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Making 360-degree appraisals beneficial

360-degree appraisals provide feedback to employees not just their supervisors. They can be horizontal, among colleagues who work together at the same level, and/or vertical, from those at lower levels commenting on their bosses.

Sounds like a good idea, yes? After all, each one of us can benefit from holistic feedback to become more self-aware, more in touch with reality, so as to understand where we can improve our performance. Right?

Sure. Except that many organisations that have introduced side-to-side or bottom-up assessments have suffered negative unintended consequences.

Indeed my first experience of formal 360-degree appraisals was with a global multilateral institution whose Kenya director would cry on my shoulder about his supervisor being completely disinterested in what he felt many of his staff unreasonably needed him to do and not do in order to assess him positively.

It provided an easy opportunity for disgruntled staff to get their own back on him if he had made tough – but in his view necessary – decisions about an issue. And instead of appreciating his resistance to taking the easy way out by being unduly nice to his staff merely to gain popularity and higher ratings, his boss would just condemn him for the negative reviews.

It is such risks that make me wary about recommending 360-degree feedback to all and sundry. I am more likely to if an organisation enjoys a particularly healthy culture of high trust all round, and where all levels have been prepared for handling such a sensitive subject in a constructive way.

As a first stage, I often suggest that such feedback be provided between teams rather than individually – like between levels, departments and functions.

Another question that arises is where extremely low ratings, accompanied by highly negative comments, are made about some receiving their 360-degree appraisals. Should they be shown the precise content of such feedback?

Might it lead them to have their self-confidence and self-esteem battered, and even to overfocus on the likely sources, however anonymously the responses will have been submitted?

Would it be less disruptive for whoever is discussing the feedback with them – whether their supervisor, the HR function or an external coach – to merely offer a sufficient flavour of what has been provided, before turning to how they can deal with the issues expressed by changing some of their attitudes and behaviours?

Either way, adequate reference should also be made to positive feedback that will have been provided.

If the ones who’ve received particularly harsh feedback should perhaps not be shown the whole ugly picture, is it OK to share the full story with those where more positive views were expressed about them? I don’t think so. Let there be a consistent approach.

Whether an organisation’s appraisal system includes 360-degree components or not, it is vital that all involved – everyone who appraises and all who are appraised – are engaged in sessions to help them understand the purpose of such exercises, i.e performance improvement, personal development and career planning, all within a coaching culture.

Not an occasional parental lecture to one’s children; not tick-in-the-box annual compliance with having “done” appraisals and pleasing the folks in HR; not just a way to negotiate a salary review or a promotion.

I long ago ceased being surprised by how in very few organisations do appraisal systems add value. On the contrary, too many are but a disruptive, time-consuming nuisance, harming rather than enriching relationships of mutual trust and respect.

Adding the 360-degree component requires yet more focus on purpose, yet more time to plan and implement, yet more continuous follow-up. If appraisal systems work well they are extremely valuable, making everyone feel good about contributing to each other’s learning and growth.

So I am a passionate advocate for them, including the collection and sharing of broader feedback. Plus, I should add, at the highest level, among boards of directors and with CEOs – often the ones who least dare apply such treatment to themselves.

So, does your organisation’s appraisal system help you as an individual move forward, and is this in alignment with the progress of the whole entity? And is your culture robust and honest enough to handle a 360-degree component? These are mission-critical questions that must not be avoided.

Avoiding family wars that ruin businesses

These days I am being invited more frequently to help align family members within their businesses so they can lead the organisations they own more effectively.

I am encouraged by those who reach out to me for such assistance, as it speaks of being realistic about the importance of cohesiveness among them and of feeling optimistic that they can indeed do better.

In my capacity as an adviser — or, as I often label myself, coach — I first listen to each family member involved, getting a sense of their personalities and styles, and of the roles they play in their enterprise.

In a spirit of “appreciative inquiry” I like to start by having them tell me about the achievements they are proudest of and the strengths that explain them, and then asking them to share the challenges they face — including and not least with other family members.

