CEOs

NHS can’t afford to reward failure like this

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hEFGqWFbq4rM2_uOeHbVLAwqtt1UqJeYUGU5cjJmrhSXx7TLIftY0Sy8Z6V9GiDxQzIaEJA=s151Katrina Percy, the former Chief Executive of Southern Health Trust, has been under pressure to stand down for months after the mental health trust she led failed to investigate the deaths of more than 1,000 people with mental health and learning disabilities between 2011 and 2015.

This catalogue of disasters in a Trust that states its aim is: “to provide high quality, safe services which improve the health, wellbeing and independence of the people we serve”.

Her LinkedIn profile describes her as: Passionate about leading organisations through transformational change of their clinical service; placing a very strong emphasis on the leadership and team development throughout the organisation to enable this.

That’s her opinion. An independent review found that “a failure of leadership” had led to these deaths going unanswered but she resisted efforts to resign until this week.

3016053_Katrina_Percy_14th_MayAnnouncing her resignation she said “I have reflected on the effect of the ongoing personal media attention has had on staff and patients and have come to the conclusion that this has made my role untenable.

I have, therefore, come to the difficult decision to step down from my role as chief executive after nine years.

“I am delighted to be taking on an alternative role, providing strategic advice to local GP leaders as they work with others to transform the way in which health services are delivered across Hampshire, and I feel that now is the right time to take on that new challenge.

I know and understand that many will say I should have stepped down sooner given the very public concerns which have been raised in the past months. I stayed on as I firmly believed that it was my responsibility to oversee the necessary improvements and to continue the groundbreaking work we have begun with GPs to transform care for our patients“.

Not one word of apology or any sign of contrition. This “I’m the only person who can fix it” attitude, despite getting the Trust in a mess in the first place (she was CEO for 9 years), is not uncommon. It’s also been used by Police Chiefs and other public sector chiefs.

And of course she’s delighted with her new role – she’s still being paid very generously – on the same £180,000 + benefits – in a consulting role. But why would GPs take advice from someone who has been criticised for leadership failures?

It now turns out that the post was created especially for her, there were no other candidates and no interviews. This is not the way to recruit top executives in any organisation.

And what were the chair and board members doing about the independent report? Well the Trust’s Chairman Mike Petter resigned days before the publication of the Care Quality Commission report which said that the Trust was still failing to protect people.

The interim chairman, Tim Smart, says “Katrina has ensured that Southern Health is now working more closely with other health and care organisations in the region to provide more joined-up care, so more people receive support at the right time and place

But Andrew Smith, the MP for Oxford East, said that her continued employment was evidence that the Trust was “not fit for purpose“. He also said “it’s disturbing too that her comments and those of the Trust blame her resignation on media attention rather than acceptance of her ultimate responsibility for the abject and fatal failings of Southern Health

The mother of a vulnerable teenager who drowned in a bath after having an epileptic fit , an incident a jury inquest ruled as caused by neglect, also criticised the Trust. “It’s good that she’s no longer CEO and hopefully there will be more movement at board level. To reward her with a made-up post at the same salary is simply scandalous”.

I think most people would agree with that sentiment.

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The World’s Most Disappointing Leaders?

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imagesFortune Magazine recently published a list of what it considered the World’s Most Disappointing Leaders.

These are mostly American and some names probably won’t mean much outside  the USA . This might reflect Americentricism or the fact that there are more disappointing leaders in America – which is hard to believe really.

Anyway the list, starting with politicians (a group which never fails to disappoint somebody):

The Mayor of Michigan, Rick Snyder, for refusing to accept any responsibility for his actions which resulted in lead poisoning in the water in the city of Flint. He blamed the government and the EPA instead. Well he is a politician and not the only one on the list.

The Governor of New Jersey, Chris Christie was considered the most craven one after first blasting Donald Trump’s candidacy “the President of the US is not a place for an entertainer” then declaring “… none better prepared to provide America with strong leadership …. than Donald Trump“. He’s been called a lot of names including puppet and ultimate lapdog.

The Mayor of Chicago, Rahm Emmanuel, prevaricated and changed his mind several times about the shooting of a black teenager by a white cop, first supporting then firing the Police Superintendent, objecting to a Justice Department investigation, and refusing to release the video of the shooting until a judge forced him to.

