efficiency 94
Binney, Mike 85 costs, of employees 25; training 160-1; warehousing 126
BMW (GB) 84 courage, in accepting mistakes 83-4
Body Shop, Charter Working Groups 190-1 credibility 208-9
Bonfield, Sir Peter 211, 212-13 Creighton, Elaine 137
de Bono, Edward, Sixth Hat Thinking 154 criticism 153-4
bonuses 83, 84 Crocker, Graham 81
‘boundaryless’ organisation 103 Cullen, Bill 35, 149
BP Exploration 99 cultural web of organisation 201-3, 205
brainstorming, involvement in 46; meetings 88 culture 24-5, 27; adaptive 192-4; collegial 121-2; creating
brainstorming exercises 31, 43, 47, 57, 67, 80, 92, 127, a winning culture 121-5, 192-8, 205; enhancement of
147, 162, 181, 204-5, 217 195-6; formalistic 121-2; of loyalty 197-8; personal-
British Airways 184; corporate goals 78-9; ‘Putting istic 121-2; unadaptive 192-4
People First’ programme 160; reputation 61; Vision customer panels 18
2000 statement 55-6, 211 customer-related measurements 116-17
Brown, Jonathan 50, 85 customers, consultation with 60, 62, 75; first impressions
Burt, Jim 52 95-6; increasing demands by 19; ‘internal’ 71; per-
Buzan, Tony, Mind Mapping 154 ceptions of 70; relationships with 231-2; segments
72-3
Campbell, Andrew 208-9
capacity to grow 154-6 deadlines 116-17
Carling, Will and Heller, Robert, The Way to Win 68, 123, dealers and distributors, partnership with 60, 62, 206-7
151 debriefing sessions 187, 204
Carlzon, Jan 73, 95, 116-17, 184, 186, 190; Moments of debt collection period 118
Truth 86, 210 Democrat, The (US newspaper) 112
cascade briefings 156 demotion 142-3, 145, 248
Case, John 159 demotivation 21-5, 172
Champy, James 35, 43 Dentsu (advertising agency) 129
Chandler, Alfred 93 Direct Line Insurance 19
change, analysis of 69-70; and mindset of organisation dismissal 248
199-203; readiness for 73, 123; resistance to 45, 123, Disney organisation 137
179, 192-4; sets of disciplines 157 Drucker, Peter 71, 93, 106
‘chimneys’ (hierarchy of functions) 103-4
Clark, Miles 60 Edmar, Tomima 99
CMG (computer management group) 142-3, 180 EDS (data processing) 99
coaching 27, 37, 138-40, 151 education, encouragement of 155
emotions, and motivation 76, 165-9, 182-4; negative 166 individuals, and teams 108-13
empathy 24 induction programmes 137, 245-7
employees, as colleagues 26, 37, 171, 232-43; as experts information, personalised 118; release of 86; and respon-
75-6, 88, 233, 238 sibility 83, 86; sharing of 104; unnecessary 115
empowerment 26, 56, 143; and measurement of team information facilitators 115
contribution 34 Inland Revenue 99
entrepreneurs, front-line 96 innovation 73; encouragement of 96-7
ethical investment 61 Institute of Personnel Management 177
ethics, standards of 145 integrity, culture of 197-8
European Quality Award 130 Intel 96-7
intellectual assets 63
Farmer, Tom 184, 197-8 interchangeable skills 144
federalism 120-1 interviews, appraisal 88, 138-9, 235, 238-41, 247, 249;
Fijisawa, Takeo 157 recruitment 134-5
Financial Times 19, 120 involvement 152
financiers, relationship with companies 61, 206-7
Fletcher, Clive 177-8 Japan, consultation process 184-5; leadership style 40;
flexibility 238-9 relationships with suppliers 59
followers, effective 43, 45, 84 job descriptions 138
