Guest-blog: Roger Phare – A Nod to the NED – the key dynamic of the modern board

We welcome back Roger Phare as our guest blogger, who is an accomplished Global Executive Director, equipped with a commanding track record over the past 37 years of bringing sound judgement and a strong commercial perspective to IT businesses, from ‘Mainframe to Mobile’.

Roger has been fortunate to have been part of the commercial computing lifespan. With a market driven approach, which he has strategically supported, a number of organisations, both at significant Board, Executive and Regional Directorship and responsibilities. An expert in corporate governance and compliance and risk management; enjoying challenging the status quo and providing independent advice to Boards whilst maintaining sound judgment, impartiality and with integrity.

In the third of this series (view Part I and Part II ), we are going to look at the role of the Non-Executive Director (“NED”), which is a highly debated subject in today’s modern board.

To provide some background, before I hand you over to Roger, as an Independent Non-Executive Director and Executive Adviser on several companies, I talk with experience across the list of attributes required of a non-executive director, which is so long, precise and contradictory that there cannot be a single board member in the world who fully fits the criteria.

They need to be: supportive, intelligent, interesting, well-rounded and mature, funny, entrepreneurial, steady, objective yet passionate, independent, curious, challenging, and more. They also need to have a financial background and real-life business experience, a strong moral compass, and be first class all-rounders with specific industry skills.

Chairmen and chief executives should use their NEDs to provide general counsel – and a different perspective – on matters of concern. They should also seek their guidance on particular issues before they are raised at board meetings.
Indeed, some of the main specialist roles of a non-executive director will be carried out in a board sub-committee (particularly the remuneration and audit committees), especially in listed companies.

The key responsibilities of NEDs can be said to include the following:
Strategic direction
As ‘an outsider’, the non-executive director may have a clearer or wider view of external factors affecting the company and its business environment than the executive directors.
The normal role of the NED in strategy formation is therefore to provide a creative and informed contribution and to act as a constructive critic in looking at the objectives and plans devised by the chief executive and the executive team.

Monitoring performance
Non-executive directors should take responsibility for monitoring the performance of executive management, especially with regard to the progress made towards achieving the determined company strategy and objectives. They have a prime role in appointing, and where necessary removing, executive directors and in succession planning.

Remuneration
Non-executive directors are also responsible for determining appropriate levels of remuneration of executive directors. In large companies this is carried out by a remuneration committee, the objective of which is to ensure there is an independent process for setting the remuneration of executive directors.

Communication
The company and its board can benefit from outside contacts and opinions. An important function for NEDs, therefore, can be to help connect the business and board with networks of potentially useful people and organisations. In some cases, an NED will be called upon to represent the company externally.

Risk
NEDs should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.

Audit
It is the duty of the whole board to ensure that the company accounts properly to its shareholders by presenting a true and fair reflection of its actions and financial performance and that the necessary internal control systems are put into place and monitored regularly and rigorously.
An NED has an important part to play in fulfilling this responsibility, whether or not a formal audit committee (composed of NEDs) of the board has been constituted.

Now I would like to hand over to Roger!

Thank you Geoff, today I would like to discuss the role and ‘A Nod to the NED – the key dynamic of the modern board’.

Of all the Board positions the Non-Executive Director (NED) role is undoubtedly the most confusing. Not so much as to the expected outcomes of growth, compliance, shareholder returns and social responsibility but more as to the background and dynamics of the modern NED.

Why confusing?

Surely the NED role is the most historically formulated, culturally cultivated and legislatively defined of all board member roles.

Yet instead of being well defined and well-structured the NED requirement seems to be all over the place.

Part of the issue is that demand has rapidly increased due to factors such as legislation, compliance and business growth. This has spread the net further afield and created a demand over and above the previous norm.

The result of this demand there has seen “NED Membership” organisations springing up. I recently read as part of a membership promotion the following excerpt:

“If you have the right amount of experience to offer, you could become a Non-Executive Director. This could be an especially good option if you are approaching retirement because it can be a useful way to earn money without the pressures of being involved in the day-to-day decision making of a business.”

Whoa! This conjures up images of geriatric un-prepared old-boys rolling up for a four-hour board meeting; pontificating and story-telling before retiring to their local club for a large brandy and an afternoon nap in a dark leather padded armchair!

Nothing could be further from the truth for the modern NED. Guidance around “day to day” decision making is a critical part of the NED role. Four hours in the Boardroom can equate to four days spread pre and post meeting guiding and assisting the CEO & executive team. It is serious business.

A related problem is that somehow a “one size fits all” approach to NED requirements has become the prevailing attitude. Other than “Chair” type roles it seems that there is little demarcation in the nature of the role nor organisation in which the NED is required.

Contributing to this is the definition of organisation types. Most understand the concept of listed or private organisations and the duties, responsibilities and remuneration levels required by and from the NED’s. When community organisations are brought into the mix then things really go off the rails.

It starts with the concept of “Not for Profit”, equating with the concept that NED roles being “Volunteer”. To start with, Not for Profit organisations should be re-branded “Not for Dividend”. In other words, they need to be governed and run the same way commercial organisations operate with a view to making a surplus; the only difference is that those surpluses are distributed to beneficiaries rather than shareholders.

This topic is probably the subject of a whole new thread but the point is that community organisations need directors with the same level of skill and due diligence as those in the commercial world.
The question is when an ad appears that asks for applications for a NED “Volunteer, expenses only”, who is going to apply?
Yes, there is a small percentage of experienced and talented individuals who are prepared to provide their time on a “pro bono” basis and these people are to be commended. Simply having time on one’s hands and looking for an activity is not necessarily a qualification for a board position.
Even worse, to a degree, is the concept of applying for volunteer positions to “gain experience” as a Board member. This can lead to frustration and disappointment for all parties.

Yet it is not all doom and gloom. Demand for high quality Non-Executive Directors is increasing and it is generally acknowledged that the keys to success are the right recruitment, support, training and ongoing engagement. With these factors in place, NED’s can add significant value to all types and size of business.

So, here’s a nod to the new breed NED – exciting times ahead!

Roger Phare

You can contact Roger Phare via LinkedIn: Roger Phare on LinkedIn
or by email:
roger phare @ gmail .com
(remove all spaces)

Does shareholder value rule business?

What is the purpose of a corporation?

It’s remarkable that after a century of management theorising, there is no agreed upon answer.

Common-sense tells us that the purpose of a business is to make money.
A conversation with almost any businessman or economist shows it to be so.
Why else would a company be in business? Many experts agree: The Economist has recently declared that the goal of maximizing shareholder value, i.e. making money for shareholders, is “the biggest idea in business.” Today, “shareholder value rules business.”