And the last politician on their list is Dilma Rousseff, President of Brazil. A former political prisoner during the military regime she is now facing impeachment for manipulating government accounts and hiding the worst recession in the country’s history. Don’t mention the Zika virus or the Olympic games!

Other contenders include Jeff Smisek, the former CEO of United Continental Airlines, which operated unprofitable flights to allow the chairman of the Port Authority of New York and Jersey to get to his vacation home.

The former COO  Al Giordiano and CEO Steve Nardizzi, of the Wounded Warrior charity project spent 40% of donations on salaries and expenses (compared to 10-15% in similar organisations). They are no longer with the organisation.

The co-CEOs of Chipotle, Steve Ellis and Montgomery Moran, clearly didn’t understand the concept of hygiene in a food retailing environment. They’ve had E.coli, salmonella, and Norovirus for which they blamed the Centers for Disease Control. Despite reassurances abut new food safety measures they had repeated problems and now face a federal investigation over its food safety issues.

Former FIFA Sepp Blatter and his intended successor Michael Platini were both banned from sport for 8 years. To say FIFA was a hotbed of corruption is probably an understatement after nine senior soccer officials and 16 others were indicted in the US for money laundering and racketeering.

Marissa Mayer clearly thought highly of herself when she was appointed CEO at Yahoo. And she was paid accordingly but has failed to deliver on her promises. If she successfully sells the business she reportedly gets $28m and if she’s sacked before then she gets a mere $8 million. Reward for failure yet again.

Martin Winterhorn, who led VW as chairman throughout its diesel emissions scam but allowed ambition to blind him to the truth.

Then there are a handful from the pharma/health industry such as Martin Shkreli, former CEO of Turing Pharmaceuticals who bought drugs cheaply and then hiked the price astronomically before being indicted; Michael Pearson, former CEO of Valeant, a Canadian pharma company which misstated its financial results after also jacking up drug prices; and Elizabeth Holmes, founder of Theranos a company that promised to deliver cheaper and less invasive blood tests – claims that didn’t stand up to scrutiny and were found to actually jeopardise patient safety.

Gustavo Martinez, former CEO of J Walter Thompson obviously thought he was Don Draper (Mad Men) in the way he treated staff and allegedly threatened to rape one of them.

Zappos boss Tony Hsieh, who lives in a trailer with two alpacas keeping guard, was regarded as a leadership guru who eliminated all bosses in his on-line shoe company and created a self-management model called “holacracy” in which the company was aiming to achieve a state of organisational enlightenment known as “teal” (This might be familiar to those who know about Spiral dynamics). Strangely staff didn’t take to it and left in droves.

Finally Parker Conrad, former CEO of Zenefits, an employee benefits company with a thousand employees worth $4.5bn. It turned out that 80% of its health insurance sales were made by unlicensed brokers and employees weren’t being given mandatory training. However Conrad obviously believed in employee benefits as there were office parties, drinking at work, wrestling and sex in the office. Zenefits’ culture was considered “Inappropriate for a highly regulated company“, although in this case obviously highly unregulated.

Fortune magazine didn’t rank any of these but invited readers to vote for their choice of Most Disappointing Leader. The result?

A Fortune Magazine readers poll says that Michigan Governor Rick Snyder is number one on the list of the 19 most disappointing leaders in the world, because of his role in the Flint water crisis. Flint had switched water sources while under an emergency manager appointed by the governor. The Flint River water’s corrosiveness leached lead into the city’s water supply. It’s believed many children were exposed to dangerous lead levels for an extended period of time. Critics say the governor should have acted sooner when indications of the problem first surfaced. Fortune Magazine awarded the governor their “Don’t Blame Me, I’m Just the Governor” award. A Snyder spokesperson says the governor is focused on fixing the problem, not on internet polling.

You might be wondering why President Obama‘s picture is at the top of this post. He wasn’t mentioned but surely he just be a disappointment after his failures at home and abroad?

And Tony Blair must also be in there with his post-political consultancy work (and his wife a human rights lawyer – allegedly).

