Energising your enterprise: the key challenge for leadership

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Leadership & Organization Development Journal

ISSN: 0143-7739

Article publication date: 1 March 2000

Citation

Lloyd, B. and Wickens, P. (2000), "Energising your enterprise: the key challenge for leadership", Leadership & Organization Development Journal, Vol. 21 No. 2. https://doi.org/10.1108/lodj.2000.02221bab.001

Publisher

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Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited


Energising your enterprise: the key challenge for leadership

Energising your enterprise: the key challenge for leadership

Bruce LloydPrincipal Lecturer in Strategy at South Bank University, London, UK in discussion with Peter Wickensauthor of Energise Your Enterprise, Macmillan Business (1999)

BLCould you start by summarising the core messages of your new book?

PWIf you look at Energise Your Enterprise, it essentially builds on my work that was previously published in The Ascendant Organisation. This identified a standard four box model, with Control of the Processes on one axis and Commitment of the People on the other. From this model you can see that, if all you have is control, you end up with alienation, and if all you have is commitment, you end up with anarchy. If you have neither, there is apathy and, finally, if you have a high level of both control and commitment, you end up with The Ascendant Organisation. It is a good model, but I decided that it needed to be extended, particularly on the commitment axis, in order to show how, in any organisation, you can generate more precisely the commitment of people.

In my new book I started off by using the title "Energise Your Workplace", which was a phrase I got from my Japanese colleague, Iwao Kobayashi. It was then suggested that such a title was too narrow, and I eventually came up with this word "Enterprise", which is broader than "Workplace" and sexier than "Organisation". The essential themes of the book are related to the broad issues associated with leadership. For some time I have argued that one disservice that writers on leadership have given to the world is their over-concentration on leadership at the very top. However, I strongly argue that one of the key tasks (if not the key task) of leadership is to encourage an environment where leadership can exist, and develop, at all levels of the organisation. So, as soon as you have one person you can supervise, one budget line over which you have some control, or one facility you can effect, then you are in a position to exercise the characteristics and responsibilities of leadership. There is considerably more to it, of course, including the need to integrate a discussion of values, innovation, real teamwork and leadership styles, which I also cover. But the central theme that runs through the book is that leadership can, and should, exist at all levels of the organisation and what we must do is create the environment where that can happen. What I attempt to do is show how it can happen, and what needs to be done to gain the commitment of people at all levels of the organisation.

BLFirst I must confess that I found your book one of the most readable and relevant management books that I have read for a long time. In fact, I found it a very exciting book to read, which, in my experience is, unfortunately, a very rare reaction to reading management books. So many of them seem to approach management as being essentially a technical subject and this reaction even happens with HR books. Your book recognises that energy comes from values and meaning. I believe any good management book needs to start with these factors and be driven by them; they are the driving forces that create the energy in our enterprises. Do you agree?

PWI have always tried to write as I speak, and my background is that of a practising manager, not an academic - although I am doing some academic work now. In this book I deliberately set out to write as I speak and I am very pleased that you found it exciting to read, for it reflected my natural enthusiasm for the subject. That is what I hoped would be the result. The other theme of the book is that I consider a core task of leadership, is to inject that spark into the organisation and its activities, which when properly conducted can lead to quite amazing results As the book cover shows, I relate it to bolts of lightning being injected into the organisation. Of course, if these forces are not properly conducted, they run the risk of destroying the organisation itself.

Competency and commitment

BLDo you agree that there is some sign that, over the past few years, from Charles Handy and The Search for Meaning to the growing number of books exploring "the Soul of the corporation", that this whole issue of values as the core driver of organisational success is now getting much more attention. It appears that for the past decade or two we, at least in Britain, have tended to be obsessed with competencies, and have tended to forget about the issues of commitment. Yet competence without commitment doesn't lead to action.

PWI have never been a great enthusiast of "competency". I came to this issue of values not via the competency route but by building on what I had previously covered in my earlier book, where there was a chapter called culture, vision, mission - whatever you call it. All three concepts are mixed together. At the time I was very critical of the fashion for Vision and Mission statements that said things like: "We are committed to being first in customer service". These statements tend to be written by those at the top of organisations and handed down layer by layer. I was dissatisfied with that approach but, when I wrote my earlier book, I was not aware of what needed to go in its place. Then I started hearing this word "Values" being used much more widely, and I went back to something I had picked up when we were setting up Nissan in the UK. I recalled a statement of Tom Watson Jr, who didn't use the word values, but spoke of the "beliefs" of the organisation and for IBM their "beliefs" centred around a concern for the individual. Unfortunately, the experience of IBM a decade ago shows that you have to be careful not to become too inwardly focused as opposed to having the needs of the customer at your core.