Ford 89, 141; Employee Involvement Programme 89 job enrichment 165
job functions, redefinition of 99, 100
Garelli, Stephane 94, 99, 101 Johnson & Johnson, Credo Survey 52-4
General Electric (GE) 20, 29, 37, 48, 64, 144-5; commu- Johnson, Gerry 199-203, 205
nications 191-2; leadership values 37-8, 43; and loy- Jones, Dan 59, 89, 94, 97, 185
alty 197; Management Development Centre 155; Jones, Dan and Womack, James, Lean Thinking 97, 126
training 158; workout concept 89-90 Joseph Rowntree Trust, The Ethical Investor 61
General Motors (GM) 85, 123, 193; Head Office 124-5 Judge, Mike 187
Ghoshal, Sumantra 38-9, 50, 68, 76-7, 96, 118
Gibson, Ian 71, 91, 150 Kaizen (continuous improvement) 21, 73
Giles, William 74 Kanter, Rosabeth Moss 155, 157
global mobility of work 94 Katzenbach, Jon and Smith, Douglas, Wisdom of Teams
goal setting, and motivation 174-7; and stress 176-7 108-13
goals see objectives Keen, Terry 42, 170
Grove, Andy 68, 96-7 Kennedy, Carol, Guide to the Management Gurus 165
Gulf War 44 Kepner-Tregoe management consultancy 122
key performance indicators 249
Hall, Peter 148 key tasks 42, 43, 234-5, 239, 248-9
Hamel, G and Prahalad, CG, ‘Strategic Intent’ 196 knowledge, collective 81-92, 171-2, 196; rewarding 144
Hammer, Michael and Champy, James, Re-Engineering Kohn, Alfie 178
the Corporation 106-7, 127, 129-30, 132 Komatsu (construction equipment) 77
Hamper, Arthur, RIVETHEAD 172 Kotter, John 35
Handy, Charles 63, 101-2, 160-1; on federalism 120-1 Kotter, John and Heskett, James, Corporate Culture and
happiness 19 Performance 58, 192-6
Harvard Business Review 97, 101, 167, 178-80, 183, 196 Kotter, John P, A Force for Change 34
Harvey Jones, Sir John 21, 167-8, 208; Making it Happen Kwik Fit 184, 197-8
184-5
Head Office, role of 124-5, 127 language skills 210
health 19 lateral thinking 154-5
Heller, Robert 86, 91, 151 Lawler, Professor 179
Heller, Robert and Carling, Will, The Way to Win 68, 123, Lawrence of Kemnay, induction programme 137
151 Layzel, Paul 84
Herzberg, Frederick 163-5, 177 leadership, autocratic 16-17, 83; building of organisation
Heskett, James 35 40-2; charismatic 24, 40, 43, 44; contrasted with
Hewlett Packard 211-12; Company Charter 218-21 management 34; and effective followers 43, 45; and
Hold, David 61 enhancement of culture 195-6; forming responsible
home-based work 101-3 community 92; and motivation 169-70; personal
Honda 22; ‘Golden Triad’ 91-2; rational thinking process effectiveness 39-40; role of Chief Executive 45; and
157 self-regard 169-70; span of control 105; team 143;
horizontal basis of skills 103-5, 113-15 and upturning of organisation 26-7; and values 37-8,
‘hot desking’ 102-3 43, 46; and vision 170, 182-3
Hot Groups 89, 107 leadership courses 35-6
‘lean manufacturing’ 97-101
IBM 123, 193 ‘lean thinking’ 126
ICL 211, 212-13; Company Charter 222-30 learning organisation, creation of 87, 158-9
incentives, drawbacks of 178-80; employee shareholding Levitt, Theodore, Marketing Myopia 70
180; and motivation 177-80; performance related pay Lewis, Len 39
(PRP) 177-8 Likert, Rensis 175
individualised corporations 118 Linjeflyg 186
INDEX ᔡ 255
listening skills 40, 103, 191 O’Byrne, Arnold 70

