Sustainable food chains make business sense and consumers happy

AGRI-FOOD SUSTAINABILITY: Sustainable food chains make business sense and consumers happy

Customers want food they can trust and expect retailers to do the ethical and environmental thinking for them

Responsible supermarkets are now making moves to ensure the sustainability of all of the fish they sell. Photograph: Graeme Robertson

In a year when horsemeat contamination and food waste have made the headlines, consumers are more conscious about the operation of the food system. Everyone wants food they can trust, but today's shoppers increasingly want more than that, and expect retailers to embed ethical and environmental sustainability in all of their products.

This was one of the messages that came out of a recent progress report by Sainsbury's, two years into its 20x20 sustainability commitments programme.

"Customers want us to act for them and ask the question and take the actions they would expect," said Justin King, chief executive ofSainsbury's, speaking at the launch of the report on 20 November.

"We can help them by taking on that responsibility and solving complex problems for them. Ultimately, the power of 24 million customers shopping with us will always mean we can make a big difference more quickly."

This mainstreaming of sustainability is a response to customers no longer seeing the issue as a bonus feature, sold under a label, such asFairtrade, with a price premium to match. Ethical and environmental sustainability is increasingly seen as fundamental, and consumers expect supermarkets to make it easy for them to live by those principles.

"When surveyed, most shoppers say that, on key ethical food issues, they want their supermarket to make those choices for them, before the product even reaches the shelf," says Kath Dalmeny, policy director of the charity Sustain, which campaigns for better food and farming.

Indeed, shoppers express surprise when they discover their trusted supermarket is selling endangered fish, for example. As Dalmeny says: "The more responsible of the major supermarkets are now making principled and cost-effective moves to ensure the sustainability of all of the fish they sell, to reduce the environmental footprint of products, and to pay fair prices to farmers in poor countries."

One of Sainsbury's commitments under the 20x20 plan, for instance, is for all of its fish to be independently certified as sustainable. It is also about to launch its own set of standards, run by an independent body, covering all of the 35 key raw materials in its supply chain that may not be fully covered by existing standards, such as Fairtrade, the Rainforest Alliance and the Marine Stewardship Council (MSC).

"MSC and Fairtrade are great and we want to be able to say our standards are independently audited across these 35 or so raw materials," said King.

This trend towards embedding sustainability is being seen in other sectors, too. Unilever, for example, introduced a Sustainable Living Planin November 2010, which it describes as "a driver of everything we do so that each time a consumer chooses one of our products, it improves their life, their community and the world we all share".

"Environmental sustainability is starting to be seen as more than an optional extra," says Duncan Williamson, food policy manager at WWF UK. "There are increasing numbers of businesses who are seeing the environment as core to their future business models."

Businesses also see sustainability as a way of engaging with their customers, and the issue of tackling waste lends itself well to this. Food waste is something consumers are increasingly conscious of and want to act on. In early November, the Waste & Resources Action Programme (Wrap) revealed that, since 2007, the UK has reduced avoidable household food waste by 21%.

Many consumers clearly care about this and it may seem counterintuitive for a supermarket to encourage consumers to waste less if it means they'll buy less. But, according to Alice Ellison, environment policy adviser at the British Retail Consortium, this is an important way of creating value. That means selling affordable food, "but also making sure we can make the most of it", she says.

Ellison cites a range of steps taken by retailers to reduce household food waste, from providing clear storage advice and recipe ideas to offering more portion sizes and designing packaging that extends a product's shelf life. "These have helped to drive significant reductions in the amount of food and drink we throw away," she notes.

According to Sainsbury's 20x20 update, the supermarket's Make Your Roast Go Further campaign, in January 2013, was one of its most successful of the year. This substantiates King's argument that there is a business rationale in helping consumers waste less.

"Helping customers spend less by buying and consuming everything they buy is in our long-term interest, if we help you do that better than our competitors … It's not good for us to have someone looking at a bag of salad in the bin thinking 'I was tempted to buy that at Sainsbury's, but I wasted it'."

Brand owners have realised that embedding sustainability into their supply chains and brand propositions is important to their survival, as well as giving customers what they want. The supply and demand sides are coming together under the sustainability agenda, and that's why it makes sense to embrace it.

