17% of your people would sabotage the business given a chance but it’s the 83% who don’t care enough to bother who should worry you

*Gallup

What does managing corporate risk mean to you? In most large organisations, particularly financial services ones, it’s mostly about processes and oversight structures designed algorithmically to detect fraud, prevent safety violations, or predict and circumvent human error before these end up as a crisis.

 

Culture, more than rule books, determine how a company behaves

Of course, it makes a sense to manage risk actively.  Cock ups and criminality trash value and even destroy companies. But process is a small part of the picture. Everyone knows it’s people that cause the problem. We even have a name for it; ‘risk culture.’ But if that’s true, it’s also people that prevent bad stuff happening, or at least act swiftly to limit the damage when it does.

 

In other words, the beliefs and behaviours of employees either expose you to risk or save you from it. As Warren Buffett says “culture, more than rule books, determine how a company behaves.”

 

But the general view is that people are pretty weird and unpredictable. Certainly, most organisations seem peculiarly unable to get them all pointing in the same direction.

 

Yet, it turns out that something over 90% of people in your organisation are remarkably predictable. And the rest you can probably do without.

 

over 90% of human beings in a typical organisation are motivated not by self-interest but by a sense of joint and meaningful endeavour.

Chuck away your preconceptions about carrots and sticks and the theory of the rational actor and the evidence is pretty compelling.  Once their basic needs for comfort and safety are met, just over 90% of human beings in a typical organisation are motivated not by self-interest but by a sense of joint and meaningful endeavour. Call it purpose, if you like. Of course, if you choose not to provide that sense of shared meaning, or you choose to undermine people’s sense of safety, people will default to self-interest. That’s fine if you want people to perform purely simple binary tasks. But it’s deeply ineffective if people have discretion and agency in what they are doing. It’s also a horrible way to avoid risk.

 

Which is why a clear and authentic purpose, at the heart of strategy and the lived experience of employees, resolves a lot of the problem of a poor risk culture.

 

Health check: operative words in the sentence above are ‘authentic’ and ‘lived’. This is not a quick fix. It’s not about ‘having’ a purpose and sticking it on all the mouse mats (do they still make those?).  One thing that surprised us in our research across global companies was the extent to which organisations can achieve high purpose recognition amongst employees and still leave them entirely untouched in how they feel and behave. It’s abundantly clear that, in truly purposeful companies in which purpose is engaged in driving strategy and supporting human performance, purpose is truly alive in the experience of everyone in the business.

 

The key question therefore is ‘if that’s the key to effective risk management, how do you create a lived and experienced purpose?’ Our research shows that genuinely purposeful companies seem to have three key attributes embedded in their cultures that turn out to be critical in managing risk.

 

People care because they belong

Firstly, these companies exhibit a culture of ownership and responsibility that makes people, at every level, care because they belong. They own. Which means when something damaging happens or is likely, they care enough to do something about it because, emotionally, it is theirs. Emotional ownership appears to have a direct impact on both engagement (do I care?) and autonomy (enough to do something about it myself). And the easiest thing to feel ownership of is a purpose to be proud of.

 

They can articulate what the organisation believes in

Secondly, these organisations have in their purpose a clear articulation for what the organisation believes in, that this is inspiring to people whilst also being credible and congruent to what the business does for a living. And, critically, they have a commitment to authentically apply that purpose in how the business behaves and how decisions are made. That clarity of purpose cuts through confusion and guides how people behave and how decisions are made, right down the organisation, with laser-clarity and with real velocity. That means when damage occurs people are more likely to know how to respond and do so quickly.

 

They have built an enviroment of trust and compassion

Thirdly, and most critically, they have built an environment of trust and compassion. Which means  people feel able to act for the good of the company and not to keep their heads down or protect their position because they fear ridicule or blame. In every company we have assessed, a big difference in trust is one of the key discriminators between a company where purpose is lived, against one where it is stated.

 

And critically, these cultural factors appear to work together.