Yet two distinguished Harvard Business School professors – Joseph L. Bower and Lynn S. Paine – recently declared in Harvard Business Review that maximizing shareholder value is “the error at the heart of corporate leadership.”
It is “flawed in its assumptions, confused as a matter of law, and damaging in practice.”
Bower has long held this view: back in 1970, he told NPR that maximizing shareholder value was “pernicious nonsense.”

Jack Welch, who in his tenure as CEO of GE from 1981 to 2001 was seen as the uber-hero of maximizing shareholder value, has been even harsher.
In 2009, he famously declared that shareholder value is “the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products.

Managers and investors should not set share price increases as their overarching goal… Short-term profits should be allied with an increase in the long-term value of a company.”

But despite these denunciations, the “pernicious nonsense” of shareholder value has spread.
Shareholder value thinking, say Bower and Paine, “is now pervasive in the financial community and much of the business world. It has led to a set of behaviours by many actors on a wide range of topics, from performance measurement and executive compensation to shareholder rights, the role of directors, and corporate responsibility.”

There are thus two opposing schools of thought: Shareholder value is either the best idea in business and the worst idea in the world. Which is it?

Corporate strategy on the other hand, is the overall plan of contemporary management practice, CEOs have been obsessed with diversification since the early 1960s, because almost no consensus exists about what corporate strategy is, much less about how a company should formulate it.

A diversified company has two levels of strategy: business unit (or competitive) strategy and corporate (or companywide) strategy.
Competitive strategy concerns how to create competitive advantage in each of the businesses in which a company competes.
Corporate strategy concerns two different questions: what businesses the corporation should be in and how the corporate office should manage the array of business units.

Corporate strategy is what makes the corporate whole add up to more than the sum of its business unit parts.
The track record of corporate strategies has been dismal.
A study of the diversification records of 33 large, prestigious U.S. companies over the 1950–1986 period, found that most of them had divested many more acquisitions than they had kept.
The corporate strategies of most companies have dissipated instead of created shareholder value.

The need to rethink corporate strategy could hardly be more urgent. By taking over companies and breaking them up, corporate raiders thrive on failed corporate strategy.
Fueled by junk bond financing and growing acceptability, raiders can expose any company to takeover, no matter how large or blue chip.

Recognising past diversification mistakes, some companies have initiated large-scale restructuring programs. Others have done nothing at all. Whatever the response, the strategic questions persist. Those who have restructured must decide what to do next to avoid repeating the past; those who have done nothing must awake to their vulnerability. To survive, companies must understand what good corporate strategy is.

Many post-Enron discussions about corporate governance have focused almost exclusively on the responsibilities of directors and the structure of boards and shareholders.
This is hardly surprising – after all, a company’s survival ultimately depends on the effectiveness of its board’s decision-making processes.
But boards don’t exist in a vacuum. Ultimately, board structures and decision-making cultures will depend on a company’s unique circumstances.
Large companies may also operate different levels of boards throughout their businesses. The complexity of large international organisations with many subsidiaries makes the issue of management information and decision-making more complex, and the need for directors of such vast organisations to have early-warning systems is a must.

The board of directors in any organisation is responsible for its operational, strategic and financial performance, as well as its conduct.
Boards exercise their responsibilities by clearly setting out the policy guidelines within which they expect the management to operate. They will set out the short- and long-term objectives of the organisation and a system for ensuring that the management acts in accordance with these directions.

They will also put procedures in place for measuring progress towards corporate objectives. There is therefore a clear difference between the main responsibilities of directors and managers.
In his recent book, “Corporate Governance and Chairmanship: A Personal View”, Sir Adrian Cadbury distinguishes between direction and management: “It is the job of the board to set the ends – that is to say, to define what the company is in business for – and it is the job of the executive to decide the means by which those ends are best achieved.”
They must do so, however, within rules of conduct and limits of risk that have been set by the board.

Can your board answer the following strategic questions:

· Who are our stakeholders?
· What are our stakeholders’ stakes?
· What opportunities and challenges do stakeholders present?
· What economic, legal, ethical, and social responsibilities does our organisation have towards our various stakeholders?
· What strategies or actions should we take to best manage stakeholder challenges and opportunities?
· Do you have a system for managing relationships with stakeholders?
· How do you measure results? What metrics do you use to assess and gauge stakeholder relationships?
· In a crisis how quickly can you communicate with your relevant stakeholders?
· Do you know the various methods to engage with stakeholders and when not to use it?
· Can you state how much you are spending on each stakeholder group and what your ROI is?
· Have you developed a set of rules and practices on how best to manage the process of building stakeholder reputation with each stakeholder group?

Once you have answered the above questions, then you should attempt these:

I. What strategies or actions should our firm take to best manage stakeholder challenges and opportunities?
II. Should we deal directly or indirectly with stakeholders?
III. Should we take the offense or the defence in dealing with stakeholders?
IV. Should we accommodate, negotiate, manipulate or resist stakeholder overtures?
V. Should we employ a combination of the above strategies or pursue a singular course of action?

Shareholder value: Has been called the driving force of 21st-century business.

What value do shareholders bring to the companies they invest in? Are most shareholders interested in what is best for the company, or are they in it only for the financial performance of the company’s shares?

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Adam Smith, the founder of capitalism, said that everyone should do what is best for themself.
However, Professor Nash, portrayed in the movie “A Beautiful Mind”, starring Russell Crowe, stated that “Adam Smith was wrong!”
Commercial organizations can only succeed if everybody is doing what is best for themselves while simultaneously doing what’s best for the whole group.

Beginning in the 1990s, we witnessed extreme egocentric behavior among public companies who were motivated solely by their own financial gains. Several studies prove that self-centered and egocentric companies perform poorly as compared to companies who focus on developing innovative products, delivering value for the customer, and motivating their employees to be more productive and successful.
How can these companies deliver value to their customers or suppliers if they are only looking at their own bottom line? Too much focus on shareholder value, measured by quarterly reports, is one of the primary reasons that public companies are not realizing their full potential and that the West has been in financial chaos for the past six years.
Companies that outperform the rest – over time – build their success on a performance-based culture, driven from the outside in.

Most executives agree that it’s important to create value for the customer. The problem is that despite the good intentions of the senior management team, this mindset often doesn’t travel farther than the company core values posted in the reception lobby of the corporate headquarters.
You know the classic four: honesty, engagement, customer focus, and collaboration.
If you exchanged one company’s value statement for the values posted in the lobby of the corporate headquarters across the street, would anyone notice? Or are the values posted in the lobby of the neighboring company the same four?

