professional manager feb mar2012

THE CHARTERED MANAGEMENT INSTITUTE MAGAZINE

£4.50 / FREE TO MEMBERS FEBRUARY/MARCH 2012

SILVER MONEYHow to save for your employees’ retirement

NEW ROMANCELearn to love your job again

HAPPY MONDAYSMatch your managementstyle to the weekday

RED ALERT

Why Obama’s most tech-savvy strategist turned social media

into business intelligence

INSIDE EDGE

Risk analysis at work

CMI_01_Cover.indd 1 04/01/2012 15:31

Policies are underwritten by Hiscox Underwriting Ltd on behalf of Hiscox Insurance Company Ltd, both of which are authorised and regulated by the Financial Services Authority. Bannerman Rendell are authorised and regulated by the Financial Services Authority. 9345 10/11

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Chartered Management Institute (CMI)Management House, Cottingham Road, Corby, Northamptonshire NN17 1TT t 01536 207307e [email protected] www.managers.org.uk

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Professional Manager © 2012. Published on behalf of CMI by Think, The Pall Mall Deposit, 124-128 Barlby Road, London W10 6BL t 020 8962 3020 e [email protected] www.thinkpublishing.co.uk

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Daisy McAndrewITN’s special correspondent talks to Edward Saatchi about his company NationalField p20

Samantha LysterThe former Times online editor looks at how each weekday has its own personality p30

Philip SmithThe business writer for The Daily Telegraph highlights the changes to pensions p42

Professional Manager February/March 2012

20

Contributors

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CMI is incorporated by Royal Charter and registered as a charity (No. 1091035). CMI does not necessarily agree with, nor guarantee the accuracy of, statements made by contributors or advertisers or accept responsibility for any statements which they may express in this publication. ISSN 0969-6695©C

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37 PM profile Chartered Manager Karen Taplin of Williams Lea38 Masterclass Learn how to fall back in love with your job40 Ask the experts Your questions on risk management answered42 Fleeting thoughts Squeezing sta� into small cars is a false economy, says Peter Rodger 44 Reviews and events Our word on books and apps – plus key dates for your diary

20 McAndrew meets… Edward Saatchi It worked for President Barack Obama. But will Edward

Saatchi’s social media revolution really transform UK management? ITN’s Daisy McAndrew logs in

24 How to take a chance The trick with risk is to understand it, says Ben Walker30 What a day for… Tailor your management tasks to the day of the week, says Samantha Lyster34 Life savers Philip Smith dives into the new pensions duty

05 Briefing Risk is inherent to business. Make sure you manage it, says Christopher Kinsella06 Feedback The Secret Sta�er on customer service and your letters08 Agenda Michael Skapinker brings you this month’s management essentials17 Personnel touch Alison Blackhurst on how to handle extra bank holidays18 Debate Does social media hamper productivity? 50 AOB

Attempting to measure everything is futile, says Simon Caulkin

38

FEATURES

NEWS & VIEWS

18

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ON THE WEBWith free checklists, e-learning modules, podcasts and an “ask the researcher” service at www.managers.org.uk/managementresources, the latest thinking is just a click away.

ON YOUR CVEnhance your professional status with a CMI management qualification, not to mention study tips when you need them the most.

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IN THE COMMUNITYKeep the conversation going online – through our forums – or at one of our top regional networking events (see page 46).

NOT YET A MEMBER? Visit www.managers.org.uk or call 01536 207307 to join today.

As a CMI member, you have access to a comprehensive range of products and services, all designed to help you on your path to management success

Otto von Bismarck had it right. “A little caution,” said the large Prussian statesman, “outflanks a large cavalry.” His words reveal a great truth: carefully calculate any risk before you take it. Caution is as much of a virtue as courage. You need a bit of both.

This issue is themed on risk and reward, and how those great tenets of business manifest themselves in the decision-making process of the modern workplace. Our examination of how to calculate odds, quantify stakes, and anticipate the moves of others (page 24) serves as a reminder that even everyday business practice is fraught with risk. Innumeracy is apparently so rife among otherwise educated adults that one has to assume that many managers are creating strategy based on erroneous assessments of the risks at hand. Sometimes people underplay risks. Yet – arguably more often – they also overestimate them.

Take internet use and social media. On page 18 we debate whether the use of social networking at work risks compromising productivity. CMI’s own Adi Gaskell argues that it does not. Indeed, he goes further, expressly making the case that the use of Facebook, Twitter and similar products actually increases productivity by giving sta� a chance to rest their brain for short periods during their working day. Workers will either produce work of su�cient quality and quantity or they won’t. Take social media away and the unproductive employees will find some other distraction.

Some managers will bridle at this analysis – and that’s reasonable too: why should businesses pay their sta� to message their friends?

Yet, when organisations close down access to social media, personal email or the nebulous “non-work

related websites”, they are taking a big risk, often without realising it. We quote research that reveals more than half of college students and young professionals would refuse to join a company that blocked access to social media, or simply find a way to circumnavigate those rules. The stakes are high in that risk equation: play Big Brother on internet use and you might send the elite of the next generation into the arms of more liberal employers.

The lesson is that risk is found in the most unlikely places. CMI is aware of this. To combat it, we train our managers in sound risk management. But risk management is not designed to eliminate every possible pitfall. CMI accepts that risk is an intrinsic part of enterprise. Indeed, a properly implemented, comprehensive risk management process can encourage an increased appetite for risk – because problems have been identified and calculated. Gains are maximised, downsides clipped.

Bismarck was no coward, nor no dove. His record of declaring war on a raft of European powers demonstrates that he was willing to take risks, provided he deemed it to be the right strategy. Many risks should be avoided, but, as Bismarck realised, you have to take some of them.

Find out more about how CMI can help you manage risk at bit.ly/cmirisk

GET MORE FROM CMI

“Risk is found in the most

unlikely places”

Christopher Kinsella, acting chief executive, CMI


CMI_05_Briefing.indd 5 04/01/2012 15:32

06 _ PROFESSIONAL MANAGER _ February/March 2012

Your chance to comment on management matters

Dragon madea friend of meWell done, Deborah Meaden, for fi nally debunking the old chestnut that the customer is king (Winter 2011/12, page 15).It’s a business mantra that is ready to be replaced. The proof is mounting that customers buy into brands, products and services and, as Meaden says, want to be treated as “respected friends”, not kings. Increasingly savvy customers are posting both positive and negative messages on Twitter, Facebook, LinkedIn and company websites. These messages provide valuable feedback, and all businesses should be thanking customers for blogging and interacting. These interactions reinforce the idea that customers would rather be respected friends. Well, certainly listened to, at the very least! Friends tell you when things are going well and when things are not going so well. They also tell all their friends too, and this is a powerful message. They expect to be treated with respect because

● Part of the teamAdi Gaskell on giving employees something to belong toprofessionalmanager.co.uk/belonging

● Power from the peopleIs the government right to consider reducing workers’ rights at the smallest fi rms?professionalmanager.co.uk/rights

● Risk and ruinMike Petrook argues that unfair dismissal rights protect innovationprofessionalmanager.co.uk/innovation

● Role modelsCoco Chanel and Oprah Winfrey are the heroines of management expert Christina Ioannidisprofessionalmanager.co.uk/coco

PRIZE LETTER

LATEST DISCUSSIONS ON PROFESSIONALMANAGER.CO.UK

of their loyalty (or disloyalty), so they get their issues and concerns o� their chests and hopefully are rewarded or at least acknowledged. A positive message is good for business and a negative message has to be handled with respect. That is just good business sense. Social media is transforming the way that customers interact and more opportunities are opening up for interaction with businesses. To some, customers are still kings, but for many the mantra has changed to refl ect advancing technology, in the way customers are interacting with businesses and each other. I am delighted by this.Vivienne Leach MBA, BSc, PGCE, MIOC, Dip Corporate Coaching

Labour of learning Baroness Prosser (Winter 2011/12, page 19) questions the bias towards academia at the expense of vocational training, recognising that the country needs people with practical skills, and blames the current government for slashing education spending by more than 13% and taking the education debate in the wrong direction.

The truth is that successive governments have developed ridiculous performance measures that favour education instead of learning – and I will explain the di� erence. Education can be measured by exam results to show academic achievement. Year-on-year, more students achieve A grades in GCSEs and A-levels, yet the UK is seen as having a failing education system where numeracy and literacy are falling. This paradox proves that our education system has detached itself from students’ learning. The idea of every student leaving compulsory education with fi ve A to C grade GCSEs has disengaged a swathe of

students for whom this was never a realistic option. This is because we have an education system based on outputs, rather than outcomes; where we are more focused on exam results than on learning.

Let teachers teach and students learn. Remove the bureaucracy of employing apprentices whom only medium and large companies can deal with. Let all businesses employ and train these young people to use their strengths and perhaps, in the future, we’ll fi nd it easier to fi nd “tradespeople” such as plumbers, electricians and carpenters. If we do not take action now, don’t be surprised to see society deteriorating.Alan Wingrove

You booze, you loseAlison Blackhurst raises some important issues in her column on the potential headaches of o¡ ce Christmas parties (Winter 2011/12, page 43). She is right

Vivienne wins two tickets to Decanter Magazine’s Italian Fine Wine Encounter at The Landmark Hotel, London on 19 May 2012. This event will showcase some of the best wines from Italy. Guests will sample more than 300 Italian wines from the fi nest vineyards. Visit www.decanter.com/wine-events to fi nd out more.

LETTERPRIZE

GET IN TOUCH Send your views to [email protected] or PM, Think, The Pall Mall Deposit, 124-128 Barlby Road, London W10 6BL. Letters may be edited for length and clarity

CMI_06-07_Feedback.indd 6 04/01/2012 15:33

I once saw a Canadian stand-up comic describe the differences between his country and mine. He said that in Canada they had a magical thing that simply does not exist in my country: customer service.

Taking care of customers is a business imperative, right? It costs nothing and can really separate you from competitors, right? Managing employees to look after customers will result in more business if punters feel they are being helped, right?

Wrong, wrong and wrong. Today’s lesson: the customer service myth – don’t believe the hype.

My company prides itself on customer service. It gives product training to staff and encourages them

to do whatever customers need. Our stated aim is to be the best customer service retailer in the country.

Someone should really tell the people who shop here.I work for a large household name retailer. People never

tire of regaling me with their experiences at the store – I’d say that I never tire of hearing them, but it would be an outright lie – and I have never heard anyone talk positively about my employer. Some people complain to me about the service they got in a store hundreds of miles away, some say they refuse to go there (I bet they still do, though). One charming lady once told me she wanted to shoot all our employees in the face with a nail gun. However, they never complain about our prices.

Despite the rhetoric, service is crap here. The pay is low, the staff don’t care, most don’t know much about their products, and those who do are moved from department to department so often the know-how they have accrued is wasted.

The training is impossible to fail, so our bored employees race through it in futile pursuit of an adrenaline kick.

With poorly managed staff like that it would make sense if we were tanking. But we’re not. My company is huge. Cheap, really huge and really, really profi table.

We are the biggest retailer in our sector by far. When the recession hit, the money we lost year-on-year would have been enough to purchase another major retail chain – the household name in its sector – outright. Like I said, huge.

If consumers really cared about customer service, big-box, stack-it-high, sell-it-low retailers such as mine wouldn’t exist. We’d all be getting greeted by name by the butcher, the baker and the candlestick-maker – and paying through the nose for it. My company pays lip service to customer service because it makes it look like it’s trying, which is good PR, but it’s never going to correct these ills until our crappy management affects the bottom line. And that won’t happen until customers stop complaining and just stop buying. Or someone shoots us all with a nail gun.


Letters

Management and customer service are expendable for companies that compete only on price, says the Secret Staffer

WHEN THE PRICE IS RIGHT, THE CUSTOMER ISN’T

The Secret Staffer

when she says: “Free fl owing booze is, I’m afraid, probably a mistake.”

As an employment lawyer, I fi nd that the majority of employment tribunal claims arising from o� ce Christmas parties are a result of excessive alcohol consumption. Drinking too much often results in the lowering of, or the abandonment of, social inhibitions and standards. Sexual harassment and violence are the most common complaints on claims arising from o� ce parties, often as a result of inebriation.

As Alison states, it is important that managers restrict the amount of alcohol available. Managers are also advised to remind employees to treat each other respectfully.

Bosses may want to think about a specifi c policy on behaviour at o� ce parties. Currently, only around a third of employers have such a policy. The policy should lay out what is considered acceptable behaviour and what is not, but should try to avoid straying into “party pooper” territory. O� ce parties are, after all, a celebration and a way for employers to show appreciation for the work of their employees. Such a policy is a clear reminder of expected behaviours and helps if any subsequent action is required. Adrian Hoggarth, head of employment, Prolegal

Find out moreThe Secret Staffer’s company’s approach to customer relations led to a race to the bottom on price – and service quality. Find tips on more enlightened approaches at bit.ly/cmicustomer

to do whatever customers need. Our stated aim is to be the best customer service retailer in the country.

tire of regaling me with their experiences at the store – I’d say that I never tire of hearing them, but it would be an outright lie – and I have never heard anyone talk positively about my employer. Some people complain to me about the service they got in a store hundreds of miles away, some say they refuse to go there (I bet they still do, though). One charming lady once told me she wanted to shoot all our employees in the face with

As Alison states, it is important that managers restrict the amount of alcohol available. Managers are

SECRET STAFFER

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8_ PROFESSIONAL MANAGER _ February/March 2012

Insights from across the world of management

1Government to consult on protected conversations

Employers will be able to have “protected conversations” with members of sta� , allowing them to discuss employee performance without the fear of being sued for constructive dismissal, if government plans come to fruition. Prime Minister David Cameron said that the government would consult on a new set of rules “so a boss and an employee feel able to sit down together and have a frank conversation – at either’s request”. Companies believe protected conversations are very important now that the government has scrapped the default retirement age of 65. But companies need to be careful that discussions do not trigger discrimination claims.

