‘Taking the long view’, the Schumpeter column, Economist November 24th

As is common with Schumpeter, the anonymous author takes a hot topic and presents a balanced yet challenging analysis, showing that the proponents on both sides tend to simplify a complex issue.

The hot topic is the often slavish devotion to the concept of shareholder value.  The challenges started with no lesser person than Michael Porter of ‘five forces’ fame and has been picked up by a number of other leading figures since.  The article starts by quoting one of the most high profile and successful challengers to this 'cult of shareholder value', Paul Polman, CEO of Unilever.  There is reference to Polman's speech at the World Economic Forum at Davos when he told the audience that 'Hedge Fund Managers would sell their grandmothers for a profit'.  More meaningful have been his actions in stopping the publication of quarterly results and earnings forecasts.  He has also strengthened Unilever's reputation for long term thinking by his commitment to sustainability.

Polman was one of a number of contributors to the recent annual Peter Drucker Forum in Vienna.  Other speakers went for even stronger hyperbole; one called it 'a crummy principle that is undermining capitalism', another urged for its complete abandonment.  Drucker himself is quoted as criticising actions to manipulate earnings by pointing out that 'long term results cannot be achieved by piling short term results on short term results'.

The author is very skilful in the way that he accepts these views and even reinforces them with further evidence, showing how shareholders, on average, now hold on to investments for months rather than years, and how public companies, faced with these pressures, invest for the future much less than their private equivalents.

Having lured us into a cosy acceptance of the Drucker Forum view, Schumpeter then presents the other perspective by asking the legitimate question - what are the alternatives?  He (or maybe she?) also presents examples of companies who are committed to shareholder value and yet perform very well, both short and long term.  He also points out that sometimes short term pressures can work in the long term interest, for instance by persuading companies to sack underperforming executives.

The article quickly runs through the alternatives - multiple stakeholders, customer satisfaction, management assessment - and points out that these approaches are even more flawed.  He also quotes companies like Amazon and IBM who have taken a long term approach and carried shareholders with them, because their strategy and communications were strong.

The correct conclusion comes at the end of the article; it is not ‘either/or’.  CEOs can be selective about which parts of the shareholder value concept they buy into and can adopt strategies which emphasise the long term.  Warren Buffett refuses to provide earnings guidance but does not reject the whole package.  IBM provides such guidance but extends it to several years out.  L'Oreal awards bonuses for longer term shareholders.

This is an article that has a lot to commend it - short, punchy, balanced and well-reasoned.  If only the more specialist magazines published articles on management topics in similar style!

Read the original article;
http://www.economist.com/news/business/21567062-pursuit-shareholder-value-attracting-criticismnot-all-it-foolish-taking-long

Simple Rules for Making Alliances Work, by Jonathan Hughes and Jeff Weiss, Harvard Business Review, ‘Onpoint’ - Fall 2012

These special 'OnPoint' editions of the Harvard Business Review are obviously a way of recycling previous articles and generating revenue, but they are usually good value.  You get the best selection of articles from recent times and this edition has a number that are worth reading.  I chose this article because I think is the best and the review will therefore, by my standards, be highly positive.

It is about alliances and joint ventures between companies, which are becoming an increasing feature of corporate life these days.  Indeed at MTP this is featuring increasingly on the learning agendas of our clients, for instance we were recently asked to include this topic in a programme for Finance Business Partners of a major international client in the energy sector.  It is interesting that the messages in this article are very much in line with the best practice that our client asked us to emphasise, based on their long experience of managing joint ventures.

The messages of the article are simple and to some extent counter intuitive.  Alliances and JVs are an increasing feature of corporate life - increasing by 25% overall - yet the authors’ research shows that 60% to 70% don’t work.  This is because the conventionally regarded best practice does not seem to work; most companies would work to these guidelines:

·        -  Define the right business arrangement

·        -  Create metrics of end performance

·         - Eliminate differences

·        - Establish formal systems

·        - Manage external relationships

The counter-intuitive message is that these guidelines are not key success factors in practice and, in many cases, they are the cause of failure.  Instead attention should be paid to the polar opposites of these guidelines, which can be summarised as:

·         - Developing the relationships

·        - Creating metrics of means rather than ends

·        -  Embracing differences

·        - Enabling collaboration

·        - Managing internal stakeholders

What makes the argument even more powerful is the research backing, quoting quantitative data and examples of major companies who have seen the light and are willing to admit their past mistakes, including Aventis and Schering Plough.  It was also impressive that the authors (presumably) persuaded HP and Microsoft to bare their souls and admit how their alliance initially failed to work because of different perceptions of each other’s strengths and weaknesses, for example:

·        -  HP perceived itself as taking a long term mature approach; Microsoft saw this as slow and bureaucratic

·        - Microsoft perceived itself as entrepreneurial and fast moving; HP saw this as excessively competitive and confrontational

Only when they started to discuss the relationship, the differences and the need for collaboration was the alliance put on the right track.  The message was - let’s use our differences to create value rather than allowing them to destroy the alliance.

The arguments seem to be sound and very much in line with the messages we would deliver on our courses, with one exception.  Perhaps it’s my financial background but I could not quite go along with the second message - to measure means rather than ends.  The argument here is that there can be too much focus on revenue, costs and profit at the early stages, when the emphasis should be on how the relationship is working and how far agreed milestones have been achieved.  My criticism of that approach is that, like it or not, alliances will eventually stand or fall on financial performance and it should be possible to agree financial milestones, as well as for the softer targets.  It should not be seen as ‘either/or’.

But overall, an impressive piece of research and an excellent read, challenging conventional thinking as all good business articles should do.  There should be more of this kind.

Theodore Roosevelt CEO by Alan Axelrod, published by Sterling 2012

I decided to review this book as it is the latest in a series by the author, a historian who makes the bold attempt to use historical figures to illustrate learning for modern business leaders.  I chose Roosevelt because I am interested in American history and knew him to be a fascinating and controversial figure; but if you prefer more of a UK orientation you can choose Winston Churchill or Elizabeth I.  And even further afield in country and period, there are similar books on Ghandi and Julius Caesar.

The structure of the book is clever.  You receive a potted history of the life, followed by a series of chapters in which several learning themes are explored, while producing lots of anecdotes and examples to build on each theme.  In the case of Roosevelt (this is Theodore who was president at the beginning of the 20^th century, not his cousin Franklin who was President in the Second World War) you read the potted history and cannot help going ‘wow’.  How did he do all that? He became President by accident following the assassination of his predecessor McKinley and proceeded to change America in all sorts of ways, some good, some more questionable.

But this review is not to provide a history lesson but to answer the question, does this combination of history and business learning work in this type of book?  The answer is yes, it works to a certain extent for those who are interested in both.  It is a relatively painless way of improving your knowledge of history while developing your thinking about successful leadership in business.  I think, however, that the reader should have an enquiring mind when reading the lessons for today’s business world, because some seem too contrived and simplistic.

Though I liked the structure of the book into seven chapters - each showing an aspect of his life - I would have liked the lessons to be more nuanced and less didactic.  By the end of the book we had lesson number 136 and the text and tone resembled too much one of those tiresome American books on personal self-improvement.  I would also like to have seen more caveats about the applications to business and the lack of these gives the impression that the author is more of a historian than he is a business guru.

