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Work.

Because business is about people

Spring 2017

Welcome to Japan: where the future is still being invented “Nobody builds walls better than me.�

The chaotic return of charismatic leadership Time to face the painful truths about diversity Is Tim Parker really the Prince of Darkness?

Work.

Because business is about people

When Martin Luther King delivered his ‘I have a dream’ speech back in 1963, the one thing you can guarantee he wasn’t expecting is that more than 50 years later racism and other forms of inequality would still be rife in the workplace. Despite decades of legislation, King’s assertion that “all men are created equal” (you’d hope that if he’d given the speech today he might have added ‘women’) is still some way from being realised.

So where are we going wrong? In our feature on page 32, we ask whether legislation and a fear of causing offence to traditionally discriminatedagainst groups are actually hindering our efforts to create more inclusive working cultures. As usual, do send your feedback to claire.warren@ haymarket.com – and if you’d like the digital edition, it’s on the App Store and Google Play.

Claire Warren, editor

Features in detail p4 Perspectives: distilled management thinking p6 15 minutes with… Dame Carol Black p12 William Taylor on becoming extraordinary p14 Healthcare’s growing crisis p24 The challenges of diversity p32 Before they were famous p42 Charismatic leadership p44 Unlocking the secrets of Japan p50 Interview: Post Office chairman Tim Parker p58 Debrief: business research, reports and insight p62 Further reading p72 The off-piste guide to automation p74

Front cover: 727, 1996 © 1996 Takashi Murakami/Kaikai Kiki Co., Ltd. All Rights Reserved The image of the work is cropped to fit the cover

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William Taylor Healthcare’s The problem on leadership growing crisis with diversity

Before they were famous

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p32

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Writer and entrepreneur William C Taylor is best known for Fast Company, the popular business magazine he co-founded just over 21 years ago and sold five years later for $340m. In his latest book, Simply Brilliant, he explores the ways organisations in traditional fields are breaking the rules with astonishing results. From SOL, a Finnish office cleaning company that gives its frontline employees autonomy, to challenger brand Metro Bank, his examples demonstrate that you don’t have to be a snazzy tech start-up to wreak creative change. Here he talks to Jane Simms about why playing it safe is often the riskier option in business, and the importance of allowing people to flourish.

When the NHS was created nearly 70 years ago, no one could have foreseen how advances in medical science and an ageing population would drive costs up.

But the NHS is not alone. Healthcare cost around $7.2trn in 2013 worldwide (roughly 10.6 per cent of global GDP) and nearly half of European hospitals face financial difficulties.

Asking individuals to stump up more to fund healthcare isn’t a realistic option, so should employers be footing more of the bill? After all, while work is good for us it can also make us sick. Providing private medical insurance is one obvious option but, as Georgi Gyton reports, there are other ways business could help shoulder the burden.

From Leonardo da Vinci’s grandiose claim to be able to “design indestructible bridges, drain moats, silently build secret passages…” when looking for a job as a military engineer, to games designer Tim Schafer’s novel adventure-game covering letter, it can pay to send in funny, original or candid job applications.

Though it didn’t quite work for author Hunter S Thompson, whose frank letter lambasting “journalism as overrun with dullards, bums and hacks hag-ridden with myopia, apathy and complacence” failed to get him hired at the Vancouver Sun. Paul Simpson takes a peek at the early aspirations of the soon-to-be famous – and infamous.

Jane Simms is a freelance management journalist and was previously editor of Financial Director

Georgi Gyton is associate editor at People Management

“If NASA launched a person into space today, she could soar past Mars, travel all the way to Pluto and return to Earth 10 times before women occupy half of C-suite offices.” The words from Facebook COO Sheryl Sandberg sum up the state of diversity in today’s workplaces.

Casual racism is still rife, more than half of working-age disabled Britons are jobless and around one in five lesbian and gay employees have experienced verbal bullying. So why, asks Claire Warren, haven’t we progressed further when there is plenty of evidence to suggest that the benefits of diverse workplaces run much deeper than the social good? To open up the debate, Work. takes a look at some of the issues that we often prefer to ignore.

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Claire Warren is editor of Work. and has previously worked for the Independent

Paul Simpson is a business journalist and author, who has contributed to Wanderlust magazine and written books on football and Elvis

Chris Garff, SuperStock, Internet Archive Book Images, Gamma-Keystone/Getty Images, Alamy Stock Photos, Jerome Favre/Bloomberg/Getty Images

FEATURES IN DETAIL

Charisma and the CEO

Spotlight on Japan

Interview: Tim Parker

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“Oh hell, everyone in the game has ego. You have to have self-confidence to seize the opportunities.”

Jack Welch’s comments aptly sum up the leadership styles of many politicians and business leaders. Persuasive, magnetic, inspirational and decisive – leaders with a healthy dose of charisma have certainly made a name for themselves over the years, but does charm and influence necessarily equal business success?

Morice Mendoza looks through a historical lens at the great visionaries who have built giant corporations, including Andrew Carnegie, John D Rockefeller, Henry Ford, Lord Weinstock and, more recently, Steve Jobs and Bill Gore, to discover what makes a successful CEO.

Japan used to be the country of the future, the land most likely to reinvent capitalism, to which tribes of consultants flocked, hoping to unlock its secrets. Today, after two ‘lost’ decades of economic underperformance and the disgrace of many of its most famous corporate icons, the country is often regarded, socially, politically and economically, as an anomaly. Yet in many respects, Japan remains the country of the future, writes Paul Simpson.

Many of the 21st century’s most vexing issues – an ageing population, automation and equality – are at their most acute in Japan. The country has also spent a long time pondering a question many other developed economies are only just getting to grips with: in an era of slow – or no – growth, what should society aspire to be?

Nicknamed the Prince of Darkness, Tim Parker has a reputation as a slash and burn operator. But his decisive measures have rescued an array of failing businesses, notably an almost loss-making Clarks in the 90s. His remedies were drastic, closing all UK manufacturing and moving it offshore, but he set the company back on the road to growth. Now juggling a trio of roles as chair of the Post Office, the National Trust and Samsonite, Parker tells Matthew Gwyther why he always wanted to be a general manager and loves nothing more than getting under the bonnet of a project. He still has some rummaging to do: keeping the Post Office in the black, steering the National Trust’s farming arm through Brexit and keeping luggage brand Samsonite flying high.

Morice Mendoza is a consultant and editor, who specialises in world business, HR and sustainability

Debrief p62-71 Talent management

In the highly connected economy, technical and social skills are ever-more important.

Humour

Think twice about making jokes at work – it can be a risky business when not everyone has the same sense of humour.

Motivation

Performance-related pay can cause more intense working, leading to increased stress for employees.

Executive pay

The growth in CEO pay doesn’t correlate with increased economic returns.

Leadership

Few senior leaders are considered ‘very effective’ at people management.

Creativity

Employees who have curious minds could be more creative in solving complex problems.

Change management

Middle managers are key to gaining employee buy-in for organisational change.

Whistleblowing

Employee whistleblowers can be an effective deterrent for future wrongdoing.

Ethics

A multinational company’s code of ethics becomes more blurred the further it moves from home.

Gongs

Government awards may influence CEOs to hire more staff, serving the interests of voter-pleasing politicitians.

Matthew Gwyther is editor of Management Today

Culture

Management style across cultures doesn’t differ as much as previously thought.

HR profession

HR practitioners identify more with their organisation than their profession, a finding that may be explained by a shift to strategic HR management.

Wellbeing

According to a CIPD paper, money worries can affect employees’ job performance.

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PERSPECTIVES MANAGEMENT THINKING DISTILLED

Q&A DAVID ROBERTSON

Little ideas unlock business innovation

How does the third way work?

The goal is to make a product attractive by surrounding it with a portfolio of complementary innovations – think of the Apple Mac and how its appeal was enhanced by the iPod and other innovations. You must choose a product worth investing in and work out its promise – what customers want from it – before generating ideas for new ways of fulfilling that promise. You then have to set up roles and processes to deliver those innovations.

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How can top managers help their teams find third-way success?

Understand that you need to be humble about your ability to predict innovation success. Push your team to do small, cheap experiments to test your innovation ideas. As you start to see success for a specific product, spread the lessons around the company, and roll out the approach to more products.

Is this approach right for every company in trouble?

No. It wouldn’t, for example, have helped Kodak respond to the threat of digital photography.

This is one tool in the innovator’s tool belt. But for some companies at certain times, it can be the best approach to innovation.

The perils of the ‘echo chamber’ IT’S TAKEN MINISTERS months to begin explaining Brexit, and a clear definition remains elusive. Meanwhile, business leaders have begun shaping the post-Brexit world, revealing themselves to be more strategic thinkers than politicians, according to Michael Smets. He points out that some banks are already preparing to move jobs from London to mainland Europe, creating facts on the ground that will have to be taken into account in negotiations.

Operating at the intersection between business and politics, leaders of major companies have much to teach politicians, says Smets, co-author with Timothy Morris of The CEO Report. The biggest lesson may be the need to view doubt as a positive that contributes to good decisionmaking. As one of 150 CEOs interviewed put it: “If you don’t doubt yourself in a constructive, positive way, you are borderline dangerous for your company.”

Doubt, says Smets, is the antidote to life in an ‘echo chamber’, where the only voices are those who share your views. Brexit underlines the importance of bringing a diversity of thought into any debate on important issues. “That’s relevant to CEOs,” says Smets, “and also to politicians.”

Smets is associate professor in management and organisation at Saïd Business School

Words: Anat Arkin

CONVENTIONAL WISDOM SAYS companies innovate in one of two ways. They either make incremental improvements to current products or they pursue radical, disruptive innovation. But there is a third way, according to David Robertson, professor of practice at the University of Pennsylvania’s Wharton School.

His forthcoming book, The Power of Little Ideas, shows how many well-known companies have successfully used a strategy that is neither incremental nor radical.

What does this mean for a company’s people?

To develop complementary innovations, companies need to bring in people from business functions that aren’t usually expected to innovate. Company lawyers, for example, might be asked to come up with a new legal approach that increases a product’s appeal, with similar challenges for procurement, finance and other functions.

This requires a new type of leader. Businesses often give product managers responsibility for developing new products. But you need a solutions integrator – someone with the skills and authority to manage people from different business areas.

Nephi Niven, Paula Carlino, Pierre Jayet, Malcom Cochrane, Internet Archive Book Images, Fisher Studios

Candour is key to long-term success GIVING GUIDANCE is the most important part of managing people, in Kim Scott’s opinion. But she also believes guidance will only help employees develop their skills and achieve better results if managers demonstrate ‘radical candour’.

This shouldn’t be confused with rudeness or unkindness.

“Radical candour happens when you care personally at the same time as you challenge directly,” Scott explains. “It demonstrates concern for the other person’s wellbeing, both their feelings and their long-term success.”

By contrast, “obnoxious aggression” occurs when you challenge people without caring about them, while “ruinous empathy” results in criticism so sugar-coated and fuzzy that employees don’t know where they went wrong.

But doesn’t saying what you think risk giving offence and damaging workplace relationships?

“Sometimes you may have to say something that stings a little bit in the short run in service to the person’s long-term success,” replies Scott, author of Radical Candor.

You may have the best intentions, she continues, “but if you can’t make those clear to the other person then it’s up to you to figure out a better way to get through”.

Scott is a writer and co-founder of Candor, Inc

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PERSPECTIVES

Are employers ready to manage four generations?

As skills shortages, pension deficits and demographic change lead people to work longer, it’s becoming commonplace for members of three or even four generations to work side by side. But what are the challenges of age diversity, and how much difference does when you were born make to your success at work?

EXPERTS’ VIEW

FLORIAN KUNZE

LYNDA GRATTON

Chair for organisational studies,

Professor of management practice,

University of Konstanz

London Business School

Young people promoted into supervisory roles are increasingly likely to find themselves managing older employees. But while age diversity issues are now receiving more attention from employers, strategies for dealing with the young boss-older subordinates scenario are rarely included in leadership development programmes.

Generational differences are overdone. Most people want interesting work and some autonomy – whatever their age. It’s been a mistake to put people into superficial categories, and expect baby boomers, for example, to be less willing to invest in their own development than millennials. There’s little evidence behind these categories, or the idea that different generations can’t work together. Some studies even suggest mixed-age teams are more productive than those made up of just one age group.

A recent study (Younger supervisors, older subordinates: An organizational-level study of age differences, emotions and performance

by Kunze and Jochen Menges) found inverse age differences have the potential to create negative feelings. If such feelings are widespread, company performance can suffer. Age-inverse leadership relationships go against common norms that equate seniority with age.

To avoid these problems, businesses should regularly assess employees’ emotional states.

They should also invest in training to help upcoming leaders deal with situations where they are managing older people. Research has shown that young managers are most successful if they maintain a professional distance from older subordinates and provide them with autonomy. Beyond that, companies need to encourage positive attitudes. Only if different age groups value their mutual differences and strengths will they be able to work productively together.

Instead of tailoring people management practices to the supposed needs of different generations, employers should stop assuming employees’ lives will fall into the traditional stages of education, work and retirement.

They need to recognise that, as life expectancy rises, our lives will increasingly follow more varied patterns, and build greater flexibility into the way we all work.

Employers should also rethink retirement.

People have to be encouraged and supported to work longer than they used to, and organisations can do that by dropping their tendency to stereotype employees on the basis of age. Age stereotyping is worse than gender stereotyping right now, but it is being challenged by the growing number of role models showing they are perfectly capable of doing big jobs in their 60s, 70s and 80s.

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Outcomes

How big a trend is this?

Certain companies – Apple, Amazon, GE and Siemens spring to mind – already have technology that spans many markets.

That doesn’t necessarily mean that they will succeed in every venture: Amazon’s iPad rival, Fire, was a flop. At the same time, the view that we have reached 'peak stuff ' is supported by the booming experience economy, so many companies will need to think more broadly about their business and see products not as ends in themselves but as part of a service offering.

The bottom line Schwieters has a point, but technology is not the only barrier to entry in certain markets. Computers slashed the cost of producing national newspapers in the UK in the 1980s, but publishers still had to spend millions on share of voice advertising.

In the drinks business, for example, Diageo (which owns such brands as Guinness, Johnnie Walker and Tanqueray) estimates that it takes 10 years – and serious investment – to build a strong global brand. Yet in some sectors, a focus on outcomes makes sense: why shouldn’t Ford look to transport people on trains, boats and bikes, as well as cars?

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Stark choices for modern civilisation Curiosity gives creativity a boost THE SEARCH for business success through innovation has put a premium on creativity. But why are some people more creative than others? Are they born that way or can anyone become a creative genius through hard work? According to Christine Temple, neither answer tells the story.

In Picasso’s Brain, the late neuropsychologist concludes that creativity cannot be “distilled down to a single factor or brushed away as a consequence of hours of practice”.

She explores the factors that made Pablo Picasso a giant of 20th century art, concluding that he had the right genes and a social environment that nurtured creativity.

Hard work was also a factor, as was a playful, childlike openness to new experiences. Most people, says Temple, lose their playfulness – and their creativity – as they grow up, but Picasso remained playful into his nineties. Citing research showing that asking people to imagine themselves behaving like children produces more creativity, Temple says: “We cannot all become creative geniuses, but we can boost our creativity by being curious about and open to the world.”

Temple was emeritus professor of psychology at the University of Essex

FACED WITH falling living standards and a widening gap between rich and poor, economists usually prescribe more growth.

But that remedy hasn’t worked for decades, according to Graeme Maxton and Jorgen Randers.

Their new book, Reinventing Prosperity, points out that the economic growth of the last 30 years has not led to the expected rise in living standards or distributed wealth more evenly. “It has achieved the opposite,” they say, predicting worse to come as new technologies fuel unemployment.

Their solutions include shortening the length of the working year to redistribute work evenly, shifting taxes from employment to resource use and increasing employment benefits.

They also want to encourage smaller families to reduce humanity’s pressure on the planet.

Maxton and Randers see society facing a stark choice between the negative long-term consequences of the current economic system and an alternative path. “The decision,” they say, “will be the epic social, environmental and political battle of the 21st century, and the stakes are as high as they can ever be: modern civilisation’s continued existence in anything like its current form.”

Maxton is secretary general of the Club of Rome think tank. Randers is a professor at BI Norwegian Business School

Pew Literary

What is it?

Markets, schmarkets – the new thinking is that companies should no longer think about staying in vertically defined sectors, but must instead adopt what Norbert Schwieters, global power and utilities leader at PwC, calls an 'outcomes mindset'. His argument is that technology is reinventing so many industries – media, telecoms, automotive, infrastructure, healthcare, to name but a few – that traditional demarcations no longer apply. To stay competitive, organisations need to be fl exible enough to rethink their business, thinking less about product and more about outcomes. So Ford is not a car company, it is a company that helps a customer get from A to B. The Internet of Things could act as the mother of all disruptors given that, Schwieters writes, “digital fabrication will make it possible for a single factory to make everything from airplane parts to garden ornaments”.

PERSPECTIVES

Employee branding an untapped asset AS COMPANIES increasingly recognise that employees’ social media activities can be a marketing asset or a disaster, Marie-Cécile Cervellon sees ‘employee branding’ emerging as a strategic issue.

“Employee branding involves, at a minimum, employees behaving in a manner consistent with their employer brand values on social media,” she explains. “However, employees might even promote their employer’s marketing message, becoming brand advocates.”

Research by Cervellon and Pamela Lirio, assistant professor of international HRM at Montreal’s School of Industrial Relations, found that employee opinion is seen as a credible source of information on brands. But organisations have only partially tapped into this, they suggest in an MIT Sloan Management Review article, ‘When Employees Don’t ‘Like’ Their Employers on Social Media’.

Companies could encourage staff to be brand ambassadors, says Cervellon, by setting out policies on the dos and dont’s of social media behaviour. But she recognises employee branding could be seen as intruding into employees’ private lives. “Employee branding requires a culture built on freedom and trust,” she says. “It should be encouraged and never imposed.”

Cervellon is professor of marketing at EDHEC Business School in Nice

LAURA HARRISON

LET'S GO BACK TO STRAIGHT TALKING BEFORE MORE WORDS LOSE THEIR MEANING I ONCE worked in an organisation to devalue as they become mangled that had a craze for a game called in the business machine where ‘the real deal’. You were given a deck white can be relabelled black. of cards, each bearing a different Purpose, values, truth and trust word or phrase (they could be are probably already lost causes. anything from love and beauty, to Kindness, compassion and love may making a difference or working in well be next. If a retail bank wants nature), and were asked to sift to show its customers love, what’s through them, pulling out those that the word for that heart-stopping most resonated with your values. It moment when you realise you’re was intended as a conversation sitting over the table from someone starter, an early milestone in an you want to spend the rest of your authenticity programme. Hmm... life with? Is it post-love?

Honesty and truth featured And if a colleague says he thinks frequently in selections. someone doesn’t really “The honesty card But what I began to have a place in the seemed to be worn notice was how bizarrely organisation because as a badge of pride these words were being ‘they don’t share our by senior managers” values’, but really means used in a hierarchical context. The honesty ‘don’t share my social card seemed to be worn as a badge background or education’, how do of pride by senior managers, who you have a conversation about apparently interpreted the word to values? If an organisation decides mean: ‘I have a right to share my to raid archives for its founder’s unfiltered perceptions of reality. purpose, plundering original You will listen and adapt your integrity in pursuit of margin, what perception accordingly.’ Truth are the words that will help you? too suffered from this corporate Perhaps business needs a new bastardisation of language. Far from language. One where meaning what the Buddhist sense of wisdom, it you say, and saying what you mean, meant: ‘This is my truth; suck it mean, well, meaning what you say up.’ So a good intention towards and saying what you mean. We could integrity and authenticity began make a pact to start again, to call a to bristle with passive aggression. cock up just that (OK, it’s a learning The experience left me intrigued opportunity too), a prejudice or bias by how words change their meaning just that, and a desperate, relentless within corporate worlds. Big, pursuit of short-term gain just that life-enhancing, abstract words start too. That would be the real deal.

Harrison is the CIPD’s director of people and strategy

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PERSPECTIVES

BEST OF

Fresh thinking from the worldfamous incubator of ideas

DAVID AUTOR Ford professor of economics, Massachusetts Institute of Technology Why do so many people still have jobs?

Machines increasingly do our work. So why are there still so many jobs? One reason, says Autor, is that while it eliminates some jobs, automation frees us up to invent new products, services – and jobs. Many people aren’t qualified for the good jobs created and end up in low-skilled work. But we’ve been here before and survived. When automation destroyed many agricultural jobs in the US, farming states raised the school leaving age to 16 – an investment that created a productive workforce. So we can rise to the challenge of automation. “It’s not costless,” says Autor. “It’s not easy. But it’s feasible.”

SUSAN CAIN Founder, the Quiet Revolution organisation Celebrating introverts In a world that prizes extroverts, life can be difficult for introverts. Most workplaces are designed for extroverts and their need for stimulation, while introverts are most switched on and capable in low-key environments. They need the solitude that self-described introvert Cain sees as a crucial ingredient in creativity. But that doesn’t mean people should stop exchanging ideas. “That’s great,” says Cain. “It’s great for introverts and it’s great for extroverts. But we need much more privacy and much more freedom and much more autonomy at work.”

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Authenticity doesn’t lie in one ‘true self’ AT A TIME of low trust in business leaders and even lower employee morale, the idea of ‘authenticity’ has gained currency.

A whole industry has sprung up to advise leaders on how to win trust by discovering and being their ‘true’ selves. But a simplistic understanding of what authenticity actually means can get in the way of effective leadership, says Herminia Ibarra.

