Juanita and I in our new book and in our "WIN! How to succeed in the new game of business" masterclasses talk about the need to give autonomy to our people, to trust them and to not micro-manage them. But – and it's a big BUT – what we must never do is forget what we learned probably in our first ever position where we had people to manage –
 
You must never trust anyone 100%.
 
We all make mistakes, we sometimes have rushes of blood to the head, we sometimes go off the rails completely and sometimes there is unexpected malice and fraud.
 
It is our job as a manager - whether a first line supervisor or a CEO or Chairman of the Board - to provide, on the one hand a safety net to make it as safe as possible for people to make mistakes, but also to carry out all the regular checks and balances on what people are doing in order to protect the company and all its stakeholders.
 
That’s our job.
 
We need to do regular, random “audits” of what our people are doing - ask questions, do checks, look at analysis - everything to be reassured and confident that what is being done is what you want to be done - but, of course, without micro-managing or being over bearing.
 
By the way when it comes to financial irregularities - be they minor or major - we can never assume that we can safely delegate that responsibility to the auditors and rely on them to pick up any wrong doing. They simply don't.
 
Of all the businesses I have run, or had responsibility for, over the years I can think of four separate occasions when we discovered major financial wrong doing. In each case it was my finance director and I who uncovered it not the auditors.
 
Those of you based in the UK will know that Patisserie Valerie was a coffee and patisserie chain in the UK with around 200 shops and 3000 people. It had been bought by Luke Johnson in 2006 and floated on the stock market in 2014 and with Johnson retaining a substantial shareholding and appointing himself ‘Executive Chairman’.
 
A word about Luke Johnson: he is a ‘serial entrepreneur’ and media darling with – to this day – columns in national newspapers, and seen as a guardian of corporate governance practices. Although Chairman of PV was apparently  one of 33 positions he held!
 
Trading in Patisserie Valerie shares was suspended in January 2019 because two £10 million unauthorised overdrafts had been discovered. This later turned out to, in fact, be a £40 million black hole. Also, there was significant malpractice and fraud uncovered that had gone over on over a number of years - resulting in both sales and margins being significantly overstated.
 
The finance director was arrested and the CEO under Johnson left.
 
It has now been announced that the liquidators are suing the auditors Grant Thornton for £200 million for negligence.
 
However if you look at the business management, both the CEO and the finance director had worked for Johnson previously in two other companies. As “Executive Chairman”, of course, Johnson was in reality the “chief” executive and the buck for such  top level malpractice must clearly and completely rest with him.
 
Was he doing the fundamental basic checks and balances of the people under him the we talked about earlier as ‘chief’ executive? He cannot have been - he clearly had abrogated his responsibilities by over trusting people he had worked with for many years.
 
Apparently, over a number of years, the gross margins reported byPatisserie Valerie  were significantly better than those being achieved by the class leader of that sector - Starbucks. That should, surely have rung some alarm bells. A simple seven line, three year P&L analysis (as we advocate in Staying in the Helicopter®) should have led him (and indeed the auditors!) to ask some fundamental questions.
 
As a result of those questions not being asked 1000s of people have lost their jobs.
 
So – what’s the message? It really is quite simple. It is our responsibility as business leaders to look after the interests of all our stakeholders and the buck stops with us.
 
We cannot and must not assume that we can trust everybody to do the job we want them to do 100%.
 
It is our responsibility to do the necessary checks and balances no matter what position the person holds, no matter how well we know them or how close we are to them.
 
We must always keep the interests of all stakeholders  head and shoulders above every other consideration.

I remain convinced that 2021 is going to be a great year - eventually!
The very best,
Roger

There’s one skill that as business leaders we’re going to need now more than ever before ... COMMUNICATION.
 
I’m sure you’ve been communicating much more than normal throughout the entire crisis, but that’s got to continue. Your communication needs to be wholly honest, and share with people exactly the situation you and the organisation finds itself in, because we’re all in uncharted waters.
 
Your Employees
Number one priority has to be your employees. You need to be sharing with them very regularly, honestly exactly what’s going on.
 
All of us throughout these last months have suffered from different levels of anxiety. Your staff have been anxious about catching the COVID virus. They have been anxious about their relatives and friends catching the virus. They have been anxious about their jobs. They have been anxious about the country. They have had all kinds of anxieties. It’s something we need to recognise, and it’s something that we need to be helping with as far as we’re able, whilst always keeping our focus on our organisation and taking it forward to the new bright future.
 
