YQ - Issue 01

YQ2009 Issue 01

• In the spotlight: Diageo• Rumsfeld risk management• Book review: Bakan vs de Botton• Agony Uncle: Brown study

• On the couch: Stephen Page• Meaning in turbulent times• Obama: leadership blueprint• Confidence trick

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This edition contains:

On the couch: Stephen PageFaber & Faber’s boss on mentoring, market mayhem, and the other Mosley.

Meaning in turbulent timesEvents, dear boy, might sink us. But a compelling narrative will restore trust and belief.

Obama: leadership blueprint The Obamadrama in Washington has fruitful insights for all commanders- in-chief.

Confidence trickPractical strategies for putting the mojo back into your business.

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In the spotlight: DiageoAn insider’s view of how the drinks giant is distilling great managers.

Rumsfeld risk managementRisk has become a dirty word. Has the pendulum swung too far?

Book review: Bakan vs de BottonOur reviewers explore the personal and societal impact of organisations.

Agony Uncle: Brown studyAngst-ridden times at Number 10 are not beyond our Ken.

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Executive editor: Gurnek BainsEditor: Jock EncombeConsultant editor: Jane LewisAssistant editor: Sam GilpinProduction manager: Matthew SinclairProduction executive: Louise Lamb Graphic design: Simon Fincham

Feedback: please send feedback including ideas for future articles to [email protected]

Subscribe: for a complimentary subscription to YQ, please register your details at www.ysc.com/yq

Welcome to YQ

We live in strange times. A year ago much of the world was in rude economic health. With hindsight, everyone says they knew we were heading for trouble. Sure enough, in the space of a few months we were plunged into the most pessimistic mood that I can remember the business world ever having been in. But just as we have got used to bandying around words like ‘depression’, ‘crisis’ and ‘meltdown’, the kaleidoscope shifted again. While it’s bad out there, the predicted cataclysmic collapse of consumer confidence has not occurred. There is suddenly talk of green shoots everywhere. Even house prices have started going up. And who would have believed that investment banks would be making masses of money so quickly after the dark days of Lehman’s collapse?

No-one has a crystal ball – this could be a double dip recession, or a dead cat bounce, as they say on Wall Street. However, the mood has moved from ‘how on earth can we weather this storm’ to ‘what opportunities are there and how can we move forward with confidence?’ The next phase will be uncertain and challenging, but also not without hope and possibility for those who approach it in the right way. This is what we focus on in the first edition of YQ.

Jock Encombe’s article on how leaders can create meaning in challenging times touches on something deep and fundamental. We always believed meaning was important in business (we even published a book on the subject), but especially in today’s time, we think that businesses which thrive will be the ones that think hard about how they renew their compact with society and employees. Nick Hastings looks

by Gurnek Bains

At YSC our mission is to release the power of people. We do this by combining industry leading psychological insight with a thorough understanding of our clients’ business needs. We work with clients across their entire talent lifecycles including: recruitment, induction, development, the identification of potential, internal selection, role change, measurement and departure. Our key client offerings include 1:1 and team assessment and development, executive coaching, and organisational consultancy.

About us...

at how leaders can create confidence in a true and genuine way, both in themselves, and in the people that they lead. Confidence has been in short supply of late and we need, more than ever, leaders who can ignite the fires of self-belief.

On another point, we are also clear. Getting out of this situation for most companies is going to be a marathon not a sprint. We need to think about how we look after ourselves and others, both physically and mentally. I was struck here by how Stephen Page finds inspiration, by accessing his love of poetry and his passion for both listening to and recording music. Also, one cannot help but be impressed by the sense of possibility about the future that he exudes, even as the publishing industry goes through one of its most challenging times.

Finally, because this whole situation is playing out differently in different markets, we thought we would get a perspective from our offices around the globe. On a lighter note, Ken Rowe has some free words of advice for a leader experiencing significant challenge and difficulties. For this edition, we could think of no-one better than Gordon Brown, whose resilience, in the face of a maelstrom of challenges, is a wonder to behold.

Gurnek Bains is the Chief Executive of YSC. T: +44 (0) 20 7520 5540 / [email protected]

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On the couch with . . .

Stephen Page,

The coach’s notes: Stephen Page, 44, became chief executive of Faber & Faber in 2001, after previous stints at HarperCollins, Fourth Estate and Transworld, and is credited with breathing new life into “the house that TS Eliot built”. The company is still privately owned by the Faber and Eliot families. Renowned for championing the cause of the independent book trade, Page says books are a passion – as are writers. “Some of the best business conversations I have are sitting down to lunch with a writer.” But he hasn’t lost touch with his first love of music and continues to record in his spare time.

Faber & Faber

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Stephen Page has been coached by Paul Ballman, a Managing Director at YSC, for ten years. T: +44 (0) 20 7520 5555 / [email protected].

How does it feel to be on the couch? It’s freedom. It’s about being able to run a bit freer than you can with people who are looking to you for leadership. You know people read you...the subtlest change. For a company of relatively small scale, Faber’s culture and position makes it a very public platform and you learn that you’re very, very visible. So this is a place where you can be a bit more inclusive of yourself when you’re trying to fathom the best outcome for the business and your role in leading it.

So it’s good to cede control from time to time? It’s just great to have someone who knows you very well, who can point out the recognisable pathological anxieties and maybe mock them a little bit. There’s a wisdom about it. I’ve just read Hilary Mantel’s book, Wolf Hall, about Thomas Cromwell. What a book! It’s all about the relationship between Thomas Cromwell and Henry VIII. Cromwell’s the coach.

Do you know what you want to talk about before the session? It depends. I first met Paul when I was working at HarperCollins and frankly it was a godsend. It was a very big job following an acquisition and I was part of a new team bringing in a different culture. It was a real battle-hardening, giant education and Paul helped steer me through. There’s a shorthand now to us getting to a place which is useful. He’s good at bringing in useful models, but he’s not prescriptive and, like me, he’s big on humour. Sometimes we talk quite personally, or just chat. But sometimes that’s what I need.

What have you learnt about yourself? When I arrived at Faber, I set myself a target of getting the company into health within three or four years. And we did it, really pretty quickly: in 2006 we had a record year and we won Publisher of the Year. I went to see Paul soon after and I remember saying: “I feel terribly flat”. He said: “OK this is your obituary: He Made Faber Profitable. How do you feel?” He understood there was much more I wanted to do – that it’s the getting there that’s so exciting and not the being there. I don’t think anyone else could have nailed it quite so simply.

Has coaching changed the way you manage? Definitely. I’ve learned not to get so worried about the implementation of decisions, to be more demanding of people and not to over-nurture them. I’ve got a wonderful group of people here – they’re hugely vocational and highly intelligent. So it’s about pointing people in the right direction, creating priorities, finding the right emphasis, identifying the things that you might just lean on a little harder.

Was it daunting taking over at Faber given its distinguished history? I remember a day of sheer panic: proper, high level can-I-do-this anxiety – which was terrific really. I felt hugely optimistic and ambitious about what the firm could do and what it could mean. As an act of hope in a cultural world, for Faber to be successful was a sort of pure ambition. But it was hugely daunting. You know: Heaney, Pinter, Stoppard...these are just towering figures – and not just in literature, but for me personally; they were what I read as a teenager.

How have you changed the company? It’s much more directly concerned with the commercial business of making a publishing house swing today. It didn’t feel like that before. But its roots of being a business with real commitment to the cultural core of literature are intact. If anything, I’ve tried to play that hand harder.