2Unfair dismissal rights to remainThe government

has decided against a more radical reform to employment law, which would have ended employees’ rights to sue for unfair dismissal. The suggestion came in a report by Adrian Beecroft, a donor to the Tories. The Institute of Directors welcomed Beecroft’s proposal, saying it would have liked to see the law chang ed to allow employers to dismiss sta�

Management minutesFinancial Times associate editor and management specialist Michael Skapinker lists his regular round-up of the top 10 news items for managers

without challenge but paying them compensation.

4Chief executives urge employment of ex-o� enders

Sir Richard Branson and Marc Bolland, chief executive of Marks & Spencer, headed a group of corporate leaders calling on companies to employ former prisoners. “It is a fact that 70% of people leaving prison re-o� end within 12 months, but this fi gure drops to 22% for ex-o� enders in full-time jobs,” they said in a letter to the Financial Times.

if they had been recruited directly. After 12 weeks in the same job, agency workers are now entitled to the same basic pay, overtime and bonuses as directly recruited sta� .

7Unions accuse on Swedish derogationNo sooner were the

new agency workers’ rules introduced than trade unions accused some employers of fi nding a way around them. The Trades Union Congress (TUC) passed a resolution expressing concern over companies using the “Swedish derogation”, under which the agency, rather than the company, acts as the employer, depriving workers of the new

For the latest management news and views, visit www.managers.org.uk

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over social mediaWhile some companies

may encourage sta� to use social media such as Facebook, LinkedIn and Twitter for work-related activities, 21% have taken disciplinary action over inappropriate postings about another individual,

according to a study by law fi rm DLA Piper.

6Agency rules changeThe

government has improved the rights of

agency workers, putting them in the same position as

3Need for creative industry skillsAccording to a report by

the Confederation of British Industry (CBI), the creative sector is expected to employ 1.3 million people by 2013, potentially making it larger than the fi nancial services sector. It is important to make sure these people have the right skills. “We must ensure that young people leave school with a strong grasp of the basics. Solid maths and science is particularly vital,” said Susan Anderson, CBI’s director for education and skills.

February/March 2012

calling on companies to employ former prisoners. “It is a fact that 70% of people leaving prison re-o� end within 12 months, but this fi gure drops to 22% for ex-o� enders in full-time jobs,” they said in a letter to

Financial

according to a study by law fi rm DLA Piper.

6Agency rules changeThe

government has improved the rights of

agency workers, putting them in the same position as

CMI_08-09_CMI_Agenda revise.indd 8 04/01/2012 15:33


News

rights. The TUC said it was considering a legal challenge to the practice.

8Young recruits lack workplace skillsThe shortage of young

people with relevant skills is a concern for 28 leading companies and professional organisations interviewed by the FreshMinds consultancy on behalf of the Young Enterprise charity. Three quarters of the companies surveyed thought the education system was not giving young people the skills needed to enter the workforce. When asked to list the problems, one company said: “Commercial awareness, written and spoken English, technical skills, interpersonal skills, you name it.”

9Female directors make some progressOne year since the

review by Lord Davies on female directors, progress is slow but discernible. In October, government fi gures revealed that women now make up 14.2% of FTSE 100 directors, compared with 12.5% in 2010. Women account for 8.9% of FTSE 250 directors – up from 7.8% in 2010. The number of all-male FTSE 100 boards has fallen from 21 in 2010 to 14 now.

10Directors’ pay soarsDirectors’

pay is not su� ering despite the economic crisis. Total earnings of FTSE 100 directors rose by an average 49% in the past fi nancial year, according to research by Incomes Data Services (IDS). The average company director now earns £2.7m per annum. Steve Tatton, editor of the IDS report, said: “Britain’s economy may be struggling to return to pre-recession levels of output, but the same cannot be said of FTSE 100 directors’ remuneration.”

0515 I power through emails that have arrived overnight, before having breakfast with my two boys and walking to work. It’s important to me to walk to and from work. It’s a way to clear the head and think more deeply about the issues of the day or week. 1000 My palate is best in the morning, so this is when we do tastings or create prototype blends. I might bring in samples of things we’ve been working on, and it’s great when I taste them and think: “No one’s ever done anything like that; it’s a winner!” These are eureka moments. 1200 There is a brainstorming meeting about the launch of a limited-release whisky. The world of Scotch whisky is steeped in tradition and we are regarded as creative and innovative, because we try to remove the rules that people feel surround the use of Scotch whisky and make it more relevant to modern times. 1300 I check my travel plans. I spend a lot of time at events around the world where I can meet whisky lovers. Many of them really enjoy what we do and that is rewarding, but it’s equally important to hear what they wish we did and see what competitors are doing.1500 Maintaining our relationship with distillers is a big part of my role. People think these are old guys with big beards, doing things the same way they did 200 years ago. In reality, I’m mostly dealing with big

companies. It’s not as romantic as you’d think. 1700 I call our California sales brokers to discuss the launch of a new product there. It’s a process that starts with me getting an idea and making the commercial case for it. The fun part is sourcing the component whiskies and putting them together, and fi nally working with our package designers to come up with something that makes people go “Wow”.2200 I sometimes have a glass of whisky to end the day, but not often on weekdays, when I have to be up early. Sadly, I’m not just drinking whisky all day; that would be some job!

THE WHISKY GURU With a brand that he started in his London kitchen, founder and head whisky maker of boutique blender Compass Box Whisky Co John Glaser is challenging the conventions of a very traditional industry

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emails that have arrived overnight, before having

walking to work. It’s important to me to walk to and from work. It’s a way to clear the head and think more deeply about the issues of the day or week.

tastings or create prototype blends. I might bring in samples of things

creative and innovative, because we try to remove the rules that people companies. It’s not as romantic

“I tell colleagues they can have fi ve minutes now, or an hour later, and they have developed the skill of presenting ideas very quickly. It has liberated me!”Tim Smit, chief executive and co-founder, the Eden Project

CMI_08-09_CMI_Agenda revise.indd 9 04/01/2012 15:33

for that plum managementpositionCandidates with the right Qualifications on their CV are in pole position for the plum managerial jobs.

Make sure that’s you, by gaining management and leadership Qualifications awarded by CMI.

Study part-time or online, whichever suits you.

For more information or to enrol for a CMI Qualification today, call 01536 207404 or email [email protected]

Jump the

www.managers.org.uk/qualifications

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News

This year is likely to see a digital revolution in training, according to research. A report into e-learning by accredited accountancy body Acca reveals that the number of organisations delivering over 50% of their training via e-learning will more than double in 2012.

And, citing external research from the Chartered Institute of Personnel and Development, Acca states that 46% of organisations will have more than a quarter of their training online in 2012, up from 26% in 2011.

The Acca report forecasts that e-learning will grow further. “When asked whether learning technologies would be the norm in 10 years’ time,

the panellists were unanimous in saying that learning technologies are very much the norm now,” says the document. “They did add, however, that these technologies would undoubtedly become more sophisticated and adept at meeting the needs of professionals and organisations over the next 10 years.”

Report panellists scorned the idea that e-learning was an easy ride compared to traditional training. “E-learning can be incredibly demanding, because learners are doing a lot of the learning and the research themselves, which is incredibly beneficial to deep understanding,” says Martin Taylor, chief executive of BPP Business Schools.

Training joins tech revolution

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Remember that technology is only a means to an end“The reality is,” says BPP Business Schools chief executive Martin Taylor, “if your technology and your strategy don’t fit together, no learning programme is going to work.”

E-learning must be integrated in wider training programmes“When putting programmes together it is important the individual perceives there will be additional value from online content,” says Martin Taylor.

Poorly designed software can alienate employees from e-learning“You have to invest time in producing a quality product, otherwise nobody will use it,” says Jim Robertson from energy giant Shell, who was one of the report’s consultees.

Make it feel familiar“You need to think about where people are in terms of technology and social media,” says report consultee Laura Overton, managing director at learning technologies experts Towards Maturity.

THE REPORT MAKES FOUR KEY PRACTICAL RECOMMENDATIONS FOR ORGANISATIONS WISHING TO JOIN THE E-LEARNING REVOLUTION:

Visit our new Professional Manager website for web-exclusive articles and analysis of the current affairs that matter to UK managers.

As well as an archive of the best articles from Professional Manager, professionalmanager.co.uk features fresh content from leading writers examining management news and asking you for your views.

Visit professionalmanager.co.uk today – and sign up for our Twitter feed, @ProfManager – to keep abreast of the latest content on the site.

SEARCH – your favourite articles from the magazine at your fingertips, helping you become a better leader and manager.

DISCOVER – web-only content, including exclusive new sections such as My Hero and Whose Side Are You On?

DEBATE – get interactive! Let us – and the world – know your views on leading managers’ styles, key management issues, and current trends.

Bring the big questions to your desktop with professional manager.co.uk

1 The ranking of London in Cushman & Wakefield’s European Cities Monitor 2011, a league of the top business cities

CMI_11-13_Agenda.indd 11 04/01/2012 15:33

Consultancy Skills Course...acquire and develop the skills you need to be a top

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This course provides a practical toolkit for both internal and external consultants. Helping you to operate effectively as a consultant.

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Enhance your professionalism and credibility. After participating in our Consultancy Skills Course you can gain globally recognised qualifications.

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“I was looking for a qualification to recognise and accredit my skills and experience, as well as giving me extra credibility whilst working with senior managers within the business. The Diploma was the perfect qualification, accredited by the Institute of Consulting it has the right mix of self study and supported learning via the workshops. The tutors are very knowledgeable and the help and support you get to put together your Portfolio and prepare for the exams is phenomenal.”

Sue Muzolf,Organisational Development Facilitator

012_CMI_FebMar12.indd 12 04/01/2012 09:55


News

Black-sky thinking 1. n, v. Considering or planning for the worst-case scenario. Essentially the evil twin of ‘blue-sky thinking’, this phrase has

been used in the financial press to describe the bleakest of economic forecasts. However, some see it di�erently, using it to describe ideas

so powerful that they can’t be contained by the Earth’s atmosphere. Let’s start the fight against doom and gloom here. Blast o�!

MANAGEMENT SPEAK

CMI continues to spread learning and accreditation well beyond the shores of Great Britain.

Just before Christmas, a raft of students from Gibraltar qualified with diplomas in management at Level 3 and Level 5.

Students are pictured below with Gibraltar’s minister for education and training, Clive Beltran; and Maria Antonia Brooks, principal of Gibraltar College, which delivered the programme.

Study success in the sunshine

Olympics boss headlines CMI dinnerThe Olympic Delivery Authority chairman John Armitt is to speak at the annual CMI President’s Dinner, where he will be this year’s guest of honour.

The event is hosted by CMI President Terry Morgan , and is exclusively for Companions. It will take place on 22 February at 30 Pavilion Road in London.

“It’s fantastic news to have a leading figure from the Olympics’ management team speaking in 2012,” said CMI companions manager Daniel Symonds.

Tickets cost £99 and can be booked through Miranda Goldstone on 01536 207306. Alternatively email miranda.goldstone@managers. org.uk

9.5 is the number of minutes it takes to form an opinion of someone face-to-face, but an online photo prompts a decision – good or bad – in just 5.5 minutes. Source: Reputation 24/7

77% of those polled by the British Council for Offices said that an unattractive workplace would make them less proud to work for an employer

74% of European employees polled trust their manager, while only 51% trust their organisation’s senior leader, according to BlessingWhite’s Employee Engagement Report 2011

100% of the top 100 UK companies now report on corporate responsibility, up from 91% in 2008. Source: KPMG International Survey of Corporate Responsibility Reporting 2011

CMI_11-13_Agenda.indd 13 04/01/2012 15:34


POLICY WATCH

The only way is ethics

Gone are the days where looking after human beings conflicted with making money. The way to be truly successful is to be ethical, says CMI policy and research director Petra Wilton

This year is going to be a struggle. Operating against a backdrop of European economic

instability, rising energy prices and domestic austerity, with public spending likely to be reined back even further, many will be seeking to protect the delivery of core services and cutting back elsewhere.

By focusing on the core, will we finally see more organisations putting people at the centre of their businesses? In our future forecast survey, which asked managers who they would most like to shadow for a day, Sir Richard Branson emerged as a clear favourite. In his latest book, Screw Business as Usual, he claims that it is “time to turn capitalism upside down and switch from a profit focus to caring for people, communities and the planet”. However, he argues that a focus on people should not be viewed as being at the expense of delivering profits – as focusing on people makes good business sense.

In any new year, the most eective leaders adopt the visage of the Roman god Janus – they

will wear two faces: one looking backwards and one looking forwards. They will have a strong vision and sense of direction for their organisation, knowing what’s happening in the marketplace and anticipating what’s ahead. They will reflect on the past year and be inspired by their people to face the year ahead.