Say to them: “I don’t know what’s going to happen in the future. It’s a new world we find ourselves in. But I promise you that I’m going to be working my hardest to try and ensure that the business gets back to where it was and kicks forward from there. I promise you that I am going to keep you informed throughout this period, and I will be absolutely as honest with you as I can”
 
I would recommend that you use video and it needs to be you, the boss, they see. They deserve to hear directly from the horse’s mouth.
 
Have a look at this video of Badar Khan, the CEO of National Grid in the USA speaking to his employees about recent events in there.

I think it’s an excellent example of employee communication that we should all aspire to and I’m indebted to my good friend Michael Dodd for sharing it with me.
 
Your Customers
So, who is the next priority after employees to communicate to? It must be your customers. I would suggest you need to be talking to your customers in a way you never have done before - be honest with them also.
 
You may need to say to them, “I hope you’ll understand, but at the moment, we aspire to but may not be achieving the sort of service levels we used to achieve with you. Please bear with us. We are working very hard to get back to where we were”
 
Share with them honestly what’s going on, but also ask for their advice. People generally respond to being asked for advice.
 
Maybe, “We’re thinking about moving into this sector, changing the way we do things from this to this.” Maybe for example, it’s doing more online. “What do you think about that? I’d love to have a chat with you about your views on the direction that we should go in as a business. I would value that.”
 
I have a classic car that I work on and one of the companies that I buy from regularly online is Car Builder Solutions. I was impressed by this note from them recently - just being honest and keeping their customers in the picture.

Your communication doesn’t need to be complex. It just needs to be from the heart.
 
Your suppliers
I suggest that you need to be communicating with them like never before. They are your lifeblood - so treat them as a member of your family!
 
Share with them what you're doing. Share with them things that they might find reason to feel optimistic about. If nothing else they will certainly look upon you more favourably than other of their customers.
 
Your Financiers
You need to be sharing with them also exactly what’s going on. But most importantly, your strategy for the future, your optimism about what you believe you can achieve, how you’re going to change the organisation, maybe new markets, new products new ways of doing things - to be successful from here on.
Also what you want from now - and maybe in the future.

I can’t finish without reminding you of some of the things that Juanita and I talked about in our last newsletter:

Strategy
There have been some markets, some sectors that have been irretrievably damaged through this period. There are big companies and organisations that have simply disappeared.
 
There’s a golden rule of business: “Sell to people who’ve got money”.
 
You need to find who they are - and they may not be the same people as before. There have been sectors and companies that have thrived through this period and are doing extremely well - focus on them.
 
By the way, Juanita and I have an ongoing list of the “winners” and “losers” here.
 
Sales & Marketing
We cannot emphasise this strongly enough:
What you and your organisation need now more than ever before are basic sales and marketing skills.
 
Your company needs to be knocking on both new and old doors and If you believe you or your people have not had the training they need on basic sales skills, get them that now. Invest in them. Invest in yourself, because that is what is needed now.

You need to get the business thriving again.

Finally, please keep smiling. The media, in my opinion, have simply been a disgrace throughout this entire period. They have been wholly negative about everything. They really haven’t helped individuals, organisations or nations move forward. We now need to be positive. We now need to be smiling.
 
A colleague of mine, Roger Martin-Fagg is an economist, regularly does economic forecasts, and rarely gets it wrong. Here is his latest which you’ll see is remarkably upbeat.
 
Some of this report is somewhat technical but even if you just read the headlines, it should make you feel better because we may just be coming out of this nightmare much faster than any of us think and be in a position where we can really kick on forward thereafter.
 
Please try and enjoy everyday. Please try and make sure every one of your employees, as far as possible, enjoy everyday!

Source: www.escapetheratraceradio.com/episodes/roger-harrop-how-to-win-in-the-business-yVPyDyJL?ref=podhunt

The FMCG giant plans to invest more of its marketing spend on “communication that is explicitly purposeful” as part of its growth framework for the next few years.
By Sarah Vizard on Marketing Week

Unilever is doubling down on its investment in brand purpose, saying it is important for both the short- and long-term growth of its brands that “stand for more”.

The focus on brand purpose is one of five key growth fundamentals for the company as it looks to boost both its growth rate, which has hovered close to 3% over the past four years, and improve its profit margin.

The investment in brand purpose comes alongside work Unilever has done to measure how brand purpose is perceived by the consumer and whether people truly understand this at the point of purchase.

“[Brand purpose] is important for the short-term, but also to ensure our brands remain relevant for generations to come,” said Unilever’s CEO Alan Jope, speaking on an analyst call on30 January to discuss its annual results.