Is publishing in crisis? No. But this is an extremely interesting moment; there hasn’t been such a revolution in print since Caxton. The new technology is thrilling – extraordinary. And yet there’s still a deep love of books as objects and we have to find a balance. Faber can’t be caught being sentimental about the book: clinging to it like a sort of Knight’s Templar: ‘we die with this’. But, despite the arrival of electronic reading, there’s not yet the slightest hint that people are deciding the book is not a great way to carry literature.

What was your experience of the financial crisis? Were there moments of real fear? You cannot but take on some of the atmospheric anxiety. But apart from the collapse of Woolworths, which took a giant wholesale distributor with it, it hasn’t showed up in a big way in publishing. The people bearing the brunt are high-street and independent booksellers. They were already having a tough time steering between the mass-marketers and online sellers. Throw in a recession and it hurts.

“Sometimes a generation can’t just pick things up and move on a bit; it actually has to move gigantically.

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I was never worried about disappearing down a black hole. But I do think that people aren’t yet realising the sheer extent of the thing: how long it’s going to go on for, and how much in hock we are.

So what keeps you awake at night? I have two sons aged seven and nine – and that’s where it hits me. It’s that sense of what sort of world are we passing onto them. We’ve buggered the planet, we’ve buggered the economy, we have a society that seems to be struggling. Sometimes a generation can’t just pick things up and move on a bit; it actually has to move gigantically. That’s why I think that Obama is such an extraordinary phenomenon. He’s emblematic in the way that Gandhi was at the end of empire.

Is literature reflecting this great shift? So many notions have been eroded now that an increasingly freewheeling capitalism has come unhinged. We’re seeing a lot of non-fiction that challenges [the old regime]. There’s a new sense of the sudden and the now. We’re publishing Phillip Bond’s book Red Tory, which is about the failure of market politics; and Fintan O’Toole’s book about the Irish economy, Ship of Fools. We’re putting out Ben Wilson’s book on the history of liberty as a pay-what-you-like e-book. It’s called What Price Liberty? We’re saying: what are you prepared to pay for it?

On the fiction side, there’s much more emphasis on narrative than ideas or style. That kind of post-modern writing has precious little purchase nowadays. I think we live in a more atomised society and we’re after stories that link us to our world.

Is there a connection between language, narrative and effective leadership? Absolutely. The times when I feel I wasn’t so successful here were the times when I dropped the narrative of the company and

became absorbed in other things. The past five years have seen a giddy degree of change: you’re always trying to mop that up and tell that story. Not just to the company, but to the outside world too. The interesting thing is that because of the blogging revolution, they’re always giving a version of it back to you. So you can’t just sit there with your fingers in your ears telling your own story. You have to engage. Our ear is tuned to try and hear the new, and not dismiss it as a version of the old.

Which writers do you turn to for solace/inspiration? Poetry plays a big part and I read the Faber poets: especially Louis MacNeice and Eliot. But fiction is the core of where I would go. I’m a bit of a Russian man myself. If you read Tolstoy or Bulgakov you get a sense of context and perspective: that joy isn’t about the big things necessarily. Turgenev’s novella First Love is like a cold glass of water that refreshes the palate. I once described Nicholas Mosley’s novel Hopeful Monsters as the best business book I’ve ever read, because it’s all about changing environment and culture: laughing at the things that are impossible or dangerous, but being hopeful about possibilities – and brave enough to transform.

IndiaThe business culture here is very bullish and following the election victory of the Congress party in May – seen as a resounding vote for economic progress – there’s a sense of renewed optimism about India’s future. Clearly, different industries have different perspectives. The financial services and IT outsourcing sectors have been the hardest hit due to their international exposure, but even with this in mind India is still running at a projected GDP growth of 6% for this year. Retail and telecoms industries are booming. In management terms, that’s a mixed blessing. Demand in telecoms, for instance, is so high that the focus is more on keeping up with millions of new subscriptions and less on maintaining edge from a talent perspective. Several of the large Indian conglomerates are extremely diversified businesses, and for them the key questions are how to maintain a meaningful sense of shared purpose and identity in times of growth while better understanding how their leaders benchmark on an international stage. There’s a different economic, business and talent dynamic in play here and that’s a good challenge and opportunity for a global consultancy like us.

Elisa Krantz is Head of YSC India which opened in early 2009, based in Mumbai. [email protected]

International Perspective:

“ “There hasn’t been such a revolution in print since Caxton.

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Pop goes the social contract The extraordinary levels of turbulence, anxiety and disillusionment our society is facing has brought a number of fundamental questions into sharp relief. Many of these are connected with what it takes to be a good leader and have been bubbling along below the surface during the recent ‘good times’.

The upshot is the curious phenomenon that it is now both easier and harder to be a leader. Easier, because the majority of employees are generally compliant, not least because their hierarchy of needs has had to rapidly readjust: forget about professional development or existential satisfaction, they just want to hang onto their jobs. And there’s a kind of resigned cynicism in the air. ‘Of course the bosses have got their noses in the trough. That’s what they do and always have done.’

Yet the flipside of this weary scepticism is that it has seldom been harder to win genuine commitment. There’s a good deal of anger lying beneath the surface and it is, of course, justified. The financial and political leadership classes have demonstrated some spectacularly incompetent, self-serving and unethical behaviours – and their psychological and social contracts with the rest of society are, if not wholly severed, then deeply weakened. The gilded world of the executive suite is increasingly alien and alienating to the average employee.

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Meaning in Turbulent Times

The only certainty in a changing world seems to be uncertainty – and those enmeshed in old mindsets are in danger of being left behind. We need a new idea of leadership. Jock Encombe digs deep to find it.

by Jock Encombe

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Given that most business leaders are fundamentally decent people, this should be an issue of great concern to them. Most people do not want to lead cynically: they want to believe that they are doing a good job that benefits their employees, their customers and – with luck – the broader community. And they need to know that their work is in some way aligned with their values and sense of purpose in life. At YSC we would define that combination of benefits as ‘meaningful work’. We also argue that organisations with high levels of meaning are more likely to thrive and survive because they tend to win the

emotional commitment of all their stakeholders.

More fundamentally, if leaders cannot provide meaningful leadership that people want to follow, what chance do we have of negotiating the extraordinary challenges of the first half of the 21st century? The danger is that people will retreat into petty self-interest and head-in-the-sand mentality. We need good leaders so we can all lead. So the question is: to what extent have the rules of the meaning game changed, and what do leaders need to do to play it well?


GermanyThese are turbulent times for Germany, which has just suffered the sharpest quarterly fall in growth in living memory, and a good deal of soul-searching is going on. Plummeting global demand has meant that Germany’s greatest strength – its export industry – has become its greatest problem. YSC does a lot of work with the automotive industry and has therefore been in the heat of the action: a lot of our recent work has been firefighting. At least the situation isn’t getting worse: the economy may start growing again by the end of the year. But the challenge for many companies is getting through the next six months. We’ve been talking to clients a lot about how leaders can create confidence: if you become paralysed by events and are unable to react, you get lost. Public anger about the stupidity of banks has given way to a debate about the future: the free market is very much under scrutiny. There’s also a feeling that Germany’s strong export orientation was a mistake – we created an export bubble and we should look now for other opportunities.

Wolfgang Ottmann is Head of YSC Germany, based in Ratingen. [email protected]

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South Africa

The mood here is either one of cautious optimism or denial – it’s difficult to know which. South Africa hasn’t been hit as badly as other countries: the banking sector is much more tightly regulated, so the banks have been stronger. At one point in the crisis, the market capitalisation of Barclays’ South African arm, ABSA, was greater than that of its parent. The crash in commodity prices has had a bigger social impact, with mining companies laying off workers. But within the financial services industry, where talent is still at a premium, the emphasis is still on attracting and hanging onto the right people. We’ve been helping clients to try and define a leadership brand – a strong sense of meaning and purpose that people can identify with. Because of its history, the South African psyche is much less complacent than in other countries, so perhaps the shock has been less. There’s a feeling that the crisis should be set in the context of worse troubles in the past.