Professor Solow, winner of the Nobel Prize for his theory on economic growth, found that only a portion of financial growth in the world comes from companies making money out of money.
Instead, the majority of financial growth comes from companies actually producing a product, developing a new service, or changing the way we conduct business.
Corporate leaders need to do more than shuffle numbers on a balance sheet.
Consider Steve Job’s unrelenting focus on product innovation and what Apple was able to achieve by creating the iPad, iPhone, and iPod. As we know, iTunes has literally changed the entire music industry!

The obsession with maximizing shareholder value has also impacted the way that companies approach negotiations with their customers and suppliers.

To solve the world’s economic crisis, we need brave CEOs and leaders to step up and declare, “I don’t care what the share value will be for the next two years. We might not make a profit during this period. But we are going to focus all our resources on product research and development with the goal to create the best product the world has ever seen.
We’re here to change the world! We are fully committed to delivering value and a return on investment to our shareholders. Yet it may not be in the next 30 days or even the next three quarters. I am asking our investors to look at us with a long-term view. I am asking them to stand by us and risk a much larger return on their investment if they will agree to fund the innovation required to develop a market-changing product.”

If you left Sharpies under the statement of core values that hangs in the lobby of your company, what kind of graffiti would you find scribbled on your values statement? What would your customers and suppliers write? Your corporate values are better articulated by your employees, customers, and strategic partners than by your management team and board of directors.
If there is a disconnect between your formal statement of values and the graffiti, you have work to do.

If you can build a product that will truly change the world, like Steve Jobs did several times, your shareholder value will take care of itself. Your problems will be protecting your distribution channels, defending your intellectual property, and retaining your talent. Which set of problems would you prefer? I think the answer is obvious – to hell with shareholder value.

Experience tells us that listening to your stakeholders and strive to meet their expectations—difficult or not.
Ensuring they are feeling heard, valued, and appreciated grows trust, support and credibility. Building relationships and understanding motivation takes time and effort but will make your job easier in the long run. Companies are more successful when everyone is on board and on the same page!

A famous quote by Dennis Muilenburg:

 “As we continue to drive the benefits of integrating our enterprise skills, capabilities, and experience – what we call operating as ‘One Boeing’ – we will find new and better ways to engage and inspire employees, deliver innovation that drives customer success, and produce results to fuel future growth and prosperity for all our stakeholders.”


Does your executive board need an Entrepreneurial approach to business?

There has been much discussion around transformative innovation that explores new horizons and potentially disrupts business models, and whether this requires an entrepreneur mindset on the Board of Directors.

Recently, I was asked by Freeths LLP, an award winning and large UK legal firm, to share insights on ‘how to infuse boards with entrepreneurial spirit’ – an article that was included in their prodigious Winter 2018 edition of their Platinum Magazine.
The Freeths Platinum Magazine is sent to their top and private clients. You can read it online HERE (page 15).

This subject is increasing in board discussions and agendas, which has prompted me to continue the subject discussion, to take a deeper dive across the positives and repercussions of adapting and entrepreneurial approach to business.

If you are leading a start-up business or involved in a scale up business with potential for high growth, one of the most valuable things you should do early on is to set up an board of advisors.
Scaling an enterprise is hard work, and you only stand to benefit from drawing on perspectives, experience, and networks that augment your own.
A group of advisors committed to your success not only provides a sounding board to test and strengthen your ideas, it gives you access to important competencies and resources.

But many entrepreneurs, especially those in the early stages, find the task of building an advisory board daunting.

Whose strengths would complement their own and counter their weaknesses?

Who might bring an insight to the table that would otherwise be missed?

It can feel like an exercise in knowing what you do not know. Moreover, most people who have not formalised such a board before have not given much thought to what it takes to keep one running effectively.

Board members tend to have immense experience in at least one of these three areas: financial expertise, industry-specific knowledge, or operational management.
Over the past couple of decades, though, companies have become more interested in diversifying their boardroom both in race and gender as well as in expertise.

Today, you’ll find individuals with backgrounds in marketing, IT, and human resources in addition to the “classic” board member tracks.

The latest trend, however, is adding someone with an entrepreneurial background to your team of directors.

Boards are constantly being pulled between short term goal-oriented oversight and long term, strategically focused planning.
Entrepreneurs are generally going to default to strategic thinking and will help pull your board out of conversations that should be left to your company’s C-suite.

Entrepreneurs are often “visionaries” in the business world and offer a complementary element to boards that already favour members who are well-versed in risk management or short term, operational guidance.

This is not to say that an entrepreneur will always be right about their theories or suggestions, but their presence alone will force more conservative members to tackle some out-of-the-box thinking.

The boardroom is not generally thought of as the ‘nerve centre’ of entrepreneurism within a company, particularly a company trading on the stock exchange.
The role of a typical director is often more about audit, risk reviews and compliance, and directors may see ‘entrepreneurship’ as a risk element.

Often this means keeping one or even both eyes on the rear-view mirror, and yet maybe the biggest threat is ahead and not yet fully visible in the headlights.

Most directors have little experience or understanding of the risks posed by disrupters and technological changes. With many directors on stock exchange companies being recruited from large and established companies, few of them can boast about any entrepreneurial experience. This raises a number of questions:

Do boards need to be more entrepreneurial to detect and counter modern-day risks?

Could a board that is more diverse in terms of experience, age or culture help address this?

We live in a fast paced and rapidly changing world. Even just a decade ago, changes to markets and business challenges were slower paced. However, since the dawn of global connectivity, big data and the maturing of the World Wide Web, companies are encountering threats at a much faster pace and competition is global.

Companies face modern-day risks associated with the ‘Sharing Economy’, cybercrime or even the IoT (Internet of Things).
The threat posed by disrupters can be catastrophic and quickly bring down what was a very successful company.
The board needs to anticipate changes and be innovative in relation to these modern day risks; that is, it has to become more entrepreneurial.

Yet, though the environment in which companies now operate is constantly changing, the behaviours of directors and the majority of boards are not.

Boards spend significant time on compliance and on examining historical data on company performance and comparisons to budgets, yet the strategic role sometimes remains an annual event completed, printed and filed away for 12 months.
Directors spend limited time considering strategy at a typical board meeting, and may regard innovation as a change of state and, therefore, a risk factor.

Directors have a duty of care to their shareholders and are responsible for determining the company’s growth and survival strategies. But do boards spend enough time discussing competition, or new developments in technology, or even possible changes to regulations that may in the future impact the business?

For many boards, these areas are never discussed.

In the business world, will we ever forget Kodak and its devastating collapse, after being a highly successful business that neglected the need to change when digital photography was first introduced.
The irony is that the technology was originally developed by Kodak in 1975 and was effectively discarded because Kodak feared it threatened its photographic film business.
The digital and, at the time, much smaller companies took it on, and everything else is now history.
Although this is a classic example and a tragic one for Kodak’s shareholders and staff, there are many other examples and are likely to be increasingly many more to come.

