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Negotiating through exchanging offers and requests

My last article was about the destructive influence of toxic marauders, and today I want to explore a related phenomenon, tensions between levels in organisations. It’s tough when such relationships are made difficult by each cohort believing they’re “OK” while the others are “not OK”.

Inevitably it’s a lose-lose scenario, as the negative attitudes on each side merely reinforce one another. This unless interventions are introduced to align energy and reduce the inevitable waste that results from difficult relationships between higher and lower levels.

This is as true between boards and management as it is between senior and middle management, and on downwards to the lowest cadres. Its consequences are diminished engagement and hence reduced productivity, with higher staff turnover.

Many efforts at culture change aimed at improving such situations fail to make a difference, ephemerally raising expectations and enthusiasm and then leaving those involved disillusioned and worse off than if no effort had been made to resolve the matters between them.

Much of my work as a consultant involves diving into such scenarios, where my role as facilitator is to act as mediator, bringing the levels into alignment through helping them engage constructively with each other, for the benefit of both. Not a straightforward challenge, as skepticism if not cynicism may well be present, at least with some of those involved – often the most vocal.

Creating a safe space in which participants are prepared to be open is the first step, and we facilitators have ways of getting people sufficiently relaxed to share what’s really on their minds and in their hearts. Equally important, as in all mediation, is only to bring the groups together when they are ready to engage with each other with an adequately win-win mindset.

Even when working with just one level, upfront ice-breaking is needed, followed by discussion on what will make the initiative succeed – especially if other such initiatives have failed to make a difference before.

What does it take to develop that win-win mindset? First is to cool off on the “We’re OK-You’re not OK” ego state. Mere finger-pointing blame-games will not resolve the issues. There has to be an acceptance that in some respects we too are “not-OK”, and that for the other level there are “OK” components to their behaviour.

Then, for those at the higher level, to hold back from “looking down” on their subordinates, not to act as “Parents” to their “Children” – never mind just viewing them as naughty ones. And for those at the lower level, to hold back from seeing themselves as “Children” with unreasonable “Parents” against whom they are rebelling. Everyone involved must behave as mature, solution-oriented “Adults”.

Once the “We’re OK-You’re OK” “Adult-Adult” mindsets are adopted, getting to win-win becomes possible. So each level can identify their issues, and then to come forward with relevant offers and requests. The requests must be practical and respectful, while the offers should be genuine and generous – so as to encourage the recipients to respond positively to the requests.

It’s all about give-and-take, not necessarily immediately, but over time. And appreciation should be shown to those who make concessions gracefully.

As external mediators, we are only there for part of the journey, since after some time internal individuals with such skills will have emerged to take on the role and to nurture the fulfilment of the alignment. Make no mistake, the default position is regressing to the status quo ex ante. Those who persist with other than a win-win mindset must be nudged away from such positions, and to assist in this evolution I encourage the use of the common language of OK-OK, Adult-Adult, Win-Win… and the other variants to these positive expressions where appropriate.

I tell people that such change actually needn’t take forever. It’s a choice, I believe, and previous unhelpful ego states can and must be treated as unwanted baggage, with new behaviours being readily attainable.

Those who like to play tough must develop their soft skills, and the quiet ones must summon up the courage to have their voices heard. For everyone this means developing emotional intelligence, something we are all capable of doing if we decide it’s a priority.

Some of us are more natural mediators than others. Do reflect on the extent to which you are among the consensus-builders. For the more you are the more likely you will rise to senior leadership positions. At least in organisations with aligned cultures.

Managing change in Kenya

This article was first published in November 2021 in the London Business School THINK magazine. Mike Eldon graduated from the LBS Sloan Masters Programme in Leadership and Strategy.

An LBS Sloan Fellow recalls being thrown into his first leadership role and going on to transform the organisational culture.