Damien Anciano is a Managing Director of YSC, based in Johannesburg. [email protected]

Does my boss ‘get it’?The first thing leaders need to recognise is that everyone knows the context has changed: not just because of the financial and leadership meltdown, but because it has taken place against a much broader backdrop of profound historical and global change.

As Simon Caulkin put it in his final Observer management column of 14th June “The management model that has run us for the past 30 years, like the discredited economic theories (rational expectations, efficient markets) to which it cringes, is bust, dead, finished – a mortal danger to us and the planet.”

Leadership is often a lonely and difficult business – not least because of the ease with which great men and women can be undone.

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The talk at this year’s Davos was that the world faces not just a recession, but a ‘re-set’. The arrival of new powers like China and India, combined with a mass of defining 21st century issues – from climate change and the impact of transforming technologies, to the unsustainability of consumer capitalism and the realignment of the financial order – has changed the rules of the game. While these issues are global in scale and impact, they also have a national and company dimension. In recent years, many leaders have

got away with being good at delivery on a narrow scale. This will no longer wash. People now need them to articulate how their organisation fits into, and will respond to, the larger trends around it.

To create coherence out of complexity, to craft a story that makes sense of things, requires what psychologist Howard Gardner calls synthetic, creative, analytic and ethical minds*. You also need to be able to communicate your story. This is not about story-telling as a way

of galvanising people – bullshit meters are now sharply attuned to any kind of snake oil. This is about creating a narrative that gives people confidence that you see reality as it is – and that you have the skills, values and knowledge to tackle it. In other words, that you are intellectually and ethically competent, and you aren’t going to screw up. Because the world is in re-set mode, because the game is changing and the dice are in the air, intellectual competence is also about recognising that you do not know all the answers – smug certainties have little currency.

Tips for leaders:

How to make a great organisational story

1. Be honest – acknowledge the truth and bring clarity to your audience.

2. Be positive – aim towards something great, rather than just retreat from something negative.

3. Be realistic – shape a vision of the future which is believable.

4. Be consistent – repeat the story again and again but be prepared to adapt it as the context evolves.

5. Emphasise the why – stories are about decisions, and you make decisions based on your values.

6. Offer insight – show a new way through complexity and apparent contradiction.

7. Be personal – link the journey of the organisation to your own journey.

8. Listen first – if you spend time understanding your audience, their stories and the story of the organisation as a whole, you will be able to “speak” to them.

9. Be professional – respect your audience by preparing carefully for delivering the story, whatever format you choose to use.

10. Be “sticky” – try and find ways of communicating in a way that is memorable and fresh (i.e. not “corporate speak”).

Tips compiled by Sam Gilpin, Senior Consultant

Do I trust my boss?Two more vital capacities that leaders need to demonstrate are integrity and self-awareness. Both are directly related to competence, and intricately connected with each too. The human capacity for self-delusion – particularly when under stress – means that to be truly self-aware, we need feedback from others. Indeed, there’s a kind of virtuous circle that leaders need to ensure is visibly in place, connecting integrity, competence, feedback and self-awareness.

In recent years many leaders at the top of organisations successfully insulated themselves from ‘needing’ to receive feedback. Tellingly, it is many of those organisations who have become undone by recent events. These leaders managed, for a while, to delude themselves and the people around them that they knew all the answers. The importance of the licensed fool or jester, who could say what everybody knew, but nobody else dared, has never been more important.

Is my boss tough enough?Another important dimension of competence is simple bloody-minded resilience. What Churchill famously referred to as “KBO” in his WW2 memos – Keep Buggering On. There is a role for cussedness and determination in a crisis, and always has been.

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KBO is related to courage. But if we only think about courage as the capacity for tough-mindedness and endurance then we’re missing an important truth. Leadership is often a lonely and difficult business – not least because of the ease with which great men and women can be undone by the slings and arrows of outrageous fortune. “Events, dear boy,” as Harold MacMillan famously acknowledged, can torpedo the best captained ship. As a leader, you are therefore at the mercy of external events over which you have no control, as well as your followers’ unconscious projections. And that’s before you get onto your own private demons...

Barack Obama’s great hero, Abraham Lincoln, struggled all his life with profound depression but, through his battles with melancholy, developed great capacities for wisdom, compassion and transcendent leadership.

Somehow, in the cosseted world of recent years, we’ve lost sight of this. Since the great business bull market run kicked off in the early 1990s, several generations of leaders have grown up to believe that with hard work, talent and developmental support, they could achieve anything. The reality is there is no such guarantee. It’s time to kick this Cosmopolitan have-it-all view of the world into touch, permanently.

A new idea of leadership

In our work as coaches, we have the privilege to work with leaders who – if we might hesitate to call anyone great without the benefit of history’s lens to evaluate their contribution – are certainly damn good. Like Lincoln, one thing they all have in common is a capacity to access their own self-doubt. They are fearless in their capacity to examine themselves, to face up to their own limitations and to take the steps necessary to address them. Most have another vital attribute too: what the poet John Keats called a “negative capability” – the capacity to tolerate uncertainty; to deal with “not-knowingness”.

The nuts-and-bolts of effective leadership – the ability to inspire, to take decisions and to plot winning strategies – are still as important as ever. But if companies are to regain trust and respect from their employees and wider society, they need to nurture a new idea of leadership to underpin these qualities. The essence of it might be described as a capacity for truth, and a recognition of the mystery of destiny and the vicissitudes of life. Simplistic prescriptions will no longer do.

Jock Encombe, Director, is based in YSC’s Edinburgh office. T: +44 (0)131 228 7940 / [email protected]

* See Gardner’s “5 Minds for the 21st Century”

Machiavelli, the master of realpolitik, maintained that studying the past was the key to success.

A prince should read histories and consider in them the actions of excellent men, should see how they conducted themselves in wars, should examine the causes of their victories and losses, so as to be able to avoid the latter and imitate the former.

EnglandThe mood in the country seems to change by the week, but there’s a much greater sense of optimism. At the start of the year, the situation looked extremely choppy. The banking sector went very quiet, and there was so much uncertainty about how the crisis would impact on companies that a lot of projects were put back or frozen. But now I think everyone’s sights are on rebuilding.

In some sectors, like retail, there have been definite winners: the crisis has shown the true importance of a strong management team and strategy. Most of our clients have regrouped pretty effectively at both the macro and micro levels. People are thinking strategically and carefully. There’s a sense that maybe all the leadership development we’ve done in the past is really paying dividends.

Companies are rethinking their values. When times are tough organisations have the opportunity to reassess, to ask themselves how they’re adapting their values to different times. A lot of top teams are regrouping, and you can see that theme running throughout their organisations. We recently had a big success with a Team Effectiveness project that was driven by the corporate centre, but oversubscribed by leaders throughout the organisation.

People are looking for initiatives that major on leadership and team-working. There’s a new recognition that vision and values are no longer just nice to have – they’re often mission-critical.

Jane Anderson is a Director in YSC’s

London office. [email protected]

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International Perspective: Helping organisations move towards

success, rather than away from failure…

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Obama: A blueprint for leadership by Kathleen Gounaris & Luis Marrero

In his last volume of poems, Endpoint, John Updike characterised Barack Obama as a Christmas present waiting to be unwrapped. Halfway into his first year, is the President fulfilling his potential? And what lessons in leadership development are there for senior executives? Here Kathleen Gounaris and Luis Marrero examine the opening months of the Obama era.

