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The magazine of the Warwick Business School Alumni Association Autumn 2001 “why I was compelled to take part in the BT Global Challenge” teamwork in extremis x ne us
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The magazine of the Warwick Business School Alumni Association Autumn 2001
“why I was compelled to take part in the BT Global Challenge”
teamwork in extremis
xne us
Warwick Business School has taken another major step forward with the launch of a new dedicatedalumni website, which went ‘live’ on 1st October, 2001.
The easy-to-navigate site has been constructed to provide more than just a news and informationbase for alumni - important though this is. As WBS Webmaster Nick Kaijaks explains, “It will also be afully interactive site, empowering fellow alumni and Nexus readers to contact each other, networktogether and exchange information. A further exciting stage of development - planned for early nextyear - will be the launch of an on-line directory of all WBS alumni”.
Among the features of the site are:
Online updates / Use the site to give us on-line updates of your details - to ensure that we keep intouch with you.Read the WBS news / Keep abreast of all that is happening at your business school. Check thecalendar of forthcoming events of the Alumni Association - and be the first to review an event that youhave attended or read about.Alumni notice board / Publish your own news (subject to site regulations) and use it to announce jobmoves, business start-ups and other new ventures. Discover what networking groups are operating inyour own field of interest or location - or start up your own with the help of the Alumni Association.Become a mentor / Use the site to share your knowledge by becoming a mentor to your fellowalumni. Register your area of specialisation and geographical location - with the confidence that yourdetails will not be divulged without your prior agreement. Alternatively, find a mentor - from adatabase of experienced WBS alumni.Read all about it / Sign up for the Warwick Business School Alumni Library Scheme - and gain accessto an excellent business database.Get in touch / Coming early next year will be an on-line directory of all WBS alumni - past andpresent. Use this service to search for former classmates and colleagues.
The new website is all yours - visit it now at www.wbs.ac.uk/alumni/ g
Jill DwyerEditor
xne uscontents
g Alumni News 03
g New alumni achievement awards 04
g Alumni on the move 04
g £7 million investment sees Warwick Business School development continue apace 05
g University website is in tune with the needs of business 06
g Alumni Views 08
g Nexus Interview 10
g Planning for private medical care in Saudi Arabia 12
g Bridging a management gap - the interim solution 14
g Does leadership make a difference in organisational performance 16
g Noticeboard 20
New dedicated website is forum forWBS alumni
contacts
Emily Fay Alumni Relations Manager Alumni OfficeWarwick Business SchoolUniversity of WarwickCoventry CV4 7ALUnited Kingdomt +44 (0)24 7652 4176f +44 (0)24 7652 3719e [email protected]
Sue Cresswell Alumni Assistant t +44 (0)24 7652 4396e [email protected]
Nexus is the magazine of the AlumniAssociation, Warwick Business School,University of Warwick, Coventry CV4 7ALUnited Kingdom t (024) 7652 4306http://www.wbs.ac.uk/alumni
The views contained in Nexus are those ofcontributors and not necessarily those ofWarwick Business School or the University of Warwick. 09/01
Emily Fay began work in September as the newAlumni Relations Manager for Warwick BusinessSchool. "I am thrilled to be working for a top rankedbusiness school," she said. Emily was the AlumniOfficer for Lancaster University for eight years andhas spent the past twelve months working for theUniversity of California, Berkeley, in the UnitedStates. She is American, although she has lived inthe UK for 14 years and is a Lancaster Universitygraduate. "My goal for my first six months in post isto get an online database up and running to helpWBS Alumni to network with each other," sheexplains, "with 10,000 Alumni the internationalnetwork can be vibrant and I look forward toworking with you to achieve this."
Jill Dwyer, Editor
MBA Refresher14-17 October
Dr Michael LewisLecturer in Operations Management
Ken BatesLecturer in Accounting and Finance
Professor Howard ThomasProfessor of Management and Deanof Warwick Business School
Professor Leslie WillcocksArthur Andersen Professor ofInformation Management and e-business
Professor Bill WeinsteinProfessor of International Business,Henley Management College
Professor Richard OrmerodProfessor of Management andAssociate Dean of ExecutiveProgrammes
London Evening Seminar22 November
International MBA Refresher21-24 January 2002
Professor Andrew PettigrewProfessor of Strategy andOrganisation
Professor Leslie WillcocksArthur Andersen Professor ofInformation Management and e-business
Professor Jacques NantelHEC, Montreal
Professor Louis HebertHEC, Montreal
Professor Fred SeidelEM, Lyon
Professor Christophe ChaumontEM, Lyon
Women’s Group SeminarFebruary
Discover theEntrepreneurial Spirit
Summer Ball 2001
A record number of new WBSgraduates and alumni attendedthe Summer Ball on 13 July.Nearly 300 came together forthe event held for the first timeever on campus. Those whocame back enjoyed reliving alittle of the Warwick magic infamiliar surroundings.
The Dean, Howard Thomas,and his wife welcomed anumber of prominent guestsincluding the acting ViceChancellor of the University andsome key corporate clients. Alarge contingent of full-timeMBAs 1999/00 arrived in verygood spirits - which even theevacuation of the building and
03
nexus | autumn 2001
Our panel of entrepreneurs willaddress all these burning issuesand more during the evening.
Grier Palmer, AssistantDirector (Training) of the Centrefor Small and Medium SizedEnterprises at WBS, will lead aninteractive evening seminar,using live cases of realentrepreneurs. Grier Palmerworks with SMEs in businessgrowth, entrepreneurialleadership, organisationaldevelopment, marketingexcellence and e-business. Hehas a wealth of experience intraining and advising smallerbusinesses in the early stages aswell as helping them move intosecond-phase growth.
On the panel will be anumber of successful WBS
alumni who have started up ontheir own, including a venturecapitalist with experience offunding and advising start-ups.
Panel members will sharetheir own experiences of startingand building a new business andwill address the issues raised byGrier Palmer and members ofthe audience.
The seminar will be held atthe King’s Fund in CavendishSquare, London W1 onThursday 22 November. A buffetwill start at 6.15pm, giving anoppor-tunity to meet thespeakers, fellow alumni andguests before the seminar startsat 7pm. Tickets are priced at£49.99 for alumni and £59.99for guests and include buffet andwine - see contact details g
diary dates
The Alumni Association London Seminar on Thursday22 November will be an opportunity to meet peoplewho have set up in business on their own and knowthe rewards and pitfalls. How do you get started?How do you turn your ideas into a structuredbusiness proposition? Where do you look for fundingand how much will you need?
alumninews
To reserve your place contactPam Barnes in the Alumnioffice.
t 024 7652 4396e [email protected]
Contact
arrival of two fire engines laterin the evening could notdampen! We were also verypleased to welcome back arecord number of alumni whohad graduated in previous yearsand took the opportunity tomeet up again.
Thanks to all of you whocame to the Summer Ball and welook forward to an even biggerand better event next year. Letus know your ideas and sugges-tions for next year’s event g
Next year will see the inauguration of an entirely new annual awardby Warwick Business School. Its purpose is to provide an opportunityfor public recognition and celebration of those alumni judged tohave made the greatest contribution to business or society in general.
Entry for the new achievement award is open to all WBS alumniregardless of their programme of study, current area of activity orgeographical location.
Announcing the new scheme, Vin Hammersley, WBS director ofcommunications said, “The concept of an achievement award hasbeen in our minds for some time, in part reflecting suggestions madeby alumni. We see the achievement award as a logical extension ofalumni involvement in school activity. It will serve a number ofpurposes, including the building of a closer relationship with alumni.Publicly, it will highlight the benefits of a WBS qualification andshow the sort of achievements in society to which such aqualification can lead”, he continues. “We expect that it will providea role model for others, but perhaps its primary purpose will be tocreate a forum to publicise and celebrate the achievements ofalumni”, Vin concludes.
