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It’s always about the manager

I spent Tuesday evening at the launch of WorkL’s new Employee Experience report.

WorkL is the business set up by Mark (now Lord) Price, who used to run Waitrose. It’s a data-based approach to helping organisations understand and improve their performance in the big areas that drive engagement.

What’s interesting about WorkL is that it uses an App to gather feedback from employees in over 27,000 organisations around the world, but it also provides specific insight and consultancy for individual businesses.  

The result is that you get a fascinating big picture view of employee experience trends across different industry sectors, countries and socio-demographic groups. And you also get practical, hands-on stuff you can do to improve your own performance.

If you’ve followed my blog for a while, you’ll know I’m a big fan of Lord Price. When he was at Waitrose, he pioneered a style of leadership based on culture, purpose and empowering individuals. 

Those themes are pretty standard in most businesses now but, 15 years ago, they were still groundbreaking in this country (outside HR departments) – and the success of Waitrose and John Lewis played a big part in bringing them into the mainstream.

After the presentation, I asked him what he thought was the most important factor in making employees happier and more productive at work. 

He said: 

‘Without a doubt, the relationship each individual employee has with their manager. The correlation is so strong that, if I only asked one question – do you have a good relationship with your manager? – I could tell you with confidence what their overall engagement score would be, based on that one answer alone.’

It’s a timely reminder that, whatever else we do to engage people and improve their experience of work, the thing that makes the biggest difference will always be the quality and humanity of their manager.

So choose your leaders well, at every level. Your business depends on it.

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Make your own luck

Ingo Fiedler is a German academic who spent years studying the economics of poker. He discovered that, on average, the player with the strongest hand wins just 12% of the time: less than one game in eight.

In other words, success in poker is much less about what cards you have – and much more about how you play them.

That’s because poker, like life, is a game of partial information (which is why academics like using it as a model for complex decision-making). There are some things everybody knows, some things nobody knows and some things only each individual player knows and everyone else has to guess at. 

Even if you’re lucky with your cards, you can never be certain that one of your opponents hasn’t been luckier. So the best poker players never worry too much about what cards they’re holding. 

Instead, they rely on a mix of memory and maths to help them understand the statistical likelihood of different outcomes. And behavioural psychology to help them understand what their opponents are likely to think and do – and how they’ll react to different cues. ‘Play the man, not the cards’, as the legendary Amarillo Slim once put it.

Leaving aside the casual sexism (Slim played in a time before many of the world’s most successful poker players were women), that’s good advice for any business operating in today’s rather uncertain conditions.

Don’t worry about the stuff you can’t control: the market, the weather, global macroeconomic issues. Those are the cards everyone can see and you can’t do anything to change them.

Instead, focus your attention on what you can control. Watch your opponents carefully and use your experience and analysis to figure out your best way forward.

Is their customer offer or market position likely to be better than yours? If it is, can you dilute their advantage by launching earlier or promoting in a more eye-catching way? If it isn’t, can you anticipate how they might try to do the same to you?

The most successful poker players are the ones who think rationally, not emotionally.

Who are clear-eyed about the relative strength of their position – and adapt accordingly.

Who don’t let themselves get manipulated – or compound a loss because they’re too invested to walk away.

And who are constantly alive to everything around them, absorbing information and learning from their mistakes.

Because in poker, as in life, you get a lot luckier when you work at it.

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Who’s the Twit?

Elon Musk is, by any standard, a brilliant and successful man. Which is what makes his takeover of Twitter such a grimly absorbing spectacle.

Within a month of completing the high profile $44bn purchase, Musk has fired half his workforce, told the remainder they need to embrace a culture of ‘long hours at high intensity’ or leave – and has scared away so many advertisers that Twitter is haemorrhaging $4m a day just to stay in business.

The fascinating question is ‘why?’

Musk says he wants to turn Twitter into a marketplace of global ideas, where people can say anything, however outrageous – because, ultimately, the best ideas will win through by superior reasoning.

But it’s a little difficult to square this with an owner whose default position, when confronted with a dissenting opinion, is to deploy his considerable wealth and power to crush it.

Musk has form in this area. When his (ludicrously impractical) offer of a submarine to help in the recent Thai cave rescue was rejected as a stunt by the British diver Vernon Unsworth, he responded (on Twitter) by accusing Unsworth of being a paedophile.

