Let me put on my old cracked record.
We put people who stole trainers in the riots a few years ago in prison.
Management of RBS have scammed the entire country for many years now. Costing us billions and billions. More than a few pairs of trainers. And instead of locking any of them up we are paying them another £500m in bonuses.
Puke
This is a thorny question - even thornier if selling change consultancy is what you do for a living!
If more and more people understood why "change" is a job - or an activity that mattered - selling the consultancy would be much easier - so spreading that word is clearly a self-interested thing for Bozo to be doing! To this accusation I hold up my hands. But Bozo's passion for doing change right - or at least doing it "better" arises from his own experiences in a couple of companies who thought it all consultancy nonsense and didn't do it at all. And his experiences of listening to executives who had suffered through the grimmest of communication processes in the companies they work for.
Just because you are paranoid doesn't mean they are not out to get you...
And, just because it's self-interested - doesn't mean I am not right.
Co-creation of new strategies with the workforce is a very rare animal - even among enlightened 21st Century companies. And anything short of co-creation requires excellent communication. And if your new strategy doesn't require any of your workforce to do anything new or different - then good communication is all you need.
Now you may want to invest in how you communicate - because you want high impact that inspires your people - or makes sure they know things are new and different.
But the grim reality of new strategies is that they require implementation. And those implementing them tend to be a different pay-grade to the geniuses (genii?) that had the brainwave. And the grim reality of new strategy implementation is that it is normally something that happens over a prolonged period of time - and frequently involves doing things differently.
How many companies do you know that have made big strategic changes to marketing/customer/sales policies; but have made no changes to team or personal objectives? And have made no changes to pay/bonus and reward strategies?
The big high-impact loudspeaker-in-the-ear event is all well and good. [and definitely better than nothing] But which other mechanisms are joined up to changing behaviours? If you don't change how people are rewarded - I can promise you that you won't stop them behaving in ways that maximise the rewards they get under the old system.
I recently had a "wasting both our time" chat with an HR director. He was disappointed that his team did not live and breathe new policies on teamwork and joined up approaches to the business. I asked him what he had done to get them to live and breathe these new policies. He said: "I told them very clearly these are our new policies!"
Wow. How shocking that this didn't do the trick.
Of course I know most people who reach the dizzy heights of director in a company employee a few thousand people think that they instantly become the Roman centurion from the Gospel according to Matthew (Chapter 8):
"For I myself am a man under authority, with soldiers under me. I tell this one, ‘Go,’ and he goes; and that one, ‘Come,’ and he comes. I say to my servant, ‘Do this,’ and he does it.”
What is it about a directorship that makes people think they are back in the Victorian era (or even the First Century AD)?
If I go to this same companies head of talent and recruitment and ask:
"Is it company policy to recruit mindless automatons who blindly obey orders?"
The answer will be:
"No! We recruit the best and brightest people - we want self-starters and free-thinkers and we value imitative!"
Yet it seems that your best and brightest people are expected to change their whole way of working just because the boss told them to in an email?
Really?
The reason the HR Director and I were both wasting our time was that the time effort he was prepared to invest in galvanising his team behind the new policies was zero.
Notice that I didn't mention money. He would have invested money in Bozo (or some other bright spark) galvanising them. But his own time and effort were too valuable. Now maybe it explains why Bozo is not the richest consultant in the land - but taking on a project like that where the boss has not bought into the need to put personal effort into it - is wasting the client's money - which isn't a core value of Bozo Inc. Worse still it is a guarantee of finishing a project with a client who is less than overwhelmed with our success - which is never worth the money anyway.
Change is everyone's job - it really is - but if those at the top see it as anything less than a priority on their time - are going to get the results they earn.
Sadly - given the way recruiting is done for director level posts - these failures are hardly likely to derail their careers - and the losses to shareholder value fall squarely in the "we cannot measure what we didn't do" column. Because if it did cause career problems the bad news for these senior executives is that jobs as Centurions are hard to come by these days. Even the military has moved on.