 

I’m clear about why we do what we do, I’m proud of it and feel responsible for its success, and I’m not afraid to act on it to protect it and see us succeed.

Purpose is not a statement. It’s a living culture based on clarity, trust and ownership. If you don’t invest the time and energy in creating these cultural underpinnings to your purpose it will have minimal impact on your people. And that matters a great deal when it comes to managing risk. If I don’t really get ‘why’, if I don’t feel I belong or if I feel scared I’m spectacularly unlikely to bother to do much about it when I see a risk of harm to the company or respond quickly and in the right direction to reduce the damage.

 

If you enjoyed this article you may enjoy:

Purpose, not profit, that inspireds companies to perform.

Turn pressure, stress and conflict in business into productivity, innovation and trust.

“Most big companies won’t have the velocity to see you the decade.’  Survival tips from the ones wearing the running shoes.

 

Image from rawpixel.com / Markus Spiske


Turn pressure, stress and conflict in business into productivity, innovation and trust

“The ability to deal with people is as purchasable a commodity as coffee. And I will pay more for that ability than for any other under the sun.”

J D Rockerfeller

 

There’s a simple technique to turn pressure, stress and conflict in business into productivity, innovation and trust.

Here’s some good news. It is perfectly possible to make yourself and your people dramatically more productive. To turn conflict into creation, pressure into progress, breakdown into breakthrough. And make everyone a great deal more joyful in the process.

But first you have to accept a fact that is deeply shocking to most highly educated and skilled executives and professionals.  A fact that it took me about 5 years to digest.

 

What you know has surprisingly little impact on how good you are

The fact is that very little of our commercial success has anything to do with technical knowledge, skills and expertise.  It may suit us to believe that our value to our organisations and our clients lies is in our expertise. But it’s not wholly true. In fact our brilliance may be damaging to our effectiveness. And that could be costing us a lot of money.

Research by the Carnegie Institute of Technology shows that only 15% of financial success is due to technical knowledge. 85% is due personality and our ability to communicate, negotiate, and lead (what they call “human engineering”).

 

Our brilliance may be damaging to our effectiveness

Consider this, Nobel Prize winning Israeli-American psychologist, Daniel Kahneman, found almost everyone would rather do business with a person they like and trust rather than someone they don’t, even if the likeable person is offering a lower quality product or service at a higher price.

 

Could all that investment in skills training be a waste of time and money?

There are broadly three areas of skill in a business: technical, commercial and human. We invest incalculable amounts of time and money in training our people, at school and in business, in technical and commercial skills and almost no time at all in developing their abilities in human engineering. And yet that is what accounts for 85% of our success. Skills training is valuable. But we’re missing a trick if we focus on technical expertise to the exclusion of the human.

And there’s another problem. Even where we do spend time and money on helping our people understand themselves and other people, most of the tools we use actually get in the way of taking any practical action.  We are told that the first step in understanding others is to understand yourself. The problem is that the personality tools we use are so complex that people spend even less time thinking about others because they have so much more complex ‘insight’ into themselves.

The difficulty in applying the tools that are supposed to help in this area result in little change in people’s behaviour. And this is particularly so in the way they are experienced – very often away from, and not directly related to, real business environments. Which means that, when the pressure comes on, any learnings are swiftly overwhelmed and made irrelevant.

 

We’re missing a trick if we focus on technical expertise to the exclusion of the human

After all, when did you last apply the learnings from that latest psychometric analysis when the proverbial hits the fan and you and your team are up against crisis, pressure and the clock?

Surely, the key to true dynamic skills is the ability to apply techniques in real time and under pressure.

 

People’s response to pressure is key to understanding how to improve human dynamic skills

That is, after all, what happens in elite sport.  This is how the ‘process of coaching’ works. Firstly, you help a person learn a new technique, then you put them under pressure and see if they can still execute the technique. Then it is called a skill. In a game, if they can execute this skill for the benefit of another team member then they are called a player.