Yet there are some clear parallels that convinced me of the relevance to modern leadership.  Roosevelt was a risk taker who constantly referred to risk as a positive factor in decisions, looking at the opportunities rather than the pitfalls.  ‘There is no reward without risk’ was his constant message.  And he was an early exponent of the ‘Management by Walking Around’ theory, rejecting organisation charts and talking to people at all levels.  He reformed the New York police in the early phases of his career by walking the streets of the City, gaining the respect of the lower levels and gaining the knowledge and determination to break the bureaucracy.

As I read through the chapters I began to wonder where I had heard these messages before and it came to me towards the end; the book is quite similar to the style and content to ‘In Search of Excellence’, the all-time best selling management book of the 1970s by Peters and Waterman.  Their approach was to look at how successful business organisations behave; these books look at how successful historical figures have behaved, albeit in a different time period and context.

The outcome is very similar.  You learn a lot more about the world, your thoughts are stimulated but there is no automatic transfer to the secrets of success in modern business.  But I guess that applies to any management book.  In Search of Excellence went out of favour because many of the featured companies fell from grace and were only successful for a limited period;  at least the reputations of Roosevelt, Churchill, Ghandi et al have stood the test of time. 

Buy the book;

http://www.amazon.co.uk/Theodore-Roosevelt-CEO-Alan-Axelrod/dp/1454901705/ref=sr_1_1?ie=UTF8&qid=1351762198&sr=8-1

‘No longer the place to be’ the Economist October 6th and ‘Finding Happiness the MBA way’ Management Today October 2012

These two short articles have the same theme, the ways in which the MBA is changing.  The Economist article is the better of the two, because it is based around their own survey of Business School rankings.  The main theme is the way in which the European business schools are struggling to keep up their numbers as the recession continues.  Apparently a recession is good for MBAs if it is short - a convenient break until things recover - but has the opposite impact if it goes on for several years.

The drop in numbers is most serious among Asian students who previously believed that schools like London, INSEAD and IMD had the right cachet but were not so long and expensive as the top American schools.  They are now thinking again for a number of reasons; Europe is not exactly an example of economic success right now and countries, particularly the UK, are tightening up on visa regulations.  This has caused UK schools to suffer an 11% drop in volume this year.

It is surprising where these lost students have gone; not to the USA where many of the above problems still exist and costs are even higher, but to Australia and Canada where the reputations of their schools have grown markedly.  Apparently Australian MBAs are the highest paid in their first jobs after graduation.  Asian students have also decided to opt for the emerging schools in their own region, with China and Indian academic reputations on the increase.

While this is very interesting, it is not borne out by their own ranking survey, a summary of which is shown at the end of the article.  The ranking is based on four factors; career opportunities, personal development, salary levels and networking potential.  Despite their cost and duration, American Schools still take the top 8 places (Chicago 1st, Harvard surprisingly only 5th), Europeans in 9^th, 10th and 12^th places, and the top Canadian school only 16^th.  There is not an Australian or Asian school in the top 25 that is shown.  If the changes they describe in the article are part of a trend, it seems to have a long way to go.

The Management Today article is less well researched and falls into the familiar pattern of such populist magazines by quoting a few examples and suggesting that it’s a significant trend.  The suggested trend is for MBA students to be forsaking the quest for more money after qualification and instead going in for life changing projects, like helping African children or developing ventures in third world economies.

This leads into a broader argument that the MBA is more than a degree, it is a life changing experience and, unsurprisingly, there are senior people from Business Schools - Cranfield and IMD - who agree with this suggestion.  IMD even include in their MBA an option to work with a psychologist, which nearly everyone goes for. There is also mention of an ‘Anti-MBA’ run by the McGill School (Canada again) which was originally developed by long standing behavioural guru Henry Mintzberg; this MBA deliberately sets out to boost a 'reflective mindset' and includes pilgrimages to places of worship, including a spell in India.

These may be examples of life changing opportunities but it is a long way from arguing that this is the norm.  More credible is the assertion that many MBAs from developing countries are tending to go back to their home countries more quickly, rather than looking for higher paid opportunities in the USA or Europe.  This would seem to tie in with the Economist article and is probably more to do with the lack of opportunities in the West rather than a desire to change the world.

The individual who is singled out during the article - the IMD graduate who is working in Africa - rounds off the argument by saying 'I have friends in big companies who earn more than me but that alone wouldn't make me happy; happiness is the ultimate kick'.  I hope that he means it and that this really is the start of a wider trend.  But I would need more evidence to be sure.

Read the original articles;

http://www.economist.com/node/21564203

http://www.managementtoday.co.uk/features/1150352/finding-happiness-mba-way/

‘Learning Alongside the Elite’ by Gayle Robling, Training Journal September 2012

This article covers the benefits of engaging motivational speakers to add to the quality of learning programmes and is a barely disguised marketing message for the author’s firm which recruits such people. I chose this article to review because I have always been highly sceptical of the benefits of such speakers and wanted to see how far the author could change my mind.

The answer is that my scepticism was not entirely removed but a number of my concerns were addressed. However, the glaring omission throughout the article is the issue of cost. Names are bandied about, from Steve Redgrave to Denise Lewis, without any mention of the fact that such people do not come cheap, probably out of reach of many who have restricted budgets. Or maybe the investment in such people means that savings have to be made elsewhere. This omission seems particularly strange as, at several points, the author makes the obligatory mention of the need to achieve 'ROI', which is even more difficult when there is likely to be such a major investment.

The article starts by the message that an effective learning experience needs to be 'high-impact, unique and memorable'. It could be argued that there are other factors that make learning effective - for instance interaction and engagement – and it is also possible to be unique and memorable while still being ineffective; most of us have been involved in sessions that we remember only because they failed to meet expectations in a big way. And the problem with famous people is that they so often fail to match the image, particularly when their verbal skills do not equal their other achievements.

It has to be admitted that the author does address this issue to some extent, stressing that it is important to find speakers with the right presentation skills, and the implication is that her company is the one who knows which of the available celebrities can deliver. She avoids other obvious criticisms by stressing that the starting point must be your learning objectives, rather than the speaker's 'standard spiel'. It is also suggested that you can influence such speakers to tailor their material to your company’s needs, which certainly would overcome one of my concerns if it is really deliverable. In practice I am sure celebrities' willingness to adapt varies widely.

My other concern was less easy to resolve. Throughout the article there is the assumption that we all experience a 'wow' factor when meeting or listening to celebrities; indeed there is the feeling that the author is so inclined. I am not sure how far this applies to a group of high achieving and maybe cynical senior managers who may question the relevance of sporting anecdotes to their own environment. It is true that not every motivational speaker is a sports person but this seems to be the vast majority; the author does suggest that successful business people may be a better alternative for some groups but, in this case, managers may well ask why their own top people cannot put over a more relevant message.

Despite all these reservations, the article does have a lot to offer for those who have thought things through and still believe that a celebrity speaker is right for their learning objectives and culture. The suggestion that you must find a speaker who fits the company context and culture may seem obvious good practice but it must be so tempting to avoid this step and go for the biggest name. The author also suggests that you should reject anyone, however famous and charismatic, if they are not interested in tailoring the message. I would also have added that the biggest names are not always the best speakers and that it is important to get a reference from someone who has heard the speaker deliver a similar message.

So I would recommend reading the article if you are already considering the celebrity route but I would also recommend obtaining costs at an early stage. One hears reports of A-Listers asking for more than £10k for an evening session so you have to be sure that this is the best way of spending your L & D budget. But the overall message is – follow the same principles and disciplines as you would for any other learning session and don’t get carried away by the aura of the celebrity.

