Module 7- Writing Discussion

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05Provide a framework for leadership and action, through mission and values

The advertising industry has a saying: ‘Give me the freedom of a tight brief.’ It means that the more closely the client defines success and the manner

in which it is to be achieved, the more freedom and creativity the agency can apply to the advertising, and the more likely it is to get the right result.

A tight brief is the opposite of constraining; it is liberating, it focuses people on an outcome and generates more ideas, not less. Ironically, a loose brief is a problem. It leaves too many questions open, and paralyses creativity by creating uncertainty and confusion. There is too much need for clarifica- tion, consultation, consensus building – and everything bogs down in the syrup of confusion.

As we have seen in previous chapters, leaders today know they need to create more leaders, throughout their organizations, if they in turn are going

Murray, K. (2011). The language of leaders : How top ceos communicate to inspire, influence and achieve results. ProQuest Ebook Central <a onclick=window.open('http://ebookcentral.proquest.com','_blank') href='http://ebookcentral.proquest.com' target='_blank' style='cursor: pointer;'>http://ebookcentral.proquest.com</a> Created from westga on 2020-10-07 12:20:16.

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to create more agile, responsive and faster companies. They need to give those leaders a framework for leading, a tight brief that enables decision making where it is needed, when it is needed, confident in the knowledge that those leaders will be able to use it to make the ‘right’ decisions.

To be able to make those decisions, people need to know what they are trying to achieve (commander’s intent: What is our mission?). They also need to know, exactly, what values and beliefs should be applied to those decisions (operating envelope). And, finally, they need to know what the commercial goals are, what the picture of success is, in order to be able to make the right decisions.

It is for this reason that leaders must articulate a clear, compelling and simple mission, allied to a statement about what the enterprise stands for, and how it expects employees and suppliers to behave. They must also articulate clear and concise commercial goals, a vision of what success in the mission looks like. Of course, their own sense of mission and their personal values (as outlined in the previous chapter) must resonate and reflect the corporate ones.

Sir Anthony Bamford of JCB, the world’s third largest construction equip- ment brand, which sells more than 150 products in more than 150 countries, says it is important to distinguish between the mission and the vision. ‘There is a difference,’ he says. ‘Mission is what you do all the time. It is your purpose in life. A vision is about how successful you will be at what you do, and this will be expressed as a five-year business plan. The plan will be translated into annual goals, and even monthly and weekly goals. The plan has to work in tandem with your mission.’

Business in the Community (BITC) is a business-led charity with a member- ship of more than 850 companies, from large multinational household names to small local businesses and public sector organizations. BITC advises, sup- ports and challenges its members to create a sustainable future for people and the planet and to improve business performance. Two leaders inter- viewed for this book had been heavily involved with BITC: Sir Stuart Rose is a past chairman and Philip Green is still chairman of the BITC environment leadership team.

In guidelines to members, BITC says: ‘A company’s statement of values is a high-level statement that describes how the company behaves. It is not a mission statement that describes what task the company aims to fulfil. Neither is it a set of commercial objectives. The “rule of thumb” is that if it describes time-limited objectives, task-oriented goals or aspirations of achievement, then it is a mission statement, or goals. Corporate values are about what the company stands for and how its employees behave. They are about framing a role for the business that gives it a purpose beyond profit.’

‘It is not easy to do. For every one genuinely values-driven company there are many more where the corporate values statement simply exists as a poster on the chairman’s wall. The result of such circumstances is that employees in the call centres, and possibly even those working on the other floors of head office, do not recognize the value statement as describing the actual

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values and behaviours in the workplace. To change corporate culture requires full and consistent commitment from the top, excellent communication throughout the organization, and empowerment of staff to begin to use the values as their guide to making decisions.’

BITC says that research has shown that a key factor common to companies that have been enduringly great performers – at the top of the market for 100 years or more – was precisely a base of values that were strong enough to provide employees of the company with a common bond – a purpose beyond profit.

Getting it right, says BITC, can win all sorts of benefits:

employees who are loyal to and supportive of the company, ●● and more likely to stay if offered an equivalent position elsewhere;

customers who are more likely to trust the company, because ●● they see employees doing the right thing;

enhanced relationships with investors, who may see that the ●● company runs less risk of corporate scandals or controversies;

good relationships with government and local communities, ●● who begin to see the company as a good neighbour.

‘Values statements can be very simple indeed,’ stresses the BITC guidance. ‘One company simply has the maxim that you should always “do the right thing by the customer and by the employees”. This can be the worst kind of fatuous platitude, or a profound guiding star for the behaviour of all employees – it all depends on the implementation. Most statements of values, however, have more detail that leaves little room for ambiguity in what they might mean.’

From all my discussions with leaders, I believe that the vision of the future needs to describe the commercial goals of the business, and also describe what that success will ‘feel’ like to all the stakeholders who will benefit from that success – shareholders, customers, employees and suppliers, and local communities.

Feelings and emotions are the driving force of our lives. It is why I put so much emphasis on the word ‘feel’. Leaders have to embrace the idea that good communication has to be about feelings as much as it is about facts. Head and heart. For this reason, I believe firmly that the vision can only work well in conjunction with the mission and values. For the purpose of this book, however, I am going to tackle these two subjects in separate chapters, which interlink.

