The workshop, entitled ‘Leadership and Top Performance in the New Environment’, took place at the Stamford Plaza, Auckland, on Wednesday 29 September with more than 100 senior businesspeople in attendance and looking for lessons in the management of businesses through tough times, and in how success can be achieved in these changing times.
Mike Whale introduced the speakers and topic with the Oxford Dictionary’s definition of leadership: the act of leading people or an organization, or the ability to do this. He noted that while no one leadership style suits all environments at all times, the global financial crisis has required leaders to show greatness and chart paths forward, and that the hallmark of any great leader is the ability to get top performance from people.
In a topical discussion attended by a capacity audience, the three speakers (Roger Bell (Vero), Brian Blake (DB) and Mike Pollok (Ricoh)) addressed the question of leadership, and shared their own stories of the specific pressures faced by their businesses as a result of the global financial crisis, and the decisions and steps they took to overcome recession-related problems.
The presentations were followed by panel discussion and some welcome audience participation.
Roger Bell, CEO of Vero New Zealand, began by referencing the Canterbury earthquake, which he said was the fifth-largest insured event of all time. In his experience of leadership, there are two primary challenges:
He spoke of frameworks and the need for tools that systemise what is done and can implement that across the whole company; in his own experience, such frameworks have helped Vero deploy the things it does well.
All three speakers emphasised the value of values - how to get staff to absorb them, take them seriously and feel responsible for how the company functions and represents itself.
Roger spoke of the number of Vero staff who had moved to hotel rooms in Christchurch, working 15-hour days and refusing weekends off to return home, in order to aid earthquake victims insured by the company. He cited this as a refutation of the myth that Kiwis are impossible to inspire: it is the task of the CEO to find out what motivates his people.
In Brian’s view as head of
DB Breweries, a company’s culture is what determines its ability to effectively handle a crisis, and depends on the robustness of the culture over previous years - it can’t be conjured up from nothing as needed. CEOs need to ask themselves whether they’ve done ‘the hard yards’, and whether they have developed a high level of trust across the company. Those who have will find staff following them as they lead through crisis.
Mike Pollok of
Ricoh New Zealand said the Ricoh story through the recession was, in contrast to Vero’s and DB’s, a good news story that involved developing values in concert with staff at all levels. Values are not something that can be imposed but must be agreed upon and understood by all - when this is achieved, the benefits include improved employee engagement, staff loyalty and bottom-line results.
What the World Needs Now
Roger quoted Kaplan: “What the market seems to want from leaders is a relentless and somewhat mind-numbing commitment to incremental gains.”
He said this view was outmoded, and what world-class organisations have in common is visionary leadership; customer-driven excellence; organisational and personal learning; a value of employees and partners; agility; a focus on the future; a focus on results and creating value; a systems perspective; management for innovation; and a sense of social responsibility.
Critical Success Factors: Achieving such a world-class position requires tenacity, Roger said. It needs a long-term strategy, not a short-term plan, and this can only be driven by the executive. It must be integrated into every aspect of the company, including KPIs, and embedded in the culture so all staff understand and take responsibility for what is required. Doing so pays off: Vero has been named one of the top five companies in the Best Places to Work survey every year since 2004.
Success was a hard word for DB Breweries when it hit a profit crisis in 2009, after six years of sustained growth, Brian said. The company headed into what it calls ‘a perfect storm’, as consumers traded downs, retailers discounted heavily and DB made extensive financial write-offs as pubs and taverns closed.
The company was required to reduce costs quickly across the board, and to chase tactical opportunities. Difficult steps included reducing staff by 10% in every division, freezing new recruitment, bonuses and salaries, and cutting the sales and marketing spend. The most contentious move was the decision to cancel all company credit cards, which staff perceived as a lack of trust from the executive - but it had the effect of significantly reducing expenditure.
Emergence: DB Breweries’ recovery was accelerated by key new marketing initiatives, including moving into the Australian market, the establishment of contract packing agreements with supermarkets, and the launch of new products to appeal to specific demographics.
Looking After People: Throughout the emergency response phase, Brian said it was important that the executive been seen by staff to be acting with urgency, and with an awareness of the risk of battle fatigue - at a certain point, people can’t and shouldn’t be expected to take any more.
Brian spent two weeks travelling around New Zealand talking to staff and explaining the plan for the coming years, to ensure everyone understood what senior management was trying to achieve. Data, even if commercially sensitive, should be shared with staff, suppliers and customers. And this crucial time should be treated as an adaptive phase: the remaining 90% must be helped to remain motivated.
After 15 months of crisis management, in mid-2010 the company held a mid-winter Christmas party at several locations around the country, and undertook a culture survey of staff to learn from the experience and use what the crisis had taught them to make positive changes.
Measurement and Management: Vero applied the Performance Excellence Framework, part of the Baldrige Performance Excellence Programme, to highlight problem areas and develop optimal operations.
By addressing the core values embedded in the seven Baldrige Categories (leadership; strategic planning; customer focus; measurement, analysis, and knowledge management; workforce focus; process management; and results), Vero saw instant benefits.
The company had not been completely aligned, resulting in a lack of focus, an opportunistic approach, and general gaps in operations. Achieving alignment through the Baldrige process meant that when the earthquake struck, Vero was prepared, and was the first insurer on the ground, having previous tested its disaster response capabilities to the extent of crashing its own computer systems.
There is also an awareness within Vero’s executive team that the insurance industry is not a calling; people rarely choose insurance as a profession, but rather come to it by accident and then remain. The steps taken by Vero to engage its ‘accidental’ employees have resulted, for example, in some of the highest possible engagement levels just in the Vero call centre - about 90%.
Good Times: Mike said that as the most profitable player in its industry, the focus of Ricoh’s executive through the recession had been to ensure optimal staff engagement, buy-in to company values, and undertake monitoring and development. Ricoh conducted an independent employee survey to find out what the company can do to improve in all facets of operation.
The session concluded with the audience showing its appreciation after Mike Whale thanked the panel and all of the participants in the third of the 2010 series, and this year’s sponsors, including Unlimited magazine and Fairfax Media.