Non-private sector fat cats

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relaxing_cash_1600_wht_7397I recently wrote elsewhere about the way some care providers pay staff basic wages but make sure that the people at the top are generously rewarded. Charity Chiefs have also been in the firing line too.

Housing Association chiefs are the latest to receive big pay rises with one now earning almost £500,000 a year. That’s David Cowans the CEO at Places for People who received an 11% pay-rise last year. Jane Ashcroft the CEO at Anchor saw her pay rose 7% to £366,000, and David Bennett head of the Sanctuary Group had a 15% pay rose taking his earnings to £319,00.

And the average pay of the top 100 housing association chiefs was £183,000, a 5.5% annual pay hike.

Taxpayers and tenants who are paying for these high salaries might wonder why and as the Taxpayers Alliance says “Housing Associations are not run for profit and proceeds are expected to be invested in new homes not splashed on huge pay packets

They inherited their housing stock from local councils and have done little to provide new homes, a source of frustration to the government. Four out of five housing associations didn’t build any new homes last year. The chancellor has criticised their lack of effort and plans to give the 1.3 million housing association tenants the “right to buy“. In the past local councils managed housing stocks and built good quality homes (as you can see from their resale value).

Of course the National Housing Federation is on the defensive about these criticisms and says they need “agile leaders with considerable experience who can manage complex businesses with turnovers in the hundreds of millions and employing hundreds of people.”

I’m not sure what’s so complex about housing associations which deal in, well, houses and their new build record is lamentable (local authorities have not done much either with third not replacing any of the houses sold off under the “right to buy” legislation). Hardly a high risk business with much competition. And that hardly explains the inflation busting pay raises they’ve received.

The NHF also claims that “On average the CEO’s pay is ten times that of their lowest paid staff – significantly less than in other regulated industries“. They are lies damned lies, and statistics – never trust averages, particularly when it comes to pay comparisons!

Size matters

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Bar room jokes aside there are several interesting studies on the impact that size has on the way we perceive people and the way they behave.

Study 1.

single_colored_chair_rotating_anim_500_wht_10055Andy Yapp, at MIT’s Sloan School of Management, examined the impact of ergonomics on people’s ethics.

They wanted to know whether or not your workspace would have an effect on your honesty.

What they found was that the bigger and larger the space and seating, which encouraged expansive gestures, the more likely it was that people would pocket overpayments, cheat on a test, and break the rules in a driving simulator.

In the first test they deliberately overpaid people for participating in the test and found that 78% of those with the bigger chairs kept it compared with 38% of people working in cramped spaces.

They also observed illegally parked cars in New York and found that when a driver’s seat increased by 1 standard deviation from the mean the probability that a car would be double parked increased from 51% to 71%.

The researchers say that when we have more space we can adopt more expansive postures and these often project high power whereas people working in constrictive spaces where they have to keep their limbs close to their bodies project low power.

The findings were not influenced by the height of the person nor by how corrupt the person might have been before the experiment as they were randomly assigned. The posture was the only variable.

This is interesting as I would have thought that people working in constricted or uncomfortable environments might be likely to cheat just to get back at their employer – a kind of organisational justice.

But we also know that power corrupts.

Yapp and his colleagues admit there might be cultural differences e.g. Asian norms of modesty and humility are inconsistent with the power posturing.

The research replicates that done at Columbia University (see below)  on the size of desks (and illegal parking in New York).

Main source: “Big chairs create big cheats” HBR November 2013

Study 2.

fountain_pen_writing_ink_1600_wht_11648Companies led by CEOs who have large signatures – an indicator of narcissism – perform worse than ones led by CEOs with small signatures.

Researchers at the Robert H Smith School of Business at the University of Maryland measured the signatures of 650 CEOs on 10 years’ worth of annual reports from almost 400 top 500 companies.

Large signatures, which have been linked to narcissistic personality traits such as dominance and an outsize ego, were positively associated with overspending, lower return on assets, but higher CEO pay relative to other industry peers.

The companies of these CEOs spend more on capital goods and acquisitions but had worse sales and sales growth over several years. They also had fewer patents suggesting a lack of innovation.

This is probably because narcissistic leaders dominate discussions, ignore criticism and belittle other employees.