"It's not just about CSR [corporate social responsibility]," says Williamson. "It's about resilience, and their medium- and long-term future. Companies are recognising that the core elements of the food system – water, land, ecosystem services and oil – are becoming scarcer and will cost more. A sustainable food system will need responsible business."

Posted by Bruce MacDonald

CASE STUDY: COMPETING IN RETAIL– “DAVID VS GOLIATH"

By: Richard Peters

The retail industry and retail strategy have been major influences on the marketing and sales operations of a number of the companies with which I have been involved. I marvel at the innovation and creativity shown by some small retailers in the face of what may appear to be insurmountable competitive threats from much larger players. Probably the largest single threatening development facing small retailers are the “big box stores” the most notable of which is Wal-Mart and the niche market “category killers” such as Best Buy and Future Shop in the technology retail sector.

I want to share a few examples, which I believe,  you will find to be inspiring and motivating competitive advantage stories. These are cases where small retail owner/operators have grown and prospered by turning potential adversity into opportunity at a time when their peers were folding their tents in face of what they perceived as impossible odds.

As I write this case study, I am reminded of the bestselling book entitled “Who Moved My Cheese?” If you have not read this book, you must.

CATEGORY KILLERS

I have spent over 10 years helping software, hardware and internet organizations brand and market their products and services. In that time,  I dealt with dozens of retailers who either exclusively or primarily sold computers and related technology. As this industry started to consolidate “category killers” such as Best Buy and Future Shop became the nemesis of small technology retailers.  Aggressive pricing and extensive product selection caused numerous smaller retailers to close their doors.

Here are few examples of small IT retailers who through innovation managed to survive despite the odds. 

1.   As Best Buy and Future Shop were expanding and smaller retailers were closing their doors, one of our IT retailer’s was actually opening. If memory serves me correctly, he had 3 or 4 stores. I noticed that they were located very close to if not directly across the street from a Best Buy or a Future Shop. I asked him about the wisdom of this strategy. His perspective was that the big guys were either an opportunity or a threat and he chose to capitalize on viewing them as an opportunity

His competitive strategy focused on what he perceived were weaknesses or deficiencies in the big store business model. These were:

• When a consumer purchased a computer, TV etc. from a big store, they would invariably end up being sold cables etc. to accompany their major purchase. Often the additional cost of these ad-on items could be a few hundred dollars.  The store owner advised me that the prices being charged for these cables etc. were significantly marked up from what they had originally cost the store. Actually, the cables etc. were relatively inexpensive to the retailer but provided a significant margin opportunity. The same, by the way, is true of the “extended warranties”  often purchased when someone buys a new computer etc. These warranties represent significant bottom line revenue for retailers.
  
  
  This store owner began to advertise that, at his store, the cables etc. were included in the purchase price of any equipment. The owner noticed that while his big ticket items prices were fairly competitive with the big stores, his clients were willing to pay a little more for these major items to avoid the additional cost of the add-on items. In many cases, despite the fact that some of his big ticket item price was higher, when the customer  factored in the “free” cables and accessories, that they would be required to buy a “big store” , the total cost was less at the small retailer. 

•  Another competitive advantage was his “knowledgeable staff” and outstanding customer service.  In his stores he hired what he referred to affectionately as “nerds” who lived and breathed IT. The big stores on the other hand were less inclined to do so. The big operators offered clients access to in-store tech services such as “Geek Squad”at Best Buy who, if they were unable to deal with your issue in the store would visit your home or office and, for an hourly fee, would resolve whatever issues you had.  The smaller operator also offered to send a technician to a customer’s home “free-of-charge” to help them setup whatever new equipment had been purchased as well as resolve issues with existing equipment. He also opened his stores earlier and closed later than the big stores. He encouraged people to stop by on their way to work and on their way home.

The retailer found that people quickly discovered where he was. Word-of-mouth and referrals were a significant source of business. Once new customers did business with him, he found they tended to check with him before visiting the big stores for future purchases.

2.   Another IT retailer had his stores located in close proximity to supermarkets. He noticed that men were less inclined to want to spend time shopping with their wives or partners if they had someplace to which they could easily escape after parking the car and kill time while their other half was shopping. He trained his staff not to pressure people to buy but to create an atmosphere where people could come to relax, check out the equipment, have coffee, relax, ask questions and feel comfortable. He found that he developed a dedicated clientele who felt a loyalty to his store where they had developed relationships. They were even willing to pay slightly higher prices to shop there because of the level of service, customer relationship practices and convenience.