The motto of the Royal Military Academy Sandhurst is "Serve to Lead"
Hardly any CEOs I know could get a job as a 21st Century centurion on that basis.
We are a funny country - or maybe we are a funny species.
Let me give some contextual examples as background.
Do you remember Hunter and Purchase, exhausted mentally and physically - and apologising in tears to the country that they only got Silver?
Do you remember Rebecca Adlington tearfully saying she felt she had let everyone down when she got bronze and not Gold?
(Let us not mention the millionaire soccer playings limping out as usual with no apology at all)
Do you remember Tom Daley ecstatic about his Bronze - even though he had Gold from the world championships and he himself and the country both had higher expectations.
Tom was happy... not sad .. and not apologetic. And I believe rightly so. "Diving is such an on-the-day sport" he said. "All you can do is your best on the day and hope that the years of training get rewarded with a medal."
How mature! He came 16th in the opening phase and barely qualified for the semi-final. But, David Boudia - who won the Gold - had come 18th and qualified dead last for the semi! It is indeed an on-the-day sport. And Tom had every right to be happy - and in my view so did Becca and Hunter/Purchase - and the four rowing boys who missed Gold by 0.2 seconds.
Ok, I hear you cry, enough context, what's your point?
Well shortly after the Games I heard that David Cameron had said we needed a new focus on competitive sport in schools and an end to the "prizes for all" philosophy.
And I agree with him.
Then, on Tuesday I was at a meeting with a client in which we discussed a performance and reward project I did a year or two back for a major global blue-chip employing over a hundred thousand people. This project had as its challenge (and it was a big challenge) the task of moving middle management away from rewarding people for how hard they tried or how hard they worked and instead rewarding them for what they achieved.
All of this comes together in my mind. Because medals for all is wrong.
I know why many people like it. They don't like that the poor geeky kid who is rubbish at football and cannot run or swim for toffee always comes last and gets jeered at by his compatriots. Well for a start let us acknowledge that this is two separate problems. The problem of kids jeering at- and being cruel to- one another hasn't been solved in many thousands of years of recorded civilisation - and you aren't going to solve it by giving the kids who run slow prizes. The second problem is that (in my experience at least) most kids/people are actually good at some sort of sport - but there isn't enough sport diversity in schools to find out what the geeky kid is good at. You may say that sports clubs abound - but if he has never seen a squash court - who decides to go to a squash club?
The BBC (as Bozo has bemoaned) along with the other media have placed athletics at the pinnacle of Olympic endeavour - and let us face some facts - 65 UK medals - 8 of them from athletics. Sport is bigger than running jumping and throwing - and it is certainly bigger than premiership football - but that is another blog altogether.
And, you ask, what has all this got to do with performance and reward? What is the link between poor reward strategies and giving geeky kids medals for coming last?
Well first - the major selling point of prizes-for-all is that people believe (and rightly so I think) the old saying that: "It doesn't matter if you win or lose, so long as you tried your best!".
But - if someone comes last - or second last - or even fourth - how do you know they tried their best? How? Given human ability to game and con any system ever devised - one of the easier challenges is not bothering to come better than last - and not trying at all - especially when the reward for last is the same as the reward for first!
Companies that like low differentiated pay - and low differentiated bonuses and equal rewards for all employees in the spirit of "fairness" are of course just being UNFAIR to the people who achieve the most. If 20% of your people produce 80% of your value (and Pareto seems to work in most instances) is it fair to pair those 20% the same as the others? Really?
Bill Shankley once said "If it doesn't matter if you win or lose, how come we keep score?"
You see in Sport and business both we need to reward people who are doing their best - but to know they are doing their best we need to measure their performance.