Looking back, they will see the fate of those who did not act ethically, such as News of the World (NOTW). The impact of unethical business behaviours is that “trust in business has clearly eroded and needs to be reconstructed,” according to Andrew Witty, chief executive of GlaxoSmithKline, addressing the High Pay Commission. Our headline writers had it right when they screamed “Without trust you are chip paper” on my fellow columnist Simon Caulkin’s recent article about the demise of the NOTW (Professional Manager, September/October 2011, page 50). With this in mind, using their forward-looking face,

the best politicians and business leaders will be seeking to rebuild trust in business, which will mean being ethical in all matters and putting people above profit.

The government’s response to executive remuneration will provide an indication of how far politicians will be prepared to go down the regulatory path. Alongside any regulatory approach, there will be an important role for professional standards, ethics and codes of conduct. Indeed, CMI welcomed the recent comments of Lord Heseltine, the Prime Minister’s growth adviser, that the UK should have compulsory membership of

trade bodies to raise standards.At CMI, a key focus over

the coming year will be promoting the business value of our own professional

standards and code of conduct, as epitomised by our Chartered

Managers. For those politicians and businesses looking to rebuild trust and strong

values, it will be time to turn to the professions.

CODE OF CONDUCT

Code put into practice The CMI Code of Practice for Professional Managers is a living document. CMI members sign up to it, but that is not the end of the story. The onus is on members to exemplify the Code in their everyday management activities. A complaint raised, whether by another member, a member of the public, a professional body or by the CMI itself, alleging a breach of the Code is thoroughly investigated.

In the past 12 months, three complaints have been submitted and investigated. The complaints are administered by the Professional Standards Committee, assisted by a group of CMI and IC members who form an investigation panel. In two of those cases, the investigators found no case to answer. The third case went to a full hearing, with the

outcome being a recommendation to the Board to expel the member concerned.

Board and Committee opportunities 2012Two elected places are available on the Board for members with experience of operating at strategic level and with a profile including previous executive and/or non-executive director experience. Closing date for applications is 31 May 2012. Specialist roles on the various committees include the Professional Standards Committee and the Finance and Audit Committee.

For more information on the Code and elections to the Board, contact Valerie Hamill, Institute Secretary, on 020 7421 2707 or [email protected]

LIVING STANDARDSCMI encourages everyday ethics

Agenda

Putting on a business face: will you be looking both ways this year?

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016_CMI_FebMar12.indd 16 04/01/2012 09:57

“Tread carefully if you ask staff to come in. With many off work, you may

appear mean and unpatriotic”


Will your staff be joining in with

Diamond Jubilee street parties?

THE PERSONNEL TOUCH

Royal appointment for Jubilee

The Queen’s Diamond Jubilee means employers face another extra UK bank holiday just 14 months after the last one. Kings of industry are best advised to embrace it – and plan for it, says Alison Blackhurst

Many businesses will be grateful that diamonds aren’t forever. This year will see another

extra bank holiday – on Tuesday 5 June, for the Queen’s Diamond Jubilee – just over a year since the royal wedding triggered a bonus break. Yet there are no plans to make the extra day a permanent fixture.

Still, there remains this year’s jamboree to deal with. Extra bank holidays always prove a conundrum for employers, particularly when they drive so far into a working week that many sta are moved to take any bridging days o to secure a long break. That is the case here: if sta take the three days o following 5 June, they will be aorded a nine-day holiday for the price of just three days from their holiday entitlement. So expect a rush for holiday requests for 6-8 June.

Human resources

FIND OUT MORE… As a CMI member, you can access templates for policies, forms, letters and contracts from Business HR, plus a great monthly newsletter

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There are a few ways of managing this – either observe your normal holiday practices and sign o the days on a first-come-first-served or business-process basis, or agree to accept more than the norm and plan to operate your organisation with a last-week-of-December-style skeleton sta or shutdown. Whatever you decide, make sure you plan as soon as possible. Set clear rules well in advance as to how many sta will be allowed to take 6-8 June o, on what basis you will authorise requests, and reinforce that your absence policy applies for that period, stressing that you will be asking for medical evidence from those who do miss work when they are scheduled to be in.

the Jubilee. This could cause resentment and productivity may slump. On balance, and in most cases, the best advice is to observe the holiday.

The only solace I can provide to English and Welsh employers is that they still have fewer holidays than most of their peers. Scotland and Northern Ireland already have more public and bank holidays than England and Wales, yet the additional bank holiday for the Jubilee will still apply in the UK’s two northernmost nations. In 2012, Belgium has 10 bank holidays; Germany, Italy, Greece and Austria, 12. And France? A whopping 13. So, as well as celebrating that diamonds aren’t forever, many bosses might also remark: “vive la diérence.”

Of course, some employers may be reluctant (or unable to aord) to grant the extra holiday. Whether they are duty-bound to allow it will depend on the wording of the employees’ contracts. Broadly, there are three types of holiday clause.

The first states that an employee is entitled to “x days plus bank/public holidays”. In this case, you would have to grant (and pay) the extra holiday. The second says the employee is entitled to “x days plus the eight standard bank/public holidays”. In this case you may require the employee to work on 5 June and there is no contractual entitlement to an extra day’s paid holiday – but remember to check your contracts to see whether any supplementary

payments apply for working on bank/public holidays. The same applies for those employees who have “x days including bank/public holidays” – typically this applies to those in the retail, customer service or healthcare sectors, which operate while o¡ces are closed. However, this is becoming increasingly common as the method of calculating holiday entitlements is often easier and fairer to administer if you have part-time, job-share or fixed-term contracts and so forth.

That said, tread carefully if you do ask sta to come in. With most of the country o work and enjoying themselves, you may appear mean – and unpatriotic – should you fail to observe

CMI_17_pers_touch.indd 17 04/01/2012 15:34


The use of social media in the workplace can hinder productivity. Time spent on personal internet use is simply time not spent working. Using company-provided equipment for personal internet use on company time is not dissimilar to running up a massive phone bill for the company – only the technologies are di�erent.

Non-work-related social media activity costs the average SME with 52 employees $65,000 per year. No one wants a Big Brother culture, yet the reason people don’t make lots of long-distance calls on business telephones isn’t moral, it’s because they know there will be records leading back to them and they will face repercussions.

Businesses that have employed the flexible measures SpamTitan provides have noted that simply introducing ways to assess patterns of social media use, and letting their sta� know that their employers are able to do so, can lead to a significant change in web habits and employees’ approach to accessing social media at work. On the basis of this analysis managers can lay out a clear, comprehensive and flexible policy for use in the workplace, rather

than shoehorning vague guidelines into an existing policy that may be ignored by many anyway.

We need to re-instil the idea of “reasonable use” in company policy in accordance with the technological changes of the past decade. Of course, we must trust our workforce, but the reality is that despite those conscientious employees who spend their time working and producing e�ective output for the company, a minority will, consciously or unconsciously, abuse their freedom online. I say unconsciously, because for an increasing number of people the way they use social media is so ingrained in their daily habits they simply don’t see it as problem.

Another issue businesses are starting to wake up to is security. Education plays a part in this, but social media contains many holes that cyber-criminals will happily exploit. As a relatively new technology that is changing and gathering pace all the time, there is plenty of user unfamiliarity to exploit. This could have disastrous consequences if viruses, trojans or other malware infect a company’s network, particularly for smaller businesses that will have less money to address these issues. Keeping your company equipment secure is vital, and implementing restrictions is a small price to pay to prevent such occurrences.

Would we want to completely outlaw social media in the workplace? Of course not. However, it is vital to give businesses the tools to analyse and control the problem as they see fit.

RONAN KAVANAGH CEO SpamTitan Technologies

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Facebook, Twitter, Google+, LinkedIn – most of us now use at least one of them. But is social media a threat to business productivity? Kayleigh Ziolo hears two opposing views

Does social media hamper productivity?

56% of the college students and young professionals polled for Cisco’s Connected World Technology Report 2011 would not join a company that banned access to social media or would find a way to get around the rules

CMI_18-19_Debate.indd 18 04/01/2012 15:34


Social media in the workplace is about collaboration and increased productivity. That’s right, I said increased. Research conducted by AT&T a couple of years ago supports this, as does a recent study by the University of Melbourne on productivity improvements. No one is 100% productive for a continuous 40-hour

weekly period. Productivity for us all comes in fits and starts. Allowing people to take brain breaks when they need to is actually beneficial.

Good employees will get the job done in the time they need to. When we employ sta�, we are e�ectively telling them we think they are up to the job in hand. We enter a contract of mutual trust – it is simply bad management to then say “we’re going to make restrictions on how you use your computer and keep tabs on you”. That person is there to do a job, and it is damaging to behave as if you assume they will not do so unless watched. Banning does not work. Oppression leads to rebellion, and people will simply find a way to defy a rule they believe patronises them and makes them feel less free as hard-working individuals.

Security is a valid concern, but to ban social media based on a fear of viruses or malicious software is really just throwing the baby out with the bathwater. Again, educating sta� is key, but so is trusting that they will have some knowledge in this area as users of social media. Generally they’re unlikely to trust or click on anything at work that they would avoid at home.

Rather than see social media as a problem to be tackled, it should be embraced as part of the working culture. It is not the root of all evil – it is simply the tool through which deeper underlying issues are revealed. If people in your organisation are inadvertently sharing confidential or damaging information related to the company, you have a problem with education, not with social media. Equally, if people are sharing confidential or damaging information deliberately, to embarrass, then you have a problem of employee engagement. It’s a very public view – the press often cite social media as the cause of problems and unrest, rather than just another instrument people use.

ADI GASKELL MCMI, Content and Communities Manager, CMI

NO

For more on social networking, turn to our interview with Edward Saatchi on page 20

Debate

Does social media hamper productivity?

CMI_18-19_Debate.indd 19 04/01/2012 15:35


It’s not a face you’d forget – and it’s a story just as remarkable. Ridiculously young – but looking considerably older with his tangerine beard and frizzy, floppy hair – Edward Saatchi is being touted as Britain’s answer to Mark Zuckerberg. His communications company, NationalField (NF), promises to take social media into the world of business and change it as much as it has changed our private lives. And, with a $1 million turnover in its first year, Saatchi’s ambition looks right on course. “It’s becoming the Facebook for enterprise,” says Saatchi. “It’s got so much momentum behind it – there’s no going back.”

As the son of the writer Josephine Hart and advertising mogul Maurice Saatchi you’d have expected Edward to stay in London and use his considerable contacts, but the 26-year-old has got to where he is today via an altogether more convoluted route.

A self-confessed “Obama nut”, he went to the US in 2008 to help Barack Obama’s presidential campaign. It sounds glamorous, but exhausting. “I was doing a couple of master’s degrees in Paris and would have

to fly back from the Obama campaign to defend my philosophy thesis and then head back to the States,” he says.

And it was while working on that campaign that NF was born – under its original name, The National Field Programme for the Obama Campaign. The need, says Saatchi, was clear: as the campaign grew, and with it the number of o�ces and sta�, the Obama campaign team didn’t have a system for all the volunteers and workers to stay connected.

“We were determined we’d be the first ‘real-time campaign’,” says Saatchi, “meaning we’d know every minute everything that was going on – so we created NF.”

The “we” is his fellow NF founders Aharon Wasserman and Justin Lewis – both managers on the campaign – managing 150 people each, many older than them. They needed to know, immediately, the state of their campaign. Getting feedback from door-to-door campaigning and doing it via emails was ine�cient: by the time the information reached HQ it was out of date.

The charismatic son of Maurice Saatchi thinks most businesses’ internal communications are dinosaur-ish and

broken. Perhaps that’s why he’s pushing a Facebook for firms with evangelical zeal, says Daisy McAndrew

Edward Saatchi

MCANDREW MEETS…

CMI_20-23_DaisyInterviews.indd 20 04/01/2012 15:37


Interview



At first, only the top trio used the new system – a sort of internal social network. But soon the whole campaign was using the system to communicate.

And it formed part of what was credited as the first “new media” presidential campaign – a million people signed up for campaign text messages and 25% of Obama voters were linked to the campaign via social media.

However, it was only when his former Obama colleagues moved on to jobs in other organisations – and complained bitterly about going back to using

emails and intranets to communicate with colleagues – that the three young men realised they had a business on their hands. “We patented what we had and got on with it,” says Saatchi.

When I venture “What’s wrong with companies using the intranet?”, Saatchi looks aghast: “The intranet is dead, it was created in the 1990s, it’s not fit for purpose.” Oh, okay then.

“Intranets are not remotely interactive and they don’t engender a feeling of community,” insists Saatchi. “It’s just top-down information – there’s no sense that the people on the ground can give feedback. It’s not a management tool at all, it’s just a place to go and get basic information. I’ve never heard anybody say that their intranet is up to date.”

So, if it’s goodbye intranet, what can you expect from NF?

Well, it looks and feels just like Facebook, which is no coincidence – one of the founders of Facebook is on the board. The theory is that everybody is already

“There’s something about the social element that means

people stay really friendly and it doesn’t get mean-spirited”

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familiar with how Facebook works and will therefore quickly get the hang of navigating NF.

And, even for those few who don’t know how to use Facebook, “there’s a positive attitude and they want to learn,” he says. But, he adds, he hasn’t come across anyone who doesn’t know how to use it at all yet.

Although there are already US firms who “do social” for companies, none, Saatchi believes, o�er what his does.

So, like Facebook, there are streams of people telling each other stu�. However, unlike the normal



Interview

version your stream is based on the hierarchical set-up of the organisation – so if you’re the chief executive you get a certain stream, if you’re the new marketing intern you get a di�erent one.

