It’s fair to say that I learnt more about organisational strategy during the 30 minutes spent with Simon than I had in the last three months. Here he talks about understanding the environment you operate in, why you should read multiple copies of the same book and how maps are ultimately superior to graphs when it comes to business.
Hi Simon, thanks for talking with me today! As I’m sure you’ve seen, over the last year has been all about surviving, rather than thriving, and hopefully, as we move into a recovery phase more globally, and companies begin to take a longer-term view again, how has your focus shifted going into 2022?
Gosh, good question! Before the pandemic, my life mostly consisted of travelling around the world, visiting people as well, plus a lot of remote working from home. So I think in the four or five years previous to that, I think I’d been into the office about twice. One of the things that happened with the pandemic is, this isolation economy, to give it a term, which forced people to start adopting tools already in existence, but that we’ve been slow to adopt.
We’ve always been able to do remote work and conferences, but it’s been sort of ‘second-class’, so we had to adapt. And so for somebody like me, who’s spent a lot of time visiting places, I’ve found that it became a lot easier to do the research I was doing, because now I can have 70 people from across the world, all talking to each other in one place. I wake up in the morning and I’m talking to people in Australia and China, by the afternoon I am in Europe, and then by the evening I’m in the US. That was never possible before. I’m one of those very fortunate individuals – adaptation wasn’t particularly difficult, because I was already partially in that space and in fact, a lot more people coming online meant certain things became a bit easier, despite the horror of what has gone on.
I would say however, that looking at the people who’ve struggled to adapt, there’s quite a percentage of executives who have problems. Power is often within a structure that is hierarchical and there are a lot of status symbols wrapped up with the concept of executive power in organisations i.e. the ‘top floor office’. Those people suddenly found themselves in a world where they’re just another person on a Zoom meeting. Some of their social-physical power and some of their status symbol power has been reduced, and they could often find other, more junior people knowing more about what was going on and what they should do in the circumstances, than they did. So for those who are very much in the world of storytelling, narrative-led power relationships because of physical presence and status symbols, they have found it quite difficult and so they’re rushing to get everybody back to the office.
For those who have adapted, suddenly people have found that they can be with their family more, they can change jobs without having to uproot everything and so there’s been a shift in terms of power and relationship there. But of course, there have been some people who have also suffered from the isolation side because it has mental health impacts as well. And so we’re still adapting. We’re changing to this new world and working out how to collaborate, how to include and cooperate with others online, but at the same time, we’ve still got people trying to get us back into the old way, because that’s their comfort zone.
One of the recent projects I did looked at how organisations evolve and there are very clear signs of a new form of organisation appearing at this moment in time; one that has proponents of concepts like leaderless leadership. So you don’t have this concept of ‘heroic leaders’, instead, it is much more distributed within the organisation, much more remote learning and remote-first, and a much greater understanding of supply chains. This new world is much more modern and there are greater levels of situational awareness. And some of these companies are huge conglomerates, but have adapted and changed as well.
So for me – despite the obvious medical impacts of this disease – which have been horrendous – another personal benefit is I’ve discovered a lot more things locally; I now know my neighbours and my community, which is wonderful.
Do you think you’ll stay that way?
Yes, I have no intention of going back. One of the things I did was warn a bunch of executives back in September 2020 – who were reluctant to adapt to remote working – against monitoring everything. I said no, you’ve got to adapt and find those people running a one thousand-person guild online and just put them in charge of the company because they’ll understand, which didn’t go down particularly well. But as we recover, you’re going to discover that people are going to realise they can move and if you’ve treated them badly during this time, you’ll just lose lots and lots of staff.
There’s this awful term ‘The Great Resignation’ that has come up in the last five or six months, and it’s fair to say it’s awful because people keep saying it’s a ‘war on talent’. The problem is that yes, you may lose staff – and I’ve known groups who’ve lost significant numbers of people because it’s now easier to move – but that doesn’t mean that people who remain don’t have talent. It’s a really bad attitude to have.
I sat with my friends at Netflix many years ago with a whole group of CTOs and CIOs from different companies, and I always remember one of the CIOs asking where Netflix got their talent from. And the response was ‘from companies like yours’. Because the reality is most of these companies are pretty poor at recognising their own talent. So I’m not keen on the metaphor because it also implies that talent can’t be created, if you support and nurture people correctly.
What do you think teams are going to need most from leadership going forward? What can they offer people that stay or join the organisation during this change-up that they weren’t offering before?
Some of these organisations have these very old ideas of what leadership is – I go back to the idea of the ‘heroic leader’ and setting commands almost. And then you’ve got these new forms of organisations appearing, which are much more distributed and some of these companies are huge, like HSS Hire for example, which manufactures white coats and operates tens of thousands of small little independent companies, or Amazon, which uses a two-piece type model for structure in various parts of the organisation.
So we’re seeing a lot more appearance of these concepts like Gamestop or Wall Street Bets – that wasn’t an organisation there that took on the hedge funds with no clearly identifiable leader – but it had certain characteristics: there was good communication, good situational awareness, and discussion of the issues at hand. There was also a clear purpose and a fairly clear set of beliefs or values. And we’re seeing those plus another characteristic which is having clearly defined principles. So rather than having procedures, process, and all the rest of it, these tend to be much more principle-led organisation, generic rules, which are applicable everywhere. Things like: ‘Focus on the user needs’ or ‘Challenge assumptions’. And it turns out that’s probably a universally useful thing to do, but you can’t do that, unless of course you have good communication etc. so they’re all interlinked together.