The Obama Effect Back in January, America’s dashing new President created a wave of excitement and hope – a seemingly impossible feat in the midst of a historic global meltdown. “The Obama effect” was dynamic and titillating, contagious in its energy and grassroots enthusiasm; and it seemed to coincide with a great political and ideological watershed. The prevailing mood was cometh the hour, cometh the man.

It was clear from the outset that Barack Obama brought a different style of leadership. Indeed, it says a good deal for his persuasive powers that so many members of the ancien régime accepted its necessity. Even Jack Welch – the hard-edged former General Electric chief renowned for his command and control management style – gave Obama a Grade A for his conciliatory and empathetic leadership (while stressing that he didn’t always agree with his policies). Obama, in fact, made a point of inclusiveness, inviting many Republican politicians to his informal Wednesday evening parties. And he made conciliation the new watchword of US foreign policy.

The new President’s eclectic background and personal magnetism clearly boosted his attraction, and he possesses obvious intellectual and practical leadership strengths. Yet he is by no means the only leader imbued with these qualities. What then makes him so electrifying?

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Certainly, there is an unembarrassed spiritual quality to Obama’s memoirs that seems to have resonated deeply with a public looking to renew its faith in America’s promise. Take, for example, the way he describes the break up of his parents’ marriage.

“ Even as that spell was broken and the worlds they thought they’d left behind reclaimed each of them, I occupied the place where their dreams had been.”

Quite an antidote for a nation that felt cynical about government, disempowered by the authoritative style of the previous administration, embarrassed by our global reputation and panicked by the spreading economic tsunami. Obama’s unconventional life story symbolised a sea change for America, connecting with our most deeply held ideals.

Leaders who examine and share the impact of their personal challenges in life create a deeper emotional connection with their audience. People want to know who a leader is beneath the polish. In that context, the role played by Michelle Obama – an inspirational figure in her own right – has been pivotal. The First Lady makes no bones of the fact that bringing Obama down to earth is one of her chief private tasks. “He’s a great man, a wonderful man, but still a man.”

2Lesson Two: Own Your Story

Obama’s remarkably diverse life experience has helped cement a deep appreciation of the importance of multiple perspectives, consensus-building and compromise. But he also possesses an extraordinary gift for story-telling. Few of his forebears arrived in office having already penned an autobiography. Even fewer produced such a compelling personal narrative as Dreams from my Father. By sharing his journey with such openness and humility, Obama impressed people as trustworthy, resilient and courageous – giving him a credibility that perhaps compensated for criticisms about his experience.

In an essay in the New York Review of Books, the novelist Zadie Smith identifies the President’s enviable facility for dialogue. “Obama can do young Jewish male, black old lady from the Southside, white woman from Kansas, Kenyan elders, white Harvard nerds, black Columbia nerds, activist women, churchmen, security guards…This new President doesn’t just speak for the people, he can speak them.”

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1Lesson One: Ignite a Chemical Reaction

Fundamentally, “leadership impact” is the result of an interaction between a leader’s style and the wider environment. Great leaders understand how to deploy their unique traits at the right time, in the right context, with the right audience. During the election campaign, Obama clearly understood the potency of his leadership brand at this moment of our shared history. He gave the impression of understanding the needs of the American public – perhaps before they understood them themselves.

Obama’s talent for “alchemy” was much remarked upon. But it had a solid, elemental base. One of the hallmarks of his campaign was the transforming use of new media to extend his message and recruit support. As one commentator notes: “He turned an email list of 13 million supporters into pure electoral gold”.

A key advantage was that, after the shocks of the previous years, US society was in an “open” phase of consciousness – receptive to new ideas, innovation and inspiration. Obama made the most of it to push for an ambitious agenda of reform. As his chief of staff Rahm Emanuel remarked: “you never want to let a serious crisis go to waste” – a mantra since espoused in many executive suites. While distracted leaders might squander the opportunity, those bent on transformation have been using the turmoil to envision the future of their organisations – and refashion them accordingly.

The new administration hasn’t allowed the momentum to slip. Several months into the presidency, the White House still has the feel of a “permanent campaign headquarters”, according to one Washington insider. There remains a sense of “deliberate hyper-activism”.

Obama’s unconventional life story symbolised a sea change for America, connecting with our most deeply-held ideals

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4Ironically, Obama’s biggest leadership challenge in office can be considered a “shadow” side of his strengths. His image as a unifier, striving for bipartisanship, was effective during his presidential campaign. But, as a leader, he must now balance that ability with well-honed execution skills that may require a declarative, authoritative stance. No coincidence, perhaps, that some of the main criticisms that have been lobbed his way during the first half year in office have dwelt on a tendency to fudge issues, or kick difficult decisions into the long grass.

In foreign policy, for example, there is a subtle danger that President Yes-we-can has raised exaggerated hopes about the pay-off from engagement and diplomacy. Obama is a master of the art of soft power – and that stands America in good stead. But in some instances, he will have to display hard power too.

The same is true at home. Obama’s heroic qualities as a leader have left him vulnerable to idealisation and lofty expectations that

would be impossible for any leader to fulfil. He will inevitably disappoint or alienate a portion of Americans. Indeed, there is already considerable disquiet (and not just from the Republican Right) about the giant size of the fiscal stimulus and bail-out packages he has unleashed. The danger, should the economic and political pendulum swing too far to the left, is that trust will be eroded.

On the evidence so far, Obama seems well aware of the perils. His handling of issues, ranging from the highly inflammatory row about executive bonuses, to the recent blueprint for financial regulatory reform, shows him to be a pragmatist at heart. But there is still a danger of pushing through too much change, too quickly. As he executes as President, Obama needs to calibrate the pacing of a bold agenda with the level that Americans can digest. Systems autocorrect according to what they can handle, not what we desire to happen. That’s a lesson many corporate chiefs would also do well to assimilate.

Lesson Four: Beware the Power of Your Shadow

3“Yes We Can” – three simple words changed the course of an American election, and our history. Obama’s sense of a shared purpose spread like wildfire during his campaign: witness the huge numbers who volunteered to work gratis to get him elected. He didn’t convey that he alone would create change. Instead, he championed personal accountability and civic engagement as the primary drivers of real change. There were decided echoes of JFK: “Think not what your country can do for you, but what you can do for your country.”

During the difficult first months of his presidency, Obama has continued to appeal to that sense of a common destiny. His efforts to reconcile the nation to the shock of the General Motors bankruptcy – an event that, for some, marked a symbolic moment in the decline of American power – were typical. While empathising with the many thousands of workers laid off, he called on them to recall the greater good that would spring from their “sacrifice”. It would pave the way for new industry, and new opportunities for succeeding generations.

Lesson Three: Create Meaning & They Will Come

In summary, although great leaders understand how to make the most of their distinctive strengths, they must have an equally solid grasp of the shadow side of their “spike qualities”, or risk suffering blind spots as situations change. As a leader’s landscape evolves, he or she must cultivate versatility in leadership style to have the most impact.