Tom Daley provides us with a good example. Scoring over 500 in a diving competition is considered good. Its about 83.33 points per dive. 9 of the 12 finalists managed that. I am led to believe that Tom's 557 points would win a lot of competitions quite handily. The winner - was we have noted - came 18th and barely scraped into the semi. The fact was that Tom was brilliant on the day - and two blokes were more brilliant. Tom was worthy of his Bronze - worthy of being happy - and worthy of being judged to have done all he could on the day. Certainly worthy of being called successful. If you had asked Victor Minibaev ahead of the tournament if he would take a place in the final and 527 points - he would have said yes - and he placed fourth! I hope no one is Russia thinks Victor failed (If he was Australian he would have been run out of town).
You see the point is we know by measurement that Tom performed well. His reward was well earned.
There was British bloke who came last in the 800m race that saw a new world record. His time was both his personal best - and the fourth fastest time ever by a Brit AND would have won the last 3 Olympic 800m finals! Does anyone think Andrew Osagie was a failure? He did his best - prove-ably - by measurement and by historical analysis - and his reward? Nothing. Nada. Niente. That is the harshness of sport.
Actually there may be one member of the British media who thought Andrew was a failure. She interviewed Ben Ainslie and asked if Britain's 1 Gold and 4 silvers at sailing were a failure!! How dim.
The thing is - you cannot give prizes to all (nor yet bonuses). You have to reward success. And, you have to be measuring things to know if someone is trying their best/improving/achieving.
Prizes for all do not work. Because it encourages people not to try at all.
And, frankly - if you can discourage your staff from working very very hard whilst achieving nothing of value - well that is a good idea too.
So what is all this about?
Well no matter how well Andrew Osagie ran - he didn't get rewarded - and he shouldn't. Was he a failure? No. Should he get a medal? No.
And there are many people in your organisation who fit that profile. It's sad but true.
Because if you reward Andrew for doing his best - well the point of achieving excellence - and the incentive to do it - will be lost to your organisation forever.
So ask yourselves:
I wrote last week about how heartbreaking it was for fourth placed Elizabeth Simmonds. We can measure that she didn't fail - but the system is clear - you need third to get the medal - the system is clear and transparent. She got the right reward.
Is your reward system as clear and transparent as that? You may have such good measures in place that you can give "medals" to your foruth - or even tenth - place finishers - but if your reward system gives bonuses for people for turning up, doing their day job - and maybe staying late a few times - without measuring what they actually achieve - you have got it wrong - and will be unfair to your most productive people -and drive a culture of mediocrity through your firm. The harsh realities of how UK Sport has funded different disciplines based on success has accurately reflected the harshness of global elite sport - and has driven a culture of excellence through some disciplines that have produced shiny medal results for all to see.
If they respond in a "soft" way to the performance of UK Swimming against expectation -I predict it will have negative repercussions for the culture of excellence. I it heard loud and clear when former US Olympic champ and World record holder Michael Johnson said on Gabby Logan's show "the most refreshing thing I have seen this time - in all the years of working for the BBC is that the culture of rewarding mediocrity has gone."
...............
Now... there is PS/Aside/Coda to this involving banking...
You see proponents of Bill Shankley's view abound in investment banks and use it to justify their own bonus strategies. But banking isn't a game of football. Paying a man £5 million for buying a load of sub-prime mortgages that make money by the end of the year isn't the same as giving a winners medal to people who win the cup final.
Because nothing you did to win the cup final last year carries a risk over into this year. But as we all know - those sub-prime mortgages became both unsellable and worthless. They generated billions in losses. But the man who bought them still has £5 million in the bank doesn't he?
You see the final whistle is a good time to measure who won the cup final. The final whistle of the final game is a good time to measure who won the Premiership. The winner crossing the finish line is a good time to measure who won the 800m. After the 6th dive seems a good time to measure who won the diving.
But is the end of the financial year really a good time to measure who should get paid what in banking? When the evidence that asset values can go from 100 to 0 as quickly as we saw in 2007-2008? Is mark-to-market as sound a concept as you think? (especially when market measures like LIBO are discredited and rig-able)??