For this to happen I don’t rush into these topics, but begin by building a relaxed, cheerful and trusting relationship with them, getting them to talk more generally about their lives, while revealing something about mine.

Business school

As I was preparing to write this article I caught sight of a book I’d bought some years ago at the London Business School bookshop but had never got round to reading.

Published in 2008, Family Wars is about some of the biggest family-run companies in the world, showing how in-fighting among family members threatened to bring about their downfall.

It covers families such as Ford, Gucci and the Watsons of IBM, using these as examples of different categories of wars, not least between fathers and sons, among siblings, and as a result of marriages between families.

It also provides advice for anyone involved in a family business, offering suggestions on how to avoid such problems.

The book’s authors are London Business School Prof Nigel Nicholson, whose research interests include the psychology of family business, and Grant Gordon, the director-general of the Institute for Family Business and a fifth-generation member and former senior executive of William Grant & Sons, the distillers of Glenfiddich whisky (my favourite).

Despite relating stories of specific family “wars” they are careful to point out that many with family ownership outperform other kinds of organisations, and that some of the world’s oldest companies are those that have remained owned by their founding families.

I related very closely to what I read about both the kinds of challenges that family businesses commonly face, and how to prevent them and handle them if and when they arise.

Not least about the wisdom of “appointing skilled non-family professionals to fill business leadership roles”; “appointing a neutral ‘ombudsman’ as co-mentor of a sibling team”; and “instituting appraisals and regular feedback on work output and mentoring for family members”.

Not surprisingly, Grant and Nicholson refer to the lack of trust as “the real killer”, where one person sees another as unreliable, inconsistent, devious or duplicitous. And – as I do – they advocate for a spirit of forgiving and seeking forgiveness.

To avoid undue conflict, a culture of equity and fairness must prevail, with no cheating and taking of shortcuts. Worst of all is the hiring of lawyers to sue one another, never mind if the dirty linen starts getting washed in public.

Just as insufficient cohesiveness leads family members to either waste energy in fruitless attempts to win battles at the expense of a relative, or to disengage and scatter, so excessive cohesion, where families retreat into their own exclusive world, are also unhealthy.

Consensus builder

The challenge is to nurture an atmosphere where differences can be aired and consensus built, in a spirit of give and take.

Yes, we want the leadership team in family businesses to be diverse — including these days by including the women. We want representation of a spectrum from elders to millennials, and it’s good for members to have varied exposure to education and to other cultures and countries.

Some will have a greater appetite for risk than others. Some will be more focused on longer-term sustainability and on being fair to all key stakeholders and some will be keener than others on professionalising.

The question is how such diversity can be brought together without generating wars, and by whom.

Who in the family is the consensus builder, the mediator? Or does the business, as so many do, require external help to keep the peace and allow each family member to contribute and thrive in their own way?

Influencing upwards for growth despite volatility

In my consulting work, I engage with staff at all levels, from those who occupy the chairperson’s seat in the boardroom to those who work on the shop floor and in the fields. As I converse with them and study them I see a whole spectrum of diameters in their circles of influence — not necessarily related to their seniority.

Some chairs act merely as “traffic police”, guiding who should speak next while not adding significant value; while some of the very young and very junior can be making an impact on their environments that is way beyond what is expected.

Partly it is a function of how active and creative their minds are; much depends on their communication skills; and, a key component is confidence and boldness — the willingness to share what is on one’s mind, imagining that others will be interested in one’s thoughts and be keen to hear them.

We each develop our reputations, some for just quietly getting on with our tasks as narrowly defined in our job descriptions, others for restlessly and relentlessly championing new and better ways of doing things.

The latter may well be inconvenient disrupters, so here the challenge is to make one’s point in ways that others find possible to digest. And this brings me to the specific theme of this article: influencing upwards, often the most difficult direction in which to generate change.

Let me take you back to the time I was facilitating programmes on “Leadership for Influence” as a faculty member of the Aga Khan Graduate School of Media and Communications.