I heard so much about both these areas from the leaders I interviewed, and each is different, but with huge overlap. The leaders also tended to use a variety of words to mean the same thing or, sometimes, the same words to mean different things. For example, the words ‘vision’, ‘mission’, ‘purpose’, ‘goals’, ‘objectives’ all became quite blurred. For the sake of clarity in this book, I will define them as follows:

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Mission is why we exist; what we are here to do.●●

Values are our principles, or the qualities we consider worthwhile or ●● desirable, and which drive all our behaviours.

Standards are the minimum standards of behaviour acceptable, when ●● values are applied.

These are all on the emotional side of the story, and are what employees find most inspiring.

By contrast:

To me, a vision is the leader’s concept of the future, described both ●● in numbers and in terms of the quality of key relationships, if all the organization’s goals are to be achieved.

The goals are the four or five things to which the endeavour of the ●● organization is directed, critical to the achievement of the vision.

Objectives are the clearly defined, decisive and attainable supporting ●● goals which must be delivered if the main goals and the vision are to be achieved.

These last three are the highly rational, intellectual, measurable aspects of the story.

All six are needed for the full story – and it is only when all six are articulated that the story is complete in an employee’s mind. I include standards, because these are measurable, and another way that leaders can ensure that values are brought to life in the daily actions of people in the business. Without minimum standards of behaviour, which are appraised and rewarded, the danger is that your values will become important words on a poster on the wall.

Let us look first at mission and values, and how (if they are tightly framed) they can create a framework for freedom inside companies, liberate the creativity and imagination of employees, and enable leaders everywhere on the hierarchy to make the right decisions when the pressure is on.

Values build trust Paul Polman, global chief executive of Unilever, says values build trust. ‘I can visit my colleagues in any country of the world and I find that they may speak different languages and be working to different issues in their different countries, but within Unilever, they all have the same values. That creates trust, and trust enables us to work together – it helps us to fill the cracks that are in any system you design. And that’s the basis of prosperity. So, there can be no prosperity without trust, and trust comes from having the right values framework.’

‘You have to enable people to make decisions at the lowest possible level inside the company. I believe the best way to galvanize success in a company

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like Unilever is to be sure that decisions are being taken at the level where the knowledge is. That’s a very important statement – that decisions need to be taken at the level of where the knowledge is. So as a CEO, as a leader, you always have to drive the decision making as far down in the organization as possible. You have to show people the operating framework and make sure they understand it. It isn’t about rules and regulations – which stifle innovation – it is about having the right values and trust, which stimulate innovation.’

Rupert Gavin, of Odeon and UCI Cinemas, feels you have to know who you are and what you stand for and be clear about your values if you are to be able to communicate those well. It is only when you communicate those really well that you can truly empower and enable your staff to make the right decisions. The acid test is that any person in your organization, when hit with the challenge on Saturday at five o’clock in the afternoon, unable to get you, is going to come up with the right answer by themselves 99 per cent of the time – the answer that is right for the organization.

‘Instilling those values in the organization is what will help you sleep at night,’ Rupert says. ‘You can only do so if you are secure in the knowledge that John or Mary, when challenged by a customer, will respond in the way that you would, in the way the organization would wish them to. And they need to know that if they make an honest mistake while trying to do the right thing, they will not be blamed, but be supported.’

Why people love a motivating mission

Within a few weeks of arriving at British Airways, as the proud new director of communications, I was given a preview of the company’s new mission statement. I was asked to think about how best to communicate it to staff and to the world. British Airways was still very much regarded as ‘the world’s favourite airline’ at the time, and operated 290 aircraft, including the awe- inspiring Concorde. Managers in the company had, apparently, spent the previous two years debating the new mission, and had finally settled on: ‘To be the number one in world travel.’

A new corporate branding was also unveiled to me, a radical idea about how to use art on our fleet of aircraft to show the ‘new’ British Airways. This was what became known as ‘the infamous tail fins’ – where art from different countries was painted on the tails of aircraft in the fleet. It led to a barrage of criticism, mainly in the UK. The year was 1996.

Just a few days old in the job, I wondered whether it was wise to tell the then chief executive, Bob Ayling, that I didn’t think the new mission statement would be very inspirational to staff. After all, his managers had been debat- ing this for two years, and the new statement, along with the new livery, had been decided. They were part of unveiling a strategy for the future that required a radical overhaul of the airline’s costs, partnerships and positioning.

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Being the newcomer, I wondered what being ‘number one in world travel’ really meant. Were we going to buy hotel chains and car hire companies, for example? The answer was no. The definition of ‘number one’ would be explained in the text of the full mission statement.

