Take it from the top

What do we need to learn? What do I need to learn? And how can this happen in the most value-adding way? Do these three questions characterise the way that your directors, partners and senior managers think and act?

If the answer is yes, then your business has the essential foundation for durable performance.

‘Just getting by’ is no longer good enough. The standards of performance expected of business are constantly rising. Survival and growth make it essential that companies change their strategies at least as fast as the pace of change in their business environment.

The direction, pace, and success of business change depends fundamentally on the direction, pace and success of learning by those at the top. Just ask a company’s employees, investors, long-term customers or suppliers what is holding back change by the company, for greater profitability and growth.

Sooner rather than later, these stakeholders will be pointing to barriers at the top: the way directors and senior managers think; the way they act; and their ability to make things happen. What they are saying is that senior managers’ capabilities need to change. In other words they need to learn.

Yet those at the top of most companies in Britain did not get where they are today by being seen to be good at learning. They may have been good at getting things done, getting results, building the right alliances and contacts and at impressing the City. They may even have been good at just sticking around. But good at learning? This is still all too rare.

Learning can have some unfortunate associations. For instance, learning is often linked with ‘education’. However, for many experienced managers education is connected with exams, feats of memory and irrelevance to real life. Alternatively, it is associated with ‘training’, with its image of classrooms, questionable benefits and remedial overtones.

When a senior business development manager in a FTSE250 company, whose profits and growth have stalled, can sneer at the value he expects to see delivered by his company’s recent management development programme – as happened earlier this year – it is clear that ‘learning’ and ‘improvement in business performance’ are still not seen as connected at the top of many companies.

Twenty years ago Rob Wilmott, then CEO of ICL, was widely quoted as saying: ‘I know exactly what this company needs to achieve strategically. I just don’t have an organisation that can understand or do it.’

If your chairman, chief executive or risk management committee doesn’t want to be in Rob Wilmott’s situation tomorrow, what can be done? In essence, the answer is two-fold. The business cases for leadership and management development need to be made and a climate of challenge and support at the top of the business must be created. Five strategic management processes and three roles are critical to this.

Let us look at the five processes first.

The starting point is the process of role clarification. It’s a rather ungainly phrase, but its purpose is vital. It enables the board, directors, executive teams and senior managers to appreciate what they are accountable and responsible for and what contributions they are expected to make in both strategic and operational terms. Without this learning can have no realisable value.

Next is the process of reviewing the performance of the business and the challenges it is facing; its organisation and management capability to respond, and of creating integrated performance development plans.

This process explicitly links business performance with the capability of the organisation and of management to perform. It identifies key desired outcomes and priorities for improvement and change, and programmes for making a difference. This builds the business case and makes it a priority to deal with challenges and provide support for doing so, via learning and other means.

The third key process is business planning. The most value-adding business planning processes involve a large number of senior managers in searching for opportunities and threats. Those that are identified as significant then become the responsibility of the person who identified them. Often this requires them to work in new and unfamiliar territory, for example planning for and opening up new markets or changing the way the organisation relates to its customers. This becomes the challenge. Support comes in the form of help in learning to succeed.

Fourth is career development. This process starts by looking at the capabilities that the company will need in its directors and senior managers in the future. It then invites managers who are interested in a future with the company to be appraised in relation to these capabilities. The results are turned into personal development plans, with learning support provided by the company to enable these to be realised.

Fifth is the process of reward. This process sends strong signals about what is really valued in the organisation and is often a powerful incentive to learn. The trick is to encourage learning that is directed towards improving the strategic and operational capabilities of the business.

Reward processes that focus only on short-term financial performance are unlikely to be appropriate. Reward processes can create a sense of challenge. However, they almost always need to be complemented by a performance appraisal process that generates explicit offers of support.

Now for the three key roles. One is that of CEO. His or her behaviour sends powerful messages about ‘what is really important around here’.

This is partly because the CEO acts as a role model, partly because his or her decisions and actions determine the real priorities and partly because the way he or she communicates has a strong impact on the balance of challenge and support that others feel. Performance development by the business starts with learning by the chief executive.

The second key role is that of the leadership development director. This person needs to champion and steward the value added by the five key strategic management processes. They also need to be able to use their own knowledge about what kinds of learning support can be used to best effect and how best to mobilise it.

And the third key role is that of the finance director. Learning is an investment that requires funding. If the money cannot be found to make these strategic management processes effective, the effort put into them is just a waste of time.

Now is the time to make learning a strategic priority. Just don’t mention a classroom, homework or exams.

  • Nickie Fonda is strategy and business development adviser at the Chartered Institute of Personnel and Development.

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