The new disruptive technologies of the Sharing Economy such as Uber and Airbnb are having a significant impact on the market value of companies in transport and hospitality.
We should also consider the changes that have occurred in print media, including the retrenchment of many journalists because of the impact of digital media and resulting decline in advertising revenue.

Also consider the decline of Blockbuster video and the rise of Netflix. These types of disruptions in other industries could have staggering implications across many markets.

In the area of banking and finance, for example, people are starting to collaborate to exchange money and bi-pass the banks’ foreign exchange departments with the high rise of high growth and disruptive fintech companies.

Directors need to better understand threats and also assess more innovative growth strategies if their companies are to compete in the rapidly changing world in which we live in.

This means a different set of skills are needed at board level, in addition to the more traditional skills.
Business survival requires boards and directors to be more agile and predictive, particularly in relation to disrupters that could be catastrophic for their business.

Technological advances and customer behaviour can turn the business fortunes of companies around very quickly. For the modern-day director, it is necessary to be constantly aware of the external environment so that potential disrupters can be quickly detected and countered.

As a result, more effort is needed to create an entrepreneurial approach at the director level through properly managed processes and structures. This may include extending the current standard board committee structure to include a standalone innovation committee, providing leadership in innovation, and to bringing in a structured process to manage and assess opportunities and threats.

Many classic-minded board members are extremely risk averse and for good reason!

They are tasked with a great amount of responsibility to shareholders and to the overall success of an organisation.

Unfortunately, this can sometimes lead them to fear failure in such a way that it stifles success.

Many successful entrepreneurs are known for embracing small failures in order to reach large triumphs.

This attitude in support of both flexibility and evolution brings a unique and forward-thinking element to any boardroom

For the modern day director, it is necessary to be constantly aware of the external environment so that potential disrupters can be quickly detected and countered.
As a result, more effort is needed to create an entrepreneurial approach at the director level through properly managed processes and structures.

This may include extending the current standard board committee structure to include a standalone innovation committee, providing leadership in innovation, and to bringing in a structured process to manage and assess opportunities and threats.

With the growing need for businesses to fend off disruptions, as well as to create their own disruptions, it is time to consider how board meetings can evolve so that instead of spending so much time on backward looking and historical data, boards do a little bit of creative forecasting and consider the future of the business and the market.

Some suggestions are:
• Create an Innovation Committee. Increasing the time spent considering innovation will make an enormous difference to many companies.
• Spend some time discussing ‘what if’ scenarios to facilitate innovation discussions.
• Develop an opportunity management focus at the board level, instead of just a risk management focus.
• Place on the board’s agenda an item for competitive trends and behaviours and possible disruptions to the business model. Look to other industries for examples of how disruptions have been addressed.
• Encourage management to look to untapped knowledge in the staff pool (e.g. users of the ‘sharing economy’ might have a good understanding of disrupters).
• When it comes to funding a company, maybe consider other innovative methods to raise funds.

The future is bright for those who direct their focus to the headlights and away from the rear-view mirror. Being forewarned of an impending risk or threat may provide the opportunity to develop strategies and so mitigate that threat before its impact is catastrophic.

Keeping an eye on what is coming may help enable your company to be the disrupter, not the disrupted. Maybe we all need to reflect on that ‘Kodak Moment’ to see how quickly things can change.

Final thought, to achieve substantial and continued growth in the 21st century, companies will have to look beyond improving the existing business model or simply launching new products. These actions just will not generate enough growth anymore.

Growth will come from more ambidextrous organisations that excel at improving their established business model (exploitation) and excel at inventing tomorrow’s growth engines at the same time (exploration).

As Peter Drucker once said discussing Innovation and Entrepreneurship – Practice and Principles:

 “This defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

Peter Drucker


Every day we interact with hundreds of people across dozens of platforms, but how can a meaningful conversation help your business?

Conversations are key to language development, the exchange of thoughts and ideas and listening to each other. People learn by hearing each other’s thoughts while observing facial and body expressions that show emotions.

“Face to face conversation is the most human and humanising thing we do,” says Sherry Turkle in her book ‘Reclaiming Conversation – The Power of Talk in a Digital Age’.
“Fully present to one another, we learn to listen. It is where we develop the capacity for empathy. It’s where we experience the joy of being heard and of being understood.
Conversation advances self-reflection, the conversations with ourselves that are the cornerstone of early development and continue throughout life.”

Technology is a part of everyday life, but replacing face-to-face conversation with phone conversation, via texting, emailing, etc., has taken important skills away from children and young adults.
In today’s world, there is a “flight from conversation,” as Turkle says. All ages of people cannot do without phones and screens, but a balance is of utmost importance.

How much time do you typically spend with others? And when you do, how connected and attuned to them do you feel? Your answers to these simple questions may well reveal your biological capacity to connect.

If you’ve ever been trapped in an lift with a casual acquaintance, you know just how painful small talk can be. “Such a shame that we’re stuck in the office on a beautiful day like this!” your peer may even smile. Or, “How was your weekend?” your neighbor may ask not because he or she actually cares about the quality of your weekend, but because there is an awkward silence that begs to be filled.

There’s a reason small talk like this exists. If your peer were to ask you about your darkest secrets or deepest wishes while the two of you descend floors in a tiny metal box, you would probably feel like this is too much, too fast. As in, too much intimacy, too early on in your relationship.
Likewise, small talk can help us probe for more interesting topics to talk about.
For example, if you were to answer your neighbor by saying, “My weekend was great! I bought the final component for my laser defense drone,” your neighbor would definitely have some follow-up questions.

The instant and omnipresent world of communication has increased our capacity to connect on a perfunctory level, but in some cases has thwarted our capacity to have real and meaningful face-to-face conversations.
The two forms of communication — virtual and physical — can work in tandem, though the physical kind obviously takes a bit more effort, but most often results in a far more meaningful experience.

A popular article in The New York Times, Your Phone vs Your Heart, mirrored some of these observations. In particular, the article explored how we can actually “re-wire” our heart and brain to become more secluded.
It contends, “If you don’t regularly exercise your ability to connect face to face, you’ll eventually find yourself lacking some of the basic biological capacity to do so.”
In summary, if you don’t go out of your way to form meaningful, personal friendships beyond the virtual ones, you may lose the ability to do so in the future.
A sort of “use it or lose it” model. What was also intriguing about the article was that through these connections, you actually build up your biological capacity to not only empathize but also improve your health.

Heidegger probably had it right when he made the prescient statement, “Technology makes us at home everywhere and nowhere [at the same time].”

