Knowing Is Not Enough

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It isn’t what we know that determines the outcome; it’s what we do with what we know.

Example 1
Prior to “Operation Market Garden” in September 1944 the senior Allied commanders knew that the 9th and 10th SS Panzer Divisions were located on the corridor that the Allies planned to use for their narrow-front thrust. This made achieving the objective highly unlikely.

More than 16,800 Allied troops were killed, wounded or captured in a fruitless effort that was essentially targeted at assuaging a bruised ego.

Example 2
In December of the same year the Germans launched a tactically brilliant offensive through the Ardennes, inflicting heavy losses on inexperienced Allied troops.

Just like Market Garden 'It was not intelligence (evaluated information of the enemy) that failed. The failure was the commanders and certain G-2's, who did not act on the intelligence they had,' according to one of Patton's subordinates.

Although both of these failures to listen came close together, they are by no means unique. Similar failures had preceded them in earlier times and others have followed in later times.

Example 3
The North Vietnamese Easter Offensive of 1972 was similar and as one author has pointed out "Though the location, numbers and types of forces were not the same, the command assumptions, the weather and the use and misuse of intelligence had almost the same catastrophic effects in both clashes.... "

Example 4
Ten years later, in the South Atlantic, the Falklands war may have been avoidable. In any event it was undoubtedly made more costly and riskier by the intelligence failure that preceded it. British officials were unresponsive to warnings that diplomacy had failed and invasion was imminent.

Example 5
In 2003 it was Iraq. As the White House has acknowledged, intelligence on Iraqi weapons programs did not drive its decision to go to war.

The intelligence on Iraq was there. It did not get things wrong and thereby mislead policymakers. Once again the leaders were insensitive to information that suggested that the course of action on which they were embarked was likely to lead to disaster.

These examples are drawn from the military sphere simply because mistakes there tend to more visible and better documented than failures in business. But similar failures in business abound. Failures where the enterprise does not give sufficient weight either to facts within its purview, or relevant facts easily revealed.

Many people, let alone businesses, are uneasy acknowledging that many of the conventions and principles they operate on are unwritten, unspoken and unconscious. Psychologists estimate that 95% of the things we say and do each day are done on “autopilot”, that is automatically, unthinkingly and routinely.

And the very familiarity of such actions mean they go unrecognised and unquestioned long after they cease to be either safe or appropriate. Thus it is that we wake up one day to find ourselves in an awful mess without realising quite how we got there.

The tragedy is that working with either a business coach, or an NLP Practitioner for even a short period of time will begin to raise awareness of the subconscious paradigms we are running and what the implications might be.

Make just one New Year’s Resolution – start working on raising your awareness of yourself and your business so that you can improve your chances of recognising the warning signs before it is too late.

Clinging to the Wreckage

UBS, Switzerland's largest banking group, has just written off $37bn (£18.7bn) of its sub-prime investments.

Following an internal investigation demanded by the Swiss Federal Banking Commission, the Swiss version of our own dear FSA, it admitted a series of mistakes including inadequate supervision, poor risk management and a failure to react quickly enough when the sub-prime market started crumbling.

UBS was so focused on racking up ever larger profits that it “forgot” every silver lining has a cloud.

This is its first full-year loss (Sfr4.38bn for 2007) since its came into being 10 years ago following the merger of Swiss Banking Corporation and Union Bank of Switzerland. Planned job cuts are rumoured to run to more than 3,000 people.

As one might expect of the Swiss, those in charge have shouldered their full share of the responsibility and suffered the inevitable consequences. The Chief Executive, Peter Wuffli, was ousted in July last year, followed by the CFO, Clive Standish and the Head of Investment Banking Huw Jenkins. This month it was announced that the Chairman, Marcel Ospel, would not seek re-election.

Meanwhile, here in the UK, RBS came up with a further £5.9bn of write-offs on bad debts yesterday having already declared a £1.7bn write-down of sub-prime investments in December. However, you would search in vain for any admissions of abject personal failure by top management, let alone a principled resignation. In any industrial company the chairman and chief executive would both have been fired and forgotten by now. Not so with RBS.

Apparently RBS's has two excuses: (1) things have changed, and (2) it didn't foresee quite how bad things would become. Well, isn’t that what leaders are paid to do? Doesn’t leadership imply vision – the ability to see and foresee, rather than stumbling over the truth, picking themselves up and hurrying off as if nothing had happened (Churchill). And if they fail to uphold their end of the contract should that contract not be properly terminated?