In a Harvard Business Review article, ‘The Authenticity Paradox’, published in HBR’s new book, 10 Must Reads for New Managers, she points out that authenticity is supposed to be an antidote to a single model of leadership. But it has come to mean something far more limiting, as well as culturally specific.

A close look at how leaders are taught to discover and demonstrate authenticity – through selfdisclosure, for example, or by talking about their triumphs over adversity – reveals a model that is in fact very American, according to Ibarra. “This amounts to a catch-22 for managers from cultures with different norms for authority, communication and

collective endeavour, because they must behave inauthentically in order to conform to the strictures of ‘authentic’ leadership,” she says.

The importance attached to sticking to one ‘true self’ also flies in the face of research into how people evolve through experience – and not just through introspection. Unless leaders experiment with new ways of leading and behaving, their habitual patterns of thought and action will fence them in, she says, urging leaders to view authenticity not as an intrinsic state, but as the ability to take what they have learned from the leadership styles of others and make this their own.

“Countless books and advisers tell you to start your leadership journey with a clear sense of who you are. But that can be a recipe for staying stuck in the past.

Your leadership identity can and should change each time you move on to bigger and better things,” she concludes.

Ibarra is the Cora chaired professor of leadership and learning, and professor of organisational behaviour, at INSEAD

Tim Dunn, Financial Times

DAVID BURKUS Associate professor of management, Oral Roberts University Pay transparency pays Chances are you don’t know how much your co-workers earn, and they don’t know how much you make. Such secrecy is meant to prevent all hell breaking loose, but experiments with pay transparency reveal the opposite. It’s when people don’t know how their pay compares to peers that they feel unfairly treated. Pay secrecy also makes it easier to ignore discrimination – especially on grounds of gender. “If we want to close the gender wage gap,” says Burkus, “maybe we should start by opening up the payroll.”

PERSPECTIVES

ANTHONY HILTON

EVERYTHING YOU THINK YOU KNOW IS WRONG. OR AT LEAST IT’S NOT MUCH USE UNLESS YOU HAVE IMAGINATION TO BOOT KNOWLEDGE IS so last century.

This is the age of imagination. The business that does not understand that is not going to survive. The comment comes from a speaker at a conference dedicated to the future of work, which took place in Prague last autumn. It stood out amid presentations about the impact of digital, the imminent obsolescence of maybe a fifth of business models and the need to find new jobs for millions of low-skilled people soon to be displaced by technology, and high-skilled people like accountants whose jobs will disappear if blockchain and AI can be made to deliver on their potential.

Society has long accepted that some people know more than others.

In earlier times, soothsayers were respected for their supernatural powers and religious leaders for their apparent connection to God. As the age of commerce developed, experience, aptitude and learning came to be valued and those who knew less deferred to those who knew more, either by taking instruction from them or, as in the case of the professions, by employing them to handle their more difficult tasks. It is how the world of business and commerce evolved.

Thus, the idea that knowledge no longer has value has the potential to drive a stake through the heart of current business structures. To say

‘you may know more than me, but that does not make you better qualified than me’ is challenging.

So what lies behind this seemingly outrageous claim? First, it’s the belief there is no longer any great advantage in knowing things – or, by implication, any great reward for having spent years in education absorbing facts, philosophies and opinions – because anything you need to know you can Google.

You no longer need to learn a language because we will soon have “If the business world is in a state of permanent revolution, firms that wish to survive will also have to be open to the idea of permanent revolution” devices that will deliver instant translation. You no longer need to know geography because the sat nav (or driverless cars) will take you where you want to go. You are naïve to expect longevity from a business based on intellectual property as nothing stays secret for long.

Of course, it is not the knowledge itself that has value, it is the way people apply that knowledge and use it to interpret events and guide decisions. It is an established truth in business that the most useful person in a crisis is someone who lived through the last one. They not only remember what happened last

time, they bring a sense of perspective to the situation, which is unlikely to be found in someone seeing things for the first time. So it really goes against the grain to suggest such knowledge might be a disadvantage.

The point, however, is that we are entering a world where old solutions no longer work and experience is a disadvantage because it traps us in the past where we become irrelevant. This might not be true in times of the most extreme crises – it depends on what form they take – but most of life is not about crisis.

In the day-to-day rough and tumble of business life, experience can too easily morph into institutionalised resistance to new ideas.

If the world is changing, if we can no longer be sure of the old certainties, and if the speed of innovation is significantly greater than ever before, then anything that restricts the agility of a company could be fatal. If the business world is in a state of permanent revolution, firms that wish to survive will also have to be open to the idea of permanent revolution. Their greatest weakness will be if they cannot imagine something different; their greatest success will come from devising appropriate business structures that allow them to tap into the minds of those who can, so that imagination becomes reality.

Hilton is financial editor at the Evening Standard

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minutes with...

Dame Carol Black The former health and work tsar on stress, stepping aside and good management

On needing to stay relevant As principal of Newnham College, Cambridge, looking after the interests of the next generation of workers, there’s plenty to reflect on about how work has changed. For today’s youth, I see tremendous opportunity, but more challenges. We know they won’t be in a job for life, so people will need to continually retrain to stay relevant. This will only create more stress, and a need for ever greater workplace resilience.

I’m sure I was stressed when I was younger, although I don’t think I ever considered the state of my at-work mental wellbeing.

But even I have to adapt. I’ve just learned how to use WhatsApp. 12

On pressure to step aside At a time when retirement is no longer an automatic consideration for people in their sixties, it’s understandable how today’s younger generation can feel it’s the duty of older workers to stand aside, and give them the chance we had when we started out. For some jobs – like being a director of rheumatology – there can only be one person doing it, and when I was at the Royal Free Hospital, in exactly this position, I did just that – stepped aside. I felt I had to. Otherwise I would have prevented somebody younger, and just as talented, from taking on this role. But it’s not the same story across all sectors. While I don’t want older people to stand in the way of the young – not every older worker needs to have a full-time job – it’s better to have more people in the labour market, creating wealth and economic value, not fewer.

On developing confidence A lot has been written about me being only the second female president of the Royal College of Physicians [in its 600-year history], and becoming a female medical director of the Royal Free Hospital. But I’ve simply seen each step up as giving me – as a woman – the confidence to strive for the next big thing. It has also given me the appetite to take more risks. I wouldn’t have

applied to be the government’s national director for health and work otherwise.

On being in the public eye When you start to take on big jobs, you know that everything you do is going to be looked at forensically. Being in the public gaze is something you get used to. You can worry about people turning around something you’ve said, but it’s never stopped me from taking a role. There has been a lot of criticism about ‘fit notes’ – one of the recommendations in my 2008 Working for a healthier tomorrow report. But I still believe in it. I admit it isn’t working very well at the moment, but that’s possibly because a good idea isn’t always delivered in the best way the first time around.

On what leaders need to focus on The greatest difference to workplace productivity comes from line managers being trained how to listen to, understand and give autonomy to their people.

I’m not saying they need to be psychologists, but spotting what’s different about individuals early on can have a tremendous impact.

People bring a whole bunch of stuff to work with them, so being vigilant to what affects their mental health has never been more important. This is far more worthy than providing fruit or gym membership to staff.

Interview: Peter Crush. Portrait: Andrew Shaylor

On being an older worker I’m approaching my 80s, so I’ve now become what I was warning government about 10 or more years ago – someone who is continuing to work much later in life. Although I’ve had a long career, it doesn’t feel like it.

I didn’t begin studying medicine until I was nearly 26. I was eight years older than the other students around me, so I’ve always felt like a late starter. I’ve kept working because I’ve always been presented with interesting jobs. I never called them ‘jobs’ though, more ‘questions to try and answer’. And anyway, I’ve never been that good at being a lady that lunches!

About Carol Black

Dame Carol Black was the government’s national director for health and work, and is now an expert adviser to the Department of Health.

She has undertaken three independent reviews for the government, covering the health of Britain’s working age population (2008), sickness absence (2011) and the impact on employment outcomes of drug/alcohol addiction and obesity (2016).

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CAN BE

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EXTRAORDINARY

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It is easy to assume the average business will only ever be just that but, as William C Taylor tells Jane Simms, the greatest potential can often be found in the most mundane of places

WILLIAM C TAYLOR is a passionate believer in not letting what you know limit what you can achieve. Just as ordinary people can achieve the impossible, so too can ordinary businesses given the right mindset. “There is no such thing as an average or old-fashioned business,” he says. “Just average or old-fashioned ways to do business.”

On the morning of our interview, Taylor is the epitome of his own advice. Polished in public, the writer, entrepreneur and doyen of the conference circuit bears only a slight resemblance to the man who smiles out from his website. Refreshingly dishevelled and sweatshirted, he looks as if he wasn’t quite expecting a video call. But he’s certainly prepared for the conversation, embarking on a thoughtful and enthusiastic exposition of some of the themes in his latest book, Simply Brilliant: How Great Organizations Do Ordinary Things In Extraordinary Ways.

The over-arching message – that great businesses and their leaders break the rules – is not new. Taylor has spent most of his career challenging conventional wisdom, and his previous books, Practically Radical and Mavericks at Work, won plaudits on both sides of the Atlantic. A consummate storyteller, he populates his writing and his conversations with characters and anecdotes from fields as varied as cleaning in Finland, banking in the UK and urban regeneration in Las Vegas.

Taylor is perhaps best known for Fast Company, which he co-founded just over 21 years ago with the aim of shaping the conversation about business. The magazine earned a passionate following among executives and entrepreneurs the world over, helped perhaps by the fact that the founders practised what they preached – selling Fast Company for $340m just five years after they set it up in borrowed office space in Cambridge, Massachusetts.

Here he talks to Work. about why playing it safe is often the riskier option, his dislike of the word innovation and the importance of allowing people to flourish.

Why don’t more organisations do ordinary things in extraordinary ways?

Business culture is so focused on the sci-fi stuff that goes on in places like Silicon Valley, that executives in more established fields give themselves a ‘permission slip’ to be less daring and imaginative.

But all the razzle-dazzle associated with start-ups is not actually that exciting now. It is organisations in the most mundane fields that have the greatest potential to wreak creative change, to generate 20

excitement among customers and employees – and the benefits are disproportionately high.

A second barrier is the paradox of expertise; mastery often makes it hard to reimagine what is possible in your field. A challenge for leaders in our modern era is how you keep learning as fast as the world is changing. The idea that you merely need to pass on your wisdom to everyone else is outdated.

Creating room to engage with the future is really important. Garry Ridge, CEO of WD-40, established a small group of executives – ‘Team Tomorrow’ – whose job was to look 10 to 15 years down the road and work out what the company needed to do to get where it wanted to go. Not every business is big enough to create something like that, but you could carve out time each week, month or quarter.

Do we need different kinds of leaders today?

Leaders in traditional fields need to rethink the nature of risk. Many believe maintaining the status quo, albeit doing things better and faster, is the safe option. But the degree of change and disruption in the world today makes playing it safe the riskier option.

The real danger is in not trying things that could have worked, rather than trying things that don’t work.

I saw the CEO of Domino’s Pizza [J Patrick Doyle] give a talk recently. He gets it. One of his mottos is ‘failure is an option’. He talked about omission bias (people would rather not do something in case they are punished for it) and loss aversion (we feel the pain of loss twice as intensely as the thrill of gain, so we play not to lose rather than to win). When he joined in 2010, growth was flat and the share price was $8.50, but the business is now booming and the share price is around $150. He has changed everything.

What do the leaders you talk about in your book have in common?

They all have very different personalities and leadership styles, but dig deeper and certain attributes of leadership unite them. They all have a core set of ideas and beliefs and a distinctive point of view that guides everything they do: what they stand for is as, if not even more, important than what they sell. Vernon Hill, the co-founder of Metro Bank in the UK, has created a colourful, convenient and exciting banking experience that is turning traditional banking on its

leadership

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head. All the small things they do – from the way people dress, to quick response times and long opening hours – add up to a distinctive way of doing business. Katherine Gottlieb, who runs the Southcentral Foundation and the Alaska Native Medical Center [which has produced remarkable health outcomes among the native population] is very different, but her organisation also stemmed from her dissatisfaction with the ‘normal’ way of doing things and a belief she could do it better.

The best leaders are united by a profound understanding that to be a certain way in the marketplace, you have to act a certain way in the workplace. The connection between culture and brand is everything. Lots of leaders are great at developing brands, but poor at creating the human platform to sustain the brands’ success, so they ultimately fail.

They are also tremendously curious and have a wide field of vision, always looking for ways to challenge their own orthodoxies, and in doing so seeking ideas from different industries and fields.

For example, Metro Bank’s ‘drive-thru’ banking and sevendays-a-week opening were informed by Hill’s experience at McDonald’s.

it completely subverts every assumption about the role of a parking garage in an urban environment. Robert Wennett, the real estate developer who acquired the space in 2005, vowed to turn something blandly functional into something genuinely remarkable, not because he wanted to innovate but because he wanted to reinterpret the original vision of Lincoln Road – set in 1910 by Carl G Fisher, the father of Miami Beach – for a new era of culture and commerce.

He has created a vibrant community hub. Cars now share the space with art and sculpture, boutiques and restaurants, parties and events.

You ask why we discard emotions in business when they play such a big role in our daily lives. Do you have any answers?

One of the great promises of business is that people are most productive when they bring their whole selves to work. This promise is often unfulfilled because most leaders don’t want to work that hard, nor do they want to put their own personalities on the line. They say their people are their most important asset, and then treat them in much the same way they treat their nonhuman assets, like spreadsheets. But people are complex and don’t fit into neat boxes.

If you allow your people to flourish as You hate the word human beings you reap innovation. Why? enormous benefits. In Taylor believes playing it safe is the riskier option for businesses The word is used a world being reshaped most frequently in by technology, customers organisations that don’t want to innovate – they see want to connect with human beings, and they want it as a brief programme, an outside consultant-driven to be treated as human beings. Organisations that exercise or a brand extension. The most innovative are as disciplined about the human side as they are companies over the past 20 years have never used about the other things have a huge advantage. the word. They simply look for the obvious next steps to improve their products, processes and How does that discipline manifest itself? marketing to enable them to stick to their distinctive We have to let people be at their best more often point of view, stay relevant and remain true to their than they typically are. Liisa Joronen’s unorthodox idea about how to win. ideas about frontline employees – they should use The single most innovative project in Simply their brains as well as their hands – enabled her to Brilliant is the parking garage – known as 1111 turn SOL, a Finnish business that operated in the Lincoln Road – in Miami Beach, Florida, because low-margin, unglamorous field of office cleaning, into 21

a highly profitable, fast-growing, award-winning How important are real physical connections, as company. She understood that when you allow opposed to virtual ones? rank-and-file employees to set their own targets So important that we need to see them in terms and figure out ways of meeting them, they set higher of collisions, which implies something much harder. targets and hit them more consistently than they That’s the word Tony Hsieh, CEO of online shoe and otherwise would have. Leaders don’t give colleagues clothes retailer Zappos, uses in connection with the enough credit for understanding the work they want Downtown Project, the urban development initiative to do, the excellence they want to achieve and the he is working on in a run-down area of Las Vegas. psychological involvement they want in the business.

Hsieh talks about return on collisions. It’s about SOL employees wear bright uniforms, they have colliding with people who are not like you, but who rituals and symbols that reinforce what it means to have the same energy, passion and creativity. We be part of the organisation, they have control over often discover the most powerful ideas in the least their hours – and they work during the day, not at expected places. The reality of business is we spend night, so their clients can see what most of our time with people like us – they are doing. What Joronen has they work in the same professions, ORDINARY PEOPLE done is remove the negative went to the same universities, live in associations attached to this kind the same neighbourhoods. Sometimes of business and infused it with you have to go out of your comfort zone. something more noble.

This is part of the new emerging job Ohio-based Lincoln Electric, description for a leader. which manufactures welding and Hsieh is trying to develop a sort In Utah, when a motorcycle and a cutting machines, is another example. BMW collided, leaving the motorcyclist of creative firmament based on the trapped underneath the burning car, The business was founded in 1895, principle that no one on their own will a crowd of good samaritans lifted but it has long treated people in its ever be as smart as the collective. It sits the BMW to save the motorcyclist. factories almost like entrepreneurs, in contrast to the big, beautiful campuswith profit sharing, pay for based corporations like Apple and Nike, performance and an employee voice where very bright people are walled off with senior management – with from the outside world. Steve Jobs was huge benefits to productivity. a genius, but the rest of us are mere We need to let people use their mortals, so we need to work out how to ‘Fearless’ Felix Baumgartner’s initiative. The highest-performing surround ourselves with people inside childhood dream was to fly and, on companies are often the most human and outside the company who will 14 October 2012, he got his wish. The and informal in that they allow their Austrian skydived 39km to Earth from challenge us and make our ideas better. people to make decisions that feel a helium balloon in the stratosphere. right close to the customer, binding Does spiralling executive pay them with shared values rather than threaten organisations’ ability to rules and regulations. harness employees’ creativity?

In the US, CEOs are called the job In an era of soundbites and social creators – but the real job creators media, do business leaders are the armies of people at all levels of During Black Lives Matter protests communicate effectively? the organisation who, if you let them, in Baton Rouge, Louisiana, one Leaders who think differently, do amazing things. People want a peaceful protester grabbed the world’s talk differently. If we want to achieve greater sense of voice in decisions attention when she stood in serene deviance against riot police officers. something extraordinary, we need affecting their work – not have a more vivid way of explaining what decisions made for them. And they that is and how to work together to bring it to life. deserve a greater piece of the wealth they help The best leaders have a strategic vocabulary, which is create, not just in start-ups with stock options, often linked to rituals that help reinforce what being but in more traditional fields. a member of this tribe means, what makes this place The average CEO in a publicly traded US company special. The power of language comes most vividly makes more than 300 times what the average worker to life at Quicken Loans [a Detroit-based online is paid. How do you expect your rank-and-file to mortgage lender], where the intense culture throw themselves into your company and serve your is encapsulated in 18 ISMS – short pithy statements customers if they are not allowed to participate in of philosophy, value and behaviour that define how the resulting value? As Bruce Springsteen used to people work. For example: ‘Numbers and money say: “Nobody wins unless everybody wins.” follow; they do not lead.’ To outsiders it may seem For further reading, see page 72 goofy, but to those inside the firm it is full of meaning.

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SO YOU THINK THE FUTURE OF HEALTHCARE IS SOMEONE ELSE’S BUSINESS… Universal healthcare has always been a tall order, but will UK plc have to bail out the cash-strapped system? Georgi Gyton reports

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our new National Health Service begins on 5 July. What is it? How do you get it?” The British government leaflet, issued in 1948, went on to inform British citizens, in commendably plain English: “It will provide you with all medical, dental and nursing care. Everyone – rich or poor, man, woman or child – can use it or any part of it.

There are no charges, except for a few special items.

There are no insurance qualifications. But it is not a ‘charity’. You are all paying for it, mainly as taxpayers, and it will relieve your money worries in time of illness.”

Living up to that promise has been hard. In the first year, the NHS bust its £437m budget. Three years after its 24

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Pressures on the NHS have left it facing a “humanitarian crisis”, according to the British Red Cross. Here a baby sleeps on hospital chairs while waiting for a bed in A&E

state of the NHS

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inception, the new Labour chancellor, Hugh Gaitskell, desperate to claw back some cost, insisted on prescription charges. In the first of many clashes over NHS budgets, minister for labour and ‘father of the NHS’ Aneurin Bevan resigned in protest. What neither Gaitskell nor Bevan could have foreseen is that, over the next nearly 70 years, advances in medical science would relentlessly drive costs upwards.

The NHS remains a national treasure – albeit one politicians have been trying to reform since 1968, when Labour health minister Kenneth Robinson published a green paper that concluded: “The organisation of medical and related services, in the community and in the hospitals, has now progressed almost as far as is possible within the present divided administrative structure.” For a variety of reasons – ideological, financial, managerial, social – every subsequent government has striven, usually with little success, to reform the behemoth. The continuous changes in policy, strategy and priorities have themselves been profoundly disruptive and, if anything, 26

exacerbated what the media now routinely refers to as a ‘crisis in the NHS’.

With the British media variously blaming incompetence, bureaucracy, waste, politicians, health tourists, inefficiency and more incompetence, the NHS might seem like a peculiarly British catastrophe. Yet the many models other countries have adopted to care for their people’s health have one thing in common: their imperfection.

The US, for example, spends an exorbitant amount on healthcare per capita – around $9,000 – yet in 2014, the 33 million Americans with no insurance barely benefited.

China’s doctors are so poorly paid much of their income depends on how many drugs they prescribe – which is why 40 per cent of China’s health budget is spent on medicines. Russia’s service is theoretically free to all but, in practice, a complex compulsory medical insurance system and low wages for medical staff mean decent care is usually reserved for those who can pay substantial bribes.

On the one hand, there is a recognition that health spending can’t keep rising indefinitely. In A Closer Look at

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Full of promise: the first NHS babies were born in July 1948. Today that number stands at 44 million and counting

state of the NHS

Financial Performance in Healthcare, Siemens estimated that healthcare cost the world around $7.2trn in 2013 – equivalent to 10.6 per cent of global GDP. “In Europe, as well as in the US, cost pressure and commercial risks dominate. Nearly half of all European hospitals are in financial difficulties, especially in countries such as Greece and Portugal,” says the report. In 2015-16, the NHS net deficit in England alone reached £1.851bn.