Reward success - all in favour - reward extravagant success extravagantly - all in favour.
But please, please, please let us measure the right things, measure them honestly and measure them realistically.
I was having an interesting conversation with Mrs Bozo lst night.
Couples of our acquaintance are busy having babies. The father and father-to-be, (both in the financial sector) were both concerned about paternity leave - and concerned not so much by how much they were legally entitled to - but by how much they could get away with without upsetting bosses.
This will come as very strange news to many out there in normal jobs - and is certainly a concern that has been imported from the USA. Many of my friends and colleagues in the USA have much smaller holiday entitlements than we are used to here - and - many of them tell me that using all your holiday entitlement can be a risky strategy in a country where there is little protection for the employee, where hiring and firing is very easy - and where there is no social safety net.
So it made me ponder... when you have no employment protection and no social safety net - is the need to provide your own financial security in effect a motivation to do "whatever it takes" at work to earn salary and bonus - and indeed stay employed?
If your own financial acquisitions are all you have as security - does it validate lying cheating and stealing to acquire them?
Also - if as an employee you are working 49-50 weeks a year for your employer. Where does self-actualisation come into your life?
You see - so so many of the Americans I know say the plan is to have enough money that they can finally say to their employer "screw you" and finally get to go and do things they want to do...
You see if the job has so little time in it for you and yours - so little time to enjoy life and family - is it any wonder that people see the acquisition of cash as the only purpose of work?
And if the only escape is large chunks of cash... how big a leap is it to bending rules and ditching morality and fairplay in order to acquire more of it faster?
I know that this is definitely exacerbated in the USA. But coming back to our own shores - if you have an executive job/lifestyle and the mortgage that goes with it - the social safety net is of a lot less value anyway.
And if your job really is one of those all consuming ratrace deals - then it is easy to see financial independence as a goal worth lying cheating and stealing for.
We know the drive to cut costs has seen middle and upper management pared back. In the name of increasing shareholder value. Execs now work harder and harder - replacing the head count that was slashed.
So - culturally - as we slash costs and heap pressure on our executives - are we in fact creating the culture that will dismantle our organisations in pursuit of short term gain?
A fair days work for a fair days pay is certainly not as attractive to shareholders when an excessive days work fopr an excessive days pay allows them to trim 30-40% of management headcount. And consequently raise dividend by another 2-3p.
Bozo has long said that shareholders need to take ownership of executive behavior and executive remuneration - but they also need to take ownership of their own greed and the organisational and ethical stresses it causes....
I had hoped to be able to write a nice blog about Beth Tweddle. About the inspiration she has been to a generation of aspiring gymnasts. About the fact that one day an Olympic Gold medallist will be saying to the BBC interviewer:
"I got into this because I saw Beth Tweddle...!"
But that little statement will have to do - because the folk at Standard Chartered Bank have allowed us to once again encourage people to join the campaign for ethical behaviour and a legally obligated contractual clause in executive contracts that demands ethical behaviour. Go HERE and LIKE the campaign and then spread the word as far and as wide as you can!
So in case you have been on the moon - or so obsessed by the Olympics that everything else has passed you by and are wondering what Standard Chartered have done, you can read all about it here.
A U.S regulator has labelled the bank a rogue institution and has claimed they have evidence that shows the bank schemed to launder $250,000,000,000, which for all we know has been used to finance terrorism and build nuclear weapons.
How does an Institution take part in that?
Well about 20 odd years ago in a scandal over insider trading and other assorted skullduggery various highly respected and very well paid Wall Street figures were indicted. This caused a certain amount of shock and horror at why such respected and rich individuals could or would do such a thing. An American newspaper quoted a financial markets insider as saying words to the effect that if you don't understand the motivation to steal $500 million then you are living on a different planet.