The assumption about big signatures and narcissism is based on research by Richard Zweigenhaft which showed that people with higher self-esteem and more dominant personalities had large signatures.

It’s also the case that the CEO population is more narcissistic than the general population as well as having other dark triad characteristics.

Source: HBR May 2013

Study 3.

businessman_relax_desk_1600_wht_5638And size matters when it comes to honesty at work and in other settings.

Researchers at Columbia Business School think sprawling across an over-size desk makes people feel more self-confident and more likely to behave dishonestly to further their careers.

The researchers manipulated the size of workspaces and found that people were more dishonest on tests when their environment allowed them to stretch out.

In another study they found that drivers given bigger car seats were more likely to be involved in “hit and run” incidents when incentivised to go faster in a driving simulation.

They also checked 126 cars on New York City streets, half of which were parked illegally. They found that drivers with large car seats were more likely to be breaking the law.

Study 4.

figure_looking_observing_500_wht_13769When it comes to impressing potential partners, size really does matter.

Research conducted for Brother Europe, when it was promoting its new A3 printer range across Europe, seems to prove that.

Professor Richard Wiseman, a leading human behaviour psychologist and author of; “:59 seconds. Think a little Change a lot”, carried out the research and he found that in “Dragons’ Den-style” pitch scenarios, businesses using A3 marketing materials appeared ‘significantly bigger, more successful and professional’ than those using standard A4 prints.

Moving from size to weight, in a paper published by researchers at MIT, Harvard and Yale universities; “Incidental haptic sensations influence social judgements and decisions” it appears that our sense of touch (the haptic impressions) also influences our thoughts.

They asked people to scrutinise a job candidate by looking at a resume (CV) placed on either heavy or light clipboards. The people using heavy clipboards viewed the candidate as possessing a more serious interest in the job and as more likely to succeed than those holding a light clipboard. They conclude that; “First impressions are liable to be influenced by one’s tactile environment”.

They say that understanding how the tactile environment influences perception could be relevant in; “almost any situation where you are trying to present information about yourself or attempting to influence people“.

My colleague and I have always advised candidates to use heavy-duty paper for their CVs and covering letters rather than 70/80 gm supermarket special photocopy paper. This was based on creating a good impression (because first impressions count) but now it seems it’s not just how good it looks but how heavy.

As the researchers say; “physical experiences are mentally tied to metaphors …. when you activate something physically it starts up the metaphor related to that experience in people’s heads” eg heavy = solid, reliable, serious, and so on.”

And next time someone puts a clipboard into my hands ….

 

These posts appeared separately on SGANDA previously

Excellence has a downside

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SGA_diagram_7-bad-graphHigh performing leaders can undermine themselves by being afraid of showing their weaknesses.

Many smart professionals don’t do as well as expected and plateau in their careers because they get anxious about their performance which impedes their progress.

That’s according to Thomas J & Sarah DeLong in an article called “The Paradox of Excellence” (HBR of June 2011). The Harvard professor and his psychiatrist daughter say many high performers would rather do the wrong things well than do the right things badly. Because they are used to success they may shy away from really testing opportunities because they carry risk or require new skills and would rather preserve their image.

High achievers are often independent-minded and don’t easily ask for help and people may tell them what they think they want to hear anyway. So the trick is to have a good support network that will give you honest and constructive feedback.

We know leaders often move on before they experience failure so are not prepared for it and don’t learn from it – cynics might say they move on before they are found out. The DeLongs suggest that you need to expose yourself to new learning experiences that make you feel uncertain or even incompetent and to remember these are temporary feelings and can lead to greater professional ability. That all sounds admirable but I wonder if that is really possible when share values seem to rule corporate decision-making?

They also identify behaviours that can help you succeed but also get in the way. They say classic high achievers are:

driven to get results – but may be so involved that they don’t let colleagues know what they are doing and think helping others is a waste of time
doers- they believe nobody else can do things as well as they. They make poor delegators and may micromanage
highly motivated – but because they take all aspects of their job seriously may not distinguish between what is urgent and what is important
need positive feedback – they care what others think but may obsess over criticism
competitive – but may be obsessed with comparisons with others leading to a sense of insufficiency
passionate about work – but intense highs can be followed by crippling lows
safe risk takers – they won’t damage the company by risky moves but may shy away from the unknown and miss opportunities
guilt-ridden – they are driven to produce but no matter what they accomplish may feel they aren’t doing enough

The DeLongs are describing leaders and professionals who are behaving more cautiously then they should and thereby hampering their careers.