Among them was a series of events for groups of branch managers of a large nationwide organisation, where as I encouraged them to talk about their communications challenges the one that emerged time and again, and so strongly, was being listened to by their seniors.

What I heard was that theirs was a company where strategies and objectives were set at higher levels than theirs, and then communicated downwards. No one was interested in their voices, they felt. I found this quite puzzling, as it was their bosses who had brought me in to help them with their communications skills.

Within the workshops I had them write and perform short plays which began with a problem, either internally with a colleague or externally with a customer and reached a tipping point as a result of which the problem was resolved and a win-win solution emerged.

Many of their playlets featured a dissatisfied client, and I noted that without exception almost immediately on hearing their complaint the script had the client-facing staff take the complainant to their branch manager for them to resolve the issue.

Why were the scripts written this way? Were they not empowered to resolve issues themselves? Did their managers hold back from delegating authority? Did they not trust their people? Were they just timid, unwilling to make what would be perceived as the wrong decision? What could have led to the staff member holding back from such consistent instant escalation?

We discussed all this, and also the question of how the communication between the branch managers and their seniors could be improved. Yet when I proposed that as an output from their sessions with me the participants should seek such dialogue they were hesitant to do so.

Influencing upwards, they felt, was not something that would be appreciated. It was not in the organisational culture.

Through those who had hired me for the workshops, I did suggest that escalation and delegation management was a topic that needed airing, but I never got to know if anything was done as a result of my intervention.

How is it in your organisation? Do you actively seek the views of your juniors? Do you listen to their voices? Do you develop their competence and their confidence to make responsible judgments on behalf of the organisation — providing adequate guidelines and guardrails, and accepting that sometimes your decision might have been different?

Do you trust them to do the right thing? Or do you micro-manage them, making them feel they must delegate upwards, for fear of being hammered for taking a “wrong” approach?

The larger the organisation the more important this issue becomes. Those who will prosper in these uncertain and volatile times are the ones who encourage influencing upwards.

What conductors of orchestras teach us on leadership

In a recent edition of BBC’s HARDtalk, Stephen Sackur interviewed the Music Director of the Budapest Festival Orchestra, Iván Fischer.

The image we have of orchestral conductors is that they are the ones in charge, the ones directing those with the musical instruments — who in turn are mere recipients of their master’s voice. Not so with Fischer though. He doesn’t believe in this dictatorial know-it-all leadership style.

He enjoys bringing out the creativity in his players, and indeed he wants to hear them play in the full sense of the word so that the child within them comes alive.

He doesn’t conduct to be seen as a person of power, but rather as someone who brings the music, the players and the audience together so that they are all engaged and delighted to be sharing the experience of the concert.

Fischer also spoke of too many orchestras being like dinosaurs, doing what they’ve always done and resisting change, risking extinction.

Contrary to Sackur’s expectations, he explained how he has introduced all kinds of innovations, including selecting a much wider variety of music; placing members of a choir among the audience so they could surprise them when they stood up and burst into song and getting himself Covid vaccinated while conducting a live concert, to encourage those watching to follow suit and also get jabbed.

As I listened to Fischer reflecting on how conductors of orchestras exercise leadership it led me to compare myself to an orchestral conductor. At this stage of my life, as a chairman of boards, a consultant, a facilitator, a mediator, a coach, I no longer “play instruments”.

My job is about helping organisations to align around and live their visions and values, so that great “music” is performed (the products), to the delight of the “audience” (the customers). That is my value addition.

I don’t need to be better at playing individual organisational “instruments” (functional specialties like production, accounting, IT, whatever) to indulge in the kind of “conducting” that occupies my life. As it happens the “instrument” I mostly used to play was the marketing one, but more importantly, I was always a member of an “orchestra”, knowing I had to do better than be a great soloist.

I also tried to be aware of what it was that I did not know, and be ready to admit where my talents and experience did not lie.

In any of the roles I play these days, the instruments are not in my hands. My job, like that of the conductor, involves a great deal of listening and observing, to get a sense of where the music is good and where and how it could be better.