We are more connected than ever, yet we remain walled off behind our smartphones, mobile devices and computer screens.
Perhaps our communication tools are more cosmetic than we think; they have yet to master the ancient and inimitable art of human contact.
Your success is determined in large part by your ability to have a conversation. You can be the best at what you do, but if you’re not communicating effectively with clients, staff and the market, then you’re missing opportunities.
There are many different ways to look at communication in the small-business world from the individual formats such as writing and speaking, to different contexts such as client communication and employee management.
Each and every day you will be required to flex your communication muscles and interact; a bad conversation could spell disaster for an employee relationship, a customer or your business.
Alternatively, the right words at the right time could propel your business into places you didn’t think possible and can deliver opportunities that were not available before.

Geoff Hudson-Searle – Meaningful Conversations

We should all stay inspired with ideas and innovation, creating great things!

Interestingly, meaningful conversations are not restricted to, or guaranteed by, long-term relationships. I’ve had deeper conversations with strangers on an airplane than with some people I’ve known for decades.

Karen Salmansohn once said:

“Choose to focus your time, energy and conversation around people who inspire you, support you and help you to grow you into your happiest, strongest, wisest self.”

Guest-blog: Roger Phare – The Jekyll, Hyde and The Executive Director

Roger Phare

As an executive director, how do you powerfully lead your organisation through complex challenges? How do you align your organisation, staff, and board around impact and achieve financial sustainability? As daunting as these questions can seem, they are fundamental executive leadership responsibilities.

In spite of its institutional power, the position of an Executive Director remains an immensely demanding one, and not one that any qualified and capable man or woman will agree to lightly.

We welcome back Roger Phare as our guest blogger who is an accomplished Global Executive Director, equipped with a commanding track record over the past 37 years of bringing sound judgement and a strong commercial perspective to IT businesses, from ‘Mainframe to Mobile’. Roger have been fortunate to have been part of the commercial computing lifespan. With a market driven approach, which he has strategically supported, a number of organisations, both at significant Board, Executive and Regional Directorship and responsibilities. An expert in corporate governance and compliance and risk management; enjoying challenging the status quo and providing independent advice to Boards whilst maintaining sound judgment, impartiality and with integrity.

Roger is going to talk to us about ‘Jekyll, Hyde Associates and the Executive Director’

Thank you Geoff, today I would like to discuss the role of the Executive Director, which can arguably be the most individually challenging and changeable of all Board roles. Not that the responsibilities are any greater or less than Non- Executive counterparts, yet the concept of disassociating the “day job” with the Board role can be tricky and take some fortitude. The Executive director must possess or develop the ability to perform separate roles with separate mindsets; a veritable Dr Jeckyll and Mr Hyde (and maybe other) set of personas.

The majority of companies start from small beginnings. Friends, family or work colleagues decide to set up in business and likely form a limited liability company. Almost invariably they become shareholders, directors and employees overnight. Generally there will be a leader; a chief executive who, more often than not, will also be elected chairman of the board. The other board members are often generalists, providing input based upon their work role experience.

Confusion can set in as the company grows and more employees are taken on board. This is where the understanding of role demarcation is vital. I recall being an executive director on the board of a growing company some years ago when one of my colleagues, who was head of the technical department as well as an executive director/shareholder, threatened to fire the receptionist for an indiscretion.
The receptionist did not report to this individual but his view was that as a major shareholder and director he had the over-riding power and right to make such decisions. He clearly had confused the roles, effectively merging all three responsibilities into one.

In the board room the need to disassociate the individual roles becomes even more apparent. Recalling that a director’s duty is to represent the medium and long-term interests of the shareholders, the double or triple role can be a major challenge. Let’s say that within a growing goods and services company the head of development, one of the founders and a minority shareholder, also sits on the board as an executive director. As a manager doing his day-to-day job, he has put up a business case to employ a number of new staff members within the development team.

At a board meeting, the annual item regarding profit distribution by way of dividends is discussed. The head of development sees this as an ideal forum to lobby for the approval of the business case. This is not say the overall decision will necessarily be wrong; it is that he has unwittingly brought his managerial role into the boardroom.

Once a company goes public, then the appetite for executive director’s wanes considerably. Most Commonwealth countries operate a unitary system, indicating a balanced mix of executive and non-executive directors. Yet over the past twenty years there has been a push for greater board member independence, with a move towards more non-executive directors. The executive directors are often consigned to the roles of chief executive and possibly head of finance.

Yet are we about to see the return of the executive director on public boards? There is no doubt that the need for up to date subject matter knowledge of industry trends is as much a requirement as expertise around governance and compliance. The need for this has started show itself in the rise of the advisory board; yet this can never replace true in-house expertise.

Perhaps we are about to witness the return of our Henry’s and Edward’s; but this time around improved peer mentoring and coaching maybe the answer.

You can contact Roger Phare via LinkedIn. Roger Phare on LinkedIn or by email: roger phare @ gmail .com (remove all spaces)

Guest-blog: Roger Phare – The qualities and experience needed to getting the right advise on the Board

Roger Phare

In the small business world, there is a lot of talk about whether a company should have a Board of Advisors (Advisory Board), and if yes, what the composition of such a group should be. In my time in the small and medium enterprise (SME) world, I have been exposed to and worked with hundreds of companies, a small percentage of which have had a Board of Advisors. Whether having such an advisory group makes sense depends a lot on the business and more importantly, the CEO and senior management team of the business.

In my opinion and I state this with wisdom, one of the smartest growth initiatives a business owner can implement is an advisory board: a hand-selected group of advisors that believe in your leadership, are aligned with your culture and mission, and are committed to your success.

The vast majority of business owners who implement an advisory board fail to see a strong return on investment because they have not followed guidelines to recruiting the right advisors, and have not set them up for success.

Today I have the pleasure of introducing another Guest Blogger, Roger Phare, who is an accomplished Global Executive Director, equipped with a commanding track record over the past 37 years of bringing sound judgement and a strong commercial perspective to IT businesses, from ‘Mainframe to Mobile’. Roger have been fortunate to have been part of the commercial computing lifespan. With a market driven approach, which he has strategically supported, a number of organisations, both at significant Board, Executive and Regional Directorship and responsibilities. An expert in corporate governance and compliance and risk management; enjoying challenging the status quo and providing independent advice to Boards whilst maintaining sound judgment, impartiality and with integrity.

Roger is going to talk to us about the qualities and experience needed to getting the right advise on the Board.

Over recent years we have seen the rise of the Advisory Board concept, a trend that reflects the changing nature of modern organisational leadership and governance. Thinking further on this, the obvious question is why? What has changed in public and private Boardrooms to see such a demand for specialist knowledge and expertise?