The award - which will carry prestigious individual recognition -will be assessed by a judging panel comprising WBS staff andacademics, alumni and external people such as board members.
Nominees must be former WBS students and should benominated for their contribution:� to their fields or professions, or� through exemplary service to WBS or the wider community, or� through outstanding service of a personal or humanitarian naturelocally, nationally or internationally.
Nominations should be made in writing (with supportiveinformation such as curriculum vitae, press cuttings, brief biograph-ical notes) to the Alumni Office, Warwick Business School, Universityof Warwick, Coventry, CV4 7AL by Friday 16 November 2001.
For more information on the Alumni Achievement Award see theweb site www.wbs.ac.uk/alumni/ g
New Alumni Achievement Award
04
Alumni on the moveGraham M Winch (PhD 1998/92) has been appointed chair ofconstruction machinery management in the department of civil andconstruction engineering at UMIST with effect from September, 2001.After running construction sites, he worked as a research fellow atWarwick Business School with Chris Voss in the late eighties beforetaking up a lectureship at the Bartlett School, University College,London.e [email protected]
David Bricknell (MBA 1990/91) has been appointed managingdirector of the UK arm of the leading business-to-business e-purchaseprovider, SynerDeal.com. With a client base that includes major bluechip manufacturing and public sector organisations, the company isexperiencing substantial growth for its web-based sourcing services.e [email protected]
Dr. Gary Stockport (MBA 1986/87) has been appointed professor instrategic management and director of the EMBA programme at theUniversity of Western Australia, Perth. Gary also runs his ownconsultancy company called Western Australia Strategy Consultantsand has a growing blue chip client base throughout Asia. He is also avisiting professor at the University of Witwaters and in South Africa.
Chris Boulton (MBA 1992/93) has moved to be director, 3i AsiaPacific in Singapore. Chris had been living in Japan since 1998 wherehe was president of 3i-Kogin Buyouts, a joint venture with theIndustrial Bank of Japan which was set up to develop an MBObusiness there. He is looking to make contact with WBS alumni inSingapore as well as doing his best to help 3i meet its investmenttargets in the region!e [email protected]
Jacque Langford (MBA 1996/97) has been appointed Sales &Marketing Director at leadership training organisation, TheLeadership Trust, in Ross-on-Wye. Jacque had previously spent sevenyears in training and sales and management at BUPA before joiningPPP Healthcare. Jacque was part of the original team that set up PPPLifetime Care plc in Stratford upon Avon, before taking the majorstep of going back into education. In 1996 she embarked on a full-time MBA at Warwick Business School. Jacque said, “It was one of thebest years of my life. I developed a real interest in strategydevelopment and practice, and discovered a love of marketing. I alsofound that the MBA gave me the confidence to apply my learningacross the business when I returned to work at PPP Lifetime Care.”
05
nexus | autumn 2001
£7 million investment seesWarwick Business Schooldevelopment continue apace
As the second stage of anambitious four-phase expansionplan, the new WBS building willadd office space, lecture theatresand seminar rooms, furtherenhancing what is alreadyrecognised as a world-classfacility. It is being constructed inthe same striking style as phase1, with white external renderingand will contain manyinnovative features. Theseinclude a circular dean’s meetingroom and a communal loungethat opens into a courtyard foruse during fine weather.
Professor Howard Thomassaid, “Enhancing and improvingour facilities is a requirement ifwe are to maintain our positionas one of the world’s leadingbusiness schools. Our coursesdraw candidates who are seniormanagers in industry, commerceand from the public sector. Suchpeople rightly expect to carry outtheir studies in a pleasant andhigh quality environment”.
Completion of the newbuilding, which is set in anattractive lakeside location onthe edge of the Warwickshirecountryside, is expected duringthe early weeks of 2002 g
The future of Warwick Business School continuesto develop, as a £7 million investment in theconstruction of more prestigious facilities forstudents, staff and visiting delegates takes shape.
Construction continues on the new state-of-the-art facilities.
University website
06
is in tune with the needs of business
business@warwick is a new interactive website that will ‘open up’access to the skills and services offered by the University of Warwickand improve communications with the local and global businesscommunity. Due to go live in mid-Autumn, its design is influenced bythe findings of focus groups held early this year, in which the Midlandsbusiness community was invited to express its views freely about whatit needs in the two-way communication process with the University.
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nexus | autumn 2001
So, why a new website at all?“There are several reasons, notthe least of which is theinfluence of government’s driveto encourage universities tobecome closer to the businesscommunity and to be generallymore commercially aware”, saysJustine Pedler, Project Managerin the Research andDevelopment Office at theUniversity of Warwick.
“Obviously, there has been awebsite here for some time, butit was designed with the needsof academics and students inmind and was somewhatimpenetrable to externalorganisations. When a businesslogged on to the Warwick site, itwasn’t always easy to see whereto go to find the rightinformation. Moreover, we alsolacked the means to trackwhether or not an enquirerreceived a satisfactory response”,she explains.
The new site has beenwholly redesigned to pulltogether scattered informationon the services and facilities thatWarwick can offer to thebusiness community. It alsoanswers the need for business tonavigate the site easily and toreceive a prompt and user-friendly response.
It includes regularly updatednews and announcements fromthe campus and an events diary.One of its most innovativefeatures is a new Ask the Expertson-line enquiry facility. Visitorsto the site can pose a question,to which a member of Warwick’sacademic staff will respond.
Database-drivenThe new business@warwick siteis supported by a centralresources database holdingdetails of the expertise, servicesand facilities available withinthe University and enabling it tobe fully searchable. Thissearchable facility allows visitorsto discover the numerous waysof working with Warwick, fromstaff development programmesto student and graduate projects,consultancy and sponsoredresearch projects.
Searchability is the keyThe new site empowers visitorsto search in three ways:� Under a specific resource.� Within pre-defined businesscategories.� By key word.
“The powerful search engineallows the system to be accurateyet flexible”, continues JustinePedler. “The categories arebroader, couched in businesslanguage and deliberately almostover-classified to provide an easyroute to extra information.
“We’ve also commissionednew case studies of how theUniversity has worked with localsmall and medium sizedenterprises (SMEs). This ispresented in a succinct andbusiness-oriented way andfocuses directly on improve-ments such as innovation,quality improvement and profit.
“Despite its name, the sitealso includes informationrelevant to non profit-makingorganisations and theprofessions, such as the NHSand education,” she concludes.
business@warwick isaccessible to users in general.There is also a registrationfacility through which users cansign up for specific mailinggroups and personalise the siteto reflect their own categories ofinterest.
Autumn launch programmeNews of the new website will bebroadcast through a series ofevents and activities throughoutthe autumn. These include:� A Midlands TechnologyNetwork event to be held atWarwick on Wednesday October10. Guest speaker Robert Lindseyof Jungle.com will deliver a talkentitled What does it take to growyour business? And there will alsobe representatives of 3i, PeraTechnology and Warwick.� Coverage in many internaland external universitypublications.� Reciprocal links with otherwebsites such as Coventry &Warwickshire Chamber ofCommerce and CBI, WestMidlands.� The launch of the WarwickRegional Business Club onNovember 21. The aim is toprovide a series of meetingsaddressing topical businessissues for a selected audience oflocal senior executives. Topicswill be chosen to reflect keystrategic interests and researchactivities at Warwick, whichresonate with critical businessissues of the day - designed toencourage business to interactwith Warwick on an increasingscale.