Kathleen Gounaris and Luis Marrero are Senior Consultants in YSC’s Philadelphia and Houston offices respectively. T: +1 267 675 7057 / T: +1 832 431 3050 [email protected] / [email protected]

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3 AmericasThere’s a growing sense of confidence among US companies, but there’s a tentativeness around that confidence. People talk confidently about the future – and then catch themselves... It still feels a bit “lurchy”. Even so, business is definitely looking up. The buzz phrase in companies now is, “we’ve got to be ready for growth”, so agendas are shifting. There’s much more emphasis on organisational design and capability development – recession has taught some companies that their leaders weren’t as well-rounded as they thought. January and February this year were the worst months for many companies. People came back from holiday thinking the world was about to end; there was a sense that the levers we’d classically used to pull ourselves out of problems no longer worked. Those dark clouds have lifted, the mood is more upbeat and that’s reflected at YSC – we’ve opened three new offices in six months. But people are still questioning how the regulatory authorities could have let this happen. The real test for the Federal Reserve and Ben Bernanke is whether they can now manage the inflationary risk.

Andy Houghton is a Managing Director of YSC, based in New York. [email protected]


Few presidents have come to power with as much political capital as Barack Obama. Yet he has been pitched into a period of unprecedented upheaval and the jury is still out on the depth and edge of his strategic execution skills. Obama’s own history, however, offers solid glimmers of hope. Time and again, he has defied the odds and seemingly insurmountable obstacles – with grace, tenacity and optimism. “Obama presents a fascinating study in leadership,” concludes Betsy Myers, a senior Democrat campaign official. “It will be interesting to watch him over the next few years. When is the bloom going to come off the rose? Maybe it won’t.”

Final Thoughts

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Obama is vulnerable to idealisation and lofty expectations that would be impossible for any leader to fulfil

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AustraliaAustralia is still in wait-and- see mode although recent economic reports show that we have avoided a recession. Whether this is good government or a naïve optimism depends on your nature and political leanings. A real preoccupation for Australian corporate chiefs – particularly those involved with global businesses – is how to manage a situation at home that is very different from the current reality in the UK and US. How can they strike the balance between the global and the local? How do they grapple with global complexity as well as managing for the Australian economy? What does it mean to be a great Australian leader today? These are the sort of questions we’re helping our clients think about. There are big redundancy programmes in mining companies, but clients in financial services are using the crisis as an opportunity to reshape their businesses. Australians are pretty resilient and optimistic so there’s a sense we’ll get through this. But clients are taking it week by week, and everyone is watching China very closely.

Carmel Pelunsky is Director & Head of YSC Australia, based in Sydney. [email protected]

Confidence Trickby Nick Hastings

When words like “crisis” and “recession” dominate the news media, showering down a seemingly inexorable stream of gloom, an inevitable by-product is cultural paralysis and fear. The role of any leader must be to signal the way forward: to scan the horizon for possibility as well as threat. If your intention is to bring a measured sense of hope to your people – rather than have them wait for it to appear miraculously from around a street corner – read on. We hope to offer some practical insights.

Confidence is not an event or an episode, says Nick Hastings, it is a trajectory – and the crisis has blown many companies off course. Here’s how to restore the mojo in your organisation.

Gordon Brown recently indicated that “confidence in the future is what is needed for confidence today”. Nice line, Mr Brown, but if we relied on that sentiment alone we could be waiting a long time. Business leaders don’t have the luxury of squinting ahead for a light at the end of a tunnel; what matters is finding ways of creating meaning, purpose and engagement in the here and now. Far better, perhaps, to turn the idea on its head and argue that what is needed for confidence in the future... is confidence today.

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Meaning

Meaning is of greater relevance now than it has ever been: an organisation without a robust purpose runs the risk of getting lost at sea. Under pressure, a company’s core values may struggle to stay aligned with the attitudes and mindsets of an increasingly disconnected workforce.

Perhaps the greatest mistake that leaders make is to focus entirely on problem avoidance and damage limitation. Acknowledge the negatives by all means (every worker has a keen nose for management hogwash), but bear in mind the powerfully corrosive effect of downbeat rhetoric as it seeps through the organisation. There is no faster way of making even the most solid corporate values redundant.

One of the key distinguishing features of “elite” performers is that during periods of turbulence they tend to move towards success rather than away from failure. That often means swimming against the tide. When you look around society, it is amazing how entrenched the fixation with moving away from failure is. Weight-loss programmes urge us to “move away from fat”; sports coaches tell us to “eliminate errors”; and institutions like the National Health Service appear terrified

to “make mistakes”. What this creates is a culture of anxiety and fear which actually exacerbates the chances of people making errors on a regular basis. Consider the difference if the targets in these examples were set explicitly towards excellence. What might the impact be?

Coherence Crisis may be giving way to green shoots but no-one is in any doubt that the rules of the game have changed fundamentally since those far-off pre-Crunch days – and the bar has been raised considerably. Leaders must now contend with a whole new set of tensions and polarities; daily management, it sometimes seems, has become a series of apparently intractable dilemmas. How do you find decisiveness in uncertainty? Or connect with your workforce at the same time as you are letting people go? Can you reconcile making quick wins with plotting long-term gains? Balance old trends and new information?

If they are to navigate this ambiguity, leaders need to challenge preconceived notions about what has worked in the past and what is possible in the future. This is the time for new definitions and fresh-thinking. They must grasp the opportunity to sculpt a

““realistic yet empowering leadership story, which aspires to innovation and possibility. It’s time to re-arrange your head, step up and send a clear message.

Flow Most of us have experienced that life-affirming state, known in the jargon as “unconscious competence”, when a performer’s skills perfectly match the level of challenge they are facing. It’s another way of saying you’re on a roll, in the swing of things, speeding along with the flow....

All change. As the bar has been raised in business, so too have the skill levels needed to leap it. Leaders are under huge pressure to achieve more with fewer resources, while working motivational wonders with their people. The prospect is often daunting. The best performers, however, aren’t panicked by adversity or uncertainty; in fact, they thrive on it. The secret? They have learned how to draw upon positive memories of feeling empowered – and to exclude all negative background noise. There’s no set way of summoning these memories: some leaders listen to music; others go for walks. One CEO even adopts the subliminal strategy of grabbing a handful of his favourite coffee beans.

Leaders are under huge pressure to achieve more with fewer resources while working motivational wonders with their people

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Consider the following example. What were you doing on March 8th 2005? Unless it’s a key birthday or anniversary, there’s probably not much to remember. But how about September 11th 2001? You can probably articulate that day in great detail – where you were, who you were with, what you were doing – and it was nearly ten years ago. Why should this be the case? The answer lies in the emotional significance that we attach to these memories and the consequent effect this has on the information at our fingertips.

There’s a direct link here with levels of confidence in leaders. If attention is continually focused on threat, on worrying headlines or on the assumption of a negative reality, then anxiety will continue to dominate. If, however, leaders learn to celebrate their successes with energy and imagination, then slowly but surely the cycle is reversed – and anxiety gives way to purpose, possibility and power.

Resilience

Just as a muscle grows through exercise, so the fabric of an organisation becomes stronger, leaner and fitter over time. But muscles, like leaders, require rest and recovery time: they cannot sustain continuous application or they will eventually tire and burn out. One effect of the recent ructions that we have observed in many of our clients has been extreme levels of fatigue. Working twelve-hour days, without proper nutrition or breaks, yields at best a 40% return in capacity. Yet it is hard to persuade a business world, hypnotised with the idea that doing more is the solution to all their problems, that the battle is for quality not quantity.

When you drive long-distance, do you set out without fuel? Clearly not. Then why would you expect your people to run on empty – unfed,

unwatered and unrested? If, as road warnings suggest, “tiredness kills”, think what it might do to a business. Offering your people just half an hour of ring-fenced time per day (or ten minutes per hour) – in which they can refuel, change the scene and re-energise – could unlock an extra gear and sharpen performance.

Confidence shouldn’t be seen as distant fantasy, but as an expectation. But to rebuild it, organisations need to look at their people in a new, holistic way. It doesn’t require a new engine. It simply requires that we tune the one we’ve got and train it to excel for us.

