Sunday, 9 December 2012

Room At The Top

This morning I had a brief discussion with a friend who is a senior HR manager in Cairo.  She is brave and knowledgeable, with the ability to understand Western best practice (having grown up in the USA, as well as having held senior roles covering the Middle East for one of the world’s leading global brands) and she also values and appreciates the nuances of Islamic and Arabic life (she is a devout, Arabic speaking Moslem and proud of her Egyptian heritage).  She knows when to apply conventional international HR approaches and when to adapt to accommodate local and cultural requirements.  Understandably, she is concerned by the current conflict in Egypt (in many ways it is worse than prior to the overthrow of Mubarak), her family home is near the presidential palace, where there are fierce demonstrations (to date six people have died and over seven hundred been injured); the recrimination and bitterness in Egyptian society is almost tangible.

Anti Mursi protesters outside palace in Cairo - Reuters
The issues in Egypt seem to be rooted in disagreements over governance, the same could be said of Syria – where the problems are deepening and the potential ramifications (such as the use of chemical weapons) are terrifying.  It is believed that Syria has significant stocks of sarin – a foul chemical, used by Saddam Hussein against the Kurds and by the doomsday cult in Japan to kill innocent people on the Tokyo subway in 1995; it attacks nerves and paralyses muscles around the lungs causing people to suffocate.  Something, given my recent medical experiences, I understand a little about and I can imagine how dreadful a way it would be to die. Should these chemicals get into the wrong hands the impact could be devastating.  If President Assad is persuaded to leave Syria, in an attempt to create peace, this could leave a power vacuum, which might result in ongoing civil unrest (as has occurred in Egypt and Lebanon).  Good governance is crucial at all levels in society, just as it is in business.

Earlier this week I participated in an interesting meeting between HR directors and academics, to look at the issues of governance within organisations (and most specifically the role of board members).  We heard a great case study in which a CEO needed to be replaced at very short notice.  It reminded me of a time when I was in a business where the CEO was asked to step down, an interim CEO (a senior executive from within the business) held the reins until the new CEO was appointed and commenced.  Individuals who had joined because of the chemistry and rapport between the former CEO and themselves found the new regime very challenging and business was adversely impacted, whilst employees’ focus was on internal matters, rather than customers and revenue.  Some senior executives chose to leave the organisation and the company was not pleased to see all of them go.  It’s not always rats that leave the ship.  Better communication prior and during the period of unrest probably would have helped to retain good people, but it was a patriarchal business that felt that information should only be provided “on a needs to know basis” and most of us were not deemed worthy of needing to know.  Times of change are, understandably, potentially destabilising for those involved, even when they have been well briefed, and can have a significantly adverse impact on performance and public reaction to a brand.  However, the reverse can also be true, if change is handled well a brand and business can benefit. 

According to Sir Win Bischoff (Chairman of Lloyds TSB) and Edward Speed (the Chairman of the eminent global search firm, Spencer Stuart), both of whom spoke at a recent live event hosted by the Financial Times, less than 20% of interim CEOs are appointed to the permanent role (so press speculation that Paul Dempsey is unlikely to become the full time CEO of BBC Worldwide is likley to be true).  Traditionally interim CEOs have came from inside the business (the argument being that they are familiar with the organisation and its people).  Given the probale brevity of their tenure, it is not surprising that many interim heads of organisations usually are loathe to introduce any radical policies or approaches that might need to be overhauled by the permanent appointee.  Yet, the reason for the original CEO’s departure might be because of the need for appropriate action to be taken swiftly to stem a problem (such as occurred in the recent situations at both the BBC and some subsidiaries of News International).  To better facilitae these times of change, a growing market for professional “interim CEOs” has developed.  They can offer the unusual skill set required to manage a crisis situation, as opposed to having solely the day-to-day operations of the company.  It is infrequent that an interim head meets the requirements for the role going forward – it can be done, witness Colonel Richard Harrold OBE, who stepped up to steer the Tower of London through a difficult period after his former boss, The Governor, was asked to leave following adverse coverage in the media and internal ructions.

Although organisations usually find a way to cope when disaster strikes, it is prudent to avoid the need for an emergency replacement for a CEO and/or at the least, to have a known and understood plan for interim governance.  A plan should exist to enable a smooth transition if, for example a CEO’s to be taken ill (as occurred at Lloyds TSB in 2011, when Antonio Mota de Sousa Horta was signed off with stress).  It is not usual for a Chairman to make it common knowledge as to whom he has lined up as the CEO’s successor.  When John F. Welsh announced his intended retirement, GE was rumoured to have commenced a rigorous internal search for a new chief executive.  Reportedly, it was a three-horse race and all there individuals knew that they were contenders.  When Jeffrey Immelt’s selection was made public he commenced a year of working closely with Welsh, so that he understood the requirements of the role – an effective induction to ensure continuity and stability.  However, GE lost two good employees (namely Robert Nardelli and James McNerny) when they found that they were not the chosen one.  Senior leaders are ambitions and can easily feel slighted if they are seen to come second.  What’s more, the head-hunters will circle like sharks if they know that good employees are feeling disgruntled and can therefore be enticed into considering external opportunities.

A good relationship and mutual understanding is required for a Board to be truly effective.  Clearly the rapport between the Chairman and CEO is crucial, however it must not be too “chummy” – the Chairman needs to feel comfortable challenging the chief executive and the CEO must appreciate that he and the other executive directors are under scrutiny.  Increasingly Boards as a whole are undergoing psychometric and other forms of assessment, to ensure enhanced awareness of their strengths and capabilities of the team as well as to improve the way in which individuals interact with each other.  At times this is taken further – I am aware of one instance where a subsidiary wished to make a representation to the Board for a significant amount of funding.  The Board had been quite open about the Myers Briggs types within the team.  The subsidiary’s leadership team decided to trial the planned presentation on individuals whom they knew were similar in type to the main board members - this enabled them to anticipate the issues that might be of interest or concern and have prepared responses.

Summary Of Myers Briggs personality types

Being well prepared goes a long way towards winning the battle.

Boy Scout Badge

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