When I started to read about these issues, I very quickly recognised that the deeply held values of the organisation are always defined in positive terms by those at the top. But if you talk to people inside organisations you soon find that their assessment of their organisation often uses highly negative terms. The top down message may be "we put people first", but the message coming up from the bottom may be that this is joke and is more likely to be we are a "people last" company. As a result I became increasingly aware that there was a significant difference, if not a dysfunctional mismatch, between what top management perceived and what was really happening on the shop, or office, floor. If you want to develop genuinely shared values throughout the organisation, around which everyone can become committed, it is necessary to involve everyone throughout the organisation in determining what they are now and what they want them to be. First, they need to be involved in a detailed discussion of what your current values are perceived to be, and then, once you know that, you can explore what you would like them to be - and then how to get from where you are now to where you want to be. That process has to be a shared exercise; it cannot be imposed from the top.

BLIn fact, it is quite likely that the more you try to impose it from the top the worse the problem will become. I have found that it is relatively rare that those at the top of organisations are fully aware of these issues. And there is even a further dimension, namely that those at the bottom of an organisation don't take much notice anyway of what people at the top say, but they are influenced by what they do. It goes back to that old saying: "It's not what you say, it's what you do that counts." This approach also supports the idea that leadership must be seen to be "walking the talk". This is such a basic point, but it seems to be missed by so many of our so-called corporate, even political, leaders. And this gap is reflected in both publications and practices.

PWI agree with you. The "walk the talk" (or "management by walking about - MBWA") idea has been around for a long time and has been extensively written about. Unfortunately it rarely happens in practice.

Credibility and hypocrisy

BLBut is that a reflection of the fact that people don't really believe it is important? Also where it is done, it is rarely around the area of values. It tends to be focused on more technical issues and outcomes. Yet the more an organisation talks about its values, the more it has to be seen to "walk the talk" of these values, if people want the approach to have a positive, rather than negative, effect. If you talk up the idea of values at the top of an organisation, and you are not seen to be practising that talk, the rest of the organisation - and those outside - are bright enough to recognise the widening gap that gets filled by the potentially very damaging word "hypocrisy".

PWThat's right. If you say something and you don't behave in that way, it is usually better not to have said it. Going back to my Nissan days, Ian Gibson, who is now president of Nissan Europe and I, were both deeply committed to the principle of continuous improvement - that is getting people at all levels involved in continuous improvement. At one time, however, the workforce had a concern that, if they continuously improved productivity, they might just work themselves out of a job. This was a real concern and we felt it was necessary to address it directly, so very deliberately, and personally in front of all the staff, we said that we would guarantee that no one in this plant would ever lose their employment through self-generated productivity improvement. Of course, that didn't mean that any of us were immune from the vagaries of the marketplace; it didn't mean that if there was some radically new technology it would not affect us. But outside of that we deliberately put ourselves in a position that, if we ever retreated from that principle, we were aware and so was everyone else, that we would lose an enormous amount of credibility. We put our reputation firmly on the line and we meant it; and I believe that the workforce believed us. That is an example of management standing up and saying "this is a principle from which we shall not retreat". In a way that principle became a value because of our behaviour, reflecting the general point that the values of an organisation emerge from its behaviour; they are not imposed through mission statements or top down directives.

A phrase I use in the book is that "values have to be discovered", they cannot be imposed or invented. Basically you discover things that are already there, although it is often useful to have navigators. Eventually you do arrive at a destination, but when you are starting out on your process of discovery, you are never quite sure what it is that you will find. What I try to do in the book is develop a process that can help readers discover what their existing values actually are, then determine what they want them to be. I found that the section on values has generated more interest than any other part of the book.

BLBut if you identify a process there is a risk that the process will be institutionalised, mechanised or bureaucratised. Surely the critical element is to ensure that people really believe in it and that they are not going through the process blindfold as little more than a formality. It was institutionalisation that ran TQM into a dead end for many organisations. How do you stop that, perhaps natural, process of institutionalisation from happening?

PWThe way I try to do it is to get a collection of people together, perhaps 20-25, from all levels of the organisation. If you start with a management draft you are defining the debate, and if you start with a blank sheet of paper you quickly run out of ideas. So I start by getting the people involved to list positive, or negative, "values words" through a brainstorming session. This list is added to and you then get participants individually to identify the dozen or so words that they feel most closely reflect what is going on in the organisation. Then various people from the same level in the organisation get together to see if they can agree on these words that they believe reflect their perception of the behaviour of their organisation. Then we share the words that emerge from these various levels - top management, middle management and the work floor. We usually find that perceptions at the different levels are very different. If top management is saying that we are a "people first" organisation and those at the bottom believe we are a "people last" organisation, then we are a "people last" organisation.