THE WAL-MART ADVANTAGE

Media and public interest groups have ensured we are well acquainted with the plight of small retailers as they face the “big box” effect caused by large operators moving into their markets. Wal-Mart, of course, has come to define everything that is evil about these big box operations. However, there have been instances where smaller retailers have risen to the challenge and turned even Wal-Mart adversity into opportunity.

A few months ago I read a story about a small “general merchandise” store in Alberta which had the misfortune to be located across from a new Wal-Mart location. The store had been operating for years prior to the Wal-Mart opening its doors but the effect of discounts and expansive product lines was taking its toll on the small store’s business. The owner decided that closing her doors was the final option but not the only one. She looked for opportunities that her new neighbor might provide. She came to realization that by altering her product line to consist of products not sold in Wal-Mart, she could take advantage of the traffic coming to Wal-Mart to also visit her store. 

The Wal-Mart parking lot became her store’s parking lot and her business did better with the Wal-Mart next store than it had before the Wal-Mart arrived.

CONCLUSION

In all these cases, the store owners looked out their store windows and did not see potential customers shopping somewhere else but rather people arriving in their neighbourhood looking for opportunities to spend money.

The challenge, as these store owners saw it, was to redefine the terms of competitive engagement and they chose to “complement” and “supplement” rather than compete.

 

Employee Engagement: "It's Not in My Job Description"

For me, the sentence, "It's not in my job description", is a huge red flag.

It's a sure sign someone is not a team player.  It's a sign someone is a taker, not a giver. It's a sign someone is self-centered, putting their importance ahead of others.

I think I've said before how influential summer jobs can be, and today I'd like to share with you why I feel so strongly about the phrase in the title of this post.

Between my second and third years in university, I worked in the drill squad of the world famous Fort Henry Guard, based in Kingston, Ontario.

One of the unofficial mottoes of the Guard was "Remain Flexible".  The meaning of this was that, at any time, you could be asked to be a sentry, on gun drill, tour guide or cleaning up. Duties for sentry duty or gun drills were assigned each day, but sometimes we had more visitors than expected, which meant you had to be prepared to take on some new assignments.

While this may have been just a summer job, I think these principles hold true in any well-run organization.

In larger organizations, we tend to be slotted into narrowly defined roles and responsibilities that make it hard to be as flexible as we were at Old Fort Henry.  In smaller organizations, the ability to be functional in job roles outside your core responsibilities is vital.

At one company, our purchasing manager lost both parents within weeks of each other.  She was overwhelmed not only with the loss, but also the responsibilities of attending to both their estates.  As a result, she found it difficult to keep up with her job responsibilities, and purchasing was an area in which we were extremely thin on manpower.

While this was happening, we were also having quality issues with a company that supplied a critical laminated material for one of our products.  They were unable to identify for us whether the issues was the result of a fault in the lamination process or a defective batch of material. We knew we needed to find an alternate supplier for this lamination, and the process for finding one was normally managed by purchasing.

Because of the quality issue, we were prevented from manufacturing a product for one of our key customers, who were anxious to know when we would be able to re-commence supply.  They needed answers, not excuses.

I offered to take the lead on finding alternative suppliers because, in the end, it was a customer-driven issue: we had a customer who could not market their product because we were unable to supply a critical component.  So, while my job role was sales, handling a purchasing issue was also a way of solving a supply chain issue for a customer.

The more I researched companies who made one of the materials in the lamination we purchased, the more I came to realize there were literally only a handful of companies in the world who had the capabilities of making the material used, let alone being able to meet our specifications.  (Our customer thought there would be hundreds of companies who made this material and changing suppliers could be done in a couple of weeks). We were fortunate that two of those suppliers were located within a half-day's drive of our plant, so I visited them both to get a better understanding of the challenges in making the material we needed.

One of these suppliers analyzed samples of the lamination we used - both past and current - and determined that the incumbent had, despite protests otherwise, switched recipes and companies they purchased their materials from.  We now had scientific evidence to support our allegations there had been material substitutions.

A few weeks later, when our purchasing manager returned from bereavement leave, I took her to meet the company we felt represented the best opportunity to supply the lamination we needed.  This gave her a chance to see the plant as well as meet the executive team and allowed me an opportunity to transition the supplier search back to her so she could begin qualification trials.

