Why Good Managers are Like Sheepdogs

I'm returning from Bucharest, after speaking at the Thinkers50 conference - where they announced the 2009 list of the leading management gurus in the world. No, I'm not on the list. But I was included in their "Guru Radar", the list of the thinkers who we believe will shape the future of business.

Top of the gurus was CK Prahalad, whose "Fortune at the bottom of the pyramid" is credited with focusing a huge range of business on serving the needs of the poorest.

Check out the list at www.thinkers50.com.

"Great ideas change the world", explains Stuart Crainer who compiles the list with Des Dearlove. "And these gurus represent the most influential management thinking of our time."

A great conference with a range of great ideas from some of the gurus:

CK Prahalad (No. 1 in list) : "A good manager is like a sheepdog. A sheepdog has 3 rules to obey. First, bark but don't bite. Second, lead from behind. Third, know where you are going and don't lose a sheep." "I want leaders who can listen, so they can understand the future. If all you do is tell, you can only talk about the past."

Gary Hamel (No. 10): "Surveys show that in no country is more than 20% of workforce actively engaged at any one time." His key point: Think of the potential for increased productivity for companies who can raise that figure.

Lynda Gratton (No. 18): How to create an innovation Hot Spot: 1) Co-operation rather than competition. 2) Cross boundary co-operation, between different departments and different companies 3) Be ignited by a purpose, or a question. eg, Lord Browne's question to BP: "How do we become a force for good?"

Marshall Goldsmith (No. 14): An executive coach who focuses on civility. Just getting managers to say please and thank you can apparently make a big difference. And his offer is, if manager's behavious doesn't change - don't pay me.

Jonas Ridderstrale (No. 23) had flown in from Stockholm to speak at the conference: "Management: throughout the 20th century management was the art and science of stamping out deviance. How? By rules and conformity." He showed a great slide of a typical group of 50s white male managers in their identical suits and suggested the focus on uniformity was efficient.

"But of the Forbes 100 in 1917, how many beat the market between then and 1987. Just two, GE and Eastman Kodak. The others fell back not because they were inefficient but because they were irrelevant." Their lack of diversity, in their people and their approach, made them unable to respond to change.

Thinkers 50 has videos of many of these figures and more at www.thinkers50.com which is a fantastic resource. Check it out now before they start charging! I'm told the one for Howard Gardner (No. 16) is especially good.

And a huge thanks to Bogdan Ungureanu and all the folks at Publica for great organising and being wonderful hosts. I'm hoping to see my book Relax published in Romanian!

Engaging staff: Lessons from Asda

When I talk about Happy and how we've tried to create a great workplace, there are two very common questions: "Would what you've done work in a much larger organisation" & "Could you create that environment with staff you inherit, and are disengaged?"

I strongly believe the answer to both questions is Yes and I heard a great example of it from David Smith, the inspirational ex-Head of People at Asda. Speaking at the MLab conference on Employee Engagement, at London Business School, he explained that Asda had been 10 days from bankruptcy back in 1990.

By focusing on their people, they turned it around and grew to the company they are today: £18 billion in sales, 170,000 employees and rated the Best Place to Work in the UK in 2008. David set out 7 key points:

1) Hire for Attitude
"We realised we wanted gregarious, outgoing, chatty people - who will make it a pleasant experience to shop at Asda. We invest in recruitment, even the most lowly paid staff go through half a day at an assessment centre as part of th recruitment process.."

2) Overdose on Communication
"Talk in human language to reach people. At every staff change-over, every day, we had a 5 minute briefing to inform people."

3) Listen
"All my best ideas came from shop floor people"

4) Change Management Style
"Retail is a military operation. But we needed to move managers away from the old management style. One third of managers were enthusiastic, one third followed us and one third were resistant. "

5) Remove Under-performers
"Be ruthless with this, and most of the third of managers who were resistant are no longer with us"

6) "Money is a De-Motivator"
"Focus on financial rewards is not the way to motivate. We focused on recognition, even having an oscar ceremony for great service"

7) "Work made fun gets done"
"bring yourself to work". Bring all of your character, and be part of the community.

The turnaround has been based on a focus on engaging the front-line staff. Their measure of engagement has risen from 55% in 1990 to 91% today and Asda was rated the best company to work for in the UK in the Sunday Times survey in 2007.

"We have 360 separate P & Ls and I have done the calculations", explains David. "There is an absolute positive correlation between staff engagement and profitability. If a branch can achieve an engagement level of 94% I guarantee the profits will grow exponentially."

Watch out for David's forthcoming book "Asda Magic", out in 2010.

What Do Employees Want From Managers?

"Just about the only management book written from the perspective of the employee is Dilbert" commented Julian Birkinshaw, head of MLab at the London Business School, at their excellent event on Employee Engagement last Friday.

Its a good point and poses the obvious question: What would an organisation be like to work for if management was based on what front-line staff wanted, to enable them to do a great job. Here's some thoughts:

• A manager who is more of a coach than somebody who tells you what to do
• Managers role seen as focusing on making people feel valued and motivated, happy and satisfied with their work
• Believe the best: the first assumption - whatever difficulties arise - that people are trying to do their best, given their circumstances
• Managers chosen for their people skills - because they are good at supporting and challenging - not for technical skills
• Able to change manager if its not working out and you'd like a different one
• No blame culture, where mistakes are celebrated
• Open and transparent - all information is shared so there are no secrets
• Flexible hours - that suit the way you want to work
• Clear guidelines on what is needed, but then freedom to achieve the results your way, and trusted to do so
• Involved and informed about the things which affect you.
• Fairly paid, and know what need to do to get a rise
• Clear feedback, in a positive way, about how you are doing

I admit this is rather similar to the Happy management philosophy but I have always called it "management as if people mattered". Do let me know what you think? What other elements would you add?