When Unsworth sued him for defamation, Musk accepted the accusation was false, but defended himself by claiming the term ‘Paedo’ is just a standard form of banter where he grew up in South Africa, so it couldn’t be defamatory. Astonishingly (and legal observers really were astonished), the judge accepted this defence and dismissed the claim. 

Not a very encouraging trailer for the quality of intellectual debate we can look forward to in Musk’s marketplace of ideas. 

There are other explanations, of course.

Maybe he was just bored and wanted a new project. 

Or maybe, having made the grandiose claim that he was going to buy Twitter, he was worried he’d look weak or foolish if he walked away.

Let’s face it, there aren’t many people in the world who can afford to pay $44bn for a car they don’t want and then drive it off a cliff – but Elon Musk is definitely one of them (Forbes estimates his current wealth at $181bn). 

Then again, maybe all this chaos and bloodletting is just part of a bigger, smarter plan which only a visionary like Musk could understand.

Who knows?

In the meantime, we all have ringside seats at the very public dismantling of one corporate culture and its replacement by one that’s radically different.

I have huge sympathy for the people at Twitter who have had their lives and careers disrupted – and seen the things they worked to build ripped apart and dismissed as rubbish. It’s a horrible way to run a business.

But you’ve got to admit it’s fascinating to see what happens next.

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Indulge me

Back in the middle ages, papal indulgences were big business.

The basic idea was that, if you’d behaved badly, you could mitigate the spiritual consequences of that behaviour (in other words, reduce the time you had to spend in purgatory before being allowed into heaven) by funding good works.

A bit like carbon offsetting, really. Burn a village, build a cathedral – call it quits.

Of course, this kind of spiritual indemnity didn’t come cheap, so papal indulgences were mostly focused on the small group of rich and powerful people who could afford them.

The modern equivalent of these people might be a large multinational corporation: Coca-Cola, say, or BP.

Which is why it’s been interesting to see what happened this week when Cristiano Ronaldo, arguably football’s biggest superstar, ostentatiously removed a bottle of Coca-Cola from the table at a press conference and insisted on drinking water instead.

Coca-Cola, which had spent a large amount of money sponsoring the football tournament in which Ronaldo was appearing, was understandably unhappy.

Their lawyers rifled through the contract and forced UEFA into issuing a strict instruction that no more sponsors’ bottles were to be moved.

But the damage was already done. Coke’s share price plummeted by $4bn, as analysts across the globe calculated the likely impact from one of the world’s leading athletes pointing out that sugary fizzy drinks aren’t good for you.

It’s an odd thing, when you think about it. Nobody at Coke can deny that Ronaldo was right. So they find themselves, instead, in the slightly uncomfortable position of insisting that no-one be allowed to point out the truth, because they’ve paid for a different story.

UEFA, in the meantime, has to balance the embarrassment of indulging Coke in this story against the benefit to grassroots football from their sponsorship billions.

It’s a bit like the arts world, where theatres and galleries have had to wrestle with the ethics of accepting money from opioid drug dealers or oil companies – money without which they might struggle to operate.

I don’t really know what the answer is.

I suppose my view is that it’s good to have people build cathedrals.

But it would be better if they didn’t burn the villages first.

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What do you (really) stand for?

This week saw some interesting anniversaries.

200 years since Napoleon died.

200 years since the Guardian made its first appearance (as the Manchester Evening Guardian).

And 100 years since Coco Chanel launched the legendary Chanel No. 5 perfume.

What I find interesting about all three is how their reputations have changed over time.

Napoleon was a small man, but a towering historical presence. He was born Italian, but became an iconic symbol of French greatness. Modern-day Paris is still dominated by landmarks and railway stations bearing the names of his military triumphs.

Yet modern-day French politicians are often careful not to associate themselves too closely with Napoleon, because he was also an avowed racist, who reintroduced slavery to French possessions in the Caribbean and cynically betrayed the Haitian independence leaders who had helped him fight the British.

Not a great look for the leader of a Republic based on liberty, equality and fraternity.

Coco Chanel is another iconic French figure: an intuitive designer, spectacular self-publicist and subtly pioneering feminist, who dragged herself up from poverty to define the style of a generation.

She was also an unapologetic anti-semite and Nazi cheerleader, who spent her war years shacked up in the Ritz hotel with a German diplomat – and was only spared imprisonment because of the personal intervention of her friend Winston Churchill. 

My point is that reputation is never set in stone: glorious achievement in one field won’t prevent your reputation being tarnished by failings in another.

However, the good news is that it also works the other way.