Taking on a task normally done by purchasing gave me some insights into the challenge purchasing people face in searching for and selecting suppliers.  Given the circumstances, it helped forge a stronger relationship between sales and purchasing While helping the company respond to a customer in need.

When I left this company, the purchasing manager was the first person to come into my office and give me a hug and tell me how much they'd miss me.  I was really touched by this and it is a moment I will never forget.

I hope you can see that, in this situation, the roles of sales and purchasing were very strongly interdependent. Had we stuck to our job roles, we might still have solved the supply chain issue for our customer, but at the cost of several weeks being unable to supply them. Blurring the lines between sales and purchasing in this case demonstrated that our company really required a team effort to survive - and thrive.

Posted by Ronald Jamieson

Two Concepts that Expanding Companies Should Remember

Jerry Cahn 

I teach a course in Business Strategy for CUNY; among the topics I focus on is growth through global expansion. A key implication of understanding the “flat world” philosophy, is to realize that companies need to adopt a transactional approach –one in which offices anywhere in the world, and not just the traditional HQ in the US or Europe, can provide key corporate services, such as R&D, marketing and sales.

We also spend time understanding why so many top companies have stumbled when trying to serve emerging growth countries they don’t really understand the needs of local residents to whom they will market and sell their products. For instance, just recently Walmart, the leading US retailer, announced earlier this year a retreat from their initial approach in India, and the need to alter it. They’ve had similar experiences in other countries.

Ram Charan, the world-renown business advisor to several Fortune 500 firms, addresses these issues in “Global Tilt; Leading Your Business Through the Great Economic Power Shift”.  He focuses on 2 concepts which we all should remember regardless of where we’re expanding our companies. Here are 2 concepts that expanding companies should remember: Outside-In and Future-Back.

Outside-In refers to the need NOT to focus on the expansion solely based on your competencies (strengths), but to also recognize the need to see it from the point of view of the countries’ customers for whom buying values are different than those of our domestic customers.

For instance, when Nabisco tried to figure out why their Oreo cookies were leading their market in China as they have for years in the US, they realized that they needed to understand customers better. It turns out these new customers didn’t like round cookies nor did they associate “milk and cookies”. 

A sweeter, smaller and wafer-like cookie was introduced to this market and became #1. Procter & Gamble has done the same in trying to understand how customers in other cultures look at several products, including Tide and Head & Shoulders.

Future-Back refers to focusing on the end result, and then working backward to see what really would lead to getting there, Steven Covey address the same concept in the last of his The 7 Habits of Highly Effective People: start with the end in mind. Ram takes it to the truly strategic level: extend your time horizon as you assess the world and imagine what the competitive landscape will be as much as 20 years in the future.

The key is to work backward by thinking of the implications for the present. For instance, if 20 years from now there will be more cars being used and sold in China than the US, thinking through the segmentations that are likely to be there at that time guide you on current decisions.

In India, Tata Motors introduced a car several years ago give families of 3-4 people who travel in the morning to school and work a safer yet affordable option than their motorcycle.  So instead of buying a $1500 motorcycle, Tata offered a $2500 car, which was very basic; no air-conditioning, no dashboard storage compartment, etc. The Nano received lots of publicity as a major breakthrough.

This year, Tata revealed that sales for the car are so few that they are losing money on it. Why? They concluded that if people are going to spend more money on a car, they want one with some creature comforts. So, they are upgrading it and will price it now at $3500.  A few weeks later, Ford announced that it was introducing a new car for the emerging markets – priced at $10,000.

Ford’s decision suggests that car buyers want more than basic performance plus few comforts and that the new Nano will still not be sufficiently attractive for the Indian target.

As you think of expanding your company to new markets – domestically or internationally doesn’t matter. You need to take these two concepts into account when planning.  Are you?  Share your stories and experiences with us.

Should Leaders Focus on Results, or on People?

by Matthew Lieberman

A lot of ink has been spilled on people’s opinions of what makes for a great leader. As a scientist, I like to turn to the data.  In 2009, James Zenger published a fascinating survey of 60,000 employees to identify how different characteristics of a leader combine to affect employee perceptions of whether the boss is a “great” leader or not. Two of the characteristics that Zenger examined were results focus and social skills. Results focus combines strong analytical skills with an intense motivation to move forward and solve problems.  But if a leader was seen as being very strong on results focus, the chance of that leader being seen as a great leader was only 14%. Social skills combine attributes like communication and empathy. If a leader was strong on social skills, he or she was seen as a great leader even less of the time — a paltry 12%.