Nick Hastings is a consultant at YSC. For details of how The Confident Leaders Programme can help create confidence in your organisation, please call your local YSC office or email: [email protected]

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Clear Vision & Goals

Connect Authentically To Others

Iden

tify

Core

Meaning Coherence

Valu

es &

Pur

pose

Move Towards

Success, Not Away

From Anxiety

Nourish, Rest

Perso

nal E

nerg

y

Flow Resili

ence

Man

age

& Recover

Navigating

Ambiguity

Surface Polarities & Tensions Establish

Critical Pathways

Pers

istent

Visi

on

Boundaries Pushing

Adversity

Overcom

e CL CL

Access

Mem

ories of

Greatness w

ith

Hum

ility

Spotlight onRising spirits

In December 2008 Diageo, the world’s leading premium drinks business, was awarded ‘Britain’s Most Admired Company’ by Management Today. It came at the end of a year in which it completed the first phase of an astonishingly ambitious leadership development programme comprising two week-long workshops and 40 hours of 1:1 coaching – 25 of these with an external coach. This intervention had proven so productive for the company’s top 100 leaders that it was immediately extended to a total of 900 individuals, globally.

But, beyond the numbers, perhaps the most audacious aspect was the central tenet of the programme: that great leadership is made possible through the development of an individual’s sense of personal purpose – not just in business, but in life. The belief was that if the leader and their line manager could align on how an individual’s personal purpose might contribute to Diageo’s own stated purpose (of ‘Celebrating life everyday, everywhere’) it would stimulate a new level of collective and individual leadership performance.

A pre-requisite of the programme’s success was to find enough external coaches with the combination of business and psychological abilities to work credibly at this level of seniority. Almost 800 submitted detailed profiles, of which 200 were called for interview and 98 eventually selected. YSC emerged as the UK’s largest single supplier of coaches.

What came as a revelation for those of us fortunate enough to take part was the impact of an explicit emphasis on personal purpose. As Robert Sharrock (YSC MD and Diageo Coach) noticed:

Leaders were jolted into having to stand back and think, sometimes for the first time, what was central to their motivation; the meaning that their work brought to them; and what they had a real appetite to do in life and in work. Creating a personal purpose took time – it’s a complex and ambiguous activity – but I saw real shifts in the thinking of those I

worked with. Feeling aligned with personal purpose enabled some to take some real bold steps in their business aspirations.

Leaders were required to produce a statement of their personal purpose and a letter from the future, but the means for arriving at these deliverables was left up to them and their coach. As a group of coaches within YSC, we regularly discussed our successes – and failures – in order to build up a number of conversational and experiential approaches that consistently led to personal leadership breakthroughs.

The level and significance of change was impressive, and what we saw with our coachees in the room was then confirmed in regular 3-ways between the line manager, coach and coachee, as well as in two rounds of stakeholder feedback. Time and again, line managers were noticing improvements in confidence, a desire to create the conditions for others to contribute more fully and an ability to influence more effectively. As one Exec member put it about one of his reports: ‘I see a totally different

In tough times, there’s a welcome boldness about Diageo’s stated purpose of “Celebrating life everyday, everywhere”. Here David Presswell, head of YSC Executive Coaching, outlines how an ambitious leadership development programme helped distil that aim into an individual sense of purpose – and an impressive collective performance.

by David Presswell

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him emerging: someone who is coaching and inspiring others to deliver great outcomes as compared to driving these himself. The payback has been immense.’

The individuals themselves also noticed the impact (‘I’m pleased with the move to an authentic me. That’s really made a difference.’) as did their teams:

I have seen a real shift in her: more patient and less severe and no less effective. She empowers people much more.

The most significant general trend was the improvement in the quality of business relationships. YSC had worked with Diageo to create a Relationship Model based on studies of what made for successful marriages. With an emphasis on understanding, respect, candour and positive intent, coachees were finding that conversations with both peers and team members were becoming not only more open and supportive, but also more robust and efficient. The game-playing was gone, and with it much dissimulation, misunderstanding and unnecessary process.

Margot Hennessy, Diageo’s Coaching Director, saw the impact from the inside:

Combining personal purpose with a real focus on building better relationships created the space for more authentic conversations between individuals and teams. These conversations had a clear focus that was our collective business performance, ones which drove deeper levels of engagement to accelerate our business performance.

Such results demanded a considerable investment of HR time and effort. Hennessy and her team not only managed the selection of coaches but also their matching with Diageo leaders. On this scale, a long-drawn process of ‘chemistry sessions’ was ruled out of the question, though this then put all the more onus on getting coach selection and matching right.

As it happened, it was so successful that, of the 900 leaders matched, only 3% requested a change of coach and, of these, one third later admitted misgivings at having done so.

Margot Hennessy is left with her own theory as to why that might be:

I was clear we were looking for a group of external performance coaches that combined commercial savviness with a deep skill in individual transformation. This combination, plus a commitment from these coaches to grow themselves professionally and personally through their life, meant we were able to find the best breakthrough performance coaches in the global marketplace. We matched by focusing on what the breakthrough for each leader needed to be. Once we were clear on this, we were able to match the right coaches with individual leaders to deliver on the business investment.

She is also clear on just how significant it was that the week-long workshops were delivered, not by outside consultants, but by those who completed the initial programme – Diageo’s own Exec. Their openness about their own leadership journeys and their personal purpose modelled the way for the rest of the organisation and added to the momentum created by the investment.

There are clear challenges for any company establishing a programme of this kind, including the focus and discipline to align its future core talent and leadership practices to espoused values. In addition some leaders simply do not ‘get’ a programme of this sort or, if they do, believe it to stray too far into the private domain. Yet, in Diageo’s case, I saw early doubters turn into some of the programme’s most passionate advocates and for many of YSC’s coaches, myself included, it was amongst the most fulfilling projects we have worked on.

The frustration, for all concerned, has been that completion of the learning events in December last year coincided with the sharpest economic downturn in living memory. In an ideal world, the breakthroughs that coachees, coaches and line managers all saw would have manifested themselves directly in Diageo’s market performance. But arguably a grounded and resilient sense of personal purpose has never been more important, and a company capable of supporting and harnessing this in its leaders will continue to be most admired.

David Presswell is Head of YSC Executive Coaching, based in YSC’s London office. T: +44 (0) 20 7520 5555 / [email protected]

“ “great leadership is made possible through the development of an individual’s sense of personal purpose – not just in business, but in life

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Whatever else you might think about Donald Rumsfeld, you have to admit the former US defence chief had a certain je ne sais quoi when it came to categorising risk. Rumsfeld’s index of “known knowns”, “known unknowns” and “unknown unknowns” baffled some. But his coda has come in useful over the past 18 months: as a means of charting the sometimes terrifying progression of an epic financial crisis.

So where are we at now? The studied ennui of M&S boss Sir Stuart Rose when he pronounced in May that business is “fed up with being fed up” is as hopeful an indicator as any that we are passed the really discombobulating “unknown unknowns” phase. We’ve also moved beyond the condition of “learned helplessness” when leaders feel unable to take any risks at all. An appetite for risk is gradually returning. We need it. One of the more paradoxical “known knowns” about this crisis is that it was excessive risk-taking that got us into this mess – and that we will need a good dose of measured risk-taking to speed us out of it. No wonder the question of how to manage risk has become such a pressing and contentious topic for both governments and companies.

“People who don’t take risks generally make about two big mistakes a year.