The Warwick web linkThere is a strong Warwick linkwith bit 10, the companychosen to develop the newwebsite. It was founded by twoWarwick graduates in computersystems engineering, Ben King(1994/98) and Alex Craig(1992/95). In the Deloitte &Touche Fast Fifty ratings, bit 10was judged first in the Midlandsand seventeenth nationally g
Contact
w www.warwick.ac.uk/business
The dotcom - wheredid it all go wrong?
08
alumniviews
Simple, says former Warwick MBA John Nicola, now a managementconsultant with VEO Ltd (Virtual European Office) and a member ofthe Chartered Institute of Marketing. Writing in the institute’s journalMarketing Business, he says that most dotcom failures can beblamed directly on a deviation from the basic principles ofmarketing.
Shut Down...
Know your customer Be clear about the needs,characteristics and expectationsof customers as every activityand process should flow fromthis. In this sense, the virtualcompany is no different fromthe physical one. How will youenhance your customers’ life?Which needs do you wish tofulfil? What problems will youovercome? Unless you haveconcrete answers, you may needto go back to the drawing board.
Know the competition andthe market place Analyse the competition and itspositioning - a unique brandcannot be built without thisawareness. In my company’sexperience of rolling out USinternet companies into Europe,there are varying degrees ofmarket knowledge, irrespectiveof the size of the company. Acase in point is Netscape’sEuropean launch of itsNetCenter portal. Initiallyintending to launch one portalfor all countries, Netscape finallydecided to launch eight differentlocalised portals, each reflectinglocal market variations, whilstmaintaining core values.
Know yourself Establish your intendedpositioning, competitiveadvantage and core competence,as well as your vision andmission. Why should a customerchoose you, rather than thecompetition? Be objective: putyourself in the position of thecustomer. At some point, wehave all thought that, becausewe are passionate about ourproduct and services, ourcustomers must also feel thesame way.
Decide your brand’s corevalues Use the results of the previoussteps to describe completely thepersonality of the brand - andnot just as a list of words. If ithelps, place a face or apersonality to it.
Develop your product tomatch your customer’s needsDetermine the offer that willboth satisfy the needs of yourcustomers and differentiate youfrom your competitors. Makesure that it can be deliveredeffectively over the internet.And consider customer serviceand logistics.
Get the site design right... A well-designed site is crucial: itshould reinforce the brand andbe easy to use and navigate. Itshould enable your customers toaccess your products quickly andeasily. Remember - the brandencompasses the entire userexperience. (Take theunfortunate case of Boo.com -one factor contributing to itsfailure was its extremely slowwebsite download time).
....and the marketing Tell your customers who youare, what you offer, the needsyou satisfy and yourdifferentiator. Do notcommunicate too manymessages in one campaign as itcan cause confusion. Thinkabout your customers’ behaviourand develop your media planaccordingly.
Be creative and innovativeusing relatively low-costmethods such as PR and viralmarketing. (Microsoft’s hotmailgained a high customer baseeffectively using viralmarketing). The use of highlytargeted publications can bemore effective than television.Develop integrated campaignsincorporating both online andoffline branding.
Finally, never becomecomplacent as it will benecessary continually to refreshand re-energise the brand - itmust remain dynamic g
A brand is not just a companyname and logo - it is somethingthat encompasses a customer’sentire experience with yourbusiness or organisation.Defined simply, the brand is theimmediate image, emotion ormessage that is experiencedwhen a person thinks of yourorganisation and its offer.
We all know that aneffective brand is key to gainingmarket share and creatingcustomer loyalty. This isparticularly true on the internet,where timescales are short,competition intense - andmistakes costly. With theintroduction of the web camethe hype. We all heard, “theinternet will re-write the rulebook - you need to build thebrand quickly!”.
Some internet marketers fellunder this spell, spending vastsums on brand-buildingcampaigns, some of which werenot very successful. Marketersfelt they had ‘escaped’ from therestrictions of the off-linecompanies and wanted to dothings differently. Creativity,freedom and urgency overtooksound business practices.
Can a virtual brand be builtquickly and compete withestablished physical brands?Should building a virtual brandbe any different to building atraditional brand? According toJez Frampton of InterbrandInteractive, “Brands really existin people’s minds. Thedifference between online andoffline branding is therefore notthe brand, but the way in whichit is created. Too many onlineexperiences lack thedistinctiveness required to createpowerful brands”.
Can a virtual brandsuccessfully change behaviour?There are some brands - notablyAmazon.com - that haveeffectively achieved this. It notonly had first-mover advantagebut it also applied to the webtraditional marketing principlesof satisfying customer needs inareas such as range, price andcustomer service. Otherexamples of successful internetbrands include America Online,Yahoo!, Netscape and Excite.
Although online brandshave to work harder, essentiallythe brand-building process is thesame. Even so-called ‘new’methods like viral marketing*and CRM have their foundationsin the traditional principles ofloyalty programmes and directmail. In light of this, how doyou build a successful onlinebrand?
John Nicola is a freelancestrategic marketing consultant.
Contact
*A marketing phenomenon thatfacilitates and encourages people topass along a marketing message.Hotmail is widely cited as the firstexample of viral marketing.
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nexus | autumn 2001
Food websiteis top of themenu
Don’t loseyour head tothe hunters
OpenFind
A Bedfordshire company whichhas set up a ‘Virtual FarmersMarket’ to allow consumers tobuy direct from their localindependent food producers haswon a major accolade at one ofthe region’s most prestigiousbusiness awards.
BigBarn Ltd, based in GreatBarford, received the EasternAssociation of EnterpriseAgencies Award for Dot Coms atthe Business Link High GrowthStart-Up Awards. The £5,000prize was presented by BBC LookEast presenter, Susie Fowler-Watt.
BigBarn director AnthonyDavison (MBA 1998/99) believesthat he has found an onlinesolution which suits bothproducers and customers. “Dueto heightened public awarenessof food safety, customers havebecome increasingly demandingin their expectations. At thesame time, producers havewanted to reach these customersdirectly, to receive a better pricethan is available to themthrough normal trade outlets”,he says.
This market place has grownrapidly over the past four years,from just one outlet in 1997 tothe three hundred today.
What happens on the day thatthe head-hunter calls you up?You may think that it is the daythat all the sweat, toil andmoney that you have devotedto career preparation will startto pay you back. But is it? Itpays to be prepared in thejungle of the jobs market,suggests Alistair How (MBA,1995/96), now of Reuters Ltd.,London.
Firstly, is the call from agenuine head hunter or merelya search and selection agency?Head hunters don’t tend topublicise themselves. If you’reemerging from business schoolin your late twenties, it isunlikely that head hunters willbe calling unless you are aspecialist - or, at least, you haveachieved a level where the jobspyramid begins to narrow.
Too often, your name hasbeen culled from an MBAdirectory and is simply one ofmany called. The genuine headhunter should know a lot aboutyou, including your current roleand career ambitions. Don’t feelafraid to be cool to theapproach - too muchenthusiasm can imply desire tomove and weaken yournegotiating position.
Head hunters should qualifytheir interest in you to showthat they understand you. Avoidbeing drawn into a meetingwithout first obtaining details ofthe role in writing. Too often,agencies will simply pull you inwith a view that you might besuitable for several positions.Interviews are time consumingand tiring.
When you do take up thehead hunter’s proposal,remember that you have startedthe clock ticking. Changing jobsis not just about the immediateopportunity but needs to beconsidered as part of your wholecareer development.
Since you have notinstigated the approach, an offermay take you by surprise - andnot give you time to thinkclearly. So, avoid being bouncedinto a new role simply because itis available. Ask for time tothink and put out some feelers -if only fully to understand thecontext. This will help you tomake an informed andconsidered decision.