However, for leaders who were strong in both results focus and in social skills, the likelihood of being seen as a great leader skyrocketed to 72%.

Social skills are a great multiplier.  A leader with strong social skills can leverage the analytical abilities of team members far more efficiently. Having the social intelligence to predict how team members will work together will promote better pairings.  Often what initially appear to be task-related difficulties turn out to be interpersonal problems in disguise.  One employee may feel devalued by another or think that she is doing all the work while her partner loafs – leading both partners putting in less effort to solve otherwise solvable problems. Socially skilled leaders are better at diagnosing and treating these common workplace dilemmas.

So how many leaders are rated high on both results focus and social skills?  If this pairing produces especially effective leaders, companies should have figured this out and promoted people to leadership positions accordingly, right?  Not hardly.  David Rock, director of the Neuroleadership Institute, and Management Research Group recently conducted a survey to find out the answer.  They asked thousands of employees to rate their bosses on goal focus (similar to results focus) and social skills to examine how often a leader scored high on both.  The results are astonishing.  Less than 1% of leaders were rated high on both goal focus and social skills.

Why would this be?  As I describe in my book, Social: Why our brains are wired to connect, our brains have made it difficult to be both socially and analytically focused at the same time.  Even though thinking social and analytically don’t feel radically different, evolution built our brain with different networks for handling these two ways of thinking.  In the frontal lobe, regions on the outer surface, closer to the skull, are responsible for analytical thinking and are highly related to IQ.  In contrast, regions in the middle of the brain, where the two hemispheres touch, support social thinking.  These regions allow us to piece together a person’s thoughts, feelings, and goals based on what we see from their actions, words, and context.

Here’s the really surprising thing about the brain. These two networks function like a neural seesaw. In countless neuroimaging studies, the more one of these networks got more active, the more the other one got quieter.  Although there are some exceptions, in general, engaging in one of the kinds of thinking makes it harder to engage in the other kind.  Its safe to say that in business, analytical thinking has historically been the coin of the realm — making it harder to recognize the social issues that significantly affect productivity and profits.  Moreover, employees are much more likely to be promoted to leadership positions because of their technical prowess.  We are thus promoting people who may lack the social skills to make the most of their teams and not giving them the training they need to thrive once promoted.

How can we do better?  For one, we should give greater weight to social skills in the hiring and promotion process.  Second, we need to create a culture that rewards using both sides of the neural seesaw.  We may not be able to easily use them in tandem, but knowing that there is another angle to problem solving and productivity will create better balance in our leaders.

Finally, it may be possible to train our social thinking so that it becomes stronger over time. Social psychologists are just at the beginning stages of examining whether this kind of training will bear fruit.  One exciting prospect, one that would make the training fun, is the recent finding that reading fiction seems to temporarily strengthen these mental muscles.  Wouldn’t that be great — if reading Catcher in the Rye or the latest Grisham novel were the key to larger profits?

Matthew Lieberman

Matthew Lieberman PhD is a Professor and Director of the UCLA Social Cognitive Neuroscience laboratory. He is author of Social: Why Our Brains Are Wired to Connect and a TEDx speaker. He also consults with companies to leverage neuroscience techniques in industry.

Research: What CEOs Really Want from Coaching

Two-thirds of CEOs don’t receive any outside advice on their leadership skills, and yet almost all would be receptive to suggestions from a coach. These stats are from a Stanford University/The Miles Group survey released this month, which asked 200 CEOs, board directors, and other senior executives questions about how they receive and view leadership advice. I asked the survey’s co-authors, Stanford Graduate School of Business’ David Larcker and The Miles Group CEO Stephen Miles some questions about what they found and how it applies to CEO coaching specifically. An edited version of our exchange is below. 

 

Why is getting coaching from outside the company important?

Blind spots are less obvious when things are going well. It is very easy for executives to become almost strictly inward looking, especially when they have been very successful. But these blind spots can become devastating when performance moves in the other direction. A good, neutral third party assessment is a clear reality check for executives.

Additionally, every single person inside the company has an agenda of some sort. This makes the coaching environment a rare and safe place to think through various topics against the framework of what is in the CEO’s best interest. The coach is only concerned with the CEO’s wild success as the leader of the company.