Locke, Edwin and Latham, Gary, Goal Setting: A Ogilvy, David 76
Motivational Technique That Works 174-6, 181 Oldroyd, David 141
Lovering, John 168 Opel Ireland 70
loyalty 197-8 ‘Open Book’ management 159
Lucas, Continuing Education and Training programme open door policies 221
154 open learning organisation 92
openness, creation of 86, 139
MacDonalds 137 outsourcing of work 99-101
McGregor, Douglas, The Human Side of Enterprise 163
Macke, Kenneth 160 Pagonis, General 44
McKnight, William 83, 96 paradigm of organisation 24-5, 122-3, 199-200
McWatt, Jayne 81, 150 Parsons, David 165
Mahoney, Professor 63 participation and ownership 209
management, abdication of 178; bureaucratic 24, 25, 119, Pascale, Richard 73, 85, 119, 123, 158, 165-6, 186-7,
127, 193; contrasted with leadership 34; insincerity 209-10; case-study of Honda 91-2; Managing on the
91; levels of reaction to 24, 25; reducing layers of 18, Edge 89, 127, 193
48, 105; role of Chief Executive 49-50, 95; transac- Paul, Bill 165, 173
tional 22-4, 25; transformational 22, 24, 25; visible pay levels 173, 235-6; performance related (PRP) 177-8;
117 profit-related 177, 212; skill-based 179
Management Learning Resources 156 Peale, Norman Vincent, The Power of Positive Thinking
Mandela, Nelson 86 151
Mantle, John 35 people-wise organisations 122
margins 19, 25 performance 82-3; coaching 138-40, 145; improved 20-1;
marketing, long-term positioning 72-3; spearheading review procedures 139; tackling underperformance
business 114-15; top line drivers 116 138, 145, 172; varying levels of 94-5
Marlow Method 74 performance challenges and team development 108-12
Marshall, Sir Colin 160, 184 personnel departments 18
Matsushita, Konosuke 81-2 Peters, Tom 37, 144, 167
Maxmin, Jim 96 Peugeot, communication processes 187-90
MBO (Management by Objectives) 220 Police Training College, Exeter 35
MBWA (Managing by Walking About) 153, 186, 220 positioning, long-term 72-3
measurement of processes 34 potential, unused 13, 14, 25-6, 81, 84, 88
mechanistic organisations 122 powerlessness, sense of 15, 171
meetings, whole company 20, 70, 87, 88, 198, 237 praise 153-4, 157
mentoring 137, 246 Premier Exhaust, Coventry 20, 160
Merry, John 101 presentations, in-company 20, 87, 155-6
MIDAS construction group 39 pride in work 167
mindset of organisation 24-5, 29, 122-3, 199-200; trans- process mapping 90, 108, 115
formation of 27-8 project teams 89, 112, 181
missionary role in organisation 27, 45-6, 47 promotion 140-1, 247-8; and progress 105-6; progress
mistakes, accepting 83-4, 237-8; costs of 84; learning independent of 143-4; and vertical basis of skills 113-
from 82-3; praise for 157 14
de Monaco, Larry 105 pruning organisations 144-6
monitoring techniques 18 psychological testing 245
Montgomery, Lord 156, 204 ‘pushing workers uphill’ 15, 23, 31
motivation 14, 163-81; building 151-2; and desire to win
169-73, 181; emotional 76, 165-9, 182-4; and fun QED suggestion scheme 90
168; and goal setting 174-7; and incentives 177-80; quality, and motivation 158
and leadership 169-70; problems of 21-5; and recog- quality control, by workers 18; changing function of 18;
nition 167-8; and redundancies 19-20; and sense of total 221
meaning 168-9; shared ambition 50; theories of 163- Quirk, Bill 209
5
motivation-hygiene theory 163-4 Rank Xerox 130-1
Motorola 143-4, 167, 180 re-engineering 14, 35, 43, 107-8, 115
Myers-Briggs personality questionnaire 146 realism 210
reciprocity 91, 171-3, 181
Nathan, Peter 20, 89, 160, 161, 178 recognition 144, 167-8, 171, 172, 233
NBS Bank, South Africa 56 recruitment 73, 133-6, 210, 244-5; collective approach
Neill, John 45-6, 94, 152, 159 135; and compatability 134
NFC 49, 51, 88, 180, 185-6, 209, 211 redeployment of work 94
Nightingale Conant 152 redundancies, and motivation 19-20
Nippon Telephone and Telegraph 167 rejects 18, 22
Nissan UK 21, 36, 71, 72, 73, 82, 91; recruitment proce- research, in-company development projects 74
dures 136; training 150; visible management 117 responsibility, and assertiveness 84-5; demanded by
workers 17-18; employers taking 106-8; information
objectives, distinguished from tactics and strategy 72; necessary for 83, 86; and motivation 163-5;