The next stage is to get agreement over what they want the values to be. We then seek to put flesh on the bone and end up with half a dozen genuinely shared values. To do that we use vertical groups with people from every layer of the organisation to try to define the words. And it is usually surprisingly easy to get agreement. The critical point is that once we have shared where we are and defined where we want to be, how the organisation makes the transition is up to them. Organisations have to own the solutions if they want them to be really useful.

BLBut do you find that top management really understands these issues? The impression is given that they are far too often primarily concerned with their own personal agenda, rather than reflecting a genuine concern for the long-term interests of the organisation. In many situations you don't see these two pressures working very well together.

PWI have used this process successfully in five organisations but in one, a police authority, it didn't work at all well, because the constables and sergeants didn't feel able to be open in front of their senior officers. This is obviously reflecting the fact that they had a major problem of organisational trust. If the process I outlined is to have any chance of succeeding, those at the top need to understand the issues and their implications; they need to be willing to listen and learn. It would be very difficult to use these sessions to generate that basic trust between the different levels. A basic level of trust needs to be there in the first place; if there is no trust whatsoever you probably have to start somewhere else.

The role of trade unions

BLBut there is a paradox here. If you have that trust you can then build on it. But so many organisations seem to be in organisational and/or values crisis, where there appears to be a complete breakdown of trust, which then creates a vicious circle that can easily lead to total disaster. What can you do to break that vicious circle?

PWA colleague of mine is working in Germany with a company which is a household name throughout the world, and they have found that the unions there are not willing to have anything to do with this process. In Germany, top management cannot do anything significant without joint agreement between management and unions. This can hold up any new initiatives.

BLMy experience of some organisations in Britain, perhaps particularly in the public sector, is that strong unions have resulted in a vicious circle that has produced less and less effective management, as every change created the need for formal re-negotiation of agreements, sometimes even national agreements, between the unions and management. As a result it is difficult to maintain a structure, let alone the momentum, of continuous improvement. Of course, frequently this situation has developed because of the breakdown of trust between management and the workforce but it is not easy to change because you have to reinvent a positive role for management. I recognise there has been a lot of change in this area in the last decade or so, but it still presents many organisations with special problems because they have not had any real line management for years. Consequently, it is not surprising that there has been extensive de-layering of management in some companies as management has not been able to add real value to the organisation. Unfortunately the real responsibility for this is often further up the organisation and it certainly takes time to make the necessary management changes - and show that the produce results - before everyone is convinced that the change is, in fact, progress. Also, quite often, other cuts or changes happen for other reasons before this new approach can be well established. If there is to be any real chance of success most companies in crisis recognise that they have to work closely together with the unions. Is the experience of the private and public sector different?

PWThis concept of values is not easy for many unions to take on board. Unions often claim that they have the moral "high ground" to start with, and they do not accept that it is possible to establish shared values. Organisations have to be ready for the change we are talking about; they have to have an open mind and be willing to take a flexible approach. It is very difficult to impose the ideas, or even force the pace. If these conditions are not there usually the organisation will slip further and further towards disaster then, hopefully, before it gets too late, they all come to their senses and realise that they have to all work together, if they are to survive, let alone be successful over any length of time.

Cultural differences

BLWhat about cultural differences that arise in different parts of the world? Do cultures have more in common than we often think, when we get down to the fundamental issues?

PWI have experienced American, British, German and Japanese companies, and have done quite a lot of work in South Africa. To take the latter, I have found them extremely receptive to looking at values related issues. Perhaps surprisingly, that is not so much the case in America and Germany, where I have found that, while management might be ready, the unions are not. Also, again perhaps surprisingly I have found that Japanese companies appear to have great difficulty going down this route. First, they assume that their organisations already have shared values and secondly, they do not have a culture where it is easy for these issues to be explicitly challenged and shared. They pretend that because they have a culture of harmony everything must be all right. But, in my experience, it is very difficult to get those involved at the top to admit that they have anything to learn.

BLBut surely the Japanese are aware that the factors behind their success in the 30 years or so up to the 1990s are not enough to take them into the next millennium. After all, they do have a tradition of being able to energetically learn from others; assuming that they have not become so complacent that they now believe they have nothing to learn. Is that a valid assumption?