Read the original article;
http://www.trainingjournal.com/feature/2012-09-01-learning-alongside-the-elite/

‘Your strategy needs a strategy’ by Martin Reeves, Claire Love and Philipp Tillmanns, Harvard Business Review, September 2012

This article is by three senior people from the Boston Consulting group (BCG) whose reputation in the area of business strategy is strong and whose latest thinking is likely to be interesting. The article challenges conventional wisdom around strategic planning and offers a new two by two matrix to help us find the 'right' approach. But, though thought provoking, it is doubtful if this new framework will attract as much attention as BCG's earlier famous matrix that divided companies’ products and businesses into dogs, stars, cows and question marks.

The basic thrust of the article is that the style of strategic planning should be varied according to two factors, the degree of predictability in the industry, and the extent of malleability, how much power one player has to change the environment. The authors contend that 'classical' approaches to strategic planning - frameworks like Porter’s five forces and the BCG matrix mentioned above – assume a predictable environment that is difficult for one player to change. The oil industry is quoted as an example of this situation; for Exxon and Shell it is worthwhile having analysts and strategists using traditional approaches, developing long term plans and making multiyear financial forecasts.

While accepting the logic of the two dimensions, I was unsure about the oil sector as an example – for instance the impact of the BP Gulf Oil disaster was hardly predictable - and my reservations were confirmed later in the article where the Oil sector is only rated near the middle on both dimensions. The BCG ratings suggest that the two sectors with the most predictable but least malleable characteristics are Tobacco and Paper, for whom ten year plans and classical frameworks are particularly appropriate.

Three other planning approaches are suggested, depending on where each company falls within the matrix. Where the environment is unpredictable but the power to change things is low, an 'adaptive' approach is required, planning that is much more flexible and over much shorter timescales. Even annual planning may not be flexible enough; planning has to be embedded in operations and must be highly responsive to short term changes. Fashion retailing is quoted as an example, where the ability to respond to trends quickly is imperative; a flexible supply chain and speedy innovation are key to success.

This seems to make sense though I did wonder if 'fast moving' might be a more appropriate dimension for the matrix, rather than predictability; nevertheless it is almost self-evident that conventional strategic planning techniques are less appropriate for certain volatile market sectors. However, it was when the article moved on to the 'malleability' dimension that I became less sure of its value, particularly when the 'shaping' approach to strategic planning is introduced. This is for sectors where there is high unpredictability but where players have the ability to change the dynamics of the sector. My reservation about this approach is that surely it depends on market share of the company concerned, unless there is innovation that changes the rules of the game. The fact that Facebook is quoted as the example increased my concern that this scenario is not likely to happen too often and only to the mega players; Apple is the only other company that obviously falls into this category.

The final approach to strategic planning is 'visionary' for companies that are lucky enough to operate in sectors which are predictable and where it is possible to change the dynamics of the sector. Here the company can devise its own future and implement a strategy to exploit it. UPS is quoted as a company that adopted this approach, because they were able to predict the rise of package deliveries following the growth of e-commerce and develop a strategy to take 60% of the market. I can see how this applies in their case but again the issue of market share seems to be fundamental; the reason why UPS could do this might have been the strong base they were working from; surely it is market position as much as industrial sector that determines whether such a strategy is possible.

Overall, this article provides an interesting new perspective on strategic planning and the fact that it comes from BCG means that it has to be taken seriously. But its most powerful message is one that is perhaps too obvious to be a major breakthrough; that traditional strategic planning does not work in companies which are unpredictable and fast moving. And, after reading the article, I wondered if we could develop a better 'MTP' matrix, based on whether the industrial sector is fast moving and the size of market share of the particular player. But an MTP matrix might not have as much impact as one from BCG!

Read the article;
http://hbr.org/2012/09/your-strategy-needs-a-strategy/ar/1

‘Hard versus soft skills training’ by Natalie Henville, Training Journal, September 2012

The premise of the article seems, on the face of it, to be sound; we should examine the key success factors of both hard and soft skills training and see what each can learn from the other. But as you follow the arguments, it is difficult not to question the premise and the assumptions. There are many who would quite rightly question the validity of the author’s assumption that behavioural skills are soft and topics such finance and project management are hard. And at MTP we could point to many programmes that combine both these elements in one learning activity, for instance a Business Partnering programme for financial people.

In fairness to the author, she does come to some of the same conclusions by the end of the article but there still seem to be misconceptions about how so called 'hard' training is designed and delivered. It is obvious that she is coming from the perspective of a trainer in behavioural skills who has negative perceptions about any training other than her own, not an unusual feature of behavioural trainers in my experience! This impression is strengthened by the fact that the quoted examples of hard subjects are assumed to be covered generically, without the necessary tailoring to the target audience.

There is also a mistaken assumption that measuring the effectiveness of hard skills training is relatively easy because there can be tangible outputs, for instance a risk register or financial analysis can be produced. But this misunderstands the nature of measuring effectiveness; those involved in well-designed finance and risk management programmes would not regard such outputs as a sign of success; we would look for changes in behaviour and performance as a result of transferring that learning back to the workplace, in just the same way as a behavioural colleague. And this would be no more or no less difficult than for soft skills programmes.

Nevertheless, the author makes one or two valid points. One genuine difference is that retention of hard skill learning may be less easy because it depends on opportunities to implement the acquired skill soon after the training; you lose it unless you use it. We can recall in the early days of MTP how past attendees in Finance for Managers courses would tell us that they really enjoyed that course two years ago but it's all been forgotten now, because it was not applied.

The author argues that, on the other hand, most soft skills learning can be applied immediately on return to work because influencing, leadership and building relationships are part of the everyday life of all managers. There is a grain of truth in this argument but only if one assumes that training in hard skills is being carried out for target groups who will not have chance to apply it. This may have happened twenty years ago but, in these days of tight budgets and desire to see a tangible return, we do not see any companies wasting their resources in this way.

The author's bias is shown once again when she suggests that those who train in harder disciplines can learn from the interactive methods that are used by behavioural skills trainers which, to quote, are 'targeted, experiential, build on real work issues and …share knowledge and experience'. This is contrasted with the 'Death by Powerpoint' and 'Rigid Syllabuses' of the hard school. It is certainly true that, over the years, many of us in finance training have learnt from our involvement with the softer disciplines and stolen some of the ideas, but the stereotype advanced here is a least twenty years out of date. There may be some who use one way presentations of harder topics but they are unlikely to survive long in the current management training market. And it is sometimes because internal company presenters stick to these old fashioned methods that specialist trainers like MTP find a niche in the market.

It was hard not to let my irritation with the author’s prejudices cloud my judgement - and I probably failed in this respect - but I was pleased eventually to find something with which I agreed; that the hard and soft dichotomy is a false one because effective training of today’s managers should provide both elements, integrating them in a business context. The author mentions supplier relationships as an example of a topic that requires such integration, we would quote Business Partnering by Finance or IT people with their internal customers. By case studies or role plays, the integration can be displayed and the links back to the job demonstrated.