According to Sir Tom McKillop, the RBS chairman, the board is unanimous: the current team is the one to take the bank forward. On what logical basis should that be the case? Those that have engineered dramatic expansion are rarely adept at managing either a holding operation, or retrenchment. Those call for very different skills. Endangering the ship when it’s in stormy seas, based solely on your capacity in calm waters, constitutes reckless conduct in anybody’s book.

Marianne Jennings, Professor of Legal & Ethical Studies at Arizona State University has identified the belief by management that they are so brilliant and innovative that the mundane rules of accounting, corporate governance and even basic economics do not apply to them as one of the seven signs of ethical collapse. RBS fits the bill.

Of the five leadership traits identified by Kouzes and Posner’s research that was done for the book ‘The Leadership Challenge’ namely:

~ Honesty
~ Forward-Looking
~ Competency
~ Inspirational
~ Intelligence

RBS seems to fall short on the first three.

If the Swiss banking fraternity have the principled leadership qualities needed to do the right thing then those privileged individuals on this side of the Channel should exhibit the same qualities.

Your Credibility is Fragile

The spectre of a major employer saying one thing and doing another rises again as Shell prepares to cut 3,200 jobs.

In the past Shell have explicitly recognised how important their employees are to the continued success of the enterprise. In May 1997 Cor Herkstroter, President of the Royal Dutch Petroleum Company, delivered a speech highlighting the need to “safeguard the interests of shareholders, our staff and others who work with us around the world”.

He went on to declare “our most important asset is our people.”

One wonders why a company would consciously and deliberately choose to dispose of such a key resource.

Any professional stands or falls, not by their technical proficiency, but by their credibility. If the President of a company states publicly and unequivocally that, “we are linked by our shared values - integrity, honesty and respect for people - and our belief in the importance of trust, team working, professionalism and pride in what we do,” then all stakeholders, including the employees, are being invited to accept it as a fact.

It serves nobody, least of all the business community in general, to have those values cynically cast aside in pursuit of ephemeral profits.

Important assets and core values persist over time. Cor Herkstroter recognised that too: “I believe that one of the Group's greatest strengths has been our ability to take the long view - even when this has been unfashionable.”

May 1997 was over ten years ago. Things do move on. But these were not passing sentiments of the moment for Shell. The Shell Report 2001, a detailed and glossy exercise in CSR, affirmed: “our achievements depend on the efforts of Shell people all around the world. Their expectations drive our commitments.”

The section boldly headed ‘Business Principles’ continued the theme with the assertion that “It is recognised that commercial success depends on the full commitment of all employees.”

Credibility is hard to accrue and easily damaged. Not having credibility is tough, but professionals can earn it, painstakingly, over a period of time. However, having once had it and then lost it puts the professional in a much worse position. The loss tends to be permanent as staff, suppliers and customers adopt the understandable habit of taking everything you say with an appropriate amount of salt. As Alfred Adler recognised: “Life happens at the level of events, not of words,” or, as the Chinese have it: ‘Talk doesn't cook rice’.

One can point to the performance of Shell over the years and argue whether it represents success or failure and whether that gives them commercial credibility. That is not the point. Shell have shed staff before this latest proposed trance, yet there is no way of knowing what the outcome would have been had they refrained from offloading people. However, if one accepts their own evaluation of the basis of their success, their staff are clearly and plainly a crucial ingredient. Therefore it follows – as night follows day – that sacrificing any of this valuable resource has to be detrimental to their outcomes.

Shifting those staff to outsource partners does not secure for Shell the same benefits it once had. The staff in question will be expected to identify with the interests of their new employer, not Shell. There will no longer be that “full commitment” to Shell that it once published and promulgated as a determinant of commercial success. Sorry boys, you really cannot have your cake and eat it.

While I believe that people are an indispensable part of any organisation’s success – simply because without people there is no functioning organisation – it is not necessary for you to share that view. What is essential is to survey your past declarations, examine your own values, assess what will deliver success and act in accordance with those tenets at all times. As a professional your principles are not expensive, they’re priceless.

“If your work speaks for itself, don't interrupt.” ~Henry J. Kaiser