establishment of 71, 80 ultimate 132-3; workers taking 82-3
Ritz Carlton Hotel group 150 Thompson, Sir Peter 49, 51, 88, 209; Sharing the Success
Robbins, Anthony 151 185-6
Robinson, John 154 Thoreau, Henry David 151
role-play 175 Thorn EMI 96
Rover 37, 59-60 Tichy, Noel 165, 169
time pressures 15, 124
sales, top line drivers 116 titles 105
SAS (airline) 73, 86, 95, 116-17, 184, 210 TMI, recognition scheme 168
Saturn franchise 60 top line drivers 71, 116, 117
Schaeffer, Robert 167 Topham, Sue 152-3
Schwab, Charles 117 Topsytail hair care 99
Scientific Management 81-2, 187 Toyota 128-9, 134; ‘Five Whys?’ programme 157
self assessment 139-40 training 130; coordination 150-1; cost-effective aids 156;
self development 143-4, 233-5, 250 costs of 160-1; in decision making 157-8; as mainte-
self-employability 63-4, 87, 138; willingness to compete nance learning 148; ‘mid air’ 160; and motivation 91;
149-50 responsibility for 150; skills-specific 155
self-employment 15; and effective leadership 39 transactional approach 22-4, 25, 29-30, 97-8
self-regard, and leadership 169-70 transformational approach 22, 24, 25, 29, 34-5, 97-8,
Sewell International, Company Charter 214, 231-50 141, 216
Sewells International 214 trial periods 136, 142
shared ambition 50 trust 117, 172; and outsourcing of work 101-2
shareholders, relationship with companies 61, 62, 206-7
shareholding by colleagues 180 Unipart 45-6, 94, 108, 155, 180, 187; ‘My Contribution
short-term contracts 99, 101 Counts’ fora 20, 160; Statement of Values and Beliefs
Simpson, George 140 64, 65-6; university 152, 159-60
Sloane, Alfred 85 upward delegation 83
Smith, Deborah 179-80
Smith, Ed 59-60 Valentines, and cross functional teams 89
Smith, Jack 125, 193 value adding systems 115
Snowdon, Mike 211 ‘value stream’ 89
social architecture 121-2, 127 value stream, optimisation of 75
Somerfield supermarket chain 60 values, impact on performance 58, 207-8; leadership and
South Devon College 35, 170; Strategy Plan 42 46; projection of 64
sponsorship, local 61 Vaughan, Edward 70, 73
stakeholders, company approach to 59-67; panels of 89 vertical basis of skills 103-4, 113-14
Stayer, Ralph 76, 93, 180 videos, use for communications 187
Stayer, Ralph, reorganisation of business 16-18, 21, 49, Virgin 61
139-40 ‘virtual organisation’ 101-2
Stevens, Sue 20, 89, 160 visible management 117
strategy, distinguished from objectives and tactics 72; vision 48; communication of 51, 56, 67, 183-92, 210-11;
ensuring cohesion 156; as front-line activity 68-9; definition 48-9; and leadership 170, 182-3; state-
involvement in 74; and purpose 76-7; and vision 49- ments of 51-2; and strategy 49-50
50 visionary companies 40-2, 48
stress 15, 19, 236; and goal setting 176-7 visualising success 166-7
stretching people 88
Successories, Paignton 168 Wal-Mart 187
suggestion schemes 90 Walon (Logistics and Distribution organisation) 90, 101
supervisors, assessment of 140; disappearance of role 18, warehousing costs 126
97; responsibility for developing staff 237 Welch, Jack 20, 29, 37-8, 48, 51, 64, 73, 89-90, 95, 105,
suppliers, partnership with 59-60, 232 144-5, 160, 168-9, 171, 210; on ‘boundaryless’
survival 19-20 organisation 103; on communication 191-2, 204; on
SWOT (Strengths, Weaknesses, Opportunities and loyalty 197; on willingness to compete 149
Threats) analysis 74, 94, 152 Western Union 73
synergy 119 Westinghouse 123-4
Wibberley, Martin 130, 137
3M company 83, 96, 119 Wickens, Peter, The Road to Nissan 136
tactics, distinguished from objectives and strategy 72 Wolfson, Sir Brian 123
Tandem Computers 195 Womack, James 97
Tarmac 60, 160; Golden Arrow award scheme 168 workers, as experts 20-1
Taylor, Frederic, Scientific Management 81-2, 187 workouts (discussions) 89-90
team commitment index 14
team development 15 Xerox 179-80
team performance curve 108-9
teams, building of 46, 146, 238; definition 109-10; high Yoshida, Hideo 129
performance 111; and individuals 108-13; potential Young, John 218
111; pseudo teams 110-11; real 111; working groups Young and Rubicon 90
110
temporary staff 99, 101 Zaleznick, Abraham 85, 193