So, institutionally, it being unlikely that Standard Chartered Bank has as a core value the funding of terrorism it would seem that profit was the motivation for laundering $250,000,000,000.
So, individually, how do those people actually engineering this get involved? Are the senior executives involved all secret sponsors of terrorism? Well I suspect not - but who knows. I suspect - and frankly I do not know what the status is of the bonus and remuneration schemes of Stanchart - that the individuals who generated this profit for their bank were rewarded by pay rises and bonuses.
Whilst this is speculation on Bozo's part - I would be far more shocked to find out that that this was the result of stupidity rather than cupidity.
It is becoming increasingly clear that money - at least large amounts of it - will consistently outweigh ethics in the minds of people in the financial industries. Not the poor folks who work in call centres and on counters who see very little of the money that is being made hitting their pockets - and who are first to pay with their jobs for any cock ups. But for the folks who do see substantial bonuses - it seems that those bonuses are a bigger trigger of behaviours than the desire for ethics, morals, standards and reputation. As it is this scandal may well bring down the entire bank. The shareholders ought to care. And today - for the first time since it started they are suffering. They may say they didn't know. I ask. Why not? This idea that you pocket the dividend and ask no questions is a non-starter. As this bank goes down maybe their shareholders will become supporters of ethical behaviour at senior executive level. Because when this scandal gets more deeply analysed it will be fund to see who was involved and how they personally benefited.
You do not need to be an expert on reward and remuneration like Mrs Bozo to know that there is a deep flaw in how the financial services industry rewards its people. As she always says:
"What you tell you people in how/why you reward them speaks louder than any other message you send them"
If you tell me I am unfair to the industry - I shrug my shoulders. They don't care who slags them off especially not Bozo, they console themselves with their wealth and decide my criticism is envy and not a desire to live in a society that values one or two things above money. If the industry doesn't want criticism it should stop ignoring ethics.
If there was an Ethical Behaviour Clause in the contracts of the senior executives they would not be getting rich right now. And if they have done nothing wrong, they would be.
So why would anyone resist an Ethical Behaviour Clause?????????
There is only one reason...so join the fight now folks.
Find the campaign here and go comment.
As a postscript. I was doing some background research about the insider trading scandal of 1989. And I found myself on the wikipedia page of Michael Milken. I was astounded to see that the first paragraph describes him as a financier and - wait for it - philanthropist! The fact that he was indicted on 98 charges of insider trading and related skullduggery and sentenced to 10 years was buried in paragraph two! Who wrote that? Of course Michael only served 2 years as he was let out early in exchange for ratting out all his mates. in a four year period in the late 1980s (i.e these are dollars of 1989 not today dollars) Milkem was paid over $1,000,000,000. As mentioned above, people wondered why he was tempted to lie cheat and steal. But lie cheat and steal is what he did. And, 25 years on, lying cheating and stealing is still the order of the day.
Sigh
I know I have said this before - but this tiny aphorism which Bozo evolved when perfecting his education of speakers and content developers in business really is the secret of all success in human interaction. Especially in business.
It is about them.
I recently had a very disappointing response to an email I had sent
What I received back basically addressed the first line of my email - and ignored every other single thing I wrote.
[Note to self - never lose sight of the classic Walter Matthau line from "the Front Page" - viz:
"who the hell reads the second paragraph?"
This is a communications lesson that will cause suffering every time you forget it]
So, allowing for my own error of putting important stuff in the second paragraph - it was still disappointing to get the response I got.
And trust me your customers, your team, your boss and the markets will all be just as disappointed when you don't take notice of what they say.
I reported this to someone else in the organisation who told me they were suprised but that it was...
"Because they are very stressed - have had people leave, have been off sick..."
There you go - it had nothing to do with me - it was all about them. Who they are, what their problems are why my communication was just another nail of pain in their coffin of stress.
And despite the good intentions of the excuse maker - it did not change how I felt!
