Problems with Governance: ◦ ‘box ticking’ v. thinking◦ Structure v. behaviour◦ Avoiding risks v. creating opportunities◦ Developing policies, etc. v. implementation

Evidence about link between ‘Governance’ and performance:◦ Problem of ‘association’ v. ‘cause & effect’◦ Is association because ‘effective’ boards and management teams endeavour

to follow ‘governance’, HRD, etc ‘best practice’? Importance of the chairman of the board Overview of presentation: ◦ Differing approaches of the best run and OK companies◦ Creating a winning board and building a competitive company◦ Developing winning people – enabling them to live the values◦ Improving board effectiveness – Being World Class

Why are some companies /people more successful? Identify apparent critical success factors Survey and interview practitioners Rank responses in order of results/benefits Compare the top and bottom quartiles Isolate the factors that make a difference Publish critical success factors reports/books/tools

People Process

Technology

Supply Chain

e-business

Winning Business Customer Relationship Management

Purchasing Pricing

‘The Responsive Organisation’

‘The Competitive Network’

Information, Knowledgeand Understanding

The Knowledge Entrepreneur

Corporate LearningDeveloping a Corporate

Learning Strategy

‘Winning Major Bids’,‘Winning Business in …’

‘Developing Strategic Customers &Key Accounts’

‘The Future of the Organization’ ‘Creating the Global Company’

‘

Strategic Direction Performance Management

‘Creating Excellencein the Boardroom’

‘Developing Directors’

‘Transforming the Company’‘Business Process Re-engineering,

myth & reality’

‘Individuals and Enterprise’

‘Shaping Things to Come’

Clear distinction between winners and losers Critical success factors ◦ can be determined◦ can be built into processes and support tools

Success is directly related to the number of critical success factors put in place

Even the best companies could do much better Behavioural factors can be addressed:◦ Workgroup productivity can be improved◦ Board effectiveness can be improved ◦ Corporate performance can be transformed

Need to understand winning approaches in key areas, e.g. bidding, building relationships, differentiation, pricing, communication, etc.

Main differences between winners and losers are attitudinal and behavioural

With the same or similar processes, etc ….. winners do it differently

Ordinary people can be helped to understand, buy and behave like superstars

Organisation

Finance

People

Technology

Managementand business

processesand tools

Business Opportunityvision, goals, values

Business Environment

Determining what needs to be done

Deciding how to do what needs to be done

Reporting to stakeholders on what has been achieved

Ensuring what is done satisfies legal and ethical requirements

Ensuring that what needs to be doneactually is done

Creating the capability to do what needs to be done

Where do we want to be? (Visioning)

What are the gaps between where we are and where we want to be? (Gap analysis)

Monitoring and reporting what has been achieved (assessment and feedback)

Communicating plans and supporting their implementation

What do we need to do to close the gaps? (Action planning)

Where are we now? (Situation analysis)

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

Market PlaceUnderstanding

Listening tothe Customer

TechnologyResources

OrganisationalDevelopment

Products& Services

COREPROCESS

Analysis& Diagnosis

Corrective Actions &

Improvements

Monitoring

QIPPSP

BMK

ACTIONS LEARNING

CompetitiveIntelligence

ENVIRONMENTALASSESSMENT

•Economic / Social•Political / Competitor•Technological

SWOT

•Strengths•Weaknesses•Opportunities•Threats

SITUATIONANALYSIS

•Desired state•Current state•Barrier analysis

VISION

•Values•Priorities•Quality principles

MARKET MAP

•Case I High growth•Case II Mid growth•Case III Low Growth•Implications•Agreed direction

VITAL FEW

•Company•Functional

What are the major trends & developments in the external business environment?

How will they impact upon the company? How will they impact upon: Customers? Competitors? What needs to be done in response◦ at local level?◦ at operating unit level?◦ at group/corporate level? … to address problems and opportunities … to help customers respond

Stretching, distinctive and compelling vision that paints a picture of a better future

Desired and attainable state of affairs that can engage and motivate

A clear vision is of value internally and externally:◦ Internally it motivates people to achieve and focus their

efforts◦ Externally the vision should differentiate a company from

its competitors If the vision were an animal, a car or a person …

Do you have a compelling reason for: … existing? … charging a premium?

