‘Strategic Leadership, the essential skills’ by Paul Schoemaker, Steve Krupp and Samantha Howland, Harvard Business Review Jan/Feb 2013

It is quite unusual to see an Harvard Business Review article which is such a thinly disguised plug for a consultancy but the explanation is in the note that tells us that one of the authors - all of whom are from ‘Decision Strategies International’ - is also connected with Wharton Business School.  The article puts forward a simple framework for pinning down that elusive competence of strategic thinking, with some potentially interesting examples of how it is applied.

Unfortunately these examples lacked authenticity because they were all anonymous with an irritating use of Christian names. Mike learnt how to gain better information, Bob invited others to disagree, Liz watched consumers etc.  As the stories were all about successful outcomes, it is hard to understand why at least some of the people featured could not have been named; it inevitably causes one to wonder if these examples are composites or even fictional.  And it was stretching credibility to imply that, in all these cases, it only came right after coaching by the authors’ organisation.

The essence of the article is a simple list of key skills for strategic thinking which, it is argued, must all be possessed by the perfect strategic thinker; it is not enough just to get some right.  The six skills are the ability to:

·        -  Anticipate

·        -  Challenge

·        - Interpret

·        - Decide

·        - Align

·        - Learn.

My first reaction was that I had seen this somewhere before and it dawned on me that there was a strong resemblance to the competency frameworks we have across in a number of world class organisations when designing learning solutions.  This does not necessarily put the authors in a bad light; one of them heads up a research unit at Wharton and this would rightly involve the study of best practice among top companies.  But it does make one question the level of originality.

So what other insights are put forward to support the six headline skills?  For the most part the answer is - relatively few.  The anonymous examples seem too good to be true and the further explanations are mainly statements of the obvious.  What kind of leader is it who doesn’t look at competitors and try to anticipate what they will do?  Or encourage debates which challenge conventional thinking?  Or look for different explanations for events?  These are the gems that come out of further explanations of the first three headings.

I could continue with further examples of the ‘motherhood and apple pie’ comments shown within each heading but I hope I have made the point.  There is nothing here that will be new to the seasoned HR person who has been involved in this area before.  There is a questionnaire at the end that allows readers to test their own skills in the six skills, a shortened version of a longer test that is available on-line.  There are two statements - which are to be rated 1 to 7 – for each skill and these are rather too general and obvious for objective assessment, unless carried out by someone else.  I would bet strongly on any CEO rating him or herself high on every question, because it is obviously what strategic thinkers are supposed to do.  For example, would any CEO confess to not having curiosity and an open mind?

My overall conclusion is that this article is not of the calibre usually associated with Harvard Business Review and will not add much value for the experienced HR person who has considered these issues before.  To achieve that goal there would need to be much more on the ways in which these skills can be developed.  However, the article may well be of benefit for the less experienced person who is likely to be involved in establishing competency frameworks and learning solutions in the future and needs a starting point.

Read the original article;

http://hbr.org/2013/01/strategic-leadership-the-esssential-skills/ar/1

Exposure by Michael Woodford, published by Penguin

This book is highly readable and should be an inspiration to whistle-blowers, though the final fate of the author - losing his job - may make those with less courage hesitate before taking on powerful interests.  Michael Woodford is the man who was appointed CEO of Japanese company Olympus, only to be sacked soon afterwards when he tried to expose past wrong doing by fellow senior managers.

As the book is written by Woodford alone, it is difficult to be sure how much of the story is written in a self-serving manner but there seems no doubt who are the good and bad guys.  The fact that the press, other media and the shareholders outside Japan were so solidly on his side is an indication of the rightness of his cause and the bravery he showed.  The book describes very well the aspects of Japanese society that made it impossible for the Japanese senior managers to accept their culpability; the way that lower levels kowtow to those at the top, the way they protect each other, the way in which Japanese banks have more power than shareholders when it comes to the crunch.  In Woodford’s view these characteristics will make it impossible for the Japanese economy to thrive in the long term.

The details of the frauds are quite complex and it is sometimes tempting to skip a few pages but the key elements are excessive prices paid for companies acquired, money transferred to consultants through the Cayman Islands, covering up of losses through dubious accounting transactions.  It was unclear whether the guilty senior people had actually benefitted personally, perhaps because Woodford was concerned about defamation suits.