“It understands the hierarchy of the organisation, which is important,” says Saatchi. “A lot of social tools have said: ‘let’s make the system flat, kill middle managers’ – but, from our experience, if you want to be a real bottom-up organisation you need to have layers between the di�erent people so you can funnel information up and down the chain.”

So what type of information are you funnelling? “Many people tell us they gave a presentation to

their colleagues and six months later realise no one had a clue what they were talking about, or everyone interpreted what was said in di�erent ways.” The theory being that in a proper two-way conversation everyone will “get” everything.

Adds Saatchi: “It’s only when you can see the data in a ‘beautiful, elegant way’ that managers can see what’s going on in their organisation – and NF will present that data in that way. It paints a story with numbers.”

And the leaderboard is one example of that. Saatchi is very excited about his leaderboard.

He dismisses normal practice as “sad managers typing up leaderboard emails once a month – saying ‘you did really well this quarter, well done’. That’s useless,” he claims.

His version is real-time – you can see who’s up and who’s down all the time. “People go nuts for it,” he says – adding that it isn’t negative. “There’s

something about the social element that means people stay really friendly and it doesn’t get mean-spirited.” On the Obama campaign, the “numbers literally exploded” after they introduced the leaderboard – and Saatchi claims a 40% productivity increase in his clients. “It just unlocks something in people – they want to push themselves to the limit and it lifts the whole company.”

As a new NF client you can expect your website to be tailored to the culture of the company. “Some chief executives like transparency,” he says, “as it leads to competition. Others want people to be blinkered so they focus on the job in hand, completely private to people outside.” But one thing he’s adamant about: everyone should be providing more information about the company and what it is doing, how it’s doing it and how well it’s doing it.

“The idea that you should organise companies based on the quarterly report is dinosaur-ish,” rails Saatchi. “It should be real-time, it should be daily.”

He is also evangelical about feedback. “Most companies let their employees down by not giving nearly enough,” he believes.

But his favourite feature is Pluses and Deltas – not a new idea and one that’ll be familiar to many, but, as a rule, not on the company intranet or similar.

“Obama uses it with his daughters and calls it Roses and Thorns, and he also uses it with his Cabinet and calls it Pluses and Deltas,” Saatchi says. The idea is simple: you say something positive and something you want to change. In Obama’s team, they’d sit round and ask the questions. When they put them on the site they’d be private for everyone below them and visible for everyone above.

“It unlocks something that isn’t there when you do it face-to-face,” and he says it becomes addictive for chief executives, who can see everything said, but see it in order of what their closest subordinates say first.

And this is a young man with an unfailing confidence in his product and where it is headed. “The power of social media has brought down dictators and will change the way companies work,” he says. He sees it as the democratisation of the workplace and it’s not to be underestimated. Rather like social media more widely.

“People definitely underestimate the importance of social media and they misunderstand it,” he adds. “It’s not the information that social media brings with it, but the speed with which it’s delivered that’s the crucial factor.”

“Speed kills,” says Saatchi. “Businesses can take advantage of that because they can see trends and get a feel for what’s going on. Or they can be wiped away.” You have been warned.

Milestones Edward Saatchi’s key dates 2006 Graduated from Oxford University with a degree in literature2008 Graduated from Paris-Sorbonne University with a degree in philosophy and economics2008 Moved to the US to help Barack Obama’s presidential campaign2009 NationalField was launched in the US2011 NationalField expands to the UK



Thought leadership

CMI_24-28_Chance.indd 24 04/01/2012 15:38


Thought leadership

How to take a

chance

Did you hear the amazing story of the woman who went on holiday and met an acquaintance by chance on the beach? Odds on, you did. Statistically, it’s not in any way amazing. “A tendency to drastically underestimate the frequency of coincidences is a prime characteristic of innumerates,” says the sharp-tongued mathematician John Allen Paulos in his book Innumeracy, which contends that many otherwise educated people are comfortable with – even take pride in – their innumeracy. “If you don’t specify a predicted event precisely, there are an indeterminate number of ways for that event to take place.” Paulos takes us through the paradox of ostensibly unlikely events actually being very likely. If there are more than 23 people in a room, he writes, odds are that two of them will have the same birthday. If two American strangers meet on a plane, he adds, there’s a 99% chance they will be linked by a sequence of two intermediates. It’s certain, he says, that at least two people living in Philadelphia have exactly the same number of hairs on their head. Interesting? Perhaps. But what’s all this got

to do with careers, management and leadership? A lot, because building a career, managing and leading rely, in part, on your willingness to take calculated risks. And to take calculated risks, you first need to be able to calculate them. Most people can’t.

Calculating chance There are two key variables to consider when calculating risk: the odds and the stakes. To bring this to life, let’s consider the fictional example of Dave, a manager in the creative sector. Dave has a vacancy for a designer. Two candidates stand out – both have equal technical skills. Jim has more experience and an urbane manner; Donna is brusquer, but with brighter ideas. What should Dave do? First, he must consider the risks associated with each hire, and the stakes. The main risk associated with hiring someone is that they leave, either voluntarily or by compulsion, because they are not able to do the job, because the job doesn’t suit them, or because they don’t suit the people they work with. Research shows that it is rare for people to be let go during their probationary

Grasping probabilities and game theory is as key to success at the office as it

is in the casino, writes Ben Walker

CMI_24-28_Chance.indd 25 04/01/2012 15:38

26_ professional manager _ February/March 2012

Thought leadershipThought leadership

period due to poor performance: in almost all cases, a lack of skills is weaned out at the interview stage. It’s social clashes that are usually responsible for an early termination of employment. Although Donna has better skills, Jim is almost certainly good enough to do the job. Therefore we have to see Donna as a considerably bigger risk. Given her sometimes brusque tone, we might rate her as a 30% chance of upsetting her co-workers to such an extent that her continued employment is untenable, regardless of the quality of her work. The Chartered Institute of Personnel and Development says the average cost of replacing an employee is £7,750, once associated costs of staff turnover are accounted for.

r = s x p Mathematicians calculate risk (r) by multiplying the stake (s) by the probability of the event occurring (p). In Donna’s case this is 30%, which is expressed as 0.3.

So, in Donna’s case, the monetised risk of hiring her is £7,750 x 0.3 = £2,325. In other words, the average cost to a business of hiring Donna (or a similar personality) would be £2,325 – because three times out of ten their employment would be terminated and would cost the organisation £7,750.

Let’s go back to Jim. We know that he’s urbane, polite and charming, and that the chances of his not being able to do the job are remote. Therefore, we might reasonably calculate that the probability his employment doesn’t work out is as low as 4%. Therefore the monetised risk of his hire is a fraction of Donna’s, at £310 – hardly a king’s ransom. Easy equation then? Hire Jim.

But maybe it’s not that easy. None of the risk assessment above accounts for the possible benefits to the firm of choosing Donna. Remember

that she is a better designer, so has more potential upside than Jim. If you never hire a Donna, it’s likely that your designs might be a bit safe, and lack innovation and edge. Sometimes managers do have to take risks. This is where the art of taking a chance – choosing what risks to take and when – comes into play.

Shari Peace, president of professional speaking firm Peace Talks, suggests six tests to see whether you should take a chance on a Donna-style risky investment (see box, “When to keep the dice in your pocket”, page 27). If the risk you were considering taking falls outside Peace’s blacklist, you should almost certainly take it – even if you feel uncomfortable about it. “Every day, ask yourself what you’ve done that is daring or that is a bit of a stretch,” the psychologist and business coach Gary Leboff tells Natural Health Web. “If, at the end of each day, you can find just one thing, you are moving, but if not, you are becoming increasingly limited and your horizons are getting smaller.”

Indeed, the risk of the status quo is often overlooked. “Inertia is often mistaken for sanctuary,” says Professor Morgan W McCall Jr, author of Whatever It Takes, which explores managerial decision-making. “Risk can be associated with staying the same,” he tells Professional Manager. “The world is going to change around you. Given that, I don’t know how you avoid risk. The trick is to make that risk a calculated one – not a wild one.”

Return on luck So how do you do that? “That’s the tricky question,” McCall admits. “There are always things you can do to lay the groundwork to be more successful.” The reverse is also true – you can exacerbate the negative return on a piece of bad luck. In another of his books, Off the Track, McCall examined the reasons managers fail. “When we looked at the mistakes that derailed people, we always found that they had contributed in some way to their own downfall,” he says, “even if the initial problem was just bad luck.”

Odd odds

Bob Morton (see page 28) thought

the chances of his four children being

evenly split between boys and girls was

1 in 2 (50%). Right? Wrong.

In fact, it’s only 6 in 16 (37.5%).

Graphic: Possible combinations of

four children

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“the best way to find a strong current of good luck is to swim with the right people”

CMI_24-28_Chance.indd 26 12/01/2012 14:53


This influence human will has on the outcome of random events is known as return on luck. Sport fans will recall the quote by the South African golfer Gary Player, who, in response to a spectator’s gibe about his holing a “lucky” shot out of a bunker, responded: “The more I practice, the luckier I get.” Luck is, by its very nature, a haphazard happenstance that occurs regardless of one’s skill level – but Player articulated succinctly that the best golfers make the most of any luck they get. Hit the ball consistently well and, sometimes, you’ll make a birdie from the bunker. Prefer poker to golf ? The analogue is winning a large pot when you have a slightly better flush than your opponent, and folding cheaply when your pair of queens are edged out by your adversary’s kings.

Like great golfers and poker players, “luckier” managers are not luckier at all – they simply maximise the benefits of the good luck they do have and minimise the costs of the bad. This important concept of return on luck is explored in detail in the management tome Great by Choice.

The book analyses the fortunes of so-called “10X companies”, firms that outperform the benchmark for their industry by ten or more times. The co-author, Jim Collins, found that leaders of those companies were no more likely to get more luck, or luck at a more advantageous time, than those at an average organisation. “The real di�erence,” writes Collins, “wasn’t luck per se, but what they did with the luck they got.”

Luck is outside our control. Return on luck is within it. So what is the best way to improve our return on luck? Great by Choice is clear. It’s people. More specifically, it’s working with the right ones. The book refers to a speech made by Gordon Binder, a chairman of biotech specialists Amgen, a 10X firm. Binder told the audience of the defining moment in his company’s history. He didn’t choose a new territories rollout, a stellar promotional campaign or a corporate restructure. He chose the hire of a Taiwanese scientist. Fu-Kuen Lin worked tirelessly on cloning a gene, being mocked on the way by his colleagues, who thought the project was doomed to failure. The outcome was rather di�erent – Lin’s work led to the first billion-dollar biotech blockbuster. “The best way to find a strong current of good luck is to swim with the right people,” writes Collins. The trick is to know how to find the Lins. Understanding game theory helps.

Game theoryIf you have seen the film A Beautiful Mind, you’ve been misled. The most famous scene from the film tries to bring game theory, and specifically Nash equilibrium, to life by applying it to dating. Nash equilibrium is an important concept – it is an outcome whereby no player regrets their strategy given what their opponents have done.

In the film, a truly stunning blonde woman walks into a bar accompanied by four of her friends who, while attractive, are not as beautiful as their flaxen-haired companion. Russell Crowe’s character, the mathematician John Nash, who would later win the Nobel Prize for Economics, was seated with three male friends. He argued that, rather than all hitting on the blonde, as single men might normally do, they should all ignore the blonde and each chat up one of her friends. The film explains that, if they all went for the blonde, they’d just get in each other’s way, badger her and none of them would score. Nor would they then be able to approach one of her friends – as no woman likes to be second choice. The film is right that the “all chase the blonde” strategy is not a Nash equilibrium. “But,” argues author of management book Game Theory at Work Professor James Miller, “A Beautiful Mind should be stripped of its Oscars because the outcome that Crowe proposes in the movie is not a Nash equilibrium either. Each of the men would regret a strategy of ignoring the blonde if everyone else ignored her too. Sure, it might be reasonable not to pursue the best-looking woman in the bar if many other men are hitting on her. If, however, everyone else ignored this stunning woman, then obviously you – assuming you like women – should go for her.”

This understanding of the Nash equilibrium is as useful for businesspeople as it is for single men, because it can help you make predictions. Remember that the biggest determinant of your return on luck is who you work with. Nash, and IL

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When to keep the dice in your pocket International business speaker Shari Peace has six tests for risk taking. If any apply, don’t roll the dice.

Double or quits: There’s a good chance you could lose everything.

Runt returns: You have to bet a lot to win a little.

At God’s mercy: There are too many factors outside your control.

Losing battle: You feel the odds are against you.

No second chance: It is impossible to repair the damage if the punt doesn’t come off.

Blind bet: You have to take the risk before having a chance to prepare for and/or evaluate it.

CMI_24-28_Chance.indd 27 04/01/2012 15:38


Thought leadershipThought leadership

Further readingGame Theory at Work by James MillerGreat by Choice by Jim Collins and Morten T Hansen How to Take a Chance by Darrell Huff Innumeracy by John Allen Paulos

“Advertise the job below budget and you have played the game poorly – you have not considered other players”

game theory more widely, helps you find and retain the best people.

Let’s imagine your company faces a budget shortfall and needs to make cuts to its salary bill. The finance director o�ers you two options: cut all salaries by 10% or make 10% of your workforce redundant. In his book, Miller advises that you take the latter strategy, as hard as it may be to stomach. Why? Because, were you to choose the salary cut option, those sta�ers who could find better pay elsewhere would take another job, leaving you with the weaker employees. Given the likely outcome, you would be unsatisfied with a strategy of slashing pay – you’d lose your best sta� – so game theory tells us instead to lay o� 10% of your sta�, retaining the stronger ones. Of course, your morals and legal duties will influence your eventual policy, but it is important that you understand how game theory helps solve a dilemma in its rawest form before you account for other factors.