In business we give people lots of techniques but most of those techniques are lost when pressure is applied. No execution. No real players. 15% of the potential value.

The learning is that people’s response to pressure is key in understanding how to improve human dynamic skills, reduce friction and increase productivity. This may sounds like a whole new layer of complexity, on top of ‘personality types’ etc.  But it isn’t. And nor is it new.

J D Rockerfeller said ‘the ability to deal with people is as purchasable a commodity as coffee. And I will pay more for that ability than for any other under the sun’. Perhaps he knew instinctively what the Carnegie Institute of Technology proved many years later.

 

Our response to pressure is predictable. And that unlocks the puzzle.

And we have an ally. Our own psychoanatomy. People’s response to pressure is entirely predictable. And that means there’s no requirement to learn complex psychometric types which are hard to remember and apply. Some simple tools can be applied in the moment, in real times of business stress, to understand and engage with others under pressure. And that really is understanding human engineering.

Modern neuroscience has shown how our brain has developed over time. Most interestingly, how the neocortex (thinking and language brain) has developed.  But there’s one area of our brain that has seen no upgrade in millennia. And that’s the amygdala. The purpose and the functionality of this part of our brain has not changed. It is functionality we share with all our evolutionary antecedents.  And that function is to protect. It kicks into action when there is a threat. When we are under pressure.

New research applies this neuroscience to find out what happens when a person is under stress or pressure in real business environments. Using this, the researchers can codify and predict how people will react. This is rather hard to do in the theoretical ‘observational’ approach of most organisational modelling from Jung onwards.

 

Of tigers and tight deadlines – the unthinking tyrant within

So, what does the amygdala do when we are under pressure?  Firstly, our brain receives a shot of adrenaline to help us respond quickly. It also receives a shot of dopamine to reduce inhibitions that might prevent action. Then the neo-cortex receives a shot of serotonin, basically to help it calm down and thus stop you thinking too much which can be debilitatingly slow. It’s sometimes referred to as ‘the amygdala hijack’.

 

Our amygdala simply doesn’t distinguish between a real threat and a perceived threat

All of this is fantastic when you’re being chased by a sabre-toothed tiger. But not so good at work when we are dealing with complex pressures – and, most critically, other people. Because what the neural research suggests is that the amygdala simply doesn’t distinguish between a real threat and a perceived threat. Our response to stress, at a physiological level, is the same.

We may be the only species that does not suffer from daily threats to our existence. But instead we have invented the game of business. And in that game an amygdala response can be triggered by anything that is a threat to our reputation or our identity. This perceived threat results in exactly the same neurological drug-fest that occurred when the tiger was getting closer. And unlike in our evolution, when amygdala hijack was an infrequent occurrence, today, in the office, it is happening on a daily basis. And that creates unprecedented stress, friction and dramatically decreases productivity.

 

Conflict as a spark to leap forward not dig in and stop

So, if there is a neurological cause, is there a neurological answer? The answer is yes. There are four survival strategies triggered in response to an amygdala hijack.  These are biological responses and hard coded into our DNA. They are therefore entirely predictable.

When under pressure, some people have a need for certainty and so take charge and tend to dictate. They can come across as arrogant and perhaps uncaring. They love ideas.

Some have a need for a sense of freedom. They need to feel they are not boxed in. They can often come across as impatient and restless. They love relationships.

Under pressure a third group have a need for stability, get their heads down, tolerate things and plough on. They love getting things done.

And finally, there’s the group that have a need for security and tend to hibernate in their office. They do not like to make decisions but do they love getting things right.

Since a person’s response to pressure is relatively consistent and therefore predictable, how to deal with that person is equally predictable. There are simple things can be done differently for each style.

 

“With only 15 minutes of planning, we got a whole new approach to a Group Board member that we had struggled with for two years.”

In every office environment there is conflict, and that conflict is made worse under pressure. Breakdown between individuals and within teams is common. It’s both incredibly damaging to productivity and  not great for mental health. Either way it costs a lot of money.