Like all leaders, including conductors, I need to adequately trust and respect the musicians around me, building both their competence and their confidence, and so to empower them and delegate to them.

Fischer clearly enjoyed the HARDtalk interview, displaying a great sense of fun. It was evident that he also enjoys conducting his orchestra, and I very strongly related to that. I expect that I and those around me will enjoy working together, not least because we will be performing well together.

For me, leadership with a light touch should be the default position — and not least in times of crisis. That’s not to say the big stick is never needed, but the delicate conductor’s baton is much to be preferred wherever possible.

So I must thank Sackur for inviting Fischer to be interviewed. And like it got me thinking about my leadership style and contribution, I hope reading this article will help you ponder on yours.

Before concluding I wish to refer to another leadership analogy, as proposed by Sunny Bindra in one of his recent Sunday Nation columns. He was encouraged by the leaders and teams who have understood that collective intelligence is the future.

“A boss who gets it grows and coaches others to develop ideas and make decisions, and does not hoard power,” he wrote. “Instead of coming up with answers, this boss creates the conditions in which others can contribute answers. The boss becomes the gardener, not the biggest tree in the plot that takes up all the sunlight.”

So, are you the gardener or the big tree, the conductor with the big stick or the delicate baton?

Reviving the neglected art of self-exploration

Socrates reminded us that “an unexamined life is not worth living.” But who should be doing the examining? Too many of us have never considered the possibility of it being ourselves, of imagining that we have the capacity to self-examine, and acknowledging that it is an important skill to develop.

When we are growing up we assume it is our parents and teachers whose role it is to pass judgement on us, and this assumption remains with many of us for the rest of our lives. We continue being “children”, expecting the ongoing oversight of “parents”.

On arriving here in the late seventies as a manager I expected – as I had been accustomed to in the UK – that the appraisal process would be initiated by appraisees assessing themselves. I was shocked by the pushback I received.

“But that’s your job,” I was told by some, and asked why I was avoiding my responsibilities. Did I not know my appraisees well enough? Was I insufficiently aware of how they had been performing? Had I been too lazy to prepare my assessment?

For some, it just did not feel right to think or talk about themselves. They weren’t the ones who should be doing it, period. Part of the problem was that they were not prepared to “brag”, to “blow their trumpet”, for such immodesty would be against their principles of humility.

(Which is why so many CVs lack the marketing appeal their authors actually merit.) On and on, so many justifications for self-assessment avoidance.

Yet for me one of the main ways I judge a person is by how self-aware they are, by their ability to observe themselves objectively and draw appropriate conclusions about what’s working well that they should feel proud about and what needs to change.

Such is the mature, emotionally intelligent person who looks in the mirror to learn from experience and to grow. Yes, they must be open to the input of others, but more as a way of enhancing how they study and coach and improve themselves.

Some weeks ago I wrote about Think Again by Adam Grant, a book I have been talking about ever since I read it. In my article I shared Grant’s take on self-awareness insofar as the relationship between competence and confidence is concerned.

It is logical to assume that the more competent we are the more confident we become, I wrote. And yet, Grant points out, some of us feel confident despite lacking competence.

This speaks of arrogance and complacency, of a lack of self-awareness. (In the context of appraisals, it may just be the appraisee’s way of negotiating for a higher pay review or a promotion.)

At the other end of the spectrum Grant draws attention to the “imposter syndrome”. Those who suffer from it feel they’re not up to the task, even in situations where they actually are competent and it is only their confidence that is lacking, I explained in my article.

This can turn out to be helpful, he and others have pointed out, as it keeps them away from the know-it-all mindset and encourages listening and learning, rethinking and unlearning.

To be relaxed about rethinking we must be confidently humble, with our egos in check, Grant tells us. Interestingly, many of those with whom I interact in appraisals display what I call “excess humility”.

Such people over-focus on their weaknesses while taking their strengths for granted – prompting me to move them away from their self-flagellating mindset.

Such guidance is part of what coaches offer, as coaching individuals or groups to indulge in constructive self-exploration is very much part of what those who play this role are meant to do.