At the time, the airline was in heated discussions with all staff about ways to reduce the company’s wage bill – Bob Ayling had already announced his ‘billion pound cost-cutting’ programme, which he felt was needed to keep the airline competitive, so the tensions between staff and management were running hot. I recommended we should run focus groups throughout the company to get the feedback that would enable us to communicate the new vision with the greatest chance of success, and the management team agreed. We arranged to speak to mixed groups of people, comprising pilots, cabin crew, baggage handlers, check-in staff and admin staff, in various locations and countries, so as to get as wide a range of feedback as possible. In a carefully constructed session, these groups were introduced to the concept of mission statements, then they were shown a variety of mission statements from other companies, and finally they were shown the new British Airways mission statement.

I anticipated a great deal of hostility from the groups – after all, they were angry about the cost-cutting programme and would be, I thought, cynical and unhelpful. What I learned during those focus groups changed my view of mission statements forever.

Talking with these colourful and outspoken groups, we learned:

Employees ●● do like a good mission statement, and felt the right one was inspiring and necessary.

They were ●● very clear about the difference between good ones and bad ones.

‘Good’ ones spoke to an enduring and meaningful purpose, ●● something that made them want ‘to get out of bed in the morning, for a reason other than to earn a living’.

‘Bad’ ones were about achieving numerical goals that made no ●● difference to employees, or were so bland and generic that they could be used for any company.

The best ones were a constant reminder to employees of why the ●● company existed, and enabled every individual to see how what they did contributed to the mission.

Examples they shot down were ‘Thinking about tomorrow, today’ or ●● about ‘Being number one in the market’ or earning ‘£1 billion by the end of the decade’.

They most admired the mission statement that NASA (National ●● Aeronautics and Space Administration) used for the Apollo project, the moon landings (more about this in just a few paragraphs).

They believed the British Airways mission should be on the lines of ●● ‘Enabling people to experience the joy and benefits of travel’.

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Eventually, the new British Airways mission statement was launched, but with only a few concessions to the staff feedback. Management agreed to employee suggestions to put people at the heart of everything they did, and portray a people focus as the centrepiece of the mission statement. But it still went out as BA wanting to be ‘the number one in world travel’. The management had a tailwind of two years of debate behind them, and under- standably did not want to pause to reconsider and revise. They were happy with what they had.

employees want a good mission statement

The most powerful lesson for me though, was to do with how highly employees rated good mission statements. Until that point, I had never fully appreciated how much they mattered to people. What all the British Airways staff pointed at as desirable (‘Enabling people to experience the joy and benefits of travel’) was something that explained, in uplifting terms, why we existed. It explained what we were there to do, and why it mattered to people. They could see how what they did, no matter what their role was in the airline, helped to deliver the mission. They wanted to feel that what they did was important, and that they could be proud of it with friends, family and drinking chums in the local pub.

I came away with a strong view that employees take huge inspiration from the right mission statement, and are hugely cynical about what they judge to be the wrong one. Crafting one that resonates with all staff is im- portant. Ever since my BA experience, I have had this view reaffirmed, in dozens of enterprises.

Especially important is the ‘clear line of sight’ between what employees do in their daily working lives, and the company’s purpose. Really good managers take the time and effort to make sure that each employee can see how their actions contribute to the mission. In the case of the BA employees, they most loved the NASA statement. Let’s have a look at why.

In May 1961, the president of the United States of America, John F Kennedy, said: ‘I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.’

This came very shortly after Mercury astronaut Alan Shepard became the first American in space. President Kennedy’s exciting and daring challenge set the nation on an incredible and epic journey. Eight years of focused and aligned effort by thousands of Americans came to fruition on 20 July 1969, when Apollo 11 commander Neil Armstrong stepped out of the lunar module and took ‘one small step’ in the Sea of Tranquility, calling it ‘a giant leap for mankind’.

On the successful completion of the mission, the then president, Richard Nixon, told Apollo 11 crew members Neil Armstrong and Edwin ‘Buzz’

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Aldrin, that ‘For one priceless moment, in the whole history of man, all the people on this Earth are truly one.’

In and of itself, the mission was inspiring and incredible. So you might discount it on the grounds that not every organization can have such an inspiring purpose. But what the BA staff most enjoyed was the story of the janitor who spoke to President Kennedy before that fantastic mission was completed. Many leaders I speak to remember this legendary JFK anecdote.

The president was apparently visiting NASA headquarters and stopped to talk to a man who was holding a mop. ‘And what do you do?’ he asked. The man, a janitor, replied, ‘I’m helping to put a man on the moon, sir.’

employees need to feel part of the story

The lesson I took away from the BA employees was this: Leaders need to tell a compelling story about why their enterprise exists. And they need to make every employee feel like an essential part of that story. Knowing their part in your organization’s story engages people and gives each of them a sharp sense of purpose.

But there’s more. We know that emotional engagement is key to the success of leaders. Being number one in a market or achieving a revenue or profit target is not emotionally engaging and inspiring to most employees. Knowing what their financial or other performance goals are is crucial, but only part of the story. They are measures of success, not the reason itself. All too often, though, it is on the numbers that leaders choose to focus.

I believe that is because these are the goals that are key to each leader’s strategy, and are therefore key to the leader. Most leaders are highly rational, logical people. So it is best to stay in the world of rational and logical argu- ment, they think.

