management blog

I don’t know if many members of the Academy of Motion Picture Arts and Sciences knew that March 8, the morning after the Oscars ceremony, was International Women’s Day. I’m guessing not. But as it is, in awarding the best director award to Kathryn Bigelow for her work on The Hurt Locker, they gave a green light to campaigners to launch 1000 press releases pegged to her victory.

Last month I met Philip Kotler - the “father of modern marketing” – in London. We had a great chat. The column inspired by that conversation is in the FT today.

… as suggested to me by the wonderful Tammy Erickson over a cup of coffee this morning:

“Would you like your child to work for your company?”

If the answer is yes, great. If not, why not?

My column this week on the mixed-age workforce provoked a warm and positive response. This is one of those topics that everyone seems to have a view on.

Yesterday I picked up a new phrase – new to me, anyway - which shows how highly developed intergenerational sensitivities can be these days. I was talking to Michal Kalinowski, chief executive of Universum, the Stockholm-based employer brand consultancy. He told me that, in Sweden, they have a colourful phrase to describe the sort of intense, highly protective kind of parenting some people go in for.

“Helicopter parents” I knew about: the ones that hover permanently just above the heads of their offspring, always on the look-out for danger. But in Sweden they call these people ”curling parents”. To understand just how wonderful this phrase is, tune in sometime soon to the Winter Olympics currently taking place in Vancouver. In the sport of curling, team-mates brush away furiously at the ice, helping their team-mate’s “stone” to hit the target. That’s what over-fussy parents can do: worry away too much, looking to clear every obstacle from their child’s path.

Self-esteem is important for young people, but you can have too much of a good thing. Resilience comes from ovecoming challenges. If we want the next generation to develop true grit, we will have to get out of their way, eventually.

Forgive this brief, self-indulgent dip into the media industries, but the UK press scene is currently coming to terms with the (still speculative) news that Rod Liddle, a controversial former BBC editor, will now apparently not become the new editor of The Independent newspaper - at least according to this generally reliable source.

(I know: this is getting a bit meta – a rumour-driven blog post about about a rumour in the media. As I said, I crave your temporary indulgence.)

The serious (and substantial) point is that this (non-)appointment, if that is what it is, seems to have been scuppered by an informal and only semi-coordinated campaign on Twitter. A lot of vocal people started complaining about the proposed appointment – Facebook was used too – and, within a few days, it was all off.

Managers need to pay attention. Citizens are deploying this muscular, speed-of-light medium to greater effect. Freedom of speech is a wonderful, and powerful, thing. If you haven’t appointed someone to monitor social media full-time, isn’t it perhaps time that you did? Otherwise, the first thing you will know about a Twitter campaign against you is a tidal wave of complaints and a violent fall in sales, and reputation.

Social networks are, I’m afraid, just one more thing for bosses to worry about. Of course, there is also an opportunity for companies to develop an effective Twitter presence…

… to casinos.

Let me explain. With this morning’s news of Barclays’ impressive results, we should brace ourselves for a continuation of the debate over ”excessive risk-taking” by the banks (even though the £11.6bn profits were boosted hugely by the one-off sale of its asset management business Barclays Global Investors in December). It will be alleged, once again, that investment banks have been reckless, and that they are behaving like casinos.

But as Chris Brady, dean of the BPP business school in London always tells me, good casinos (and he’s visited a few) are managed extremely carefully. Their appetite for risk is limited. And crucially, their basic supervisory management and attention to detail – changes in people’s behaviour, for example - is intensive.

Professor Brady recommends the film 21, based on the novel Bringing Down the House, about a group of MIT students who worked a con in Las Vegas. In it a veteran employee notices that something odd is going on – something that a bank of computers and CCTV have missed.

In the City of London there is an old saying that “management is what you do when the markets close”. At first sight this could make sense. Who has time for management when there is money to be made? But the bosses of SocGen must have wished that they had managed the rogue trader Jerome Kerviel a little more closely, and not waited for markets to close, before checking up on what he was doing.

No self-respecting casino would have made this mistake.

So now we know – Eurostar’s preparations for potential mishaps in the Channel Tunnel were inadequate. Of course, we could have worked this out for ourselves. It was all-too apparent from the troubling scenes we saw last December. But fair play to the company for commissioning and now publishing this unflinching report.