The answer perhaps dates back some twenty or even thirty plus years. Up until the late eighties board members generally came with experience related to the company’s market or industry, together with all round leadership and business skills. This had largely been the post war formula, in other words Executive or Non-Executive Directors in 1958 had much the same attributes of those in 1988 – then everything changed.

We had Wall Street, Enron and the Sub-Prime less than twenty years apart. Not co-incidentally, this timeframe was paralleled with the rapid rise of business computing and the internet. Ironically, while technology was an enabler for business growth it became an inhibitor for effective all-round board performance. Directors became much more focussed on financial and legal due diligence as the regulators took control. Boards became largely the keepers of compliance and governance, with their members skilled and qualified in these disciplines. So what happened to the much needed advice in areas such organisational structure and market direction?

Enter the Advisory Board, bringing relevant expertise and experience in key strategic areas.

There is perhaps another reason for the rise of the advisor(s) in the boardroom. Casting the mind back to our pre-1988 Director, past industry experience was a key attribute for the senior board member. Being five to ten years away from a hands-on roles was not a major issue – as business and market fundamentals remained consistent. Today key industries are in rapid growth mode that did not even exist five to ten years ago, with “here and now” expertise required.

So Advisory Boards are most likely here to stay and ideally should complement our incumbent NEDs or Exec Directors; the key is find the right balance and consistency.

You can contact Roger Phare via LinkedIn. Roger Phare on LinkedIn or by email: roger phare @ gmail .com (remove all spaces)

Predictions for the start of 2018!

2017 was definitely one interesting year, and as the Chinese say: ‘We live in interesting times’.

‘2018 will be a year of political turmoil and environmental crisis caused by dramatic and unprecedented weather’, says Craig Hamilton-Parker in a recent blog post.

A man who successfully predicted the unlikely victory of Donald Trump and the UK’s vote to leave the European Union has come up with a new round of prophecies for 2018.

Craig Hamilton-Parker has prophesied there will be a terrorist attack on a British motorway, revolution in North Korea which overthrows Kim Jong-Un’s regime, and a chemical weapons attack by drones on a European city.

On a less morbid note, Mr Parker also predicted Prince Harry would become engaged to Meghan Markle.

Christmas holiday’s are always a period for introspection and once my dreaded cold had calmed down, I started to reflect on some of the most influential push buttons of business and ‘leadership with technology and operating in the new business world came to mind’.

2017 has come to a close and businesses are preparing to enter 2018 with an instant bang.

What do entrepreneurs really expect heading into the new year?

A shift in IT spending: “A significant number of enterprises will begin to invest in a dedicated security operations center as part of the shift away from prevention towards detection and response … Hybrid security offerings combining on-premise and SaaS/Cloud solutions will become the dominant architecture with customers beginning to integrate these offerings starting in 2018.” – Prakash Nagpal, vice president of Infoblox.

The Cloud will fragment into microservices: “In 2018, technology companies are going to ditch the buzzword ‘cloud’ in favor of the next big trend in IT – ‘microservices’. This is where companies will increasingly look to scale by essentially breaking up their IT and thinking smaller and using more SDN and NFV type approaches. Enterprises should also take note fast – moving to smaller applications makes it much easier to scale and decreases risk, while increasing efficiencies.” – Craig Walker, CEO of business communication platform Dialpad

The rise of the sharing economy: “Digitization and the sharing economy will disrupt more industries. Already, retail (Amazon), automotive (Uber and Zipcar), and the server market (Google, Amazon) have been disrupted – and we have had two years without another major industry being disrupted. Given this, financial services and healthcare are ripe for disruption.” – Prakash Nagpal

Banking models will begin a radical shift: “Millennials want to bank wherever they want and whenever they want, which does not align with the traditional banking model. It’s predicted that digital banking will grow to more than 2 billion users by 2020. As a result of this shift, the traditional brick-and-mortar banking solution will be replaced with a technology first-mindset. In essence, your wallet will be your phone.” – Dave Mitchell, president of NYMBUS

Speed is key in modern banking: “The banking channel will strive for speed. Lending, banking services, statement processing and other banking channel players are scrambling to get online and get faster. We expect the scramble to continue as the industry seeks to eliminate middle men – like brokers – and better serve their customers.” – Vernon Tirey, co-founder and CEO of LeaseQ

Mobile banking means more mobile cyberattacks: “All are experiencing a big increase in attacks on their mobile banking and transactions. Expect that to continue. Approximately 80 percent of financial institutions’ customers are doing online banking, 50% are on mobile and that’s growing. More customers equals more opportunity for attacks.” – John Gunn, CMO of VASCO Data Security

Machine learning and Blockchain will grow more prominent: “Two of the most interesting IoT developments to emerge in 2017, with the most potential for innovation, were blockchain and machine learning. They likely won’t go straight to market in the new year – we’ll likely see more proofs of concept instead – but, we have seen some fascinating PoCs already.” – Mike Bell, EVP IoT & Devices at Canonical

Machine learning will become more responsive in customer service: “Machine learning will play a bigger role in sales and customer support in 2018. Lower costs and increased availability of speech analytics tools mean more businesses will record and monitor calls within their contact centers. Instead of simply guiding callers through prompts, speech analytics will help to categorize them and analyze responses in terms of what you say and how you say it. Insights like these will be used to guide agents, in real time, to get the best results from each interaction.” – Chad Hart, head of strategic products at Voxbone

AI implementation will help business capitalize on large troves of data: “Although discussions on the topic of data may not be new, until now most business have been focused on forming teams and building data pipelines, but the data itself has not produced much disruption. With the right people and tools in place, companies can now focus on using data to drive growth. Companies will look to incorporate artificial intelligence (AI) to gain a competitive edge.” – Jennifer Shin, founder and chief data scientist of 8 Path Solutions

IoT cyberattacks will become more common: “There will be an increase of random IoT hacks and attacks because the tools are easy to find and use, and also because of all the unsecured IoT devices – Gartner says there are 8 billion connected things in 2017 and expects 20 billion connected devices by 2020. Anyone can go onto the dark web and start using available malware code, not to mention the readily available services such as hacking, malware- and ransomware-as-a-service, which can all be hired for next to nothing. It’s very easy these days for someone with little knowledge to launch a sophisticated attack, and there’s clear financial incentive – in the last three years, business email compromise alone made $5.3 billion.” – Christian Vezine, CISO at VASCO Data Security

IoT devices will become more secure: “Expect to see at least 2 or 3 large-scale, botnet-style attacks on IoT-related hardware in 2018. To remedy this, the industrial space may pick up a trend from the consumer space, where device updates are downloaded automatically, and give the user little say in the process.” – Mike Bell

Industry will employ more low power wide area networking (LPWAN): “LPWAN technology can be unwired and run for a long time, with minimal power consumption. Its potential applications include heartbeat communications and predictive maintenance for industrial equipment like basement boilers, which can be otherwise difficult to reach … LPWAN provides better penetration and range in hard-to-reach areas, which opens the door for groundbreaking new industrial equipment use cases.” – Mike Bell

Economies are growing. Stock markets are climbing. Employment is healthy. These are all positive signs of the marketplace as a whole.
But the fate of individual companies has never been more uncertain, and the window of opportunity is closing for many companies unprepared or unable to adapt to new market realities.