But if they do use rational argument only, they are losing sight of the need to communicate with people on the things that matter most to them, if they are to communicate successfully. As I have already argued, you need logic and emotion and character all wrapped up in your story if you want to inspire people. This view has led to me advocating that employees are most motivated by the sense of mission they glean from their organization only when it is allied powerfully to the values of that organization. Do they feel inspired and empowered by the culture? And is that culture rigorously upheld? Are there minimum standards of behaviour that are required, where crossing over those boundaries will actually have consequences?

The need to raise people’s sights

Helen Alexander, of the Confederation of British Industry, said: ‘You know the NASA story, don’t you, with the janitor? Not everybody knows that.

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I was talking in a school the other day where the teachers are the heroes and the admin staff are not. I told them about the NASA mission statement and the admin staff said: “That’s amazing. Can we use that story?” I said of course they could – because they were also helping to educate the talent of the future, and that sense of a higher purpose is really important. You need to raise people’s sights about why what they do is important. It is incredibly important.’

Ben Verwaayen is chief executive of Alcatel-Lucent, a global telecommu- nications corporation, headquartered in Paris, France. It provides voice, data and video hardware and software to service providers, enterprises and governments around the world. It holds Bell Labs, one of the largest R&D houses in the communications industry, and operates in more than 130 countries. In 2010, Alcatel reported revenues of almost €16 billion.

Ben says: ‘As a leader, it is extraordinarily important to be a good commu- nicator, in order to do your job. Leadership is all about good communications and leaders must recognize they have three essential communication jobs to do. The first is to put a dot on the horizon for your people to see. In my case it is 80,000 people around the globe. I cannot say for those 80,000 people that the dot on the horizon is to grow our earnings per share or something else that is irrelevant to the vast majority of them, right? So you need to give them something that is inspiring and is relevant throughout the organization.’

‘Allied to this relevant vision is the need to set the tone from the top with all the right values. Together this will give people enough freedom to add their own intelligence and creativity to what they need to do. Then you need to reinforce the values by making sure you model them yourself and are very tough on people who do not deliver the values. I cannot say that I am against bullying if I leave in place a person that everyone can see is a bully. My actions speak louder than words and are most vivid in the people I choose to lead. It is through these three things that you change the DNA of a business.’

externally, a purpose wider than profit is needed

People expect more of business today. As we saw in Chapter 2, transparency has changed everything. In a world where people are so much more em- powered, leaders in business have now to do a far better job of explaining what business is for. To customers, they must explain the benefits of their endeavours. To the wider public, they must explain how and why they are a force for good.

It is not enough simply to explain themselves to their shareholders or, if they are not publicly listed companies, to their financiers. Leaders, when thinking about crafting their mission statement, must now think about a broad range of stakeholders and make sure that all of them are included as beneficiaries.

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Tony Manwaring is chief executive of Tomorrow’s Company, a business- led think tank based in the United Kingdom. It believes that business can and must be a force for good, and that this is in the self-interest of business because this will be how companies can best deliver long-term and sustainable value. Tomorrow’s Company works with leading businesses and business leaders around the world, and is respected for the quality of its thought leadership, as well as the practical value and policy impact that this achieves.

Tony says: ‘The world is undergoing a period of unprecedented change and it is becoming clear that the current frameworks within which the market operates are leading to unsustainable outcomes. The survival and success of companies are bound up with the health of the natural environment, the social and political system and the global economy. Companies must play a role in all three and they need all three to flourish. Companies can be a force for good and are uniquely placed to deliver the practical solutions that are urgently required to address these issues.’

Tony says that Tomorrow’s Company has identified ways in which leaders can ensure that they expand the space in which they operate. These are con- tained in a special report available from the think tank, entitled ‘Tomorrow’s global company: challenges and choices’.

First, says Tony, leaders should expand their view of success and redefine it in terms of lasting positive impacts for business, society and the environment. Having done that, they should then stand firmly behind their convictions and use them as a basis for the business strategy and decision making. ‘Second, shared values are essential to provide cohesion in companies, especially those that are global and diverse. Once values have been established and communicated, they must be rigorously followed in practice and people should be held accountable for observing them. Those values should provide the bedrock upon which a company’s behaviour should be based.’

John Connolly, immediate past senior partner and CEO of Deloitte, says: ‘I believe that we have come to a stage where we have now to imagine a new definition of the purpose of business. What is it for? How does it make a positive contribution? There has to be more of a focus on long-term sustain- able success rather than just short-term gain. It is only if you think long term that you build more value in your business. You cannot sustain your business in an environment, either social or physical, that does not have a future. Leaders must recognize that they not only must articulate this better, but must be prepared to stand up more often and talk about it, both inside and outside the enterprises they lead.’

Be an engine of progress for humankind Sir Christopher Gent, chairman of GlaxoSmithKline, says: ‘Having a strong set of values throughout the company – that are part of the DNA of the organization – is the best way of reducing bureaucracy. That way you don’t need endless manuals about how to behave. You must create a culture which

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is ethical, and will stand up to both internal and external scrutiny. It is crucial for a leader constantly to give voice to a purpose and values that are authentic and relevant in today’s world.’