Coal Mining or Indian Food?

At an LBS MLab conference on Friday, I found this statement from business author Stuart Crainer staggering: "More people in the UK now work in the Indian food business than in coalmining, shipbuilding and steel-making combined".

One hundred years ago, when my grandfather was leaving school, almost 10% of employment was in the coal industry alone. And probably nobody in the UK worked in the Indian food industry. Even 30 years ago, when Mrs Thatcher came to power, there were probably half a million people working in those 3 industries. (The membership of the NUM, for instance, was then around 200,000.)

Is this a statement of tragic decline or a testament to the economy's ability to change. It makes you wonder which industries, that may hardly exist today, will be the big employers in 30 years or 100 years time?

Remove the Rules: Learn from Netflix

When Happy was voted the best company for customer service in the UK, I asked the judges why we won it. David Jackson, chair of the judges, replied that we clearly knew exactly what our customers wanted. "But", he continued "that is not unusual. Most companies understand what their customers want. But most companies then put in place rules and procedures which prevent their staff from delivering what the customers want. You don't."

Learn from Netflix
I was reminded of this when I was sent this great slide show from Reed Hastings, founder of Netflix. (Netflix is the leading US DVD rental service, the equivalent of Lovefilm in the UK - and a company that has won awards for some of the best customer service in the USA.). There are a lot of slides (123) but they are packed with interesting ideas:

http://www.slideshare.net/reed2001/culture-1798664?src=embed

Many companies assume you need more rule as you grow. Reed rejects this idea, saying that since Netflix went public in 2002 and continued to grow, they have substantially increased employee freedom.

Netflix Expenses Policy: 5 Words
For instance Netflix has no vacation policy, instead judging people on the work they do rather than the time they are in the office. Their policy on expenses, entertainment, gifts and travel is just 5 words long: "Act in Netflix's Best Interests". This is backed by guidance such as "Travel as you would if it were your own money". Instead of lots of rules they trust their people and rely on their common sense. As one Netflix employee puts it:

"There is also no clothing policy at Netflix, but no one has come to work naked lately" Patty McCord, 2004

What happens when trust doesn't work and your people do something dumb? Reed suggests you don't blame them but ask what part of the context you failed to set for them.

"Flexibility is more important than efficiency in the long-term."
That is an interesting view from Reed. It reminds me of my current dealings with my bank, NatWest. I would forgive their inefficiency (making 5 penalty charges for a payment I never made) but not their refusal to fix it, despite me being a telephone banking customer, unless I write a letter explaining my case.

For Reed the approach is based on ensuring you have only the most talented people and paying the top market rate. "One outstanding employee gets more done and costs less than two adequate employees." Look at the rules in your company. Do you really need them? What would happen if you replaced them with guidance and gave your people ore freedom to do a great job for your customers?

Yearn for the Vast and Endless Sea
To finish, I love this quote (again from Reed's slides):

"If you want to build a ship, don't drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea"
Antoine De saint-Exupery, author of The Little Prince

Truly Great Customer Service: Learning From Bernie

We have got the builders in at home, Bernie and his gang. And they are rather amazing, they keep finding extra things to do. They changed the lock that used to stick, have fixed the window that has had a crack in it for years and sorted the leak from the shower. All for no extra charge. It is, of course, an inspired approach. None of that costs them much but it really delights us. I may have no idea whether their brickwork is better than the next guys but I was already all set to recommend them.

So what unexpected extras can you provide, just to delight your customers?

But it didn't stop with the little things. This week he's had one of his men spend 4 days re-pointing the back of the house. Again, no extra charge. This morning he discovered dry rot in the floorboards and he says he'll sort that too. Now this is getting ridiculous. But Bernie explained: "I hate charging extra so I build in some contingency in the original quote."

Would that approach work for you? Make the quote a bit higher and find some serious extras to include once you get started, that really meet the needs of the customer.

The result: Bernie hasn't had to search for work for years and won't need to even in the current climate. Everybody recommends him. Me included: if you want his details, just get in touch (henry@happy.co.uk). Though he only works in North London, and doesn't actually stray far beyond the streets of Stoke Newington and Crouch End.

Management Lesson from Tiger Woods

The July 6 2009 edition of Fortune has Tiger Woods, among others, talking about the "best advice I ever got".

'When I was young, maybe 6 or 7 years old, I'd play on the Navy golf course with my pop. My dad would say, "Okay, where do you want to hit the ball?" I'd pick a spot and say I want to hit it there. He'd shrug and say, "Fine, then figure out how to do it." He didn't position my arm, adjust my feet, or change my thinking. He just said go ahead and hit the darn ball. '

I think there is something profound here about how to help a talented individual develop. Let's translate it into management speak:

When you sit down with one of your people to plan their development, get them to set their own objective. Then ask them to figure out how to achieve it. Don't tell them how to do it, let them work out their own way. With your support.

That's it.