On face value, this story seems like any other story about disruptive technologies changing the market and the fallout from companies who were either on the front or back foot.  The real tragedy for Kodak was that the company was on both, the front foot and then the back.  How could a company with over 100 years experience in essentially capitalising on disruptive technologies get is so wrong in this case?

From reading the media coverage, the failure occurred on a single front.  Kodak was too closely wedded to their core competencies in organic chemistry and optics.  For any company playing to their strengths hardly seems like it would result in failure but in Kodak’s case sticking to what was familiar saw the company become more defensive rather than open to innovation.  The real twist in the story became public in 2008 when an engineer from Kodak reported that in 1975 he developed a prototype for the first ever digital camera.  He said management responded by saying, “that’s cute – but don’t tell anyone about it”.  Following from the 1975 breakthrough, in 1981 Kodak commissioned an extensive study to investigate the core technologies and likely adoption curves around film versus digital photography.  The findings were digital photography had the potential capability to replace Kodak’s film business altogether but it would take around ten years for this to occur.

This information tells us that Kodak firstly invented the digital camera that would eventually lead to its demise but also had knowledge of a 10 year timeline for which they could prepare.  This story of Kodak shifts from one of tragedy to perverse complacency.  However, in light of this information Kodak did invest heavily in digital technology.  It was the failure of Kodak to view the potential of digital technology as a way to push their core business rather than completely refine it.  Kodak’s entry into the digital camera space was about allowing customers to view then choose which images they liked to put on film for printing.  This hybrid of digital and film still allowed Kodak to tout their core business whilst dabbling in the digital environment.  Needless to say the product flopped.

This story of Kodak really highlights a couple of business imperatives.  Firstly it shows us that organisations can often get to closely wedded to their competencies to the extent that they are blinded to an ever evolving market place and avoid asking serious questions like, “is our business still relevant?”  The second imperative highlights the extreme difficulty in organisational transformation.  In this case, Kodak had all the right information to make an insightful strategic choice but still failed to do so.  Kodak management presided over the development of the breakthrough digital technology and also made an accurate assessment of the market risks and opportunities they presented.  Yet in light of this information, they still could not make the right decision.  It will be interesting to see how (and if) Kodak can reinvent themselves in the future.

If you Google the word ‘leader’ or ‘leadership’, there are 487 million hits. That’s a lot of information which can only add to the confusion of what leadership really is. Leadership is not the sole responsibility for ‘people at the top’, everyone can learn to lead by tapping into the abilities that lie within each of us. Leadership differs from management in that it makes the followers want to achieve high goals, rather than simply bossing people around.

True leaders always go first; they set the tone, inspire, coach and above all, lead by example to gain commitment. To inspire your team into higher levels of teamwork, there are certain things you must be, know and do. These do not come naturally.

Leaders walk their talk – in true leaders, there are no gaps between what they say and their actions. Leaders think, act and behave in line with the value and behaviours of the organisation.

Aligning the organisation with its desired brand values is a continual and complex process. Yet, I’m amazed that all too often companies adopt a single focus approach around internal communications. It’s absolutely essential that any internal branding initiative is supported by internal communications but NOT in the absence of addressing the role of managers. Flooding the office corridors with brand posters, handing out glossy brand books and company merchandise will not alter employee behaviour. This has to be addressed by management behaviours. After all, the actions and behaviours from an employees direct manager influences what the employee does and how they act, not the poster behind the water cooler! Unfortunately, the so called ‘sexy’ side of internal branding seems to receive a lot more attention and resources than the critical elements of developing managers into brand leaders. Ask any employee who has attended a grand, Hollywood style internal brand launch, “what really changed the following day, month, year”? I would bet that in 9 out of 10 times the response would be “bugger all”.

Our approach to aligning brand with culture is to start with management, from executive management to middle management down to supervisory positions. This is where the communication blockage lies. Most, if not all managers lack the skills, competence and confidence to lead by example. It becomes even more complex and challenging when we throw in brand as well. So these people need to be developed and empowered to make a difference with their teams. Clearly, the CEO needs to set the tone, but it needs to be cascaded down throughout the organisation. One off leadership training days serve little purpose. What’s needed is a structured, continual learning and development program.