So devote time to reflecting purposefully about yourself, generating self-knowledge that helps you navigate your way through life. Do so in calmness, in a quiet place, perhaps by going for a walk. Write about it, indeed make this a habit by doing so in a journal.

Yes, do also seek input from bosses, mentors, coaches and others, and be open to their contributions. Celebrate with them what is to be celebrated, and work on what needs to be worked on. Enjoy the journey. Not least the one where you accompany yourself.

How firms can handle integrity lapses by staff

In PwC’s 2020 global economic crime and fraud survey, Fighting Fraud – A never-ending battle, fraud was identified among the top concerns. So the ability to identify fraud perpetrated from either within or outside the organisation and then to deal with it swiftly and fairly is critical.

In one large local company on whose board I serve, I chair the Board Audit, Risk and Compliance Committee, where the issue of identifying and handling fraud and other integrity issues features prominently. So let me share the lessons we have been learning in dealing with such matters.

A major challenge organisations face is just gathering information on fraud being perpetrated by employees or others, which is why many have invested in ways of making it as easy as possible to communicate information about integrity lapses.

These include ethics hotlines, compliance web portals, and email contacts to which to send such information – often outside of the organisation, and typically to an audit firm.

Not surprisingly perhaps, utilisation of these platforms is relatively low when compared to informal reporting, or finding out about cases through the grapevine.

Organisations, therefore, need to build cultures and systems that enable whistleblowers to feel it is the right thing to do and to feel secure about doing so. Some even provide monetary incentives, although this may encourage false whistleblowing – a not unusual occurrence anyway.

The speed with which reported issues are investigated, action is taken, and communication is fed back to the whistleblower, has a direct impact on confidence in the process. So there must be adequate investigating capacity, with staff possessing the relevant forensic experience.

Matters reported must be handled with utmost confidentiality, for whistleblowers need to remain anonymous, thus minimising the chances of retaliatory actions being taken by those involved in the integrity matter.

Then, staff in departments that are likely to access information on matters being reported – such as ICT, investigations and internal audit – should sign Non-Disclosure Agreements.

Some decide to sue staff for damages resulting from integrity issues, pursuing criminal and/or civil litigation. But the evidence threshold for successful litigation is extremely high, so one must ensure that documentation and other sources of evidence are impeccable – no mean feat.

For criminal proceedings, the investigating officers and prosecutors need to be properly appraised of the matter to ensure they fully understand the issues, prepare robust witness statements, and hence prosecute successfully.

In addition to the evidence, witnesses must come forward and corroborate that evidence, so organisations need to publish guidelines on witness protection, together with incentives to encourage witnesses to be present in what are likely to be lengthy court processes.

When obtaining evidence from private investigators, one must ensure that it is obtained through legal means, so that it can stand scrutiny in court.

Organisations also need to be alive to the fact that fraud can be perpetrated by anyone – even those responsible for ensuring internal compliance and investigating abuses.

Serious background checks and vetting therefore should be carried out before onboarding such staff, and an internal mechanism must be put in place to ensure that fraud perpetrated by staff in these offices can be detected.

In staff induction programmes the value of integrity and the importance attached to compliance should be included for all staff, and there should be continuous emphasis by all levels of management on these subjects in staff meetings.

Alongside this, those who uphold the value should be recognised, while those who do not should be penalised.

A major fraud risk results from conflicts of corporate and individual interests. It is therefore important for staff to be given an opportunity to declare such potential or actual conflicts so as to remain relaxed in their roles.

The process of making declarations should be continuous, so that staff are given an opportunity to declare interest conflicts upfront.

What happens when there is proof of culpability, and the organisation wishes to recover its losses from the employee?

With the slow pace of court litigation, it takes forever, diminishing the value of any recoveries. And that’s if the verdict is favourable, in itself of relatively low probability. But at least with the introduction of the Small Claims Courts such matters will be concluded much more quickly.

The more I have been involved in these integrity and compliance issues, the more I have realised how complex and challenging it is to deal with them, and how one must keep constant focus on them and keep applying the lessons learned.