Towards the end of the article, there are several mentions of ROI - Return on Investment - and this is typical of the looseness with which this term is bandied about. It may be that, as a financial person, I am too precious about its correct meaning - the extra profit generated as a percentage of the investment made. I am not suggesting that such calculations can and should always be done but the way in which ROI is used here is to describe any benefit, even if not quantifiable. For instance it is suggested that 'increased visibility to the rest of the organisation' is 'a real test of ROI'. Not in my book it isn't.

But despite all the above criticism and scepticism, I still found the article stimulating and worth reading. To be as irritated as I was, you have to be engaged and challenged. I have no doubt that those involved on the 'softer' side of training will be equally irritated with my views but, as long as we are learning, this doesn't matter. I would like to think that the development of MTP into a more cross-functional and business focussed organisation has, to some extent, resulted from this kind of debate.

Read the article
http://www.trainingjournal.com/feature/2012-09-01-hard-vs-soft-skills-training/

Evaluating Learning by Kevin Lovell, Training Journal, August 2012

I always look out for articles on evaluation of learning for two connected reasons. First because our clients like to know if there is anything new on this topic; second because we are all looking for that Holy Grail that takes us beyond the work of Kirkpatrick and provides better answers to the much asked question; is this training providing a return on investment?

I would like to say that the author helps us in our search but sadly he offers little that is new. Nevertheless he does add some substance to those sceptics who say that the above question is so difficult to answer that maybe we should stop asking it. Mr Lovell achieves this by spending the first page of his article telling us that measuring training effectiveness is difficult, expressing this obvious point in a number of different ways.

He also mentions that there are a range of different evaluation methods, 'from NPS to the Kirkpatrick model'. This caused me immense irritation because, though I have written about and debated training evaluation for many years, I do not know what NPS is. My financial background took me immediately to Net Proceeds of Sales which did not seem to fit. So I Googled and found the Nigerian Police Service and the National Philatelic Society but nothing to do with training. It may show my ignorance but I am unlikely to be the only one who is flummoxed and annoyed.

The author then goes on to make the interesting claim that 'many Learning & Development professionals believe that learning delivers more value than they can demonstrate'. This is an interesting proposition which is probably true though it begs the question as to whether they are right. It may be that most of us are born optimists or feel that we need to behave that way to convince others. Unfortunately the author does not go on to explain why this happens or why it is important.

Too much of the first half of the article is made up of statements of the blindingly obvious; evaluation is desirable but difficult, budgets are likely to be cut if value is not proved, there are many other uncontrollable variables that impact the transfer to job performance. The only positive suggestion is that training objectives should be linked to business goals, hardly a new breakthrough in thinking.

The author then moves on to suggest three steps; the first is that you have to make a case for investment in training and assemble all the information required, again not exactly earth shattering stuff. The only interesting recommendation is that we should look positively for anecdotal evidence and share it around. This may seem obvious but I can relate to it; when we worked with the old ICI business, we ran a follow up to a finance programme and asked participants for ‘critical incidents’ when they had used course content to add value. We were favourably surprised with what they came up with, including several benefits that far exceeded the cost of the course. It is of course difficult to separate the genuine direct benefits from the contrived ones but such anecdotes can be highly useful with sceptical senior managers who want to cut budgets.

Another important point made by the author is that any attempts to use the methods of 'Kirkpatrick, Phillips and others' (I would be interested to know who the 'others' are) are always likely to be too late to create interest and impact decisions; senior managers and sponsors want to know about last week’s course not last year’s. But he is less convincing when suggesting what you can do to create immediate impact, apart from some rather obvious questions about the business issues and strategic goals.

The other two steps are similarly obvious; adopt a holistic approach when justifying training and get your priorities straight. This means looking outside the one course you are assessing and comparing the investment and the impact with alternatives, including those managed by other claimants to training budgets. There is an interesting classification of training priorities between Mandatory, Vital, Important and Elective which is a useful framework for making choices; I might have added a fifth category that is ‘nice to have’ or ‘could be delayed’.

The article concludes by restating the three steps in a way that is a good summary but only confirms the obvious nature of the author’s recommendations:
- Show that learning is integral to organisational goals
- Have a comprehensive understanding of training in the organisation
- Identify areas of importance to strategic goals.

For those who, like, me, have been looking for the Holy Grail for many years, this article only confirms the extent of the challenge. For those who are just starting out on their search, it represents a useful summary of the key issues and the barriers to be overcome.

To read the article in full click here
http://www.trainingjournal.com/feature/2012-08-01-evaluating-learning/

‘The End of Solution Sales’ by Brent Adamson and Matthew Dixon, Harvard Business Review, July- August 2012

Once again my article review comes from Harvard Business Review, this time from their latest edition which focuses on sales training. This article interests me for two reasons; first because we at MTP are always wanting to increase our selling effectiveness; secondly because a recent project for a major client has involved the work of the joint authors. We were asked to develop case study material to support a sales training programme built around the authors’ recently published book, the Challenger Sale.

This article refers to the content of the book but goes much further, in my view too far. The principles of the Challenger Sale are sound and valuable to any organisation selling business to business. You must know the customer’s business, be able to tailor solutions, be comfortable talking about money, take an assertive role, provide insights about the market that others cannot replicate, act as a support to the purchaser in the buying process. This is all good stuff and it was a rewarding challenge to be able to write case studies/role plays that bring out these principles.

But in this article the authors seem to go much further. They rightly identify the reason why a new approach is required; because purchasing procedures have changed, buyers have become better prepared, have more formal processes and are much more likely to go out to price based tendering. But the authors’ answer to these challenges is much more far reaching than is advocated by the Challenger Model; they suggest that, in addition to providing valuable insights for the customer, those who are successful in the modern business world also do the following:
- Focus their efforts only on organisations who are in a state of flux
- Seek out those in the organisation who are change agents, even if they are sceptical and resistant
- Coach these change agents on how to buy, changing the way they think about their needs

An example of success would be to persuade the customer that the tender they put out should be withdrawn and reassessed, because the needs are different from what was originally believed. This sort of outcome is clearly possible and would be a dream result for those who are selling business to business but it is hard to see this working on a regular basis, even if the three processes mentioned above were successfully carried out. And it does not help that the example of this goal being achieved successfully is an anonymous 'business service company'.

Though there is a lot of good advice in the article, some of the content comes over as idealistic, even arrogant. How far is it possible and advisable to confine your selling efforts to the 'state of flux' segment when there are so many other characteristics to use for segmentation; and how easy is it to define those who are in flux? And isn't it almost arrogant to think that you can coach these change-agents to better understand their own organisations?

The good advice is the emphasis on insights, both as a way to show that you are different from competitors and to help the customer rethink the way they are approaching the problem. The authors' research indicates that new market insights are the biggest driver of customer loyalty. The article is also right to put emphasis on meeting the right people and not just the group which are cleverly defined in the article as 'The Talkers'. We know from our selling activities at MTP – often in hindsight it has to be admitted – that being blocked from meeting the key people is likely to lead to failure, either to get the business or to develop a successful solution.

The authors suggest that rather than spend the easy time with the 'Talkers' who enjoy meeting you but will not close the deal, good sales people will seek out the 'Mobilisers' who will challenge and question you but are much more likely to make the right decision. They may challenge your insights but, if your knowledge and your solution are sound, they will respond to your approach.

There are sub-headings that break down the Talkers and Mobilisers into sub-categories - for instance Mobilisers are split into Go-Getters, Teachers and Sceptics – but I found this unnecessarily complex; I could much more easily identify the two main types. I did however have difficulty in relating the need to find Mobilizers with the suggestion that the sales person needs to 'coach them through a sale'. I can see the need to influence this category in subtle ways but the idea of coaching them better to understand their own buying processes would surely meet with resistance from more self-confident change agents.