Finally, when you do get theoffer, recognise who the headhunter is working for. You arenot the client, but the prey g
BigBarn has developed what itclaims is an innovative websitefor both producers and customersalike. Simply by logging on andtyping in their postcode, users seea map of their area displayingicons representing differentproducers and the type of goodsthey sell. Individual updateablewebsites are linked to icons andrecipes, food articles and shopsappear beside the map.
“Our website is something thatfarmers desperately need toimprove their incomes and agrowing number of consumersdesperately want easy access tolocal produce” continues AnthonyDavison. “Worried by so manyfood scares, millions are rallying tothe ‘local is best’ flag. Local meansproduce which is accountable,fresh and above all safe.
“This award will help raiseawareness of BigBarn and our2,900 registered producers and. inturn, make a real contribution tothe rural economy”, he says.
What does the future hold?Anthony was delighted toexplain, "We have just agreed asponsorship deal with the NFUand will be on the back of 5million Jordan's cereal packets inthe spring" g
Contact
w www.bigbarn.co.uk
nexus | autumn 2001
10
Imagine leaving work at the BT Wholesale corporate headquarters office
near St. Pauls Cathedral and - instead of joining the customary throng home
on the Central Line - stepping aboard a 72ft state-of-the-art yacht as a
member of its crew for the toughest leg of the toughest yacht race in the
world. This was the challenge that Warwick MBA Caroline Watson was
stimulated to accept - and which would prove to be the greatest adventure of
her life.
why I wascompelled to takepart in the BTGlobal Challenge
Caroline Watson
nexusinterview
Apart from this, the selectionprocess was much the same as itwas for the core crew. Myintroduction to yachting was twofour-day weekends where wewent to sea to learn everythingthere was to know about theboat. This was not just aboutsailing, but also about teamwork.A file is opened with details ofevery member, and the skippers -who had by this time been chosen- selected what they thought werebalanced teams.
Although I had a preference todo the southern ocean leg, Ididn’t have a choice. I wasallocated that leg through thecrew selection process and wasjoined by fellow ‘legger’ PeterStewart from Compaq.
Nexus / So, you were now amember of the crew?
Caroline / Well, not quite. BTstipulated as part of the selectioncriteria that each BT ‘legger’would first have to raise at least£7,500 for the race charity Savethe Children. For me, this was abig task. I decided to approach itthrough a mix of both corporateand personal sponsorship.
The corporate bit wassurprisingly easy. What is the pointin being in a large organisation ifyou can’t leverage personalcontacts and raise sponsorship inthis way? On a personal level, Isaw it as part of the challenge todo something that I could notnormally do. So I decided to learnto run - which I found very hard -with a view to completing a realchallenge - a triathlon. This ledme to entering the LondonTriathlon with two teams, raisingover £2,000 for Save the Children.
As part of the training for thisand the BTGC, I put together asmall team to do the Three Peaksin 24 hours. This raised over£4,500 - and anyone whoremembers me at Warwick duringmy last MBA module will knowthat they got stung for support! Inall, I have raised over £18,000 forthe charity.
Nexus / Let’s move on to yourfellow crew. What were they like asa team?
Caroline / My first impressionwas that the crew of CompaqNon-stop were all enormous -mostly well over 6ft tall,compared with my 5ft 3in!
Nexus / What exactly is the BTGlobal Challenge?
Caroline / It is a yacht racethat is staged every four years. It isled by Sir Chay Blyth and hasbeen sponsored by BT for the pasttwo races. It is a unique race inwhich twelve boats, each with itsown corporate sponsor,circumnavigate the world. Itdiffers from professional yachtracing in two ways. First - unlikethe Whitbread, it is for amateuryachtsmen. And second - it goesround the world the ‘wrong way’.
Nexus / The wrong way?Caroline / Yes, the route it
takes is against the prevailingwinds and currents, which meansthat you are constantly beatingagainst the winds and big seas.This makes it even morechallenging.
In 2000/2001, the race tookten months to complete, coveredthirty thousand miles and wasdivided into seven legs. Thesewere from the start atSouthampton to Boston, BuenosAires, round the Horn toWellington, Sydney, across thesouthern ocean to Cape Town, LaRochelle and back toSouthampton.
Nexus / You’re not ayachtswoman, so how did you cometo participate?
Caroline / Three years ago, Iknew that I was planning tograduate from Warwick with myMBA in July 2000, so I askedmyself an important personalquestion - ‘what do I do next?’ Inmy studies, I had covered all thetheory about organisations andhow they work, so I saw GlobalChallenge as a novel way to putthis theory to the practical test.
I wanted to do somethingdifferent. So, what really inspiredme when I read about the race ina BT publication was the conceptof accepting a challenge in whichyou cannot anticipate how youwill respond to it - how you willget on. It was also different frommy work, yet was supported by it.
Nexus / What was the selectionprocess for crews?
Caroline / Each of the boatshad a skipper and a crew ofseventeen. Two of these crewmembers would be ‘leggers’ andwould join the boat for just one ofthe seven legs. In the case of myboat, Compaq Non-stop, the boatsponsor had decided on one BTperson and one from Compaq astheir ‘leggers’.
11
nexus | autumn 2001
You find out what yourstrengths and weaknesses reallyare when you are pushed to thelimit. You learn how to deal withpeople that you may not chooseto deal with normally - but you’vegot to work together. You have toget beyond the personal issuesand learn to trust them - and theyyou.
Nexus / To what extent do youthink the whole experience haschanged you?
Caroline / Having completedboth my MBA and the BT GlobalChallenge, I felt that I hadchanged quite a lot as a personand that I now needed to pushmy career on. In fact, I was verylucky to come back to a new rolein BT.
As Executive Assistant to theCEO of BT Wholesale - the largestpart of BT - the nature of my roleis to support the CEO in thebusiness and in the decision-making process.
This work means that I can beinfluential in the making of thosedecisions, although notresponsible for them. Effectively, Iam shadowing everything thatgoes on in corporateheadquarters. My new challengefor this year is to get tounderstand how big organisationswork and to learn from peoplewho are highly qualified.
Everything that I have done inthe MBA is coming to life g
Nexus / What were yourfeelings when you finally sailed intoCape Town?
Caroline / My initial thoughtsthat morning, as the mist roseover Cape Point, was that I hadbeen to hell and back and that Icouldn’t wait to get my feet ondry land again.
Then, I realised that this wasthe end of the adventure in whichI had invested two years of my lifeand six weeks of intense activity.My part of the challenge was overand I knew I would miss thecomradeship of the guys onboard. Now, when I think back, Ireally did enjoy it - it was thechallenge that I wanted bothmentally and physically. But theonly way I could exorcise theempty feeling in Cape Town wasto stay with the support crew untilthe boat sailed on to the LaRochelle leg. Then it really wasover.
Nexus / Now you’re back in theoffice at St. Pauls, what did youlearn about teamwork?
Caroline / I learned a lotabout teams, as this type of teambuilding is very different from thatin corporate life. You appreciatethe value of people and thecamaraderie.
Nexus / What were conditionslike in the southern ocean?
Caroline / I have to admitthat I was hoping for a few daysgrace for us to get our sea legsbefore we met any rough weather.But, on the day we left Sydney,we hit a storm in the stretch ofwater where, you may recall, sixpeople were lost in the Sydney toHobart race in 1998.
We hit force 10 winds and30ft waves that caused severecasualties on another boat, withtwo crew members needing to beairlifted ashore. That same firstnight on deck, our watch leaderliterally flew over my head andbroke two ribs. How he didn’ttake me with him, I will neverknow. You can imagine myfeelings - he is experienced and Iam a novice: this is the first day -and there are another 39 days togo!