The author is very open about his feelings while all this was going on, revealing how even the most impressive and courageous CEO can have anxieties and personal insecurities, while putting on a brave face in public.  This anxiety even extended to personal safety when Woodford discovered from friends in Japan that organised crime could be connected with some of the fraudulent transactions.  The fear extended to his family and he is very open about the impact on his relationship with his wife who, quite understandably, questioned whether the effort, and legal costs, were justified by his prospects of reinstatement.

In the end, after several trips to Japan and tense encounters at Board and General Meetings, Woodford had to throw in the towel.  His interventions and public statements had an enormously negative impact on the Olympus share price and some colleagues, who used to support him, begin to have second thoughts. Yet he is praised by the overseas shareholders who, despite their losses, felt that such wrongdoing must be exposed.  Woodford was showered with praise in the media and given several awards by the business press for his courage.

It is difficult not to be impressed by his side of the story but I was left wondering what the same incidents would feel like if written by someone on the other side.  It could tell of a heavy handed Brit who didn’t understand our culture and came wading in to something he didn’t understand without thinking about the consequences; he should have talked to us before going public.  And the result has been a disastrous fall in company value and reputation.

After reading the book - which at times feels like a thriller novel - I came down strongly on the side of Woodford.  I suspect that other readers will do so too.  It is certainly worth finding out.

Buy the book here

‘Davos Man and his Defects’ Schumpeter column, Economist, 26th January 2013

This article is typical of what the writer of the Schumpeter column does best; it is concise, insightful and topical.  It uses the annual talking shop of the world’s leading politicians and business people - the World Economic Forum at Davos - to make some penetrating points about global leadership and business education.  He (or she?) starts by quoting the standard cliché of this year’s forum, the need to provide ‘Global Leadership’ which must be ‘mission led and principle driven’.

There are examples of the way in which Business Schools from various countries in the world are climbing over each other to jump on the global leadership bandwagon, each claiming to be the most international. INSEAD – based in France - pretentiously calls itself the ‘Business School of the World’ and proves it by having schools in the Middle East and Asia.  The Business School at Duke University in North Carolina - hardly the place you would expect to see global perspectives – can make a similar claim because it has six overseas campuses, though the size and quality are not specified. 

It is interesting that these schools seem to believe that the number of overseas locations is a key factor in globalisation when the development of virtual learning methods makes this less relevant by the year.  One also wonders about the nationalities of the faculty, which is usually a better guide to global perspectives.  French or American professors will say much the same things wherever they are based.

The article then moves on to suggest that lack of global talent is a major factor preventing top companies from growing, particularly if that growth is sought in emerging markets.  It also makes the point that business schools have not been producing high quality executives, as measured by the incompetent and sometimes dishonest examples of performance during the financial crisis.  This has led to business leaders being seen as untrustworthy; a recent survey indicated that only 18% are trusted by the general population.

This leads Schumpeter to the conclusion that the ‘industry’ that teaches global leadership needs to be shaken up.  There is too much superficial coverage of international management that overestimates the importance of global thinking and leads to managers knowing a little about a lot of places.  The reality is that most managers need to have in-depth knowledge of the cultures they work in one at a time; otherwise they are not credible and are unaware of risks and opportunities.

Harvard Business School is tackling the problem in a different way from INSEAD and Duke.  It is adopting the more realistic and cost effective route of insisting that students spend time in different countries as part of their MBA course.  The best run companies are adopting a similar philosophy by insisting that those in senior positions have worked in several countries before appointment.  Another sign of a truly international company is that it has a number of different nationalities in the top team; this is a much more effective way of making a company truly international than sending individuals on Global Leadership courses.

The article closes with the warning that there can be too many leaders who think they are superior because they have attended such courses or have been to places like Davos.  This breeds arrogance and causes the sort of mistakes that were made during the global financial crisis.  Schumpeter closes the article by suggesting that the CEOs at Davos might be better employed listening to their customers, rather than each other.  

Read the article in full;

http://www.economist.com/news/business/21570684-global-leadership-industry-needs-re-engineering-davos-man-and-his-defects