Yet, now we understand the neuroscience behind the problem, there is a simple solution to breakdown. A clear set of strategies people can learn to apply to unblock relationships, build trust and unleash the power of collaboration. These strategies take less than a day to learn and can be applied to real situations immediately.

Find out more about how Agile Styles can be applied in your own business here.

 

“Of all the courses in our core curriculum, this has shown the highest correlation with accelerated revenue growth and improved performance. Individuals and teams in every service line have dramatically transformed their results with these tools.”

Katherine Steen, Colliers University Global Director

 

You might also enjoy these articles:

Why are corporates so hopeless at innovation (and entrepreneurs so good at it?)

How to make your people 30% more engaged, 29% more joyful and 26% more productive. Easily.

Leadership? It’s followship we should be worried about

 

John Rosling is a writer and lecturer on entrepreneurship, CEO of Contexis and Head of Thought at the Contexis Index; ever curious as to how entrepreneurial thinking is the key to activating purpose, stimulating agility and velocity and fulfilling human and commercial potential in global organisations.

 

Photo by NeONBRAND on Unsplash


‘Most big companies won’t have the velocity to see out the decade’. Survival tips from the ones wearing the running shoes.

90% of CEOs don’t believe their business is moving fast enough to adapt to the changing world.  And that raises a mass of questions. How do I create an agile, high performance culture? How do I engage and align our people?  How do I drive productivity? Land strategy? Create trust in our business?

There’s an old story about two hikers who are confronted by a large bear in the woods. One calmly sits down, removes his boots and puts on a pair of running shoes. “What are you doing!” his panicked friend asks, “you’ll never outrun a bear.” “I don’t have to” he replies” I only have to outrun you”.

 

The life expectancy of a S&P 500 company is down to 15 years!

Whilst CEOs may be right that their business is not moving fast enough, it may not be as bad as they fear. In most cases they only need to go faster than the other guy.  It’s therefore worth asking who is wearing the running shoes in your industry. Which are the agile businesses you face, and what are they doing that you are not?

The answer tends to be the businesses that are smaller, newer, less encumbered with legacy; in other words, the entrepreneurial ones.

 

Entrepreneurial thinking; a mindset not a legal entity

Yet, entrepreneurial thinking actually has very little to do with scale or age. It’s a mindset. It’s therefore worth taking a really close look at what entrepreneurially-minded businesses, of whatever size, actually do. How is that they create that agility of culture, productivity of people and performance of management. And can this be replicated?

 

Entrepreneurial thinking actually has very little to do with scale or age

A big part of what drives agile business is a compelling and engaging purpose which is authentically and consistently held in the organisation.  For purpose to have any impact, it must not only be credible and congruent to the activities of the business. It must also be absolutely authentic. Most large organisations know this and have spent a great deal of time, trouble and money creating and communicating a clear purpose. They believe it’s the key to driving the agility in their people, their leadership and their cultures that they need to survive in the fast-paced and ambiguous world they face. They believe that a clear purpose will engender behaviours of alignment and engagement in their people, clarity and velocity in their management, and openness and creativity in their cultures. These are the hallmarks of the agile, entrepreneurial business they seek to create.

 

For purpose to have any impact, it must be credible and congruent to the activities of the business. It must also be absolutely authentic.

And most are finding it’s making not a jot of difference to the behaviours in the organisation; “we’re just not getting any traction from our purpose” as one C-Suite said to me recently. There is a big gap between the purpose at Board level and the experience of employees and customers. Just why is this?

 

Entrepreneurially-minded organisations achieve agility not by having a purpose but what they do with it.

Agile, entrepreneurial businesses just use purpose in an entirely different way. A way we find can be replicated in almost any organisation to bridge the gap and actually harness all the power of legacy (that currently burns itself up in internal nonsense) and point it outwards to create velocity for the company.