‘Having a higher purpose and a sound set of values is more important than ever. Companies are rooted in the society they serve. Socially engaged capitalism is critically important and to me is an engine of progress for humankind. All constituencies are interested now in business endeavour, but not always necessarily interested in ways that are sympathetic to business. Therefore, as a leader, you have to communicate what you’re doing and express it in terms that convey the benefit you’re trying to achieve for society as a whole and not just shareholders.’

‘You provide employment, you provide benefits to pension holders, as well as shareholder returns. And there should be an agenda of public benefit broader than just profitability. There aren’t many firms that aren’t in the position to do that. I’m not trying to make this sound overly grand but I do actually think it makes the world go round.’

Paul Drechsler, chairman and CEO of the Wates Group, says: ‘Trust in business, in my mind, has taken a major walloping over the past two or three years, particularly trust in business leaders. Yet business is a tremendous force for good. Now we are going to have to expend as much energy proving it and explaining why and how, as well as actually being a force for good.’

Jeremy Darroch, chief executive of BSkyB, argues that being open and forthright about what you do is crucial if you want to be trusted. ‘Organ- izations that aspire to long-term success have got to have trust as an important part of their agenda.’

‘You never trust somebody you don’t know, whose motives you don’t understand. So, as a leader, you have to give people inside and outside the company a sense of who you are and what you stand for. That’s what will help people decide whether they are willing to trust you.’

‘You’ve got to make sure that your mission and values are relevant to a broad range of audiences, and that they understand your endeavours are making a contribution beyond the narrow profit motive of your business. What is good for you as a business is generally good for others too, whether you are a partner, an employee or a customer. So you have to be prepared to stand up and explain why your success is good for all of those people.’

‘There is no good in doing a lot of good and then not communicating it. Business has got to get itself on the front foot. Leaders have got to start laying out the positive case for business and private enterprise in a much more compelling way.’

Chris Satterthwaite is chief executive of Chime Communications plc, the holding company for a portfolio of 52 companies which include public relations, advertising, digital, marketing, sports marketing, market research, corporate responsibility and design businesses. (Chime is also my employer.)

Chris says: ‘A lot of people think that the scrutiny of this fishbowl world is a monstrous intrusion, but it has brought a greater sense of responsibility to actions and means that leaders are much more accountable.’

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‘Reputation is a reflection of what you believe, what you do and how well you explain what you do. It is that last part – how well you explain what you do – that is part of the new accountability of business. Leaders must now think in terms of being trustworthy, which means you have to have values and standards that you apply to everybody, which enable people to know what to expect from you and what you expect from them.’

Involve everyone in your mission

Paul Polman, global chief executive of Unilever, puts it like this: ‘All I have to do is ignite the flame that links the passions of our people to a great sense of mission, then we are up and running. That’s what makes a high- performance organization.

‘However, your mission cannot just be about the optimization of profits, because that leads to the wrong behaviours. The recent financial crisis we had was really a crisis of ethics that has highlighted how business should be done.’

‘We at Unilever see the fishbowl as a great opportunity. There are things in life that you cannot do anything about, but as a leader there are things that you can influence and do something about. In my business brands build trust. When consumers are more uncertain and look for brands to trust, it is a huge opportunity for brands. It is not surprising to me that last year we had the highest volume growth for 30 years in this company.’

‘Unilever recently launched a sustainable living plan which actually capi- talizes on the fact of being in the fishbowl. We think it’s a unique opportunity to leverage consumer power through transparency to really say, look we’re trying to be a company that is responsible. If you see us doing bad things, let us together correct those.’

‘We’re trying to say to people that they, as individual consumers, might not think they can make a difference but, if they buy a Lipton teabag and it is sustainable tea, they might think it’s a drop in the ocean, but think about two billion consumers of our products and harness that power. How can you harness that positively? Leaders who don’t understand that, who run away from the need to be more vocal about their mission, or that try to protect themselves, over time will become dinosaurs.’

‘It all goes to building trust, which is a very transparent asset on your books. Look at the market cap of a company like ours, take off the tangible assets, and then what you see is a difference of £60 billion. People call that reputation. It’s trust in your brands and it is trust in your organization. So the biggest asset I need to protect is the reputation of the overall company. That can be wiped out in one day nowadays. But don’t fear that. Turn that into a positive. We are, and by doing so we set much higher standards for our individual brands. I believe that is a catalyst for growth. So the only way I can run this company globally is because the values are so strong and the values drive trust.’

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Reputations at risk

Sir Stuart Rose was, until early in 2011, the executive chairman of British retailer Marks & Spencer, which has more than 700 stores in the United Kingdom and another 300 stores spread across more than 40 countries. M&S specializes in clothing and luxury food products.

He is worried about the demonization of business: ‘I was chairman of Business in the Community and I think it is beholden on business leaders to spend time in educational establishments, especially schools, and explain to children that work is not a bad place and that unless they are unusual they are going to spend 30 years or more in work. One of the downsides of the financial crisis is that there is now a feeling in schools that the creation of wealth is a bad thing. We’ve got an obligation to explain to the community at large that business growth is good, otherwise we wouldn’t have roads, universities, trains, planes, and all the other infrastructure we need. People need to understand that the government is spending the money that business makes. This is hugely important and I’ve been quite vociferous about it.’