On the other hand, there are more of us – by 2034 the UK population will potentially hit 72.2 million, 8.1 million more than in 2014. We are, thanks to advances in medical science, living longer, though not always healthily, as diseases caused by lifestyle choices have reached epidemic proportions. In the US in 2010, seven out of the 10 top causes of death were chronic conditions, and two – cancer and heart disease – accounted for 48 per cent of all deaths.

Some experts argue we are over-diagnosed. Controversy still rages over how common attention deficit hyperactivity disorder (ADHD) really is, while one study, published in the British Medical Journal in 2012, found a third of asthma sufferers did not have the disease. This is often driven by a safety-first, low-risk medical approach and the ability of new technology to detect smaller abnormalities in our bodies, many so tiny they don’t pose a realistic threat to our health.

New technologies and drugs have helped treat us, but are often more expensive than their predecessors.

Inspiring medical breakthroughs are still being made, but pose tough questions for those managing budgets: is a new wonder drug that costs £90,000 per patient represent the most effective use of resources for an NHS that has 3.7 million people on the waiting list for hospital treatment?

For some experts, the state of many healthcare systems raises bigger questions. Atul Gawande, a surgeon and public health researcher, argues in a recent New Yorker article that the “heroism of incremental care” is underrated in a system that favours magical interventions – of the kind featured in Casualty – even though evidence suggests that “primary care is the medical profession that has the greatest overall impact, including lower mortality and better health, not to mention lower medical costs”.

Design thinker John Thackara takes an even broader view. In a talk at the University of California Berkeley School of Public Health, he said: “Healthcare is a multidimensional crisis in which trillions of dollars are spent treating the symptoms of illness rather than the causes…

The business model is typically pay-per-procedure – when it should be, we get paid if people don’t get sick.”

Even the jargon, Thackara argued, is misleading: “It doesn’t help that so many experts talk about health as if it was a product. They talk about delivery of healthcare as if it was a pizza. The pervasive delivery metaphor perpetuates the myth that health is something produced by one set of people (the professionals) for another (their customers) that we, the customers, have to pay for.”

Thackara has a point. The one thing that is seldom blamed for the NHS’s difficulties is us, the British public.

Even though one in six of us still smoke, roughly the same proportion drink hazardous amounts of alcohol and 44 per cent admit to doing absolutely no exercise, we still see it as the professionals’ job to keep us healthy. Thackara argues that we need to think of health as an ecosystem in which we, as individuals, play a part – as do, in his view, the companies that add sugar to so many of our foods. For him, governments would be better off taxing the food companies – or banning their sugar products – than spending millions on ineffectual campaigns urging us to eat less and exercise more.

His view has been recognised, albeit in an extremely unorthodox fashion, by the government of Dubai, which has offered obese citizens 1g of gold for every 1kg of weight they lose over 2kg. In 2015, more than 25,000 people entered the competition.

In these austere times, the world’s finance ministries have a strong incentive to find someone else to pay some of the healthcare bills. Asking cash-strapped voters to stump up isn’t a realistic option, so that leaves business as the most likely source of funds. Taxes on fizzy drinks and other unhealthy products may raise some revenue, but the best outcome for governments would be for employers to pick up some of the tab.

Making companies take responsibility for their employees’ health has a certain logic. Work can be good for us, but it can also make us ill. If businesses looked after their employees better, it would save money for the NHS and, with sick leave costing British firms around £9bn per year, for companies too. The World Health Organization estimates that the cost of work-related health problems is equivalent to 4-6 per cent of GDP in most countries.

Providing private medical insurance is the obvious option, but there are other ways business could help shoulder the burden. In the US, 29 per cent of firms with more than 5,000 staff offer an onsite or nearby health clinic, while 40 per cent of Fortune’s 100 Best Companies to Work For have clinics on the premises. This approach is now gaining favour in the UK, notably at the Royal Bank of Scotland and Citigroup, which has a medical centre at its Canary Wharf offices with around 20 healthcare staff and 12 consulting rooms. Such services are not provided entirely out of altruism. Staff spend less time waiting in local GP surgeries and such services can boost retention rates. Citigroup reportedly has a 98 per cent return rate for employees who go on maternity leave. So could this be a vision of the future?

Chris Jessop, chairman of UK-based occupational health services organisation OH Assist, says businesses need to develop healthcare strategies that suit their needs.

Most companies still rely almost entirely on the NHS to deliver health interventions for their employees and, given that its existing model, Jessop believes, is unsustainable, they cannot afford to assume the status quo will be maintained indefinitely.

There is also, Jessop argues, a strategic imperative for organisations to act. In a business environment, where 27

competition for the best talent is fiercer than ever, many young professionals want more from their workplace than a career. “It’s no coincidence that blue chip companies in central London are talking to job candidates as much about their gym and swimming pool as their career prospects,” he says.

James Barlow, professor of technology and innovation management (healthcare) at Imperial College Business School, agrees that businesses need to take some responsibility for their employees’ health. This could take the form of mechanisms to ‘nudge’ behaviour change, or “the introduction of new technologies such as fitness apps and devices”. Such incentives spurred Simon Stevens, chief executive of NHS England, to lose three stone while working for UnitedHealthcare in the US. Writing for the Financial Times last year, Stevens said he would strive to persuade “employers and their staff to take more responsibility for their health and ease the burden on the NHS”. Many progressive employers have done things for their staff that help prevent illness that “would otherwise make its way to the NHS”, he said.

Seeking to reduce demand for its hospital services, the Japanese government has put the onus on the employer.

Passed in 2008, the ‘metabo’ law stipulates that residents between the ages of 40 and 74 must adhere to government set waistline limits: 33.5 inches for men and 35.4 inches for women. Employers are required to measure their employees’ waistlines once a year and those failing to meet specific targets can be penalised. Estimating that it could be fined up to $19m, NEC, Japan’s largest PC maker, decided to be proactive and measure the waistlines of employees when they turned 30.

While Danny Mortimer, chief executive of NHS Employers, is unlikely to get his tape measure out, he does believe businesses’ responsibility for their employees’

health varies from creating the right working environment, to providing support for those who are ill (whether the condition is related to work or not) and putting systems in place to help poorly employees get back to work.

One aim of the NHS’s Five Year Forward View is to develop its own approach to providing healthcare for its employees, and use that evidence base to encourage other organisations to do what it has done.

“There is a business case for UK plc to invest properly in health and social care, and our concern is that austerity over the last seven years has meant the UK has not done so,” says Mortimer. “It’s about understanding the benefit to them, their workforce and their customers, if we have a properly resourced health and social care system.”

The NHS Confederation’s figures show that health expenditure in the UK stood at 9.78 per cent of GDP in 2015 – 98.8 per cent of which was funded from taxation (including national insurance) and 1.2 per cent from patient charges. This compares with 16.91 per cent in the US, 11.01 in France and 9 per cent in Spain. But does a higher spend on healthcare equate to a better system?

The French have a state-run equivalent of the NHS, but most patients pay for doctors and practitioners upfront and are reimbursed by the state within five days. Transactions are paid for via the Carte Vitale smartcard, a visit to the GP costing around £17. But changes are coming. From November 2017, the state and mutuelle – semi-private health insurance bodies – will pay doctors directly. France has invested in general practitioners – it had around 3.3 physicians per 1,000 people in 2014, compared with 2.8 in the UK – but it placed only ninth out of 11 in a 2014 ranking of healthcare systems compiled by the Commonwealth Fund, whereas the UK came top.

Despite its huge spend on healthcare, the US ranked last in the Commonwealth Fund’s report. One third of

HEALTHCARE POSITIVES A new line of defence Preventative measures Located in the town of Weesp, it is $2,650 per person, which would Hailed by the Cancer Research The World Health Organization an innovative elderly-care facility more than cover costs.

Institute as “the most promising for patients suffering from severe estimates that, in 2014, 422 million new cancer treatment since the people suffered from diabetes, cases of Alzheimer’s or dementia.

It’s all in the voice development of chemotherapies in costing $825bn to treat. In the US, Rather than long corridors and Israeli start-up Beyond Verbal, the late 1940s”, immunotherapy the YMCA is helping prevent those wards, residents live in houses, which uses voice recognition to in groups of six or seven, with effectively reawakens the with pre-diabetes from developing detect human emotions, has carers. Featuring its own square, immune system so it can fight the condition. Participants meet conducted a study with the Mayo theatre, garden and post office, cancer, ‘remember’ the cancer to with a trained YMCA lifestyle coach Clinic that points to a strong the village allows residents to prevent it returning and target only for 16 weekly sessions, followed by correlation between certain voice carry on a normal daily routine. the cancerous cells. These monthly support to encourage characteristics and heart disease, Their safety is ensured by inspiring developments come at healthy eating, physical activity and the leading cause of death a price – more than £100,000 per cameras posted across the weight management. After a year, according to the World Health patient per year, according facility, carers in plain clothes 42,000 participants across 42 Organization. One particular voice to Cancer Research UK. dispersed around the village and states had lost an average of 5.5 characteristic meant patients one entrance/exit. Residents per cent of their body weight. The were 19 times more likely to suffer Alzheimer’s innovation reportedly require fewer US Department of Health from heart disease. The company The ‘village’ of Hogeweyk, on the medications, eat better and live concluded that the YMCA’s has also discovered correlations outskirts of Amsterdam, is home longer, and are generally happier programme could save federal between voice and conditions than those in standard facilities. health insurance scheme Medicare to an unusual demographic. such as autism and Parkinson’s.

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state of the NHS

Reuters/Alamy Stock Photo

Never mind a Weight Watchers sticker, in Dubai the Your Weight in Gold competition saw lost kilos rewarded with gold

Americans on lower incomes admitted to going without needed medical care in 2014 because they couldn’t afford it. Barack Obama’s Affordable Care Act had begun to change things, but the future of this legislation remains uncertain. The Republicans’ initial determination to eradicate Obamacare seems to have faltered as the risks of alienating millions of voters who are benefiting from it become more apparent.

Mortimer does not envisage the British ever adopting an American-style system. Yet he does believe the UK can learn from overseas healthcare models “particularly from other European countries, because they invest more in their health infrastructure”.

As America pays too much for healthcare, it might not seem the best place to learn from. But the US is developing an evidence base around workplace health interventions, which staff at the UK’s Faculty of Occupational Medicine are investigating. “There is a real opportunity to enhance that evidence base, and demonstrate the real benefits of employers taking a greater role in terms of the health and wellbeing of their staff,” says Mortimer.

American healthcare organisations, Jessop says, “are very keen adopters of technology and that’s good. They are also open to the use of different practitioner types to provide interventions.” At urgent care centres, often located in supermarkets, nurses are mainly in charge and can prescribe basic medication and refer patients to specialists without a GP. Every country has subjective views about its health system. The Swiss are proud of theirs – which is based on compulsory health insurance – but wish it was as good as the system in the Netherlands. The Dutch, meanwhile, groan it is much easier to see your GP in France.

In his book, In Search of the Perfect Health System, Dr Mark Britnell, chairman of the Global Health Practice at KPMG International, examines models in 26 countries, and identifies 12 characteristics to support optimal healthcare. Believing the global healthcare system is at a

tipping point, Britnell says that, to better support healthcare, “the entire ecosystem will need to adopt sustainable change and embrace the idea of universal healthcare, accountable care, value-based outcome payments and empowered patients”.

One of Britnell’s optimal characteristics is the UK’s universal coverage and the values of the NHS. Israel’s primary care model is another. Four major health organisations provide care for the bulk of Israel’s population, acting as purchasers and providers of services, and focusing on preventative and primary care, with evening and urgent care centres, and home visit services.

In Brazil, citizens benefit from a national model that takes healthcare into the community. A team – a doctor, a nurse, an auxiliary nurse and six community health workers – look after a population of around 4,000, visiting every household once a month. “They don’t wait for patients to walk through the doors of the community centres,” says Britnell. “The team is on the streets, in people’s houses, supporting people to live healthier lifestyles.”

To fund healthcare for its ageing population, Japan mandates people start paying long-term care insurance aged 40, buying into a programme that provides home help, community-based services and nursing care to those in need aged 65 and over, regardless of their ability to pay.

If Jeremy Hunt were given a blank sheet of paper, as Bevan was in the 1940s, on which to sketch his perfect NHS, he might draw on some of the characteristics Britnell identified. Yet Thackara has a point when he says healthcare is too important to be left to the professionals, and a better way would be to solve problems through a sharing community. Looking at health as an ecosystem, he argues, makes it easier for individuals to make a difference – whether it’s cleaning up polluted rivers or helping dementia patients find a dog to pet. “It’s already happening,” says Thackara. “We’re not starting from scratch.”

For further reading, see page 72 29

NHS TIMELINE Moments in history

1948

1968

The NHS is 1958 launched by Polio and health diphtheria secretary vaccination Aneurin programme is Bevan introduced

1952

The first prescription charge of one shilling (5p) is brought in

1978

Britain’s first heart transplant is carried out by South Africa-born surgeon Donald Ross at the National Heart Hospital in Marylebone, London

1991

2000

The world’s first The first 57 1988 IVF baby, NHS trusts Breast cancer Louise Brown, screening is are established is born to challenge introduced for dominance of the over 50s hospitals

1980

The Black Report is published, revealing widespread health inequalities

1962

Enoch Powell’s Hospital Plan promotes the building of district general hospitals

1990

The NHS Community Care Act is launched, giving health authorities control over their own budgets

2009

The publication of the NHS Plan sees the introduction of the four-hour A&E target

1998

2007

E-health service NHS Direct is launched, handling more than half a million calls each month

RUDE HEALTH?

The Care Quality Commission is launched as new regulator for health, mental health and adult social care

A robotic arm is first used in heart operations at St Mary’s Hospital, London

NHS EMPLOYEES Hospital, community healthcare services and GP practices, 2015

With 1,000,000 patients to see every 36 hours, the National Health Service is under increasing pressure. Work. looks at some healthcare facts and figures

30,952

Managers

149,808

Doctors

Ambulance staff

SPENDING CHANGE PER GOVERNMENT

25,418

Average yearly change in UK health spending, 1951-2015 10%

L L

8%

Average across whole period

C

C C

C

L

L

146,792 Midwives Scientific, 23,066 therapeutic and technical GP nurses staff

6%

L

4% C

L

314,966

Nurses and health visitors

18,862

C

2012

The first UK hand transplant is carried out on Mark Cahill

Co C

2% 0%

C

-2%

WORLD’S TOP FIVE BIGGEST EMPLOYERS The NHS came in at number five in 2015, according to the World Economic Forum 3.2M US Department of Defense 2.3M People’s Liberation Army, China

-15 10 20 -10 05 20 5 -0 01 20 1 00 -2 97 19 7 -9 92 19 2 -9 87 19 7 -8 83 19 3 -8 79 19 9 -7 74 19

-74 70 19

-70 66 19 6 -6 64 19 4 -6 59 19 9 -5 55 19 5 -5 51 19

C = Conservative

L = Labour

Co = Coalition

OPERATIONS COMPLETED BY THE NHS IN 2015-16

UK POPULATION WITH PRIVATE MEDICAL INSURANCE

10.119M

10.9%

£116.4BN

15% in Italy; 8% in Norway Source: Commonwealth Fund

1948 NHS budget was £437m, equivalent to £15bn today Source: NHS

30

1.9M McDonald’s 1.7M NHS

Source: The Health Foundation

Compared to 7.215m in 2005-06 – an increase of 40 per cent Source: NHS Confederation

2.1M Walmart

NHS BUDGET FOR 2015-16

WORKING DAYS LOST TO SICKNESS EVERY YEAR, UK

140M Source: Health at work: an independent review of sickness absence, 2011

state of the NHS

FINANCIAL PERFORMANCE, 2012-16

ANTICIPATED FUNDING GAP

Proportion and value of trusts in surplus/deficit

Surplus

Health spending pressures, productivity at 0% Health Health spending spending pressures, pressures, productivity productivity at at 0% 1% Health Health spending spending pressures, pressures, productivity productivity at at 1% 1.5% Health Health spending budget UKpressures, productivity at 1.5% Health budget UK

Deficit 27%

11%

48%

65%

£260bn £260bn £240bn £240bn £220bn £220bn

2012-13

2013-14

2014-15

2015-16

£200bn £200bn £180bn £180bn

£577m

£160bn £160bn

-£109m

£140bn £140bn

NHS budgets are under increasing strain, with trusts in England witnessing a steep decline in their financial performance

1 1 -3 -3 30 30 20 2030 30 - 29 29 20 20-29 -29 28 28 20 20 8 8 -2 -2 27 27 20 2027 27 - 26 26 20 2026 26 - 25 25 20 20-25 -25 24 24 20 20-24 -24 23 23 20 20-23 -23 22 22 20 2022 22 - 21 21 20 20-21 -21 20 20 20 2020 20 - 19 19 20 2019 19 - 18 18 20 20 -18 -18 17 17 20 2017 17 - 16 16 20 2016 16 - 15 15 20 20

-£845m

-£2.5bn

The chart shows The Health Foundation’s projections for the rate at which spending on the NHS would need to rise over the next 15 years to maintain the quality and range of services provided. The funding gap is dependent on various productivity scenarios

Source: The Health Foundation

Russia 893 7.1

GLOBAL VIEW

Denmark 6,463 10.8

Health expenditure per capita ($) and as a percentage of GDP, 2014 per capita

% GDP

Press Association Images, Getty Images, Alamy Stock Photo, Rex Shutterstock

Source: The World Bank

US 9,403 17.1

UK 3,935 9.1

HEALTHCARE SPENDING PER HEAD ACROSS THE UK (2014-15) Scotland £2,208

Northern Ireland £2,177

England £2,112

Japan 3,703 10.2

France 4,959 11.5 Cuba 817 11.1

Switzerland 9,674 11.7

Myanmar 20 2.3

Qatar 2,106 2.2 Wales £2,129

World average 1,061 9.9

South Africa 570 8.8

Source: The Health Foundation

Australia 6,031 9.4

New Zealand 4,896 11.0

UK HOSPITAL BEDS PER 1,000 PEOPLE

PATIENTS THE NHS DEALS WITH EVERY 36 HOURS

2.7

1,000,000

6.9

2.8

Source: NHS Confederation

Japan (16.9); Germany (9); Italy (7.8); France (5.6) Source: OECD, 2014

Germany (4.1); Italy (3.9); France (3.3); New Zealand (2.8) Source: OECD, 2014

Germany (8.2); France (6.2); Spain (3); Denmark (2.7) Source: OECD, 2014

AVERAGE LENGTH OF HOSPITAL STAY IN THE UK (DAYS)

Vietnam 142 7.1

UK PHYSICIANS PER 1,000 PEOPLE

31

DIVERSITY Are legislation and fear of causing offence hindering our efforts to eradicate prejudice? Claire Warren reports

16

diversity

“FOR MY BIRTHDAY, an all-white floor of human resources professionals, my peers, sang happy birthday, and gave me a cake and a card. As I opened it, one of them, female, blonde hair, blue eyes, told me they chose it because it looks like me. It was a monkey on a sun lounger.”

The words – from a black respondent to Business in the Community’s recent Equality, Diversity and Racism in the Workplace report – reveal that racism still flourishes in some British organisations, sometimes in the very department responsible for promoting diversity.

There’s a similar story when you consider other kinds of discrimination. Following a survey of 30,000 employees in the US, run by LeanIn.Org, which showed that men got promoted faster than women, Facebook COO Sheryl Sandberg said that if “NASA launched a person into space today, she could soar past Mars, travel all the way to Pluto and return to Earth 10 times before women occupy half of C-suite offices”.

In the third quarter of 2016, more than half of working-age disabled Britons were jobless, while UK LGBT charity Stonewall estimates that 19 per cent of lesbian, gay and bisexual employees have experienced verbal bullying. In the US, employers keen to fire expensive older staff without being sued have developed what one consultant calls the ‘suddenly stupid’ defence, where great appraisals are suddenly mysteriously replaced by criticism of issues the company had not previously cared about or doesn’t notice among younger colleagues.

To be fair, the workplace reflects a polarised society: in a 2013 survey, only one in 10 Britons said their best friend was from outside their own ethnic group.

For a first-world country that outlawed sex and race discrimination in the 1970s, a decade in which popular sitcom Love Thy Neighbour made the country laugh with such terms as ‘sambo’ and ‘honky’, the persistence of prejudice is shocking – even before you consider the recent surge in right-wing populism (which we’ll discuss later). So why isn’t Britain – and by extension UK plc – genuinely more diverse, tolerant and inclusive? Have years of legislation and workplace diversity programmes left businesses with a tick-box approach, which settles for compliance rather than a genuine change in attitudes?

“We’ve learned from economics that you get value from the margin yet we do not apply that to our people.

We still have this crude approach to the nine protected characteristics [covered by the UK’s Equality Act],” says Stephen Frost, who led the inclusion programme for the London Olympics and Paralympics. He estimates that more than half of organisations globally operate a

compliance-based approach, while real inclusion is defined by embracing different backgrounds, orientations, experiences, personalities and thoughts.

“You create value from leveraging every difference.

This is not just about the protected characteristics.

This is about outliers, oddballs and introverts, and people who don’t self-promote.”

That degree of inclusion will inevitably lead to conflicts of belief and behaviour. Diversity, says Frost, is not a bed of roses. “It’s by nature conflictual. In a British culture, an American compliance culture or a Japanese don’t-rockthe-boat culture, we shy away from this.”