Our experience of these agile and entrepreneurially-minded businesses reveals a clearly defined set of drivers within their cultures that are the secret to bridging the Purpose Gap.

Inspiring leadership helps.  Purpose should be inspiringly and credibly led.  But what the business believes about itself and how it behaves are more important.

The first major difference in these organisations is a strong cultural assumption of TRUST. These cultures tend to be open, compassionate and creative rather than inward looking, fearful and controlling. In more traditional cultures based on control, people are instinctively distrustful of the purpose and hence it has no power to change things for the better.

 

What drives trust is a marked difference in the organisation’s approach to people.

What drives trust, allows purpose to thrive and transforms cultures is the organisation’s approach to people.  There is no mystery to this; as Jeff Weiner of LinkedIn says, it can be taught. There is also nothing soft or altruistic about it; creating trust is a major driver of exceptional productivity and efficiency.  And, as LinkedIn has discovered, the rewards of creating Cultural Agility in terms of building cultures that are innovative, open and always learning can be extraordinary. To find out more about creating agility through building a trust culture read here.

 

There is nothing soft or altruistic about creating trust; is a major driver of productivity.

The second major driver of entrepreneurially-minded businesses is a company-wide feeling of, and desire for, OWNERSHIP.  Unless everyone in the organisation feels – and feels allowed to feel – a powerful sense of ownership of the business it will not flow through into agile employee behaviours. Organisations in which everyone feels an emotional investment demonstrate employee behaviours of alignment, engagement and autonomy. And the simplest and most compelling route to creating a culture of ownership is to create a feeling of ownership of the purpose the organisation serves.

 

Organisations need to reframe the relationship between the company and the employees from one of control to one of self responsibility

This is about a critical shift in how management at every level of the organisation thinks and behaves and about shifting the relationship between the company and the employees from control to self responsibility.  To find out more about creating agility through developing ownership and responsibility read here.

The final driver of entrepreneurially-minded businesses is the ability to manage in CONTEXT.  Whilst trust drives cultural agility, and ownership drives engagement and autonomy, the ability to manage in context defines how effectively and efficiently management behaves.

 

Contextual Management creates clarity, adaptability and, above all, velocity in management decision-making.

An increasingly volatile, uncertain, complex and ambiguous world requires a significant amount of adaptability; and that is something that entrepreneurial management is all too familiar with. Whether because of the speed of development, newness of the market or paucity of resources, entrepreneurial management has long been adept at navigating an ambiguous world.  The key skill entrepreneurial management demonstrates is the ability to make decisions contextually to create clarity and direction rather than getting bogged down in the content. And this is a skill that can be taught.

Where management uses a clearly articulated purpose as the context for key decisions, within an environment of trust and where the whole team is willing to take responsibility, it creates enormous velocity. It also ensures the purpose links the business up from top to bottom.  To find out more about creating agility through managing in context read here.

 

Is there any proof to support these observations?

Actually, yes. So convinced are we that purpose drives performance we wanted to prove it. So, we’ve spent two years creating a measurement methodology with Cambridge University and others that provides the metrics to definitively prove that purpose drives performance. But that’s not enough. We also need to show how this effect works and measure the correlations and causalities between the cultural attributes described above. We need to show how these cultural factors activate and unlock purpose. So that any company can replicate the cultural systems of the best entrepreneurial businesses and start to develop a more dynamic and agile culture. You can find out more about that work, and how you can benefit from it today, here.

It’s easy to agree that purpose is a good thing.  With the life expectancy of a S&P 500 company down to 15 years, it’s easy to identify that the behaviours of aligned engaged staff, open innovative cultures and agile clear-headed management are the key to survival.  The problem is the gap between purpose and behaviour. Without the entrepreneurial drivers of trust, ownership and context muddle, distrust and cynicism will persevere in middle management and purpose will not take root. Without these entrepreneurial ways of thinking no business can hope to be agile. It will always be outrun.  And in a volatile, uncertain, complex and ambiguous world the bear is very large and very real.