“There’s more to this dark mathematics,” says Miller. When you want to hire a key executive do you state a salary and, if so, what level do you set it at? Game theory suggests that, even if it feels counterintuitive, you should set the salary at the highest you can a�ord, rather than the least you feel would be enough to fill the vacancy. Let’s say you want an IT team leader. Your maximum budget is £40,000, but, to keep some in reserve, you advertise the job at circa £35,000. Three good candidates earning £36,000-plus decide not to even bother applying. “On average,” writes Miller,

“the job candidates who would be happiest with your salary would be the candidates who are of the lowest quality – since the marketplace values them the least.” Advertise the job below budget and you have played the game poorly because you have not considered how the other players – the candidates – are likely to react. You have alienated strong candidates even though you may have had the resources to poach them. Better just to advertise the job at £40,000 and see where it takes you. You may or may not be able to attract your favourite candidate, but at least you will have had the chance to meet them and win them over, so you can be satisfied with your strategy. Alienating candidates with a poor initial salary proposal is as futile as all four single men ignoring the gorgeous blonde in the bar. It is simply bad science.

Don’t be like BobBad science is everywhere. In his entertaining book How to Take a Chance, mathematician Darrell Hu� recalls the story of the Morton family, who had two daughters. Like many other 1960s families, the Mortons considered two boys and two girls to be the ideal family. Bob Morton, the father, longed for some boys to balance his brood. “After the girls were born,” he told Hu�, “we began

to doubt that we’d come out two and two in the end. But I have figured it out – our chances were fifty-fifty in the beginning, so of course they still are. Because boys are just as likely as girls.” In fact, the only part Bob was right about was the last bit – barring minute di�erences in the birth and survival rate, boys are as likely as girls. Yet he was too optimistic at the beginning – the chances of four o�spring splitting evenly is only 6 in 16, or 37.5% (see graphic, page 26). And there’s worse news for Bob: the chances of the two unborn o�spring both being boys is just 1 in 4 – 25% – even assuming that Bob is not genetically predisposed to generating girls, which his record so far suggests he might be.

That there are so many Bobs in the world is, perhaps, depressing. Yet it can be used to your advantage. If your competitors for jobs and contracts have no understanding of probabilities, return on luck and game theory, you need only a rudimentary grasp to command a massive advantage over them. As McCall remarks, some risk taking is sensible: “People who just hunker down wake up one day and see that the world has moved somewhere else.” Given the benefits an understanding of risk can bring, ignorance isn’t a chance worth taking.

CMI_24-28_Chance.indd 28 04/01/2012 15:38

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CMI_30-33.indd 30 04/01/2012 15:38

professionalmanager.co.uk _ 31

In practice

Each day of the week has its own personality. Wise managers shape their business to fit, writes Samantha Lyster

the soft downy duvet of Sunday. Yet there is no evidence that people are actually predisposed to worse moods on Mondays.

Indeed, Charles Areni of the University of Sydney and Mitchell Burger of the NTF Group say Mondays are not as depressing as people imagine. They conducted a survey where people were asked to give a day-to-day account of their moods, which remained, on average, the same throughout the working week. The participants were then asked to recall their moods from that week. Many misremembered: the majority stated that Monday was when they were feeling most low. Areni and Burger believe this is

They regulate our very existence. And while we cherish some and hold significance for others, we accept the days of the week without question. Historians are unsure about who exactly came up with the idea for a seven-day week as a way to mark the passing of time. The late Roman Empire had a hand in it, as did the Christian church – which used the Bible as source material: God, we’re told, created the world in six days and then rested on the seventh.

Had he chosen a midweek break instead of waiting until Sunday, it is possible we would all be sighing into our breakfasts on a Thursday, rather than a Monday, morning. As it is, Monday gets the groans. Monday is no di�erent to any other weekday in the simple regard that most of us have to do a full day’s work; rather it is because it immediately follows a break that it is so disliked. London School of Economics researcher Alex Bryson says that we are less welcoming of any day on which we are due to restart work after a break from our employment. That happens to be Monday for most of us. Yet the interesting thing is that, not only are Mondays unloved, they are also unproductive.

Bryson gathered together the results from various studies on work productivity to see whether days of the week had any influence on levels. One clear outcome, not surprisingly, was that productivity levels were low following a break. “It takes time,” he says, “to get back into your workflow.”

One might assume that this productivity deficit on the first day of the working week is down to employees being grumpy and pining – even daydreaming – about the fun and frolics of Friday and Saturday and

What a day for a daydream

because the participants were thinking back with ‘memory bias’ – a tendency to recall the worst incidence of an event we’ve experienced before. Mondays are stereotypically depressing, so the test group simply recalled their worst Mondays.

Motivation expert Andrew Risner, who coaches management teams through his business Empowerment At Work, says that Mondays are a great day to improve your position in a company. The trick is to wait until after lunch. “I often advise people to book in a Monday afternoon to discuss their role with their managers or to talk about a new position,” says Risner. “The reason is that people are already in planning mode. Once they get the morning out of the way they are then thinking about what has to be done next, and so it’s a great opportunity to tap into that mindset.”

Charlie Mullins, managing director of one of the UK’s largest plumbing firms, Pimlico Plumbers, and one of Channel 4’s Secret Millionaires, agrees with Risner. For him, Monday is the best time to discuss work issues. “I approach a Monday with total enthusiasm,” he reveals. “It’s the day that sets the tone for the rest of the week.

“If sta� want to discuss their work, I would rather get it out of the way on a Monday afternoon.”

Yet while Monday may have just cause to shed its Manic tag, perhaps another day is ready to wear it: Tuesday. The Centre for Advanced Spatial Analysis is running a project called Mappiness. Some 45,000 people have downloaded the centre’s application that asks them to record their mood on an hourly and daily basis. Lead researcher George MacKerron says it is

“Workers feel at their most stressed

on Tuesdays”

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In practice

on a Tuesday morning when people are least happy at work. MacKerron is unable to o�er an explanation, but a survey conducted by the nutrition supplement Bimuno o�ers some insight.

The results of the survey revealed that workers felt most stressed on Tuesdays. The majority of respondents said the second day of the working week was the one on which they make the most phone calls and on which they are most likely to work through lunch. It is also the day and the time when people are most likely to look for a new job, turning Tuesday mornings into an opportune time for both prospective employers and workers.

Anton Roe, director of education and training recruitment specialists Alderwood Education, says that its four recruitment sites get the most hits on a Tuesday morning. He adds that Alderwood’s sites are not alone and that Monster has reported the same behaviour.

“It means that we are more likely to post new job adverts around that time,” he says.

But Tuesdays aren’t just about stress, frantic phone calls and disloyalty. Dr Angela Carter, an occupational psychologist at She�eld University’s Institute of Work Psychology, says that Tuesday afternoons are a great opportunity for introducing new ideas. “People have caught up on their work, but are not pressed to complete tasks. This is a great time for discussion.”

So what of the remainder of the week? When it comes to sta� training, Roe

suggests Wednesdays – as this allows a team to absorb and review the training before the end of the week. Mike O’Brien, senior consultant with training provider ILX, also recommends Wednesdays for getting sta� on board with new practices and policies. “They are no longer mopping up and they still have two days ahead of them to finish their week’s work, and so on a Wednesday they can take a breath and be completely focused,” he says. Yet both Roe and O’Brien agree that the best day for training depends on the working patterns of the company and that, for some, Thursdays are the better candidate. This is certainly the case for global IT consultancy Xceed. “Thursdays are far enough into the week for all key deliverables to be well under way and under control,” says its services director Dan Russon. “Crucially, it puts people back into their roles with the training fresh in their minds. It’s beneficial to bring the classroom back into the day job as soon as possible, so that the lessons learnt can be applied in a real environment.”

Russon adds that for Xceed, as with so many other companies, Friday is the day for tying up loose ends. But while many might be mentally tasting the first sips of a cold beer while putting the week to bed, Roe says managers could be missing out on a good day to kick o� the next week with. “Friday is when we like to reflect on what has happened that week, but also to prepare ourselves for the next one,” he

MondayGood day for: buying camera equipment. Shopping portal Extrabux.com found that cameras were 4% less expensive on a Monday.

Bad day for: feeling well. Monday is the most common day to stay away.

Tuesday Good day for: booking business travel. Farecompare.com says that most airlines post domestic fare sales on a Monday evening, which leads to a Tuesday morning scramble.

Bad day for: an office fling. We have the least sex on Tuesdays, according to an NOP health survey.

WednesdayGood day for: asking for a pay rise. A survey by recruitment firm Office Angels revealed

that bosses were more receptive on a Wednesday.

Bad day for: commuting by car. Most road accidents happen on Wednesdays, according to vehicle management firm Velo.

ThursdayGood day for: an office fling. Thursday is the optimum day to make love, according to a London School of Economics report.

Bad day for: holding a meeting outside. An average 2.97mm of rain falls on Thursdays in the UK.

FridayGood day for: binning the fag breaks. If you quit smoking on a Friday, you have a better chance of keeping off the cigarettes.

Bad day for: making key decisions. The 24-Hour Society author Martin

Moore-Ede says Fridays are not good for making major life decisions.

SaturdayGood day for: sending out email marketing campaigns. 60 Second Marketer magazine says that, increasingly, managers are checking work emails on a weekend.

Bad day for: binge drinking. The British Medical Journal reports the number of people with alcohol poisoning increases by two-thirds on Saturdays.

SundayGood day for: sending personal emails. According to web research company eMarketer, open and click rates are higher on Sundays.

Bad day for: a quiet trip to the shops. Verdict found that 53% of the population hits the shops on a Sunday.

GOOD DAYS AND BAD DAYS

says. “By planning the week ahead on a Friday, it stops stress from building up.”

Roe is one of an increasing number of managers who sort out work on a Saturday morning. But, far from seeing this as a source of stress, he feels that it actually balances out his work. “It’s one of the most productive days for me,” he says. “That means I can enjoy my Sunday knowing that on Monday I’m not firefighting.”

Roe is not the only one enjoying his Sunday. Researchers at the University of Vermont say it is the world’s favourite day. The team analysed 2.4 million blogs to find out which days of the week we love the most. Sunday came out tops, perhaps because it is the only day when one can wear pyjamas in the afternoon.

“Thursdays are the optimum day for an

office fling”

CMI_30-33.indd 33 04/01/2012 15:39

34_ PROFESSIONAL MANAGER _ Winter 2011/12

With the rules due to change in October, how will employers

cope with their new duty to fund their employees’ retirement?

Philip Smith goes in at the deep endencourage, now almost insist, those in work to save into private funds for their twilight years. The modest state pension simply won’t be su�cient, even when workers finally qualify to receive it.

The idea of a pension is far from new, of course. The first organised scheme, for Royal Navy o�cers, was launched in the 1670s. But it wasn’t until the 1908 Old Age Pensions Act that we saw a means-tested state pension payout for those over 70. The state pension grew in both size and scope of qualification until it became the default means of financing retirement for the masses. And that’s when it became unsustainable.

The latest Pension Act sets out how the UK plans to address the issue. It starts to come into e�ect in 2012 and the onus is on employers to run and manage in-house qualifying pensions schemes. They not only have to enrol eligible sta� into the scheme but must also contribute to it. To start with that will be 1% of the employee’s salary, but by 2017 that will have risen to 3%. Unless they have opted out, the employee will also have to contribute – 1% to begin with, rising to 5%.

It’s tough persuading those in their twenties, probably with a student loan to pay o�, to start putting money aside each month to finance their retirement in 50 years’ time. With youth unemployment high – nearly one million people between the ages of 18 and 25 are out of work – and those in work seeing wage rates drop in real terms, it’s more likely that cars, holidays and rents will take priority over saving into a pension fund.

It’s not just younger workers who are failing to make adequate arrangements. According to the O�ce for National Statistics, the number of people paying into occupational pension schemes is at its lowest level since the mid-1950s. Recent research by Baring Asset Management revealed almost half (48%) of UK workers have never reviewed their pension plans. They should; estimates vary as much as annuity rates, but the consensus is that you’ll need £100,000 in your private pension pot to provide £500 a month gross income. Far too many are unaware that their fund is not on track to finance that dream retirement.

It’s as much a worry for the government as it is for individual savers, as it struggles to find ways to address the looming pensions crisis. The analysis is stark: too many are saving too little.

With life expectancy rising and final salary schemes in their death throes – due to increasing liabilities from a diminishing fund – successive governments are looking at ways to first

Life savers

CMI_34-35_Pensions final.indd 34 04/01/2012 15:39


In practice

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PENSION PLAN“Even if a business already has a

workplace pension scheme, it may have to change to comply with the new law,” warns chartered certifi ed accountant Jo Nockels from TaxAssist Accountants.

Some employees will be exempt: those already in a qualifying workplace pension scheme, those under 22, those over state pension age and those who earn less than £5,732 a year in today’s prices. Sta� can opt out, but the government is candid on this: “The expectation is that inertia will lead many people to remain automatically enrolled, just as inertia today appears to be an important reason for a lack of pension saving by many people,” says a Department for Work and Pensions spokesman.

