The MTP Business Learning Blog

This blog is produced by MTP for senior professionals highlighting relevant and interesting books and articles on business, finance and strategy, and the opportunity to comment on them. It also contains news of MTP and its clients and, from time to time, extracts from MTP publications.

Wednesday 21 December 2011

‘Can you learn soft skills from e-learning?’ by Paul Matthews, Training Journal, December 2011

This article is of particular interest to MTP as we have recently been asked by a client to build on their e-learning programme in people skills by creating an on-line session, to be delivered by one of our facilitators. I therefore had to go through the existing e-learning programme to judge what kind of foundation it would provide. I was highly impressed by the design but very uncertain about its likely impact. The author’s views confirm and clarify my reservations.

The article starts well but does not quite maintain its early promise. The author makes the key point right up front; that you can learn about soft skills via e-learning but you can’t necessarily learn to perform more effectively. You might become more knowledgeable but performance improvement depends on the effectiveness of subsequent practice.

Some people might therefore reject e-learning for this reason, in the same way as the more perfectionist L&D professionals say that ‘awareness’ training in finance or business is not effective. The author makes the point that the road to competence is a sequential process and learning about the importance of a skill can be a first step on the way to eventual mastery. He uses the pathway from unconscious incompetence to conscious competence to illustrate this point. E-learning may only move you through the first stage to conscious incompetence but that can be a key step for the manager whose people skills need to improve.

Having made this excellent, practical point, the author then loses his way by suggesting that, after learning what the skill is and why it is important, e-learning can allow learners to practice people skills. This is where I part company with the author’s views, particularly as he stresses the importance of creating ‘realistic scenarios’ to relate to. My view is that e-learning then becomes superficial and patronising, particularly with experienced managers. A typical approach is to introduce fictional characters and require judgements that are impossible without knowing the history, context and personalities involved. And it is not really practice; it becomes a guessing game with no perfect answer.

I sympathise with what the e-learning designers are trying to do because, to make e-learning engaging, you have to create interaction. But there are other ways of doing this, for instance asking learners to input what THEY would do when faced with scenarios in their own context and then feeding back the pros and cons without claiming that there is a right answer. This is however not ‘practice’; it is merely an interactive way of increasing understanding,

The article then goes further downhill by suggesting a rather meaningless distinction between e-learning and e-reference which did not move the argument forward. However there is a recovery at the end when the author makes the important point that the right way to see e-learning is as one of a number of learning methods that need to be blended together. This resonated particularly well with me because the on-line facilitator-led session for our client mentioned above was designed to lead into a later face to face programme when the skills will be applied.

The article raises interesting issues but it would have been even more useful if advocacy of the blended learning approach had been raised earlier and had underpinned the rest of the content.

Click here to view the article in full:

http://www.trainingjournal.com/feature/2011-12-01-can-you-learn-soft-skills-from-e-learning/

‘Peter the Great’ by Stefan Stern, Management Today, December 2011

This article is based around the annual Drucker Forum, recently held in Vienna. It is a tribute to the ‘Father of Management’ that 102 years after his birth, 65 years after his first book and six years after his death, his name still attracts a wide audience and high calibre speakers. When analysing modern problems, ‘what would Drucker say?’ still seems a relevant question to many modern management thinkers.

It is also true that many of Drucker’s arguments and quotations have remarkable relevance to present day issues and prove his remarkable gift of foresight. In 1997, well into his eighties, he predicted that, during the next recession, the differentials between top pay and that of lower levels would cause ‘an outbreak of bitterness’. Not a bad call!

One of the speakers at the conference was Charles Handy, another guru who has questioned the values of modern day business. His view as expressed at the conference is that modern managers lack sympathy and that the quest for shareholder value has allowed too much uncaring behaviour. The conference also gave a platform to Mark Kramer who worked with Michael Porter on the development of the concept of ‘shared value’ which we have (critically) reviewed in past blogs. Their ideas could be seen as a further development of Drucker and Handy’s thinking in that they advocate using the profit model to ‘improve people’s lives’. However, our concerns about the wooliness of the shared value concept were backed up by Adrian Wooldridge of the Economist who claimed that Drucker, the originator of the concept of Management by Objectives and a great believer in focus, would never have embraced such a vague idea.

Perhaps the most interesting contribution to the debate was the surprising admission by Harvard professor Rakesh Khurana that business schools had played ‘a large and ignoble part’ in encouraging negative attitudes to business in the last quarter of the 20th century. He went even further than Handy by suggesting that the obsession with shareholder value and the assumption that rewards had to be linked to it, have created a self-interested culture. The assumption that managers have to be bribed to do their jobs, often at the expense of moral values, has been the main driver of the negative behaviours which drag down reputation of business.