People who do take risks generally make about two big mistakes a year.”Peter Drucker, management guru

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Robert Sharrock was interviewed by Jane Lewis for this article

Rumsfeld risk management

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Groupthink Perhaps the more important insight to be had from Hanna Todyagl’s take on pre-crash Iceland is her emphasis on the dangers of groupthink. A key hallmark of this crisis – from the all-pervasive belief that the old rules of boom and bust had somehow been suspended, to the unquestioning way so many boards followed vainglorious chief executives – is the phenomenon defined by Charles Mackay as far back as 1841 as “The Madness of Crowds”.

How can groupthink best be countered? By far the most effective tool, says Robert Sharrock, is a balanced board that is “open to debate, scrutiny and contrarian challenge”. Companies that embrace diversity (not just of sex, age and race but also, crucially, of temperament and experience) are the best placed to withstand the worst unknown

unknowns that fate can lob at them. There is a spectrum of risk appetite: from adrenalin junkies at one extreme, to the “pathologically cautious” at the other, says Sharrock. “A good team has a bit of both.”

Perhaps the most positive legacy of this crisis is the way it has opened our eyes to the nature of risk. Books on the subject – including Nassim Nicholas Taleb’s acclaimed study “The Black Swan” – are storming the best-seller lists. So what is the most important thing for any leader to understand? The answer in a nutshell, says Sharrock is that “intelligent risk-takers know when they’re taking a risk; dangerous risk-takers don’t”. For all his useful contribution to the language of risk assessment, that was clearly where Donald Rumsfeld fell down.

Oestrogen Republic

The more extreme the financial fall-out, the more radical the subsequent reaction; and nowhere has the risk pendulum swung more decisively than in Iceland where a newly-chastened nation seems agreed that the blame for a disastrously over-leveraged economy can be pinned squarely on testosterone. Iceland hasn’t just elected a female prime minister and a predominantly female cabinet. It has also hired women to clean up its most gung-ho banks. As Hanna Todyagl, one of the country’s few surviving fund managers (female of course) told Der Spiegel. “The crisis is man-made. It’s always the same guys. Ninety-nine percent went to the same school, they drive the same cars, they wear the same suits and they have the same attitude.” The causes of the crisis, she says, can be summed up in two words: “penis competition” .

The influence of hormones on risk propensity is a hot scientific subject. Leading the field is Cambridge neuroscientist, John Coates, who has drawn on his experience as a Wall Street trader to demonstrate the link between soaring testosterone levels and “manic behaviour and a sense of infallibility”. But it is easy to over-simplify. For one thing, Coates also found that the best traders – those capable of making the right decisions in tough trading environments – often had higher levels of testosterone than their peers; for another, gender is no protection against recklessness and greed. As Gillian Tett points out in her study of the origins of the crisis “Fool’s Gold”, the leader of the team that devised collateralised debt obligations, convinced regulators they were perfectly safe and, indeed, sold the concept to AIG was a woman: one Blythe Masters of JP Morgan.

“There is a spectrum of risk appetite: from adrenalin junkies at one extreme, to the pathologically cautious at the other

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International Perspective: Hong KongThe inscrutable Chinese temperament is much more than a myth. People here are still anxious and apprehensive, although a great deal of that is unspoken. The Hong Kong economy has shrunk by more than 4% since January and there is considerable trepidation about swine flu. The Sars outbreak nearly killed the Hong Kong economy and the rate of the slowdown now is much faster: people are trying to stay one step ahead. A lot of YSC’s business in Hong Kong comes from UK-based companies with a strong regional presence, who are keen to push a standardisation agenda. They want to be sure that their recipe for success is replicated. But in China relationships are very different: business networks and associations are powerful conduits of favour-doing and that can take things off the strictly rational page. We have to go the extra mile to prove that we really understand the client, their business and their point of view on the world. We’re spending a lot of time thinking about leading out of crisis – and there are some optimists about. But I think it’s pretty significant that you can generally get a window seat in the Grand Hyatt business lounge without having to queue.

Phil Smith is Director & Head of YSC Hong Kong. [email protected]

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The question of how to manage risk is a pressing and contentious topic for both governments and companies.

What do you need in a risk manager?

Are companies employing the right kind of risk managers? A four-year YSC research study, which assessed the profiles of 120 risk professionals, revealed some worrying mismatches. It found that although the role attracted some very able operators, risk professionals have a higher need to be included – to be part of a team – than is typical. The upside is that they might make strong business partners. The downside is that “many will find it hard to challenge others with the required level of robustness”. Too many risk professionals are prone to toe the line – their objectivity compromised by a need to belong.

Part of the problem is how the role is perceived. While some risk leaders have a passion and commitment to the function, others have been sidelined into it, or see it as a stepping-stone to the next job. “There’s a need for strong functional leadership in the areas of risk,” concludes the report. Here are the optimum attributes to look out for:

• Sound analytical skills and experience. Strong players often have a background in finance, law or compliance. But many of the best come from commercial roles, enabling an instinctive sense of profit and risk.

• Excellent people skills and an ability to engage, tempered by a healthy detachment from colleagues.

• An ability to challenge independently when required.

• Credibility to influence others at the highest level.

For more, see The Risk Function – Observations and Implications. (YSC 2009; email [email protected] for details).

Robert Sharrock, a Managing Director, is based in YSC’s London office. T: +44 (0) 20 7520 5555 / [email protected]

by Matt Brown & Clare Morse-Brown

In the wake of the global economic crisis and the scandal surrounding MPs expenses, business leaders, employees and voters alike are increasingly questioning the morality of the organisational systems that touch our lives daily. The emotion within the debate is palpable, the searching questions endless. Where did it all go wrong? If systemic change is required then what does it need to look like? If we are to some degree defined by the jobs we do then do they really do justice to who we are as people? There is a real sense that organisations – whether commercial or governmental – are at a seminal inflection point. Their role in society is under scrutiny and answers are needed.

International Perspective: The Netherlands There is a depressed atmosphere in Dutch business, particularly in the multinationals and some specific sectors like transport, construction and consultancy. Government support packages – enabling companies to let go of staff temporarily and hire them back later – have helped. But companies are suffering big order cancellations and embarking on drastic cost-cutting, and many are postponing training projects. Investors are getting angry [witness the rebellion over directors’ pay at Royal Dutch Shell] and managers are certainly worried – some of them even sleepless. Research by the electronics giant, Philips, shows that in most countries the amount of sleep they are getting has fallen significantly. Interestingly this is not the case in Holland; perhaps thanks to the Dutch sobriety? There’s a strange disconnect with the mood on the streets which is, paradoxically, rather cheerful – as if nothing’s really changed. But I think it’s wishful thinking to assume we’ve hit the bottom. The consequences of the crisis – in terms of the loss of homes, income and so on – have yet to really hit. Still, we are historically a great trading nation, with a strong and flexible entrepreneurial ethos, and that will stand us in good stead.

Jurgen Hell is Head of YSC Netherlands, based in Arnhem. [email protected]

What to ReadScotland

The collapse of Scotland’s two largest and most historic banks – Royal Bank of Scotland and Halifax Bank of Scotland – put us in the eye of the financial storm last autumn. We’ve moved beyond the shock and shame. But there’s a deep sense of betrayal at the arrogance and incompetence that caused such pain and dealt such a blow to the reputation of Scotland’s financial services industry. Boom and bust is nothing new to Scotland: in the 1690s the country was bankrupted by the Darien Adventure – a disastrous speculative attempt to establish a “New Caledonia” in the swamps of Panama. But the upside of this crisis is that it’s forced a degree of soul-searching and self-examination – a return to more traditional values. There are still great strengths in Scottish financial services, especially in insurance and asset management. But there’s growing recognition we have other trump cards. Some are calling Scotland “the Saudi Arabia of renewables”. Certainly, the utilities industry – led by Scottish Power – is beginning to flex its muscles and there’s a strong renewables agenda at manufacturers such as Diageo. Overall, business is in knuckle-down mode. We’re working with clients in a robust and thoughtful way, trying to understand what an altered business environment – and big changes in the broader cultural landscape – mean for leaders. It’s going back to first principles: creating value and wealth for the long-term, while earning respect.