Altogether, we hit four stormsof this severity but the rest of thetime wasn’t plain sailing either.Average winds of 35 to 40 knotsand 60ft waves meant that it waspretty rough all the way through.
Nexus / How would you assessthe performance of the crew?
Caroline / Well, the boatfinished the whole race secondoverall, so the team wereobviously doing somethingcollectively right. This is all abouttaking the right navigationaldecisions and making the right sailchanges at the right time.
There were downsidemoments. We worked four-hourshifts by day and three hours atnight. Imagine having to get up at3.00am in a storm and having todo a sail change. Needless to say,there were a few words said atthis time in the morning!
Having said that, we had toplan things before we went on tothe foredeck where you can hearlittle except the sea anyway.Planning and using simple,straightforward commands wasthe rule. A couple of sail changesdid go wrong and one of thesewas actually caught on film - wewill put that one down to atraining exercise!
The core crew on my yachtranged in age from 25 to 59. Itincluded a couple of relativeyoungsters who really weren’t sureyet what they wanted from life.There was also a lovely lady of 52who ran a bed and breakfast inDevon and was taking partbecause her children said shecouldn’t do it and she wanted toprove that there was life in the oldgirl yet!
One of the first things we didwas to arrange a team-buildingsession where we looked at thecapabilities within each of us todetermine how we thought wewere going to work together.Those with sailing experiencewould control tactics and the restof us had to formulate how wewere going to work together tomake the boat go fast. That’s thecritical factor in a race of twelveidentical boats - it’s all about howthe crew work together as a team.
In the March, we all wentaway together for a week’sbonding, physical training andcommunication techniques. Wealso carried out assessments ofourselves to determine what typeof characteristics we had. Wefound that we had a lot of‘shapers’ and not many ‘finishers’- which meant that we wouldhave to pay particular attention tomaking sure that tasks werefinished.
We held social events forfurther team bonding, as well asqualifying sailing days in whichthe core crew worked outprogrammes in conjunction withthe ‘leggers’. Peter and I knewthat we would join the boat atSydney, when it had alreadytravelled half way the round theworld. By then, things wouldinevitably have changed and itwould be hard for the new‘leggers’ to bond. This was a bit oftrepidation for us, so we weredetermined to talk to the ‘leggers’from previous legs to see howthings had changed - in the hopethat we would hit the groundrunning.
Nexus / Did things work out likethat?
Caroline / We joined at thestart of the longest and toughestleg of the race, where teamworkwould be absolutely vital. I confessthat, for the first day, Peter and Istuck together. But, once weknuckled down and got involved,the crew realised that we couldplay a major role. We found aniche where we could make adifference. Perhaps our businesstraining helped, making us a bitmore flexible in how we were ableto deal with people.
Courtesy of Team Compaq at BTGC
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For over twenty years,healthcare in Saudi has beenrapidly developed through alarge public sector supported bya much less significant privateone. Many large hospitalprojects of 500-plus beds werebuilt for the Ministry of Health,particularly in the larger,western cities of Jeddah on theRed Sea coast and Riyadh, thecapital - leaving the east of thecountry less well served.
Signals had been sent out bythe Saudi government thatlegislation compelling thesignificant expatriate populationto have private health insurancewould be forthcoming. Therewas an expectation that such aruling would come into forcelast November and, althoughthis did not materialise, it isconsidered likely to happenwithin the next year or two.
“Work started a few yearsago on the planning anddevelopment of an ambitious500-bed private hospital in theGulf town of Al Khobar in theEastern Province”, reportsDouglas McLaughlin, (WarwickMBA 1992/95) and now directorof planning and developmentfor the project . “Known as TheSaad Specialist Hospital, it willultimately provide a range ofservices comparable with thosefound in the larger urbanteaching hospitals in the UK.
“With its location near otherGulf states such as Bahrain,Qatar and the United ArabEmirates, both the nationals ofthese countries and expatriateworkers are within thecatchment area for advancedmedical treatment”, he says.
An unusual aspect of theSaad project is its sheer scale fora privately owned facility. Theonly other private hospital ofsimilar size to be completedrecently is in Buenos Aires,Argentina.
Saad’s new outpatient clinicwas opened in 1995 andextended in 1997. Three yearslater, the first phase of thehospital itself opened, withclinical diagnostic services suchas radiology, laboratory andemergency room. In Februarythis year, the first inpatientswere admitted and it isanticipated that two hundredbeds will be in use by the end ofthe year.
Local competition can be ofextremely good quality, but theservices and treatments offeredinvariably tend to be of a morestandard medical level. The Saadhospital is aiming to developand sustain markets both inthese core services and withadditional specialities.
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“This should include data ondemographics, epidemiologyand morbidity. Once the datahas been collected, a financialand risk management modellingprofile needs developing toensure that there is a robustbusiness case for sustaining theproject,” he concludes.
The stages for strategicplanning are:
Data gathering � Analysis of healthcare needsand uptake, both regionally andnationwide.� Review data from sources suchas the Saudi health ministry andthe World Health Organisation.� Assess potential with localbusiness, multinationals andinsurance companies. Includeprice comparison.� Evaluate competition, bothcurrent and potential.� Establish the components of amarketing strategy.
Market analysis� Analyse gaps in the market.� Establish the primary servicesthat determine business volume.� Establish likely patientnumbers - by type andspeciality.� Project indicative marketshare.� Assess potential hospitalrevenue from patients.
Financial and risk modelling� Estimate capital cost of theproject.� Estimate assumptions ofoperating costs.� Determine a three, five andten year financial projection ofrevenue and costs.� Apply sensitivity analyses.� Calculate the key investmentratios such ROCE and ROE.
When positioning a newprivate hospital in Saudi Arabia,the scale of the market becomesevident. About twenty percentof all hospital inpatient beds arein commercial hospitals,although the proportion variesaccording to location.
Several factors have emergedin determining the hospitalposition. These include the priceand range of services, user-friendliness, quality and staffqualification and medicaldesignated facility status.
“Establishing a successfulcommercial hospital can beaccomplished. The correctmarket entry can be sustained ina competitive environment,”Douglas concludes g
Planning forprivate medicalcare in SaudiArabia
The Saudi government has provided free healthcare for generations. BothMinistry of Health hospitals and military hospitals were developed rapidlyin the post oil-boom years of the seventies and eighties. Since then, thecountry has had to contend with a reduction in oil revenues and anexpanding population. With the provision of free healthcare puttingpressure on finances, the government is encouraging an enlarged privatemedical market.
“To establish a newcommercial hospital,particularly one thatprovides services such ascardiac surgery, organtransplantation and otheradvanced medicaltechniques, needsstrategic planning”
Douglas McLaughlin.
However senior you are it always helps to have an ally in the wider market place.
We at Chapple work alongside you to help you establish your long term career
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Warwick is hosting the first international MBA Refresher staged bythe AEA Alliance of business schools. Key note speakers from EMLyon, HEC Montreal and WBS will team up to present thisstimulating three day MBA update programme.
Jacques Nantel from HEC Montreal, will develop the theme of e-marketing.Louis Hebert, also from Montreal, will explore strategic alliances and mergersand acquisitions. Fred Seidel and Christophe Chaumont, both EM Lyonprofessors, will cover the issues of business ethics and knowledgemanagement.
Professor Andrew Pettigrew and Professor Leslie Willcocks from Warwick willpresent their latest work on leadership and strategic e-business.