Why it’s a good idea for family businesses to form boards

Much of my talk with owners of family businesses is about whether the time is right for them to create a formal board with independent directors.

Very few do, even where their companies have reached a significant scale. So I was pleased that on a recent webinar hosted by Sirdar, the South African-based organisation that helps build better boards around the continent, this was the topic of discussion.

There was easy unanimity among the contributors that appointing independent directors is a good idea. So why are most family business owners reluctant to bring in such independent voices? What do they fear? Why do they hold back from what is commonly labelled as “professionalising”?

Well, they’ve never done it, and doing so has never been on their horizon. As one owner-director-manager put it to me, “My brother and I just talk about things like strategy as we drive to and from our office,” and another does so with his father at their family Sunday lunches. That’s worked well enough, they reckon.

But as younger generations have been emerging into senior leadership, and as “sustainability” is entering the mindset of SME owners, more family businesses are bringing external minds into their worlds.

Not to hand over control to them, and perhaps not – at least initially – to have them be full directors with fiduciary responsibilities, but to be “advisory” board members. This way they can test the waters, seeing how much value they add and how well the chemistry works between them.

A common concern is loss of control, having been used to always acting as the sole decision-makers. Yet disagreements among family members are all too normal, and a common role of independent directors is to act as mediators and consensus builders.

More so if they are offered the position of chair – in itself recognised as displaying good governance. This implies seeking individuals with high emotional intelligence, able to bring together different perspectives.

The challenge is often between generations, where younger, more exposed directors may feel constrained by their elders – who remain convinced that the way they’ve always been handling the business should remain untouched. “If it ain’t broke, why fix it?” they pose.

A major benefit of bringing non-family members into a board is the formalisation of strategy development and implementation, along with more effective performance management.

Professionalising also implies having a Board Charter; circulating board papers in advance; and agreeing a calendar of board meetings (and perhaps board committee meetings, assuming the appetite exists), at least quarterly and each with their purpose and agenda. In these ways the business becomes more focused on the longer term – and is therefore more sustainable.

How do owners go about identifying the benefits they can enjoy as a result of appointing independent directors? It’s not hard.

The family decision-makers are typically the father and two or three from the next generation, maybe brothers, maybe cousins, and now including the occasional female member. They should list the areas where they are strong and ones where they are less so, and seek external contributors to fill the gaps.

Likely candidates will have their own functional, geographic and other experiences; they will come with complementary educational backgrounds and networks; and their personalities and styles will be compatible with those of the family.

It may be good to offer them initial engagements that don’t even include directorships. To offer a personal example, in a couple of family businesses where I was invited to be a director, it was after carrying out some consulting activity with the company. They were happy with my contribution and my style, and I felt comfortable with them.

Even once appointed, there may be benefits in having the independent directors carry out activities beyond merely attending board and board committee meetings. They can guide strategy retreats, meet stakeholders and offer other areas within their expertise.

At the conclusion of the Sirdar webinar, one of the panelists’ closing comments was to urge families to bring in external directors, as his family business had done to great effect. And for my conclusion here I turn to Manu Chandaria, whom I interviewed recently on a Nairobi Business Forum webinar.

In commenting on how it was that he and his family managed to grow their business to the scale they have achieved, one of his explanations was the bringing in of professionals as both board members and executives at an unusually early stage of their development. So if you are running a family business, try it!

Entrepreneurs should act like revolutionaries

I’m always grateful when my daughter Amy sends me a book to read, including the most recent one I received from her, Total Rethink: Why Entrepreneurs Should Act Like Revolutionaries, by David McCourt, published in 2019.

McCourt has indeed proved himself to be a serial revolutionary entrepreneur, disrupting the telecommunications industry in multiple markets around the world and earning himself a fortune in the process.

He came up with radical new ways of transforming how customers’ needs could be met, comparable to what the likes of Amazon, Netflix and Airbnb came up with in their domains.

McCourt saw how previously unthinkable ways could be devised to dramatically improve services and reduce costs – often by eliminating middlemen.