The Guardian was first published by Lancashire mill-owners. In its early years, it was derided by the labour movement as a mouthpiece for capitalist exploitation. During the American Civil War, it loudly supported the Confederate states in their struggle to keep slavery.

Yet, over time – and under the careful stewardship of a new owner – the Guardian gradually established an editorial position more consistent with its lofty pronounced ideals.

During the Spanish civil war, it was the only mainstream British newspaper to oppose Franco. Just as it was the first British newspaper to ring alarm bells about the rise of Mussolini and Hitler, long before that become a fashionable position.

Now, I don’t say this because I’m a particular fan of the Guardian. The truth is, I rarely read it these days and, when I do, I often disagree with its editorial positions. 

But I’m glad it’s there. I think it plays an important role in keeping our leaders honest and promoting a fairer society – and I’m not alone in thinking this.

Opinion polls regularly show the Guardian to be the most trusted source of news, both online and among mainstream print media. 

It’s taken them 200 years to build that trust. Which is an example worth remembering next time you’re thinking about your organisation’s values.

You build trust by doing what you say you’re going to do and by living up to the things you say are important.

In other words, values aren’t optional. They’re not something you can disregard when it’s inconvenient or difficult (when you need to close a factory, say). 

If you do, you will lose trust – and all your other brilliant achievements won’t protect you.

So choose your values carefully.

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The next big thing

It’s just over 300 years since the infamous South Sea investment bubble burst.

It was made up of hundreds of different – and often quite bonkers – investment schemes. Here are three of them (direct quotes from the prospectus): 

‘A process for extracting silver from lead.’

‘A company for making a wheel of perpetual motion.’

And (my personal favourite) ‘A company for carrying on an undertaking of great advantage, but nobody to know what it is.’ 

What’s extraordinary is that all three of these schemes found plenty of backers.

Even the brilliant Sir Isaac Newton invested (and lost) a fortune.

Of course, it was a long time ago and our forebears simply didn’t have the knowledge and information that we have today. So it’s easy to look back with an indulgent smirk and feel confident we would never be so naïve.

And yet… 

It’s only 21 years since the dotcom bubble burst, leaving lots of people holding shares in businesses with plans almost as risible as their South Sea counterparts.

It’s only 13 years since the world’s economy imploded, when bankers realised they’d been selling each other toxic subprime mortgage debt repackaged as AAA-rated investments.

And we’re still living through a time where our greatest economic brains simply can’t decide whether Bitcoin is a bubble or not.

That’s because it’s part of human nature to be easily distracted by things that seem new and clever. We’re scared of missing out. We don’t want to be last to the party. And we love a shortcut.

Hence, the explosion of organisational communication tools over the past five years. 

It’s so tempting to believe that, if we can just get the board to sign off on the shiny new comms app, it’ll suddenly be a breeze to get everyone engaged.

The problem is that, after the initial novelty wears off, there’s nothing inherently engaging about the app itself. In the same way there’s nothing inherently engaging about Instagram or Facebook or Twitter or Pinterest.

What makes them engaging is that people are able to use them to connect with people and ideas they find interesting and cool and fun.

In other words, it’s not about the shiny new tech. It’s about what’s on it – and whether it feels relevant and interesting and useful to the people you want to use it.

It’s about the message, not the medium. Substance, not hype.

It’s about giving people the freedom to engage with each other on subjects that interest them. Not pushing out top-down, functional ‘approved messages’ that your leadership team wants them to know.

To put it another way: there’s no point investing in the shiny new tech, unless you’re also ready to embrace a much looser and more organic way of communicating.

Which is hard work. And tricky to manage. And scary for the people at the top of your business (who often don’t like the idea that they’re not in control of the narrative). 

But it’s also absolutely essential.

Because, as those South Sea investors learned the hard way, there are no shortcuts to any place worth going.

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Starlings vs. Lemmings

One of the most bizarre – and beguiling – things you’ll ever see in nature is a murmuration of starlings.

This is when hundreds (sometimes thousands) of starlings swarm together and, in almost perfect synchronisation, swoop and twist and expand, as if they were a single creature with a single mind.

That description doesn’t really do the phenomenon justice, of course. So, if you’ve never seen a starling murmuration, have a look at this:

Extraordinary, right?

What’s even more interesting is how and why they do it.

Ornithologists and animal behaviourists have studied starling murmurations for centuries. And the conclusion they’ve come to is that the birds are not taking their lead from a pace-setter at the front (as migrating geese do). 

They’re not following a choreographed plan.