Another reason that leaders have to define their mission and values and then drive them into the business is because their own reputations stand or fall by whether or not employees in the organization behave according to those values.

Ron Dennis is the executive chairman of McLaren Automotive and McLaren Group, and is also a significant shareholder in both companies. He was the team principal of McLaren, the group’s Formula One team, until 2009.

‘One thing I’m absolutely sure of is that, if you’re going to lead, you’re going to have to push hard for the benefit of the people in your company, for your shareholders, so you are going to make mistakes, and you’d better come to terms with the fact. Taking responsibility for your own mistakes is hard enough. The most painful part for me, of leading a company that attracts a lot of publicity, is you actually have to take responsibility for other people’s mistakes, and that is really painful.’

‘In all big companies, a leader can do no more than instil values into the DNA so that they ensure people deliver the right behaviours, but you’re a fool if you think that you’re not going to have the odd bad apple. When that happens, the world cuts you no slack. You have to take the responsi- bility, because even if it’s an individual that’s caused that problem, you’re responsible for the system, and you’re responsible for the monitoring, you’re responsible for everything.’

‘If you work in a slow-moving organization, that’s tough enough. Running a Formula One team, when you have to work in margins of half a second, you’ll succeed or fail very publicly if you call it wrong, and you have to operate at incredible speed. You are on a roundabout where you’re stuck to the walls, being centrifuged out, and you’re trying to hang on. In this situ- ation, I think it’s a harder challenge. And you cannot do it if you don’t ensure everybody subscribes to the values.’

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The need for speed and the need to create leaders The main reason for clarity on your mission and values and standards is to create a liberating framework that enables employees throughout the enterprise to be leaders themselves – leaders who are able to take decisions without constantly having to go up the chain of command for decisions.

Philip Green is the immediate past chief executive of United Utilities, which owns and operates the water network in northwest England. He says: ‘Leadership isn’t one person; leadership in a decent-sized company is hundreds of people.’

Leaders that I spoke to constantly talked about how leaders need to create leaders if their organizations are to thrive. The modern business arena shares many of the same attributes as a battlefield. The troops on the ground are the ones who are in the thick of the action and know most about what is going on around them. Everything happens at fantastic speed. There is little time to go up and down the chain of command, and employees need to be able to take action in the heat of battle. Leaders have to invest in them the ability to make decisions that are appropriate and in the spirit that they would themselves make decisions. If the sense of mission and the values of the enterprise are truly ingrained, then employees need only go to their hearts at times of crisis to make the right decisions – the decisions that are good for customers, good for the community and good for shareholders.

John Gildersleeve is the immediate past chairman of New Look, a British global fashion retailer with a chain of high street shops in Britain, Belgium, France, the Netherlands, Ireland, Malta, Singapore and the United Arab Emirates. He was on the board of global grocer and retailer Tesco for 20 years and, until recently, chaired Carphone Warehouse, Europe’s largest independent mobile phone retailer, with over 1,700 stores.

He believes that a strong sense of mission and a defining set of values are an essential part of a leader’s armoury. ‘Lots of companies have a set of values but they make the mistake of putting those in the annual report and going about their business as if they don’t exist. Successful companies use values successfully. These sets of values are communicated relentlessly. Leaders go around the business asking questions of employees, and vice versa, about whether what they are doing adheres to the values. It gives people a framework, not a rigid set of rules, and acts as a true north that keeps them pointing in the right direction.’

Lord Sharman is chairman of Aviva, the sixth largest insurance company in the world, created by the merger of Norwich Union and Commercial Union and employing 46,000 people. He says the big issue for leaders today is speed. ‘You simply don’t have as much time to think as you did before. You have to empower people – it is a business imperative. You can only do this through a very clear set of ethical and behavioural guidelines. Those values and standards are the most important thing. If you’ve got that strong

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framework in place then people understand how to behave and they can make their own decisions about what feels right.’

Standard Chartered is a multinational financial services company head- quartered in London, with operations in more than 70 countries. Lord Mervyn Davies says the only way he could run Standard Chartered when he was chief executive was by instilling a strong set of values that influenced the culture.

‘How do you get engagement and communicate across 75 countries with tens of thousands of people that you don’t see regularly? Well, how do you do that? First, you decide on the values of the company, what sort of culture you’re going to have; and then you decide how you are going to consistently communicate those values to people. You’ve got to break through that per- mafrost that you see in lots of different companies, where messages come from the top and get stuck in the middle. So the key is: know your audience, get your culture right, get your values right, get your messaging right, and then communicate, communicate.’

Three examples of mission and values at work

Xstrata plc – where information knows no hierarchy

Xstrata is a global mining company headquartered in Switzerland, with its registered office in London. It is a major producer of coal (and the world’s largest exporter of thermal coal). It has operations in 19 countries across Africa, Asia, Australasia, Europe, North America and South America. Mick Davis is the chief executive. A South African, he was previously finance director for mining giant Billiton plc.