He won himself bold contracts, sometimes without having fully thought through how he could deliver on them but confident that necessity would be the mother of invention… which it typically turned out to be.

So what does this “Total Rethink” require? What are the characteristics of revolutionary entrepreneurs? It starts when we are young, says McCourt, with how our parents support and encourage us, and how our teachers also do.

Then there’s developing a strong work ethic, again from a young age. As a teenager McCourt took it for granted that he would help around the house and in the garden – as I used to do! And while at college – again like me – he always took up summer jobs.

In the American education system there’s too much emphasis on overcoming weaknesses and not enough on further building natural strengths, McCourt notes, while worrying that virtually all school curricula in America are geared towards helping children get good results in standardised tests – which then enables them to get into universities.

Here they are subjected to more such tests, as a result of which they qualify to enter graduate schools.

“If they do really well they get into Harvard,” he continues, “where the whole premise of the business degree is to teach them to think outside the box – the exact opposite to everything they have been taught up until then.” It makes us feel really good about our new Competence Based Curriculum, which has done away with the problems this revolutionary has identified in the US system.

All the top universities around the world now have courses on entrepreneurship, McCourt has observed, it being a “fashionable” subject to offer. But if you ask the students why they want to be entrepreneurs they will most often say it’s because they want to be rich and because they don’t want to have a boss.

He’s not impressed, asserting that no high quality entrepreneur he’s ever met has chosen that path in order to get rich, and that while not having a boss they all rely heavily on mentors and on the support of others.

He writes at length about the importance of confidence, based on capability; being willing to collaborate and compromise in order to get to win-win; sharing generously rather than being selfishly secretive (worrying in particular about middle management in this regard, who too often see their colleagues as competitors rather than teammates); listening to others and not talking at them (this for all managers, politicians, teachers, and others too).

He also stresses the need to be a good story-teller; to articulate one’s message simply, briefly and clearly – as in the elevator speech; and to write well. He was once told that his “secret sauce” was his ability to chat with anyone, whether they were three years old or 80 years old, and that they would feel like he could relate to them and that he respected them.

Here he quotes Dale Carnegie, who famously said that “you can make more friends in two months by becoming interested in other people than in two years by trying to get other people interested in you”.

All that I have selected so far are personal attributes, and in my next article I’ll focus on the business side of entrepreneurship, on how to deal with customers so as to get the business and then how to deliver on it.

But before I conclude today I’ll leave you with a question his mentor put to all those at dinner aboard his yacht: “If you could come back as something else what would that be?”

McCourt’s immediate thought was that he would return as a revolutionary. Mine? Maybe a tennis professional or a photographer. How about you?

Challenges to change in dynamic business world

Since writing my last article on how to influence change, I have had the privilege of listening to Costas Markides, a professor of strategy and entrepreneurship at the London Business School and author of several outstanding books on the subject — including his latest one, Organising for the New Normal.

He was a delight to be with online at the Davis & Shirtliff management conference in which I was participating, making his points in such a lively and humorous way. Don’t take my word for it though, listen to him on this podcast, ‘Resilience mindset and the new normal’ on YouTube. You won’t regret it.

Costas — which I am sure is how he’d like me to refer to him — is, like me, an economist by education, and again like me he migrated into strategy. As with anyone who works in this field these days he reflected deeply on how the strategy must incorporate innovativeness, agility and resilience, and concluded that so much of what differentiates those who succeed relates to influencing people’s behaviours. He, therefore, focuses on social psychology as a key ingredient in his mix.

Why do people behave as they do, he asks, and what is it about the organisations within which they work that makes them do so? For sure leaders cannot simply tell their people to be, say, resilient and innovative. You won’t be surprised to learn that Costas is a great storyteller, and one he loves to quote is from the Harvard Medical School, which carried out a study on patients being released from hospital following major heart surgery.

Each of them was told that on returning home they needed to stop leading dangerously unhealthy lives — no more smoking or drinking alcohol, healthy eating and plenty of exercises. 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 percent of them reverted to their bad behaviours within six months of their operations.