Instead, they achieve their amazing synchronisation by focusing on the six or seven birds closest to them and reacting instantly whenever any one of them switches their flight pattern.

Why? Because they know they’re safer and more successful when they stick together. But they also know they’ve got a better chance of evading predators, or finding the best feeding spots, if they trust and respond to the instincts of the companions around them.

In other words, they become far more effective than the sum of their parts. 

Which is why a starling murmuration is such a good analogy for how an empowered organisation should work. Everybody moving in the same direction – but able to react quickly to threats and opportunities, because they trust the colleagues around them to make good decisions.

Unfortunately, it’s not the model that most organisations actually follow. Which is to have a shared plan and make sure everybody sticks to it.

That’s a good way of getting everyone moving in the same direction. But it won’t help you react flexibly to emerging threats and opportunities.

Instead, like gazelles on the Serengeti, your people will end up focusing all their energy on getting close to the inside of the herd, so they’ll be less likely to get picked off by predators.

Or like lemmings in the Arctic, they’ll focus rigidly on the plan. 

Even when it means they fall off a cliff.

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Changing the game

Short selling, as you probably know, is when an investor (let’s call them A) is so confident the value of a stock will continue falling that they bet on it. 

They make a deal to sell shares to B at an attractively low price, without actually owning the shares yet. Then they wait for the value to fall, so they can buy the shares at an even lower price, deliver them to B at the price agreed and bank the profits.

This is an arrangement that seems quite strange to people outside the financial markets (how can you sell something you don’t own?) But it’s legal and it has, historically, proved hugely profitable for Hedge Funds. 

The problem is what happens when that bet goes wrong: when the market doesn’t do what you expect and the share price goes up. A is still contractually obliged to give B the shares they’ve paid for, which means A has to acquire those shares at whatever price the market demands. So A makes a loss, not a profit.

That’s what happened last week to a number of Wall Street Hedge Funds, who had taken a short position on GameStop, a loss-making retailer.

Amateur market-watchers noticed so many funds were ‘shorting’ the stock that there weren’t enough actual shares to cover all the exposure. They smelt an opportunity, bought some shares and went on Reddit to urge fellow private investors to do the same.

The result was that, instead of falling, GameStop’s share price surged from $2.57 to nearly $500. It made no sense, but that didn’t matter. By the time the funds had worked out what was happening and bought enough shares to cover their obligations, they’d collectively lost around 19 billion dollars. They’d been beaten at their own game, by amateurs.

What’s interesting is that many of the amateur investors who piled in don’t seem to have been motivated by money. They know the shares they’ve bought are likely to drop in value just as quickly as they’ve risen. And they don’t care.

Because what they really wanted to do was give the Hedge Funds a bloody nose.

I suspect many observers feel some sympathy with that. After all, short-selling is a pretty unsavoury practice: Hedge Funds can buy and sell stock in such significant volumes that the simple act of offering the shares at a lower price often triggers precisely the fall in value they’re betting on. Which hardly seems fair. 

Especially when you consider that, for the Hedge Funds to win, someone else has to lose – which, in this case, includes the real people who work in GameStop’s stores and may lose their real jobs when the company’s value plummets.

That’s why I always think the most important question any business needs to ask (and keep asking) itself is this: what value do we create? What would the world lose if we weren’t here?

If the only answer is ‘money’, you’d better start looking over your shoulder.

Because the real people have figured out how to play your game. And they’re coming for you.

Covid, cancer and creativity

This year marks the 50th anniversary of the National Cancer Act, Richard Nixon’s attempt to immortalise himself as the President who beat cancer.

The plan was to copy the spirit of JFK’s ‘man on the moon’ vision and throw so many resources at the problem that, within five years, nobody in the USA would die from it any more.

Unfortunately, ‘beating cancer’ turned out to be a lot more complicated and nuanced than putting a man on the moon. Which is why, 50 years later, Nixon’s legacy is rather less glorious than he’d imagined and cancer is still the second biggest cause of death worldwide. 

That’s not to say things haven’t got better. Survival rates have improved significantly for every major type of cancer. 

Except one.

While overall cancer deaths have fallen, deaths from pancreatic cancer have actually risen. It’s now the second-biggest cause of all cancer mortality, killing half a million people worldwide every year, with a survival rate of just 5% in the UK (compared to 76% for breast cancer, or 53% for bowel cancer). 

How come? Why has this particular form of cancer resisted efforts to tame it?