Priced at £2000 the Refresher from 21 - 24 January 2002. Don’t miss thisunique opportunity to meet MBA alumni from Europe and North America. Onbehalf of our French and Canadian partners and Warwick Business School welook forward to welcoming you to this groundbreaking event.
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International MBA Refresher - January 2002
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The concept of deploying an interim manager to fill a short-termbusiness need is not new one: it has been around for twenty years ormore. But it is a weapon in the management armoury that is nowbeing ever more widely used. Acknowledgement of this trend hasnow been made by the Institute of Management, which has set up anew professional body for everyone involved in this specialised skill.
The concept of engaging aninterim - or a temporaryprofessional manager - isgenerally assumed to have beenborn out of the leanmanufacturing ethos of thenineteen-eighties. Then,flexibility was king. Smaller,leaner teams were expected toembrace more advancedtechnology and, at the sametime, to improve their businessperformance on a continuingbasis.
Perhaps partly influenced byNorth American businessculture, the search for flatter,more efficient structures led tothe delayering of management.But, as many businesses foundto their cost, this could have itsdownside, too - it could lead toa loss of expertise. There wouldbe times - caused mostly bycrisis or by other catalysts forchange - when the leanermanagement team lacked thetime or the wherewithal to dealwith a new or unexpectedchallenge.
And, of course, at times likethese, it is a paradox of businesslife that the need for swift,incisive management is at itsgreatest.
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- the interim solution
bridging a management gap
So was born a new breed ofinterim managers andorganisations specialising in oradding these management skillsto their existing portfolio. Theprimary skill they brought wasthe ability to assimilate achallenge very quickly and thenplace an appropriate temporaryexecutive into the clientorganisation to fulfil a clearly-defined short-term assignment.
The corporate crisis couldhave come from many causes -from bridging a sickness,recruitment or under-achievement gap right throughto addressing wider businessissues such as performance orprofit downfall, turning thebusiness round, downsizing orclosing a plant, companyfloatation, introduction of newtechnology and even preparingthe whole business for sale.
Whatever the problem, itsresolution will bring with it theneed for change, to take somehard decisions and often toconvey some bad news. Againstthis, the interim should havetwo considerable advantages.The first is that he or she isquite unfettered by corporatepolitics or machinations and thesecond is that he or she shouldbe able to take a hands-on rolewith just one objective - to meeta clearly defined brief within adefined time span.
Interim management inactionOne member of the institute isStuart Firth, former WarwickMBA whose Masters was gainedback in 1977 when they werestill classed as MScs inmanagement and businessstudies. Today, Stuart runs hisown interim managementbusiness from his office atRipponden in West Yorkshireand has kindly opened hiscasebook to Nexus readers toshow how he used interim skillsto resolve three differentproblems for three differentcompanies.
The turn-roundThe first assignment came fromSmith and Nephew MedicalFabrics Ltd. The company hadbeen taken through an extensiveturn-round exercise, in whichthe MD had integrated severalscattered factories on a singleBrownfield site. Facilities hadbeen upgraded on a product linebasis and the wholemanagement ethos and structurehad been revolutionised.
As part of this process, the1200 strong workforce had beenhalved. At the next stage, Stuartwas consulted to carry out adetailed review of the functionof the engineering andmaintenance departments,which had played a key part inthe reorganisation. One of theoptions was radically todownsize the departments, adelicate exercise that wouldrequire considerable diplomacy.
Within ten days, he hadinterviewed all members of thedepartments concerned, as wellas ‘customer’ departmentalheads in order to identify theirnew needs. A proposal wasdeveloped which strengthenedthe product line management,made full use of the potentiallyredundant staff and provedacceptable to all. It was, said theMD, “a true win-win outcome”.
The skill of interimmanagement can be used toaddress a far wider range ofproblems than thosedemonstrated by the three testcases. As a career developmentopportunity, it offers a specialist,professional role giving a varietyof short-term as well as medium-term assignments across manysectors of industry andcommerce. It requires a numberof personal attributes includingvision, motivation, HR skills, achallenging mind, diplomacy,mentoring, building trust andmany others.
There is just one healthwarning, suggests Stuart Firth.“This is one career where lifereally does begin at forty.Anyone younger is unlikely tohave enough street experienceor career scars to be able to walkin on Day One with thenecessary credibility in the eyesof the rest of the team” g
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nexus | autumn 2001
So, typically, what sort ofskills does an interim bring tohis or her role? Vision and theability rapidly to grasp theoverall situation may suggestsomeone of more mature years,possibly over-qualified andcertainly with a blend of humanresource management skills. Agood interim will have theability to focus quickly on thedirection in which the businessneeds to go, the route that itmust take to get there and -perhaps most importantly -convincing other key people ofthe need for change.
Professional accreditationBut now there’s anotherpotential string to the interim’sbow - accredited membership ofthe relatively newly-formedInstitute of Interim Management.By establishing and settingstandards, membership bringswith it evidence of an approvedlevel of qualification andexperience. It helps to developinterim skills, endorses theexperience of interim managersto their clients, promotesinterim management as arecognised profession - and isexpected to raise industrystandards and awareness ingeneral.
As an employmentopportunity, membership of theinstitute should take its placealongside other potentialprofessional opportunities whenspecialist career routes are beingconsidered. Membership at oneof three grades brings with itassessed status and an industrycode of practice. It also offers acontinuing professionaldevelopment scheme (CPD) aswell as a members’ help line,networking opportunities, itsown website and access toextensive managementinformation.
For the first time, theburgeoning interimmanagement profession now hasa single voice together with aframework for distinguishing theaccredited professional fromthose that just use the name.
Filling a gapDownsizing and rationalisationlay at the heart of things whenthe Standard Piston RingCompany Ltd., was bought bythe Swedish Daros Group. Thenew owners were looking toreorganise and consolidate theirworld-wide manufacturingoperations in Sweden, Italy, UK,Germany and China.
It was clear that the UK sitewas most likely to be relegatedto a distribution role only,needing a fifth of its originalworkforce. When the MDposition became vacant,recruitment of a long-termreplacement was therefore not arealistic option.
Stuart was retained asinterim managing director toanalyse the UK business and todrive the strategic changes. Overa period of just a year, saleseffort was refocused andreinvigorated ‘Cinderella’products resulted in a newbusiness stream. Simultaneously,operational facilities werereorganised and production wasmoved overseas in a plannedmanner.
Tony Lodge, who recruitedStuart, is sold on the interimmethod of filling managementgaps. “He was quick to identifythe underlying problems and toapply solutions which resultedin a steady turn-round. Irecommend this route as amethod of managing changewhen a permanent appointmentis inappropriate,” he said.
Illness crisisThe illness and early retirementof the long-standing MD of theUK arm of the German-ownedspray technology business,Lechler Ltd. led to an acutemanagement successionproblem.
As an interim manager,Stuart Firth was given theassignment of revitalising thebusiness. “It soon became clearthat challenges of the transitionwere compounded by difficultmarket conditions and a historyof under-investment in capitalequipment”, he explains. “Anentirely new business plan wasformulated, accepted by theowner and implemented over aperiod of two years. As a result,clearer customer focus wasachieved, succession problemswere overcome and productivity,service levels and quality wereall improved”, he concludes.
Contact
The Institute of InterimManagement
t 01536 207307w www.ioim.org.uk
Firth Interim Management
t 01422 824324e [email protected]
Stuart Firth or the InterimManagement team with HRHThe Duke of Kent
Why are some organisations consistentlysuccessful and others less so? Do leadersmake a difference and if so how? As anexercise in research, it is difficult to proveleader effects, says Professor AndrewPettigrew of Warwick Business School.People have already largely made up theirminds on the subject - they just assumethat leaders do make a difference. Hisfindings on the subject suggest that weshould avoid easy assumptions.