Current thinking is based on transformational leadership. Transformational leaders work towards a common goal with their team; putting team members first, trusting them and developing team to the next level. They inspire their team members to ‘live and breathe’ the company’s brand. Not because they have been asked to, but because it makes sense for the individual, the customer and for the organisation.

There are generally five characteristics of transformational leaders:

1. Model the way – people follow the person then the plan. It is the leader’s behaviour that wins respect.
2. Inspire a shared vision – enlist others in a common vision or objective by inspiring confidence to achieve extraordinary things.
3. Challenge the process – search for opportunities by seeking innovative and better ways to do things. Support good ideas and make things happen.
4. Enable others to act – foster collaboration by promoting cooperative goals and building trust. Engage the team.
5. Encourage the heart – recognise contributions by showing appreciation for excellence. Celebrate your success stories with the team.

By all means introduce an element of fun and enjoyment into your internal branding program. And use all available internal communication tools to keep the company brand front of mind across your organisation. Above all else, engage your management teams to take the message to the frontline through their individual behaviours and abilities to communicate brand to their teams. Ensure your managers are consistently displaying “on-brand” characteristics; walking the talk and integrating brand into daily decision making, setting of goals and priorities and actions.

Conditions vary massively, some sites that have recently been established have temporary dongas located on portable semi-trailers so that the process of extracting ore can begin without camp construction. These sites could only be described as primitive. Dongas are very small, there is very little communication with the outside world and the people that work in these environments are generally long term experienced miners. 

Other sites that are in full production mode have wonderful facilities with basketball courts, swimming pools, gymnasiums and full buffet dining.  Many would think that these more established sites would have the most engaged and committed workforces. 

Whilst the infrastructure varied greatly, I was surprised to find that some of the harshest environments with the worst facilities had the most engaged, committed and motivated groups of people with low rates of turnover.  

Conversely, some of the sites with the best camp facilities had highly disengaged workforces with massive rates of turnover. 

Further exploration revealed that the degree of engagement at any site was significantly influenced by the quality of the leadership and the management at site. Sites where there was a collaborative leadership approach where workers views, thoughts and opinions were valued were significantly more engaged. 

On the other hand, sites where leadership was autocratic, dictatorial and lacked respect for their workers had highly disengaged workforces with high levels of worker dissatisfaction resulting in high turnover rates.

Many managers at site claim that it is not possible to give workers a say in determining their own future with such a strong focus on safety and following the rules.  In my view, these managers use safety as a cop out for their own lack of capability as managers and leaders.

Many employees at site explain that the softer skills of management have been lost in the harsh environments of the outback. Empathy and understanding or as Daniel Goleman termed it emotional intelligence, are arguably more important in harsh conditions. In harsh conditions a person does not have the support of his/her family.

There are many factors which influence engagement in FIFO environments, factors such as length of roster, accommodation, travel time, access to communication, food, facilities, working conditions and salary.  Indeed, it is critical to understand the relationship and relative importance of each of the factors when managing a FIFO workforce. In Herzberg’s world these factors are all hygiene factors.

Insight and understanding of these factors can allow tradeoffs to be made between finite resources. For example, shorter rosters can be offered in exchange for a lesser salary, or telecommunications networks could be installed before a gymnasium.  Analysis of this kind allows organisations to make informed decisions about prioritisation of investment with a view to maximising retention of the workforce.

Irrespective of decisions about investment in hygiene factors, my recent experiences would lead me to believe that the type of manager on-site is one of the most important drivers of the quality of a FIFO employee’s life.

Positive Hiring Intentions – most employers are planning on hiring more people

Widening gap between candidate and employer salary intentions – most candidates expect more than employers are prepared to pay

Skills shortages – 54% of employers in Australia are experiencing difficulty in filling critical positions. This number is significantly higher in WA and QLD. Australia is ranked fourth out of 39 countries for skills shortages in critical roles.