Khurana has his own agenda here because he is the driver of the move by Harvard to make management more of a profession - as reported in previous blogs - but it is difficult to challenge some of his arguments. However to blame the business schools or the managers themselves seems to be missing the point; the underlying cause must be those investors who look for performance based on shareholder value, often over the short term. No CEO can push for moral values if he is out of a job.

Overall, an interesting article that made me wish I’d attended Drucker’s annual forum; it also caused me to think that maybe MTP should be represented in future years.

Click here to view this article in full:

http://www.managementtoday.co.uk/features/1105852/why-drucker-relevant-ever/

‘Trouble in the middle’; Economist, October 15th

I carried this short but interesting article over from the last blog, because there were so many other competing articles. It builds on two other articles reviewed last time; the top hundred business school rankings published by the Economist and the article in Management Today about the growth of business schools in emerging countries.

The article starts with the interesting and counter-intuitive observation that business school attendances often boom during a recession, as managers ‘seek shelter from the storm’. And, following this trend, there has been a recent fall-off in global attendances as economies have begun to recover. This fall has been so severe - particularly for mid-ranking schools in the USA - that there are fears that the traditional business school model is in trouble.

The key ratio behind the willingness of managers to invest in MBAs has always been the multiple of salary earned to investment required. Five years ago the average investment for a two year MBA was around $60,000 and the likely salary earned would be nearly $80,000, a multiple of around 1.33. Since then salaries have stagnated while costs have gone up and the ratio has reduced to around 1.0, still not bad if you remember that the salary is - hopefully - for many years.

The article suggests that current pressures are resulting in the ‘squeezed middle’ as the top schools retain business and the cheaper, lower level schools attract those who cannot afford the high investment. The elite schools like Harvard and Stanford generally retain good ratios of cost to salary, as recruiters are reassured that admittance is a good sign of calibre and commitment. But the mid-level schools are losing out and, at the same time, they cannot afford faculty of the right calibre or to maintain buildings to the high standards expected by modern managers.

Adding to these pressures are the dangers of losing overseas students to the increasing competition from developing countries’ schools. In 2011, about a third of students of American schools were from overseas, double the ratio of ten years ago. Though the new business schools in countries like China and India will take time to grow their international reputations, the pressure for students to stay at home will be intense, particularly as the cost - excluding travel - is around 50% of the USA schools. Though the cost differential may reduce as the emerging schools recruit international faculty, the cost differential will still be substantial.

It is also suggested that the emerging business schools will have other advantages by offering courses that are more global that the US centred American schools. There are at present very few sessions or case studies that cover cross-border activities and truly global issues. There is not enough focus on ‘difficult economies’ and the article quotes one Russian school as accepting students from crime families to help face up to the real life issues where crime and corruption are endemic. Maybe there will be Mafia faculty next!

The expected response is for many US and European schools to follow the example of INSEAD by offering shorter courses of a year or less; apparently this has not impacted the reputation and earning capacity of INSEAD graduates. Another response may be more specialisation, for instance an MBA for those managing in the health sector or in a particular industry.

Overall a thought provoking article that must give the managers of the mid ranking schools - and the universities who rely on their revenue - much food for thought.

Click here to view this article in full:

http://www.economist.com/node/21532269

The Evolution of Training by Andrew Vermes, Training Journal, October 2011

This is a thoughtful article by a senior consultant at Kepner Tregoe, one of the few international names in management training that has survived over time. It starts well, makes some insightful observations but fades towards the end, leaving the reader unsure about the points the author is trying to make.

He starts by arguing that, for all the many developments in technology over the last thirty years, not much in management training has changed. The blackboard or overhead projector may have been replaced by PowerPoint and there may be e-learning rather than books as pre-reading but the fundamentals are much the same. The main reason is that the capacity of the human mind has not changed so there are limits to how far you can speed up the learning process and achieve economies of scale.

Another factor is that there are few big players in the training market, apart from specialist areas like IT Training, and this has become even more so as the desire for tailored programmes has gathered pace. The author quotes figures of 12,000 trainers operating in a £3 billion market with no single company having a significant share; he also mentions that the market becomes even bigger if you add on internal providers. This is an extreme example of a fragmented market that no-one fully understands.