PWThey do admit that they learned a lot from everyone in the post-war period but there is much evidence to suggest that they became complacent over the so-called Japanese model of harmony and continuous improvement. When the financial bubble burst, the Japanese found it very difficult to change. In fact, they would probably say they had been driven by values for many decades, and that was the cause of their problems today. They believe that what is needed now is a much more hard-nosed approach that emphasises profits and shareholder value, rather than the issues of market share and commitment.

BLIs there also an ideological split between those people who say that individuals should pursue their own personal agendas first, and if they do that within an effective organisational structure, then the organisation itself will benefit. And those who argue that, if individuals are committed to the interests of an organisation, they will then derive more personal benefits over the long term. Although this is rarely a 100 per cent split one way or the other, it is often a 80/20 split and sometimes it is 50/50. Which do you find works best?

PWI think the latest approach doesn't focus on productivity, instead it is just concerned with maximising shareholder value. I see a polarisation between this obsession with shareholder value and the ideas I am concerned with, which focus on the people in the organisation and how they can best be committed and energised in the long-term interests of the organisation. If that does not happen it is very unlikely that shareholder value will be maximised.

BLOne way these issues can be brought together, and this is reflected in The Tomorrow's Company agenda and the book Built to Last, is through making sure we emphasise the long term, rather than just the short term. Your book is concerned with the factors that help an organisation work over the long term.

PWYes. But there is a tendency in the fund management industry for performance to be increasingly measured over the short term, and the pressure of league tables can make this worse. We need to re-educate the fund managers and that might well be the focus of my next book.

Education and training for leadership

BLOn the assumption that what we have been talking about is important for the future of us all, what needs to be done to improve the quality of leadership in the way you define it?

PWWhen I talk about leadership I do not try to define it in a "sound bite". I just try to describe what I believe leaders do. And the answer is long and wordy. I do not believe you can train people to be leaders, but you can put them into positions where they can discover and develop their ability to take on leadership roles, if they wish to do so. There are a wide variety of leadership styles, and I discuss what I consider to be the heart of leadership, rather than at the top. To get to the heart you have to earn respect for your abilities, others have to share your goals, they must trust you, and be inspired by you. Ability is the easy bit - that is about knowledge and techniques, and these you can learn relatively easily. But can you learn to trust others, or how to be trusted by them? Do you share the same goals? Are you inspired by them? Do you inspire others? It is one thing to respect ability, but quite another to earn trust, respect and inspiration. And that is, I believe, one of the weaknesses of the competency driven model. If you ask leaders today, what it was that most helped them to develop their abilities, you invariably get answers such as they benefited from the developmental experience of having a tough assignment. You do need the right kind of non-threatening support for this to be really beneficial, or people end up in "make or break" situations and many people do benefit, or suffer, from such an experience. Perhaps you can teach management, if you just define it as a package of techniques. But it should be more than that and, certainly, leadership is much more than that.

BLThis raises a number of important issues. First how do people learn to acquire listening and learning skills?

PWI do believe it is possible to learn to listen. People who work with The Samaritans certainly have to learn how to listen and their training, which I outline in the book, is second to none. There are other well-accepted techniques. But first you have to be motivated to learn and listen. And there is no way that I am arguing that just because you can listen and learn, you will make an effective leader. It might be a useful, even essential, building block, and I believe it is, but there is much more to leadership than that. Some apparently inspirational leaders can be effective over the short term, but, if they are not listening and learning, it is unlikely that they will be able to sustain their inspirational quality over the long term. And it is likely that there will be people who break all the rules and be highly successful. People are like that. Sometimes drive and personality can be enough, particularly where the objectives are very clear.

Leadership and listening

BLOne difficulty that arises in many situations is knowing when to pass on your leadership mantle to someone else. That is where the listening can become critical and many so-called charismatic leaders seem to get it wrong at this point.

PWWhat my book is really about is how leadership happens at all levels of the organisation, whether you are a foreman, or divisional head, or CEO. And people at those levels do not succeed if they are little, or even big, dictators. They succeed through a combination of trust, integrity and inspiration, as well as being able to listen.

BLBut almost all of the apparently charismatic leaders came up through an organisation. Did they have the same style all the way up, or did they change their spots when they got to the top. If you need to listen to get to the top, why do some people appear to stop listening when they get there?