These factors combined have moved the pendulum of power well and truly back into the favour of employees. Reality is that well qualified candidates in the trades, sales and marketing, engineering, mechanical, accounting and technical trades have an abundance of choices.

Candidates in these professions can afford to be choosey about which roles they accept. For recruiting Organisations having a good reputation or brand in the marketplace becomes mission critical. To minimise turnover rates Organisations need to be able to deliver on the psychological contract that exists between them and their employees. Work places that don’t satisfy employees basic and higher level needs will find it increasingly difficult to attract and retain staff.

Not only do organisations need to meet candidates increasing salary expectations, they need to provide an environment where people enjoy, achieve and are actively engaged in their work. Leadership, strong organisational values, a great culture and team based incentives become increasingly important in this kind of environment.

Smart Organisations are being proactive in positioning their Organisation to deal with this storm. They are developing their Employment Value Proposition (EVP) and they are investing in building the culture of their organisation to maximise their ability to attract and retain their people. Increasingly successful organisations also measure the level of engagement of their workforce. They continually look for ways to deliver on the promises that they have made to their existing employees and look for ways to become more attractive to potential new hires.

The bad news for employers is that this situation is not a temporary. In spite of the Global Financial Crisis the ageing population and the mining boom mean that this storm is likely to continue to worsen for years to come. Organisations need to reinvent themselves and review how they engage their existing and potential workforces to successfully navigate the storm.

Good managers are described as being people and task oriented, honest, open and importantly, fair (Shroers 2009).  Good managers are also managers that show initiative, responsibility, drive for achievement and are emotionally stable (Yukl 2006). Managers that show surgency, conscientiousness, flexibility and intellectance have positive correlations with managerial effectiveness.  A negative correlation has however been identified with managers that exhibit agreeableness and fairness with managerial effectiveness (Yukl 2006).  This is also supported in a recent Harvard study that revealed that ‘fair’ managers are perceived by peers as less in control, less powerful and having limited ability to appropriately reward and punish.  Yukl’s (2006) research also suggests that being agreeable and fair as a manager can result in a diversion from task orientation in favour of interpersonal and emotional focus in the workplace.

To demonstrate this phenomenon, two high-ranking managers from Pfizer were examined as part of a Harvard case study into what makes a manager successful.  Whilst both managers were high-performing, it was the manager with a reputation for “toughness” and exhibited often abrasive behaviour that received a tap on the shoulder for the newly-vacant position of CEO.  This contrasts with the second manager with a reputation for showing respect, fairness and in turn being respected by her team members.  This ‘tough’ and strong management style was not only considered necessary for a promotion to the company CEO, it was also strongly favoured across other industries examined  (Wiesenfeld et al 2011).  It is these perceptions and the reputations of how powerful managers are, that most influence their promotional chances, rather than perceptions of how fair they actually are.

This in some ways demystifies why some managers do not behave consistently fair.  Managers see respect and power as two mutually exclusive avenues to influence, and many choose the latter.  Companies that support bad management can face dire consequences.  Those loyal to fair managers may be opposed to the promotion of new managers showing rude and abrasive management styles.  In the Pfizer case, it was found that employees loyal to the ‘fair’ manager resigned upon the appointment of the ‘tough’ manager to the position of CEO.

All is not lost – the species of fair managers are not destined to become extinct. Rather, changes in organisational design and culture can support managers exhibiting ‘fair’ management styles. Organisations can show support for fair management behavior.  Some simple examples include using a measure of fairness in managerial performance reviews.  Managers that are viewed as fair can also gain views of power.  This is suggested that patience is needed, however returns are promised through managers persevering with showing a fair managerial style.

The question is whether Volvo is appropriately consolidating its brand equity as a “safety” oriented brand, by representing afresh as edgy, sleek, and target to the luxury oriented customer.  Arguably this has the potential to undermine such established brand equity, and Volvo must prove the credibility of such a strategic change to espouse what are clearly different organisation visions and values.