There are a number of reasons. It’s hard to detect. It spreads more easily. It hasn’t had the profile of other cancers – and, therefore, not as much focus or research funding.

But the biggest problem, historically, has been not so much the scale of the resources available as the way they’ve been deployed.

All the big pharmaceutical companies have invested money and expertise in researching ways to treat pancreatic cancer. But most of that research hasn’t worked, which means they’ve hushed it up (‘don’t spook the shareholders’).

Which, in turn, means that, instead of pooling resources and learning from each other’s failures, they’ve wasted time and money duplicating them. 

In the meantime, 95% of people with pancreatic cancer are still dying from it – probably even more this year, since the lockdown has made it harder to detect the disease at an early stage.

And yet, oddly, the long term impact of the pandemic may actually be far more positive for cancer sufferers. Why? Because it’s changed the way people think.

Backed by massive government funding, pharmaceutical companies have combined with research institutes and health agencies to create not one, but five, viable vaccines to combat the covid-19 pandemic. 

Less than a year after the work started, the vaccine is already in the market and protecting people – one tenth of the time it would typically take. 

Working together on the covid vaccine has built relationships and trust between competing clinical bodies. More importantly, it’s built an instinct of collaboration, where people talk openly about research that didn’t work, because it helps everybody’s thinking move on faster.

The results are already seeping into cancer research, with a more collaborative approach yielding encouraging progress in treating pancreatic symptoms.

There are important lessons in this for any business.

The most important being that, if you really want people to be innovative, you have to create a culture where they’re not too scared to tell you something didn’t work.

Where they’re motivated to help each other, not keep things to themselves.

And where they can focus on the problem, without being distracted by money.

Blue eyes, brown eyes, closed eyes

In April 1968, Jane Elliott was an elementary school teacher in Randall, Iowa.

The day after Martin Luther King was assassinated, one of the eight-year-olds in her (entirely white) class asked her ‘why’d they shoot that King?’

So she asked the class if they’d like to try an experiment.

On day one, she divided the children into two groups: those with brown eyes and those with blue eyes. The blue-eyed children had to wear blue fabric collars, so they would be easier to identify.

Then she told the class the brown-eyed children were superior – and, because of that, were entitled to extra privileges, such as second helpings at lunch, longer breaktimes, access to the new jungle gym.

The brown-eyed children sat at the front of the class, while the blue-eyed ones sat at the back.

Blue-eyed children weren’t allowed to drink from the same water fountain as brown-eyed children – they had to use one further away.

And brown-eyed children were given more leeway in their behaviour, while the slightest transgression by a blue-eyed child was seized on and condemned.

The results were striking. Very quickly, the brown-eyed children became bossy and assertive. Their test scores improved, but they became ‘nastier’ to their blue-eyed classmates, mocking them for their inferiority.

The blue-eyed group, by contrast, became more withdrawn. They lost confidence, isolated themselves at breaktimes and performed worse in tests.

The following Monday, Mrs Elliott reversed the experiment – explaining that she had made a mistake and it was actually the blue-eyed group that was superior. The results were the same, with the brown-eyed group faring worse this time and the blue-eyes doing better. The one difference was that, having experienced discrimination themselves, the blue-eyed children were notably less nasty to their ‘inferior’ classmates.

Opinion was divided about Mrs Elliott’s experiment. Most of the parents were furious. The other teachers refused to speak to her. Her family were abused in the streets. And some psychologists said the effects might be traumatising for young children (which, when you think about it, says quite a lot about why the experiment was needed in the first place).

But it quickly gained national – and then international – interest, when letters by the children explaining what they had learned were published in a local newspaper.

The ‘blue eyes / brown eyes’ experiment has since been picked up and repeated all over the world – and is still often used in diversity training.

The point – the thing Jane Elliott instinctively realised – is that it’s hard for someone to understand a concept like discrimination without experiencing it themselves.

That’s why ‘white privilege’ is such a tricky issue. Most of us who enjoy it (me included) simply don’t recognise it as anything other than normal.

At a more mundane level, it’s also why so much organisational change doesn’t work (over 70% of change programmes fail to achieve their goals, according to research by McKinsey & Company).

It’s difficult to persuade people they need to change when everything feels fine as it is. Especially when change can be chaotic and unsettling – and often means more work, at least in the short term.

If you want people to engage with change, you have to help them understand it. You have to bring it to life, so they vividly feel what the benefits will be for them – and what will happen if things stay the same.

You have to open their eyes. If you don’t, nothing will change.