What is unique, special or distinctive? Why should people buy from you? What would the world lose if you folded? Who would notice or care? Do customers, staff, business partners, etc.

understand your critical differentiators? Can they quickly communicate the essence of

what you are about?

Level of Margin or Return

0

Shared visionAccepts challengesNew approachesFlexibilityInnovationAdds valueShares riskBusiness relevance

Level of Risk

LegalisticProtectiveDamage limitationSafeguardsCautionAvoids riskTechnical competence

Commodity supplier

Business partner

Purpose: Vision, goals and values? Image and reputation? People: Skills? Understanding? Support? Processes: Way of working and learning? Products and services? Basis of charging? Approaches? Methodologies? Tools and techniques? Relationships: Partnering? Risk sharing?

Will, Rationale, Purpose and Vision Goals, Values, Objectives and Strategy Resources, Capability and Processes Competent Management Team Framework of Policies and Values Agree & monitor plans & performance Safeguard assets & ethical standards Report performance to owners / interests

Establishing vision, mission, values, objectives and policies

Setting business/financial direction/strategy Ensuring appropriate structure/capability Delegation to management and control Exercising responsibility to shareholders and other

interested parties

Board Responsibilities and Activities

Outward looking

Inward looking

Providing accountabilityProviding direction

andFormulating strategy

Monitoring performanceand

Supervising managementEstablishing policies

Source: Hilmer and Tricker, 1991

Past and present oriented Future oriented

Private Company:◦ Entrepreneurial drive v. prudent control◦ Be knowledgeable about and answerable for corporate

activities v. standing back and maintaining an objective longer-term view◦ Sensitivity to short-term pressures v. being informed about

market/broader trends◦ Focus upon company’s commercial needs v. acting

responsibly towards various stakeholders Public Sector Board: ◦ Public accountability requirement for objective measures◦ Quantitative targets v. needs

Positive and Negative Boards

High / right

Low / wrong

Talkers Invest

Irrelevant Threat

Awareness

and

Strategy

Commitment and Drive

Low High

Proactively creating a better future Exploring, pioneering and discovering Turning organisations into incubators of new enterprises Creating and launching new ventures Creating and exploiting knowledge/intellectual capital Generating new options and additional income streams Establishing new markets and winning new customers Building more intimate customer/partner/etc relationships Transforming performance with job support tools

Change model of operation (network, virtual) Change relationships (partnering) Change processes (improvement, re-engineering) Change work patterns (outsourcing, teleworking) Change teamwork approach (activities, exercises) Change approaches to learning (e-learning, tools) Change approaches to management (democracy) Change assumptions and expectations (visioning) Change attitudes, skills & knowledge (enterprise) Change focus & allocation of time (vital few) Change support provided (tools with CSFs/winning ways)

Lack of awareness of full range of options Focus on corporate not client requirements Failure to address greatest opportunities Excessive faith in single solutions Insufficient tailoring to particular culture, situation

and context Excessive emphasis upon ‘hard’ issues Inadequate balancing of interests Inadequate attention to people factors

Restructuring disrupts relationships Downsizing causes loss of experience Re-engineering results in loss of specialists Outsourcing and the loss of key capabilities Regression when systems upgraded Standard solutions destroying diversity Assumption of linearity

Activity and reflection Action and reaction Change and continuity Complexity and simplicity Surface and substance Fads and fundamentals Individuals and organisations Citizens and communities Performance today and capability tomorrow

Understand what is happening in the business environment and marketplace

Anticipate events, address specifics and confront realities Develop additional income streams, new capabilities and

fresh intellectual capital Inspire, energize and motivate Are determined, pragmatic and positive Initiate, e.g. proactively approach those they would like

to do business with Focus upon areas that make a difference and critical

success factors for competing and winning Understand that change can disrupt valued relationships,

and only change what needs to be changed

Trust reliable people and take calculated risks Delegate and encourage entrepreneurship Think for themselves and reflect before they act Adopt simple solutions and differentiate their

companies’ approaches, products and services Create bespoke offerings, additional choices and new

markets Are open and self-aware and monitor their own

performance Welcome questions, invite feedback and encourage

challenge Choose pragmatic colleagues and competent advisers

Display the will to win and are driven to succeed, while being able to show that they care

