Chartered Management Institute: In my opinion

Chartered Management Institute Companion Sandra Macleod, CEO of Echo Research, believes listening is essential for new leaders.

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Last Updated: 31 Aug 2010

There is a well-known quip about a local who, when asked for directions by a stranger, answers: 'If I were you, I wouldn't have started from here.' Much has been said about the opportunities that the first 100 days offer a new leader to mark their journey of leadership, but occasionally the blindingly obvious is overlooked in favour of more grandiose, complex plans destined to go nowhere fast. If such leaders had taken the time to take stock, listen and consider the basics, would they have started from there?

British Airways' new chief executive Willie Walsh has wasted no time.

Just three days after his appointment and with support from his predecessor, he outlined his priorities for the first year. Cadbury Schweppes CEO Todd Stitzer and Mark Hurd at Hewlett-Packard also took notably swift yet highly considered action once at the helm.

In those early days, there is huge pressure to announce strategy changes, plans to fix customers' loyalty, re-engage staff and make promises about future results. It is vital to resist this until ready. It is wiser to listen first to colleagues, customers, shareowners, the financial community and other known stakeholders to gain insights about the business. As fellow Chartered Management Institute Companion Patrick Dunne of 3i says: 'It's important to listen to what people say, but even more important to listen to what they think.'

This listening can be physical or come distilled as research, which any well-organised adviser or corporate affairs director should be able to put on the new CEO's desk at the outset of their tenure. Getting the right balance between analysis and action is vital: analysis should not lead to paralysis, but possession of the facts is crucial. A new leader who acts without due consideration may create a backlash.

The climax of the deliberation process is deciding on solutions. Here, it is important to encourage others to participate. Then comes the time to deliver, drawing up plans to execute and implement. The final stage is to communicate what is happening, both internally and externally. A communications event at the end of, say, the first 100 days should set the seal on the style and aspirations of the new regime.

But this is not the end. The vehicle is on the road and needs steering down the fast straights, through motorway snarl-ups and occasionally off-road through swamps. Research helps to log progress, deliver learning and support evidence-based action throughout. But how do leaders establish the benchmark of where they started, the SatNav of where they are going and how well they are progressing on their chosen route?

The first benchmark is built by listening to key voices both inside and on the influential periphery of the organisation, and registering the expectations and concerns of key stakeholder groups. These can be codified so that a baseline can be created: needles are set on dials, calibrations are put in place and warning lights installed. And, since no man is an island, data on opinion around competitors or chosen comparator players should be shown.

In one case, our research revealed powerful stakeholder reaction to a CEO's move into non-core business. The media criticised 'stupid purchases' and 'a man dripping with arrogance', while investors promised to go 'on the warpath if big bonuses were paid'. But influential analysts countered: 'He's on track to deliver; it's just that the media don't understand him.' Adept handling of the media buys much time. An independent observer to marshal stakeholders can aid decision-making and help focus additional efforts to encourage wider support.

Soundings - whether asking people directly, or assessing the media and even the opinion on the web - strengthen a CEO's hand in the longer term too. The board benefits if it is sensitised to the pressures of short-term issues, to the creep of longer trends and to the responsibilities of leadership on public policy issues. Change management is made easier as stakeholder expectations show the need to do things differently.

Reputational risk is reduced by early warning-style opinion feeds to crisis management teams. The fresh air of the outside world helps leaders to achieve clarity on specific changes, motivate teams to act and reinforce the CEO's efforts to drive the business forward, while delivering learning about mistakes and ensuring - to quote former GE super-boss Jack Welch - 'that strategy is dynamic and anticipatory'.

In my opinion, leadership, change and new directions are all about a journey. Throughout, the value of third-party, independent voices - a 'clear mirror' of what is out there, simple and without bias or vested interest - cannot be underestimated. It avoids the distortions of self-interest, and delivers an answer to Robbie Burns' prayer: 'O wad some Pow'r the giftie gie us To see oursels as ithers see us!'. Put in this light, 100 days is just the beginning, with the duty to listen coming before the right to speak. After all, a mile on the right path is infinitely better than five miles in the wrong direction.

CV

Sandra Macleod is CEO of Echo Research, a leading provider of reputation analysis and communications evaluation for FTSE-100, NGO and public-sector clients. Formerly with PA Management Consultants and a board member of the DTI's Business Links, she is a frequent author and lecturer across five continents on reputation measurement, professional accountability and corporate responsibility.

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