This my friends is the lesson for you - if you make it about you - then they will not see the love.
It doesnt matter what you are doing. Selling, managing downwards, managing upwards, recruiting, marketing communicating - excellence starts when you make it about them.
Trust me on this one.
I know you are all surprised that I have waited until today to blog on the HSBC money laundering fine.
Of course it does keep the scandal in the news cycle a smidge longer.
Never a bad thing.
But what made me saddest was not my old friend Stuart Gulliver's inability to "reassure regulators the bank did not facilitate the financing of terrorism and other criminal activities..."
Hello folks.
After rattling on about it for a while Bozo finally created a "cause" page on facebook for the Ethical Behaviour Clause.
Find it here and "like" it - and tell your friends.
Will we triumph over the forces of evil?
We will be lucky to triumph over apathy!
So get on it dudes....
So RBS do not want to reveal their internal documents to the criminal investogots dealing with the LIBOR rigging scandal.
I assume this is some sort of corporate taking of the 5th amendment...
Read the Telegraph version here
I am sure RBS have nothing to hide... Aside from their involvement.
What we already know about RBS is damning enough:
And now it seems the senior execs and traders are as unethical as they were useless. Mind you - if you get paid gazzilions in bonuses for losing all the money they have lost - what exactly is being incentivised anyway?
The thing that made me laugh most was the loser who said RBS had to pay competitive bonuses in order to keep their best people!!
I would have thought that describing any set of individuals as "best people" might require them to have made a profit? Seriously - the bank was a major disaster - are you really asking us to believe there is anybody there you cannot do without?
Are you asking us to believe that in this market where it seems HSBC, Citi, JP Morgan and UBS have all got a problem revealing documents - that their is a buoyant market fro people being sacked by banks?
If so - why?
I do not know what cash benefits Barclays had from fixing LIBOR.
I do know that any share price gains it helped them get have been eroded this week!
I do not know if cash gains exceeded the $450m fine (plus Bob's extravagant reward for presiding over the cock-up)...
So the question is, given the unknown cash value of the benefit and the fine...it is unlike the net gain(if any) has come close to exceeding the share price devaluation of the past week in terms of total affect on shareholder's pockets.
So if even Bozo can put aside the appalling moral and ethical exhibition and deal with shareholder value. Why cannot shareholders?
It wasn't shareholder pressure that drive out Bobbie D was it? I mean he seemed to be surviving the decline in share prices - it was the media and the government who made the stink.
So, this man has trashed shareholder value - got paid £20million for doing it - and the shareholders weren't in uproar?
You see, we cannot legislate away bad moral codes or unethical leadership. We cannot - its too hard to force compliance - the tax bill for a regulator to have resources would be scary!
So I think - if this economic rationality, capitalist system is to work - the shareholders have to give a toss no?
We know the remuneration committee system is flawed beyond rescue. The Barclays committee has the guy from RBS, whose committee has the guy from WPP (I merely speculate) it is all totally "you scratch my back I'll scratch yours" so any notion of oversight or looking after shareholder interests has long gone by the board! So what else can there be?
Well let me float another idea that is typically BozoBrilliant - and typically will never catch on.
Why not require any senior executive to sign an ethical behavior disclaimer as part of contract. In other words - if we get stung bythe regulators - lose a court case about behaving improperly or shafting our clients - get done for mis-selling products (or polluting the Gulf of Mexico - and here I am referring to Haliburton not poor Tony - the CEO of Haliburton got paid ridiculous amounts - and Haliburton were quietly proved equally liable with BP....) So - if any of that stuff happens - bonuses and golden parachutes and all those other incentives are made null, void and unenforceable.
Senior executives need to control the activities of their subordinates - lack of knowledge or intent is just as big a failure! If you aren't in control of what is going on - why should we pay you all this money??
Surely one shareholder somewhere thinks this idea makes sense? Or would they all rather encourage "so long as you don't get caught"....
He's a nightmare
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