Take a longer-term view and provide strategic leadership Assume responsibility and are prepared to be

accountable for their actions Understand the different roles of director, manager and

shareholder and the distinction between direction and management

Are clear about directorial duties and responsibilities and preoccupied with enabling and supporting the achievements of others

Concentrate upon the external, strategic and business development aspects of corporate governance

Strive to ‘build the business’ and deliver additional value for customers and shareholders

Provide clear direction, a distinctive purpose, and achievable goals that prove compelling to those working towards their achievement

Manage performance by means of an appropriate range of indicators and develop new income streams, capabilities and intellectual capital

Invest in director/board development & the professional selection, appointment and induction of new directors

Determining the knowledge required◦ ‘Shaping Things to Come’ / Differentiation

Creating the knowledge required◦ ‘Developing a Corporate Learning Strategy’

Managing the knowledge created◦ ‘Managing Intellectual Capital to Grow Shareholder

Value’ / K-frame Exploiting the knowledge created◦ ‘The Knowledge Entrepreneur’

Applying the knowledge created◦ Developing knowledge based job support tools

Information overload People need to be helped to understand & buy People need tools and relevant knowledge Opportunities for new knowledge-based services and

offerings (37 categories) Income opportunities (31 learning services) Superstar know-how can be captured / shared Need for knowledge entrepreneurs/support tools

Make it easy for people to locate/understand what they need Help people to: ◦ understand technology/benefits for users/customers◦ tackle more complex problems

Help and enable your people to behave like winners Capture and share best practice & superstar approaches Build critical success factors into how work is done Provide simple, scalable and cost effective support tools

(e.g. Tools used by Avaya, B&Q, Cisco Systems, Dana, Eyretel, Friends Provident, etc. see www.cotoco.com)

SWOT Analysis

OpportunitiesThreats

Strengths Weaknesses

The importance of inter-relationships between SWOT elements

Sales up 25% in 8 weeks £500k orders direct result of tool in first 8 wks. Sales cycle down from 12-16 to 8-12 weeks Sales technical support requirement down 66% Savings achieved of £2.5M per year Eyretel submission to eBusiness Innovation Award

£3M direct benefits in year one (£500k + £2.5M) Year one ROI 71.43 x project costs (£42k)

“Before the sales accelerator came along not one Account Manager wanted to sell SN [Storage Networking]. … In 6 months since, we have closed deals in Morocco, Saudi [Arabia], UAE and Pakistan worth $2.5M. We have $10M in the pipeline.”Systematic evaluation study compiled for Cisco Systems

$4.4M (min) attributable to sales in 6 monthsFirst few interviewees within a large global sales force

Six month ROI min. of 38 x project cost ($116k)

Traditional Approach: ◦ Checks and Reviews◦ Delays and Higher Costs◦ People focused on compliance rather than customers◦ Bespoke responses discouraged as they create compliance

issues New Approach:◦ Build checks and reviews into support tools◦ People cannot produce proposals, etc that miss-sell etc.◦ Faster responses and lower costs◦ People free to deliver bespoke responses◦ Also build CSFs and winning ways into support tools◦ Large improvements in key work group performance◦ High returns on investment: 20+X, 30+X, 70+X

Provide the easiest way to accomplish a task Keep it simple: Use should improve understanding Improve processes, capture and share best practice Build critical success factors into practices/tools Most cost-effective with homogenous groups/tasks Enable bespoke responses to individual customers Focus on applications with the greatest impact Review, refine and maintain

Limited and short-term vision Obsession with ratios and cost cutting Internal and win-lose orientation Protection of own interests Working harder and cutting corners Staying close to existing know-how Low margin commodity supplier Squeezed margins and falling profitability

Broad and long-term vision Focus on the customer and opportunity generation External and win-win orientation Ensuring mutually beneficial outcomes Working smarter and building relationships Exploring, pioneering and discovering Sought after business partner Rising margins and profitability

Distinction between direction and management / Directorial qualities

Multi-functional experience International / network perspective Entrepreneurial attitudes Complement qualities of colleagues The learning board and counselling