“We are investing more of our marketing spend on communications that are explicitly purposeful as we have extremely strong data on the link between both purposeful communication and short- and long-term growth.”

Jope said Unilever gets the “biggest bang for its buck” when it has a high-quality innovation and motivates people to buy through purpose-led brand communications. “Then we see a multiplier in the effectiveness of our spend, it doesn’t require more [investment],” he explained.

With that in mind, innovation is another area where Unilever wants to “step up its impact” to focus on new products that can drive growth at a total category level. That means Unilever will be more decisive on which innovations to prioritise, make faster decisions on whether to accelerate, pivot or kill projects, and reduce focus on smaller projects.

We are investing more of our marketing spend on communications that are explicitly purposeful.
Alan Jope, Unilever

At the moment, around a third of its innovations are successful, a third it walks away from and a third need a pivot to see if they can be successful. Jope said he is “happy with that ratio”.

“We really know after 100 days with a high level of certainty which are the winners we should back and where we should cut our losses quicker on something that is not working,” he added.

Unilever is also focusing on improving penetration, which it defines as the number of households buying a product in a given period and where there is a direct correlation between market share and growth. That means Unilever will be addressing the long-tail of buyers, rather than core, loyal customers.

“We need to build the mental and physical availability of our brands through improvements in the quality of our advertising and strength of distribution,” Jope explained.

The final two areas of focus are designing for channels and providing fuel for growth, with Unilever able to invest in its brands due to savings from initiatives such as zero-based budgeting and organisational restructures.

Those restructures include, for example, the creation of Unilever’s 38 digital hubs and content studios, as well as its data centres. While the company admits building these has come at a “huge cost”, it was still 30% cheaper than buying in the expertise from outside and means it is set-up for growth in the future.

“With these five growth fundamentals we are trying to lay out a very important growth lever for us – execution. This is the easiest growth to unlock, but requires a step up in areas like the quality of our advertising and distribution,” said Jope. “That is what the five growth fundamentals are all about.”

Unilever expects brand and marketing investment to “step up” this year, both as an absolute number and a percentage of its turnover. In 2019 it was up €70m (£59.2m) in terms of spend, but flat as a percentage as it finds efficiencies in marketing spend from new digital tools and “rigorous” tracking of effectiveness.

By: Jeroen Kraaijenbrink on Forbes
Strategy is a mess. I mean the way of thinking about strategy that we know from our textbooks and that is taught at MBA programs all over the world. It is the approach to strategy that is driven by missions and visions, relies heavily on external and internal analysis, is supported by numerous tools, and targets at formulating and implementing an inspiring strategy that will beat the competition over the next three years.

If you don't know what I mean, have a look at the most recent edition of Johnson, Scholes & Whittington's (2017) "Exploring Strategy: Text and Cases" and browse its contents. With over a million copies sold, it is one of the most popular strategy textbooks ever and has basically set the standard. As such, it provides a good idea of the dominant way of thinking about strategy. 

The clearest indicator that strategy is a mess is the high failure rates reported in academic studies. Depending on which study you read, failure rates between 50 and 90 % are reported. So the range is wide. But even if a critical examination would cut this number in half, this failure rate is still extremely high and something we certainly wouldn’t accept from any other business process—or of anything else.

Another indicator that strategy is a mess is that the approach—as well as the field in general—is heavily criticized by many experts in business, consulting and academia. I'd like to single out one criticism because it is interesting due to its age. The approach above was already called "traditional" and "distorted" in 1984 (in a Long Range Planning article by Roy Wernham.) This is 35 years ago and the same year that the first edition of Johnson's textbook appeared. Ever since, similar criticisms have been voiced by numerous experts.

While slightly updated, the essence of the approach has remained pretty identical over the past decades. Furthermore, take a random alternative strategy textbook and you find basically the same contents. Of course, there are differences, but the canonical ideas of what business strategy is all about have remained remarkably stable over all those years.

This is interesting. It means we are stuck with an approach of which we know it doesn't work, but that we keep on promoting and teaching anyway. The main reason, I think, is that it is based on a set of myths about strategy that are so strong and convincing that we keep them alive, no matter what. The strength and broad acceptance of these myths make that we hardly dare to challenge them or look for alternative approaches.

Instead, we all do strategy as we are supposed to do and thereby perpetuate the myths.