This seems to me to be the main weakness of the article; it goes too far in advocating the coaching approach without making any reservations about the type of people and personalities likely to be involved. Insights, yes, understanding their business yes, but coaching all customers in this way? I don’t buy it.

Read the article:
http://hbr.org/2012/07/the-end-of-solution-sales/ar/1

Managing Risk; a new framework, by Robert S Kaplan and Anette Mikes, Harvard Business Review, June 2012

Reading the June version of Harvard Business Review reminds me of the old parallel with a London bus; you wait for months for a decent article and then lots come along in the same edition. This is the third I have reviewed so far and all three have been practical and interesting.

It is no surprise that this article comes over as a good balance between the conceptual and the practical because one of its authors is that annoying example of academic and publishing success; Harvard Professor Robert Kaplan of Activity Based Costing and Balanced Scorecard fame. Why annoying to me? Mainly because of jealously that such simple but powerful concepts can be put over in such an engaging way, with such a high level of success! Kaplan makes us mortals say – now why couldn’t we have written that article or created that label?

This article does not contain such a major breakthrough in thinking as ABC or BS but it is an interesting take on a topic that most companies struggle to master and that those who teach the subject find hard to conceptualise. The traditional matrix of risk impact and likelihood is widely used by companies but does not provide enough guidance on how risks can be better managed; it is an analytical tool rather than a management blueprint.

The start of the article is brilliantly conceived though perhaps a little unfair to Tony Hayward of BP. It quotes his pre-disaster approach to risk management as writing emails to staff about texting while driving and using lids on coffee cups, while no proper plans were being made for the risks of the Deepwater oil exploration. The authors use this as a lead into one of their main points; that the overemphasis on compliance and box ticking is at the heart or many companies’ risk management problems.

The article’s main theme is that the best framework for effective risk management is to classify risks into three categories:
- Preventable risks, mainly internal
- Strategic risks, those taken consciously and for positive reasons
- External risks, uncontrollable and to some extent unpredictable

The argument is made that these three types of risks are fundamentally different and should be managed in different ways, whereas most companies deal with them through the same processes. In particular they adopt a compliance approach to all three when this is only applicable to the first category.

The authors then move on to link risk management to that other key concept that we are covering in increasing frequency on our courses, that of BIAS. They argue that there is a natural inclination to be over-confident in forecasting, particularly where there is a leader whose style is upbeat and positive. It creates a sort of ‘groupthink’ that suppresses objections and talks about successes but not failures. This encourages risks to be discussed with the different types of bias – anchoring, confirmation and over-confidence – which result in poor evaluation and unrealistic management plans.

The article therefore makes a convincing recommendation that companies with major investments and a high level of strategic and external risks should have independent experts to challenge the internal managers responsible. This is backed up by a number of examples of top companies who are already using these processes. These examples are interesting but it would have been more convincing if more of these companies had been global operators; only VW and JP Morgan fall into that category.

I assume that the article must have been written before the most recent JP Morgan debacle and that it was too late to change the content for, with hindsight, the reference to JP Morgan as a beacon of good risk management practice is laughable. The authors suggest that the Morgan model of risk management and control was a major reason why they fared better during the financial crisis than other banks and have stopped traders ‘going native’. Another comment which seems amusing in hindsight as their CEO fights for his career, is this quotation - 'Preventing traders going native is the responsibility of the company’s senior risk officer - and ultimately the CEO – who sets the tone for a company’s risk culture.'

One particularly thought-provoking point is the authors’ view that companies make their risk management less effective by carrying out analysis on a functional basis – marketing risk, production risk etc. – when they should look at the assessment holistically, linked to the business strategy and using - surprise, surprise – the Balanced Scorecard approach as a framework. I’m less certain about the latter point but the general comment is valid; at MTP we have seen companies’ investment evaluation processes which use a functional framework as a checklist and it has exactly the impact that is described; another example of the compliance, box ticking approach which can get in the way of business judgment.

The article finishes by suggesting the tools and concepts which apply to each of the three categories of risk. The first category of Preventable Risk requires a combination of compliance and internal audit, supported by the company’s statement of values. Strategic Risk requires workshops run by independent facilitators and experts to challenge assumptions, supported by ‘risk scorecards’ linked to the strategic planning process. The uncontrollable External Risks require stress testing, scenario planning and war gaming exercises, also using independent people to facilitate the process. This was all good stuff though, as often happens with content in this area, there should be more on what is done after the analyses have been carried out, rather than seeing the tools as ends in themselves.

My overall assessment is that this is a valuable contribution to a topic that needs some fresh thinking in the light of events like BP’s Gulf Oil spill and numerous disasters in the financial sector during the recession. How many companies carried out evaluations of the impact of a Lehmann type crash and are now doing so for the various scenarios around the Euro? And if they are doing so, are they using the box ticking, compliance based approach that probably dominates the risk assessment methods in their audit and planning processes? Like all good articles in business magazines, this one should make major company CEOs think seriously about their current practices.

Read the article;
http://hbr.org/2012/06/managing-risks-a-new-framework

Pricing to create shared value by Marco Bertini and John Gourville, Harvard Business Review, June 2012

The June edition of Harvard Business Review has some excellent articles and this one combines two themes that we have been covering on our courses; Pricing and Value.  The authors - one a professor at London Business School and the other at Harvard - are critical of those companies who extract every cent they can out of customer transactions.  The airlines who charge more for extras come in for particular criticism and the authors point out that other airlines, who do not do this, have benefited in terms of customer loyalty.  I was not sure how this reconciles with Ryanair’s amazing profit growth when this company is the most prominent exponent of this sharp practice; nevertheless I read on with interest.

The authors argue that today’s consumers are not ‘passive price takers’ and point out how Bank of America’s debit card fee and Netflix’s 60% increase in DVD hire charges inflicted immense damage to their reputation and share price.  The financially driven approach of charging what the market will bear is no longer the best way, particularly where it is exploiting customer ignorance or confusion.

The alternative approach advocated by the article is to develop pricing strategies that are a win/win for supplier and customer; the customer gets an added value offer and the company gains more revenue, by the extra volume and loyalty that is generated.  The extra volume comes either from increasing the size of the market or taking share from suppliers who are not so enlightened.  The core principle is to say to customers ‘we value you as a person’ rather than ‘we value you as a wallet’.

The element that makes this article most interesting is the fact that the example of best practice that is quoted, is the London Olympics 2012.  Apparently this has been written up as a Harvard case study because it features five key principles of shared value pricing.  Those like me who have paid extortionate prices for tickets may find this hard to believe and it is difficult to see how a one-off event like the Olympics - with no need for continuing customer loyalty - can be a case study that illustrates general principles.

The five principles suggested as best practice are:

- Focus on relationships, not transactions

-  Be proactive

- Put a premium on flexibility

- Promote transparency

- Manage the market’s standards for fairness

I thought these principles to be sound, though nothing new; for instance MTP’s courses have been advocating proactivity as a key pricing skill for many years.  I also found the linking of each principle to the Olympics a bit of a stretch, particularly the last one.  Those who failed to get tickets and saw many going to corporate sponsors may not think that all was fair, though it has to be agreed that it was probably impossible to satisfy everyone who applied.  If demand exceeds supply and prices have already been determined, there is not much you can do.