The new pensions duty may be good news for the employee, and for the country. But it’s not such good news for employers, as it’s down to them to set up

schemes and manage the contributions. Too few, it seems, are prepared. “Most small employers simply have no idea that they’ll be required to comply with the new duties from 2016 at the latest,” says a spokesman for

the Institute of Directors.And it will cost. When a company

has to start introducing the scheme

depends on how many sta� it has. A fi rm with, say, 55 employees will have to introduce it by April to July 2014, while a fi rm with 45 sta� can wait until February 2016.

That in itself is unfair, says the British Chambers of Commerce. It added that a small business which is due for auto-enrolment a year before a competitor will face around £960 more in contribution costs than its rival.

Be warned: doing nothing could see you in the dock. “Business

owners can face fi xed penalties of at least

£400 and escalating daily penalties of

at least £50 or even imprisonment for

non-compliance,” warns Nockels.

The basics● Starting in October 2012, and due to be phased in over four years, every business will be required to offer a company pension scheme to employees. You will be allowed to certify any existing company pension scheme that complies with the new pension rules. Alternatively, you can start your own new scheme to meet the criteria. The fi nal option is to use the government’s new, independent, low-charge, trust-based scheme called the National Employment Savings Trust (Nest). ● When you have to start depends on the number of employees in the company. Check at bit.ly/pensionduties ● You will be legally obliged to enrol employees aged between 22 and 75 who earn more than £5,715 but less than £38,185 each year (at current

rates), although employees can opt out. ● You will also have to make payments into their fund. ● At least 8% of employees’ earnings will have to be paid into the scheme, made up of an employer contribution of 3%, an employee contribution of 4% and tax relief of 1%. What you need to do● Review any existing schemes to establish whether they qualify under the new pension rules.● Decide what type of pension arrangement to implement, either Nest or an existing qualifying scheme.● Review the new cost requirements for employers to make a 3% minimum contribution to make sure they are affordable.● Ensure your HR and payroll departments can cope with the increased administration.

BIG BOYS GO FIRSTThe new pensions duty rolls out to the largest organisations fi rst – check our ready reckoner below to work out when it comes into force for you.

Staff Implementation

800+ 1 Oct 12 – 1 Oct 13

250-799 1 Nov 13 to 1 Feb 14

50-249 1 Apr 14 to 1 Jul 14

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“Even if a business already has a workplace pension scheme, it may have to change to comply with the new law”

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Want to be a Chartered Manager? To fi nd out whether the Chartered Manager award is right for you, head to www.managers.org.uk/cmgr, email [email protected] or call 01536 207380. You can read more about the benefi ts on the CMI site and take our new self-assessment questionnaire to receive a personalised report and identify the most suitable award route for you. For more inspiration, see our recent successes at www.managers.org.uk/success. This also highlights members who have renewed or gained Chartered Manager status.

an o� shore initiative to India, with a view to moving 50% of production o� shore.

I then looked for new learning and development opportunities within Williams Lea. I took over the in-house management certifi cation programme, where I could not only train on all the management theory, but also bring it to life with operational experience. This was a fantastic and rewarding management programme, which produced great success stories of career progression.

The learning and development team engaged with CMI to strengthen the programme with an o� cial accreditation. I had never done anything of this kind, so it was great to work with CMI, which provided me with the support and expertise I needed to tailor our in-house management certifi cate programme to meet o� cial Level 2 accreditation.

With the leadership curriculum, we have taken a blended approach to learning. CMI lends extra credibility, providing the professional guidance we need to give our employees development towards a relevant professional qualifi cation that is in tune with the modern business environment. We are starting to see real success stories as employees move around the business and are promoted into leadership roles.

Karen TaplinFrom Deutsche Bank to Williams Lea, Karen Taplin CMgr has been at the helm of development, resulting in Williams Lea’s leadership curriculum in partnership with CMI. She explains why CPD is so essential in the organisation

I cut my teeth in learning and development in the banking sector. I was designing and delivering a host of training and development programmes and took on the role of regional training and developing manager at Deutsche Bank. Running presentation services in investment banking was like running a business within a larger business. I worked in partnership with the local operational managers to set up presentation services departments across Europe and Asia Pacifi c.

During this time, the team in London grew from 10 to 175, operating 24/7, with smaller teams in Europe and Asia Pacifi c. It was a very exciting time, both for the business and for me. We were at our peak during the dotcom and telecommunications boom, before the various economic challenges came to the fore. Like most businesses, we needed to rethink and question the way things were done. I started to learn how to lead through a downturn, while maintaining the same level of service from the teams.

At this point we recognised that our business model was no longer fi t for purpose. We began to look at outsourcing and I moved across to Williams Lea. We managed the teams alongside

CONTENTS Masterclass 38 Ask the experts 40 Book reviews 45 Latest events 46

Find out moreKaren Taplin is learning solutions manager at Williams Lea. She is leading the Williams Lea leadership curriculum in partnership with CMI, which aims to provide employees with qualifi cations for the modern workplace. To fi nd out more, visit www.williamslea.com

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Practical hints and tips to help you on your management journey

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The holiday season is the peak time for relationship breakdowns. And career relationships can also suer from a midwinter malaise. Even more so when a weak economy seems to point to poor prospects elsewhere, and it is easier to keep your head down and stick it out than to confront your workplace worries head-on.

But when you decide to stay in an unsatisfying role, says John Lees, author of How to Get a Job You’ll Love, you are “accepting a psychological contract, which is: ‘My work will now be dull and I’m going to be stuck in a rut.’ This doesn’t need to be the case. There are active strategies you can use to review, refresh and to initiate change.”

So, here are Lees’ tips on how to tackle the most common career relationship complaints:

“I’m bored”You should review your role every six or 12 months, whatever your happiness in it, says Lees. “You need to see how your job has changed and what have you added to it.” He suggests asking yourself “What have I learned?”, “What’s new?” and “Where are things going?”

“The spark is gone”Every job is a learning curve, and once you reach the top of that curve you will be de-energised because things start to repeat themselves. That is when you have to look at what you can add to the role. You may be able to adjust your workload, renegotiate the focus of your work, or attach yourself to a

new team. In HR-speak this is called “job sculpting”.

“I don’t feel appreciated”If this is your issue, you are probably not getting feedback and don’t know if you are doing things that are valued. Find a mentor (ideally someone two or three rungs above you), coach or work buddy to give you two important bits of feedback: what are you doing well that is important to the organisation, and how does the organisation see you?

“We don’t want the same things any more”One common reason for work disturbance is a role mismatch, when people might say: “This isn’t what I expected to be doing.” This is an important career conversation – what

As new-year celebrations recede and Valentine’s Day looms large, now is the perfect time to recapture the romance with your role. Caitlin Mackesy Davies tells you how

LOST THAT LOVING FEELING?

Masterclass

KNOWLEDGE TRANSFER

were your expectations of this job or this organisation when you started? How far have they been fulfilled? Think of work as a compromise between what you want from life and what your employer wants from you, and review what you do. If the employer is getting the better part of the deal, it’s time to renegotiate.

“I’m just not happy”A very general complaint, cautions Lees, uses language that doesn’t mean anything to employers. It’s much better to say: “Here’s something that will help me to develop the organisation.” If you want to change your role, using win-win language is vital. It may not work first time, but employers value the positive impulse behind it and eventually run out of reasons not to let you act on your ideas.

CMI_38-39_Masterclass.indd 38 04/01/2012 15:40

Masterclass

Timing is everything. While I was taking the CMI course I applied for a promotion, which I got. I was much more confident in applying thanks to what I had learned.

It’s never too late to learn a new vocabulary. I’m a clinician, and in the NHS there are also business services. Sometimes we use very different language. The course gave me the vocabulary I needed to communicate more effectively with colleagues who have a more corporate role. I need a “recipe”. The best things I got from the course were the models and frameworks it provided. I can make the cake, but I need to be told whether I need eggs, or flour, and so forth – and the frameworks and models give me those guidelines.

Being honest is best. In our organisation we constantly strive for service development and improvement, so there is a lot of change. People may not like it, but if you are honest they often find it easier to deal with. It’s when the transparency and the trust aren’t there that it is difficult.

Hard skills have their place. As a therapist by training, my soft skills are very developed, but I struggled with managing poor performance and being more directive. Shared vision is vital. The NHS has commonality among services, but is not always as joined-up as it could be. Communicating a shared objective and vision is a way to get some of that ‘joined-up-ness’.

My husband can unload the dishwasher! While I was on the course my family was patient, and it was good for my children to see me doing homework too. When I did well, they said: “Yeah, Mum!”

After 20 years, I’ve still got passion. The course reignited it and my career aspirations. I’m enjoying the challenges of my new position and thinking about the future – and the learning I did on the course played a big part in that.

Join in and skill upJo completed the Level 7 Diploma in Strategic Management and Leadership at Charterhouse Training. Will you? Go to employers.covcollege.ac.ukIL

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Allied health professional lead for learning disability services at Coventry and Warwickshire Partnership NHS Trust feels her CMI training has awakened her ambition

Love lettersVisit www.managers.org.uk/practical-support for checklists and models to help you guide your career or those you manage who face these issues

WHAT I’VE LEARNED

“It’s over”If it really is time to make a break, advises Lees, “stock your lifeboat before you jump”. This means having a reasonably clear idea of what you are good at and what you are looking for. If you are aware of what your skill mix is and what makes you a distinctive worker you can go to the market with a good story, which makes you attractive to prospective employers.

But beware, says Lees, of accepting novelty as an alternative – otherwise known as the rebound. This can mean you enter a new organisation, but encounter the same problems. The attraction of the new should always be more important than the repulsion of the old. Every move should build something new into your career.

Jo Morris

CMI_38-39_Masterclass.indd 39 04/01/2012 15:40


Your management questions answered

Ask the experts

QHow do I encourage open debate among my frontline staff? Many of

them seem wary of upsetting authority, but I feel important issues need to be addressed honestly.

PROF MIKE LEWIS Centre for Research in Strategic Purchasing and Supply, Bath University

DR ALF CROSSMAN Senior lecturer in industrial relations at Surrey Business School

Mike says: The profile of supply chain risk management has never been higher, with uncertainty surrounding the global economy, resource constraints, inbound inflation and the supply disruptions experienced in many sectors over the past 12 months – such as the impact of the floods in Thailand on hard-disk drive production. Although many of the tools used by purchasing and supply professionals have risk management principles at their core, events with a low likelihood and extreme consequences – what Nassim Taleb has called “black swans” – are dierent.

By definition there is an almost infinite number of low-probability events and, as a result, attention paid to some – triggered by direct experience or high-profile news coverage – means that firms will necessarily be ignoring others. For example, given the devastation caused by the Asian tsunamis in 2004 and 2011, it is no surprise that a recent survey of 100 executives at multinational corporations (FM Global Supply Chain Risk Study 2011) revealed concerns that a large proportion of China’s industrial production capacity is near its east coast – and is vulnerable to flooding. This is not to say that this is a misplaced concern, but it is important to recall what we know about the biases associated with human decision-making processes: we give undue weight to compelling stories, and recent events are often associated with a greater likelihood of an event happening – i.e. we worry more about what we can bring easily to mind.

There is limited benefit associated with trying to forecast specific extreme events and much greater value will come from scenario planning intended to increase the organisation’s ability to cope with all sorts of consequences. Correspondingly, purchasing supply practitioners should place more emphasis on identifying those supply options that provide genuine flexibility and/or reliability.

Alf says: In a previous organisation in which I worked, the administrative employees were reorganised three times in four years; on each occasion they were required to apply for their own jobs on the basis of “best practice”. The result was the total destruction of morale and camaraderie, as employees competed with each other for their survival. No wonder organisational change is feared – in many cases, management has created the situation itself.

Mass meetings are the favoured way of getting views from sta and disseminating information quickly, but they are rarely eective: the opponents may be the most vocal, but this tends to make management defensive and the mood of the

QHow does one approach a supply chain risk

management programme for more unpredictable risks? Can over-planning actually be less constructive?

CMI_40-41_Experts.indd 40 04/01/2012 15:41


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Meulaboh, Indonesia: A man looks out over an area that has been

totally demolished in the tsunami-ravaged town

GREG PARK Senior consultant at Deloitte

Greg says: Initiatives will have an optimal chance of success when they are clearly communicated as being part of the organisational vision with which sta� are already aligned. It is important that sta� feel they are making a contribution towards the company’s goals.

During periods of economic instability there is a tendency to focus on the tangible risks when undertaking a new initiative. These will include matters such as intrinsic market, regulatory, finance, systems, production, pricing and operational risk. What frequently slips o� the dashboard of innovators and leaders of organisations is what might be termed “people risk”.

Start by listening. People who see no need to shake the status quo are not interested in hearing all the reasons why change is happening – they simply want to be heard.

Keep the initiative collaborative every step of the way and the natural inclination towards resistance will subside, as long as the need for change is truly in the best interests of the company these stalwarts so fiercely believe in.

To pursue and establish a people-centric mindset, leaders must clearly communicate and reinforce the vision of the organisation, and o�er clear, specific and detailed direction in respect to its achievement. We become so excited by something new that we focus too much time, energy and focus on its implementation, and unknowingly allow the organisation to drift o� course.

meeting adversarial. Some employees are reluctant to raise their concerns publicly for various reasons – it could be shyness or the desire to not be seen as a troublemaker. Challenging organisational norms or decisions for change strikes fear into the heart of employees, but what they like even less is not being in control of the situation that is unfolding around them. Open-door policies also rarely work; employees often feel uncomfortable about going to the boss’s o�ce and entering management territory.

