From all research Nada and I have undertaken, what the role and spread of the responsibilities of the CEO and chairman is is one of the two most difficult questions we’ve had to answer. Unlike most of the literature, we have found that the CEO and chairman roles are what each of the role incumbents make those roles. There seem to be two critical driving factors in the thinking behind those roles: the first is the business proposition, what the business that the CEO leads is all about. Is the business about product innovation? Is the business about being customer-centric? Is the business about being disciplined on cost? Those three elements as examples are concerns for any business. The second critical factor is: which is your company’s primary principle, and which other ones are just operational skills that you have to practice?

In a business that is more at the mature end of market, and really controlling costs is the prime factor, how can a CEO effectively interact with the customer community when in fact that CEO is leading strategies and policies that will reduce costs within the organisation and possibly damage or undermine customer relations, customer service, and being customer-centric? So it’s no surprise in the cost-discipline type of business, that most are hierarchical, with the CEO and the top team tending to be smaller. They’re highly focused on making management very aware of how to deal with their costs and how to reduce their costs year by year, and trying to keep same levels of service year by year (or slightly less service year by year but not by much)–all this comes down to the skill of management. So the CEO under those circumstances is probably more aloof, and that’s not just part of his or her personality, it’s a business requirement.

If Steve Jobs and Apple really have a customer-centric focus to their business, and that is coupled with product innovation, then the example from the top becomes very important. So the CEO responding to customer concerns or complaints or praise is really a very important branding factor. Now how much of Steve Jobs’s time can be used to be customer-centric is another matter, but the fact that the individual is responding to the customer on a business proposition of customer-centricity as critical to Apple, that to me at least makes a lot of sense.

So the first concern to address is: What’s the business proposition of the company? The second is: What makes the difference? Regarding differentiation. in world that’s highly competitive, where in many ways it’s difficult to tell the difference in terms of product quality, service, support, pricing, and/or customer care amongst products and companies, that extra 1% difference creates a unique differentiating factor, and for all I know, Steve Jobs may be achieving just that.

So, under those circumstances, those organisations that do really well examine their context, examine their competencies, are very often quite honest about their weaknesses and what needs to be done to address those weaknesses, and try exceptionally hard to make that 1% difference. We’ve found that context is critical: What is it unique about you? What makes the difference about you? And how do you show that difference even just a little bit? We’ve found that making a 1% difference can have a 10% effect on performance.

So the way Steve Jobs interprets his CEO role (which is someone more informal, distinctly in charge of the business, very creative and at the same time deeply concerned with customers and interacts with customers) could be the result of two things: the business proposition of Apple, and that unique differentiator that makes Steve Jobs stand apart which other companies don’t have.

All CEOs should keep these two factors in mind: what’s the business proposition of your firm, and what is it about you that makes the unique difference that will stand out and make this brand grow? Does it matter whether it’s customer centricity? Does it matter whether it’s excellent stakeholder relationships? Does it matter whether it’s very good internal disciplines within the corporation? And the answer is yes it does, when those little bits of extra effort are linked to a clear business proposition that makes the difference.

All companies, says Andrew Kakab­adse, professor of international management development at Cranfield School of Management, have done localisation “badly at some point”. The key to making it work is “clarity of strategy”, which is formed “when a company interrogates itself about what it’s really good at”, he says.

and

Prof Kakabadse says this is a reversal of the old strategy of “think global, act local”. Now, it is “think local, then act global”. So, rather than companies customising products to a local market, the focus should be to start with the local products and then try to leverage them globally.

You can read the full article here.

People in social groups have three basic needs:

• Belonging (to the tribe/group)
• Beliefs (what the group thinks)
• Escape/Salvation (achieve something, saved from ordinariness of life)

The bouncers can’t easily access the club-goers beliefs, and the club-goers just want to belong; they might not even know the value of what they believe in, but still want to join because celebrities or other people they admire go. The ritual of dressing up to go to a night club (or, say, an event like Henley Royal Regatta) is a residual tribal belief, and certain rituals are associated with certain networks. Facebook is another modern example — people are encouraged to join and socialise with their friends, and belong to a group. Their friends have similar beliefs, and often they are using Facebook as an escape (I think most wouldn’t call using it achieving something, however).

Here is a model of these beliefs (click to enlarge):

In the end it all comes back to these three basic needs.

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So yes, the trade unions are now giving management the chance to reposition their cost structure and try to put the airline on a much sounder footing. Though I think that many have underestimated the brand damage that is occurring to BA from these strikes. I suspect that the trust in the marketplace for British Airways is low, and I also suspect that for many European, regional or international travelers, British Airways must now be on the bottom of their lists. Seat for seat, ticket for ticket, BA is expensive. You’re likely to find that the Eastern airlines (Thai, Cathay Pacific) and Gulf regional airlines (Emirates, Etihad) have a much better service, have nicer flight attendants, more up-to-date seats and beds in business class and first class, all at a much cheaper price.