The other examples of shared value pricing are more convincing.  The best is Amazon’s offer to waive delivery costs in return for an annual fee of $79; this move achieved two objectives, making the customer feel that they had a good deal and encouraging more volume.  Apparently this single innovation increased sales by 30%.  This simple offer is contrasted with the more complex deals offered by other sectors which only confuse and annoy the customer.  Banks and telecom are suggested as companies who deliberately avoid transparency and are seen by their customers as inflexible and unfair.

Overall, the article makes some good points which are food for thought.  I would have preferred less emphasis on the Olympics - whose links to the themes seem contrived - and more examples of good and bad practice.  It would also have been good to see some recognition that there are some companies like Ryanair who can and do get away with financially driven pricing because their competitive position and cost leadership are so strong.

Read the article in full here

‘Management in 10 words' by Terry Leahy, published by RH Business Books

This new book by the recently retired CEO of Tesco is worth reviewing because he is among the most
successful CEOs of his generation. As he tells us early on, Tesco was struggling to compete with more successful retailers like Marks & Spencer and Sainsbury’s when Leahy joined the Board; now it is the third biggest retailer in the world and, despite recent hiccups, by far the most successful UK retail business over the last fifteen years.

Despite his justified claim to have been part of this success, this book is not an ego trip for its author; he is clearly a modest man who is almost surprised by his extraordinary achievements. He makes it clear that he is not writing a biography and almost apologetically provides a pocket biography in the introduction. In it he tells us how he was initially rejected by Tesco and only got the job as second choice; he has certainly made up for that since.

The book is about his view of management, as expressed in the ten words that are his chapter titles. He recounts many examples of his experience at Tesco to make his points and, while these are generally interesting, they are mainly about the business issues rather than his personal challenges within the unique Tesco culture. His few descriptions of the attitudes he faced when he tried to introduce change - the insults and the contempt for his ideas as shown by a bullying top management - made me want to hear more of this type of challenge. (I was particularly interested because I ran some finance seminars for the Tesco Board at around this time and experienced some of what he describes)

The structure of 10 words and chapters works well, even if you are moving from one time period to another and this is sometimes difficult to follow. The ten words are Truth (which he later suggests as number one on his list) Loyalty, Courage, Values, Act, Balance, Simple, Lean, Compete and Trust.

There is not space to comment on each chapter so I will just mention a few highlights to give an impression of his approach and the issues that arise:

TRUTH; his view is that organisations tend not to confront the truth and to continue with strategies that are clearly not working. As I read this I started thinking of Tesco’s American venture which, though Leahy claims it can still work out, is generally regarded by analysts as a major mistake that should have been divested years ago. After reading Leahy’s justification in a later chapter, I came to the conclusion that a failure to confront the truth and cut their losses was precisely the problem.

LOYALTY; I found it interesting that Leahy holds the view that the introduction of their loyalty card was the single biggest factor in their successful period starting in the mid-nineties, both for the information it provides and for the customer loyalty that it promotes and rewards. He also talks about employee loyalty but it is customer loyalty that is his obsession and which he sees as key to successful retailing.

BALANCE; It is nice to know that the concepts that we cover on our courses are sometimes implemented successfully. Though we were running courses for Tesco in the mid-nineties, I am not sure that our coverage of the Balanced Scorecard was the trigger but Leahy mentions this concept as the driving force of the ‘Tesco Steering Wheel’ which has become the basis of their strategic planning and performance management. This has now turned full circle as we currently cover the Steering Wheel framework on our courses for Tesco’s suppliers.

COMPETE; Leahy is a great believer in the free market economy and the positive forces of competition, rejecting the criticism that Tesco’s puts small firms out of business. He is also a great believer in learning from competitors, for instance the move into convenience stores was driven by information that well run small stores were still thriving, despite the competition of the big supermarkets. He also stresses the importance of assessing potential new competitors, quoting his forecasting of Amazon’s likely growth outside the book market as a big factor in the rapid enhancement of Tesco’s on-line sales facility.

TRUST; His view is that good leaders need trust and must show it to their teams. He is fond of quoting military heroes, Field Marshals Slim and Montgomery from the Second World War are among his favourites; he clearly sees leadership as transferrable from one organisational context to another, though I was not entirely convinced.

This book is worth reading, though not as entertaining as it might have been if it had been a more conventional biography. But we should be willing to learn from someone who is among the top few business leaders in this century so far.

Buy the book

‘Captain Planet’ by Adi Ignatius, Harvard Business Review, June 2012

This is quite an unusual contribution for HBR, an interview by Adi Ignatius (HBR’s Editor in Chief) with Paul Polman, CEO of Unilever. Its Q & A format is more typical of what you might expect to see in a national newspaper, rather than the world’s most prestigious business magazine. It is in reality, an excellent public relations communication, explaining in some depth Unilever’s strategy, in particular the emphasis on environment and sustainability.

It is nevertheless a highly informative article, largely because the questions asked by Ignatius are penetrating, and Polman’s responses are open and informative. The calibre of the interviewer became obvious to me as, while reading through the article, I kept saying - 'why doesn’t he ask him about that?' – and this was soon followed by that very question.

The article is particularly revealing about the risks of Unilever’s strategy and it is to Polman’s credit that he is highly open about these, accepting that he is ploughing new furrows and learning along the way.

It is surprising to find that Polman – who still seems a new appointment - is already in year four of his tenure and that this is getting close to the average lifespan of CEOs in top companies. There is, throughout the article, a clear commitment to the long term and a belief that he will be there to see it through; otherwise he would be content with the shorter term earnings targets of most other CEOs. There are however no references to other CEOs taking the same long term route, which confirms how far his strategic approach is ground breaking and how he is prepared to stand out from the crowd. He has already shown his ability to challenge existing practice by abolishing quarterly reporting and earnings forecasts but this strong emphasis on environmental goals is a much bigger step.

The article also reveals that there has been some good progress so far; the percentage of materials sourced sustainably has already increased from 10% to 24%. The interviewer follows up by asking how this has benefited shareholders and the reply here is interesting and less convincing than some of the other responses; 'It’s clear that if companies build this thinking into their business models, it will accelerate growth'. This begs the question as to whether this applies to one company, working in isolation, or whether it needs a critical mass; if it is the latter, it would have been more convincing to hear of others following suit. When asked why more CEOs have not followed, he blames the short average tenure of 3-5 years, which encourages them to do no more than 'hunker down'.

He clearly has the confidence that he will stay for the long term and has the advantage of relatively good operational and share price performance so far. There are some interesting revelations about the culture that Polman is creating, which may have even more impact than the sustainability strategy. For instance 'We’re creating a culture where it’s OK to take risks and OK if some of them don’t work out.' This is very different from the Unilever that we have seen in the twenty plus years of MTP involvement. The other striking comment is 'you get what you measure'; the plan is to hold people accountable for delivery, to make even the environmental targets 'hard-wired' into the business.

There is a lot in the article that is impressive at the personal level; the fact that he has frozen his own salary for six years and that bonuses are fully transparent and payable for long term performance, with high level targets. It was also interesting to hear that he started business life as a maintenance man in P&G’s Cincinnati HQ while taking night-school classes, before rising in P&G, moving to Nestle and finally ending up at the top of Unilever. His advice on career success is to create opportunities, select one and 'go for it'.