The best course of action is to walk around and talk to employees in their own workspaces. This is a far more productive way of getting the message across. People are happier voicing their concerns in their own environment. It might take more time, but this approach is constructive and will pay dividends in the long run. Whatever approach is taken, there must be a culture of openness and trust in which discussion is encouraged rather than feared. Employees can get concerned over what appear to be trivial things. But they’re not trivial to them and managers should not dismiss them as such; listening to and respecting employees’ concerns is crucial in managing change e�ectively.

QMy management team want to make some major changes in company

strategy to weather the prolonged economic storm. However, more conservative leaders have expressed reluctance. How do we communicate the positive side of the plans?

FIND OUT MORE… Check out CMI’s Management Direct service bit.ly/cmi riskmanagement for checklists on themes such as risk assessment, managing risk and spotting when to take a risk in your organisation.

For advice, assessment tools and

study support, visit www.managers.org.uk/practical-support

CMI_40-41_Experts.indd 41 04/01/2012 15:41

42 _ PROFESSIONAL MANAGER _ Winter 2011/12

FLEETING THOUGHTS

Given the economic slump, many managers are trying to

cut spending in ways that aect us directly. There’s no shortage of pressure to push back against that – we need to invest in new products and inflation is creating higher costs. To run an organisation, we always need to do something, spend something and save somewhere. But where can savings be made?

Before I dive into where I think you shouldn’t scrimp, bear in mind that many businesses say that the most important resource they have is the people who work for them. I want to take you a long way with that line of thought.

I’m not too fussed where the long way gets us to really, if it’s a long journey – that means a long time with your sta member or colleague sitting in a driving seat. The pressure on businesses to cut costs means that there’s a huge temptation for that driving seat to be in a small car, with a big miles-per-gallon capability. Now, don’t leap to conclusions here – that’s great if you do short trips, especially around town where parking is tight and if you aren’t the same height as the average basketball player. But, if you drive from London to Glasgow regularly, or you are significantly tall, that small car is not a suitable tool for the company to use. Your

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“Many businesses say that the most important resource they have is the people who work for them. I want to take you a long way with that”

Don’t play squash with your staffCutting costs on fleet cars and having cramped and tired staff meeting clients is a false economy, warns motoring expert Peter Rodger

but for hundreds of motorway miles it’s not the choice I would make. Something a bit bigger, with more room for the driver, a less hard-worked engine and perhaps a bigger presence on the road will mean a more comfortable, less fatigued and more eective employee. The key is to think of your fleet car or van as a tool, which means you must think about what you want it to do.

Some of us escape all of these problems, because we let sta use their own cars. It’s financially beneficial sometimes. But it can mean that you let them choose the wrong tool for the task. What is sometimes known as the “grey fleet” is as open to problems as company cars. There’s an irony that sometimes more senior managers have the tools those further down the organisational food chain actually need, but don’t have. That is, the boss might be making his 15-mile daily commute in a

Mercedes-Benz E-Class, while the sales manager is schlepping up and down the country in a clapped-out Metro. That is the opposite of good business process. We view cars as status symbols, but company cars should be recognised as business tools. Buy the cars that the business needs. Peter Rodger is chief examiner of the Institute of Advanced Motorists

PETER’S TOP GEARChoose the tool to match the task…Fiat 500 Brilliant fun, great around town and attracts attention. A bit cramped for three

customers and their luggage, and not ideal for the trip from London to Glasgow up the M1 and M6.Mercedes-Benz E-Class saloon Very comfortable, strong image, eats motorway miles, and leaves you feeling fairly fresh and relatively relaxed. A bit awkward to park in small spaces, leaves you worrying if parked on a run-down estate and

will cost more to buy or lease.Vauxhall Astra Solid, medium-sized car. Carries the people, carries some load and does the miles. Doesn’t do either extreme as well as the others – it is a compromise between them. You won’t create the same image as the Merc – either on the dodgy estate or in the executive car park – or the Fiat, come to that.

sta member will be tired, cramped and not at their most eective when they step out into your customer’s car park. The fuel bill will be lower, the car tax might be lower, the capital cost (or lease price) will be lower – but sta eectiveness will also be lower. If the sta are tired before they start dealing with the customer, have ringing in their ears from a loud, overworked engine (OK, I exaggerate, but…), what eect will that have on customer relations, e�ciency in how long the job takes and the bottom line?

Let’s work out what the business needs. First – is the car the best option anyway? I travel from London to Glasgow by train or plane, leaving the car at home or the airport, and I work for a driving-based road safety charity. If you decide that the car is the right tool for the journey, you have to ask yourself whether you are buying or sourcing your cars simply because they are the cheapest or because they are the right tool for the task that the employee has to undertake. The Ford Fiesta is great,

CMI_42_Feb_Mar12_Fleeting thoughts.indd 42 04/01/2012 15:42

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A look inside the work of top management thinkers

Reviewsthat people can ask themselves – questions that address their inner mindset, outside influences and practices they can apply. Each chapter also finishes with a philosophical exploration of the concept of the challenger spirit. We didn’t want a heavy management book that was full of chatter and padding where the reader has to work to find the insights they are looking for.

How did you set about writing it?K: Our research initially focused on smaller companies that weren’t market leaders and asked what they were doing to challenge big players. Yet people who worked for the dominant companies were saying “please don’t ignore us”. We found the most interesting stories of innovation in larger, more established companies.

Why is it so relevant in the current financial climate?K: It is harder to be an innovator when the economic outlook is bad. Companies are receiving conflicting messages – they must grow and change the fortunes of the company, but they must not take any risks. Everyone is bogged down by strategy, performance reports, analysis, growth drivers and so on. We lose contact with the things that make the most impact in an organisation – our vision, sense of hope, ambition, ability to cause some instability and the relationships we have with those around us.

What do you hope readers will take from the book?C: We look at the leadership skills and organisational culture that is required for companies to become real drivers in their marketplace. We hope it will provide readers with the information and inspiration to take a challenger leap of their own.

Find out more The Challenger Spirit analyses the practices and disciplines that underpin the successful challenger organisation. It is published by LID, RRP £16.99. To find out more visit relume.co.uk/challenger_ spirit_book

What did you aim to achieve with the book?K: We wanted to provide inspiration to those who want to challenge the status quo – often against the odds – and comfort to those who are already doing so, in seeing that they are not alone.

What does a “challenger” do di�erently?K: Di�cult times allow real challenger managers to thrive – constraint often fuels their desire to be more creative and go against the grain. Challengers want to reconnect with why they set out with the company in the first place, and want everyone around them to reconnect with them too.

Going against the grain – so we’re talking about rebellion?K: One thing we don’t want to do is to confuse a challenger with a rebel. There needs to be a certain

amount of rebellion in one’s character, but to be a total rebel means you become completely disconnected and your actions are just destructive. Without a certain amount of grounding in the establishment side of the organisation, you won’t be able to channel your energies e�ectively, or have the ability to speak the language of more conservative employees for your ideas and approach to be accepted.

How did you go about presenting your research and communicating your message?C: We wanted to identify the core practices and behaviours that we felt defined the challenger “spirit”: the distinctions in character that were at the heart of the organisations challenging the status quo. We end each chapter with a set of questions

Khurshed Dehnugara and Claire Genkai Breeze of research and advisory firm Relume tell Kayleigh Ziolo about The Challenger Spirit, a study of organisations that have challenged the status quo

ONLY THE BRAVEWRITER REPLIES

Albert Einstein bravely

went where no one had

gone before

CMI_44-45_Reviews.indd 44 04/01/2012 15:42


Reviews

Reader offerReaders can buy The Economist Guide to Business Modelling by John Tennent and Graham Friend for the special price of £15 (plus p&p). To order, please call 020 7841 6300 and quote “Professional Manager offer”. Offer ends 31 March 2012.

THE APPETISER

Business modelling is often a di� cult subject to master and use e� ectively. The Economist Guide to Business Modelling, now in its third edition, takes the reader through the full process. Along the way it provides a wealth of guidance on how best to approach the modelling process and highlights areas where issues commonly occur.

The guide will not make the modelling process easy, but it does provide a clear path to best practice for anyone involved in the development and use of fi nancial business models. It covers everything from the practicalities of the model itself to the details of handling the fi nancial inputs and outputs used in the process.

Unfortunately, the guidance assumes the business model will be built using Excel. But the main emphasis is on the modelling process rather than the use of spreadsheet packages. Having said that, there is a lot of guidance on how to get the best out of Excel and plenty of tips that could be used by any manager in any situation.

The book is aimed at a wide audience, from the novice to the experienced business modeller, providing coverage in a digestible format. It can be read cover-to-cover or dipped into as required.David Stephens FCMI

The Economist Guide to Business ModellingJohn Tennent and Graham FriendEconomist Books£25.00PM rating: •••••

GistBlackBerry, iPhone, AndroidFree

It’s hard enough trying to pin down your contacts in real life, without having to sift through various devices and online profi les to contact them in cyberspace. Gist is an app that brings everyone together, giving you an easy way to navigate and view your entire network. You can even see your contacts’ updates on Twitter and Facebook, and the app can be used with Google Chrome, Gmail, Outlook and Mozilla Firefox as a plug-in.PM rating: •••••

Full of powerful stories and advice, Higher Ambition argues that successful companies have demonstrated “the distinctive ability to do good while doing well”. On the downside, it is not made entirely clear whether that is actually the same as doing well because they are doing good.

The chief executives identifi ed in the book, from Standard Chartered Bank to Campbell’s Soup, follow basic practices and principles, forging winning strategies that leverage unique cultural and human capabilities; raising the aspirations

of their sta� , aligning the diverse elements of their global fi rms and focusing on upgrading leadership capabilities in their organisations. However, some of these companies have a more erratic performance than the authors recognise.

The book argues that great leaders win with their employees, customers and communities. These are relevant insights and, at last, stakeholder theory is becoming a mainstream theme in leadership literature.Professor Bruce Lloyd, London South Bank University

Winning Investors OverBaruch Lev

Havard Business Review Press£21.99PM rating: •••••Baruch Lev is an accounting and fi nance professor at the Stern School of Business and a visiting professor at the City University Business School. This may put managers o� , but don’t let it. A highly readable book, Winning Investors Over is full of fi rst-class ideas and supported by research on how top managers should deal with their investors.

The book addresses the need to handle corporate fi nancial communications with investors as a key element in developing a long-term business strategy. Lev

bases his work on studies that he and others have undertaken on a wide range of business issues that a� ect investors’ perceptions.

Extensive research enables Lev to dispel many myths surrounding management actions in dealing with investors. His advice is summarised at the end of each chapter and provides a prescription for management action that is pragmatic and powerful. He is by no means a fl u� y academic and the book is right on the money commercially. Lev has a fl uent writing style and the book is packed with interesting examples. It is fully annotated and has an exhaustive index. Every board member should read this book.Andrew May FCMI

Higher Ambition: How Great Leaders Create Economic and Social Value

Michael Beer, Russell Eisenstat, Nathaniel Foote, Tobias Fredberg and Flemming NorrgrenHarvard Business School Press £21.99PM rating: •••••

CMI_44-45_Reviews.indd 45 04/01/2012 15:42

46_ professional manager _ February/March 2012

Your management questions answered. Visit www.managers.org.uk for more details

Stay connected with our regional networking events

Events Spark their enthuSiaSmSpeaker’S corner South eaSt

8 FebruaryUnlocking Motivation in Your OrganisationSouthampton Science Park, 2 Venture Road, Chilworth, Southampton6pm£15 member/ £20 non-memberOrganised by CMI Solent and WiM Hampshire and West Sussex, with IoD Hampshire and Isle of Wight.Speakers: Steve Jones and John TunstallContact: Abha Thakor or Tim Groves (t 01962 737325, e cmisolentevents@ gmail.com)

29 FebruaryConfronting fear of the workplaceBuckinghamshire New University, High Wycombe Campus7pm£10 member/ £12 non-memberOrganised by South Bucks branch.Contact: Stephen Fletcher (t 07768 686160, e [email protected])

14 MarchMindful LeadershipUniversity of Surrey, School of Management, Guildford, Surrey7pm£10 member/ £12 non-memberFor location, please go to the University of Surrey campus map at www.surrey.ac.uk. Parking is free in the evenings. Organised by Guildford branch.Speaker: Susan PeacockContact: Brian Good (t 01483 689347, e [email protected])

London23 FebruaryThe Medium is the MessageVenue tbc6.30pm£10 member/ £15 non-memberA look at communications today and its advantages and disadvantages. From snail mail to Twitter and beyond. Food is provided. Organised by Central and Westminster branch.Contact: David Blackett (t 020 7602 2755, e [email protected])

South WeSt5 MarchManagement Forum and CPD & Chartered Manager WorkshopRoom 8W3.14, School of Management, University of Bath6.30pmFree member/ £10 non-memberRefreshments are provided. Please use the West Car Park. Organised by Bath branch.Speaker: John RichardsContact: John Richards (t 01761 434537, e [email protected])

15 MarchBristol Airport, Past, Present and FutureBristol International Airport7pm£10 member/ £15 non-memberA coach will leave Rivers Street in Bath at 6pm. The event will end at 9pm and the coach will return by 10pm. Refreshments are provided. If travelling by car, please tell Walter Sweetenham and we will arrange a free car park pass. Organised by Bath branch.

What is your background?I was an electronic engineer for 10 years, before I went into sales. I joined just before the advent of the internet. Until that point, sales strategy had been the same for 100 years.