So we are seeing a different form of organisation emerge, and principles are a big part of this. They’re not just words, they’re fundamentals that drive through a company. Awareness is a big part of this. Even things like marketing is no longer just used to justify executive decisions, it’s used to challenge them.
It’s so interesting to hear how you think leadership as a whole is going to change but what can leaders do to support their teams better through this transformation and how can they bring empathy to the fore in this new modern world as you call it?
Things like the situational awareness, the distributed leadership, the non-hierarchical structure, and the tendency towards remote, all of these are characteristics. The problem is when it comes to the practice of those, they are more in the novel emerging space. People are exploring. They’re working out what it means to collaborate and cooperate with others effectively online. So lots of people will come up with ideas and think they have the magic solution, but the honest answer is it’s going to take a bit of time to get through it.
So from the point of view of leadership, what you need to do is embrace this moment much more – take that as a given. You’re going to need to talk to people and talk to your staff. Challenge the assumptions that you’ve got over your existing organisation, and in order to do that it would be useful to understand your existing organisation and most companies do a very poor job of understanding it or the environment in which they compete, because they lack that basic situational awareness. That’s what I would suggest.
The counter to that is how close are you to retirement? If you’re retiring in five years, you may as well try and ram everybody back into the office, not care just pay out dividends, do share buybacks, get the share price up, then clear off. And I’m sure many will do that.
When you say things like talking to their people and situational awareness being key, what would you advise companies to do when trying to communicate their vision and their strategy to their staff? What are the most important things for articulating that and creating buy-in?
The single most important thing to start with when trying to plan any form of strategy or vision, is to understand the landscape you’re competing in. The second is then understanding the patterns that apply to that landscape, as in where it is going. In order to do that, you have to allow other people to challenge the assumptions that go into your understanding of both. So I would say the three most important things are, understand your landscape, anticipate change and challenge assumptions. And those I would say, are the three critical things that you need to do while also being, by pure chance, the three things which are most commonly almost non-existent.
Interesting! And so following that, what’s the most common failure you’ve seen in strategic planning?
That people don’t understand their landscape! We create a story, a narrative instead of actually understanding it. The problem with stories is that we have an entire industry that goes around telling people that to be a great leader, you’ve got to be a great storyteller. So basically, they tell you that your idea failed, because you didn’t sell it in the right way and wouldn’t have done, if you were a better storyteller. So this creates a problem. Because when I give you my story, and you challenge it, you’re actually saying I’m not a great leader. It immediately becomes political.
The word competition actually means ‘seeking together’. So we are seeking something together, and we might do that in conflict, but we also might do that collaboratively or in cooperation with each other but it’s all competition. The problem is, if the head of the organisation shares their story and you confront the face beyond it. Because their politics are tied to the story, as soon as you challenge the story, you’re challenging them, and you’re engaging in conflict where the highest-paid person’s opinion wins.
And as I mentioned about learning patterns, we don’t tend to learn them from stories. Because we don’t tend to write the story and do a pre-mortem exercise before doing the action. Most business cases are shelved after they’ve been agreed never to be opened or looked at again and that is a mistake.
That makes sense. And so let’s say that when leadership is strategising effectively, how should they behave to get those juniors further down the business food chain – who aren’t linked to the story – to want to be part of the vision or mission, when perhaps they can’t really see their role in it?
Great! Fantastic question. A friend of mine at the United Nations started from the point of view of wanting to reduce global poverty, so they decided to map it out. (Maps are a very specific thing that we don’t have in business – we have graphs that we call maps, but they’re not actually maps). And they asked what does that require? One of those was knowing where the all-weather roads are (what it says on the tin – roads that work in all weathers) and people need that to get to jobs and things like that. And so how do we know where those are? That comes from analysing the available survey systems: 192 different countries, 192 different survey systems, and you can then map that out. And so they used this map to put a case together and build the UN’s data platform. But the second aspect of this is if you are in the national statistics organisation working on one of those systems, you can see all the way through the map: why you were working on a particular part, and how it was connected to the mission of reducing global poverty. That’s one of the beauties of mapping – it’s easy for everybody to see the interconnection. It’s very difficult to do that with narratives.
That is so fascinating! Thank you for sharing. Well, my last question is can you recommend a key book or a podcast or anything else that you think every technology leader should read or listen to?
Certainly. The first book you should read is Sun Tzu’s The Art of War. And the second book you should read is another translation of The Art of War and the third book is yet another translation of it. And then basically ignore everything else from then to now.
The reason for suggesting different translations is because native speakers say they are different. But Sun Tzu talks about the factors of competition – given different terms, but fundamentally: Landscape; climatic patterns- how the weather changes the environment you’re operating in; doctrine – basically your rules of organisation, and then you’re into gameplay, which is leadership. This overlaps with John Boyd’s OODA loop because observing the environment is all about understanding the landscape and how it’s changing; the climatic patterns. Orientating around this are the principles and the doctrine you have as an organisation. Then you’re deciding where to attack and acting upon it and that is where all the gameplay stuff comes into it.
It made no end of difference to me when I was CEO for a company. I would write these wonderful vision statements, but basically gibberish. Revenue was growing and we were very profitable, but I hadn’t got a clue what I was doing. I read every strategy book I could find and it didn’t help. So when I was in a bookshop in London and talking to the bookseller explaining this, she told me to read Sun Tzu’s The Art of War and persuaded me to buy two copies and two different translations. To this day I’m very grateful for that, because it was through reading the second one that I came across those five factors of competition and it opened a doorway for me into this whole thing.
Thank you, Simon!
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