Jock Encombe is a Director of YSC, based in Edinburgh. [email protected]

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... is five years old, but its content is still echoingly relevant. Bakan launches a savage assault on big business in pursuit of a more consistent focus on corporate social responsibility. He cites the historic birth of limited liability corporations and the rules under which they are governed as a societal evil. His point of view is that because corporations are legally bound to act in the interests of shareholder return, we should not be surprised when they behave in a way that runs counter to the wider interests of society. He illustrates his account with numerous examples that underline his view of the seemingly irresolvable tension between making profit and caring about society. Whilst his argument is compelling and resonates with the times, it is not balanced and he sidesteps powerful examples of organisations that think long and hard about their role in society and act in good faith.

To purchase the book/DVD visit www.thecorporation.com and support the campaign for corporate harm reduction.

The Corporation: The Pathological Pursuit of Profit and Power...

The Pleasures and Sorrows of Work...

... is an observant exploration of people’s relationship with work. He is faithful to ethnographic methodology, spending time with ordinary workers from a diverse range of occupational backgrounds. He inspires a sense of wonder at the vastness and intricately interconnected nature of the global economy; and an individual’s tiny role in making the system work. Whilst he clearly senses beauty and meaning in people’s intricate mastery of their craft, his account is geared more towards sorrows than pleasures and there is a rather empty futility implicit in his account. Rather than search more vigorously for examples of people who are passionate about the work they do and examine why, he moves towards a view that work provides us with a context in which to strive towards goals, distract ourselves from our everyday anxieties and keep us out of harm’s way. Whilst it is easy to protest at his concluding reflections, they do resonate with many people’s perception that a crisis of meaning is taking root in society.

What to Read

One of the interesting themes emerging from reading both books in tandem is the role that is designated (or not) for organisations – both in balancing the creation of profit against societal impact and in generating an environment in which employees can draw meaning from their work. Bakan’s account explicitly argues that attempts by organisations to enhance their impact on the world draw them into potential legal conflict with their shareholders if these activities are seen to have a negative impact on profitability. He advocates enhanced international regulation as an important component of his prescription for healing, in his view, the pathology of the corporation. The role of the organisation in the creation of meaning seems a strange omission from De Botton’s account, save for the efforts of an accounting firm to generate motivation and an esteem-building environment for employees to work within. One cannot help but wonder at the dissonance between the perceived evil or impotence of organisations on the one hand and a global public clamouring for a new world order at this time.

There is an emerging sense that leaders of organisations will be judged over time on the extent to which they are able to combine imagination, courage and insight into the issues of the 21st century – and emerge on the other side with organisational models capable of making a sustainably positive impact on the full breadth of their stakeholders. Whilst there are always exceptions to the rule, organisations are generally neither evil nor impotent. External regulation may be part of the answer, but the greater impact will be felt from organisations creative enough to find solutions for themselves.

Matt Brown, Director and Clare Morse-Brown, Research Consultant, are based in YSC’s London office. T: +44 (0) 20 7520 5555 / [email protected] / [email protected]

What to Watch25

Author: Alain De BottonPublisher: Hamish Hamilton (An imprint of Penguin Books)Price: £18.99/US $26.00 hardback

Author: Joel BakanPublisher: Constable/Penguin CanadaPrice: £6.99/US $15.00 paperback

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To seek advice from Dr Ken, please email your question to him at [email protected]

Dear Dr Ken

You may have read in the newspapers about the challenges I’ve had to deal with over the past month or so – with some resilience, I might add. This culminated in a meeting in which I was forced to say I would change and start listening to people. In all honesty, my inclination is just to plough on, as I have done all my life. However, my great friend Peter Mandelson has suggested I write to you as he thinks psychology might help. I really don’t know about this. All through my life I have achieved and, at different points, have been picked out as having special talents. I’ve never found the need to influence or persuade before. A clunking fist does the trick just as well. What do you think? Could I learn anything from rats?

Yours truly,

Gordon Brown

Dear GordonFirst of all, you’ll be pleased to hear that your case is not unusual to us at YSC. We are forever working with talented individuals who are misunderstood and unappreciated. Having looked at your case, and the detail in your letter, I do think that psychology may have something to offer you. Let me explain.

The first problem you face is that you are a victim of what we psychologists call FUNDAMENTAL ATTRIBUTION ERROR. Basically, people are bad at judging other people. They tend to assume the worst: that when something happens, it is because of the individual’s personality rather than the circumstances. If you are a victim of this, you will find that people talk a lot about your traits and attitudes rather than external factors. The answer is to build on the steps you’ve already taken to show you’re not the only one leading a country in difficulty; lots of other leaders are too. Keep talking about the global economic crisis. This will help people understand that you are a victim of circumstance.

Reading your note about your great track record of success, I think you may be a victim of what we psychologists call LEARNED HELPLESSNESS. Research we have done with rats shows that when they are confronted with events over which they have no influence whether good or bad they become miserable, look a bit glum and tend to give. Your great history of success may have induced similar feelings in you. I’m interested, as a psychologist, in how you were picked out for success at different stages in your life.

Did this leave you feeling unable to really influence what happens to you? You may, for example, feel indecisive as a result. We at YSC have successfully treated people suffering from this. You need to start doing things which give you a sense of Efficacy. For example, Nintendo Wii games can induce great feelings of power and control (once you’ve got the hang of them). Ask Peter to get you one.

Finally, I would like to point you to some research that psychologists have conducted into the drives that are associated with success amongst politicians. Using ink blot tests, we have found that to be successful as a President, you need to not only be strongly motivated to achieve (what we psychologists call NEED FOR ACHIEVEMENT), but you must also possess the urge to have power over people. In other words, you have to want to influence people as well to achieve great things. My worry from your letter is that your need for power may lack finesse. Ask yourself if this is the case and, remember, using colleagues to persuade others isn’t the same thing. We find taking part in social games such as Monopoly can be a helpful technique to develop this motivation.

Yours sincerely,

Ken Rowe, Managing Director, YSC

Cover image: “The sage and the golden deer” by Mahjibin I MajumdarPage 3 image: “Untitled” by Mrinmoy Debbarma

The Indian artwork appearing in this YQ was first exhibited at The Menier Gallery in London on the 1st of April 2009. The inaugural exhibition was curated by R.B. Sharma, founder of IMA (Indian Modern Art), to showcase the work of emerging Indian artists. IMA’s intent to promote new talent aligns closely with YSC’s mission statement which is “to release the power of people”. To find out more about the artwork including purchasing, please contact R.B. Sharma on +44 (0)7796 957639 or by email to [email protected]

YSC – where psychology means business

www.ysc.comReleasing the power of people

YSC is the trading name of Young Samuel Chambers (“YSC”) Limited. Registered in England at 50 Floral Street, London, WC2E 9DA. Company Number 2402857

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At YSC our mission is to release the power of people. We do this by combining industry leading psychological insight with a thorough understanding of our clients’ business needs. We work with clients across their entire talent lifecycles including: recruitment, induction, development, the identification of potential, internal selection, role change, measurement and departure. Our key client offerings include 1:1 and team assessment, executive coaching and organisational consulting.

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YQ - Issue 01

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