In your survey, CEOs say the area they most want to develop is in conflict resolution. Why?
Conflict management is critical in the CEO role — just about anything that gets to the CEO’s desk has an element of pleasing someone and making someone else unhappy. When the CEO avoids conflict, it can shut down the whole organization: decisions are not made and problems fester, creating a domino effect of unproductive behaviors down the ladder. A CEO who can manage and channel conflict in a constructive way can get to the root of issues, apply rigor to the team’s thinking, and, ultimately drive the best outcomes. So cultivating this skill can be a powerful tool to help the entire organization.

The survey also reveals that nearly two-thirds of CEOs do not receive coaching or leadership advice from outside consultants. What’s behind that?
There is still some residual stigma that coaching is somehow “remedial,” as opposed to something that enhances high performance, similar to how an elite athlete uses a coach. But there really is not a single top athlete who does not have a coach. CEOs should not be insecure about this issue, and instead see coaching as a tool for improving their already high performance.


Part of this stigma comes from board members themselves, many of whom grew up in an era when coaching was truly remedial and not something in which a CEO would ever voluntarily engage. So even CEOs who believe in coaching and want to engage have to ensure that they bring these board members in particular along with them on the journey.

So there’s tension between boards and executive teams when it comes to coaching. How does it manifest itself?
Again, when things are going well, there can be a tendency on the part of some CEOs to be less open to feedback and a corresponding “If it ain’t broke…” attitude from the board. If things are going well, boards often feel as if they don’t need to have this difficult conversation with the CEO. Both of these attitudes/approaches are a problem and certainly do happen. 

It’s probably not surprising, then, that 79% of CEOs said it was their idea to receive coaching. But should it only be their responsibility, or should it involve others?
Fundamentally, it is a responsibility of both the executive and the board of directors, while a trusted Chief Human Resources Officer can also play an important role. If some of a CEO’s behaviors are truly dysfunctional, these need to be identified and worked on. If the CEO is introspective, he or she will recognize their weaknesses without prodding from the board. However, there are also times when the board says to the CEO: “It might be good to do some personal development on X.” This is a key part of CEO performance evaluation: What things need to be improved?

Many times coaching starts through a partnership with the board of directors on the CEO evaluation, and out of that usually come a few specific actionable development themes that can prompt an advisory relationship with the CEO. It typically does come from both sides, and so boards must be sufficiently up to date to see high performance coaching for what it is, versus being purely remedial. The board can help set the conditions for success.
The CHRO can also be instrumental in setting the stage for CEO coaching, as they are often the ones who originate the idea with the CEO.

Is there any evidence that the things CEOs want to be coached in aren’t areas they need help in, and vice versa?
I think that we should look at the “gaps” between what is being worked on and what weaknesses are highlighted. For example, 23 percent of CEOs are working on their team-building skills, but only 13 percent of directors believe this is an area that needs improvement.


Comparatively, there’s a reluctance to be coached on so-called “soft skills” like motivation, compassion, and persuasion. How important are these, and should CEOs and execs take a closer look at being coached on them?
“Soft skills” have an important place in the CEO toolkit. Skills such as motivation and being able to coach and develop people allow a CEO to build a “complementary leadership structure” at the top of the organization. This kind of organizational design allows the top team members to work more effectively together and on their own, but relies on a CEO who can motivate, inspire, and coach those below him.

Is there a way to be transparent about a CEO being coached without causing shareholder and market panic?
Coaching is a private and personal activity. The fact that your CEO is being coached is not something that would normally be disclosed to shareholders. However, you can certainly imagine situations where something bad happened in the company (unfortunate press coverage, loss of top managers, etc.), and the CEO admits that he/she is responsible and his leadership style was instrumental in the problem, and that he/she is going to work on this weakness. Done in an open and honest manner, this type of disclosure can have a very positive impact on reputation, motivation, and performance in an organization.

Many of the highest performing CEOs disclosed that Peter Drucker advised them. They may have used a different term in that era because of the stigma, but we are now moving clearly into an era where there is less stigma associated with having a coach.

Is there an internal risk for company employees if their CEO or a senior executive is open about getting coaching?
This will be influenced most importantly by the culture of the organization and the delivery of the message. The employees that you want to keep will probably be grateful to hear that a problem is being addressed. However, it is certainly possible that the admission of a need for coaching might be interpreted as a personal weakness of the CEO. This happens all the time in political settings. Matching the message to the employees is essential. 