Career evolution:◦ Managerial progression◦ First appointment to board◦ Becomes managing director◦ NED on another board◦ Becomes CEO of quoted

company◦ Becomes chairman of board◦ Creates portfolio of NEDs◦ Establishment of own

business

Development needs:◦ Management development◦ Duties and responsibilities◦ Role of the CEO◦ Role of the NED◦ Understand listing

requirements◦ Role of the chairman◦ Understand company

specific issues◦ Business start-up and

financing

Understanding of context Strategic awareness Holistic perspective Ability to ‘vision’ / look ahead Personal qualities IOD / Henley standards The Winning Board ‘Transforming the

Company’/’Winning Companies, Winning People’

Strategic awareness and perception Analytical understanding/ thinking skills Decision making capability Communication and inter-personal skills Board skills: planning, delegating, appraising,

developing colleagues …. Achieving results: energy, drive, integrity ..

Ethics

Judgement

The Competent Director

Legal and Financial

Strategy

Monitoring

AwarenessKnowledge

Skills

Sensitivity

Experience

Chairman Chief Executive Officer Non-executive Director Functional v Process Owner Director Director of Learning / Transformation ‘Owner Director’ Aspirant Director

Business environment Company specific Specific to board Contribution to the board

Evaluating individual and team performance Identifying obstacles & barriers ‘Cosy club’ versus ‘healthy debate’ Outstanding individuals versus team effectiveness Interaction of particular personalities

Creating an enterprise culture Stimulating entre/intrapreneurship Buy-outs and buy-ins The company as an enterprise colony Supporting enterprise development Create, package and exploit know-how From employee to business partner

Freedom to dream, aspire, build and create Freedom to enter into mutually beneficial relationships Freedom to do what is necessary to deliver value and satisfaction to

customers Freedom as a customer to seek new sources of benefit and value Freedom to initiate debates, explore, question, challenge, innovate

and learn Freedom to understand one’s self, be true to one’s self, and develop

and build upon natural strengths Freedom to work at a time, location and mode that best contributes to

desired outputs Freedom to use the most relevant technology, tools and processes

depending upon what it is that needs to be done Freedom to confront reality, identify root causes and tackle obstacles

and barriers Freedom to learn according to one’s individual learning potential

Are there compelling reasons for change? Why should anyone be interested or care? Are you clear about what you are seeking to do? What’s in it for those whose help you need? Do they understand why change is needed, what needs

to be done and how they can help? Are your aspirations expressed as clear objectives? Can these objectives be measured and monitored? Have they been agreed by your change partners? Are likely obstacles & barriers identified & addressed?

Have the ‘vital few’ tasks been identified? Are people visibly committed to their achievement? Do rewards, communications and performance

management support what needs to be done? Does everyone understand the critical success factors for

competing and winning? Are individual roles, responsibilities and contributions

understood? Have people identified the knowledge, understanding

and support tools they will require? Are they motivated / equipped to communicate / act?

Provide people with a distinctive and compelling vision Give them good reasons to follow you and/or change Enable your people to differentiate and make a difference Give them opportunities for personal growth Provide them with relevant support tools Enable them to communicate, share and live the vision Recognise their unique contributions Inspire trust and encourage innovation Back initiative and responsible risk taking Reconcile commercial success and personal fulfilment

Providing Knowledge is not enough People may also require skills and tools to apply it Tools work best with homogenous groups and tasks Don’t use inflexible tools in rapidly changing areas Regular review, updating and maintenance extends life Improve rather than automate current practices Support tools enhance performance/understanding Superstar practice and expertise can be spread Behaviour can be changed through traffic lighting, etc. Returns on Investment (ROI) of over 20 x achieved

Build an effective board (‘Developing Directors’)

Build a Winning Team (‘Winning Companies; Winning People’)

Attract, motivate, enable and support entrepreneurs (‘Individuals & Enterprise’)

Create new options, genuine choices and alternative offerings (‘Shaping Things to Come’)

Exploit know-how to create new offerings/services (‘Knowledge Entrepreneur’)

Transform business units into flexible networks for managing change, competing and winning (‘Transforming the Company’)

Publications: ◦ Books, ◦ Reports and ◦ Briefings

Presentations Benchmarking Reports Health Checks Course Modules Consultancy Support Support Tools