PWIt is very difficult to get everyone to believe they are part of a great operating team. The best you can expect, in practice, is that people are willing to work hard for their mates and that they trust the management at the top. But how do you get that trust? You get it when you see that those at the top are not just in it for themselves. When they don't get massive bonuses irrespective of how well the organisation is doing. You get it when top management really shows that they care for their employees. Employees don't expect everyone to get paid the same, but their commitment comes from a perception that they are treated fairly; it happens when the salary structures are not part of secret agreements. If top management finds that it has elements of its salary package that they want kept a secret, then they should think again. Trust is an extremely fragile commodity. People at the top earn that trust by their behaviour; it can take years to create and it can be destroyed by one casual remark or one thoughtless statement or action. That is another reason why values are so important. If you are driven by a sound values base it is much less likely that those sorts of mistakes will not happen. But nothing will guarantee trust, it needs to be worked at continuously.

BLYet many people at the top don't seem to understand this. Don't you find that surprising?

PWWhen we started things at Nissan in Britain, we said that there would not be any special executive bonuses. We argued that it was the job of top management to improve organisational performance and that was what we were paid a salary to do. We should not need bonuses as well, to do our job properly. And that principle should apply throughout the organisation. I have no problem with structures that share the success and surpluses throughout the organisation. This is not the problem. But some of the current bonus structures are likely to result in distorting the priorities of top management in a way that will focus on manipulating earnings, rather than really causing them to grow by concentrating on the important long term issues of improving organisational performance. Also some managers try to use the reward structures to motivate people, yet an integral part of the job of management ought to be to motivate and inspire people 365 days a year.

Management and leadership

BLAt one point in our discussion you appeared to argue that management was fundamentally different to leadership. But later you appear to be arguing that leadership should be a characteristic exhibited by people throughout the organisation. Doesn't this mean leadership is an integral part of management, if management is doing its job properly?

PWI have no time for trite comments such as "leaders do the right thing, managers do things right" or "management is responsible for the organisation of existing resources, while leadership is about what needs to be done in the future". Leadership can, and must in my view, exist at all levels, and effective people are both leaders and managers at the same time.

BLIs the distinction between the two, in terms of specific individuals, meaningless if not actually misleading? It can be a way of separating activities but it should not be a way of labelling people. The historic patterns that have tended to separate leaders from managers is partly a left-over from the nineteenth century class system that separated, often by the accident of birth, some people into officers and "other ranks". Do you find the same debate about the separation of managers from leaders in other cultures and language?

PWIf you go into German companies you will find a difference between the boss and managers. And, in contrast to conventional wisdom, the distinction between people at different levels is very clear.

BLAre there any issues over the tendency for some people to be more committed to their profession than to their company? This area could be even more important as we move into requiring more flexible working.

PWJapan used to recruit generalists but now they have begun to give more attention to professionalism. German companies have their professions but they are not obsessed with professional qualifications. Good academic qualifications are enough for them.

Knowledge work

BLAre there any special implications from the move into the knowledge economy and its greater emphasis on knowledge work?

PWI do not accept the phrase "knowledge worker" in the way it is normally used. I believe that part of my concept of Energise your Enterprise involves seeing an increasing element of discretion, as opposed to prescription, in all our work. A chief executive might have 95 per cent discretion, and 5 per cent prescription, in their work while, for those at the "coal-face", the figures are the other way round. What we always need to try to do is ensure that the prescribed element is done as well as possible, and then skilfully seek to expand the discretionary contribution from people at all levels.

BLAnd it is in the discretionary element where values are the most important, because the agenda that is influencing this discretionary element is more open and so there is more scope for choice.

PWThat is true, if you are just looking at the future. But you must not forget it was the historic values of the organisation that determined the priorities that defined the prescribed element.

BLIn the discretion element a key factor is how you live with, and manage, responsibility. This brings us back to leadership and learning. How do you learn to live with, and manage, responsibility?

PWSome people appear to take to it, almost naturally and some people appear strongly to resist it. What you can do, if you provide the right support by recognising and valuing the contribution of every individual, is shift the whole curve in the direction where everyone is both more willing to take responsibility, as well as being better able to manage it well. The less the direction and the more the devolved responsibility and authority, the greater must be the support, if we really want the end result to be productive over the long term. In practice, it is the support element that is usually the missing part of the equation.

BLIt is interesting that you use the words "responsibility and authority" almost automatically as one word. In my experience there is a tendency for many organisations to devolve responsibility without devolving authority, and certainly without the appropriate levels of support. That is a classic recipe for stress.

PWSupport is such a critical element, yet you are right to say that it is, regrettably, too often missing.

BLOne area that we have not really touched on is where individual values come from?

PWThe whole issue of values is one that I hope to address in more detail in my next book.

BLThank you for your time and for sharing your experience and insights in this discussion. Many more people need to read your important book and I look forward to reading your next one too.