Simon Fanshawe, co-founder of Diversity by Design, says that for too long diversity and inclusion have been focused on the idea that you can train people to be better. “Changing behaviour is what changes thinking, not the other way round,” he says. “What that means is you have to do something differently. Training won’t stop you not liking the mosque. What will stop you not liking the mosque is going to the mosque and having tea.”

The workplace is one of the few parts of our daily lives where we have the metaphorical opportunity to have tea in a mosque.

Yet is there a danger that, as we strive to protect groups that have traditionally suffered discrimination, we become so stymied by legislation and fear of causing offence that we hinder this process rather than help it?

Columnist Melanie Phillips thinks so. Writing in The Times, she argues that political correctness has created that right-wing populist backlash. For too long, she suggests anyone who challenged the view that the “white, male-dominated, Judeo-Christian West is the embodiment of oppressive global power” and that, therefore, “minorities can only ever be victims” was likely to face a “secular inquisition, character assassination and moral opprobrium”.

Sociologist Frank Furedi doesn’t go that far, but he is convinced that it’s almost as if we have two languages – the one we use in informal life and the policed language prevalent in workplaces that “inhibits free speech, distorts conversation and breeds dishonesty”. That “creates an environment where the words you use become increasingly more managed, undermining the quality of democratic public life. Backward and wrong ideas often lie under the surface and are not raised because people are scared to acknowledge them in public.”

Furedi worries that diversity has become something we quantify rather than encouraging spontaneous engagement between different people. Does he have a point? To stimulate debate, Work. explores some aspects • of diversity that we often prefer to ignore.

SUCKS

33

SOCIAL MOBILITY

“UNEDUCATED WHITE MEN ARE THE NEW NEGLECTED MINORITY”

WHEN EMILY THORNBERRY tweeted a picture of a white van parked outside a house draped in England flags during the 2014 Rochester and Strood by-election, she was dubbed “drippingly patronising” by then deputy prime minister Nick Clegg. The tweet cost the Labour MP for Islington South her position as shadow attorney general and led to her being pilloried as an out of touch elitist – even though she grew up on a workingclass estate in Guildford.

The term ‘white man’ has become a stigmatising concept – one that has become acceptable, Furedi says, because it sounds progressive: “If you talked to other groups like that it would be seen as discriminatory.”

While that applies to all white men, including ‘male, pale and stale’ business executives who wield power and influence, it is those at the other end of the social spectrum who feel left behind and alienated.

34

Phillips’ viewpoint, that white workers are victims of a kind of reverse racism – thanks to the clichéd ‘political correctness gone mad’ – is certainly popular on social media.

At the extreme, these feelings fuel hate groups such as the White Lives Matter movement, a direct response to the Black Lives Matter protests against police violence in the US. Yet such views are hardly restricted to Twitter. The Pew Research Center estimates that 67 per cent of non-college white people in America voted for Donald Trump.

Fanshawe says it’s important to understand that, historically, black people have been disadvantaged in comparison to white people, but equally focusing on ‘white privilege’ isn’t helpful. “Less well-educated white working-class people feel they haven’t got a voice. If you look at it politically, there has been too

Press Association Images

‘White privilege’ means nothing to those who feel they have lost their voice

diversity

much time spent taking them for granted and too much time in a sense saying ‘your voice doesn’t matter’.”

White working-class pupils are now the worst performing at GCSE of all the main ethnic groups, according to the UK-based Sutton Trust’s Class differences study in 2016. It found that disadvantaged pupils from Chinese backgrounds were almost three times as likely to get the benchmark five good GCSEs as their white working-class peers.

This underachievement costs them financially. A recent report from the Social Mobility Commission revealed that professional employees with poorer backgrounds are paid £6,800 a year less on average than contemporaries from more privileged families, who tend to be better educated.

So should white, uneducated men be treated as a minority group? When the UK’s equality legislation was being looked at, BITC race equality director Sandra Kerr lobbied for socioeconomic background to be included.

“I thought people who don’t have high education or parental financing power, who were born on a housing estate for instance, shouldn’t be lumped into white male privilege. It didn’t get into the legislation but employers should monitor it. For inclusion to work in the UK, everybody needs to feel it’s working for them.”

This needs to be put into context, she adds: “When you look at the unemployment rate for young white men,

it’s 15 per cent; for young black males it’s 35 per cent. And when you look at education, even if a black person gets a degree and gets into work they are still going to be paid about a quarter less [than their white peers].”

Broadcaster Paul Mason is adamant that poor white kids are not victims of reverse discrimination. In the Guardian, he writes: “It is simply that a specific part of their culture has been destroyed… and the means of destroying it was the long-term unemployment millions of people had to suffer in the 1980s.” Putting right the injustice, he says, “requires us to put aside racist fantasies about ‘preferential treatment’ for ethnic minorities; if their kids are preferentially treated, it is by their parents and their communities”.

Frost agrees that white, uneducated men face challenges – they were the hardest to reach group, for instance, when he worked on the Olympics and are one of the “most ‘need to target’ groups in the UK”.

Yet he says white people still enjoy a lot of privilege in predominantly white societies. “Because immigration has risen, because diversity has gone up the agenda, because we are a more diverse society on some levels than we ever have been, we are suddenly, as white people, feeling under threat like we never have before,” he says. “That doesn’t mean that the pendulum swings completely to us – this is how minorities have been • feeling forever.”

Uneducated white working-class men feel they have been left behind. In the US, their votes helped Trump become president

35

GENDER

FORMER SAATCHI as such because it has & Saatchi chairman Kevin negative connotations.

Roberts’ assertion that “I’m generalising here the lack of women leaders but the men come in and in the advertising indushead for partner but Gender plays a role in attitudes to reaching try wasn’t a problem led to for women it’s more of a the upper echelons of business his forced resignation last labyrinth. Women don’t year, but did his downnecessarily sit there specfall merely reflect the fact ulating at a more junior that he was too male to make the point? level how they can make it to partner, they are looking “Their ambition is not a vertical ambition,” he told at the next promotion.”

Business Insider. “It’s this intrinsic, circular ambition to Roberts’ comments were widely condemned, yet it be happy. So they say: ‘We are not judging ourselves by seems that managers at many organisations may those standards that you idiotic dinosaur-like men privately agree with him. Women in the Workplace 2016, judge yourself by.’” a study conducted by LeanIn.Org and McKinsey, found Fleur Bothwick, director of diversity and inclusion that corporate America promoted men at 30 per cent at consultancy EY, believes men and women plot career higher rates than women during the early stages of their paths differently, but that doesn’t mean she agrees careers. The study also revealed that only 40 per cent of with Roberts. Employers, she says, tend to underesti- women were interested in becoming top executives, mate a woman’s ambition because women express compared to 56 per cent of men. While both genders themselves differently. worried equally about work-life balance and company “If you haven’t got a sensitised leader, male or politics, women – with and without children – were female, they are going to misread a conversation and more likely to say they didn’t want the pressure. conclude that that person isn’t ambitious,” she says, But does that mean women are less ambitious? pointing out that 99.9 per cent of the women on the Bothwick points to a recent survey of EY’s middle leadership programmes she runs would say they are managers, which found the key difference between the ambitious, although they would dislike being labelled genders was that women measured the cost to their 36

Words: Emma De Vita

“IT’S OK FOR WOMEN TO BE LESS AMBITIOUS THAN MEN”

Copyright © Guerrilla Girls, courtesy guerrillagirls.com

diversity

ambition. “The women said they were willing to work as hard as the men but they were not convinced that they would reap the rewards,” she says. “It doesn’t make them any less ambitious, it just means they conclude that it just isn’t worth it.”

Women traditionally manage childcare – whether they want to or because society expects them to. Yet Baroness Margaret McDonagh, co-founder of leadership training provider The Pipeline, says if it was simply to do with raising families, women without children wouldn’t have a problem getting to the top. The issue is not lack of ambition either, she says, as “in a social entrepreneurial space women on average earn 18 per cent more than men”.

There is, McDonagh says, “a sense that we don’t like ambitious women”, which deters many from declaring that they want to be CEO: “They would feel uncomfortable saying it and people would feel uncomfortable hearing it.”

Women, she says, tend to be promoted for their attainment, and men for their potential, which is effective until it comes to leadership roles, when people are often picked for their potential. That pattern encourages women to become subject experts in disciplines such as HR, marketing, finance and law, where they miss out on P&L experience and can’t find the time – or are disinclined – to develop bigger, strategic relationships.

Unconscious bias plays its part. Neuroscientist Dr Tara Swart says that if you look upwards and see few or no women, this reinforces the perception that it is unusual for women to reach leadership positions. Of more importance, she says, is the link between testosterone and ambition. The hormone correlates to appetite for risk, confidence and drive – the exact words most organisations would use to describe ambition – and women have eight times less of it than men. “The single factor that makes it more likely that a woman will reach a senior management position is her subjective level of confidence,” says Swart.

Baroness Denise Kingsmill, an experienced nonexecutive director, agrees that “a sea of men in grey suits” can be off-putting for women, but says sometimes they look at other women in senior positions and think: ‘I don’t want to be a woman like that I don’t want to forgo family life.’ Equally, she adds, many men feel the same, despite societal pressure to become thrusting and dynamic CEOs. “We are asking the wrong question. Instead of saying women should be this, or women should be that… we have to shape the world of work to make it more productive and satisfying,” says Baroness Kingsmill. “Men and women want to bring up their children, they want to have a home life and a social life. Organisations must rec• ognise that work needs to be more people-shaped.”

Women remain underrepresented across many walks of life. This 1989 poster by Guerrilla Girls highlights the lack of female artists on display at the Met Museum in New York

37

diversity

“LET ME TELL YOU about my trouble with girls,” social media,” he said. “People make ill-advised comsaid scientist Sir Tim Hunt at a scientific conference in ments from time to time: is it appropriate to hound Seoul in 2015. “Three things happen when they are in someone out of their position?” the lab. You fall in love with them, they fall in love with Some senior women in science defended Hunt, you and, when you criticise them, they cry.” His including Professor Ottoline Leyser of Cambridge comments were tweeted, instigating a vicious social University, who wrote a letter to The Times, saying: “It’s media campaign against him. By the time his flight time for all of us to stop cowering and shouting, bucklanded in the UK, he had been asked to resign from passing and finger-pointing and start listening and University College London. talking.” She says she wrote it because she felt that an The discussion of the incident soon polarised into opportunity to discuss diversity and inclusion in those who saw the scientist as a sexist pig and those who science was being lost as the media turned the story believed he was a martyr to political correctness. into “a kind of blame game”.

Seventy-two when he made the remarks, Hunt readily Although she has never personally experienced admits that his off-the-cuff attempt to be jokey and ironic overt sexism, Leyser says science is still a very male culwas, in retrospect, inexcusable. “I have become toxic,” ture. “There’s a lot of hierarchy, ways of arguing that he told the Guardian. “I have been hung out to dry.” are very assertive and an enthusiasm for measuring At the time, Professor systems… That doesn’t Brian Cox told BBC Radio mean that it is full of 4 that Hunt’s ouster was people saying that we SOCIAL MEDIA wrong, although he don’t want women, but it admitted that using such does mean it’s an envilanguage, especially when ronment where women women at the top of scidon’t necessarily feel ence are so scarce, was comfortable.” inadvisable. “On the other Nigel Nicholson, proside, of course, there is the fessor of organisational wider problem of trial by behaviour at London

“THE ‘TROUBLE WITH GIRLS’ COMMENT WAS A FUSS OVER NOTHING” The internet is quick to judge, but online overreaction deters genuine debate

Words: Emma De Vita

Sir Tim Hunt’s attempt at humour provoked a social media storm. Many female scientists responded using #distractinglysexy on Twitter

Business School, believes gone viral. She intended, Hunt’s enforced resignashe maintains, to mock “It is strange to live in a world tion was ridiculous. He her life in a bubble of priviwhere people are more likely argues that institutions, lege but, despite an abject nervous of litigation, of apology, resigned with her to be severely punished for being deemed politically reputation in ruins. words than deeds” incorrect and of bad pubJournalist Jon Ronson licity, are at fault. “The believes Sacco was people running the instiunfairly treated but, after tutions say they want to be on the right side of this saying as much in his book So You’ve Been Publicly because they don’t want to be smeared with that strange Shamed, he became the target of opprobrium and shame, so they’ll distance themselves as far as possible. character assassination.

The easy way to do that is to sack somebody.”

“On social media we’d had the chance to do everyBothwick is less sympathetic: “It doesn’t matter that thing better, but instead of curiosity we were constantly afterwards he said he was sorry. People heard it and lurching towards instant cold judgment,” Ronson wrote remember it. He should never have said it, joking or not. in the Guardian. “The great thing about social media Comments like that set us back terribly. It’s not that was how it gave a voice to voiceless people. We are now diversity and inclusion shouldn’t be discussed but that turning it into a surveillance society where the smartthese need to be proper conversations, not throwaway est way to survive is to go back to being voiceless.” silly jokes.”

Social media may be a fine arena for JK Rowling to Hunt is far from the first to have learned how spar with Piers Morgan, but it is probably the worst quickly social media can destroy a career. For example, possible space to conduct nuanced debate. And shortly before boarding a flight from London to South organisations, by kowtowing to such ‘secular Africa in 2013, US-based PR executive Justine Sacco inquisitions’, are fuelling the ‘political correctness gone created a social media storm with one tweet. mad’ narrative. As Nicholson says, it is strange to live in By the time she landed, her post: “Going to Africa. a world where people are more likely to be severely

Hope I don’t get AIDS. Just kidding. I’m white!” had punished for words than deeds.

39

EQUALITY IS, most of us would agree, a good thing. cause problems by emphasising minorities rather than We want to live in a world where there are no barriers to inclusion. “Quite obviously for historical reasons, the recruitment and progression. Yet in striving for this focus has been on what are the blocks to the talent of BME goal, organisations may come up against an inconvenient people, gay people, women etc,” he says. “But if you frame reality: when one group is seen to progress, another may it as being about advancing minorities, there is a group of feel it is slipping down the ladder. people who think: ‘Hang on a sec, is something being Many businesses create networks and forums as taken away from us now then?’” part of their diversity initiatives but, says Octavius Successful companies, he believes, look at the ‘diverBlack, chief executive of Mind Gym, these can sity deficit’ (the discrimination that leads to untapped “reinforce in-groups and out-groups”. Several studies talent) and the ‘diversity dividend’ (how you combine show that companies that increase diversity without difference). “You look at how everybody is different – creating a climate of inclusion perform worse than if you don’t just look at minorities. People say stupid things they’d stayed homogenous – an outcome, he writes in like if it had been Lehman Sisters we wouldn’t have had City AM, that can be explained by basic neuroscience. the financial crash. Nonsense, if it had been Lehman “The part of the brain that is affected when we feel Brothers and Sisters, we might have had a chance.” left out is the same part affected when we are physically In their 2016 article in HBR, ‘Diversity Policies hit – the anterior cingulate Rarely Make Companies cortex,” Black writes.

Fairer, and They Feel “The route to greater Threatening to White INCLUSION diversity is not to focus on Men’, Tessa Dover, Brenda gender, ethnicity or sexual Major and Cheryl Kaiser orientation, but to conclude: “The most embrace difference in its commonly used diversity infinite forms.” programmes do little to Fanshawe, at Diversity increase representation of

by Design, agrees that minorities and women. A diversity programmes can longitudinal study of more

“WE SHOULDN’T CHAMPION MINORITY GROUPS”

Diversity programmes without a focus on inclusion reinforce stereotypes

diversity

Press Association Images

To conquer discrimination we need to create a climate of inclusion.

Here people come together to support human rights at an Amnesty International benefit concert in 1988

than 700 US companies found that implementing diversity training programmes has little positive effect and may even decrease representation of black women.”

Part of the problem, they argue, is that the mere existence of such policies persuade managers that their organisation is making progress: “Even when there is clear evidence of discrimination at a company, the presence of a diversity policy leads people to discount claims of unfair treatment. We’ve found that this is especially true for members of dominant groups and those who tend to believe that the system is generally fair.”

Academic and author Margaret Heffernan believes it’s important to champion groups that are not your own to avoid accusations of self-interest. “The problem with HR being so dominated by women is that the whole conversation about women feels self-serving to men,” she says.

“The men are never going to tell you what they think – they’re going to tell you what they think they have to say.”

She points to Ted Childs, who was a passionate advocate for other minority groups at IBM: “I was the vice president for global diversity not the vice president for black people,” says Childs, who worked with IBM’s then chairman and CEO Lou Gerstner to launch a successful diversity taskforce initiative in 1995.

At the time, as outlined in an HBR article, ‘Diversity as Strategy’, IBM had a long history of progressive management but, assessing his senior executive team,

Gerstner felt it didn’t reflect the diversity of the market for talent or IBM’s customers and employees. Rather than trying to eliminate discrimination by deliberately ignoring differences among employees, IBM chose to accentuate the difference, setting up taskforces, each focused on a different group.

Unusually, one of those groups was for white men: “I felt that white men had through their voting patterns demonstrated that they felt discussions about diversity were essentially at their expense,” says Childs. “We were at a point where we couldn’t leave anyone out, and if we were going to be competitive we needed to use the talent of all groups.”

He remains a keen supporter of networks. “Networks are empowering, they give people strength and a voice. If you go through the flow of history right up until today, we see the need for people to speak up from within a group.”

Many would argue that men have had their own network for a long time – it’s called the organisation – and to compete with that minority groups need to network, formally or informally.

“We all gravitate toward sameness and away from difference. That’s natural, normal and human,” says diversity expert Frost. “If you are less similar to someone else it is just harder. Even with gender, the biggest ‘minority group’ in most organisations, women will unconsciously suffer a network penalty because there are less of them to network with.”

Companies seeking to overcome the inevitable resistance to inclusion should craft a message that feels inclusive to everyone within the organisation (not reneging on your commitment, just thinking harder about how it is expressed), develop programmes that go beyond window dressing and then monitor their effectiveness.

It all sounds terribly obvious but, as the research by Dover, Major and Kaiser suggests, the current prevailing approach is probably more effective as a defence against discrimination lawsuits than it is in creating a more inclusive, diverse workplace.

For further reading, see page 72 41

BEFORE THEY WERE WERE FAMOUS BEFORE THEY FAMOUS

“I’D RATHER OFFEND YOU NOW THAN AFTER I START WORKING FOR YOU” Original, funny and, in Hunter S Thompson’s case, excruciatingly candid, these job applications let us glimpse the early aspirations of the famous – and infamous

HUNTER S THOMPSON “As far as I’m concerned, it’s a damned shame that a field as potentially dynamic and vital as journalism should be overrun with dullards, bums and hacks, hag-ridden with myopia, apathy and complacence, stuck in a bog of stagnant mediocrity. If this is what you’re trying to get the Sun away from, I’d like to work for you.” Thompson’s application to the Vancouver Sun newspaper in 1958 was typically frank, but then, as he noted, it’s better for the potential employer if you offend them before you join. The future writer of Fear and Loathing in Las Vegas didn’t get a job. The Times Herald-Record in New York hired him – and fired him after he damaged the office candy machine.

TIM SCHAFER

In 1989, Tim Schafer got a job at Lucasfilm by turning his covering letter into a game. He said later: “I would never hire somebody as unqualified as I was”

MADONNA “Dear Stephen. By the time I was in the fifth grade, I knew I either wanted to be a nun or a movie star – nine months in a convent cured me of the first disease.” Even as a 21-year-old wannabe in 1979, Madonna knew how to make an entrance. A singer and drummer in Breakfast Club, an underwhelming rock band, she was desperate to

LEONARDO DA VINCI “My most illustrious lord.”

Writing to Ludovico Sforza, the Duke of Milan, for a job as a military engineer, the ultimate Renaissance man started with a bit of mild flattery before dismissing his rivals (whose

42

“Your quest for the ideal career begins, logically enough, at the Ideal Career Center.” Schafer’s quest for a job at Lucasfilm in 1989 had gotten off to a far from ideal start – in a disastrous phone conversation he had admitted playing pirated versions of the company’s computer games – but he still sent in a résumé and decided to write his covering letter in the form of a semi-graphic adventure game. His pitch worked and he went on to design such iconic computer games as The Secret of Monkey Island . Looking back on his application 20 years later, Schafer admitted: “If I can get a job in the games industry, ANYBODY can. (Not at my company of course.

I would never hire somebody as unqualified as I was.)”

Words: Paul Simpson. For more letters in this vein, try Letters of Note by Shaun Usher (Canongate Books)

land the lead role in A Certain Sacrifice, even if it meant appearing topless. The sleazy, straight-to-video movie was directed by Stephen Lewicki (you might remember him from – no, actually you won’t) and starred Madonna as a woman at the heart of a love triangle. She later tried to buy the footage and have the film banned, but it resurfaced in 1985, just as the world was getting into the groove with Madonna.

weapons were in “common usage”) and promising to place his secrets at Sforza’s “complete disposal”. Written in the 1480s, the letter offering da Vinci’s services is not in his own hand – he probably hired a professional writer to draft it – but the words and the grandiose claims are definitely his own. He can, he says, design indestructible bridges, drain moats, silently build secret passages, destroy “every fortress... unless it has been founded on a rock”. Da Vinci then mentions – almost as an afterthought – that he is a decent painter and sculptor. His missive paid off. He moved to Milan in 1482 after Sforza commissioned a horse sculpture (like many of da Vinci’s jobs it was never finished) and prospered until the duke fell from power in 1499.

Without the duke’s patronage, da Vinci might never have painted The Last Supper.