 

You might also enjoy these articles:

How thinking like an entrepreneur could make corporate organisations 26% more productive

Purpose transforms performance. But if you can’t measure it how can you implement it?

How one of the world’s largest financial institutions got more than it bargained for in implementing purpose

 

John Rosling is a writer and lecturer on entrepreneurship, CEO of Contexis and Head of Thought at the Contexis Index; ever curious as to how entrepreneurial thinking is the key to activating purpose, stimulating agility and velocity and fulfilling human and commercial potential in global organisations.


How entrepreneurs manage when they don’t even know what the question is

What drives agility in large, complex organisations?  Most have spent a great deal of time, trouble and money creating and communicating a clear Purpose. And most are finding it’s making no difference to the behaviours in the organisation. There is a gap between the purpose at Board level and the experience of employees and customers.

Entrepreneurially-minded organisations achieve agility not by having a purpose but what they do with it.  These agile and entrepreneurially-minded businesses exhibit a clearly defined set of drivers within their cultures that are the secret to bridging the Purpose Gap.

The first two of these, TRUST and OWNERSHIP  have been discussed in previous articles.  The final driver of entrepreneurially-minded businesses is the skillset of managing in CONTEXT.

“High performance people do better work if they understand the context…the best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people”.

Reed Hastings, Netflix

Whilst trust drives a culture of agility, and ownership drives behaviours of engagement and autonomy, the ability to manage in context defines how effectively and efficiently management behaves. In my previous article I suggested that ‘with consistent and effective management the transition from control to self-responsibility will be a natural process and the behaviours of engagement, autonomy and shared commitment will emerge”. The question now is what the source of that effective entrepreneurially-minded management actually is.

Entrepreneurial management has long been adept at navigating a volatile, uncertain and ambiguous world.

The answer lies in developing in the management community the awareness and skills of contextual management. In a world of increasing complexity and speed, if management at every level learns the skills to be able to use ‘context’ and not ‘content’ to make decisions it greatly speeds up the decision-making process and allows for clear-headed management, able to communicate decisions clearly to others. Much has been written recently about the business environment becoming volatile, uncertain, complex and ambiguous (VUCA). Increasingly, people are required to manage in an environment where not only are the answers not clear but even the questions are not easily understood.

This requires a significant amount of adaptability; and that is something that entrepreneurial management is all too familiar with. Whether because of the speed of development, newness of the market or paucity of resources, entrepreneurial management has long been adept at navigating a volatile, uncertain and ambiguous world.

The key skill entrepreneurial management demonstrates is the ability to make decisions contextually to create clarity and direction, ‘keeping the main thing the main thing’,  rather than getting bogged down in the content. And this is a skill that can be taught.

Reed Hastings at Netflix is a passionate proponent of contextual management as the only way to motivate and retain talented people and maintain the velocity and agility required to keep up the pace of growth Netfix has experienced. “High performance people do better work if they understand the context” he says and adds “the best managers figure out how to get great outcomes by setting the appropriate context, rather than by trying to control their people”.

Contexis Purpose Gap_v3_5

Where management uses a clearly articulated purpose as the context for key decisions, within an environment of trust, and where the whole team is willing to take responsibility, it creates real clarity of thinking and far greater adaptability in management.

An understanding of context allows management to pivot and creates the kind of ‘speed with direction’ or velocity typical in entrepreneurial management teams. Referencing to purpose creates flexibility in a dynamic and changing world.

Put simply, contextual management is agile management equipped to deal with a volatile, uncertain and ambiguous world.

 

You might also be interested in these articles:

‘Most big companies won’t have the velocity to see out the decade’. Survival tips from the ones wearing the running shoes.

Purpose transforms performance. But if you can’t measure it how can you implement it?

How one bank is creating radically different relationships with the small business market by teaching their relationship managers to understand the mind of the entrepreneur.

 

Photo by Ken Treloar on Unsplash