To help break through the cycle, I will discuss in this series of articles the ten most important myths about strategy. They are:

1. Myth #1: Strategy Is About War
2. Myth #2: Strategy Equals Planning
3. Myth #3: Strategy Starts With Goals
4. Myth #4: Strategy Should Be High-Level
5. Myth #5: Strategy Should Be Simple
6. Myth #6: Strategy Resides At The Top
7. Myth #7: Strategy Can Be Made By Consultants
8. Myth #8: Strategy Derives From Data
9. Myth #9: Strategy Requires Offsites
10. Myth #10: Strategy Should Be Formulated

The first three myths concern the essence of what strategy is all about. As I will argue in those articles, strategy is not about war, not about planning and foresight and not about achieving predefined goals and purposes. The next two myths concern the key characteristics that strategy is supposed to have: that it is high-level and generic and that it is simple and easy. I will explain why it is a mistake to believe this. Myths #6 through #9 concern who should make strategy and how it is made. Discussing these four myths will show that strategy needs to be made in a different way than we usually assume. Finally, myth #10 challenges the whole idea of strategy as a noun, the idea that organizations need a definable strategy that can be formulated and executed.

Along with the demystification of these ten myths, the next ten articles will sketch an alternative view to strategy that, so I hope and think, helps break the dogmatic insistence on the traditional strategy approach as we know it.

By Martin Zwilling on Forbes

How is it that only a few business leaders and entrepreneurs seem to drive exceptional results and disruptive innovation in this rapidly changing market economy (marketquake)? These few seem more adept at executing market and technology turns, not just incremental evolution. They consistently take bold steps to stay ahead of the curve, often contrary to conventional wisdom.

Steve Jobs of Apple may have been the most visible example of this ability to “see around the corner,” but others often mentioned include Richard Branson (Virgin Group), and Howard Schultz (Starbucks). Most of you could suggest one more, but not many.

While searching for some structure that could facilitate learning the process, I came across a recent book by G. Shawn Hunter, “Out Think,” which offers a step-by-step outline for executives to achieve this stage of creativity. It suggests that they need to shed outmoded management and organizational biases, to foster an atmosphere where disruptive innovation becomes the norm.

Here is my summary and interpretation of the ten processes that he outlines as key to driving the disruptive innovations that entrepreneurs and startups all dream about:

1. Establish the engine of leadership (trust). An IBM Global CEO study listed integrity and trust in the top three characteristics leaders must have in today’s changing business landscape. These are about being true, honest, and authentic with others, inside and outside the company. Without trust, no one will ever follow even the best innovators.
2. Provoke with questions, not answers (inquiry). Peter Drucker once said “The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.” Exceptional outcomes don’t come from standard answers to pre-defined questions by conventional leaders.
3. Mine the organization for expertise (exploration). Identify individuals within the organization who have led innovation over many years, as well as newer employees that share the same vision. Just as importantly, you have to deal quickly with innovation blockers, including bureaucrats, power mongers, and skeptics.
4. Dream well – you may find yourself there (aspiration). Aspiring to greatness requires uncovering and exploring truths – including hidden truths – and sharing them with others. The most innovative leaders expect the best of everyone, and develop the guru in others. Emulating perceived heroes and role models can lead to realizing your own aspirations.
5. Embrace new kinds of risk (edge). Finding the “edge” is similar to “finding flow,” being “in the zone,” or being “in the groove.” These are states conducive to heightened engagement, accelerated learning, and creativity. These states allow deep curiosity, exploration, and highly focused activity to occur, leading to disruptive innovation.
6. Collaborate to innovate (connection). To create a culture of innovation, leaders must first create a culture of collaboration. That means engaging and inspiring the creative talents of others, respecting employees’ ideas, and bringing new insights into group decisions. With collaboration, differences add up to more than the sum of the parts.
7. Borrow prior and current brilliance (mash-up). By constantly mashing up prior ideas, applications, and outcomes, powerful new combinations emerge that have value to customers. Find people who deviate positively from the norm, intentionally destabilizing the work environment, and foster moderate creative tension that can spark innovation.
8. Get moving or accept the consequences (action). Action counts – not words – especially when that action is novel and unique. Once you are in motion, actually producing something, people will respond, contribute, collaborate, and spread the word, driving energy and awareness your way. Innovation does not come without action.
9. Make it your own (signature). A signature innovative solution is born of the core identity of those who have joined in the innovation journey, executed with the unique personalities of participants. Signature innovation is not easily copied or pirated, because it comes out of a truly unique cultural identity within a team.
10. Connect with “why” (purpose). In any endeavor, there must be a purpose behind it if we are to receive maximum enjoyment, fulfillment, and a deeper sense of our own role in its achievement. Many companies and leaders now reinforce and demonstrate a commitment to responsible behavior that goes way beyond profit and individual gain.

