Welcome to the latest Madston Black Singapore newsletter. In this edition, we reference a recent interview with Greg Ellis, a CEO who contends that the main impediment to business growth is the lack of leadership and management competency. We look at an example of organisational excellence as described in a new book, Reinventing Organisations. We also link to some inspiring leadership principles from Michael Gregoire (CA Technologies), and we review our recent seminar on the concept of antifragile organisations.
The departing CEO of the digital advertising business, REA Group, Greg Ellis has provided a forthright critique of how conservative business cultures hold back the growth of a company. The interview was broadcast earlier this month and while his comments were directed at Australian businesses, the observations are universal. He observed that while business organisations may be well endowed with technical talent and financial capital, generally they are severely deficient in managerial competency. Some of his more candid remarks included:
Business graduates tend to be analytically driven and are unskilled in interacting with or leading other people, and lack the foresight to pick market directions.
Growth emanates from having competent managers who can lead others, encourage innovation and tolerate mistakes.
Where shareholders demand that a company pays higher dividends rather than re-invest in growth strategies, it is due to a failure of management to demonstrate the value of their strategies.
So how did he overcome these perceived deficiencies at REA? One of his approaches was to ensure decision-making was not concentrated at the executive level. Financial and operating responsibilities for business units were delegated (with adequate supervision) and the result was higher levels of creativity and individual satisfaction. To listen to the full interview, click through to the ABC website here.
Photo credit:Stuart McEvoy
This new book from Frederic Laloux is billed as a handbook for founders, leaders, coaches, and advisors “who sense that something is broken in the way we run organisations today and who feel deeply that more must be possible… but wonder how to do it.
“The book includes case studies on a number of organisations across different industries. We particularly liked the example of the French group FAVI which is a long-established manufacturer of automotive gearboxes that has patiently and incrementally developed over a period of more than 20 years.
Some features of the organisation include:
Business units are organised as self-managing “mini-factories” dedicated to each major customer rather than a particular function e.g. the Volvo team, the Volkswagen team, the Audi team.
Within each unit, teams are responsible for their own supplies, sales, customer management, quality control, production scheduling, personnel hire and induction.
There are no centralised departments that act unilaterally – the roles of those outside the teams are to act as advisors and not as decision makers.
Salespeople are integrated in each team and are true account directors taking full responsibility for client fulfilment through the whole sales cycle.
Another case study of the organisation by Cornell University can be downloaded from our resources page here ».
In another insightful interview from Adam Bryant’s Corner Office, the CEO of CA Technologies, Michael Gregoire provides his viewpoint on a number of leadership lessons including:
How one of his early leadership mistakes was to surround himself with people “who kind of looked and acted and thought like I did. Almost zero diversity.” Later he realised that he had deprived the team of the creativity that comes from a diversity of thought.
How he now derives most satisfaction not from his own success but from watching someone else in his team be successful and as result, he has been able to attract really good people wanting to be part of a winning team.
Why the traits he values highly are mental agility and adaptability because whatever skills a new hire has on commencement, will probably be irrelevant in two years’ time.
The full interview can be read at the NYT site Read more ».
Photo credit: Bruce Gilbert
At our most recent breakfast seminar for HR leaders, the topic we explored was Beyond Resilience: Developing organisations that benefit from volatility. The content was based on the works of Nassim Nicholas Taleb with particular emphasis on his book, Antifragile. The basic premise of the book is that an object, person or system that is able to withstand volatility is resilient but those that benefit or grow from variances and uncertainty are antifragile.
We looked at five characteristics of antifragility in relation to organisations:
Redundancy – how building in excess capacity is preferable to over-optimisation of systems.
Via negativa – how subtracting components from a system or not doing something can be better than adding layers or doing too much.
Optionality – how always having options mitigates the risk of failure from an unexpected breakdown in the system.
Skin in the game – how the reliability of advice of experts is generally correlated with how much skin in the game they have.
Trial and small error – how systems only improve through lots of experiments with small errors, or errors that are confined to one part of the system. An example of an antifragile system being the restaurant industry where operators learn from the mistakes of others, and the occasional large errors by a single operator do not blow up the whole industry.
We also considered how HR systems would look under the lens of antifragility. For example, skin in the game would manifest in a remuneration structure that incorporates a variable component for all team members dependant on overall profitability, and in rewarding leadership behaviour that results in a high-performing team rather than a team with some high-performing individuals. We hope to explore this concept further following our attendance at a short course, Antifragility: A User’s Manual at the New England Complex Systems Institute in May.
After five years of operations, the Madston Black team in Australia is moving to join Korn Ferry. The Australian partners, Jason Murray, Amanda Sheard, Ritchie Castree-Croad and Michael Hamer will work as principals in the leadership and talent consulting practice of Korn Ferry.
Madston Black Singapore is an independent business and will continue to service its clients in the south-east Asian markets in the same way we have been doing since 2012.
We wish our colleagues well in their new roles and gratefully acknowledge their support in the establishment of the Singapore office.