Many factors are combining to define the fate of companies: Unmet customer expectations are resulting in churn; the lack of digital transformation gains is translating to loss of market share; industry lines that protected some are crumbling; and longstanding, durable business models are failing.

For some, it feels like a burning platform mandating bold action; for others, it will be the quiet but real deterioration of their business.
Customers demand what they demand. And when companies fail to deliver experience by experience or live up to their brand promise, customers will take flight.

Evolving customer expectations will challenge everybody — leaders, followers, and laggards. The across-the-board plateauing of CX (Customer Experience) quality reminds us that customers continuously re-evaluate experiences and reassess loyalties.

Leaders will adapt and, ultimately, thrive. Those slow to change will struggle. And the distance between the two will grow.

2018 will be a year of reckoning for those that have held on too long or tried to bootstrap their way through transforming their business.

Simply put, the distance between customer expectations and the reality on the ground is becoming so great that a slow and gradual transition is no longer possible. Incrementalism may feel good, but it masks the quiet deterioration of the business.

Whether CEOs in these companies start to use their balance sheet wisely, find new leaders, develop aggressive turnaround plans, or do all of the above, they and their leadership teams must aggressively get on track to preserve market share and market standing.

Finally, leaving you with a new year quote and thought by Melody Beattie:

“The new year stands before us, like a chapter in a book, waiting to be written. We can help write that story by setting goals.”

What can we learn from Darwin in today’s technological world

Charles Darwin was born on February 12, 1809. The world he was born into would be entirely unrecognisable to us today. Bicycles had yet to be invented, steam engines were just beginning to appear, and slavery was commonly practiced in both England and the United States. During the course of his lifetime, Darwin saw the world around him change enormously, but arguably the most significant change came from his own ideas. Darwin’s theory evolution of natural selection, altered the ways we think about almost every aspect of life.

While Darwin’s theory was ground breaking, shocking, and tremendously illuminating during his lifetime, what can it mean for us today? With all the time that has passed since Darwin’s birth, is there anything we can still learn from him? In the pursuit of science and everyday life, there are countless ways Darwin’s words still ring true today.

I recently watched a film called ‘Concussion’, which triggered the thoughts behind this blog. Starring Will Smith as Dr. Bennet Omalu, a Nigerian-born pathologist who brought the issue of brain damage in retired NFL players to the forefront, Concussion is the sort of underdog-stares-down-corporate-behemoth feature that reliably manages to stir up some awards buzz.

The true-life story began unfolding in September 2002 when Omalu, then with the Allegheny County coroner’s office in Pittsburgh, Pennsylvania, was assigned to perform an autopsy on the body of Mike Webster. Known as “Iron Mike,” Webster was a beloved former Pro Bowler with Pittsburgh Steelers, the anchor of a front line that helped the team win four Super Bowls. However, his mental health deteriorated to the point where he was ranting at strangers and zapping himself with a Taser gun, until his death from a heart attack at age 50.

In the film, Dr. Bennet Omalu did significant research across Darwin’s observations of birds and quoted in the film: ‘All of these animals have shock absorbers built into their bodies. The woodpecker’s tongue extends through the back of the mouth out of the nostril, encircling the entire cranium. It is the anatomical equivalent of a safety belt for its brain. Human beings? Not a single piece of our anatomy protects us from those types of collisions. A human being will get concussed at sixty G’s. A common head-to-head contact on a football field? One hundred G’s. God did not intend for us to play football.’

NFL Commissioner Roger Goodell was subsequently hauled in to testify before a House Judiciary Committee in October 2009 about safety measures, and stricter guidelines were established in the pro game to limit head injuries. Still, dozens of former players embarked on legal action against the NFL in 2011, claiming that the league had failed to adequately warn and protect them. As of the summer of 2015, more than 5,000 former players were involved in a consolidated lawsuit, with a settlement figure of $765 million deemed insufficient by a judge.

This was just one example of Darwin and his teachings in our fast-technological world, it could be said that we do not observe enough, and only in times of necessity or extreme need, as with the case with ‘Concussion.’

Nature is wonderful. Darwin taught us that complex animals like birds, frogs, and even humans came about in complex ways over long periods of time. Evidence for this history is everywhere, you just have to stop and notice the details. His vivid description of an entangled bank reminds me that there is wonder in acknowledging this simple fact from time to time:

“It is interesting to contemplate an entangled bank, clothed with many plants of many kinds, with birds singing on the bushes, with various insects flitting about, and with worms crawling through the damp earth, and to reflect that these elaborately constructed forms, so different from each other, and dependent on each other in so complex a manner, have all been produced by laws acting around us.”

Beauty can be found in the struggle. Darwin knew all too well that nature can be brutal. Individual animals fight, starve, and die other horrible deaths. Darwin acknowledged that existence is a struggle, that nature is often at war, and that resources are scarce. Somehow, he still found solace in the end product:

“Thus, from the war of nature, from famine and death, the most exalted object of which we are capable of conceiving, namely, the production of the higher animals, directly follows. There is grandeur in this view of life…from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.”

We are all connected and we depend on each other. Evolution reminds us that all living creatures came about through the same basic principles. We all evolved from common ancestors in the remote past, from simple beginnings. Let’s return to Darwin’s entangled bank quote. He asks us to:

“….reflect that these elaborately constructed forms, so different from each other, and dependent on each other in so complex a manner…”

His theories are now associated with business through the concept of ‘Darwinian Economics’, namely that it is organisations that are best able to adapt that are most likely to survive.

But what else can you, entrepreneur, business leader or individual learn from Charles Darwin?

Use the power of observation. Many people are so busy making decisions, analysing problems and seeking answers that they pay no attention to simply observing. Darwin, on the other hand, spent much of his career observing. He spent six years, for example, dissecting and describing in eye-watering detail the structure of barnacles!

If you are observing you cannot be analysing, and vice versa, and it was Darwin’s observations that formed the basis of his idea that changed the world. His five years on the Beagle trip, for example, involved him taking thousands of samples of various species.
Observation requires getting out there, suspending your beliefs and simply taking note. It cannot be done from behind a desk through reports.

