A few blogs back I was holding my head in my hands as I learned of recently appointed Lloyds Banking Group CEO Antonio Horta-Osorio’s desire to make sure the bank is a centrally controlled entity rather than a federation of smaller units.

I now read that Mr Horta-Osorio, who has been in his new role less than a year, has been obliged to take a temporary leave of absence. The leave is ostensibly due to illness but, allegedly, those in the know have said that he is ’suffering from extreme fatigue due to overwork’.

I have yet to fully unravel all of the thoughts this news sprung in my mind, but here’s a few:

• first of all, there is some irony in the fact that Mr Horta-Osorio has burned himself out so quickly given that part of his plans were to ‘burn out‘ 15,000 of his employees jobs
• secondly, Lloyds Banking Group is in a right mess. So, I take my hat off to Mr H-O in his commitment to sorting it out. However, working yourself into the ground is not what leadership is about, surely. He has put himself out of action at a time when his business needs him. Now they’re floundering around trying to plug the gap (and even considering the temporary appointment of someone who has already announced his defection to another company next February)
• you cannot manage the world. Mr H-O has apparently said that the devil is in the detail but there’s an awful lot of detail in a large company like Lloyds. One individual cannot tackle all of that… and it’s another reason why smaller units work better.

Smaller units working better. Dunbar’s number. Individuals having autonomy. Over-controlling CEOs who burn out. The need to concentrate on a handful of key priorities. These items, all of these items documented separately in this blog have an obvious relationship with each other.

The bottom line for great leadership is to understand what makes people tick…
what inspires them to performance
and how that performance cannot be forced.
Why is that so hard to grasp?

Tags: appointment autonomy banking group bottom line ceo ceos defection desire devil dunbar extreme fatigue gap group ceo handful head in my hands horta osorio irony leave of absence lloyds mr horta osorio priorities
 

What did Winston Churchill, Horatio Nelson and Abraham Lincoln all have in common?

Asymmetry.

Let me explain. Two studies* carried out at Aston University in Birmingham in the UK were expected to confirm the commonly held view that more attractive people (whom they termed ’symmetrical’) tend to make better leaders because they are perceived to be more dominant and more intelligent.

In one study, 80 volunteers were assessed for their leadership qualities via psychometric tests. In the other, 42 students were separated into teams, with each team electing a leader to carry out a task.

The outcome? Well, the performance of the team with asymmetrically featured leaders was independently rated 20&perc; higher than those with symmetrical leaders, with team members also rating asymmetrically featured leaders more highly.

This unexpected correlation between those with a less favored appearance and leadership performance astonished the research team. They’ve since hypothesized that people who are asymmetrical have to compensate more for their appearance and this increased effort comes through in better organizational ability and leadership qualities.

In their conclusions, the researchers termed the asymmetrical leaders approach ‘transformational’ leadership. This includes getting people to co-operate and inspiring them to willingly achieve a common purpose. They also contrasted this with the type of leadership so often criticized in this blog (more dictatorial and based on fear of retribution for failure).

My view. Well, I’m relieved to see the view debunked that better looking people make better leaders. I cannot, however, see the measurements used in the study to determine symmetry (including finger length, wrist width and ear length) going over that well at interviews!


*Research conducted by a team led by Dr Carl Senior. The results have been published in the Harvard Business Review.
Tags: abraham lincoln asymmetry common purpose conclusions correlation dr carl ear length finger length harvard business review horatio nelson leadership performance leadership qualities measurements organizational ability psychometric tests retribution symmetry team members volunteers winston churchill
 

Recessionary times affect corporate confidence and outlook in lots of different ways.

The most obvious is ‘bunker mentality’.

You know the one. All these horrible missiles are coming over with names like ’shrinking market’, ‘defecting customers’ and ‘falling share price’. So what do you do? You hunker down and hope it will pass.

And you start cutting costs.

All of which brings me to the problem of ‘function leadership’ in business. ‘Function leadership’ is something I quickly detect whenever I’m working with a new client. For whatever reason… historical, force of personality, CEO’s own background… there is usually a favored function within the business. It’s often sales. It’s quite often finance. Sometimes, HR (curiously) has the upper hand.

