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(Ronald Sewell) 12 Pillars of Bussiness Success H (BookFi) PDF
(Ronald Sewell) 12 Pillars of Bussiness Success H (BookFi) PDF
of
Business Success
The 12 Pillars of
Business Success
Ron Sewell
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Advisory/Production Team 9
Foreword 10
Author’s Introduction 12
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 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
Brainstorming Exercises or Projects: 3 57
References 251
Index 253
Advisory Team
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.
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.’
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
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
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?
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
Performance
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.
22 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
24 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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
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.
26 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
Leadership
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’
Table I.2
TRANSFORMATIONAL APPROACH TRANSACTIONAL 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.
THERE HAS TO BE AN EASIER WAY ᔡ 31
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.
MANAGEMENT LEADERSHIP
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.
PILLAR 1: LEADERSHIP ᔡ 35
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.
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.
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
Commitment
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
38 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
removed for having the wrong values, with violations of integrity being
totally unacceptable.
A LIBERATING PHILOSOPHY
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.
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.
40 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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.
PILLAR 1: LEADERSHIP ᔡ 43
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
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
46 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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
WHAT IS A VISION?
Ralph Stayer was a good paternalistic ‘boss’ but his survey showed that his
workers saw little to commit to.
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;
50 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
SHARED AMBITION
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.
PILLAR 3: VISION ᔡ 51
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?
52 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
1. Overall, how would you rate your COMPANY on meeting its RESPON-
SIBILITIES as described in this part of the CREDO?
54 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
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.
PILLAR 3: VISION ᔡ 57
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.
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
60 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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’.
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.
PILLAR 4: SUPERIOR PHILOSOPHIES ᔡ 61
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
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.
PILLAR 4: SUPERIOR PHILOSOPHIES ᔡ 63
INTELLECTUAL ASSETS
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
64 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
CONCLUSION
Your objective should be a very lean team of highly committed people, not
requiring very much supervision, for two reasons:
All of our futures are determined by our ability to satisfy our customers’
needs, who, whether individual, retail, wholesale or corporate deserve:
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.
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
CHALLENGE
UNDERSTANDING ENVIRONMENT
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:
PILLAR 5: SUPERIOR STRATEGIES ᔡ 71
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.
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).
72 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
Table 5.1 makes the distinction between tactics, objectives and strategy,
which is another topic for ongoing briefing and brainstorming throughout
your organisation.
LONG-TERM POSITIONING
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
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.
COMPETING SUCCESSFULLY
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.
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.
76 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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).
78 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
PILLAR 5: SUPERIOR STRATEGIES ᔡ 79
៚ 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
Superior Strategies
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?
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 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.
84 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
4. Assertiveness
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.
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.
PILLAR 6: COLLECTIVE KNOWLEDGE ᔡ 87
7. Learning organisation
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.
88 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
PILLAR 6: COLLECTIVE KNOWLEDGE ᔡ 89
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
90 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
PILLAR 6: COLLECTIVE KNOWLEDGE ᔡ 91
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?
(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
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.
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.
94 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
Company A Company B
So let’s accept that in these highly competitive times, we have to look hard
at our structures and systems.
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
96 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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%
100 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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
102 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
‘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?’
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
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 103
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.
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’.
104 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 105
Span of control
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.
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
106 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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’.
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 107
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
108 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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
Working groups
Pseudo team
The authors warn that there is a real danger that in trying to adopt a ‘team’
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 111
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
Source: The Wisdom of Teams by John Katzenbach and Douglas Smith, Harvard Business Press
and get them to research the basis on which high performance teams could
flourish in your organisation.
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.
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
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.
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.
‘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-
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 117
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)?
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.
118 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 119
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.
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 121
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.
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
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.
Mechanistic
organisation People-wise organisation
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.
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’.
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
124 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
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-
PILLAR 7: WINNING STRUCTURES AND SYSTEMS ᔡ 125
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.