The market has become even more fragmented in recent years as buyers of training have become more selective and employees have been given more responsibility for their own training. There have been less ‘one size fits all’ corporate programmes, more personal or divisional approaches to meeting specific needs. This means that there are less internal management trainers and more opportunities for flexible specialists; the article quotes a company where eighteen internal management trainers 20 years ago has reduced to one today.

These changes have been accompanied by a pressure that we at MTP are constantly fighting against; the desire for shorter programmes, often to cover the same content. The author shares our view that such pressure should be resisted because the extreme example he quotes - 500 slides to cover project management in one day - does not lead to client satisfaction. Instead we should be pushing for less content rather than being pressed into overloading. Our argument should be that though technology may have moved on, the human brain works in much the same way as 50 years ago.

There is also an interesting comment that the ‘classroom’ is still the dominant location for off the job training; e-learning is even now only 14% of training hours and is, in many cases, not much better than reading a book. I was surprised that the author didn’t move on to stress the importance of interaction and engagement to both forms of learning; instead he made the more obvious points that e-learning is better for the harder, knowledge based topics and that a blended approach is the way forward.

This was all very interesting and in some cases insightful but the ‘so what’ factor will be the main impact on most readers. It would have been good to explore some of the issues arising from these fundamental changes, for instance, for the provider, the impact on trainer recruitment, development, motivation and retention, and for L&D professionals in companies, supplier selection.

Click here to view this article in full:

http://www.trainingjournal.com/feature/articles-features-2011-10-01-the-evolution-of-training/

The Bank that ran out of money, BBC 2, 5th December

As a general rule, I don’t join in the widespread revulsion about bankers and their bonuses, on the basis that the extreme cases we hear about are not typical of what goes on in most banks; the multi-million bonuses are the extreme cases and are usually earned one way or the other. And, in any case, we can all apply to work in a bank if we want to.

However, it was difficult to watch this fascinating documentary without feelings of revulsion and amazement, particularly when you saw the footage of the shareholders meetings where false assurances were given and misleading statements were made.

The two characters we saw most of were the former CEO and leading hate figure Fred Goodwin and the less well known but equally culpable Chairman Sir Tom McKillop. And hearing these characters talking to their shareholders was enough to explain much of what went on; the Chairman was clearly out of his depth and quite unable to restrain Goodwin and his equally driven henchman John Campbell. It was interesting that no other board members were interviewed but, if they were anything like as hopeless as McKillop, it is no wonder that the company was out of control.

The other big question was how someone with the accounting background and track record of Fred Goodwin could have made such an appalling decision when he persisted with the ABN Amro acquisition despite all the risks involved. One of the main reasons for buying the company had disappeared when ABN Amro sold its American bank but the decision to carry on was still taken, even after Northern Rock had failed.

The programme made it clear that the answers are all about vanity and hubris. There is much evidence that, when it comes to acquisitions, common sense often goes out the window. There is research which quotes many examples of CEOs doing exactly what Goodwin did here, trying to repeat his major career success - the acquisition of NatWest - in another quite different context. Deluded CEOs assume that they cannot fail to repeat the winning formula and they pay the price. And this was combined with a desire to spike the guns of a major competitor - Barclays - who also had their eyes on the prize.

It would have been better if the programme had secured interviews with more of the guilty parties and not those who left before the main events or watched from the sidelines. There was enough evidence to show that a key factor in the decline of RBS was the inability of management and fellow directors to stand up to Goodwin’s tyrannical behaviour and this was an interesting comparison to the programme about Steve Jobs a week or so later. The key difference - confirmed by my book review below - is that Jobs was genius who got most things right, whereas Goodwin was a pretty ordinary banker with delusions of grandeur.

At around the same time as the programme we heard the news that the FSA report shared blame rather widely but did not believe that evidence justified prosecution of those most directly involved. This programme did not provide evidence to back up this conclusion. OK, maybe the government should, in hindsight, have exercised closer control and maybe the FSA should have asked more questions; but the main culprits were a CEO who lost his business judgment and took a colossal gamble, and a board of directors who did not understand what was going on.

The Language of Leaders by Kevin Murray, published by Kogan Page

It is perhaps not the ideal time for a senior person at leading PR organisation Bell Pottinger to be bringing out a new book, following recent exposures about their (allegedly) sleazy lobbying activities, but I decided to approach it with an open mind. After all, PR proved to be an effective training ground for our prime minister so why shouldn’t a PR executive have something to say about leadership?