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?does leadershipmake a differenceto organisationalperformance
On the subject of organisationalperformance, many of us areguilty of holding comfortablebeliefs on the subject. One isthat innovation leads toperformance gains. Another isthat increased funding leads toenhanced performance - just pilemoney in and, somehow orother, performance will rise.
A slightly more complexview would be that acombination of innovation andfinancial investment - plus theright kind of leadership - mightlead to improved performance.But here you are dealing withthree sets of factors, rather thanjust one. So, already, you can seethat concentrating on leadereffects alone as an explanationfor increased performance isbound to be somewhat limited.
And we’ve all observed thecontrary situation - aperformance decline directlylinked to people trying toinnovate. We’ve also seenfinancial investment dissipatedin improvement programmes.So, a contrary position canalways be seen when youexplore these issues.
The romance of leadershipSo, why is it that peoplecontinue to believe that leadersare important? One reason isbecause of what some peopledescribe as ‘the romance ofleadership’. This could bedescribed as the extent to whichwe want to believe that leadersdo have an effect. We want tobelieve that they do, so weoverstate the importance ofleaders and we over-attributeleader effects.
Equally well, we also knowthat when things go wrong,people have a tendency toblame the state of theenvironment around them.They point to a changedeconomy, technology failure orthey blame customers or otherstakeholders. Equally, whenthings go right, they want tobelieve that it was leader-inspired.
This ‘romantic’ simplicitycan be seen through variousphenomena, just one aspect ofwhich is that ‘impression’management and self-servingleader behaviour are simplyreinforced by the needs offollowers and others. It is easierto believe in leadership than toprove or establish leader effects.
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nexus | autumn 2001
It is this that leads me to saythat although leaders areimportant and leader effects arequite crucial, we shouldn’tconcentrate our attentions onleaders alone. Indeed, my beliefabout the links betweeninnovation, change andperformance is that we shouldthink about fixing the system,and not just the people. This isnot to rule out the significanceof people, but it does meanlooking at a wider set of factorsin assessing why things dochange and why performancegoes up and down.
What you can concludeabout leader effects is very muchdependent on who you define asthe leaders. Do you mean theboss, the CEO, the board or thetop executive team? Do youinclude the leaders going downthrough the senior and middlelevels of the organisation? Somepeople define leaders in anarrow way, but I think mostpeople today take the view thatyou have to have an inclusiveview of leadership - right downinto the depth of theorganisation.
We all know that someboards think up great ideas andhave great visions that theycannot implement. The leadersare pulling levers that are notconnected to anything. Bytaking an inclusive view ofleadership, you can observe thatthere are people who lead indifferent ways and at differentlevels. If the whole leadershipsystem is not linked together, it’squite common that things don’tget done and the performanceexpected by the effects ofleadership fails to materialise.
The education analogyThe first example deals with thetopical issue of schools and wasused by me as part of the firstannual NHS Confederationlecture. If there is one elementof government policy wherepeople think leaders make adifference, it’s in schools. Firethe head teacher, replace him orher with another person - andthere’s going to be a turnaroundin that school!
A lot of government policyand the actions of OFSTED havebeen made on the assumptionthat poor performance inschools is attributable toweaknesses in leadership in theschool. But, who do you believethe leader to be - is it the headteacher or the senior
By changing structures, werethey decentralising, were theyde-layering? Were theyintroducing project forms oforganisation? By changingprocesses, were they investing inhorizontal networks, were theybuilding IT capability in order toease communication betweenpeople and were theyimplementing new humanresource practices? By boundarychanges, were they developingstrategic alliances with othercompanies, were theyoutsourcing non-core activitiesand were they de-diversifying -shrinking the portfolio of thebusiness?
What we did was to measurethese factors at two pointsduring the 1990s to see howmuch change was going on,where was it going on and inwhat elements the changes wereoccurring.
The result of the study is aclear and interesting one aboutorganisational performance.Basically, we showed that withinthe companies that were moreor less simultaneously changingtheir structures, processes andboundaries, there was a clearstatistical relationship betweenthis pattern of innovation andhigh levels of performance.
By contrast, in thosecompanies that only madelimited change - particularlythose that only changed theirstructure and their boundaries -not only did this limited changefail to lead to higherperformance, it actuallyproduced negative performanceconsequences.
So, what these results showis the importance of factorsother than leadership alone.They underline the importanceof making sets ofcomplementary innovations -that feed off one another andreinforce one another.Performance gains require doingmany things together.
Performance effects aredependent on the whole systemaction and certainly not just onchanging leader or altering thepattern of leadership at the verytop, although this can have aneffect. It is a question of fixingthe system and not just thepeople. It also shows that leadercompetence and effectiveness isonly as good as organisationalcompetence and effectiveness.Both need to be dealt with.
Does it also include theboard of governors? Does it alsoinclude the influence of theparents and the local educationauthority? You can’t fire themall - so it’s the head who getsfired if things go wrong.
In fact, the schools that havebeen placed by OFSTED inspecial measures category arerequired to change their leader.From the OFSTED research,there is some evidence, bothstatistical and anecdotal, thatchanging the leadershipactivities plus the processes plusthe personalities in failingschools does make a difference.But it is still the head that getsreplaced!
Business performanceAnother example - from thebusiness sector - illustrates themore general problem ofexplaining performancedifferences. It broadens thediscussion away from just theleader to the widerconsiderations that might affectorganisational performance.Here at Warwick BusinessSchool, we have just completeda big study of new forms oforganising and companyperformances among European,Japanese and US firms.
The data from the Europeancompanies - ranging from thoseemploying 450 people right upto the largest - shows someinteresting findings aboutperformance differences. Wemeasured the extent to whichthey were changing theirstructures, changing theirprocesses and changing their
The BP case studyThere is an excellent example ofthis from the corporate life ofBP. Today, BP is regarded as thebest-managed company inBritain - but it wasn’t always so.Now, it is the largest companyin Britain and is the secondlargest oil and gas company inthe world. It has beenresponsible for making quitedramatic changes in its industry,changes that have not onlyaffected its own performancebut have also forced itscompetitors to react. So, justhow has BP had such a powerfulimpact?
BP did get into a pattern ofmaking whole-system change -but it took them upwards of sixor seven years before the effectsof making sets of changesbecame apparent.
During the nineties, it hadthree leaders. John Horton, thefirst of these, was chief executivefrom 1990-92 but was asked toleave the company because of itspoor performance. Yet he startedthe innovation process in theorganisation that provided thefoundation for its later success.You might call it unfortunatetiming! The benefits were notcoming through fast enough tobe reflected in the bottom line.
His successor was DavidSimon who was a different sortof leader and a differentpersonality. Shrewdly, he did notthrow away all the processes ofchange that Horton had begun -he saw that what Horton hadstarted was quite fundamental.Simon attended to the shortterm needs - to improve theperformance and reputation ofthe company - but he kept tothe longer-term patterns ofchange. These were to do withstructures, processes andboundaries of the business.Within three or four years,successive linked changes werebeginning to be reflected in aquite significant improvementin performance.
Then it turned again. Simonwas replaced in 1995 by John(now Lord) Browne, whostimulated another pattern ofchange as a result of the mergerwith AMOCO, ARCO andBurmah Castrol, creating theworld’s second largest oil andgas company. At the same time,Browne also perpetuated manyof the patterns of change thatboth his predecessors hadstarted.
So, here are to be seen bigleader effects, made not by oneleader but a succession ofleaders.
Rather than creating a majordisjuncture, they had built onone another’s achievements andavoided the risk of importingtheir own ideas and their ownperspectives that could push theorganisation off course.