Eurostar muffed its apology back in December, something I was rude about at the time. If it is any consolation to them, Toyota’s recent “apologies” have been even worse. Businesses still have a lot to learn about apologies and recovering from set-backs.

There is one bit of good news to report. Richard Brown, Eurostar’s chief executive, has learned how to express his regret more convincingly. And, as you can see in this clip (scroll down to see it), he has had a sensible haircut.

Diageo, the international drinks group, was putting a brave face on some less than thrilling results today. In the six months to the end of December pre-tax profits were down one per cent. The company saw some improvement towards the end of 2009, however, and is hopeful for better results in the first half of 2010.

Elsewhere the company’s chief executive, Paul Walsh, has been speaking out about the tax treatment of his company and its better paid UK-based employees. This is a highly sensitive issue for any global company. You have to be headquartered somewhere, to be a legal entity. But where? And what if a foreign country – let us say, hypothetically, the Swiss – were to offer favourable tax treatment both for the corporation and its top-paid staff? This is something else for the CEO to think about.

There could be major PR damage to any company, and its brands, if it were seen to be making good profits in its nominal “home” country while paying taxes to another less demanding jurisdiction. Diageo has already had to deal with a hostile reaction when it announced the closure of its Kilmarnock site last year, where Johnny Walker whisky was produced.

Just like competitive devaluations, competitive tax breaks are a dangerous game for governments to play. Where will it end? And what will happen to overall government tax receipts? It is also potentially disruptive for companies to uproot and find a new home. Will the best employees be happy to move too, even if there might be a tax advantage in it for them?

The fact that Mr Walsh has gone public on the question of tax, however, is a sign that the company is genuinely concerned. I doubt very much that Diageo wants to leave the UK. But it has sent a clear message to the UK government that it needs to see a meaningful response.

Modern media and the blogosphere love a “story” (as we call them) like the Toyota saga. It gives everybody a chance to offer an opinion, whether or not they have any of the facts at their disposal.

This recent piece in the New York Times, by the auto industry blogger Matthew DeBord, argues that the famed Toyota Production System sowed the seeds of its own destruction -

“For such an intense system to function properly,” DeBord wrote, ”employees have to blindly adhere to it; overconfidence is the natural outcome of this arrangement. Yes, any worker is empowered to stop the assembly line because he spots a flaw. But if a flaw does get through, the company as a whole is loath to admit that the system broke down.”

I don’t think this is quite fair. The TPS is good. But it has struggled under the pressure of the amazing expansion the company has undergone in the past ten years. Senior managers may have been arrogant, or perhaps just not brave enough to admit how standards were slipping. But I expect that, down on the production line, Toyota employees could see exactly what was going on. That is the Toyota way.

I have written a column today on how great companies fall. Ironically – serves me right – a foul-up in production led to an idiot mistake in the print edition (which you will now not find in the corrected on-line version!) To err is human. That is why you need systems – like the TPS – to spot mistakes and act on them.

 A sensational piece in today’s New York Times by Dick Brass, former vice president at Microsoft between 1997 and 2004, on the continuing struggles at the software giant. Mr Brass worked on the company’s unsuccessful attempts to develop popular tablet PCs and e-books. You might think he is writing out of bitterness and disappointment. But he offers a measured (and fascinating) commentary on the difficulty big, successful companies have in changing to adapt to new times.

This is one of the reasons why the mighty fall. We are currently seeing another example of this at Toyota. I shall write at greater length about this topic in my next Tuesday column.

But here is an initial thought to be getting on with. The management writer Charles Handy urges us to think about our own lives in terms of an S or “sigmoid” curve, which represents the struggle, growth and decline life-cycle which most of us, and most companies, are on. The trick is to start something new while you are still at the height of your powers, and before inevitable decline sets in. That way you can remain a high performer in some activity, even as you start to tail off in another.

Toyota’s problems are rather different, I think, and have to do with complacency and cutting corners. But Microsoft is a classic example of a business that still lives off its killer product, Windows, without ever quite coming up with anything even half as lucrative.

Whether at the personal or the corporate level, we have to become as adaptable “as change itself”, as Gary Hamel says.