Michael Ochs Archives, Keystone, Michael McDonnell, Corbis, ABC/Getty Images, United Archives/Alamy Stock Photo, AP/PA Images, Double Fine Productions & 2 Player Productions

TOM HANKS

EUDORA WELTY

“My looks are not stunning. I am not built like a Greek God, and I can’t even grow a mustache, but I figure if people will pay to see certain films... they will pay to see me.” Hanks was an 18-year-old student in Oakland, California, when he wrote to director George Roy Hill in 1974. Hill had just directed the Oscar-laden The Sting starring Paul Newman and Robert Redford. He kept the letter, but may never have replied to it.

Hanks wrote that, although he was a “nobody”, it was his dream to know Redford well enough to call him “Bob”. Hanks’ big break came eight years later: given a cameo role in Happy Days, he impressed the show’s star, Ron Howard, who was looking for a male lead for his comedy, Splash. Hanks and Redford met recently when Barack Obama awarded them the Presidential Medal of Freedom.

And Hanks did call him Bob.

“There is no telling where I may apply, if you turn me down... consider my alternative: the [University of North Carolina] offers for $12 to let me dance in Vachel Lindsay’s Congo. I rest my case, repeating that I am a hard worker.”

How could The New Yorker resist such a charming application from 24-year-old publishing executive Welty? Yet, that is precisely what they did, ignoring her offer to step in if the magazine’s resident humourist, James Thurber, “went off the deep end”. Welty was not deterred: The New Yorker later published her short stories, and in 1973 her novel The Optimist’s Daughter won the Pulitzer Prize.

ROBERT PIROSH

LEE HARVEY OSWALD On 15 October 1963, a former US Marine wrote a job application that would change history. Like many job hunters, Oswald was economical with the truth when he applied to the Texas School Book Depository in Dallas, Texas. He was given an ‘honourable discharge’ by the Marines, as the form says, but his status changed to ‘undesirable’ when they realised he had lied about the reason for leaving – his mother was not ill. His claim to have lived in Dallas “continuously” was also false. He had defected to the Soviet Union in 1959, returning to the US in 1962. Oswald got the job.

Five weeks later, John F Kennedy was assassinated. Shots were fired from the Book Depository and Oswald was arrested.

“I like words. I like fat buttery words, such as ooze, turpitude, glutinous, toady. I like solemn, angular, creaky words such as strait-laced, cantankerous, pecunious, valedictory. I like sniggly, chuckling words, such as cowlick, gurgle, bubble and burp.

I like the word screenwriter better than copywriter, so I decided to quit my job in a New York advertising agency and try my luck in Hollywood.” This missive, written by bored Madison Avenue copywriter Pirosh in 1934, must be one of the most memorable job applications of all time. After declaring his love for even more varieties of words, Pirosh signed off: “I like words. May I have a few with you?” It worked. Pirosh was hired by MGM, the biggest studio in Hollywood. After uncredited contributions to such classics as A Day at the Races and The Wizard of Oz, he won an Oscar in 1950 for Battleground, drawing on his combat experience in World War II.

In very different ways, job applications from Oswald (top) and Madonna (above) changed history. Pirosh’s wordplay earned him work with the Marx Brothers

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FRIENDS

HOW CHARISMATIC DO YOU NEED TO BE TO GET INTO THE OVAL OFFICE?

Facundo Arrizabalaga/Epa/REX/Shutterstock, Susan Walsh/AP/PA Images

History’s successful leaders have often had charisma in bucket loads but, asks Morice Mendoza, is it a prerequisite for reaching the top?

A

t CIA headquarters on 21 January 2017, leadership styles are still available to a CEO. Despite president Donald Trump told agency decades of management theory emphasising the virtues staff: “In the meantime, we have a bust of teamwork, delegation and democracy – and a of Churchill.” It was his idiosyncratic technological transformation that has made work a acknowledgement that one of his first much more connected place – Jeff Bezos is just as much acts as the 45th president of the United of an autocrat as John D Rockefeller. The Amazon States was to move a bust of Winston Churchill by British founder’s put-downs are legendary. After one mediocre sculptor Jacob Epstein back into the Oval Office. Barack presentation, he asked the engineer: “Why are you Obama had removed the effigy to accommodate a bust of wasting my life?” civil rights leader Martin Luther King (which, contrary to The ‘great man’ theory of leadership, based on the media reports, remains there). assumption that leaders are born not made, was popuWhatever you think of Trump, he understands the larised in the 19th century by British historian Thomas power of symbolism, and moving the bust may have Carlyle, for whom “the history of the world is but the been his way of underlining the scale of the crisis he biography of great men”. The continuities between such insists America is facing – a narrative that will make titans as Andrew Carnegie and Rockefeller – and Jack his forthcoming ‘triumph’ even more glorious – and Welch and Steve Jobs – are as striking as the differences. portraying himself as a leader in the same mould as the All of them, in Carlyle’s terms, have shaped their times. most revered British prime minister.

Their biographies often fit a heroic narrative – Charismatic, volatile, unorthodox and brilliant, Carnegie was born poor, got his break as a telegraph boy Churchill was often regarded with suspicion by the in Pittsburgh and established an iron and steel business political elite – Liberal prime minister David Lloyd that made him one of the richest men in history – that George said of him: “He would make a drum out of the sheds little light on one of the most intriguing aspects of skin of his mother on which to beat his own praises” – their success: their mysterious gift for spotting but he changed history, using his energy, eloquence and opportunities before anyone else. During the American personality to inspire Britain to Civil War, Carnegie intuitively confront Nazi Germany. understood how badly American As David Bell, Princeton industry would need iron in “In his autocratic style and University history professor, peacetime and, by 1900, his writes in Foreign Policy magacompany was producing more hunger for acquisitions, zine, Churchill could “rally the steel than Britain. If anything, Rockefeller set an example for British people with a rhetoric of Rockefeller’s rise was even more many leaders to follow” glory and honour that much of spectacular – the son of a New his generation thought had been York con man, he became richer discredited forever by the horthan Carnegie, building an empire rors of trench warfare”. that controlled 90 per cent of America’s oil business before Trump’s ‘Make America Great Again’ pitch sounded it was broken up following an anti-trust suit. corny to many but the slogan resonated with millions of “After he carefully weighed a course of action, he voters with whom, Bell says, he “forged a powerful, would act quickly and boldly to see it through to fruition,” personal connection”. He understood the anger of the Keith Poole, professor of political science at the “forgotten people”, as he called them, at the elites they University of Georgia, says of Rockefeller. “He had iron felt had abandoned them and “delighted them with his nerves and would carry through very complicated deals utter disdain for the rules those elites allegedly enforced”. without hesitation.”

Charismatic leaders, such as Trump, have a knack It is tempting to see Rockefeller as a product of his for distilling complex situations into simple equations. age, when American capitalism was at its most dynamic, One strategy that helped Margaret Thatcher win three largely unfettered by regulation, yet in his autocratic successive general elections was that, before the style, hatred of waste and hunger for acquisitions, he set campaign started, she selected her core message an example for many business leaders to follow. and repeated it until voters went to the ballot box. In As autocratic as Rockefeller, Henry Ford was a great the boardroom, Berkshire Hathaway CEO Warren innovator, who revolutionised automobile production by Buffett has a similar knack. Bill Gates once said the best applying Frederick Taylor’s time and motion concept. In advice he ever received from the Sage of Omaha was: 1912, Ford manufactured 82,000 Model T cars at a price of “Keep it simple.” $850. Four years later, it made 585,000 Model Ts at a price In business, leadership styles go in and out of of $360. When investors disagreed with his strategy, Ford fashion. It is tempting to marshal them into a timeline bought them out. He irritated Wall Street by agreeing to – put the ‘great man’ theory in the 19th century, pay workers a generous $5 for an eight-hour day. He made ‘organisation man’ in the 1920s to 1950s, and ‘rock star this sound altruistic – if Americans didn’t earn enough CEOs’ in the 1990s – but this is too neat. All these how could they buy a Model T? – yet it also enabled him to 46

charisma

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Organisational genius Alfred Sloan (left) formed General Motors into a multi-divisional corporation. Here he is inspecting machine guns manufactured by General Motors’ Frigidaire Division in World War II

run his factories 24 hours a day with three shifts that lowered his unit costs. Like many great autocrats, Ford’s greatest weakness was clinging on to power too long.

Acquisitions were a passion for Henry Singleton, owner of US conglomerate Teledyne, who thought it was his job to “squeeze every penny he could to acquire more firms” – as Anthony Mayo and Nitin Nohria say in their book, In Their Time. By the end of the 1960s, his business was worth $1.3bn.

Mayo and Nohria say that Singleton “achieved dramatic and swift growth by carefully reading the context of the times and adjusting to the dictates of market conditions”. A secretive soul, Singleton took seven years to build one of America’s most profitable businesses. Though praised for his studied, unhurried decision-making, the single greatest contribution to his success may have been his ability, as an MIT PhD, to anticipate the semiconductor boom and plan accordingly.

In his fixation on financial controls, Singleton resembled Lord Weinstock, once a paragon of British management, who ran GEC from 1963 to 1996. Weinstock confined his risk-taking to the racecourse – where he gambled recklessly – and was happiest poring over columns of figures from the 180 or so businesses in a group that dominated the UK’s defence, power and electronics sectors. Coming to power in a decade of great social upheaval in Britain, there was nothing swinging or trendy about Weinstock’s leadership. He could be as

autocratic as Rockefeller or Ford: after one complaint about GEC locomotives breaking down, he fired a manager over the phone. In the late 1980s, Weinstock was ridiculed for his conservative insistence that he would not invest in any business if he could earn more by leaving the money in the bank. His caution was tragically vindicated when his free-spending successors wrecked GEC. When corporate historians trace leadership styles, bosses like Weinstock, who are good at numbers but not “the vision thing”, are invariably overlooked. There is an inevitable bias towards world-changing visionaries, yet neither of the two leaders who have had the biggest influence on the corporate mainstream in the past 100 years fits easily into this stereotype.

Alfred Sloan, CEO and then chairman of General Motors from 1923 to 1956, was a modest man with a genius for organisation. He all but invented the modern corporation, enabling it to grow without incurring inefficiencies, based on a multi-divisional organisation supported by head office functions such as strategy and finance. This style became known as ‘organisation man’ – as Fortune magazine noted in 1938, Sloan “displays an almost inhuman detachment from personalities, a human and infectious enthusiasm for the facts”.

Such giants as Coca-Cola, DuPont, General Electric, Heinz, IBM and Kodak adopted Sloan’s organisational template. Like all orthodoxies this model became restrictive, and when Louis Gerstner took charge at IBM 47

in 1993, he likened the task of reinvigorating the company to teaching elephants to dance. Yet ‘Neutron Jack’ Welch – so called because he cut thousands of jobs but left buildings intact – had acted decisively GE in the 1980s. Under his ‘rank and yank’ policy, managers were assessed every year with the bottom 10 per cent at risk of being fired.

Famed for his brutal candour, repositioning GE’s business and abolishing nine layers of management, Welch was a shrewd strategist, though he had the good fortune to be CEO in the 1980s, an era when acquisitions – he made more than 600 of them in 20 years running at GE – were seen as evidence of managerial vigour. Later, he might have been quizzed over whether these deals genuinely created value. Welch’s informality also endeared him to the media which, for much of the decade, lionised business leaders in a way it had not done since before the Great Depression of the 1930s.

One of Welch’s most famous remarks was: “Oh hell, everyone in the game has ego. You have to have selfconfidence to seize the opportunities.” Yet Harold Geneen’s Napoleonic self-confidence proved catastrophic for him and International Telephone & Telegraph (ITT). A workaholic, impatient with legal nuances, Geneen built a 350-company conglomerate with annual sales of $17bn. Geneen was a pragmatist who liked to set managers against each other by giving them overlapping responsibilities. The system made confrontation inevitable but ensured checks and balances existed on everyone – except Geneen. He offered the CIA $1m to stage a coup in Chile, sold off some good businesses to persuade anti-trust investigators to let him buy an insurance company and, in 1977, relinquished 48

his CEO role as insurance losses mounted and juggling 240 profit centres became impossible.

In retrospect, it is hard not to see Geneen’s reign at ITT as a precursor of Enron under CEO Jeff Skilling. In 2006, Skilling was sentenced to 24 years in prison for 19 counts of fraud, insider dealing and misleading auditors.

A Harvard MBA graduate – and former McKinsey consultant – Skilling was initially lauded for his determination to create a culture of risk and innovation at Enron, shifting the business from hard assets such as power plants to energy trades to drive growth. It eventually became clear that Enron’s innovations were all varieties of financial chicanery. As losses mounted, Skilling tried to cover it up, once calling a Wall Street analyst an “asshole” for asking why Enron could not release its balance sheet.

Since the 2008 financial crisis, there has been something of a backlash against charismatic bosses.

Alternative leadership styles that put less emphasis on the individual, though far from new, have found favour.

The idea of CEOs as servants of their stakeholders was first coined by Robert Greenleaf in 1964, inspired by the authoritarian leadership he had loathed at AT&T and Hermann Hesse’s short novel The Journey to the East (1932), in which a mysterious servant called Leo emerges as the real leader of a group of travellers.

The theory of quiet leadership, highlighted in Jim Collins’ book Good to Great, can be traced back to Laozi, a philosopher in ancient China who recommended that “actions are performed without unnecessary speech”.

One contemporary leader who epitomises this approach is Nancy McKinstry, the American CEO of 175-year-old

REX/Shutterstock, NEWZULU/PA Images

Charisma and a clear message helped Margaret Thatcher win three consecutive elections

Source: Margaret MacMillan, St Antony’s College, Oxford, writing for the World Economic Forum

charisma

Dutch publishing company Wolters Kluwer, whose hippy who had gone to India in search of a guru and a digital transformation of the business has been man of such supreme self-confidence that colleagues successful and low key. talked of his “reality distortion field”. The ultimate rock It is now technologically possible – and, given the star CEO, Jobs took Apple from annual sales of $8bn in modern corporation’s complexities, some would argue, 2000 to $65bn 10 years later. desirable – for CEOs to experiment with more How did he do it? Malcolm Gladwell suggests that dispersed models that encourage collaborative decision- Jobs’ true genius lay in the way he ruthlessly refined making. Bill Gore, the founder of WL Gore, already invented products until they which makes Gore-Tex fabric, was one of emerged as world-beating iPhones and the pioneers of this style. Fed up with iPads. Yet perhaps, like Carnegie and seeing innovation stifled at DuPont, he quit Singleton, his indispensable gift was his in 1958 to build a company with no layers of ability to read contexts and markets, management, where information would HISTORY LESSON anticipate the future and decide what flow freely in all directions and individuals The past won’t give us a Apple had to do to get there. Did Jobs leadership formula but it and self-managed teams could go directly distort reality – or just glimpse it before can provide helpful hints to anyone in the organisation to get what anyone else? they needed to succeed. The business now Drawing on 100 years of European Be a good communicator Great orator David Lloyd has a CEO and divisions, but its founder corporate data, Christian Stadler, professor George once said: “I reach out would still recognise it as a “democracy of of strategic management at Warwick my hand to the people and innovation”. Brazilian entrepreneur and Business School, has identified five aspects draw them to me. Like self-proclaimed maverick Ricardo Semler of CEO leadership that underpin success. children, they seem then.” is indebted to Gore, putting his mentor’s Companies, he says, should make sure they It helps to listen dictum – that “authoritarians cannot exploit their current businesses effectively In the Cuban missile crisis, impose commitments, only commands” – as well as explore new ideas. Second, CEOs president Kennedy insisted into practice at Semco in the 1990s. should be conservative in their handling of on hearing his advisers’ As Semler once told CNN: “The finances. They also need to learn from differing views before deciding what to do. purpose of work is not to make money. The success and failure, should diversify only purpose of work is to make the workers, into related businesses and manage change Beware the pitfalls whether working stiffs or top executives, in a way that fits with corporate culture. of power feel good about life.” Such thinking has Like all such formulas, Stadler’s five Robert McNamara, US influenced the concept of purposeful secretary of defence during points come laden with caveats and excepthe Vietnam War, later said: leadership. While command and control tions, but he is probably right to say that, “Our misjudgements of friend styles of leadership remain dominant, while charismatic leaders come and go, the and foe alike reflected our Katie Bailey, management professor at the “fundamentals of what makes a CEO sucprofound ignorance of the University of Sussex, says: “Purposeful cessful remain the same”. Yet the same history, culture and politics of the people.” leadership combines a host of things. It is dynamic that fuelled the emergence of the business leadership that takes account of corporate saviour CEO in the 1970s could Don’t believe your own hype multiple stakeholders in building success be at work today. Back then, with many In ancient Rome, when a right across the board.” Bailey is working sclerotic conglomerates being battered by leader enjoyed a triumphal with the CIPD to explore how organisations march, a slave whispered: nimbler competitors from emerging econ“Remember you are human.” can foster an ethical, visionary leadership omies, markets clamoured for decisive, style and how this affects employee charismatic CEOs who behaved as if, in the Know when to step down attitudes and behaviours. words of American general George Patton: When Churchill became prime Yet this focus on collaboration, democ“Leadership is the thing that wins battles. minister again in 1951, his government drifted and his racy and servant leaders does not necessarily It probably consists of what you want to do, chosen successor Anthony spell the demise of the charismatic CEO. As doing it and getting mad as hell if someone Eden grew embittered.

Professor Margarita Mayo of IE Business tries to get in your way.”

School says: “Charisma is curiously unfashThough they all ran their organisaionable among business theorists and researchers. Yet, tions in very different ways, Patton’s credo could apply few could deny that charisma is often an essential quality to Rockefeller, Churchill, Geneen, Weinstock, Welch, of leadership.”

Thatcher, Jobs and Trump. In times of distrust, uncerA case in point is Steve Jobs, an entrepreneurial tainty and fear, when institutions are deemed to be icon in the mould of Carnegie and Rockefeller, and a unresponsive, ineffective or bloated, ‘strong’ leaders charismatic leader who bounced back from some who convincingly simplify the world’s complexities will Churchillian lows (his initial rejection by Atari and his always appeal. limited commercial success at NeXT). An outlier even by For further reading, see page 72 Silicon Valley’s standards, Jobs was a college dropout, a 49

J A P A N D E C O D I N G No longer the unstoppable economic machine destined to take over the world, Japan may, as Paul Simpson discovers, point to a future where GDP isn’t everything

Kusama with Dots Obsession 2012, Installation View: Kusama’s solo exhibition “YAYOI KUSAMA ETERNITY OF ETERNAL ETERNITY” at Matsumoto City Museum of Art, Nagano, Japan © YAYOI KUSAMA

Yayoi Kusama’s Dots Obsession reconfigures her trademark polka dots with mirrors and amorphous inflatable objects. She made her name in the 1970s painting naked subjects with polka dots

Yasumasa Morimura An Inner Dialogue with Frida Kahlo (Gift 2) Working as a conceptual photographer and filmmaker for more than three decades, Morimura uses props, costumes, make-up and digital manipulation to transform himself into recognisable subjects, often drawn from Western art (eg Kahlo and Vincent van Gogh) and culture (famously Greta Garbo and Che Guevara).

2005 Hisashi Tenmyouya, 2005 FIFA; Courtesy Mizuma Art Gallery

2001 Yasumasa Morimura; Courtesy of the artist and Luhring Augustine, New York

Tenmyouya Hisashi Football, 2004 Hisashi infuses traditional Japanese art with non-traditional media (mostly acrylic paint) and images from modern life. Calling his work Neo Nihonga, he aims to maintain the relevance of Japanese-style painting by portraying old motifs through a modern lens, celebrating Japanese culture and artistic tradition.

clairvoyant called Nui Onoue, who interpreted the ‘wishes’ of a brownish ceramic toad, to offer investment advice to industrialists, financiers and officials from the Industrial Bank of Japan. Toads are traditionally associated with wealth in Japan and this particular bit of porcelain’s reputation for infallibility meant that, by the late 1980s, it was indirectly controlling a portfolio of shares worth $20bn.

Alas, Onoue and her toad – in reality, an executive at Yamaichi Securities who was giving her inside information – failed to predict the bursting of Tokyo’s stock market bubble or the bruising recession that followed.

At first economists referred to this as Japan’s ‘lost decade’ but, when it became clear that economic stagnation was going to be prolonged, ‘decade’ became ‘decades’.

Yet, as David Pilling, the long-time Financial Times correspondent in Tokyo, asks in his book Bending Adversity: Japan and the Art of Survival, what does ‘lost’ really mean? One surprising aspect of Japanese society for the gaijin (foreigner) is how much time people spend queuing – for trains, tickets to the cinema, Kentucky Fried Chicken takeaways and Krispy Kreme doughnuts (where a wait of two hours is considered normal). The joke in Tokyo is that some queues are so long because passers-by assume people must be waiting for something special and join them.

None of this consumer clamour squares with the negative stereotype of Japan Inc that Pilling describes: “In the 1980s, Japan was said to be taking over the world with its unstoppable economic machine. Today, the default position is to see a glass not so much half empty, as one cracked on the bottom with the remaining contents draining away.”

In this dystopian view, “Japan must continue to sink. Its industry is dying, its women are suppressed, its people suicidal, its society closed and its debt unpayable.” There is some truth in all these criticisms but they do not tell the truth about contemporary Japan.

The exaggerated death of Japanese industry reflects, in part, a remarkable succession of corporate scandals.

The rap sheet is extraordinary: Mitsubishi and Suzuki have misstated fuel economy data; Takata has had faulty airbags; Mizuho Bank made hundreds of illegal loans to gangsters; the Tokyo Electric Power Company was accused of ignoring safety warnings before the Fukushima disaster (it has since been nationalised); Olympus has been exposed as fiddling its accounts as has Toshiba, which has also put its very existence on the line by mismanaging its Westinghouse nuclear power business.