As I read the article, I was struck by the similarity to managing football clubs; Polman clearly hopes to be the Alex Ferguson of international business, staying longer than all those who go for short-term fixes. He would probably prefer this label to the name given him in the author’s title and headline - 'Captain Planet'. Sounds more like Disney than HBR.

Read the article
http://hbr.org/2012/06/captain-planet/ar/1

Listen to the article

http://blogs.hbr.org/ideacast/2012/05/unilevers-ceo-on-making-respon.html

http://itunes.apple.com/podcast/hbr-ideacast/id152022135?mt=2

‘Is L & D engaged in projects?’ by Abdu Naser Shubb, Training Journal, May 2012

I have often been critical of the Training Journal because so many of its articles are written by freelance consultants who are selling their latest concept or programme. Therefore I was attracted to this article because it is written by someone from Saudi Aramco, the major oil company of Saudi. I thought that here we would see a practical rather than theoretical article, and I was also attracted by the emphasis on projects, which is an increasingly important issue for many major companies in international markets.

The article starts off well, addressing the important issue of how best to engage employees in training activities. The point is well made that this engagement often fails to take place because the request comes at short notice, is poorly specified, or is suggested at times when there are other pressures. The author then suggests that some research and analysis is needed to assess whether the engagement is at the right level.

So far, so good. But then the article takes the most bizarre turn that made me wonder whether, if it had been the April rather than May edition, it was an April Fool contribution. The transition from interesting and practical to complex and theoretical starts with a step by step 'methodology' that seemed OK until we got to step 6 which was 'use hypothesis testing to prove the problem'. I don’t know many MTP clients who are attracted by hypotheses so I began to wonder if this is my sort of article

My concern deepened when the author argued that 'statistical hypotheses testing' should be used to accept or reject the claim that training professionals are fully engaged in projects. I still had some interest but this was soon challenged when the equations started appearing. I am probably more numerate than most but I do recall that statistics was not my strong point during accountancy exams; and I was certainly challenged by the equations that now came thick and fast; my word processing package is not capable of sharing the complex formulae which included square roots and a number of signs that I had not seen since my statistics examination days. It was ironical that these were preceded with the author’s comment that these were not real numbers but were made up figures 'for simplicity'.

This extraordinary burst of equations then ended abruptly and the author returned to show the complete questionnaire with a genuinely simple five point scoring system (from strongly agree to strongly disagree) and ten interesting questions that would be useful for anyone who wants to assess the levels of engagement in training activities. So the article finished well, just as it started well, and I was left puzzled by the incomprehensible burst of complexity in the middle. It seemed to be a lost opportunity.

I would be interested to know if anyone out there disagrees with me or understands why a potentially interesting article has been drowned in such a sea of complexity.

Read the article
http://www.trainingjournal.com/feature/2012-05-01-is-ld-engaged-in-projects/

The Real Leadership lessons of Steve Jobs by Walter Isaacson, Harvard Business Review, April 2012

The author of the recent highly successful biography of Steve Jobs (soon to be made into a film according to rumours) has produced an article in HBR, picking out the 'Leadership Lessons'. This was exactly what I tried to do in two previous blogs, so I thought it would be interesting to see what I hit and what I missed.

Isaacson seems to have none of the concerns that I and others have expressed about the dangers of taking lessons from a genius when there are very few, if any, of his calibre of people around. And many organisations wouldn't want too many people like him as he was, for many people, an impossible working partner. But, with these reservations, here Isaacson's extra points that are worth sharing.

The first lesson is that, when you are behind competition in the innovation stakes, there is no point in trying just to catch up, because by the time you catch up, you will be behind again. The lesson is that you must leapfrog your opponents by anticipating the next big thing. Jobs did this when left behind by competitors who introduced music onto PCs, he leapt over them all by developing iTunes and the iPod.

The second is that Jobs somehow managed to combine the big picture and the details, proving that CEOs don’t necessarily have to make that choice. He could have a vision to develop the next big thing while also 'fretting over the shape and colour of the screws'. And he would never allow compromise on the details, even if it meant delaying a launch or making his staff work all night. He believed that allowing a product that was capable of improvement would not only lead to lower long term sales but also to a corporate culture that allowed second best.

Isaacson quotes other combinations that made Jobs different from other leaders. He could combine the Humanities with the Sciences, to stand at the intersection between the two disciplines, the secret behind his ability to harness creativity and apply it to technology. He was not a great scientist or a great designer artist but he was great at bringing them together and developing them into a business strategy.

The last point made by Isaacson is that, despite his great success, Jobs remained a rebel at heart, never accepting the conventional wisdom, always thinking different, often arguing for the sake of it but always challenging the status quo. Even as CEO, he always wanted to be the 'crazy one who would change the world', which is just what he did.

These were the lessons that I missed previously; the other lessons put forward by Isaacson tie in pretty well with my analysis - his belief in simplicity for the consumer, putting products before short term profits, pushing for perfection, only tolerating 'A' players, believing in face to face meetings to develop innovation.

However it is interesting to read on the HBR website the comments from readers who do not all share the adulation of Jobs. To quote one sceptical contributor; 'Does anyone seriously think that Jobs’ success would have been any less had he not been a 'screaming a-hole' who terrorised his employees?' An interesting question to which, according to Isaacson, Jobs replied 'It’s who I am'.

And it's a question that never could and never will be answered.

Read the article;
http://hbr.org/2012/04/the-real-leadership-lessons-of-steve-jobs/ar/1

Previous blog reviews
Part 1
http://alanwarner.blogspot.co.uk/2011/12/steve-jobs-exclusive-autobiography-by.html

Part 2
http://alanwarner.blogspot.co.uk/2012/02/steve-jobs-exclusive-autobiography-by.html

The rise of the Introvert by John Morrish, Management Today, April 2012

This is a thought provoking article, based around a new book by Susan Cain titled ‘Quiet’ and with a sub-title that summarises its theme- ‘The Power of Introverts in a world that can’t stop talking’. The article and the book are unashamedly biased in favour of those of us who are introverts, arguing that such bias is necessary to counter the normal prejudice in favour of extravert behaviour.

The message is that organisations are wasting talent. They allow their cultures to develop in such a way that they give more weight to the opinions of extraverts, promote those with extravert tendencies and favour processes that allow such people to shine. Brainstorming is quoted as a clear example of the latter; introverts prefer to process data and reflect on their own; they do not like to shout out multiple ideas in the company of others.

The author of the book argues that introvert tendencies are innate rather than learned and can be seen at an early age. One surprising outcome of research is that it is the quiet babies who become extravert – they need extra stimulation to become involved - and vice versa for introverts. She also argues that parents try too hard to push children towards extraversion, because this is how society values people from an early age and how the education system in most countries is slanted. (As I read this I thought to myself that this includes the management education system with its focus on group work and the tendency to judge participants by their contribution to discussions)

The article then moves on to show examples of introverts who have achieved success by working alone and includes in that list Steve Wozniak, Steve Jobs’ original partner at Apple. I thought that this was an unfortunate example to choose because, though Wozniak was undoubtedly successful, his more illustrious and clearly extravert partner was many times more so. There is a reference to Jobs later in the article but the career of this man – the ultimate extravert who favoured personal interaction as a management process - is surely evidence that this approach is more likely to achieve outstanding results over the long term. Maybe the introvert can make the scientific breakthrough but the extravert is needed to tell the world about it.