Three years after completing the LBS Sloan Masters in Leadership and Strategy programme in 1974, ICL – the British computer multinational for which I was working – transferred me from the UK to Kenya to run its subsidiary there. It was my first major management appointment, leading around 100 Kenyans – including a senior management team that was just taking over from a group of British expatriates and for whom this was therefore also a baptism in leadership.

My British bosses expected me to be a distant, feared and unsmiling instruction-giver, as my expat predecessors had been. To a significant extent my direct reports also expected such behaviour, never mind those in more junior positions. These were the normal parent-child, “I’m OK-You’re not OK” relationships of the time, practised not only by expats from the former colonial masters and elsewhere but also by local leaders – reflecting the deep-rooted local culture of great respect for seniors that assumed the steepest of organisational pyramids with the largest of power gaps between levels.

So here I was, plunged into a country I knew so little about, in a culture so different from the one I was familiar with in Britain, expected to act as a know-it-all in my new environment: change in reverse gear. I was determined to flatten the pyramid, and this transformation I undertook by spelling out my expectation of adult-adult, ‘I’m OK-You’re OK’ relationships and then helping the team to develop such ways of interacting with me and with others. Against the odds, I managed to nurture their path to maturity.

It was a fascinating time, acting as a pioneer for spreading the use of technology in a country that was already ahead of the game relative to elsewhere in Africa, and Kenya has been my home ever since. I continued as a CEO in the IT vendoring business as mini-computers replaced mainframes, in turn giving way to personal computers and laptops; as our customers’ huge systems and programming departments shrank with the advent of software packages; and later as the Internet linked us into the global village. So much change, with each technology not merely enhancing but completely replacing its predecessor.

From IT to management consultancy

My own work as CEO was not significantly affected by these technical revolutions. Rather, it was to help both my staff and my customers deal with the related non-technical challenges, to ease the change management that introducing IT systems always gives rise to. It was a natural transition for me out of the IT industry and into management consultancy. I helped organisations and individuals deal more generally with strategic shifts of all kinds, and with the ever-increasing and unpredictable pace of change. I took on directorships too, in which roles I also helped with such issues, and became a columnist for Kenya’s Business Daily newspaper.

One company where I have been a director for many years is Davis & Shirtliff, which operates in the water and energy sector in numerous African countries and is headquartered in Nairobi. Its Chairman Alec Davis attended London Business School’s Senior Executive Programme in 1992, and its Group CEO David Gatende participated in the same programme in 2010. This was when David met Costas Markides, Professor of Strategy and Entrepreneurship at LBS, and he recently invited him to join us by video for our Annual Management Conference.

I had just published an article on how to influence change, so listening to Costas speak on the subject at that conference – never mind enjoying how he made his points in such a lively and humorous way – was a great experience, as it was for all those attending virtually from around Eastern and Central Africa.

Costas is, like me, an economist by education, and again like me he migrated into strategy, with social psychology a key ingredient. In his talk he reflected on how strategy must incorporate innovativeness, agility and resilience, and concluded that so much of what differentiates those who succeed relates to how they are able to influence people’s behaviour.

Behavioural change that lasts

He told the story of the patients who had been released from hospital following major heart surgery and were told that on returning home they needed to stop leading dangerously unhealthy lives: no more smoking or drinking alcohol; healthy eating and plenty of exercise. All very logical and rational. The group was followed for two years, and it was found that whereas all heeded their doctors’ advice in the first month after surgery, 90% of them had reverted to their bad behaviours within six months of their operations.

In Change or Die, author Alan Deutschman described what differentiated the 10% of outliers who held on to what was good for them, Costas related. It was how the doctors went beyond instilling fear in their patients by identifying the consequences of bad behaviour to also talking about positive futures that would result from good behaviour – like envisaging playing with their grandchildren or walking their daughter down the aisle. So to encourage people to change, we must make the need for the change positive, personal and emotional, we heard.