In 2015-16, 58 cases of improper accounting were exposed in Japan, twice as many as in the previous year. No wonder Japanese prime minister Shinzo Abe has talked about the need for better corporate governance. No wonder, either, that R Taggart Murphy, professor at the University of Tsukuba, suggested that

“The exaggerated death of Japanese industry reflects, in part, a succession of corporate scandals”

IN HIS POWDER BLUE KIMONO, decorated with patterns of pink cherry blossoms, and plugged into his iPod, the sumo wrestler caused quite a stir as he strode through a crowded waiting room at Kyoto station, flanked by his entourage. One of his loyal retainers was dispatched to Starbucks and, a few minutes later, listening to music on his headphones, he surveyed the waiting room with a proprietary air as he sipped his latte.

It was the kind of incongruous sight you come to expect in Japan, a country whose national slogan should probably be French novelist Andre Gidé’s remark: “Please don’t understand me too quickly.”

Contrasts and contradictions abound. Robot baristas are welcomed into the nation’s cafés yet, when you catch the train from Narita airport into Japan’s capital you are likely to see someone whose job it is to hoover the platform – not sweep, actually hoover.

One of Tokyo’s essential sights is Shibuya Crossing, the world’s busiest intersection where, at peak times, 45,000 pedestrians scramble from one side to the other, like two armies squaring up for battle. Yet 20 minutes away by Metro, in the suburb of Setagaya, where the streets are the preserve of pedestrians, cyclists and cats, life feels as slow as in rural Japan in the 1950s, as portrayed in Hayao Miyazaki’s film My Neighbour Totoro.

Foreign and Japanese analysts have diagnosed the country’s ills as ‘Galapagos Island syndrome’. Just as Charles Darwin discovered that animals evolved differently in the Galapagos’s isolated environment, the theory is that the Japanese market is so insular and different it is hard for its companies to create products that appeal to the rest of the world. While Japan Inc has developed fewer global hits since the 1980s, Piko Taro’s irritatingly contagious ‘Pen-PineappleApple-Pen’ (PPAP) ditty became an instant worldwide phenomenon last year.

Japan’s economic miracle was driven by the most effective industrial strategy in history. Bureaucrats at the legendary Ministry of International Trade and Industry (MITI) picked – and backed – winners with such astonishing consistency that aspiring prime ministers were obliged to serve there until the 1980s.

The fact that MITI and Japan Inc was accused of taking unfair advantage of globalisation by some American politicians is ironic. The US had bullied Japan into entering the global economic system in the 1850s. The country reluctantly opened up to international trade after a spot of gunboat diplomacy by Commodore Perry, who sailed his squadron into Tokyo harbour. (The Japanese paid Perry back: the most famous woodprints of him, depict him with a large nose, referring to the size of his penis and, by extension, the size of his brain.)

Yet the transformation MITI’s experts had laboured so effectively to create was finally undone, in part, by a

Abe’s latest budget offered tax incentives to encourage firms to turn temporary staff into permanent. Yet the causes of karoshi are far too deep rooted to be blamed on any particular politician or economic system. As Ian Buruma writes in A Japanese Mirror, “Power in Japan has never rested so much on the letter of the law as on a type of social totalitarianism. People were often made to behave according to imported codes which they didn’t really share.” These codes, enforced by the Tokugawa shoguns in the Edo era (1615–1867), were reinforced by a brand of Confucianism that emphasised duty to one’s parents, the state and society.

As Buruma says: “Now that Western culture has reached even the simplest Japanese home, the surface of Japanese life has changed beyond recognition – yet it remains a deeply traditional country.” The desire not to disturb wa – harmony – is one reason so many Japanese (especially men) work such long hours. It also explains why conflicts are so rare in Japanese corporate culture as staff are schooled to handle the distinction between tatemae (the official version of reality to which everyone pays lip service) and honne (what is really happening).

The emphasis on social duty is especially striking on Tokyo’s efficient Metro service. On a typical daily commute, workers may be urged: to turn their mobile phones onto silent (and not to talk on them if someone calls); to adopt the best posture when sitting; to wear their backpacks on their chest and to be careful with wet umbrellas and pushchairs. These messages are reinforced by social conventions that it is rude to talk too loudly even to fellow passengers – a taboo usually ignored only by drunken businessmen on their way home from nijikai (after-party drinks at the end of an office night out) – or eat food on the trains.

In such a social climate, the only way to end systemic karoshi is to create a new harmony in the workplace that encourages staff to seek some kind of work/life balance. Some companies are doing this: Tokyo healthcare firm Saint-Works Corp actually tapes departure times to employees’ uniforms when they plan to work late; trading house Itochu has banned work after 10pm and IT developer SCSK gives staff a bonus if they take more holidays and work less overtime. Even Dentsu now turns off the office lights at 10pm and has appointed a former government minister to advise them on complying with labour laws.

Workaholism is just one aspect of Japan’s business culture that hampers Abe’s drive to persuade more women to work. Women are, Pillings says, the country’s most “neglected resource”. Better educated than men, they are still given more menial jobs and are often advised by their boss, at a certain point in their lives, that it is time for them to go home and have a baby. In

Granger Historical Picture Archive/Alamy Stock Photo

US Commodore Matthew C Perry sailed into Tokyo harbour in 1853, creating a crisis that opened up Japan’s society to foreign influence.

ROUGH TRADE

“the Japanese leadership class has become so incompetent as to be dangerous”.

For the record, Japan Inc is still producing successful businesses: high-precision measuring group Keyence, telecoms group SoftBank and retail pioneer Rakuten being the most obvious examples. The country has also begun, albeit belatedly, to discover the virtues of the sharing economy.

Yet the recent scandal that has resonated most in Japanese society has to do with a very different kind of fraud. On 28 December, Tadashi Ishii, president of Dentsu, the country’s largest advertising agency, resigned after 24-year-old employee Matsuri Takahashi committed suicide, jumping to her death from a company dormitory. She had tweeted about the strain she was under – she worked over 100 hours of unpaid overtime in the month before her death – saying: “They’re making me work Saturdays and Sundays again. I want to end it all.” To make things worse, supervisors harassed her about her “messy hair and bloodshot eyes” saying she had “no feminity”.

The investigation into her suicide by the Ministry of Health, Labour and Welfare found evidence that Dentsu had under-reported overtime hours worked by several dozen employees, presumably to circumvent regulations that are supposed to ensure that staff don’t work more than 48 hours a week without an agreement with unions. The prevailing ethos at Dentsu before Takahashi died is best illustrated by a quote, in its training materials, from a former president to complete tasks and satisfy clients “even if it kills you”.

(This exhortation has since been removed.)

The fact that the Japanese language even has a word for death from overwork – karoshi – indicates how bad this problem is. The first government report into this issue said that one in five companies had staff who worked at least 80 hours of overtime a month. Part of the difficulty, as Japan Times columnist Hifumi Okunuki says, is that “mouretsu shain”, the word Abe has used to describe workaholics, “are the workers who slaved morning to night during the country’s three decades of economic growth in the 1960s, 1970s and 1980s. In exchange for giving up their private lives, they enjoyed nearly guaranteed employment through to retirement, only ever at risk of getting fired over a particularly grave offence.”

Yet today, Okunuki says, “mouretsu shain are now treated more like war criminals, depicted as middleaged wage thieves with little ability and low productivity.” Companies pit them against each other – or against younger colleagues – because they are so expensive. It is far cheaper to replace them with younger staff or irregular workers, the latter now account for 40 per cent of the workforce.

Keiichi Tanaami The Bizarre Scenery One of post-war Japan’s leading pop artists of post-war Japan, Tanaami has been active as a multi-genre artist since the 1960s as a graphic designer, illustrator, video artist and fine artist. He was nine when Tokyo was bombed during World War II, an experience that haunts this work.

Hiroaki Ito Fighting Man Ito’s composition shows a salaryman about to lose his lunch after a long drinking session with his boss or co-workers. He captures his suited, white-collar workers in moods of submission, anguish, self-assuredness, and unrest, often catching his salarymen and ‘office ladies’ during an apology, sombre reflection, or nausea.

japan

2012 Hiroaki Ito

2011 Courtesy of the artist and NANZUKA

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Masami Teraoka McDonald’s Hamburgers Invading Japan Mimicking the flat, bold qualities of ukiyo-e woodblock prints, Teraoka’s paintings in the early 1980s blended reality and fantasy, humour and commentary, history and the present, using his concern about fast food homogenising world tastes to address cultural globalisation.

2016 Carl Court/Getty Images

Courtesy of the artist and Catharine Clark Gallery, San Francisco, CA 1982

Shido Nakamura Hanakurabe Senbonzakura Kabuki actor Nakamura Shido (right) and popular virtual idol Hatsune Miku perform together on stage in Hanakurabe Senbonzakura (A Thousand Cherries: The Banquet of Now and Then), a traditional work of Japanese kabuki theatre combined – to award-winning effect – with state-of-the-art technologies.

Japan

Monozukuri The art of making things. Japan has an almost mystical pride in its ability to manufacture. The emphasis on quality, ironically, was inspired by American engineer W Edwards Deming.

Monozukuri is still integral to its self-image even though, for example, Japanese companies now manufacture 3.6 million cars a year in the US.

Oidashibeya Literally the ‘boredom room’ to where a company deliberately assigns certain employees (often elderly ones who, because of the system of seniority, are paid more) and gives them either far too little – or much too much – work until they get so fed up they leave of their own accord.

Wa ‘Harmony’, a key concept in Japanese society, which is very collectivised. The need to preserve wa in the workplace is one reason that many Japanese staff put in hours of unpaid overtime as it is deemed bad form to leave work before your boss or even colleagues who have been at the company longer than you.

Japan’s much maligned traditional culture may help.

Respect for elders and superiors was one of the Tokugawa codes, and that attitude is reflected in Miyazaki’s movies: powerful old people are a recurring motif in Castle in the Sky, Kiki’s Delivery Service and Spirited Away. Many of the older staff still working in manufacturing are passing on their skills to younger staff.

For a society often typecast as too traditional for its own good, Japan has proved flexible in, to use Pilling’s phrase, bending adversity. A quarter of a century of little – or no – economic growth has left some asking whether a return to the high-speed growth Japan enjoyed from the 1960s to the 1980s would actually be good for the country. Haruki Murakami, Japan’s most famous novelist, is encouraged by such questioning, telling Pilling: “We are lost and we don’t know which way we should go, but that is a very natural thing, a very healthy thing.”

Although as a wealthy novelist, it is easy for Murakami to pontificate about what young people should do, he is encouraged by the willingness of many to ignore ‘the promised road’ (the conventional career path in which they go to university and then get hired, en masse, by one of the big companies) and enjoy a less pressured lifestyle akin to ‘slow living’ in the West. The term otaku refers to a more alienated version of this attitude, typically a young man whose obsession (usually an aspect of popular culture) is more meaningful than anything else in their life. In extreme cases, these men barely leave their bedrooms and are known as hikikomori (literally ‘pull-in and retire’).

A country full of joshi-kais, otakus and hikikomoris probably isn’t the Japan Abe wants to create, but it may well be what he ends up with. In some ways, Japan remains one of the world’s most cohesive societies – it is not irrevocably divided by ideology, religion or regionalism. Yet it is a more diverse place than it has ever been. It remains a land where consumers are enthralled by novelty – whether it be in the form of a backless and sideless sweater, a fad for hiding in IKEA stores overnight or Super Mario go-karts.

Anyone trying to understand this enigmatic society would do well to heed Oscar Wilde when he said: “The whole of Japan is pure invention.”

Freeters Part-time or casual employees, which now account for 40 per cent of the Japanese workforce.

Poorly paid, in dead-end jobs, being a freeter used to be a last resort, but among the yutori (anything goes) generation, which began entering the workforce in 2010, who aren’t looking for a job for life at a big company, it is a lifestyle choice.

FOUND IN TRANSLATION – THE LANGUAGE OF JAPANESE WORK

some companies, such sexism was incorporated into HR policy. In 1983, a leaked memo from the Kinokuniya bookstore revealed that managers were not to hire the following kinds of women: ugly, argumentative, tiny, divorcees or those who “respected passionate artists like Vincent van Gogh”.

As R Taggart Murphy notes, Japanese culture is changing, partly driven by women themselves, who have created different, less restrictive personas than okusan (wife) or kyaria ooman (career woman). In Tokyo’s bars, it is not uncommon to see groups of young women ( joshi-kai, literally “women’s meeting”, because they have no intention of meeting male expectations) dressed to shock, subverting Japanese feminine stereotypes.

Pop star Matsuda Seiko was a harbinger of change, becoming a heroine, in the 1980s, for single Japanese women. The greatest female pop idol of the 1970s, Yamaguchi Momoe, retired relatively quickly to marry an actor and has publicly played the loyal okusan ever since. In contrast, Seiko dressed satirically in a schoolgirl’s uniform, gloried in her three marriages and flaunted her boyfriends.

Ironically, Abe’s expressed desire for women to take top roles may come to pass in politics. Three women have been hailed as his likely successors: defence minister Tomomi Inada, Yuriko Koike, the governor of Tokyo, and Renho Murata, leader of the Democrats, the main opposition party.

Getting more women to work will not help Japan’s demographic crisis.

Last year, the number of births fell to 981,000, the lowest since 1899. This wouldn’t be so much of a worry if Japan wasn’t so good at keeping old people alive. By 2050, one million Japanese could be over 100 years old.

The obvious ways to tackle an ageing population are to increase fertility (which Japan has failed to do), productivity (where its world-leading investments in automation may help) or participation in the workplace.

Yet Japan is ahead of the curve when it comes to helping the over-65s work. Sheet metal manufacturer KATO Mfg (which supplies Boeing) only hires workers who are 65 or older but keeps the production line going 24/7. Cosmetics maker Pola has no retirement age and estimates that 5,500 of its 50,000 sales staff are in their seventies (one employee has turned 100). For once,

For further reading, see page 72 17

THE DEVIL WEARS PRADA Post Office chairman Tim Parker has earned himself a reputation for being prepared to make tough strategic decisions. But, as Matthew Gwyther discovers, the so-called Prince of Darkness has fought – and won – some hard business battles Portrait

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im Parker’s at the Post Office. Not cashing his giro or buying the latest set of first day covers, but in the chairman’s office in London’s Finsbury Street, shepherding the organisation through one of its perennial difficult periods of change.

And he’s feeling quite pleased with himself because he has a positive story to tell: his senior managers have just struck a deal with high street banks to provide almost double the number of small businesses with over-thecounter services as the banks speed up branch closures across the UK (HSBC has just announced it will close a further 62 branches this year).

The Post Office retains a large retail estate, still 11,600 branches strong, while many businesses are running headlong from bricks and mortar. Ninetyeight per cent of the population live within three miles of a branch. The new agreement will provide nearly all of the large banks’ personal customers and 75 per cent of their small business clients with face-to-face services, from depositing cash and cheques to reviewing balances. Last year, some 110 million transactions were carried out at Post Offices on behalf of banks, up from 104 million the year before.

This makes a positive mood change from the preChristmas walkouts by members of the Communication Workers Union (CWU) in a continuing dispute over jobs, pensions and the transfer of up to 61 branches into WHSmith stores. It isn’t a dispute that’s likely to end any time soon – in January the Post Office announced

plans to close and franchise a further 37 Crown offices.

“The CWU has a fairly regular strike timetable,” notes Parker drily. He says the Post Office has a brighter future having split from the Royal Mail in 2012, which then went on to be privatised. “It’s our first year in the black and we can now further subsidise our important rural network.” The operating loss before subsidy was £24m in 2015-16.

Parker, the king of turnarounds, currently wears a three-pointed crown as chair of the Post Office, the National Trust and Samsonite. He’s the go-to guy when hard strategic choices need to be made and has performed sometimes painful reconstructive surgery on a list of companies of diverse shapes and sizes: Clarks shoes, the AA, Kwik Fit and Kenwood food mixers. Trained at the old Thorn EMI, HM Treasury under former chancellor Denis Healey and London Business School, at 61 he’s been in business for a long while. At 26, he was put in charge of a struggling catering equipment maker in Chicago – it proved a rare defeat and he had to sell it.

Much of his work has been for private equity masters Candover and CVC Capital Partners. Private equity retains a no-nonsense reputation for short-termism, cost-cutting and playing the tax system to its limits. His moniker – acquired when he was said to have driven up in his Porsche to fire half of the workforce at the private equity-owned AA – is the Prince of Darkness: a slash and burn artist with a whiff of sulphur and a cloven hoof.

In truth, he doesn’t appear that devilish – tall and slightly dandy-like in his choice of clothes, with a 59

remarkable mop of authentic, tumbling grey curls very handsome return as the company was floated to top it off. The son of a Desert Rat, Parker is now in Hong Kong – like Prada – for $2bn in 2011. It has a very wealthy man, having been valued in The Sunday since been on the acquisition trail, buying rival Tumi Times Rich List at £185m. He lives in some comfort for $1.8bn last year, thus solidifying its status as the in Sussex, Chelsea, Majorca and Venice with his world’s biggest premium luggage maker. Parker says wife Thérèse.

Samsonite is his favourite company of all those he’s His management style is one of decisive action. There been involved with. has been very little steady as she goes during his career.

The National Trust is the first charity he has chaired He likes teams and says that while many of his cohort at and he’s clearly enjoying what could be a tricky, highbusiness school wanted to go into finance or consultancy, profile position. “I found it very well-managed,” he he always wanted to be a general manager. Nothing says. “It currently has a record number of members and pleases him more than getting under the bonnet visitors. Did you know that 200 million people CURRENT of a new project and rummaging around to see walk on Trust land every year?” what’s going on.

He’s conscious that Brexit may prove a big CHALLENGES Parker’s most high-profile turnaround jobs issue for the charity, which has recently moved were Clarks in the mid 90s and Samsonite in attention away from its buildings towards 2008. Clarks was a venerable, but sprawling, the natural environment. Leaving Europe may Post Office Quaker business set up in 1825, which had shod change our whole attitude towards the Trying to stem the most of the nation’s middle-class children. It had government-subsidised countryside as the losses while keeping the powerful rural 1,000 shops and its manufacturing was done in Common Agricultural Policy is left behind and the UK, but the company was left reeling by an lobby happy. ‘Save our subvention comes under a new spotlight. unsuccessful bid from a rival. It was almost loss- local post office – the Many within the farming lobby have been last shop in the village’ making, a property portfolio keeping it afloat. saying the Department for Environment, Food should become a cry “The tail was wagging the dog,” Parker has noted and Rural Affairs lacks the wherewithal to of the past. of the influence of the retail arm. conduct complex international trade negotiaHis remedies were drastic and shocked the tions in the area of agri-business, because the inhabitants of Street, the town Clarks built: he EU has done it for them for the last 44 years.

National Trust shuttered all UK manufacturing, moving And it’s often food where tariffs are very high Treading a fine line between middle production initially to Portugal and then to Asia. because of the sensitive political need to Englanders and the He devised a new marketing campaign under protect home producers. the ‘Act your shoe size, not your age’ slogan and farming lobby, both of “It’s created great uncertainty for everywhich can get ugly set the company back on the road to growth. It one,” admits Parker. “The government is when roused. Not now turns over £1.5bn, with more than half its being too militant on currently puzzling through what might be the eco and climate sales from outside the UK. The Desert Boot has implications for the countryside. It’s possible change issues. become a style icon worn by everyone from to nudge farmers towards looking after nature musician Florence Welch to Tony Blair. Jamaican more and at the same time support smaller dancehall star Vybz Kartel has even written producers.” As the Trust is the nation’s largest three songs about Clarks in recent years. farmer with 618,000 acres, it could well find Samsonite Parker does not normally stay in one place itself locking horns with both the government Fighting to keep the brand values high, very long. “I hate the thought of lurking in the and the National Farmers Union. while battling cheap corridors of the HQ of a large company,” he A ‘remainer’ in the referendum vote, Parker Chinese competitors says. But the man of action is now into his is pretty uncomfortable being pushed on and knock-offs. ninth year with Samsonite, the luggage maker politics. He has an innate distrust of business Getting further into voguish rucksacks. founded in Denver, Colorado, in 1910. With a people who pontificate on the subject, despite disastrous sense of timing, the business was being an active member of the Labour Club acquired by private equity outfit CVC in 2007 for $1.7bn while at Oxford. His one entrance into the political arena – just in time for the crash of 2008. People across the did not end well. Boris Johnson sweet-talked him into globe cancelled trips and stopped buying suitcases. taking the role of deputy mayor in London. It only lasted After profits had dropped by an eye-watering two- a matter of weeks – when Parker discovered he was one thirds to $53m, in came Parker. He steadied the ship as of six deputies, he left. Cue the memorable Telegraph non-executive chairman, but got so into the task that headline: “The axe man who axed himself.” The he jettisoned the management within two months to equivocation of politicians and the lack of straight run the show himself. answers doesn’t appeal to him. As he has said when Headcount and shops were reduced to preserve answering the charge that he’s bloodless in his execution precious cash that was ploughed back into new suitcase of a strategy: “The one thing you cannot fault me on is designs and marketing. Parker was also wise enough to that I’ve always told the truth. I always carefully spell invest $9m of his own money, on which he has made a out the alternatives.”