It is also important to not simply see coaching through the lens that there is a “problem.” Many times you are not focused on a problem when coaching someone. Rather, you are advising them on the issues they face — such as the expansion of the leadership team or transforming from a private company CEO to public company CEO — and helping them be even more effective. 

Ultimately, is there a relationship between coaching and getting to the top?
This is fairly common in tech firms such as Dell, Google, etc., where coaches/advisors have been brought in to help young CEOs. But Jack Welch is another prominent example of a top business leader who worked with an advisor — Ram Charan — for many years.

In general, where there is a relationship between coaching and getting to the top is when an executive believes in continuous learning and development. The saying “It’s what you learn after you know it all” resonates here. These kinds of chief executives seek out a number of different coaches/advisors who help frame topics for them and play a point of challenge and reflection. CEOs who do this are also triangulating information, and their set of coaches/advisors help frame, challenge, and assimilate all of the information/data.

How should CEOs choose the right outside coaches or advisors?
You need coaches who are very smart, intuitive about business and interpersonal dynamics, neutral in their assessment (i.e., not captured by their client), and can tailor the training to the individual needs (not a canned approach).

A good coach does not make someone feel badly about themselves, but will engage in training so that the CEO gets up the next morning and is excited about trying something new or doing something in a different way.

What did you find most surprising in the report, and what is the actionable takeaway for CEOs and boards?
We were very surprised to learn the low percentage of CEOs who have coaches. The key takeaway for CEOs and boards is that seeking out a coach or advisor is not a sign of a fundamental problem or weakness, but instead a key attribute of being a superior leader. 

For boards and other stakeholders, they should understand that it could help make the difference between a good organization and a visionary one. 

Gretchen Gavett

Gretchen Gavett is an associate editor at the Harvard Business Review. Follow her on Twitter @gretchenmarg.

What A Music Conductor Knows About Leadership: Hugh Ballou

Leadership coach Hugh Ballou spent the first 40 years of his career with his back to the audience

In my recent article on Cooperative Capitalism I promised more information from CEO Space faculty co-lead Hugh Ballou, who directs that effort together with multi-award winning author and expert on integrity in business Dr. David Gruder. The two coach, train and provide keynote addresses and learning experiences for corporations, both individually and jointly.

Of particular interest to me was seeing the way Ballou’s years of background as a music conductor have contributed to the skills he presents to leaders of organizations of all sizes including the world’s largest musical efforts, church organizations and even Fortune 1000 CEOs.

Says Ballou: “In 40 years of music ministry I conducted my work with my back to the audience.” Now, in his leadership training, he is addressing the challenges corporate leaders face head on.

Ballou defines a leader as one of three things:

1. A person who gets things done.
2. A person who learns how things get done.
3. A person who accomplishes work by influencing others.

Sometimes the influence is autocratic and negative. In other cases it’s based on inspiration, through trusted relationships (which is the path he selects and promotes).

Orchestrating Success
Have you ever watched a musical conductor at work? It’s leadership in motion. There is never an instant of indecision or a moment of doubt. The musical conductor is always in control. This may sound and seem like a dictatorship, but it is not, Ballou says. Nor is it a democracy, as a single person directs the will of others and the artistic vision that will shape the result.

On a corporate team, the leader articulates a vision through carefully crafted goals and empowers and directs key players in their role to the outcome and success.

In either case, the leader inspires the maximum result by inspiring and empowering the team of participants. If the leader is open and straightforward, the team will engage and do their best to succeed. But if the leader is ill-prepared, guarded and uncommunicative…the result is subpar (or perhaps a disaster).

Each player is highly skilled, and each person contributes the best of their unique talent. Together, the team creates a result that far surpasses what any individual could produce on their own. If the leader tells an expert oboe player how to play oboe – by the next season that player will likely be gone. But if he or she can bring out the greatest creativity and enthusiasm in the player, magic ensues.