Costas also talked engagingly about how leaders must create an environment that supports the desired behaviours. So if you want your people to be proactive, question what’s happening, collaborate across silos, experiment and assume responsibility, you must generate an appropriate culture based on supportive values; devise measures and incentives that reward such behaviours; develop structures and processes aligned to what you are seeking; and hire people who are likely to be responsive to your aspirations.

This doesn’t mean people in the field can do whatever they want. There must be parameters that define their limits, beyond which they must consult with their bosses – such as if what they are considering lies outside the defined strategy. Above all, Costas told us that we must “treat people as people”, not as “human resources” or robots. They must feel special, working to support an uplifting purpose with which they engage.

For Costas the new normal involves frequent and unpredictable sources of disruption, with inadequate time in which to respond. But the optimist within him reassured us that we must see these disruptions as not just threats but opportunities too. Yet this requires going beyond simply asserting that leaders must lift their people psychologically and emotionally. Leaders must reach out to both the heads and the hearts of their people, enabling them to visualise the fulfilment of the opportunity. Then they will commit to fighting with you.

Leading the way in tech

Through the good number of visionary and empathetic leaders that have emerged in Kenya, the country has reinforced its leadership position in technology – we’re known as “Silicon Savannah” – not least with its global pioneering in processing money transfers through mobile phones.

The change to widespread financial digitisation has been made possible by the implementation of appropriate infrastructure, an enabling set of regulations, and not least the good education level and high energy and curiosity of Kenyans generally. As a result, and accelerated by the Covid pandemic, cashless transactions have become a new normal, including in the remotest of areas and among the poorest of citizens.

So are Kenyans generally good at managing change? We have developed an unusually diversified economy with a strong service component and a robust private sector that benefits from a highly developed entrepreneurial spirit. The era of expatriate leadership is long gone, and indeed so many Kenyans fill senior leadership positions all around Africa and more broadly globally.

Do we need to apply more of what Costas writes about and talks about? Of course. And, as everywhere, those who would most benefit from doing so are the ones least likely to. Here I particularly include the usual suspects: politicians and government bureaucrats; small-scale farmers and pastoralists; and family businesses – including many large ones that should know better.

My own time at LBS was a great experience for me, building both my competence and my confidence and preparing me so well for that life-changing overseas assignment all those years ago. I was by far the youngest in our class, and unlike my fellow students (we were only 16 in all) I had not yet benefited from significant formal leadership experience. But my account management and other previous positions had required me to exert influence even in the absence of authority – if anything, a greater challenge. I had also interacted with the top management levels both among my IT customers and within ICL. And I was ahead of the game as far as use of computers was concerned, more so having spent a year running ICL’s IT strategy workshops for CEOs and top civil servants.

So much of what I learned during the Sloan programme – from fellow students as much as from faculty members – affirmed both the good and the bad of what I had been seeing and doing. I was particularly attracted to organisational development as a topic, as we discussed it in the context of the turbulent industrial relations prevailing at the time in the UK that resulted in a three-day week (although not at LBS). I appreciated the practical approach our professors took, while it took us some time to become reaccustomed to the classroom setting. I have since also treasured my friendship with several of my colleagues in that sixth iteration of the Sloan programme: we still have lunch each time I visit London.

Promoting business school exposure among its staff was entirely new to ICL, and its general environment was actually anti-intellectual. The result was that in order to reintegrate me into the “real world” I was initially posted to a sales branch in the City where neither my boss nor my two salesmen had any university exposure at all and were considerably older than me.

To survive my time there I kept quiet about what I had been exposed at LBS, or I would have been mocked for spouting “ivory tower theories”. Little did they realise what stimulation they were missing out on. I learnt so much about building relationships of mutual respect with others very different from me. It took a great deal of holding back on what I might have offered, and required great humility and other aspects of emotional intelligence. Happily, my patience and perseverance were rewarded when I was asked to move to Africa.

Costas’ recent session for us reminded me of my uplifting days on campus next to Regent’s Park, taking me back to the stimulation that so characterised London Business School then and showing it to be as vibrant now as it was in the 1970s.