The BP story illustrates thepower of complementarities - ofmaking innovations in sets -over and above the changes inthe pattern of leadership andstyle at the top.
It illustrates well that leaderscan make a difference. But youneed to look at leader effectsover the long-term and youneed to look at other kinds ofinnovation that have beenattempted by the organisationover time.
Boardroom behaviourNo look at the significance andimportance of leadership at thevery top could be completewithout a study of board levelbehaviour. Not much researchhas been done on this subjectbecause boards are rather privateinstitutions and they don’t likeacademic researchers fromuniversities prying behind theirgilded curtains and - askingawkward questions!
Recently, however, TerryMcNulty and I have been able toobtain a research grant from theEconomic and Social ResearchCouncil to carry out work in thisarea. We found a number ofinteresting things about boardsthat cannot yet be linkedstrongly to performance, butfrom which deductions abouttheir effectiveness can be made.So, what is an effective boardand what are some of theconditions that create thiseffectiveness?
Warwick Business Schoolinvestigated a sample of about120 chairmen, chief executivesand main board directors ofmajor PLCs. We found a changein the character - the conduct -of large company boards in theUK. The direction of change wasfrom minimalist to maximalistboards.
A minimalist board is usuallyrun by an individual or a smallfaction. It is often run by thechairman - or by an unholyalliance between the chairmanand chief executive. There arebig power asymmetries betweenthese two and the rest of theboard and the executives.
The non-executives have lowlegitimacy - indeed, ineffectualpeople are selected so that theboard power system will bemaintained.
These non-executives arestarved of information, so theyhave a limited perspective. Theyare often confined to theboardroom and not allowed tomeet and talk to people outside.The board agenda is oftenstylised and predictable in itshistorical reporting. In otherwords, people are always lookingin the rear-view mirror - lookingat financial information aboutthe past and not really thinkingabout the future. As a result,there’s no space for issuespotting - even less for dealingwith the real issues. There islittle or no challenge, dissent orconflict on these boards.
This is a characterisation, ofcourse, but evidence from theresearch shows that - right intothe 1990s - there were manyboards showing thesebehavioural characteristics. Itcan only be assumed that thesecharacteristics did have a bigimpact on the performance ofthe company. Indeed, the reasonwhy these boards ultimatelyfailed was a performance deficit,often leading to the removal ofone or another of the powerfigures who brought about thistype of social conduct.
By contrast, an increasingnumber of boards are nowmoving away from thesecharacteristics and towards whatcan be described as maximalistboards. The trigger for change inthis transition is invariably aperformance crisis bringingabout a clamour for change.New personalities come in witha new purpose - to open up andenliven the board. There’s oftenan attempt to define roles moreclearly and the boundarybetween board members is morecarefully delineated.
This helps in terms ofattributing responsibilities.There’s often a tendency tochange the calibre of the non-executive directors as well - tobring in big hitters who havegot real legitimacy. The boardagenda processes are oftenopened up, so that, instead ofhistorical reporting, there’s a listof more forward-looking agendaitems. Space is created on theagenda for spotting issues andresolving them.
Non-executives areencouraged into this process andalso into the strategy process -often through meetings awayfrom the boardroom, so theygiven a better sense of what theindustry’s choices are within thecompany. They may also beallowed to roam outside theboardroom to meet seniorexecutives in strategic businessunits.
Through this informalcontact, they are able to accessinformal information - thatwhich is not written down on apiece of paper!
So the encouragement ofgreater informality means a freeflow of information and thebetter perspective to create amore trusting relationshipbetween the parties,encouraging a more open boardprocess.
Although nobody has triedto link this change fromminimalist to maximalist boardsto board performance, ourassumption is that it is a keyfactor in turning companiesaround. Certainly, where boardswere changed in turnaroundsituations, many of thosebehavioural characteristics wereimportant.
ConclusionsSo, to return to the question,does leadership make adifference to organisationalperformance? First of all, easyassumptions about leadershipeffects should be avoided,especially given the tendency toover-attribute them.
But you can’t make thecontrary conclusion - to say thatleaders have no effect. Theproblem is to balance out thecompeting explanations. I havetried to deal with this in twoways - firstly by looking at workin schools, where there isevidence of leader effects, andsecondly by looking atorganisational change and itslinks with performance. Here,the point is made about theimportance of whole systemchange - of making manyinnovations simultaneously.This should avoid the danger ofgetting caught in the middleand making partial moves whichmight not create higherperformance and which mightactually create negativeperformance effects.
The case of BP showed thecombined effects of severalgenerations of leaders, which isnot well understood. Peopletend to look at single leadersrather than a succession ofleaders. Finally, we beamed rightinto the boardroom under theassumption that a higher-performing board would lead toa higher performing company.We don’t know this - it’s aproposition that hasn’t reallybeen tested. We looked at part ofthe proposition - at some of theinputs into board effectivenessand to improvements in boardperformance. I tried tocharacterise those inputs bytalking about this change, whichwe had observed in our ownresearch from minimalist tomaximalist boards g
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� The ability to create and update when necessary your own unique Career Profile� The notification of relevant recruiter Approaches, via MBA-Direct, with your ideal job/s � The power to remain anonymous until you decide otherwise and accept or reject Approaches from
recruiters in total confidence� Exposure to a far greater number of job opportunities� Access to up-to-date information on trends and developments pertinent to you
Who has already registered?Thousands of Alumni and current students from leading business schools around the world have alreadyregistered with us. Including those from LBS, Bath, Strathclyde, Cranfield, City, Imperial, Bocconi, Insead,HEC (isa), Harvard, Kellogg, Rotterdam and of course Warwick.
Which recruiters are using MBA-Direct?Already many leading blue chip companies and major Search and Selection firms are using Executives-Direct tohelp with their recruitment needs and recent partnerships with The Industrial Society and Rebus HR will help toprovide Executives-Direct with significant reach and presence in the recruiter marketplace and represents astrong endorsement of the quality and positioning of our service.
Alumni Wedding Bells
When Anthony Cowell and Sarah Hosie married at All SaintsChurch, Royal Leamington Spa on 1st September, they weresurrounded by friends and former classmates from Warwick.An impressive total of fourteen alumni (including the brideand groom) and lecturer and tutor Dr David Arnott, attendedthe wedding.
Anthony graduated in 1996 with a BSc (Hons) inmanagement sciences and Sarah graduated in 1994 with a BSc(Hons) in accounting and financial analysis. Best manSpencer Chartres and guests Richard Curtis, Peter Savage,Andrew and Jane Balhatchett, John Ellard, Rob Sanders, KevinCalder, Kevin Cook, Stuart Gregg, Ben Harnwell and DrewHerd all graduated in 1996.
The happy couple currently live in the Cayman Islands andboth work for KPMG.
Prue Hardwick (MBA 1997/00)
Nominated for an AA Good Breakfast award in her first yearof operation, Prue Hardwick’s Hare on the Park B&B at No 3Emscote Road, Warwick couldn’t have got off to a better start.Even more of an accolade when you discover that the menuis virtually vegetarian and so there is no bacon with the eggsfor breakfast at Prue’s place. Cheesy bread and butterpudding, raisin and cinnamon waffles with honey and cream,or creamy scrambled eggs with smoked salmon are just a fewof the tempting alternatives on offer. Using only organic foodin her kitchen, Prue bakes her own bread. Situated twentyminutes from the NEC and close to all main Midland routes,you can contact Hare on the Park at the details listed below.
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www.wbs.ac.uk
Contact
Anthony Cowell and Sarah Hosiew www.caymanhearts.com
Hare on the Parkw www.thehareonthepark.co.uk