FROM TO
Teams of specialists and teams of skills Mix of specialists and skills in process
focused teams
Staff-specialists Facilitators
Directors Leaders
Excessive concern with titles and rank Concern to gain respect for contribution
to team
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.
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
When Toyota started recruiting for their new plant at Burnaston, they were
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 129
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.
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
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 131
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’
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.
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.
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 135
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
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?
136 ᔡ THE 12 PILLARS OF BUSINESS 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.
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.
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 137
Sustaining performance
Frequency
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.’
140 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
Peter Principle
We are back to the Peter Principle, the mistake we all make in terms of not
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 141
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.
Leading change
Criteria Definitions
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
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.
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
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.
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
PILLAR 8: BUILDING A WINNING ORGANISATION ᔡ 145
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
146 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
BUILDING A TEAM
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.
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.
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
150 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
BUILDING COMPETENCE
Coordinating training
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
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.
152 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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
154 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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
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
156 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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.
PILLAR 9: DEVELOPING YOUR WINNING TEAMS ᔡ 157
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.
Quality
Communication
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
PILLAR 9: DEVELOPING YOUR WINNING TEAMS ᔡ 159
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
160 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
PILLAR 9: DEVELOPING YOUR WINNING TEAMS ᔡ 161
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.
MOTIVATIONAL THEORIES
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!
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
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
Pride
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
168 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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.
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.
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
170 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.’
Strategies
Philosophies
People are motivated when their organisation requires them to act with
integrity in all their dealings with suppliers, dealers, customers, sharehold-
PILLAR 10: MOTIVATING A WINNING PERFORMANCE ᔡ 171
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
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
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
Communication
All the above activities both rely upon, and are reinforced by, truly effective
communication. A point we have yet to consider.
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.
174 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
PILLAR 10: MOTIVATING A WINNING PERFORMANCE ᔡ 175
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.
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.
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.
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.
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
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:
PILLAR 10: MOTIVATING A WINNING PERFORMANCE ᔡ 179
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
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-
180 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
CONCLUSION
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’.
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.
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.
184 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
11: COMMUNICATE TO ACHIEVE EXTRAORDINARY PERFORMANCE ᔡ 185
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
186 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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.
188 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
11: COMMUNICATE TO ACHIEVE EXTRAORDINARY PERFORMANCE ᔡ 189
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.
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.
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.
‘Swim better!’
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
Inherent conservatism
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.
Source: Kotter and Heskett, Corporate Culture & Performance, Free Press
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
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
A culture of loyalty
A CULTURE OF INTEGRITY
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.
198 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
11: COMMUNICATE TO ACHIEVE EXTRAORDINARY PERFORMANCE ᔡ 199
5 4 3 2 1
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.
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 11.3 How Managers Define the Cultural Web – One Case Background
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
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.
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.
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
204 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
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?
208 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
ADVANTAGE OF A CHARTER
SIX CAUTIONS
1. 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.
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
5. Presentation
6. Vibrant
While your values and beliefs should be changed rarely, your mission state-
PILLAR 12: YOUR CHARTER FOR EXTRAORDINARY ACHIEVEMENT ᔡ 211
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
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’.
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.
PILLAR 12: YOUR CHARTER FOR EXTRAORDINARY ACHIEVEMENT ᔡ 213
SEWELLS INTERNATIONAL
CONCLUSION
You might like to use the following questionnaire as a basis for discussing
your priority attention areas.
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
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.
220 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
‘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
224 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
COMPANY CHARTER : THE ICL WAY ᔡ 225
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
226 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
COMPANY CHARTER : THE ICL WAY ᔡ 229
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.
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.
230 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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
232 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
COLLEAGUES’ CHARTER
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).
234 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
SEWELL’S COLLEAGUES’ CHARTER ᔡ 237
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-
238 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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.
240 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
242 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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.
244 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
Recruitment
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
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-
SEWELL’S COLLEAGUES’ CHARTER ᔡ 247
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
Promotion
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
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.
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,
250 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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.
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252 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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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
254 ᔡ THE 12 PILLARS OF BUSINESS SUCCESS
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
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