So what changed?Previously, most customers were happy to pay more for quality. But the internet gave rise to increasing polarisation between those focused solely on price and those who sought solutions to their specific issues. The latter group became the focus of my work.

What was the result?The company saw a profit increase of £70,000, without even taking on a single new customer.

How does this relate to your event?“Unlocking Motivation in Your Organisation” is about using the potential that is already there, rather than going to costly and time-consuming lengths to create solutions.

What makes this event stand out?The event is based on a government-supported report. The 2007 MacLeod Review’s results are still relevant today.

What will people learn?It will provide knowledge, tools and inspiration.

l “Unlocking Motivation in Your Organisation” takes place on 8 February. See the next column for more information.

22 February (30 Pavilion Road, London)President’s Dinner with guest speaker John Armitt, Olympic Delivery Authority (black tie)

5 March (Royal College of Physicians, London)Dining Club with guest speaker Rt Hon Stephen Dorrell MP

26 April (venue tbc)Dining Club with guest speaker Baroness Tanni Grey-Thompson DBE

23 May (venue tbc)Dining Club with guest speaker Baroness Virginia Bottomley

27 June (venue tbc)Dining Club with guest speaker Lord Heseltine

Events begin with a drinks reception at 6.30pm, followed by a three-course dinner. Dress code is lounge suit and cost is £89, unless otherwise stated.

Benefits of attending include:• Listen to guest speakers on

topical management issues• Experience the finest

venues the UK has to offer• Networking opportunity

with other Companions

Contact Agatha Sutcliffe (t 020 7421 2730, e [email protected]) if you would like to reserve a place at any of the events – guests are welcome.

companionS’ dining cLub dateSWe have pleasure in announcing the following Dining Club dates for the first half of 2012, exclusive to CMI Companions:

For the latest event updates and to book

your place, visit www.managers.org.uk/

events

John Tunstall tells us why employee engagement is the key to motivation in your workplace

CMI_46-49_Events.indd 46 04/01/2012 15:42


Events

Speakers: Mike Littleton and Jacqui MillsContact: Walter Sweetenham (t 01225 427110, e wsweetenham @theiet.org) or Sarah Golding (e sarah.golding @btinternet.com)

East1 February The time advantageVenue tbc6.30pmCost tbcOrganised by Cambridgeshire branch.Contact: David Woodcock (t 07866 576089, e [email protected])

WEst Midlands8 FebruaryDeveloping a Leadership CultureButts Park Arena Conference Centre, Coventry Rugby Club7pm (buffet and networking from 6.15pm) £7 member/ £10 non-member Joanna Tong is the first winner of the North West Women’s Achievements Award. Copies of her book,

Dragon Leadership, will be available to buy and one copy will be raffled via a show of business cards. Organised by Coventry and Warwickshire branch.Speaker: Joanna TongContact: Janet Payne (t 07946 021720, e [email protected])

15 MarchSmarter Working Project WorkshopCoventry University Enterprises, Coventry 6pmFreeOrganised by Coventry and Warwickshire branch.Speaker: Corinne EdwardsContact: Janet Payne (t 07946 021720, e [email protected])

WalEs7 FebruaryCorporate Social Responsibility (CSR): does it matter to small firms?Newport Business School6pmFree member/ £10 non-memberThe South East Wales Network wishes to thank

Newport Business School for its sponsorship of this event, which is being held in association with CIM Wales. Organised by South East Wales Network.Contact: Barbara Chidgey (t 07989 385114, e [email protected])

23 FebruaryCoaching for SuccessSwansea Business School, Mount Pleasant, Swansea6pmFreeAt this event you will be encouraged to think differently about coaching and take away practical and effective ideas to use in coaching. Organised by Swansea branch.Speaker: Doug StrycharczykContact: Terance Phillips (t 07794 000492, e terancephillips@ hotmail.com)

29 FebruarySt David’s Day LectureSwansea Business School, Mount Pleasant, Swansea7pmFreeThe annual St David’s Day Lecture will this

year be given by a high-profile Welsh sports personality. Organised by Swansea branch.Contact: Terance Phillips (t 07794000492, e terancephillips@ hotmail.com)

1 MarchSt David’s Day Breakfast – SE Wales CMI in association with ACCA WalesHilton, Cardiff7.15am£22 + VAT member/ £200 + VAT table for 10 The South East Wales CMI Network is delighted to announce that the guest speaker for the prestigious annual St David’s Day Breakfast is the entrepreneur Sir Chris Evans MBEContact: Barbara Chidgey (t 07989 385114, e [email protected])

15 MarchThe Manageress: does gender affect your management style?Swansea Metropolitan University, Swansea Business School,

institutE of consulting (ic)Enrolment to any IC course at the non-member rate includes a FREE year’s membership to the IC. www.icon consulting. org.uk

10 FebruaryEffectively Implementing a Balanced ScorecardInstitute of Consulting, London9.30am£295 + VAT member/ £395 + VAT non-memberSpeaker: Phil HallContact: Angela Rose (t 01536 207404, e [email protected])

5 March (also 2 April) The Professional Consultant: CMCE & DMCInstitute of Directors, 116 Pall Mall, London 9am (three-day course)For cost please contact provider on 020 8883 1423Speaker: Mark Law BSc (Hons) MBA CMC FIBC Contact: Laura Robertson (t 020 8883 1423, e laura@ amskills.com)

14 March The Lean Operations Consultant: DMCInstitute of Directors, 116 Pall Mall, London 9am (three-day course)For cost please contact provider on 020 8883 1423Speaker: Mark Law BSc (Hons) MBA CMC FIBC Contact: Laura Robertson (t 020 8883 1423, e [email protected])

19 MarchThe Strategy Consultant: DMCInstitute of Directors, 116 Pall Mall, London9am (three-day course)For cost please contact provider on 020 8883 1423Speaker: Mark Law BSc (Hons) MBA CMC FIBCContact: Laura Robertson (t 020 8883 1423, e [email protected])

12 March (also 9 April) CMCE/DMC CourseDistance learningFor cost please contact provider on 020 8883 1423Speaker: Mark Law BSc (Hons) MBA CMC FIBCContact: Laura Robertson (t 020 8883 1423, e laura @amskills.com)

CMI_46-49_Events.indd 47 04/01/2012 15:42


Where did it all begin?Ever since university I knew I wanted to be a chief executive. I was lucky enough to become managing director of Sharwoods at the age of 33.

What did you do for the company, and what did you learn?Through developing Sharwoods into an international food business, I learnt about the importance of strategic leadership, of a focus on people and of the power of creativity.

How did it infl uence you as a manager?I was able to build on my skills in subsequent roles. When I came in as chief executive of the Design Council, it needed to be drastically turned around. My experience at Sharwoods helped me give the organisation a stronger focus on customers and stakeholders.

How did you come in contact with CMI?CMI was associated with the Design Council. My business school experience had given me a good grounding in some of CMI’s principles and I was honoured to become a Companion in 1997.

What have you learnt through CMI?The Companions network is made up of 800 senior leaders. I have learned so much from these talented people.

What has the CMI enabled you to provide?I have been able to develop the Companions programme and I hope to become a mentor for new managers.

What is currently on your agenda?I am part of an Olympic Taskforce for Business. This organisation will showcase UK business during the London Olympics in 2012.

Andrew Summers has led organisations such as Sharwoods, the Design Council and Companies House. As chairman of the CMI Board of Companions, he tells us about the benefi ts of CMI and how it can help all managers

Mount Pleasant, Swansea6pmFreeFor women in management across many sectors. Interactive session. Tea/coffee served. Organised by Swansea branch.Contact: Steve Griffi ths (t 01792 481118, e steve.griffi [email protected])

20 MarchThe Lying, the Which and the WardrobeHugh James Solicitors, St Mary Street, Cardiff6pmFree member/£10 non-memberThis event is being held in association with CIM and we wish to thank Hugh James Solicitors for their generous sponsorship. Tea/coffee and light refreshments on arrival. Organised by South East Wales Network.Speaker: Sue SmartContact: Barbara Chidgey (t 029 2049 6464, e [email protected])

YORKSHIRE & HUMBERSIDE13 FebruaryHow to be a thought leader

Marshgate Prison, Doncaster6pmFreeHear leading author Mindy Gibbins-Klein deliver a really interesting and different presentation, with tips on how we can all become thought leaders, raise our profi le and maximise our performance/goal achievement. Organised by Doncaster and Barnsley branch.Speaker: Mindy Gibbins-KleinContact: Paul Kincell (t 07952 822326, e [email protected])

23 FebruarySelling Yourself on Paper: Writing a Persuasive CV and Covering LetterEversheds, Bridgewater Place, Water Lane, Leeds7pm£8 member/£15 non-memberIf you are actively seeking a new job or just want to keep your CV up to date for the next time you need it, join us at this event for advice on how to make your application stand out from the crowd, with real-life

examples. Refreshments will be served from 6.30pm. Please book early. Organised by WiM Yorkshire. Speaker: Chris BainesContact: Chris Baines (t 07710 515041, e [email protected]) or June Lancaster (07775 942775, [email protected])

NORTH EAST23 MarchAnnual Black Tie Dinner and AwardsJudges Hotel, Yarm6.30pm£40CMI members will be issued with a £5 drinks voucher to spend at the bar during the event. Menu is available online. Organised by Tees Valley branch.Speaker: Baroness Tanni Grey-Thompson DBEContact: Kay Matthews (t 07796 267571, e [email protected])

NORTH WEST12 MarchHow to become resource of choice through personal brandingVenue tbc

6.15pmFreeHow to become a resource of choice using the power of personal branding – a keynote presentation invaluable for anyone who networks – either physically or virtually.Speaker: David WatkinsContact: Robert Colin Lynch (t 07778 113333, e [email protected])

14 MarchManufacturing: A Future for Britain – Manufacturing Institute EventForum 28, Barrow-in-Furness7pmFreeThis is a joint event as Cumbria branch works closely with several organisations to offer a varied programme throughout the year. Organised by Cumbria branch.Speaker: Dr Julie Madigan, CE The Manufacturing InstituteContact: Ian Palmer (t 01229 832847, e [email protected])

MY CMI ANDREW SUMMERS

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50 _ PROFESSIONAL MANAGER _ February/March 2012

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f you can’t measure it, you can’t manage it” may be the most commonly quoted adage in management. Yet,

extraordinarily for such an infl uential phrase, it has neither defi nitive attribution nor justifi cation. It’s a folk saying, with as much objective validity as, say, “Too many cooks spoil the broth”, or indeed its opposite, “Many hands make light work”.

Measurement is so critical to management that basing it on folklore was always going to end in tears. And the harm that the idea has done is incalculable. W Edwards Deming classed “management by use only of visible fi gures, with little consideration of fi gures that are unknown or unknowable” as one of the seven deadly management diseases. Henry Mintzberg, the sanest of management thinkers, suggested that “the premise that we can’t measure what matters” was the most realistic starting point for management.

One problem with the measurement-management equivalence is that it is normative and thus self-fulfi lling. I’m reminded of another saying – true, this time – that “you get what you inspect”. You certainly do – because many, even most, human beings are conditioned to meet those targets they are measured on, to the detriment of other concerns. The result is a highway to hell that ends up in such ghastly places as an NHS that doesn’t do care or schools that don’t do interesting, because those qualities aren’t specifi ed or measured.

This paradox operates like Gresham’s law with a twist: the easy to measure drives out the harder to quantify, even when the latter is more important. Another management writer, Igor Anso� , sighed: “Corporate managers start o� trying to manage what they want, and fi nish up wanting what they can measure.” Yet the problem runs even deeper, driving one of managers’ most perennially damaging wild goose

The numbers game you always lose

The measurement culture might seem inescapable, but obsession with fi gures can lead to horrifying results. It’s dangerous to reduce management decisions to mechanical calculations, argues Simon Caulkin

Ichases: the attempt to reduce their job to numbers. Hence many bosses’ obsession with league tables and the resulting arms race of measurement bureaucracy. This causes managers to constantly fi ne-tune measurement mechanisms, just as those they manage learn how play them or avoid them altogether.

Spurious quantifi cation is everywhere, leading to misleading conclusions and vast amounts of pointless work. But nowhere have its e� ects been more dire than in risk management. In some cases this would be ludicrous if it wasn’t tragic, as with the failure of two community police support o� cers to go to the rescue of a drowning 10-year-old boy because it didn’t fall within their risk range. In other cases, it is both ludicrous and hair-raising. One of the contributory causes of the fi nancial meltdown of 2008 was the bogus validity ascribed to securitised subprime mortgages and other instruments by a mechanical ratings process that ranked them as risk-free even though no one could fully comprehend them. And the risk-management model in the trading algorithms used by the banks failed to foresee the possibility of all traders doing the same thing at the same time. Moral: just because they’re numbers doesn’t mean they’re not pure fantasy.

Thus do attempts to eliminate risk by quantifying it actually increase the danger. Because the greatest casualty in all this, alas, is what good management really is about: judgement. The chief executive of a London council told me with a sigh that younger managers were lost without numerical targets because it forced them to think and make decisions for themselves. This included one of the most important decisions of all: what to measure. “Not everything that counts can be counted, and not everything that can be counted counts.” That’s often attributed to Einstein – a more reliable source of management wisdom, I submit, than ‘anon’.

“Spurious quantifi cation is everywhere,

leading to misleading conclusions and vast amounts of pointless work”

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