Exceptional innovation or “seeing around the corner” does not come from closing your eyes and jumping into the unknown. It comes from a focus on learning and following the processes proven by other great entrepreneurs and leaders. Even creativity alone is not enough to deliver real innovation, unless it is teamed with the tendency and tenacity to execute. How well are you executing on the drive to exceptional outcomes in your business?

By Gihan Perera

​I sometimes go out to breakfast or lunch with my 20-year-old stepdaughter, Abbey. As soon as the food arrives, she – like many others of her generation – pulls out her smartphone, takes a photo, and shares it with her friends on social media (And, to her credit, she then puts away her phone for the rest of the meal).
Of course, knowing that I have a futurist sitting across the table from me, I’m always curious about her behaviour, so I ask what she’s doing. She recently told me that she’s stopped posting these photos on Snapchat, and has now gone back to sharing them on Instagram. Why? Because Instagram’s recent update made it more attractive to post there, and she and her friends have all made the switch.
Abbey and her friends are happy to keep using whatever works best, and they don’t complain about the constant changes to platforms, apps, and technology in general. In fact, it’s quite the opposite: They crave change, rather than resisting it.
How different this is from the way many people think in business!
What about you?
Do you love change or loathe it?
Do you embrace it as an opportunity or resist it as a threat?
Do you sigh and call on your reserves of resilience, or get excited and shout, “Bring it on!”?
Resilience is not enough.
We hear a lot about the importance of resilience, which is about bouncing back, standing up every time you fall down, and getting back on your feet after every setback. But the problem with only being resilient is that you end up being reactive. Even the most resilient person, team, or organisation is still at the mercy of what’s happening around them.
And let’s face it – it’s no fun being constantly knocked down! As good as you are at bouncing back, facing a constant barrage of punches eventually wears you down.
That’s why you need something more than resilience – for yourself, your team, and your organisation.
Instead of just being resilient, build change management into your strategy, so you thrive in chaos rather than being battered by it.
The best organisations are “antifragile”.
In 2012, author Nassim Nicholas Taleb introduced the word “Antifragile”, in his book of the same name. Something is antifragile when it thrives on chaos. In other words, far from just resisting change or recovering from it, it actively grows and thrives in a chaotic, ever-changing environment.
For example:

• Day traders thrive in volatile (rising and even falling) markets.
• Healthy bones adapt and become stronger when exposed to pressure (Wolff’s law).
• Your immune system gets stronger by being exposed to small doses of stress (that’s how vaccinations work).
• Software products released in “beta” form (such as Gmail) develop faster because they are subjected to a barrage of user testing.

Are you building an antifragile team?
When it comes to managing stress, chaos, and an ever-changing business environment, there are four kinds of teams:
 
Which of these applies to you and your team?

• Are you brittle? This team performs adequately in a stable environment, but falls apart at the slightest stress. Life is a constant struggle, with no end in sight.
• Some brittle teams strive to be more nimble, where they artfully jump around, always looking over their shoulder, so they can dodge and avoid change. This can work in the short term, but it’s exhausting.
• Then there’s the resilient team, which we’ve discussed already. They bounce back, get back from every setback, and work desperately to cope with all the change around them. But they never get ahead, are always punch-drunk, and eventually get broken.

You might recognise your team or organisation in one of these three categories, but that doesn’t mean all is lost – unless you continue operating that way forever.
Now is the perfect opportunity to set a new direction for your team: Be more antifragile.
What does this mean in practice?
Here are three things you can do to get started:

1. Adopt an antifragile mindset. Most leaders have the mindset, “If it ain’t broke, don’t fix it”. But that doesn’t work in a fast-changing world. Instead, adopt the mindset, “If it ain’t broke, break it!” This doesn’t mean you wantonly break things just for the sake of it. But look for long-established practices and consider whether they are still the best way to solve whatever problem they are solving.
2. Engage your antifragile team members. If you already have young graduates or recent recruits in your team, consider yourself lucky – because they might already have the antifragile mindset. Instead of forcing them to conform to your established processes, engage them to develop something new.
3. Make “antifragile” a habit. Don’t wait until “things quieten down” to start building an antifragile team – that will never happen! Instead, make it a habit by setting aside time regularly for it – for example, at team meetings, with initiatives like reverse mentoring, and even with formal recognition and rewards for team members who embrace it.

Whatever you do, start now! In any industry, not all businesses will survive. Be more antifragile, and you’ll thrive – not just survive – in this fast-changing world.


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