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The 12 Pillars

How to Achieve Extraordinary Performance

First published in 1996

Kogan Page Limited

© Ron Sewell, 1996

British Library Cataloguing in Publication Data

Typeset by Saxon Graphics Ltd, Derby

The Most Important Book you will Ever Read 14

There has to be an Easier Way 15

Pillar 2: Effective Followers and Missionaries 44

Pillar 4: Superior Philosophies 58

Pillar 5: Superior Strategies 68

Pillar 6: Collective Knowledge 81

Pillar 7: Winning Structures and Systems 93

Don’t Show Customers your Arse! 95

Pillar 8: Building a Winning Organisation 128

Pillar 9: Developing your Winning Teams 148

Pulling Together: Cohesion 156

Pillar 10: Motivating a Winning Performance 163

Pillar 11: Communicate to Achieve Extraordinary Performance 182

Pillar 12: Your Charter for Extraordinary Achievement 206

Company Charters 218

Sewell’s Colleagues’ Charter 231

Professor Jonathan Brown

Brian Coolahan, Former Managing Director, GE Capital Finance

Professor Stephane Garelli, IMD and Lausanne University

Bryan Gourlay, Sewells International Ltd

David Heslop, Managing Director, Mazda Cars (GB) Ltd

Daniel Jones, Professor of Manufacturing, Cardiff Business School

Richard Whipp, Professor of Human Resources, Cardiff Business School

Martin Wibberley, Personnel and Organisation Director, Sun Valley

Sir John Harvey-Jones MBE

Percy Barnevik – ABB

You want to win: to have a successful organisation or business. To this end,

Figure I.1 Managing

Figure I.2 Fly with the GEESE

BENEFITS OF FLYING WITH THE GEESE

Turning our organisations into the equivalent of a ‘flight of geese’ depends

Finally, we have no option. In today’s highly competitive environment com-

seek vastly improved performance from a committed team of colleagues,

Let’s come back to improved performance.

It comes back to deeply ingrained attitudes. The manager of one Tarmac

Switching people off

At my seminars, I often ask people to complete the questionnaire overleaf.

Figure I.3 Pushing ‘Workers’ uphill

Table I.1 Five styles of management or leadership

I’ll Get Even First level reaction is created by bloody minded

I Couldn’t Care Second level reaction is created by

I Only Work Here Third level reaction is caused by traditional,

I’m Involved Fourth level reaction is caused by transactional

I’m Committed Fifth level reaction is generated by

In short, the level of reaction we generate is a direct Total no.

Changing the paradigm of your organisation will be your biggest challenge.

Upturning your organisation

The way to transform your organisation’s productivity is to upturn it in the

One thing you may notice

Figure I.5 Upturning your Organisation

At my seminars I ask those present to underline words they believe to be

Figure I.6 Your space shuttle to achieve your vision

THE PILLARS FOR SUCCESS

Earlier we discussed the need to change the culture of the organisation, to

1. Leadership 1. Scientific management

THE STRATEGIC DIMENSION