So yes, Willie Walsh at BA is now being given an opportunity to restructure. Whether he can reclaim the same brand position that BA had in the mid-to-late 90s and early 2000s, I doubt. The ongoing issues with volcanic ash from Iceland don’t help matters. How have all the canceled flights affected airlines? Well, they’ve lost a lot of money in terms of passenger receipts (though presumably they would have had some savings on fuel). The volcano hasn’t led to British Airways’s union or management loosening their position. I can’t see how the union will in any way give up, because should they do so, there is no way back for them, and British Airways will cut costs. I actually think that cost cutting will be inevitable, and the union is trying to do the best it can to preserve jobs.

The shame of all this is that there isn’t a partnership arrangement between the management of British Airways and the trade union, because that’s the only way that things are going to move forward. The airlines, like many other businesses, are in a mature market. Under those circumstances, costs constantly have to be under review. The more partnership arrangements we have, the more forward-looking both management and the trade union can be. Neither the strike nor the ash cloud have done anything to improve the relationship.

Another question to ponder is why flights were grounded for so long. I think there are two answers — one is that there wasn’t the body of knowledge to understand how planes would perform and behave while flying through volcanic ash. The only case studies that existed before were when aircrafts flew over a volcano but not through dispersed ash. I suspect now that the various authorities have learned quite a bit.

However, that doesn’t explain why that learning couldn’t have taken place in less than six days. There were airlines trying to experiment with what it means to fly through volcanic ash, but European authorities wouldn’t allow passenger flights for six long days.

I’m left with an interesting question–what did we learn as a nation about people being stranded and about how people move should there be some sort of crisis when planes can’t fly? On Sky News, there was constant repetition of the prime intelligence committee of the UK, COBRA, meeting periodically during the day. I have to ask the question whether this was just safety concerns for aircraft and their passengers, or was there another concern that if there was a war in the future, we have now learned something else about how to move masses of people in one direction, how to hold masses of people in a particular location, and how to use the armed forces for social purposes. I don’t think that’s the way it started, but I do feel that there was learning about trauma conditions that have nothing to do with this ash cloud.

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Stefan Stern wrote an article in the FT a while back that basically says there’s a way of getting around this. My experience is that it’s really difficult, because it’s tough to create an environment where people are motivated and feel they are making a contribution when in fact their lives are constantly disrupted. If we forget the term ‘multi-multitasking’, and introduce the term ‘authentic leadership’, we’re probably in a more accurate description of what’s happening today.

If you look at the situation we have today, first of all, the amount of money we made from productive capital (i.e. goods that we produce and sell) really slowed down in the 1980s. Since then we’ve had financial capital–in a sense we’re making money out of money. The way we do that is to take the existing structure of the organisation and constantly prune it down. That’s why we have many CEOs who actually come from a financial background. You need financial skills to become a leader today. That was not the case twenty years ago, when the finance director or the accountant was called a bean-counter–that was a term of abuse a long time ago. What we also have is making money out of parcelling up and selling the corporation in such a way that it looks more attractive when the bits are pulled apart, and then put together by somebody else who will then sell them on. What that does is create a very short-term attitude and perspective.

So we have a number of tensions: how to make money quickly, and how to make more money by looking after costs rather than looking after sales and the customer. We then have the tensions between governance and the stewardship of the board: the board really looks after the moral health of organisation, while the executive team drives the business and the leadership in terms of profit, sales and future strategy, and the general management below the executive team tries to keep the whole place together. But the executive team is caught between the board telling them to do one thing, and the general management who dislike being told what to do.

So we have a situation there where the best leader with the best intent, wanting to do the very best for his or her organisation, comes over as insincere. In fact these leaders are facing too many pressures in too short a timeframe. So they may intend authenticity, but at best they come out as inconsistent, and at worst they come out as highly political and not to be trusted. So strangely enough, many of our top executives are being seen as politicians and are the sort of person people want to listen to and take notice of. That situation doesn’t help.

Equally, asking people to be very good at multi-multitasking doesn’t help because they can keep it up for a while, but what they need to have is a culture which is supportive and helpful, so that they can continue working at an ever-increasing rapid pace but still be motivated. The multi-multitasking article by Stefan Stern masked an overwhelming need to examine what authentic leadership means today. It’s an issue that’s difficult to talk about because people have to become very personal. It’s an issue that many people find difficult to understand because while they face pressures in their role, they don’t quite comprehend the range of pressures that their boss has to face in trying to manage the organisation and manage the team. So, multi-multitasking can be conducted in positive, supportive cultures which are led by highly authentic leaders, and those leaders have learned how to cope with continuous diversity and pressure and changing agendas but in such a way that their personality and charm comes over and is authentic in front of internal stakeholders (employees) and external stakeholders.