He feels that Xstrata operates differently from most other mining com- panies, with just 40 people in the two head office sites. ‘We have a devolved management structure. We have high levels of accountability at business unit level, high levels of responsibility and high levels of authority. Authority is key; we vest a lot of authority in our people to take decisions and to act. To enable this to happen, it was essential for us to establish a set of principles about how we want to behave. So our values go round the import- ance of people in our organization, the safety of the people who work in our organ ization, the health of the communities and environments that we operate in.

‘One of our values is that we are a value-conscious organization. We’re here to extract as much value for our shareholders as we can. Every day I expect people to come and say, how can I run the business differently today than I ran it yesterday, for more value? Another example is the value of momentum, continuously moving forward; don’t sit back. Organizations with momentum are able to act and capture opportunities. They’re very simple but powerful propositions everybody buys into.’

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‘We don’t tell leaders how to implement the values, we simply tell them these are the standards you have to meet, and they know that it is for them to determine the actions they need to take. There isn’t anybody at head office who’s second-guessing them. The system works because we have built an emphasis on open communication – we have strong informal networks of communication in the company, where hierarchy matters only when instruc- tions have to be given.’

‘If you work for me I can give you an instruction. You can give the people who work for you an instruction. I cannot give the people who work for you an instruction. That hierarchy is followed absolutely. But information flow and discussion in this company know no hierarchy. I can phone the fellow running a mine in Queensland and ask how things are going. I’m asking for information and Bob’s boss knows that I’m not going to give Bob an instruction. I might encourage Bob to talk to his counterpart in South America, in order to help the spread of best practice.’

‘We strongly pursue this informal network and that does two things: it empowers people throughout the organization to share experiences and it embeds an open and honest and sharing culture. That level of transparency, allied to our strong values, is what enables us to deliver.’

The National Trust – freedom within a framework The National Trust is a conservation organization which works to preserve and protect the coastline, countryside and buildings of England, Wales and Northern Ireland. It owns many heritage properties, including historic houses and gardens, industrial monuments and social history sites. It is one of the largest landowners in the United Kingdom, owning many beauty spots, most of which are open to the public free of charge. It is the largest membership organization in the United Kingdom, and one of the largest UK charities by both income and assets.

Dame Fiona Reynolds has been director-general of the National Trust since January 2001. Before taking up the post she was director of the Women’s Unit in the Cabinet Office and was previously director of the Council for the Protection of Rural England.

She explains: ‘The scale of our conservation responsibilities is huge: more than 600,000 acres of countryside, 700 miles of coastline and over 300 historic houses and gardens. Each property is different, and needs the care of expert staff and dedicated volunteers. Both the places themselves and we, as a charity, need to be sustainable for the long term: financially, environmentally and in our strong relationships with those who love our sites, from the original donor families, to our tenants, members, visitors, staff and volunteers.’

‘At each location we must celebrate a distinctive spirit of place. Each too must nurture a web of human links – with those who loved it in the past or will do in the future, with neighbours and local communities, and with

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visitors for whom this special spot of earth can become like home, a vital part of their lives. So, though the heritage we all share is immense, it is also personal and local. The heart of our strategy is to cherish these intimate qualities, so that millions of people each year can grow close relationships with the unique places in our care.’

‘In order to deliver this, we are implementing a new strategy of localism, trying to move away from being too corporate and too samey. To do that, we have had to create what we call “a framework for freedom” – a reinforcement of our purpose and our values that enables leadership and empowers people throughout the organization.’

‘We are re-engineering and redesigning the Trust to enable this local empowerment. Freedom within a framework is the mantra for localism. It means talking constantly to values and ensuring that everyone understands what our purpose is and what our values are, and how those should be delivered in their own unique environment. It is only through that level of local empowerment that we will truly be able to deliver our promise and ensure that people keep trusting us.’

‘Trust is fundamental to our brand: staff have to trust me, they have to trust our brand, and people outside have to trust that we will do what we promise. People who leave us huge legacies need to trust us to fulfil their wishes. Trust runs in our blood and we work very hard to protect that trust. Trust is won through people engaging with you, seeing where you want to go, debating it with you, and that is what leaders throughout the organiza- tion need to be doing, not only with employees but with visitors and donors as well. To do that, they have to understand the framework.’

‘This is what will enable the organization to be very much more innova- tive and imaginative in things like interpretation and presentation. With this framework in place, already our language has utterly changed. It’s about how do operations feel? Do they feel free and confident to really fly with the ambitious ideas they’ve got for their properties? That’s totally different from sending them an instruction from some senior person to make their properties more interesting.’

Serco – be clear about the reputation you want Serco is an international service company that works for national and local governments in important areas of public service, including health, educa- tion, transport, science and defence. More than 70,000 employees deliver these services in over 30 countries. The scale and scope of Serco services are extensive, including operating traffic management systems covering more than 17,500 kilometres of roads worldwide, providing secure computer and software support services to all 66 UK law enforcement agencies, managing 192,000 square miles of airspace in five countries, and transporting more than 275,000 passengers every day on driverless trains on London’s Docklands Light Railway.