It’s rarely marketing. And that’s ridiculous.

It’s ridiculous because a business need to be in alignment with its audience. It needs to identify existing and potential market needs and be meeting them. And having met those needs, it needs to be determining the right price and reaching customers with the right promotional activity.

‘That sounds like marketing,’ I hear you say. ‘And that sounds like the penny dropping,’ I reply.

Function leadership should never be in question. Your business needs to be marketing led in good times and in more challenging economic circumstances if it’s to survive.

So back to the bunker and to cost cutting. The marketing budget is usually first in the cross-hairs in any cost reduction exercise. The very budget that, given what I’ve said earlier, should be protected at all costs (pardon the pun)!

So…
to CEOs and MDs everywhere. Make sure your business
is marketing led at all times. And if you need to cut costs,
don’t go for the soft option.

Tags: alignment bunker mentality business function business need ceos corporate confidence cross hairs different ways economic circumstances good times leadership in business marketing budget missiles potential market promotional activity pun recessionary times reply function share price soft option
 

That last blog entry about a ‘ground-up’ rather than ‘top-down’ approach to managing organizational cultural change reminded me of an earlier blog in which I talked about ‘Dunbar’s Number’, 147.8… or the ‘mean group size’ for humans.

I strongly believe that people relate to and work better in smaller communities rather than large, amorphous corporate masses totally devoid of everything that humanity stands for.

So when I read that recently appointed Lloyds Banking Group CEO Antonio Horta-Osorio wants to make sure the bank is a centrally controlled entity rather than a federation of smaller units, I groaned.

Horta-Osorio’s motivation is to reduce costs and create more opportunities for cross-sales.

Now I am all for cutting cost. But let’s look at the effect on Joe, who works in the marketing department of a small subsidiary of Lloyds. Joe was his own boss, but now he has to refer everything he does to a central marketing department. He used to walk around the corner to his small subsidiary finance department counterparts to get his suppliers’ bills paid, but now these are processed centrally, though a computer system that Joe has to re-learn every time he uses it because he uses it so infrequently. His suppliers are complaining about the amount of time it takes to get paid.

Joe’s small telemarketing team are now set targets for introducing other Lloyds Banking Group products. This is affecting their rapport with the subsidiaries customers and is affecting the brand Joe has worked so long in building. He also wonders at the potential for mis-selling (the mis-selling of Payment Protection Insurance has recently cost Lloyds £3.2bn).

Surprise, surprise, Joe’s job satisfaction ain’t what it used to be. And with long-term colleagues being made redundant left and right around him (Lloyds has announced 15,000 job cuts, bringing the total number of job cuts since its merger with Halifax Bank of Scotland to 43,000!), he isn’t sleeping so well.

Oh, and the shares Joe was encouraged to buy through the bank’s share-save schemes are now worth a fraction of what he paid for them—despite getting them at a discount.

Leadership is about understanding what motivates people and giving them the conditions they need to thrive and deliver value. Not about imposing on them in a way which breaks their spirit.

Tags: amount of time bank of scotland banking group blog entry central marketing ceo computer system counterparts dunbar finance department group ceo group products group size halifax bank of scotland horta osorio job satisfaction lloyds marketing department payment protection insurance surprise surprise telemarketing team
 

A colleague shared a thought about his local community with me the other day that had obvious parallels with the business world.

His community has about 1000 homes. On a macro scale, says my colleague, there is little in the way of community spirit, evidenced by failing neighborhood watch schemes, poorly attended home owners association meetings and so on.

And yet on a micro scale, in his small cul-de-sac comprising some 10 houses, there is a real sense of togetherness, dealing with problems as a group, helping look after each other’s homes when people are away on holiday and with each other’s children.

The business parallels?

Well, let’s say you’re a CEO struggling to make change happen or to push the corporate culture in a new direction.

I don’t think you’re going to do that with a macro approach.

Somewhere in your organization there will be pockets of behavior, values and activity that have a ‘fit’ with you company culture aspirations. Get in there! Understand how they make that happen. Share it as good practice with other managers and encourage them to do the same.