Challenges for leaders today… and how to overcome them

  • Uncertainty: Build a culture of trust, allowing for empowerment and delegation, hence agility to handle change
  • Staff retention: Identify an uplifting purpose; emphasise learning and growth, careers beyond present jobs, and provide coaching
  • Compliance: Handle this “necessary evil” calmly and holistically, with leadership from the board and properly resourced specialist functions
  • ESG: Find ways of doing well by doing good – it takes time, but may be easier and more beneficial than you imagined. Helps to attract and retain staff, customers, investors and others.

Nairobi-based Mike Eldon, a Sloan Fellow of London Business School, is chairman of management consultancy The DEPOT; co-founder of the Institute for Responsible Leadership; director of Davis & Shirtliff and Chairman of Occidental Insurance; a member of the Advisory Council of the Kenya Private Sector Alliance, and a columnist with Business Daily. mike.eldon@depotkenya.org

Entrepreneurs ought to act like revolutionaries

In my last article, I started writing about the lessons from David McCourt’s book Total Rethink – Why Entrepreneurs Should Act Like Revolutionaries. There I focused on what he saw as the personal attributes of successful entrepreneurs, and in this one, I will be reporting on McCourt’s experience regarding the business side of entrepreneurship.

McCourt, himself a highly successful serial entrepreneur in the field of telecommunications – a self-professed “revolutionary” in that domain – tells us that while in business and in life generally, everything is changing so fast, with the problems we need to solve entirely different from how they used to be, the ways we think and how we make decisions have changed little since the times of agricultural and industrial societies.

The traditional wisdom, he observes, has been that improvements are best introduced incrementally, with large established corporations planning to increase their turnovers and profits incrementally, and governments changing their laws incrementally. However everything is moving too fast for that to be an effective solution any longer, and we must all revolutionise the way we think and the way we behave in order to be more entrepreneurial.

In an article he published in The Irish Times around the time his book appeared in 2019, McCourt relished the thought that because revolutionaries threaten the status quo – and for many their comfortable way of life – they are often very unpopular. But he strongly believes that upheaval is essential if we are to cope with the challenges the rest of this century is bound to throw at us as the alternative could well be even worse.

Technology is progressing so fast that many are getting left behind, forced to “stand back and watch as the future shoots by”. So if we are to succeed we must “take a risk and ruffle the surface”

Today’s technology goes beyond previous linear approaches, he observes, with algorithms sorting through billions of pieces of data to find patterns and connections unrecognisable to humans. It is also cutting out the middle man, as crowdsourcing is taking the place of bank managers; Airbnb, Expedia and Booking.com replacing the travel agent; and Amazon having thrown the world of retail into upheaval.

The combination of technology, social media and the way people now absorb information – particularly the younger generations – means that the top-down centralised way we have been running the world for the last couple of centuries is no longer a viable model to follow, he warns, adding that the enormous opportunities available could easily slip through our fingers “due to the greed and conservatism of the establishments that dominate the economy”. Ouch.

In the book, he also complains about how too many corporates stifle inconvenient smaller competitors, and about the short-term thinking of too many companies. To make matters worse we suffer from the over-regulation of the business environment by government, seriously inhibiting innovation and entrepreneurship.

(Including and not least here in Kenya – with the notable exception of how the Central Bank allowed the introduction of the disruptive Mpesa system… plus now watch out for swift moves by the Capital Markets Authority.)

McCourt is not just focused on beating his competitors or maximising his wealth. He is equally concerned about the many who are left behind, and here he is looking way beyond revolutionary business entrepreneurs for solutions.

“A revolutionary entrepreneur,” he states in his article, “is anyone who wants to make a difference in the world. After all, change isn’t confined to business. Today’s healthcare is being transformed by advances such as 3D printing, remote diagnoses and electronic health trackers, education is being rebuilt by e-learning and video classrooms.”