In Change or Die, the book about this case by Alan Deutschman, the author describes what differentiated the 10 percent of outliers who held on to what was good for them, Costas relates. 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 we must make the need for the change positive, personal and emotional.

Another factor that influences how we behave is our environment, and Costas talks engagingly about how leaders must create one 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 — like if what they are considering lies outside the defined strategy.

Above all, Costas tells 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. He tells us we must see these disruptions as not just threats but opportunities too. But this requires going beyond simply asserting that.

Leaders must lift their people psychologically, emotionally, reaching both their heads and their hearts, so they can visualise the fulfilment of the opportunity. Then they will commit to fighting with you.

Let me conclude by mentioning that an extra reason why I so enjoyed interacting with Costas was that nearly 50 years ago I spent a year at the London Business School as a student in their Sloan Masters programme. It was a great experience for me, building both my competence and my confidence. His session reminded me of those uplifting days, taking me back to the stimulation that so characterised the place and showing me it to be as vibrant now as it was then.

Professionalising family businesses

Four years ago I wrote a column on the intergenerational challenges facing family businesses, admiring the way those who overcame such challenges did so while noting how too often the founder was reluctant to empower subsequent generations.

I want to return to that topic today, thanks to the opportunity I have benefited from over the last few months to meet with a good number of owners of medium-sized family businesses. In some cases the founding father was still very much in control, as his sons (occasionally these days his daughters, too) have been getting to grips with leadership; in others, the elder had withdrawn somewhat, just coming to the office for short periods of time; and in older-established businesses third and fourth generation family members have now risen to prominent positions.

What patterns have I observed? First, irrespective of the age of the company or its leadership, the top person is inevitably ultra-operational, what one might call “transactional”. To the extent that in some of my meetings the phone kept ringing so the boss could progress some immediate transaction, make some micro-decision.

Here, they had just found it too hard to develop a trusted and empowered senior management team to whom to delegate, and the inevitable consequence was that little mindspace was available to allow them to indulge in higher level strategic thinking.

All these micromanaging owner-director-managers were leading successful entities, ones that had survived many ups and downs, including splits from other family members. Their businesses were utterly dependent on their personal talent and experience, their energy and charisma, their motivation to show up to keep the revenues flowing in and to manage costs.

Some are fortunate in having members of subsequent generations who are both fit to contribute to sustaining the business into the future and willing to. But for others succession planning remains an unresolved question.

So busy are they with day-to day issues that it’s just too hard, indeed too inconvenient, to think about the consequences of something adverse happening to them: ill-health, for instance. Some had a notional board, often only including an elder or a spouse – most of whom would not be engaged in the business, while for others it was “me and my brother” or me and my son(s)”.

“Board meetings” might take place around the dining room table at home, or driving together to and from the office, and while a few were considering appointing independent directors none of those I met had done so.

The 2015 Companies Act specifies that four board meetings a year must be held by all registered companies, but most of our SME leaders just aren’t in the habit of complying with this requirement. Their focus, their discipline, is so much more on the day-to-day, and one of the consequences is that formal longer-term strategic plans or mechanisms for managing their implementation rarely exist.

Having said that though, these entrepreneurs are all bold innovators, courageous and optimistic risk-takers, forever on the lookout for new opportunities. They are to be admired, as they operate in this difficult environment.

OTHER VOICES

Some are hiring higher level professional managers, and bringing in consultants and advisers to help them rise. But my perception is that those who would most benefit from fresh and external inputs are the ones least likely to seek such interventions.

It is those who are most exposed to contemporary trends and hence are already ahead of the game who are open to listening to other voices. It is such people too who consider options such as public listing, joint ventures and external investors.

They are the ones with appropriate systems and controls, and robust risk and compliance management procedures.

In Kenya we are so fortunate to have such widespread entrepreneurial energy and talent. What we look forward to seeing is more of our SMEs professionalising in ways that can see them grow to larger scale, employ more people, focus on markets beyond the domestic, and be sustainable for future generations to inherit.