It’s a ‘ground-up’ rather than ‘top-down’ approach that’s a lot more effective (and cheaper!) than all those company-wide communication programs and conferences you’ve got planned.

Tags: aspirations association meetings business world ceo colleague communication programs community spirit company culture conferences corporate culture cul de sac home owners association local community macro scale micro scale neighborhood watch new direction parallels pockets sense of togetherness
 

Following the previous entry about psychopaths in senior positions, word reaches me of the behaviour of a former boss of a British bank who allegedly threatened catering staff with disciplinary action because of their failure on one occasion to provide him with his preferred biscuit.

And on another occasion, allegedly, this man’s staff went into massive panic mode because of an accident in his office (a window cleaner fell from his ladder) which resulted in a broken model aeroplane on the CEO’s desk.

These tales have emerged in a new book by Matthew Hancock and Nadhim Zahawi called ‘Masters of Nothing: How the crash will happen again unless we understand human nature’.

The book argues that failure to understand how certain figures rise to senior levels (the bullish bring promoted, particularly during a boom, while the more cautious are overlooked—and all that usual corporate ladder bull) will mean that a similar global financial meltdown could happen again.

But back to our banker.

Apparently, as his bank ran up huge losses he wasted money indulging his own tastes and lifestyle—all the usual stuff with unnecessarily and expensively decorated offices, fruit flown in from Paris and stand-by chauffeurs.

This company stood by while a culture of fear was established and where challenge wasn’t tolerated. Don’t let it happen in yours.

Tags: banker biscuit boom boss ceo chauffeurs corporate ladder crash culture of fear disciplinary action failure financial meltdown human nature losses masters matthew hancock model aeroplane panic mode psychopathic psychopathic banker psychopaths tastes usual stuff
 

A 111 point questionnaire designed by Dr Paul Babiak in conjunction with The University of British Columbia’s Professor Bob Hare has sought to determine how many industry bosses were psychopaths.

They found that nearly 4% fitted the profile.

‘So what?‘ you might ask.

Well, apparently only 1% of the general population usually fits the typical psychopath profile. Industry leaders therefore have an unusually high incidence of psychopaths among their numbers.

The industry psychopaths identified weren’t middle-management either but included vice-presidents, directors and CEOs.

The psychopathic leaders in question turned out to be not that good as managers. But they could switch on behaviours as required—charm, manipulation, intimidation—to suit situations and to support their climb up the corporate ladder.

Dr Babiak has said of the report’s findings… ‘Take that <psychopath’s> charm and couch it in the right business language and it sounds like charismatic leadership’.

This all brings me, yet again, to a point previously made in this blog. Is yours an individual-centric, corporate culture that rewards insensitive, aggressive or over assertive, tough-guy, short-termist behaviour in your senior team because of the way the company’s objectives and individual targets are set?

If so, you can bet that you’re storing up big problems for the future, not least because your workforce are intimidated and miserable… and therefore, ipso facto, increasingly de-motivated.

Tags: behaviours business language ceos charismatic leadership corporate culture corporate ladder dr babiak industry leaders intimidation manipulation middle management paul babiak point questionnaire professor bob hare profile industry psychopath tough guy university of british columbia vice presidents workforce
 

It’s a good question to pose a business leader. And, of course, he or she will say ‘team members’.

He or she will say that because of the more attractive corporate culture which this implies. The revelation about the sort of business and culture actually engendered will come only with further questions like:

• do members of your team have clearly defined roles which they have agreed?
• are targets imposed or set as a result of consultation and an objective analysis of market conditions?
• provided they exercise common sense, due diligence and observe necessary compliance, are your team members largely self-determining in how they approach their roles?
• is communication among team members sufficiently encouraged and strong to give them a sense of the bigger picture and their contribution towards it?
• is your approach to all members of your team objective and fair and without favouritism?
• are people recognised for what they contribute, or is their success overlooked?

Be honest. And if you can look me in the eye and say ‘yes’ to each of these questions, then I congratulate you on having a team rather than a group of employees.

And if you have to say ‘no’, then I salute your honesty
and suggest that things need to change
if you want maximum performance.

Tags: business leader common sense compliance consultation corporate culture due diligence good question honesty maximum performance objective analysis revelation targets team members