Clearly the change in ownership has triggered and driven this new strategic direction. However this story goes a little deeper than just a change in brand meaning.  What lie’s at its heart is two competing visions of the future held by the different stakeholders.  On one hand there is the current CEO and his belief that Volvo should continue to dominate the safety and fuel-efficient position it has held for a long time.  On the other there are the new owners who see a potential for Volvo to compete in the luxury car space against already well-known and established brands like BMW, Mercedes and Audi.

The importance of having a concise and definitive company vision has been well documented.  A vision of a desired future state is essential in any strategic transformation; this was advocated by Harvard Professor John Kotter and is a lesson to be examined in Volvo’s case.  In Kotter’s article, “Leading Change: Why Transformation Efforts Fail” (HBR, January, 2007) he proposes eight errors that make a change effort unsuccessful.  The most important take-away for this Volvo case is “Error 3 – Lacking a Vision”, or as it is in this case the lack of a concise, directive vision.  The two leaders at Volvo had competing views on the direction of the Volvo brand, the choice of “stick to your knitting” or compete in a new luxury market.

This situation may be a warning sign for the two leaders at Volvo that it is time to meet on common ground about where Volvo needs to be in the future; especially if the brand wishes to stay the leader in the family-friendly space whilst being an effective competitor in the luxury space. Here, Kotter would argue that Volvo needs a sensible vision that develops a picture of the future the brand wishes to achieve.  Without this vision any initiatives can easily dissolve into lacklustre efforts and take Volvo in the wrong direction or nowhere at all.

A company’s vision, therefore, should not be underestimated. In the case of Volvo, what does it signal to customers and the market that its leaders cannot agree on the brands direction, and what does it signal to Volvo’s employee’s who will be instrumental in driving the brands direction? A fractured vision will only mean a fractured workforce which is not a desired state to be in.

Understand people are your most important asset, and a critical start point when designing and implementing winning business strategy to prosper in 2011.  Organisationally, your top four priorities should be:

a)   Retention of the company’s best people; managing talent well and communicating often (especially during the GFC).

b)   Engaging your entire staff throughout this recession – make them feel safe, confident and that its “business as usual”.

c)   Be sure to control downsize activities carefully; number one lesson here is avoid staff cuts at all costs – a last resort only, and if you go this particular route, ensure quality and detailed communication is provided around the downsize actions; and

d)   Be sure that your organisation “walks the talk” on communication and costs.

As the CEO, or Head of HR / People Strategy, you’ve the responsibility (and a very strong business case) to hire quality talent. Best practice in this regard includes:

• Use key people;
• Defend training and leadership development budgets;
• Actively communicate and provide feedback; and
• Ensure that time, thought and a budget is invested in order to position your organisation for the rebound and for necessary improvement to capitalise upon opportunities.

We are fast approaching 2011; workers are disengaged as ever. They now notice unemployment is lagging, they’ve seen their work colleagues cut away during the recent GFC and aspects of their promotion/rotation/remuneration affected. Many are outright disgruntled and now with wider employment opportunities available to them, retention must be a fundamental strategy and key to maintaining your organisation’s knowledge base and ongoing productivity. People are searching for a clear job purpose, 360˚ relationships in their roles and a positive culture.

Recent research from the National Institute of Labour Studies indicates that unlike previous recessions, the skills shortage of 18 months ago has influenced companies to hold onto staff, rather than hiring and training young workers to boast the skills pool.

Professor Kostas Mavromaras from the Institute, highlights that generally employers want to keep experienced staff and typically cut training when business is down. In doing so they set themselves up for future shortages of qualified people. In this recent financial crisis, we see companies avoiding laying off many of their older workers, which differs from previous times.

This is a bonus for the baby boomers, who have watched their retirement age increase as their superannuation decreases. However, it’s not so beneficial for the younger generation of workers who are going to be left with serious skill gaps in the future.

It is over a decade ago that McKinsey’s strategic paper on the impending “War for Talent” was released, spurring HR leaders to upscale their talent attraction and talent management strategies. A key driver identified was the threat of the aging workforce and the impact this will have on our business world in the future. Aptly coined, the world population ‘pyramid’ will transform into a population ‘coffin’ by 2045 due to the changing age distribution. This will impact labour force participation and potential economic growth.