McCourt is aware that lots of changes are needed beyond those brought about by technology. “There are so many structures in our lives that need reinventing – and I mean total rebuilding: the political system, diplomacy, taxation, wealth distribution, the refugee crisis, to name but a few,” he challenges.

“I became an entrepreneur for the joy of doing things differently, to rethink the model and to change things in ways that would eventually bring benefits to everyone,” his article concludes.

I’m sure that Amazon founder Jeff Bezos would applaud that, as his recently launched Courage and Civility Award indicate.

The question I leave you with is whether you are simply an incrementalist… or whether there’s something of the revolutionary in you.

How to lead people in embracing change

Even as many organisations continue asking for help with teambuilding, more recently change management has also gone mainstream. While the massive Covid disruption has brought change yet further front and centre, even before the pandemic spread around the world, the 21st century VUCA phenomenon of Volatility, Uncertainty, Complexity and Ambiguity had confirmed constant change as the new normal.

Let us also acknowledge though that this century is certainly not when change first confronted humanity. It was back in 500 BC when the Greek philosopher Heraclitus pointed out that “change is the only constant” – and so it has been, both before and since. Those who assume that changes will be but temporary, or that they will happen without having to manage their consequences sensitively and positively, will surely come to regret behaving like the proverbial ostrich with its head buried in the sand.

So in this article I’ll share something of what I have learned through my work in helping organisations of all kinds with their change management initiatives – including in these last months through some online engagements.

First, we must “start with the end in mind”. Why is change needed? To enable what vision to be actualised, what purpose to be fulfilled? What is it about the present strategy and way of doing things that will prevent the actualisation of the vision and purpose?

“The way we doing things here” is as good a definition of culture as any… and, as Peter Drucker pointed out, “culture eats strategy for breakfast”. So what is that culture, what are those values, attitudes and behaviours which would overcome dysfunctionalities in the present culture? And given the gaps between the actual and the aspirational way of doing things, what will it take for people to migrate from the one to the other, in the context of the needed strategy?

I say migrate because change management – like teambuilding – is not something that can be achieved simply by going away to one of those nice lodges in Naivasha for a couple of days. Those who take the subject seriously accept that it involves a journey. Yes, the journey can be launched at such an event. Indeed it’s a good way to do so. And crucial to such a launch is spending time towards its end defining specific follow ups as to who must do what and by when.

To take the process from the necessary to the sufficient – which many stop short of doing – the participants must agree on how progress towards living that new needed way is to be assessed. What periodic feedback will be obtained regarding progress, for instance as in: none / a little / a lot / transformational? How will those involved celebrate what will have changed for the better while continuing to work on remaining challenges? And how will the expectation of ongoing continuous improvement feature?

To my surprise, I have come across clients who were planning to undergo a change management initiative separate from their teambuilding one. But discussing the need for teamwork as a critical change enabler with them, they agreed to merge the two into one. They readily accepted that to build a high performance team in this VUCA environment requires the agility to deal with change; and that where change must be handled, building trust between team members is more critical than ever. Yes, team qualities like agility and trust are essential for supporting change.

The most vital dependency for any change programme is positive, authentic leadership at board and senior management levels. Such leaders must visibly own the process and its purpose, and they must be role models for the target behaviour.

Then, given the fear and anxiety the term “change management” often provokes – however justified or otherwise – the question arises as to whether it’s good to call such initiatives by that name.

How can we nudge mindsets from negative emotions to more uplifting ones, as we encourage those involved to learn and to grow, expanding their competencies and their confidence, helping them become more empowered, recognised and motivated?

Such people will see change not as a threat but rather an opportunity, something to be looked forward to with joy and excitement… while accepting that life comes with its challenges and its ups and downs.

Now wonder Heraclitus concluded over two millennia ago that “since the very nature of life is change, to resist this natural flow is to resist the very essence of our existence”.