The author starts with the valid point that communication inside and outside the business is one of the key leadership skills yet is often neglected and not seen as a sufficiently important priority for development. Having made that point he moves on to put forward his own recipe for success over sixteen highly readable chapters, apparently based on conversations with about sixty 60 ‘top leaders’.

There are however two problems. First of all the proportion of leaders that I had heard of is quite small, the most impressive being Paul Polman, CEO of Unilever, and Clive Woodward of British Lions fame. It didn’t help credibility when the author admitted in the introduction that Richard Branson had turned him down! The second problem is that the advice often comes over as rather obvious and sometimes quite patronising. The tone is set in the first chapter when ‘keep it simple’ and ‘stand up for what you believe in’ are offered as secrets of success. This tone continues when, in chapter three, we have ‘twelve principles of leadership communication’, most of which we would look for when recruiting a new trainer!

Nevertheless the book is well written and I was particularly impressed by the way in which the messages were interwoven with quotes and stories from the leaders who were interviewed. And not all the messages are obvious or superficial. Murray is a big advocator of stories as a way of communicating and an entire chapter is devoted to this topic; ‘logic gets to the brain, stories get to the heart’ is his argument. I also liked his emphasis on preparation before public speaking though most leaders would perhaps feel that this is something they have realised by now.

I warmed more towards the author as I progressed through the book and the fact that the messages come through his interviewees helped to overcome my initial cynicism. It is nothing new to be told that authenticity, trust and values are vital to good communication by leaders but when this message comes from the mouths of Polman, Woodward, Rose (M&S) and Gent (Glaxo) it tends to have more credibility. I particularly liked the comment of Sir Stuart Rose who was quoted as saying that for a leader, ‘communication is the day job’.

Though he doesn’t use the term, Kevin Murray is really saying that good leaders need a high level of emotional intelligence, which we really knew already. My view is that a book like this could be useful for someone at the early stage of aspiring to be a top leader; it is less suitable for the more experienced who are there or nearly there.

Steve Jobs, the exclusive autobiography, by Walter Isaacson

In the last blog, I reviewed the newspaper articles after his death; this time I review the book of his life. It is not the first book about Jobs that I have read but it is by far the best. After finishing it, my feelings were that I would love to have met such an amazing icon but also relieved that I never had the opportunity to work for him. Because this was a man who could be engaging and impossible on the same day to the same people and only the tough could survive his bipolar behaviour. He rated people as either ‘insanely great’ or as a ‘total bozo’ with very few in the middle.

Yet despite his bizarre and unkind behaviour, he had the ability to retain those that he really needed and to inspire them to work impossible hours and deliver against impossible targets. And despite the way he treated them, they were prepared to follow him from one obsessive project to another. And this author, more than his previous biographers, reveals some of the secrets of his genius.

Those who were following him in the mid 1980s - when he was sacked from Apple and was floundering at his corporate creation NeXT - must have wondered whether they had made the right choice. But it was here that luck played a part. A company that he bought for its hardware - Pixar - proved to have software that would change the world of animated films and propel him on the road to success as saviour of Apple and genius of the 21st century.

Rather than describe his phenomenal success during his second phase with Apple, it is perhaps more useful to think of the strategic lessons for the rest of us mere mortals. But this is where it gets dangerous, because Jobs broke all the rules of marketing and strategy. His view was that market research is for bozos and that all he had to do was look in the mirror each morning. He knew what customers would want in the future much more clearly than they could possibly imagine.

So what are the lessons from this extraordinary life? Certainly the lesson from his first time at Apple was that, if you have a genius who lacks people skills, find him a role that exploits his genius rather than pushing him out. The lesson from his time with Pixar and his second spell with Apple, is that the driver of success is not usually the inventor but the one who sees the potential. Right from the time when he first visited Rank Xerox’s laboratory and saw the potential of the mouse, through to his belief that Apple could enter and conquer both the music and the telephone markets, he showed quite extraordinary foresight. He had the vision to see potential that the inventors could not imagine. And this talent made Apple, for a few weeks in 2010, the most valuable company in the world.

The final lesson from Jobs life that recurred time and again during his career, was the importance of design. Apple’s computers, MP3 players, telephones and tablets do not perform any better than the competition but, because of Jobs’ flair for design and his obsession with the look and feel of his products, customers are willing and proud to pay over the odds.

He should have died a happy man, knowing that his obsessions paid off and that the bozos who sacked him from Apple were proved wrong a thousand times over. But after reading the book you are left uncertain whether anyone so driven, so obsessive, so angry, could ever have found complete fulfilment.