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 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.
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....
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"....
Mr Diamond will be pleased to know Bozo returns to Euro action today (You didn't know Bob was a Bozo reader??? All those people read this...!!!)
YOU READ IT HERE FIRST...
About 2 weeks ago in my so who is going to win Euro 2012 blog you read that Bozo was picking Italy to win.
Looking pretty smart now huh?
Of course some smart alec has already pointed out that despite picking Italy to win after their 1-1 draw with Spain - I did last weekend predict that Germany would beat them in the semi final.
Hmmm Very true.
This was not hedging of bets. Having seen Germany play - I didn't think Italy would have enough to get by them on the night...up to last night Germany had looked pretty unbeatable - and no one wants to face them in penalties that's for sure.
Of course Joachim lost the plot tactically - and that was that. Italy won by virtue of Balotelli scroing two great goals (great in both build up and finish). But Germany lost by virtue of changing a winning system because of fear of Pirlo.
Spain will not make this mistake. They will back themselves to score at least as many themselves as Pirlo might create for Italy.
Nevertheless now we have the two horse race Bozo remains behind Italy. Why?
Because Italy - when they arrive at a tournament without the huge weight of expectations on their shoulders - always do better than anyone thinks they will. New coach and new (albeit rather samey) match fixing allegations lifted expectations - and so naturally they have over performed.
Both Italy and Portugal have shown that all Spain's flair does not guarantee a hat full of goals - and I am pretty sure that Pirlo and Montelivo will provide something for Balotelli to get his teeth into.
2-1 Italy.
But before I go... Mrs Bozo mentioned this morning that the Bob Diamond bleating about an isolated band of renegades being responsible for the LIBOR fixing sounded identical to senior management at News International over the phone hacking.
How true!
The point is - that if your command and control is that poor - isn't that then the reason for Bob to resign?
If you have a culture that thinks ethics - and the reputation of the bank - and the purity of the market mechanishm os so meaningless to your staff - isn't that then the reason to resign?
Why is presiding over an organisation with no sense of right and wrong, no sense of ethics and no thought to reputation a reason for prolonged highly paid employment?
Just though I would ask....
Enjoy the final...
A client actually called today and says that they are shocked by the overtly socialist tone of recent Bozo witterings.
Not so much because Bozo's leftist leanings are a secret - but more because she knows full well that when we are designing reward mechanisms and policies and the communications strategies thereof that I frequently preach to her the benefits of differentiation.
She says my blogs make it sound like I feel everyone should get the same.
Here is where I wish I could insert one of those "wrong answer" sound effects.
I do preach very high levels of differentiation in reward. Always have and always will.
This is why:-
Giving everyone the same is unfair to the people who really perform well and drive your business forward. - Differentiation is fair to the people who matter most.
Bozo you see believes in fairness - and fairness is not the same as everyone getting the same!
But let us look at a quick case study.
A firm makes a loss. It's share price goes down by 5%.
The shareholders lose out... (I know you can all see where this is going...)
A load of employees get made redundant. The survivors get an average increase of 1.2% (which probably means the high performers got 5%). The executives got an average rise of 12% (which means the poor performers got 5% and I dread to think what the high performers got).
That's not differentiation - that's daylight robbery. And everyone is getting robbed (including the capitalists) by the management who led the company to a trading loss and a 5% share price decline!
Sure, some of those managers may have been the difference between the loss and a bigger loss.
But all the pain is suffered by other people!!!
What happened to accountability and responsibility? Isn't that what is supposed to justify executives getting higher salaries in the first place? That they are accountable and take responsibility? - Sorry but the way things work right now makes no sense to me - forget unfair - this is stupid! I don't know why shareholders stomach it.
The workforce suffered the most pain - they suffered the redundancies. Why?
If it was their fault - if the loss can be generated by the efforts and decisions of the shop floor workers - isn't it them who are accountable and responsible? If so, why aren't they getting the big bucks?
You want employee engagement? Loyalty? commitment? Going the extra mile? Really? And that is your management approach to reward? You better not hire bright people - because believe me they will see through any employee engagement tactics that sit on top of that reward philosophy!