On the opposite side of the coin there are those who over-do their strengths and begin to demonstrate the dark side of their personalities, often with devastating results for themselves and people around them.

And they are not the first to suggest that leaders should show their weaknesses. Goffee and Morgan made the same point, also in HBR, in 2000 although they cautioned that leaders should do so selectively.

Queen Bees revisited

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P1010435Reading a “Women need not fear female bosses” headline in the Sunday Times reminded me of Putin saying ” the West need not fear Russia” earlier in the week.

Researchers at Columbia University in New York are saying that the real reason for a shortage of women at the top is down to men determined to hold on to their power. The findings are being presented to a conference for heads of girls’ schools.

This contradicts earlier research from 1973 that suggested women in positions of authority treated female subordinates more critically and essentially held back their promotions.

This study of top management teams at 1,500 companies was carried out over a 20-year period (I wonder if they took into account changing attitudes over two decades?).

They found that when a women was appointed as CEO it was more likely other women would be promoted into senior positions.

However when women were appointed to senior jobs below CEO the likelihood of other women following their example was reduced by 50%.

Analysing their data the researchers concluded that it was most likely men excluding women from the boardroom.

Women face an implicit quota, whereby firms seek to maintain a small number of women in their top management team, usually only one” say the researchers.

So the researchers concluded that the “Queen Bee syndrome” is a myth.

And on a positive note female bosses pay staff more, regardless of their gender.

 

Leadership – it’s tough at the top

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businessmenSince the recession CEOs have been leaving jobs more quickly than hitherto – albeit often with a generous payout. Think of Tesco or Thomas Cook, not to mention the banks. Sometimes you can’t help thinking people are being rewarded for failure.

Back in 2010 Ruth Sunderland wrote a well-referenced piece in The Observer: “Superheroes and supervillains – why the cult of the CEO blinds us to reality“.

She started by comparing the contrasting fortunes of the CEOs from BP and Tesco and suggests that businessmen are idolised out of all proportion and then become victims of a witch hunt when things go wrong (a bit like football managers?).

Some people argue that the “cult of the chief executive” requires bosses to be charismatic leaders rather than competent managers. Most modern CEOs don’t talk about making money but about “vision and values” and have a “mission statement” rather than a job description.

She quotes research that shows that fame and charisma, with a few exceptions, has little relationship to high company performance. In the past entrepreneurs like Rockefeller (founder of Standard Oil) or Victorian soap baron Lord Lever were larger than life but they were bringing something new to market.

With the exception of people like James Dyson, Bill Gates or Steve Jobs, most CEOs are not entrepreneurs (and haven’t invested in the companies which begs the question of why they get paid so much when they are not risking their own money – but that’s a different post).

Perhaps in difficult times we look for inspiration, influenced by the celebrity TV programmes like The Apprentice in both the US and the UK. Some CEOs undoubtedly succumb to narcissistic behaviour, a topic I have touched on more than once.See: “Leadership – the dark side“.

One contributor suggested that many CEOs are driven to succeed by trauma in their childhood which may help them to super-achieve but not have the personality to cope with failure. (This is not true for everyone. See: “What doesn’t kill you, makes you”). Egotistical CEOs may feel the need to take more risks to maintain or enhance their profiles which can then lead to spectacular failures with nowhere to hide.

There are also cultural differences with companies from Anglo-American meritocratic societies tending to go for star performers compared with the emerging Asian businesses preferring a more team-based approach. NB When Marissa Mayer was appointed as CEO at Yahoo in 2012 (having previously worked at Google) she apparently didn’t undergo any formal recruitment and assessment process.

As Professor Froud from MBS said; ” … in a large organisation success or failure doesn’t hang on any one individual” but an anonymous FTSE100 CEO said; “Leadership is emotional. It is about winning hearts and minds to a common purpose. It’s not just about one person, but it starts with one person“.

This is an updated extract of a post from SGANDA in 2010