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Tim Parker was tasked with keeping former mayor of London Boris Johnson ‘on message’ as first deputy mayor and chairman of Transport for London, but he resigned from both positions

My guess is he sees Brexit as little short of a disaster, although he says he’s optimistic for our long-term future. He’s a committed internationalist – as at home in Hong Kong with Samsonite as he is in the palazzo he bought in Venice overlooking Giudecca. “All I’ll say is it’s going to lead to a period of great uncertainty. It will play out over a large number of years. Some enthusiasts are very impatient to get there fast, but that will be very difficult. We are going to be the transition generation now. But look, I have faith in our adaptability.” So not much chance of a deal – good or bad – within two years?

“I’d be very surprised. One positive outcome of events so far, though, is the adjustment in our currency. It will definitely make us more competitive.”

So what does he make of the overall quality of British management since he set out from university in 1977? “The calibre has risen over 40 years. There are higher standards of executive education and we’ve been very open to bringing in talented people from abroad. But we could do with a rebalance away from the service sector towards manufacturing and engineering.”

And he’s not into rubbishing disengaged millennials for a lack of application or staying power. “Just because young people don’t stay in one place for 10 or 20 years, that doesn’t make them disengaged,” he notes. “The ones I see work hard. But they are more mobile. And they have higher expectations from work. They want better conditions, hours and levels of interest. That’s a good thing. And markets work. If they don’t get those things, they find them somewhere else.”

On the vexed question of excessive executive pay and the poor general levels of reputation currently held by business, he admits he doesn’t know the answers.

He has previously acknowledged that “a free market system needs citizens to believe the method of redistributing income is fair and effective”.

I now get the impression that bashing fat cats is testing his patience. “The difference between a good person and not such a good person can mean billions of pounds. But I agree with the disquiet when large amounts are paid for what isn’t success. My inclination on income distribution is to do it via the tax system – not for the government to impose limits on what individual companies are allowed to pay. And I think once you go above a marginal rate of 50 per cent for income tax, all the evidence shows the returns don’t merit it.”

So, is he tempted by a few more big commercial jobs on behalf of private equity owners? “No. Probably not.

I’ve done that for 40 years and you only get one life.

There are lots of other things I can and would like to do.” One, for instance, being his ownership of the British Pathé film archive, which he bought from the Daily Mail for “a definite seven-figure sum” around nine years ago. It’s a wonderful treasure trove of our 20th century history but, being the man of action he is, Parker is unlikely to be considering retirement to sit down to watch the 85,000 films that have been uploaded to YouTube.

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TALENT MANAGEMENT

Scouting for talent The connected economy needs technical competence and social skills

Move over London, Cardiff is where it’s at – at least in terms of skills and employability

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witzerland and Singapore in professional, managerial or have topped this year’s country leadership roles) and employability performance rankings for their (the extent of skills gaps and ability to compete for talent. labour market mismatches in The UK came third, ahead of the each country).

US in fourth place and Sweden In 2017, for the first time, a Global in fifth. Australia, Luxembourg, Cities Talent Competitiveness Denmark, Finland and Norway Index was also compiled. Of the make up the rest of the top 10.

46 cities listed, Copenhagen took As in previous years, the top spot, followed “Fears that analysis of the

by Zurich, Helsinki, machines will rankings shows San Francisco and wipe out all jobs a strong correlation Gothenburg. In the are unfounded” between GDP per UK, Cardiff beat capita and GTCI London, placing (Global Talent Competitiveness 11th and 16th respectively. Sydney Index) scores, with developed, and Singapore, ranking 12th and high-income countries dominating 19th respectively, led the way in the top positions.

Asia-Pacific.

The annual GTCI measures Measuring the same components how countries grow, attract and as the main GTCI, the cities index retain talent. It also assesses also considers how cities utilise their performance in developing skills to build global networks that mid-level skills (vocational and generate knowledge. The top 10 technical), high-level skills (as cities all combine high quality of required by knowledge workers life with high connectivity, and 62

opportunities for international exposure and careers.

The overall theme of this year’s index report is talent and technology. Produced by INSEAD, in partnership with the Adecco Group and the Human Capital Leadership Institute, and edited

by Bruno Lanvin and Paul Evans, The Global Talent Competitiveness Index 2017 – Talent and Technology argues that, despite growing use of automation, fears that “machines will wipe out all jobs are unfounded”. Organisations just have to adapt to working differently.

The report’s key messages include: • Think beyond automation. It’s not just about technology. To manage the implications of digital change, decision-makers must recognise that we are experiencing a profound transformation of society, organisations, careers, education and employment.

Organisations have become flatter, more interconnected and more focused on what people deliver than how and where they do it. At the same time, a ‘multicareer’ life has become the norm.

• Technology is changing the nature of work. We are moving away from an environment in which work is based on employment, with nearly 30 per cent of the population in Europe and the US now “to a greater or lesser degree, free agents”. Talent strategies need to adapt to that.

• Organisations should also rethink their process-heavy approach to human resource management, and put more emphasis on helping individuals to help themselves.

• Technical skills plus social/ project competence make up the new talent profile. Technical skills must be complemented with social and project skills to meet the needs of the highly connected new economy where

Words: Rima Evans

BUSINESS RESEARCH, REPORTS AND INSIGHT

innovation increasingly comes from collaboration.

• Educational and employment policies must adapt to the transformational changes of the fourth industrial revolution.

There is a mismatch between educational systems that do a fair job of turning out routine workers and professionals, and the needs of an emerging technology-driven society where machines are taking over routine jobs. Educational systems need to produce talent with both technical skills and the ability to collaborate with others.

They need to foster a sense of personal vocation, coupled with flexibility or learning agility.

Employment policies need to combine labour market flexibility with social protection.

• Cities and regions are showing the way. For individuals, as for companies, there is now more focus on which city to go to, rather than which country. Cities and regions around the world are becoming increasingly active in developing their own strategies to attract, grow and retain talent.

It is expected that, in the near future, some of the best and most innovative talent practices will come from cities.

Barcroft Media/Getty Images, United News/Popperfoto/Getty Images

bit.ly/GlobalTalentIndex2017

HUMOUR

When the joke is on you Humour at work can be risky if not everyone gets the punchline

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sing humour can raise an individual’s status and power in the workplace and contribute to career success – but only if the joke is funny.

Successful joke-tellers are viewed as more confident, more competent

and higher in status, and are more likely to be nominated as group leaders. However, the use of humour is risky. Telling an inappropriate joke “signals a lack of competence and can decrease status”, warn researchers T Bradford Bitterly and Maurice E Schweitzer of Wharton School and Alison Wood Brooks of Harvard Business School.

Their paper opens with anecdotes about two business people who used humour – with contrasting results. The first features former Twitter CEO Dick Costolo, who “attributes much of his success in business to his use of humour”, the paper says. The night before he joined the firm as chief operating officer in 2009, he tweeted: “First full day as Twitter COO tomorrow.

Task #1: undermine CEO, consolidate power.” He went on to become CEO a year later.

By contrast, Justine Sacco, a public relations representative for IAC, on departing from Heathrow airport in 2013 tweeted: “Going to Africa. Hope I don’t get AIDS. Just kidding. I’m white!” This ‘joke’ cost Sacco her job and reputation.

Using surveys and behavioural lab studies to investigate areas such as the pervasiveness of humour at work and the quality and appropriateness of jokes, the researchers established a clear link between humour and status. Attempting to use humour boosts perceptions of confidence, irrespective of whether the joke is appropriate or inappropriate, they say in Risky Business: When Humor Increases and Decreases Status.

However, only appropriate humour that elicits laughter boosts perceptions of competence.

Inappropriate jokes that don’t receive a laugh can harm status.

“Ultimately,” say the researchers, “our prescriptive advice is to use humour with caution.” bit.ly/RisksOfHumour

MOTIVATION

Incentivising productivity Performance-related pay linked to more intense working

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o financial incentives motivate employees? Not necessarily, according to a recent study that suggests certain incentive pay arrangements may have a less than motivational effect, and can lead to employees suffering work-related stress or poor wellbeing.

Does contingent pay encourage positive employee attitudes and intensify work? explored the relationship between three forms of ‘contingent’ or incentive pay, and positive employee attitudes – namely job satisfaction, commitment and trust in management. The three pay arrangements examined were performance-related pay, profit-related pay and employee share-ownership.

Performance-related pay is an individual-based incentive linked to the assessment of individual

As long as people are laughing, humour in the workplace can improve status

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employees’ work effort and EXECUTIVE PAY they were working too hard, that contribution to organisational their work might be too demanding goals, explains the paper. It or that there was insufficient time describes profit-related pay as to get work done. an organisation-wide incentive Lead researcher Ogbonnaya concerned with earnings accruable says: “Our study is the first to show Increase in CEO pay fails to from a measure of organisational empirical support for claims that translate into economic return profitability. Employee sharethe productivity gains of these pay ownership is also an organisationschemes might be associated with otal pay for the median FTSE wide incentive through which employees’ experience of more 350 CEO increased by 82 per employers offer their shares to intense working. By tying cent in real terms between 2003 employees at reduced rates. employees’ performance to and 2014. Yet the level of value Researchers Chidiebere financial incentives, employers creation over the same period Ogbonnaya and Kevin Daniels send signals to employees about “has been low in absolute terms of Norwich Business School, the their intention to reward extra and erratic from year to year”, a University of East work effort with “Employees may value more pay. Employees new study has found.

Anglia, and Karina these earnings, but the receive these signals A linear trend in CEO pay Nielsen of the ultimate beneficiary increases was halted only by the Institute of Work and feel obliged is the organisation” financial crisis of 2008 and 2009, Psychology, the to work harder when pay slipped back to 2006 University of for more pay. levels. Total annual realised pay Sheffield, say such incentive “Even though employees may for the median FTSE 350 CEO pay schemes have become value these earnings as a ‘good during the period studied was “increasingly important for thing’, the ultimate beneficiary £1.5m measured in 2014 prices. motivating employees to perform of their extra effort is the The CFA Society of the UK, productively at work”. organisation. As a consequence, which represents the interests of Using data from the management performance-related pay may qualified investment professionals, and employee surveys of the 2011 be considered exploitative, or commissioned Weijia Li and Workplace Employment Relations a management strategy that Steven Young, both of Lancaster Study, which is representative of increases both earnings and University Management School, around 35 per cent of all British work intensification.” bit.ly/PositivesOfContingentPay to assess the link between workplaces, the researchers found that only performance-related pay had a positive impact on all three employee attitudes. In contrast to previous studies, the research showed profit-related pay and employee share-ownership had a mix of negative and no significant effects on attitudes. Profit-related pay was found to have a negative relationship with employee attitudes from zero to medium levels of profit-related pay, but a positive relationship for higher levels. Meanwhile, employee share-ownership had a negative relationship with job satisfaction, and no significant relationship with either employee commitment or trust in management.

However, the research revealed that performance-related pay was Despite falling profits and job cuts, BP CEO Bob Dudley was awarded a £14m pay package last year. Shareholders rejected the deal but their vote was not binding on the oil company associated with employees feeling

Remuneration disconnect

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executive compensation and corporate performance.

They found that despite the growth in executive pay, the median FTSE 350 company generated little in the way of meaningful economic profit over the period 2003-09 (after adjusting for the full cost of funds). Although performance improved from 2010 onwards, the median firm still generated less than 1 per cent economic return on invested capital per year. “Collectively, our findings suggest a material disconnect between pay and fundamental value generation for, and returns to, capital providers,” the researchers note.

Two key themes emerge from the study: the choice of performance measures is critical in the debate over CEO pay; and there is a need to link incentives and rewards more directly to performance metrics that reflect long-term value creation for capital providers.

The researchers’ analysis was based on corporate performance data and CEO pay arrangements for large UK companies from 2003 to 2014-15. The final dataset comprised 113 firms with 12 years of performance data and 256 with at least five years of data.

Other findings discussed in An Analysis of CEO Pay Arrangements and Value Creation for FTSE-350 Companies include: • Simplistic metrics of short-term performance, such as earnings per share and total shareholder return, are the dominant means of measuring performance in CEO remuneration contracts.

Yet, these metrics correlate poorly with theoretically more robust measures of value creation that relate performance to the cost of capital.

• Firm size, industry and the previous year’s remuneration remain the primary drivers of

CEO reward in the UK. These organisations forward over the factors correlate with some next three years. The list of the top aspects of value-generation, but 10 leadership skills also includes they are not the most effective those needed to manage change tools for assessing long-term and difficult conversations, and to corporate success. communicate business strategy, • The proportion of total pay and those needed for budgeting linked to performance metrics has and financial management, increased steadily over the period inspiring trust and promoting studied. Salary made up 22 per innovation and creativity. cent of total pay for the median However, when asked about CEO in 2014, compared with 39 leaders’ current effectiveness, per cent in 2003.

HR opinion revealed a mismatch • Use of non-financial performance between expectation and practice. measures is increasing.

Only 6 per cent of respondents • Growing pay to the CIPD survey “Thirteen per cent complexity is considered their of respondents said also evident in senior leaders ‘very leaders were remuneration report effective’ at people ‘very ineffective’” disclosures, which management, with are becoming more 50 per cent saying difficult to understand. Compared they were ‘somewhat effective’ to remuneration reports published and 13 per cent rating them as in 2003, corresponding disclosures ‘very ineffective’. presented in 2014 are 50 per The figures were broadly the cent longer and 20 per cent less same for developing staff and readable. The evidence suggests change management. In respect transparency of CEO pay and of the other top five skills cited its link with value generation as essential – engagement and is declining, despite enhanced performance management – the reporting requirements intended findings were more negative to increase transparency. than positive, with ‘somewhat bit.ly/RemunerationReport ineffective’ or ‘ineffective’ receiving higher scores than other responses. “These findings suggest LEADERSHIP most organisations would benefit from targeted investment in their leadership capability, particularly on people issues,” the study says.

The report also points out that the HR Outlook for 2015-16 Today’s leadership cohort found “suggests HR is not alone in to be lacking critical skills its assessment of leadership effectiveness. Leadership eaders are not up to scratch in capability was among the top the skills and behaviours HR challenges that both HR and professionals consider critical non-HR leaders reported ‘keeps to organisations. The CIPD’s HR them awake at night’.”

Outlook: Winter 2016-17 highlights The online survey of 629 HR performance management, professionals reveals that leaders people management, developing have stronger technical, financial staff, engagement and change and operational skills. The management as the skills leaders proportion rating senior leaders need most to take their as either ‘very effective’ or

Falling short of the mark

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‘somewhat effective’ was 83 per that ‘diversive’ curiosity, which cent in relation to technical skills, refers to a desire to explore 73 per cent for budgeting and unfamiliar topics and learn financial management, and 72 per something new, has a positive cent for operational management. influence on creative performance.

Dr Jill Miller, research adviser This finding could prove useful at the CIPD, says senior managers’ for organisations as they strive to weakness in people management compete in today’s increasingly skills has been much debated, and dynamic and complex conditions. the results of the survey show the Selecting employees who are problem is clearly not going away. “engaged with and continuously “Organisations need to be exploring and adapting to their engendering these skills much surroundings will become earlier in people’s careers – at line increasingly critical for individual manager level, for example,” she and organisational success”, say Jay says. “This would H Hardy of Oregon “Organisations need avoid a crisis at State University, to be engendering these leadership level, Alisha M Ness of skills much earlier where their strengths the University of in employees’ careers” are focused on Oklahoma and technical skills Jensen Mecca from and capabilities.” the Shaker Consulting Group.

One solution, Miller suggests, Diversive curiosity is well-suited could be “dual career routes”. This to early-stage creative problemwould give those with technical solving, which requires individuals abilities opportunities to reach to gather a wide range of relevant top positions without having to go information they can use later in through the management route. the process. On the other hand, “More commonly, the only way ‘specific curiosity’ is more goalto progress in an organisation is directed, motivated by individuals’ by taking on people management desire to reduce feelings of responsibilities, whether or not a uncertainty and resolve gaps in person wants to or is good at them. their understanding. This trait, the This alternative option leaves the researchers hypothesise, could be people management roles for those more productive in the later stages with an aptitude for it. This is good of creative problem-solving, when for overall retention and keeps ideas are generated. people engaged and motivated.”

To establish how diversive bit.ly/ViewsOfHR curiosity and specific curiosity influence problem-solving, the research team asked 122 CREATIVITY undergraduate college students to take personality tests, which measured both traits. The students were then tasked with solving a complex marketing problem.

An evaluation of the quality Desire to explore unfamiliar and originality of their creative topics boosts performance solutions indicated participants’ diversive curiosity scores related t’s your most inquisitive staff strongly to their performance who could be the most creative scores. Those with stronger in dealing with complex problems diversive curiosity traits spent and tasks. A study has established more time and developed more

A case for the curious mind

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ideas in the early stages of the task. However, stronger specific curiosity traits did not significantly relate to the participants’ idea generation and did not affect their creative performance.

These findings led the researchers to conclude that diversive curiosity may “hold potential as a predictor of effective creative problem-solving and creative performance”. As Hardy says: “Specific curiosity does matter, but the diversive piece is useful in more abstract ways.”

Another significant finding of the study was that participants’ behaviour in the informationseeking stage of the task was key to explaining differences in creative outcome. For people who are not creative naturally, a lack of natural diversive curiosity may be overcome, in part, by spending more time asking questions and reviewing materials at the early stages of a task, Hardy explains.

Organisations may find it useful to include measures of curiosity in the hiring process for more complex jobs, he and his fellow researchers say in Outside the box: Epistemic curiosity as a predictor of creative problem solving and creative performance. bit.ly/EpistemicCuriosity

CHANGE MANAGEMENT

Corporate game-changer Middle managers hold key to gaining employee support

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ow can organisations today generate support from the workforce when implementing change? Contrary to assumptions that top managers are the most important drivers of change,

AP/PA Images

The researchers used data from the Netherlands covering 468 organisations going through significant planned changes to challenge assumptions and gain a greater understanding of the ways senior and middle managers can influence change.

Questionnaires were used to ask respondents who, in their personal view, was primarily responsible for triggering and executing change initiatives.

The report’s findings show that top-down change does not engender aboveaverage levels of employee support, regardless of whether Leaders today are often technically strong but drop the ball executed by top or when it comes to effective people management skills middle managers. change initiated by middle Employee support is actually managers engenders aboveboosted when change is initiated average levels of employee support. by middle managers and executed When top managers handle the either by them or by senior execution, support is even greater, managers. The optimum research has found. combination is middle managers Getting the backing of employees initiating change and top managers is an elusive target for managers, taking responsibility for its say the authors of Rethinking execution. Yet, as the study notes, ‘Top-Down’ and ‘Bottom-Up’ this “was the rarest configuration Roles of Top and Middle Managers observed in our sample”. in Organizational Change: The researchers involved in Implications for Employee Support. the project were Mariano L M They point out that approaches to Heyden of Monash Business change management are usually School, Sebastian P L Fourné described as either ‘top down’ from Wilfrid Laurier University, or ‘bottom up’. In the first, top Bastiaan A S Koene of the managers are seen as initiators Rotterdam School of Management, of change, with middle managers Erasmus University, Renate portrayed as ‘reluctant executors’, Werkman from Kantelwerkers while in the second, top managers and Shahzad Ansari of Cambridge are assumed to be unreceptive to Judge Business School. bit.ly/RethinkingOrganisationalChange initiatives emanating from below.

WHISTLEBLOWING

Crime deterrent Employee whistleblowers help prevent future wrongdoing

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histleblowing makes a difference – and has a long-lasting effect on corporate behaviour, says Jaron H Wilde of the Tippie College of Business at the University of Iowa.

In The Deterrent Effect of Employee Whistleblowing on Firms’ Financial Misreporting and Tax Aggressiveness, he points out that while whistleblowing has proved useful in uncovering past misconduct, there has so far been limited evidence as to whether it deters future wrongdoing.

Wilde used a sample of hundreds of employee whistleblower cases to explore what happens in firms subject to whistleblowing, both before and after allegations of financial misreporting and aggressive tax avoidance are made.

He then compared his findings with the conduct of a set of control firms.

“In the pre-allegation period, whistleblower firms exhibit a higher incidence of financial misreporting compared with control firms,” he says. “Following the allegations, whistleblower firms are significantly more likely to experience a decrease in the incidence of accounting irregularities and a decrease in tax aggressiveness, compared with control firms.

“The evidence suggests the deterrent effect of whistleblowing persists for at least two years beyond the year of the allegation.”

The possibility of being subjected to increased scrutiny or monitoring following a whistleblowing allegation is what likely discourages financial 67

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An NHS employee’s whistleblowing helped expose the Stafford Hospital scandal

misconduct, the study suggests. It also emphasises the important role of those on the inside of companies – employees, in other words – as “monitors of financial reporting and tax activities”. bit.ly/WhistleblowersMakeADifference

ETHICS

Codes don’t travel well Not everything can be easily translated to the global arena

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company’s code of ethics can change and lose its purpose when applied by global companies.

This serves to mask the very serious problems and issues the code is meant to prevent.

A study by Maira Babri of the Umeå School of Business and Economics demonstrates how a corporate code of ethics (CCE) is a ‘travelling object’ that becomes blurred and takes on new realities the further it moves from its corporate home.

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CCEs are formal documents meant to guide all business activities and apply to all company employees, suppliers and business partners, says Babri in The Corporate Code of Ethics at Home, Far Away and in Between: Sociomaterial Translations of a Traveling Code. For multinationals, this means employees are expected to abide by the same standards and guidelines as set out in the code across diverse countries and cultures, as well as political and legal systems.