This selective use of evidence tends to devalue some of the arguments. When commenting on leadership, it suggests that Bill Gates and Warren Buffett are introverts - which is credible – but then claims that Richard Branson might be the same. A more convincing argument is that such people need extravert partners to succeed and quotes Jobs and Wozniak as an example, though it fails to mention that they could not work together over the long term.

There is an interesting argument that the modern tendency towards communication by email and text is tilting the balance back to the introvert; so is the increasingly common practice of working at home. It is also suggested that it is easier for introverts to ‘fake’ extravert behaviour than for extraverts to go the other way. Therefore there may be an increasing trend for introverts to be more successful and to be more recognised in the modern business environment.

The article ends with a questionnaire that allows you to test your own tendencies. This brought back memories of the Eysenck personality test - which was all the rage in the seventies before Myers Briggs came along - ranking on the dimensions of extraversion and stability. This questionnaire is less threatening and probably less scientifically validated but it is a useful – though rather superficial – guide to preferences.

I would recommend that the article as a good read and as food for thought. I am not sure I would recommend the complete book unless you have a special interest in the topic.

Read the article
http://www.managementtoday.co.uk/news/1124091/rise-introvert

Buy the book
http://www.amazon.co.uk/Quiet-power-introverts-world-talking/dp/0670916757/ref=sr_1_1?s=books&ie=UTF8&qid=1318505677&sr=1-1

Business Challenge - a virtual business simulation

Over the past couple of years MTP have been working with Unilever to virtually deliver a simulation-based business acumen training program to a global sales audience. The program was developed together with Accenture and Enspire Learning.

The specific learning outcomes agreed upon were to improve participants’ ability to:
- Use financial metrics to inform business decisions
- Make business decisions cross-functionally
- Create business proposals that met company and customer financial needs

The simulation itself is a web application that can be accessed from anywhere in the world with a standard web browser equipped with the Adobe Flash plug-in. Teams can collaborate on decision-making simply by signing into the web application simultaneously and discussing their strategy by phone.

MTP was selected for the facilitation of the programme due to our deep experience in finance and training. Our skills in generating highly engaging and interactive materials were recognised as important, but especially so with a virtual programme. The material that was created features short interactive sessions that link elements of the simulation to key issues that affect a Unilever sales manager’s day-to-day role. The sessions were run on webinar software, and were designed to be as interactive as possible by making full use of quizzes, polls, group discussions and short industry-specific case studies.

The final result is a program that mixes sixteen rounds of competition in the simulation, with interactive sessions and discussions. It is delivered for four hours each day, for four days. This design allows participants to continue to schedule appointments during the days of the course – valuable for sales managers with busy diaries and demanding clients.

Outcome

After an initial pilot run with participants joining from four different countries, the program was refined and has since been delivered to Unilever audiences across Europe, the Americas and Asia. The response from participants and their managers is overwhelmingly positive.

This program has shown that engaging, effective learning programs can be delivered virtually to a global audience. Final proof of the program’s business value is the fact that Unilever has begun to roll-out a variation on it to a wider management audience within the organization.

Click here to read our detailed case study on how the programme was designed and delivered or find out more about our other business simulations.

A new model of evaluation’ by Bob Little, Training Journal, May 2012

The author positions himself as a writer on corporate learning and the article is well written.  However, there is an element of sycophancy in the way he reports the latest work in the area of learning evaluation by John O’Connor.  There is no doubt that the ideas behind O’Connor’s ‘Results Assessment (RA) Model’ have some merit but to position it as breakthrough thinking is an insult to those who have battled with the thorny issue of evaluation for many years.  

The RA model is based on the idea that any evaluation of learning effectiveness must be based on results which are linked to business goals.  It claims to go beyond Kirkpatrick but there seems little to distinguish his thinking from Kirkpatrick level 4.  There are a number of references to research carried out by O’Connor but no convincing evidence and no examples of its application in practice.

There is great emphasis on the importance of stakeholder engagement and understanding business goals, which is valid but hardly new to those of us who are involved in targeted, tailored learning solutions.

The frameworks that are offered make sense but are quite similar to what we see in many top companies as a matter of course when they launch major programmes, for instance;

-        -    Think and act with customers in mind

-         -   Focus on performance outcomes

-         -   Measure results that add value

Or how about these four RA processes?

-          - Alignment

-          - Planning

-         -  Data Collection/Analysis

-         -  Reporting results

My reluctant conclusion is that this is not ‘beyond Kirkpatrick’ as the author claims; it is just another vain attempt to find the Holy Grail of learning evaluation.  It could be argued that this is harmless but I believe there is potential damage from the suggestion that this kind of evaluation (and here I quote Dr O’Connor) is ‘easy to do’.  It is not easy because it is rarely possible to isolate the impact of learning from the many other factors driving business results.  How can you know what those who receive learning would have done without the benefit of their increased knowledge and skills?  This fundamental challenge is not even acknowledged in the article.

This is not to suggest that we should not try to measure outcomes where possible and cost effective and the sort of questions posed by O’Connor’s framework may be helpful to those who have never tried to get beyond Kirkpatrick’s first two levels.  But to suggest that this RA model is new or makes things easy is misleading.  And the author makes things worse by a failure to question, challenge or acknowledge the model’s limitations.  

Read the article
http://www.trainingjournal.com/feature/2012-05-01-a-new-model-of-evaluation/

‘What makes a good leader?’ by Sarah Nicholas, Director, January 2012

I chose this article because it features the recent book - ‘The Language of Leaders’ by Kevin Murray’ - which I reviewed in a recent blog.  I previously had reservations about the book’s messages but have to admit that, in the context of a shorter article, it comes over much more effectively.  The conclusion therefore may be that his research is much more credible in the shorter format.  For instance, the smaller number of leaders featured in the article hides the fact that most of those in the book were not exactly household names.

The article starts by confirming Murray’s overall message, that all round communication skills are vital to the modern business leader and this fact is increasingly being recognised by those at the top.  Leaders are now more visible than in previous times - before technology transformed communication media - and today’s more confident and transferable personnel will only accept leaders who govern by consent rather than by autocratic edict.

Another consequence of the transformation of media is the need for increased speed of decision making and response to events.  This causes tension because it increases the need for decisions to be delegated to others who may not have the same communication and leadership qualities.  The answer, according to Murray and those he interviewed, is to create a common sense of values and purpose among the global leadership team so that there are consistent messages and approaches to communication.

The other key requirement - which resonates with our experience at MTP - is the need for more training in softer skills for those at the top.  In our work with the Finance functions of many top companies, the conclusion is that the higher the level, the more the need for training in behavioural skills; yet this is often low in the development priorities of senior financial people.  It is only in the context of business partnering - the increased need for effective cross-functional communication - that this need has been accepted.

This does of course beg the question of how far the softer skills can be trained, particularly if those involved do not easily accept the need.  It is perhaps easier in the areas that Murray advocates from his perspective as a Public Relations specialist - formal presentations of key messages to staff and on public platforms.  It is less easy to develop the skills in more informal situations. 

But the message of the book is clear and well made - that those who do not have good all round communication skills will not last long at the top.  And no amount of business expertise and strategic skills will change that.

Click below to see the original article;

http://www.director.co.uk/MAGAZINE/2012/01_January/what%20makes%20a%20good_leader_65_05.html