For many companies, the impending skills shortage is just something they will have to deal with in the future. Right now the focus has been on reducing costs and training has been one of the cuts on the top of that list.

Research suggests that some companies have cut training to the bone, while others have only reduced what they have considered as ‘non-essential’ training.

Leadership training you would think would remain on the company training agenda as an essential item. After all the leaders of the company are the very people who are being looked on to help the organisation pull through the tough times, spot the opportunities for growth and accelerate the company out of the economic downturn.

In addition, leaders are being looked on to drive employee engagement and productivity. With over 21% of the current Australian workforce disengaged, company management certainly has a task ahead of them. There is also the emergence of a new ‘style’ of leadership requiring additional skills such as building resilience and leading in crisis, that leaders need as part of their armour for future success.

If you think developing employees can wait until the dust settles and the economic resurgence begins, think again. Not only does this send a clear message to the people whose talent is the most highly valued, it also leaves your organisation vulnerable to under-performance through skills shortages and you may find yourself left behind in the wake of your competitors when the market turns.

McKinsey interviewed Robert Sutton, noted author and management professor from the Stanford Graduate School of Engineering. Sutton discusses how tough times intensify the work environment and as a leader you are under even more spotlight. He speaks of a “toxic tandem” evident in current times where leaders tend to be more oblivious to the needs and actions of their subordinates. Further, subordinates have a heightened focus on trying to figure out what is going on.

So tough times present a unique leadership challenge for most executives and Sutton suggests four tips that will improve leadership effectiveness – prediction, understanding, control and compassion.

• Prediction – if some sort of stress is evident, it does less damage to people when they know they are safe versus when they are threatened. Communicate your prediction within a timeframe i.e. “there will be no lay-offs or pay cuts for 90 days; nothing is going to happen, so you’re safe until then”. Provide some psychological safety.
• Understanding – it is well documented that, independent of how stressful things are, human beings need to know why things happen. Provide an explanation to staff why actions, events etc are occurring. Part of getting rid of the fear is having an increased level of understanding.
• Control – it is beneficial to give people some control over the way things happen. Announce changes in advance, tell them why things are happening and provide people with options i.e. in the case of factory closures, different exit options.
• Compassion – show compassion not just in what you do but also how you do it.

Sutton’s piece emphasises the need to continually upskill leadership teams to be more effective leaders. The reality is businesses today have to make tough decisions to survive. Organisations which effectively manage the change through skilled leadership will certainly come out on top.

View the entire interview here:

At the top of the list of budget cuts for most companies in these uncertain times is marketing and training. So, while companies may ‘believe’ investment in development will return a benefit, many are not laying the funds on the table to make it happen.

Perhaps there is a different way to think about this essential investment.

Firstly, in a challenging business environment, people need different skills and tools to do their job effectively. This is even more evident if cut backs and retrenchments have been implemented as a means to weather the storm. With an increased focus on performance and productivity, organisations now need to do more with less resources and are demanding more from staff.

Secondly, the purpose of cutting training and development may be to save money in the short term, but what impact will this have on quality and the service that is delivered to customers? We all know a loss of customers will ultimately lead to a loss of revenue – so if this is your rationale think this through carefully.

With a significant proportion of the workforce reportedly ‘disengaged’ and ‘unproductive’ organisations need to ask themselves not ‘how can I afford to invest in training?’ but ‘how can I afford not to?’. Most importantly, they need to consider what type of investment will have the largest impact and return on the in the immediate term.

One area that can not be overlooked is leadership development and the type of skills leaders, managers and supervisors now require to successfully lead an organisation through uncertain times. For example, creating clarity from uncertainty is undeniably a leadership skill needed now more than ever.

Other areas to consider include:

• Leading highly effective teams
• Engaging and developing others
• Leading in crisis
• Empowering, initiating and managing change
• Conflict resolution and negotiation
• Building resilience
• Leading with courage

 

While 81% of companies are thinking about it, stand above the pack and actually do it. Training is an investment not a cost and upskilling your workforce will pay dividends – literally!