The adoption of CCEs remains voluntary in most countries (though they are required in the US) but they have become more widespread as a result of external pressure from various stakeholders. Babri’s research set out to establish what codes ‘do’ and how they work in practice outside their country of development – typically the country where the company’s headquarters are located.

Unlike most existing research in this area, which is based on surveys and databases from developed countries, Babri’s study involved her physically following

a CCE adopted by a Swedish multinational company, referred to in the study as Corp, as it ‘goes to work’ in China.

She conducted interviews, meetings and discussions, and reviewed various company documents to complete her investigation.

One of her key findings was that the code changed more quickly and radically the further it travelled from its home – Corp headquarters. At HQ, it remained intact and ‘stable’. But as it came into contact with new agencies and new managers from elsewhere within the company, and its suppliers, it met with “new ideas and new practices that refuse to fit into neat boxes”.

Amid day-to-day discussions between buyer and seller about price or quality, the code became mixed up with other material, documents and policies, laws, regulations and ideas about business deals.

Eventually, says Babri, it became “decoupled completely from the ideas about responsibility associated with it at Corp’s HQ”.

However, it still provided a template for audits and reports, which then went back to HQ and were used for documents such as the sustainability report.

Describing the sustainability report as a “new reality constructed every year”, Babri says: “The CCE fails to export its ideas about responsibility as it negotiates with, and is overpowered by, ideas of economic efficiency.”

Rather than trying to address a variety of problems via their codes of ethics, it might be better for firms to focus on core areas most pertinent to their industry, Babri’s study suggests. This would allow for a more thorough analysis and the implementation of more workable solutions. bit.ly/ProblemsOfEthics

PA Archive/PA Images, Culture Club/Getty Images

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Siming from Audencia Business School used legal changes in New Zealand to explore the hypothesis that ‘the prospect of receiving an award stifles management initiative’ and can also distort CEOs favour employees to CEO incentives away from detriment of shareholders maximising profit.

Although knighthoods and nighthoods and damehoods damehoods have existed in New have an adverse affect on Zealand since 1848, they were company performance, as awards abolished in April 2000 and can increase chief executives’ reinstated in March 2009. willingness to hire more staff.

Since only New Zealand citizens According to a research paper, can receive such awards, the Knighthoods, researchers were able “Awards serve as an damehoods, and to use CEOs without incentive tool through CEO behaviour, New Zealand which politicians government awards, citizenship as a influence firms� “far from being a natural control sideshow�, influence group. They used a CEOs to behave in ways that sample of 25 firms to measure the support political objectives. effects of the abolition of awards, The gongs lead to higher levels and a sample of 34 firms to look at of employment, which serve what happened when the awards the interests of voter-pleasing were reintroduced. Company politicians, while in their absence performance was measured levels of employment fall, which by operating margin. in turn boosts profitability.

The results show that, after Konrad Raff of the Norwegian titles were eliminated, firms run School of Economics and Linus by domestic CEOs experienced an increase in their operating performance of 4.8 per cent, compared to firms run by foreign CEOs. But when titles were reintroduced, the operating margin of firms with New Zealand citizens at their helm fell by almost 7 per cent, compared to control firms. In other words, companies run by domestic CEOs experienced a reduction in their performance compared to those run by CEOs from countries including Australia, Canada, Germany and the US. In addition, there was a reduction in employee numbers at firms run by domestic CEOs, compared to those run by foreign CEOs after titles were abolished.

Once titles were brought back, that effect was reversed.

Overall, the research suggests Shakespeare’s Macbeth illustrates the impact status can have on behaviour that the prospect of receiving GONGS

The allure of honours

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government awards makes CEOs more willing to hire employees. “Awards serve as an incentive tool through which politicians influence firms in favour of employees to the detriment of shareholders,� the researchers conclude. “Our findings are consistent with the idea that politicians use awards to promote stakeholder orientation.� bit.ly/KnighthoodsAndBehaviour

CULTURE

More alike than not Culture has less of an impact on management style than expected

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ulture plays a much smaller part in leaders’ management of their employees than existing research would have us think, according to Arthur G Jago of the Trulaske College of Business at the University of Missouri.

In A contrarian view: Culture and participative management, he says prior research has magnified the role of cultural differences as “causes of managerial behaviour and its consequences�. This reflects the influence of Geert Hofstede’s management classic, Culture’s Consequences, which defined culture as “the collective programming of the mind that distinguishes the members of one human group from another�.

Hofstede argued that 50 per cent of the differences between managers’ reactions to various situations were explained by cultural differences. Jago set about trying to challenge this analysis and demonstrate that managers’ behaviour differs more as a result of circumstances than

cultural differences.

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In the late 1980s and early 1990s, he surveyed more than 6,500 managers in 14 countries.

All the participants were engaged in management development seminars around the world. They were given questionnaires to measure behavioural intent (and so predict actual behaviour) across 30 scenarios or case studies, ranging from the relatively trivial to complex, unstructured decisions.

Analysis of the survey results indicates that leaders are more alike than they are different in their responses to the same situations, with ‘country’ – a term used as a surrogate for ‘culture’ – accounting for just 1.4 per cent of the total variance in behaviour.

On the other hand, the largest variance component, 16.3 per cent, is attributable to the situation or specific problem – in other words, circumstances.

While cultural differences in leaders’ behaviour do exist, these should not be exaggerated, inflated or over-emphasised, says Jago: “Leaders across country borders are more alike than they are different regardless of what Hofstede would call their ‘cultural mental programming’.” bit.ly/ContrarianView

HR PROFESSION

Organisational identity takes precedence Report points to importance of identifying with profession

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R practitioners identify more with their organisation than their profession. They also show much stronger reactions to organisational challenges than professional ones.

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ambition to uphold ethical values Those are two of the key and actual practice. While HR conclusions of a CIPD report, HR practitioners want to make ethical professionalism: what do we stand decisions, in some circumstances for? The report explored the factors they ‘deprioritise’ ethics or do not shaping both professional and feel able to apply ethical principles organisational identity to provide in practice, the study found. insight into the role HR plays However, the latest within organisations and how it can uphold “Having a clear sense of report argues that purpose can enable HR identifying with the their ethical values. practitioners to uphold HR profession and This is especially ethical standards” having a clear sense significant given of purpose within the the numerous recent role itself can enable practitioners corporate scandals – for example, to uphold ethical standards. at Volkswagen and Sports Direct “Equipping practitioners with – that have “diminished trust a set of ethical guidelines, clearly in business”. defining what they stand for as In a survey of 1,013 HR professionals, is likely to build their practitioners, 68 per cent identification with the professional of respondents demonstrated community,” the report explains. medium or high professional HR professionalism, authored identity (identifying with,

by Louisa Baczor and Ksenia and feeling a belonging and Zheltoukhova, with contributions commitment to, the profession from Frances Gorka, is part of and its values and norms). the programme of work to guide The corresponding figure the CIPD’s Profession for the for organisational identity Future strategy. (identifying with, and feeling a bit.ly/WhatDoWeStandFor belonging and commitment to, the organisation and its values and norms) was 74 per cent. A WELLBEING total of 71 per cent of practitioners agreed that ‘the challenges faced by my organisation as a whole affect me’, compared with only 54 per cent who agreed with the same statement about professional challenges.

The report suggests that these Liveable wage would bolster findings can be explained by company performance the shift towards strategic HR management, with practitioners oney worries are taking a toll striving to become more aligned on employees’ performance with business goals. A further at work. And it’s not just low suggestion is that when HR earners who are affected – workers practitioners are under pressure earning more than £60,000 are from the business, organisational saying the same. identity may take precedence over One in four workers responding professional identity. to a CIPD survey, conducted in This could shed light on findings partnership with Close Brothers, from 2015 CIPD research From said financial anxieties have best to good practice HR: developing affected their job performance. The principles for the profession, which survey report, Financial well-being: highlighted a gap between the

Financial health and happiness

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AFP/Getty Images

the employee view, also reveals that almost a fifth (19 per cent) of respondents experienced physical fatigue at work after losing sleep over money worries, while 10 per cent said they have found it hard to concentrate or make decisions at work. Others admitted to dealing with financial problems during the working day, or taking time off to sort out these problems.

Money worries affected the job performance of almost three in 10 respondents earning less than £15,000, and one in five of those earning between £45,000 and £59,999. Surprisingly, the report notes, these worries also affected one in seven of those enjoying an income of £60,000 or more.

“Furthermore, more than one in five (21 per cent) senior managers and more than one in four (27 per With a quarter of staff reporting money worries, chancellor Philip Hammond has his work cut out cent) middle managers reported that money fears affected their for example, by switching energy absence, and poorer decisionwork, indicating that money suppliers or bank accounts. This making and focus. worries affect all income groups,” was a particular issue for those says the study, which is based on a earning more than £60,000 and in To address financial wellbeing survey of 1,817 working adults from senior management roles. People in employers have several issues to across all industrial sectors. this income bracket mentioned not consider, including: The CIPD defines financial having time to manage their money.

• Paying a ‘liveable wage’. wellbeing as “a state of both The CIPD believes it is a good • Implementing fair and consistent emotional and physical wellbeing, employer’s responsibility to care reward practices communicated produced by a set of conditions about its people and their financial throughout the organisation. and abilities. It includes making wellbeing. It can bring benefits too.

• Introducing workplace savings the most of an “Boost financial products and contributing to the “One in seven of those adequate income wellbeing and we can workplace pension. earning £60,000 or to enjoy a reasonable boost performance,” • Helping to educate employees on more were affected by quality of life and Charles Cotton, financial matters by signposting money worries” having the skills and performance and relevant information or offering capabilities to manage reward adviser at the guidance directly or through money well, both on a daily basis CIPD, says in the report. “Boost a provider. and for the future.” performance and employers will • Reviewing benefits to check they Respondents said the most have more money to invest in are helping staff achieve financial common barrier to achieving their employees through higher wellbeing. financial wellbeing was ‘earning pay, better benefits and more • Tailoring wellbeing programmes just enough money to get by training and development.” to different demographics and each month’. Workers aged A separate paper, Employee employees’ stages of life.

18-24, and those earning less than financial well-being: why it’s • Building trust. £24,999, were the most likely to important, also discovered clear face this hurdle. evidence that poor financial Reports on financial wellbeing Another major barrier cited by wellbeing affects employee can be accessed at cipd.co.uk/ respondents was the amount of performance and health. It is financialwellbeing. bit.ly/FinancialWellbeing hassle involved in saving money – associated with higher employee 71

STYLE Further Reading

William Taylor p14

Healthcare p24

Diversity p32

Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways by William C Taylor Penguin, 2016

A prescription for the perfect healthcare system KPMG, 2016 bit.ly/KPMGPerfectHealthcare

Why Diversity Programs Fail Harvard Business Review, 2016 bit.ly/DiversityFailure

Mavericks at Work: Why the Most Original Minds in Business Win by William C Taylor and Polly G LaBarre Harper, 2008

Which country has the world’s best healthcare system?

The Guardian, 2016 bit.ly/WorldsBestHealthcare

Practically Radical by William C Taylor William Morrow & Company, 2012

2015 International Profiles of Health Care Systems The Commonwealth Fund, 2016 bit.ly/HealthcareProfiles

How Domino’s Pizza Reinvented Itself Harvard Business Review, 2016 bit.ly/DominosReinvention How WD-40 Created a Learning-Obsessed Company Culture Harvard Business Review, 2016 bit.ly/WD-40CompanyCulture

Before they were famous p42

Health and social care funding explained The Health Foundation, 2017 bit.ly/HealthAndSocialExplained The NHS belongs to the people: a call to action NHS England, 2013 bit.ly/NHSOfThePeople Twenty-Thirty: Health Care Scenarios Policy Innovation Research Unit, 2013 bit.ly/PolicyInnovation2030

Leonardo Da Vinci: The Flights of the Mind by Charles Nicholl Penguin, 2005

The NHS is broken. What should replace it?

The Telegraph, 2015 bit.ly/NHSBroken

The Great Shark Hunt by Hunter S Thompson Picador, 2010

Tim Parker p58

Legend by Edward J Epstein Mcgraw-Hill, 1978

Meet the 'Prince of Darkness’ Management Today, 2016 bit.ly/MeetThePrinceOfDarkness

Letters of Note by Shaun Usher Canongate Unbound, 2013 The Collected Stories of Eudora Welty

by Eudora Welty Harcourt Brace, 1982 Madonna: An Intimate Biography

by J Randy Taraborrelli Simon & Schuster, 2007 Game Noir: A conversation with Tim Schafer Game Studies, 2003 bit.ly/GameNoir

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Tim Parker – Clarks kicked into shape Independent, 1999 bit.ly/ClarksKickedIntoShape HSBC to close more branches as Post Office steps in to replace closed sites The Telegraph, 2017 bit.ly/HSBCBranchClose National Trust chairman Tim Parker says organisation must be more diverse – but not Disneyfied Independent, 2016 bit.ly/MoreDiverseNationalTrust

Diversity as Strategy Harvard Business Review, 2004 bit.ly/DiversityAsStrategy How Diversity Makes Us Smarter Scientific American, 2014 bit.ly/DiversityEqualsSmarter Women in the Workplace McKinsey, 2016 bit.ly/WomenAtWork2016 What Works: Gender Equality by Design

by Iris Bohnet Harvard University Press, 2016 So You’ve Been Publicly Shamed

by Jon Ronson Picador, 2015 How One Stupid Tweet Blew Up Justine Sacco’s Life The New York Times Magazine, 2015 bit.ly/JustineSacco Equality, Diversity and Racism in the Workplace Business in the Community, 2016 bit.ly/EqualityInTheWorkplace Why women in the workplace are screwed, in seven charts Quartz, 2015 bit.ly/LeanInSevenCharts People Who Say Society Is Too Politically Correct Tend Not to Have Experienced Discrimination Demos, 2016 bit.ly/DemosDiscrimination Diversity is for white people: The big lie behind a well-intended word Salon, 2015 bit.ly/DiversityTheBigLie Diverse Teams Feel Less Comfortable – and That’s Why They Perform Better Harvard Business Review, 2016 bit.ly/DiverseTeamsPerformBetter

Work.

Because business is about people Be good or be rich: debunking the paradoxes of ethical business

WORLD'S BEST BOSS

Charisma p44

Japan p50

In Their Time: The Greatest Business Leaders of the Twentieth Century

by Anthony J Mayo and Nitin Nohria Harvard Business School Press, 2005

Japan and the Shackles of the Past

by R Taggart Murphy Oxford University Press USA, 2015

8 leadership lessons from history World Economic Forum, 2017 bit.ly/LessonsFromHistory Narcissistic Leaders: The Incredible Pros, the Inevitable Cons Harvard Business Review, 2004 bit.ly/NarcissisticLeaders The CEO in the New Millennium (p464-69), Management Revised Edition

by Peter F Drucker Harper Business, 2008 The Halo Effect by Phil Rosenzweig Free Press, 2007 Enduring Success: What We Can Learn from the History of Outstanding Corporations by Christian Stadler Stanford University Press, 2011 Navigating change: How CEOs, Top Teams, and Boards Steer Transformation

by Donald C Hambrick, David A Nadler and Michael L Tushman Harvard Business Press, 1998 Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs

by Rakesh Khurana Princeton University Press, 2002 Trump Revealed: An American Journey of Ambition, Ego, Money, and Power

by Michael Kranish and Marc Fisher Scribner, 2016 The Difference Between Good Leaders and Great Ones Harvard Business Review, 2016 bit.ly/GoodLeadersAndBad The Tweaker: The real genius of Steve Jobs The New Yorker, 2011 bit.ly/GeniusOfSteveJobs

A Japanese Mirror by Ian Buruma Atlantic Books, 2012 Bending Adversity: Japan and the Art of Survival by David Pilling Penguin, 2014 Dogs and Demons: The Fall of Modern Japan by Alex Kerr Penguin, 2002 Game on: why Japan’s arcades are still winning Financial Times bit.ly/JapaneseArcades Japan Restored: How Japan Can Reinvent Itself and Why This Is Important for America and the World

by Clyde Prestowitz Tuttle Books, 2015 N.P. by Banana Yoshimoto Faber & Faber, 2001 The Reckoning by David Halberstam William Morrow, 1986 The Woman in the Dunes by Kobo Abe Penguin, 2006 The Wind Up Bird Chronicle

by Haruki Murakami Knopf, 1997 Where the Dead Pause and the Japanese Say Goodbye by Marie Mutsuki Mockett W.W. Norton, 2015 Wrong About Japan by Peter Carey Faber & Faber, 2005

Has Netflix killed performance management?

Matthew Lieberman on the neuroscience of effective leadership Nixon, Chewbacca and the art of better decision-making

Brought to you by…

Work. is published on behalf of the CIPD by Haymarket Network.

Registered office: Bridge House, 69 London Road, Twickenham, TW1 3SP claire.warren@haymarket.com Editor Claire Warren Art editor Chris Barker Production editor Joanna Kelly Picture editor Dominique Campbell Sub editors Helen Morgan Ilana Harris Senior editor Robert Jeffery Creative director Martin Tullett Editorial director Simon Kanter Editorial consultant Paul Simpson Managing director, Haymarket Network Andrew Taplin Account director Issie Peate Senior account manager Steph Allister Deputy production manager Alex Wilton CIPD Publishing Sinead Burke Work. – ISSN 2056-6425 Printed by Stephens & George Print Group, Merthyr Tydfil. © All rights reserved. This publication (or any part thereof) may not be reproduced, transmitted or stored in print or electronic format (including, but not limited, to any online service, any database or any part of the internet), or in any other format in any media whatsoever, without the prior written permission of Haymarket Media Group Ltd, which accepts no liability for the accuracy of the contents or any opinions expressed herein. CIPD contact details: 151 The Broadway, London SW19 1JQ, 020 8612 6208. cipd@cipd. co.uk If you are a CIPD member and your home or work address has changed, please call 020 8612 6233.

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) TE S E I T H F- P T O F (O I DE GU

AUTOMATION Rhymer Rigby on whether robots really are as smart as we think they are The popularity of books such as Martin Ford’s Rise of the Robots and Yuval Noah Harari’s Homo Deus suggests that, when it comes to automation, the future is almost here. From driverless cars and drone delivery to workaday business processes that never get any headlines, we are told daily that the smart machines are slowly, inexorably taking over. But is this really the case?

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In fact, it hasn’t even done that. The Tay chatbot wasn’t really being racist because it isn’t self-aware and can’t think. Rather it is a set of algorithms trying to unpack how humans speak and emulate them. So when people started asking it offensive questions, it gave them offensive answers. The big lesson here, apparently, is that ‘content-neutral algorithms’ are very easy to mess with.

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Even weak AI often fails to deliver the whole package – but what it can deliver is part of the package.

So you might have AI flagging offensive videos or posts for deletion on a social network, but then have a human vet them for final deletion. This is sometimes called augmentation and can prevent false positives where words like ‘smartwatch’ and ‘Scunthorpe’ are flagged (this is your chance to show you’re smarter than an AI by recognising that a clean word can have a dirty word inside it).

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The ability to think like a human is called ‘strong AI’. This technology is unlikely to happen for decades. However, ‘weak AI’ (machines that give the appearance of intelligence and perform some tasks better than humans) is here. Well, just about. Weak AI performs quite a few tasks worse than humans. Remember this difference. In the short term, it will impress machinelearning experts. In the long term, it may help you deal with your robot boss.

This is good news for humans. It doesn’t mean that knowledge workers have nothing to fear from automation, but it does mean that, for the foreseeable future at least, things like machine learning, AI and robot process automation will augment jobs, rather than replace them. Before you get too complacent, though, working with humans will teach automatons to be better. So, the human who trains a robot may still train themselves out of a job.

The utopian take is that the automation of white-collar drudge work will free up humans to do higher-value tasks. Shiny-eyed tech evangelists say things like: ‘We’re moving on from the knowledge economy to the wisdom economy.’ This sounds clever, but you might find yourself asking: ‘What if there aren’t enough higher-value tasks to go round?’ while mentally counting the days to your own retirement in a robot-staffed over-sixties community.

Bill Gates has said that if robots are going to work like humans, we should tax them like humans: “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed… If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.” He may have a point, but there are probably several decades between a chatbot that thinks Hitler is great and a robot employee that pays taxes.

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Dwight Eschliman/Getty Images

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If you want examples of artificial stupidity, there are plenty to choose from.

In the last couple of years we’ve seen Google’s Photos app tagging black people as gorillas, Microsoft’s Tay chatbot calling for genocide and Google’s self-driving car crashing very, very slowly into the side of a bus. Indeed, it’s tempting to observe that, so far, all AI has delivered is an artificial member of the alt-right who should be banned from driving.

727 Takashi Murakami, 1996 One of the great contemporary artists, Takashi Murakami’s endeavours offer proof of modern Japan’s ability to create, innovate and confound. Inspired by the flattened aesthetic of Japanese graphic art forms, Murakami founded Superflat, a movement that draws on traditional ukiyo-e woodblock prints, animé and manga to produce distinctive art. With 727, he references Japanese artist Hokusai’s The Great Wave off Kanagawa and presents his character, DOB, short for Dobozite, a deliberate misreading of the Japanese word doshite, meaning why. The contrasting styles, techniques and subjects abolish the distinction between high and low culture, essentially ‘flattening’ them into one. By reinterpreting western and Japanese sensibilities, Murakami shows that his country can innovate in art as successfully as it has in business.

727, 1996 © 1996 Takashi Murakami/Kaikai Kiki Co., Ltd. All Rights Reserved. Artist portrait Taylor Hill/Getty Images.