Tuesday, 17 March 2009

Does RBS still glow?

 

    I'm listening to Philip Stiles from the University of Cambridge's Judge Business School who has been talking about leadership at the CIPD event I'm attending today.  This is his quote on RBS' morning meeting ritual:

"All these executives trouped up to Edinburgh so that Fred Goodwin could ritually humiliate at least one of them - they just took it as a right of passage."

 

Here are some, potentially random, thoughts in response (written quickly before I get thrown out since the conference is ending soon):

 

In the last couple of Talking HR podcasts, we've been focusing on Best Companies, and in particular the changes in some of the listings from those published last year.  Financial services is one sector which is less well represented than in the past.    As People Management notes,

"Banks are the most obvious example of brands that have been hit hard in the past 12 months, and the Best Companies list partly bears this out. Morgan Stanley, at number eight, is now the only financial institution in the higher echelons of the list, whereas last year it was accompanied in the top 20 by Goldman Sachs, RBS Retail and Deutsche Bank, as well as Britannia Building Society. This trend is less a result of reduced engagement and more the fact that “three or four of the major players simply didn’t enter this year.”

 

Despite this trend, some of the banks still seem to be managing to engage their people quite well.  For example, writing in Human Resources, Lynda Gratton has announced that RBS staff are still highly engaged despite job losses and bonus cuts (and even the media attention they've been getting recently).

Actually, I could imagine that this media attention is one of the reasons engagement scores may still be quite high - it's natural, in this environment, that people will come together to defend themselves against what is bound to be seen as (and undoubtedly is, in part,) unfair attacks.

One thing that doesn't seem, in hindsight, to have contributed to engagement or business performance, is RBS' executive meeting that in Fred Goodwin's day at least, was held between 8-9.00 every morning to review the bank's performance.  Although this was singled out by Gratton as one of her 'signature processes' that provides a distinct firm identify and leads to organisational success; at RBS, it seems to have acted as a way for Goodwin to keep tight control over the rapidly growing organisation, humiliating any executive who didn't produce the required level of performance, and contributing to the UK's biggest ever corporate loss ($34.6).

This is obviously unfortunate - for Gratton, as well as RBS and the tax payers who now own the battered bank.  It's particularly unfortunate for Gratton given that at least one other of her most quoted signature processes have been withdrawn (BP peer assists), and potentially contributed to the departure of the previous CEO (Lord John Brown).

However, I don't think these two failed practices detract from the real benefits that signature processes can potentially provide.  But these clearly need to be appropriate for the particular organisation at the particular point in time. RBS' daily meeting (at least in the way it was run) clearly wasn't appropriate.  BP's peer assist looked good on paper, and was maybe appropriate for a time, but clearly wasn't generating the required results, and needed to be changed.  As Gratton said,

“There is no right answer here. As a management team you have to be intelligent and sensitive to all the data that you have got and make adjustments.”

 

I also hope that Gratton has better luck with her new endeavour, Glow, which obviously builds upon her last book, Hot Spots.  It's certainly supported by some longstanding research.

According to London Business School, Glow is about three distinct areas of life which enable people to radiate energy, innovation and success.  People who Glow:

  • Have built deeply trusting and cooperative relationships with others (a co-operative mindset);

  • Have extended their networks beyond the obvious to encompass the unusual (jumping across worlds);

  • Are on an inner quest that ignites their own energy and that of others (igniting latent energy).

     

    All seems to make sense, and interestingly, would apply to just about any blogger.  Probably not Fred Goodwin though.

  • Glow is available in the UK from 2 April, and you can get details here.  I'll be posting my reactions shortly after this.

     

     

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    3 comments:

    1. I look forward to reading Glow.

      Any management teacher learns early in their careers not to hold up companies as good examples. Inevitably, the morning after they will on the front page with an eye-popping scandal.

      Copying other companies defeats the main proposition of contingency theory, anyway, which says to each what fits the circumstances. The proof of the pudding is only in the eating not in the recipe. We can tell students about how someone went about preparing a banquet. Then they must make their own. To mix my metaphor, business isn't a spectator sport.

      Copying other companies also contradicts the appreciative principle of do more of what works. If we have an eye on what works in our own company, we stop worrying about other companies. We also notice less what doesn't work because our attn has shifted to what does.

      How would that have saved RBS? Don't know, wasn't there. The question is where do I want to be. Who has my confidence?

      ReplyDelete
    2. Jon
      Thank you for your comments on the banking industry and Glow.

      It just so happens that our business, Egyii, focuses on the relationships managers in private and priority banking, so this is all pertinent.

      In our observations and interviews with banking clients, we still see a high level of arrogance, even though there is an upheaval and change of hands going on. And with that arrogance is a lack of "deeply trusting and cooperative relationships" (at least externally)across the board of client facing programmes at many banks including RBS.

      The "old world" attitude of banking arrogance and actions still exists. Isn't it a time for a change? We believe so.

      It may be worth reading a recent white paper we did on this "The Opportunity to Climb Out of the Crisis" http://tinyurl.com/bdkr2j

      So I am not sure any bank is a good example of Glow(ing)as "Glow is about three distinct areas of life which enable people to radiate energy, innovation and success. People who Glow:
      Have built deeply trusting and cooperative relationships with others."

      Some banks may be engaging well internally but they are not engaging well externally. How important is that client engagement for success?

      Your feedback?

      Trip Allen, Team Egyii, Singapore

      ReplyDelete
    3. Hi Jo,

      Yes, I agree that ccompanies shouldn't copy other organisations - that was sort of the point of the post.

      But I do think there are common things many organisations can do to counter what, Trip, I think you correctly point out are "deeply trusting and cooperative relationships".

      I certainly think GLOW might be a good place to start.

      ReplyDelete

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