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Former chairman Kevin Beeston, now chairman of Taylor Wimpey, one of the largest British housebuilding companies, says that in large companies, where tens of thousands of employees are representing the company, they need help in understanding how to behave. A good reputation is the founda- tion stone of success and how employees behave determines the reputation.

‘You have to live the reputation you want,’ says Kevin. ‘But that means being clear about what reputation you want. Do your mission and your values enable you to deliver that reputation? Focus on helping your employees to understand the expectations of customers and the outside world so that they understand what doing the right thing means.

‘As a leader you have to spend time articulating in a very clear way what your mission is and how you expect people to behave. We did two powerful things at Serco. One was to articulate a set of what we called governing principles. These were very short and simple and defined what we expected of all of our employees, how we wanted to live our values in the organ- ization. The other was giving our sense of mission a very public presence in the form of a strapline: “Bringing service to life”. We used this strapline everywhere, in our corporate literature, on our website, in all our marketing collateral.’

‘This was a promise we made to the world which guided the behaviours of 70,000 people in the company. It was one of the most empowering things that we did. No matter what you did in the organization, whether you were sweeping streets for local councils or whether you were engaged in high- level engineering and IT, you knew that you’d got a customer and that the service we provided to them needed to be of a very high quality. That made people feel very proud and it was driven by knowing that customers had had a good experience.’

Make sure the values resonate

Frequently, the leaders I interviewed spoke of how it would be impossible to run a business if their own values did not reconcile with those of the people they led.

Jeremy Darroch, CEO of BSkyB, says he would not be leading Sky if his personal values were not aligned with those of the company. ‘We spend a lot of time talking about and making sure that anybody who joins the business understands the culture and our values. I’ve had several conversations with senior people where I had to say that if our culture doesn’t motivate them, then they might not fit, in spite of their strengths and experience. But if they do get it and believe in the values then they are likely to do very well in the company.

‘My job is about upholding the values and standards that we set ourselves. When everyone gets the values, that is when the organization starts to become really efficient. Even though communication is critical, when values

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are understood, a lot of the day-to-day stuff can be unspoken, because everyone is pushing in the same direction.’

‘You can’t write a set of rules for 17,000 people doing all sorts of different things, all over the world. You have to base communication on shared values and standards, and conversations need to be about that. Leaders need to spend time bringing those values to life, encouraging people to explore what those values mean in the margins, then you can have confidence that every- body will be approaching this in broadly the right way. Values are more powerful than rules, because you can’t provide for every likely scenario and when people get into difficult situations, a rulebook doesn’t help to orientate them. Values and a sense of common purpose will get people on the right path.’

The value of values

In every interview, I asked the leaders to tell me what the values of their business were. Many admitted that their values could be common to almost any other organization, because often values represented the moral norms of the societies within which they operated.

Some companies had worked hard to use the values to differentiate them- selves and say something about them that was unique. Nearly all of the leaders made sure that their purpose and values became part of the company’s brand and were used as a source of competitive differentiation. The purpose and values were also used with suppliers and partners to ensure consistency everywhere on the value chain and ensure high standards.

Leaders were unanimous in their view that articulating values and purpose was one of the most important jobs of leadership. It was a conversation without end, on board and management agendas, discussed on roadshows and workshops.

A shared sense of mission and values was inspiring, empowering and liberating and created enormous value in those companies that really brought them to life.

However, having a compelling mission and a strong set of values is irrelevant if you don’t have a destination in mind. What does successfully carrying out your mission look like? Who will benefit? What is the reason why all your stakeholders should take an interest and help you get to your destination?

When you paint a picture of success in the future, and ally it with your mission and values, you have a much stronger story to tell.

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K e y P O i n t s F r O m C h a P t e r 5

Too often, leaders use the achievement of financial goals as their ●● purpose. They are more comfortable being rational and objective.

Too often, followers say they don’t get out of bed in the morning ●● to achieve financial or other numerical objectives.

They come to work and want to be inspired by a sense of doing ●● something important, something that makes a difference.

Leaders with a strong set of values built on honesty and openness ●● and respect for other people are the most inspirational.

The right mission statement is inspiring; take care to craft it in ●● a way that is compelling, easily understood, memorable and unambiguous.

In today’s world, businesses need to articulate their mission in ●● a way that shows how they are a force for good in society.

Every employee needs to feel part of the story, with a clear line ●● of sight between what they do and the organization’s overall purpose.

A strong sense of mission can help shape decisions to be made ●● throughout the organization, and is even more empowering when coupled with a strong set of values.

The values you articulate must be the values that you live.●●

In this world of radical transparency, values have assumed far ●● greater importance, for many reasons.

Shared values enable trust, and liberate employees to be leaders; ●● they can then take action within a framework that enables speed, creativity and agility.

They create competitive differentiation.●●

The way your people act with their ‘customers’, whoever they are, ●● says more about you than all the words you ever utter. So take care to define, and live, the values that you want delivered in daily behaviours.

Those intangible values – often dismissed as ‘soft and fluffy’ – ●● translate into actions on the ground, which translate into hard numbers in the books.

Values must be measured for impact; people who don’t live up ●● to them should shape up or ship out.

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