Today, leadership coach Hugh Ballou trains leaders ranging from startup entrepreneurs to Fortune 1000 CEOs

From a musical conductor we can observe the following, Ballou says:

• If the leader is autocratic, there’s a limit to success.
• The leader should strive to portray a commanding presence—not a fearful dominance.
• The leader is only as effective as his or her success in inspiring and leading others.
• The leader defines how the result is expressed:
  • With passion and commitment
  • With unanimity of movement and expression
  • With a combination of skills that create momentum
  • With unity of pace and harmony
  • The leader invites people to participate through the aura of their presence
  • The leader knows and communicates that the team can only achieve its result with every member doing their best

Conductors and leaders inspire the highest possible performance from the groups that they lead. They are alert to circumstances and make adjustments and changes needed as the program progresses to ensure an optimal result. According to Ballou, corporate leaders can do much to sharpen their skills and understanding of ideal leadership by attending a symphony performance and observing the nuances and non-verbal signals that separate the merely good and acceptable from inspiring and unforgettable.

From Music Conductor to Meeting Conductor
One of the great problems Ballou notes that leaders seem to universally face is that they want to blame others for the problems they helped to create. Perhaps they are unclear about specifics or time frames and fail to provide mentoring.  Sometimes as leaders we confuse mentoring with micromanaging, Ballou says. When leaders fall short, he suggests they turn around once again, to take a close look in the mirror.

As Ballou teaches leaders he often uses his orchestra experience as an analogy:

• The orchestra lecturn holds the score (the strategic plan.)
• Every event that will happen is notated, with clearly defined roles and parts.
• The action plan is directly tied to the musical score.
• The CEO directs from the score (as opposed to playing the music). Their highest value is inspiring and allowing other people to perform to their highest level of expertise.
• As a conductor, the team lead (or CEO) begins with the “why” of a given performance, influences people with a common purpose, then gives them a clear pathway and coaches them to excellence.
• The choir or orchestra’s job is to listen to each other, and to use their level of expertise and also combine it with others then to attain a harmonic ensemble result. Many leaders inadvertently squelch these possibilities by being the “answer person” rather than allowing people to function in the areas they know best (a phenomenon leadership expert Murray Bowen has described as “irresponsible responsibility”). The result: A burned out leader and a frustrated team.

“In audiences and in facilitations it’s been interesting to note that 65-75% of those who attend have had some musical experience, and the rest have generally observed a conductor,” Ballou says. “So when I create the analogy, I hear ‘Ah’.”

“I particularly enjoy working with startup entrepreneurs,” says Ballou. “In these cases, companies can create a ‘ground up’ culture of high performance.”

That culture is vital, he notes, in that the U.S. currently suffers from an estimated 70% disengaged employees, according to research numbers from Gallup. It is an epidemic that costs organizations millions of lost hours and billions in lost revenue, particularly when we consider the vast hours leaders spend undoing conflict, much of which they’ve inadvertently (or occasionally even purposely) set up as a misguided ploy to show strength.

Relationships, trust, and a sense of ensemble are vital for optimal companies and teams, Ballou says.

"I love the concept of Jazz ensembles as an analogy,” he says. “It’s the most creative musical form we have in America. But it is not at all haphazard. In a group you have a chord structure, a rhythm, and there are rules of the road to dictate behavior such as if you don’t have a solo, you don’t play loud.”

“Yet we have leaders declaring, ‘I don’t want to be held back by a plan’. With a good structure, you have the room to be creative. Leaders tell me ‘I don’t have time to write down my goals.’ So do you have time to redo your projects, I ask?”

Finally, Ballou shares a set of leadership principles that music conductors know best:

1. Know the score. Know your vision and plan, and set it down in advance.
2. If you want a good ensemble, hire the best players. Look for good skills and good potential to grow.
3. Build effective relationships. Leaders lead people; managers manage money.
4. Every fine ensemble rehearses for every performance. But we often run straight to execution in business and then we execute poorly. By doing so, we build the DNA for poor performance. If we don’t rehearse what we want to accomplish as leaders, we’re modeling poor leadership (which others will copy). Is this the legacy we want to instill?
5. Prepare for meetings by preparing for the outcomes. Within meetings, allow people to play their instruments and to do their parts.
6. Value the rests. The pauses in any musical score are there for a distinct reason. They are punctuation. Yet as leaders we don’t value rest and we don’t put it into our calendar. We need time to plan, evaluate, think, rest and play. In doing this, we deprive ourselves of the chance to perform as a whole person, so we don’t show up as our best selves. An anxious leader communicates anxiety that is contagious throughout the whole human system. So we should value the rest periods and we should perpetually work on ourselves.

Cheryl Conner,