According to every newspaper business section in the land the major banks in this country are sitting on about £40BILLION of undeclared losses on toxic investments.
Yet.
Those same banks paid out this year a record amount of money in bonuses to the very people in trading rooms that bought the toxic assets in the first place?
How come?
Several people have mailed me to say that "banker bashing is old hat"; that "no one cares any more" that "it just sounds bitter and twisted and envious"
Well it is bitter and twisted (although praise God not envious).
I am bitter and twisted because it is WRONG!
If the government had bailed out depositors and not bankers - all the banks would have gone bust - and bust banks pay no bonuses.
The situation is not resolved - and the economy is in deep trauma caused by zombie banks scared to lend. And, the people who caused it all are the only people getting rich!
Please tell me why its fair.
And if you don't think "fair" matters - then God have mercy on your soul.
During the Euros we are going to have to have two blogs a day (at least! - Doesn't this man have any work to do? Er - this IS my work!)...
So today I am tempted to plagiarise this great article on exec pay in the Guardian but I will just let you read it for yourselves.
I am going to give you one highlight.
Let's leave fairness to one side.
Let's just ask what the average corporate performance for shareholders was?
Did they on average gain 12%
Er, NO!
The FTSE fell 5% last year.
So how come Execs gain 12% and shareholder's lose 5% ??
I can hear the cry of all those who sit on Senior Management teams - 100's and 100's of them screaming,
"It wasn't our fault! It is the trading conditions, it was the market, not fair criticism, give us our 12%!!"
OK
And I can hear the cries of all those people made redundant last year, THOUSANDS AND THOUSANDS of them...
"Well it wasn't our fault either mate - and me got kicked into the street, how come you get a 12% pay rise?"
I know who I am listening to.
OK - so any Bozo can moan - but what to do?
Well here is the thing - Last year FTSE fell 5%
Shareholders suffered. Ordinary workers suffered. Execs gained 12% There is no way on EARTH that makes sense to anyone except the "you-scratch-my-back-I'll-scratch-yours" members of compensation committees.
I think we need to start the campaign for legislation that links CEO reward to the reward of the lowest paid employees.
So, if the average of the bottom 25% of your employees is £20,000 - the most you can get paid is £500,000. I think claiming to be 25 times more important than your bottom quartile is valid.
But even if you claim to be 100 times more important - you could only get paid £2,000,000.
This will doubtless upset Sir Martin Sorrell (but he went to Haberdashers and my school used to crush them at football every year, so I don't care what he thinks) - but I just want to hear the arguments for being paid more than 100 times the average of the bottom quartile earners.
I just want to hear them!
This week George Osborne said that we as a nation are on the verge of a return to the "politics of envy" and that people are going to become anti-business. He is wrong. We are becoming anti-greed. We are becoming anti-unfairness.
To repeat:
Please, Mr Osborne - tell me who is supposed to be "pro" that?
I was reading the Business pages of the newspapers this weekend (I was at a hotel - at a wedding - I didn't go out and buy them or anything!) and I found the headline above as a quote from Sir Martin Sorrel of WPP.
OOOOPPPS - I just told a fib!
Sir Martin didn't say:
"Shut Up and Pay me!" at all!
What he said was that investors should not "fiddle with the market mechanism".
Mind you - from where I sit I have to say the difference between the two statements is hard to see.
I am already uncertain that the great chase for shareholder value (to the detriment of employee value, customer value, environmental value and plain old ethics) is the best way to run a business - but given that it is what businesses are meant to be chasing in 2012 - it seems a better goal than purely lining the pocket of the Chief Exec.
Yes there is a market mechanism - and perhaps the investors - whose opinions and desires regarding Sir Martin's £13,000,000 package he seems determined to ignore might do best if they had the courage to allow Sir Martin to go make use of the market mechanism to find some other suckers to pay him £13 million.
I don't know what makes someone worth £13,000,000 - I really don't. So I don't want to say Sir Martin isn't worth it. But like the star striker, and the money making financial market trader in JP Morgan's CIO - they are all worth it till they aren't...as they all prove...over and over again.
But - if you want just one danger sign that someone is maybe more risk than you want to take - them telling you to "shut up and pay" them is probably as good as any...
He's a nightmare
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