How much time do you spend on the front-line observing your team or your customers rather than analysing second or third-hand data?

Looking to the past for innovation breakthroughs. Darwin was not the first person to have thought of the concept for evolution: he was not even the first person in his own family to have the idea! His grandfather, Erasmus Darwin, had promulgated the idea that all animals had a common origin before Charles was born.

Similarly you can see the process of recombining ideas in other major breakthroughs and innovations. For example, Lou Gerstener refocused IBM away from hardware to service and consultancy support by connecting his prior (negative) experience as an IBM customer with his McKinsey consultancy experience and with the existence of a highly-active sales support unit within the company. This change in strategic direction transformed IBM from a company delivering record losses in the early 1990’s to multi-billion dollar profits by the end of the century.

What are you doing to make new connections that lead to new, breakthrough concepts?

You can only change the world through action, not thinking. Darwin sat on his theory for 17 years before he published ‘On The Origin Of The Species’. He held back publication in order to ensure that he had irrevocable evidence to support his theory (hence his interest in barnacles!). Darwin’s hand was only forced when a rival publication was developed and his desire to be seen as the originator of the idea of evolution overcame his need to be 100% certain of his ideas.

Likewise, taking action and prudent risks is the cornerstone of business growth and an offensive, rather than defensive strategy, is critical for ongoing survival and success. For example, Gillette has established market leadership by a stream of innovations that make their existing ranges obsolete. As a senior Gillette executive once said, “We have never launched a major new product without having its successor in development. You have to steer the market.”

In summary, the miraculous discoveries upon Darwin’s ideas established a philosophy by introducing the time factor, by demonstrating the importance of chance and contingency, and by showing that theories in evolution are based on a set of new principles that influence the thinking of every person in the living world, through evolution, can be explained without recourse to supernaturalism; essentialism or typology, and possibly one of the most important facts is that we must adopt population thinking, in which all individuals are unique with a belief and a can do attitude.

One of Darwin’s most famous quotes:

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

The circular economy in today’s business world

It was a delight to be invited to 6head’s recent seminar and creative workshop ‘Designing a Circular Economy’ at the IDEO London office. During the workshop, Chris Grantham, Portfolio Director of IDEO London, unpacked the concept of circular design and discussed how this new mindset can enable businesses to create competitive advantage, better serve customer needs, and work towards long term economic and environmental sustainability.
The concept of the circular economy is entering the mainstream and becoming better understood, but there is still misunderstanding about how to finance it, and the risks and opportunities it presents.
As the concept of sustainability becomes more deeply embedded in the fabric of society and the economy, the notion of the circular economy has started to gain traction.
But while there has been much talk of what the circular economy is and how businesses can adapt to it, one area that has not been fully explored is how it will be financed.

But exactly what is a Circular Economy?
One interpretation is that a circular economy can be an alternative to a traditional linear economy; using the concept ‘make-use-dispose’ in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.

But something far more important to factor is that a circular economy is restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times. The concept distinguishes between technical and biological cycles.
As envisioned by the originators, a circular economy is a continuous positive development cycle that preserves and enhances natural capital, optimises resource yields, and minimises system risks by managing finite stocks and renewable flows. It works effectively at every scale.

This video is a perfect introduction to re-thinking progress in our world and The Circular Economy:

Considering the above you really have to ask the question about The Circular Economy, is this a myth and if not a myth, how will The Circular Economy effect me, my business and the community in today’s world?

The president of the European Commission, Jean-Claude Juncker, has said he wants to focus on jobs and growth, and rightly so. There are a number of routes to get to a destination, but the end result will be the same. Jobs and economic growth are no exception and one possible route to achieve this ambition is growth of the circular economy.

Globally, Innovate UK claims resource efficiency measures could add $2.9tr to the economy by 2030, with returns on investment of more than 10%. There are also major job opportunities. WRAP and Green Alliance recently identified that more than 200,000 jobs could be created in the UK if circular economy activities continued to grow. In a recent report (pdf), the World Economic Forum and the Ellen MacArthur Foundation also identified that a shift in reusing, remanufacturing and recycling products could lead to more than half a million jobs being created in the recycling industry across Europe.

It is a fact that The Circular Economy could go a long way to helping reduce carbon emissions. According to a recent report (pdf) by the Carbon Trust, Innovate UK’s Knowledge Transfer Network and Coventry University, remanufacturing typically uses 85% less energy than manufacturing, and on a global scale has the potential to offset more than 800,000 tonnes of CO2 emissions per annum.

And remanufacturing is just one component of the circular economy. In its first phase between 2005 and 2009, WRAP’s Courtauld commitment, a voluntary agreement aimed at improving resource efficiency within the UK grocery sector, avoided 3.3m tonnes of carbon dioxide equivalent emissions, equal to an aeroplane flying around the world half a million times

You will find many companies using terms around The Circular Economy as a justified theory, however, I read a McKinsey report on the subject recently that really resonated with me, it quoted moving from theory to practice, refers to the transition taking place as companies in many sectors use circular-economy concepts to capture more value from resources and to provide customers with better experiences. The term “paradigm shift” is overused, but this is one instance where it applies. Since the Industrial Revolution, companies and consumers have largely adhered to a linear model of value creation that begins with extraction and concludes with end-of-life disposal. Resources are acquired, processed using energy and labor, and sold as goods—with the expectation that customers will discard those goods and buy more.

Contemporary trends, however, have exposed the wastefulness of such take–make–dispose systems. The same trends have also made it practical to conserve assets and materials so maximum value can be derived from them. Consider that resource prices have become more volatile and are expected to rise over the long term, as consumer demand increases and easy-to-access, high-grade stocks of key commodities dwindle. People and companies are increasingly willing to pay as needed to use durable goods, rather than to buy them outright. With digital technologies and novel designs, items can be tracked and maintained efficiently, which makes it easier to extend their useful lives. And governments are imposing new restrictions on pollution and waste that apply along entire product life cycles.

These developments mean that it is increasingly advantageous to redeploy resources over and over, often for the same or comparable purposes. This is the organizing principle of circular economies, and the benefits that come from following it can be substantial. According to the research documented in “Finding growth within: A new framework for Europe,” a circular economy could generate a net economic gain of €1.8 trillion per year by 2030. The building sector, for example, could halve construction costs with industrial and modular processes. Car sharing, autonomous driving, electric vehicles, and better materials could lower the cost of driving by 75 percent.

The benefits are just as significant for less-developed economies. “Ahead of the curve: Innovative models for waste management in emerging markets” describes effective ways of encouraging the conversion of waste materials into valuable inputs. These include aggregating waste flows into large volumes that businesses can work with and establishing incentives to lessen waste creation. South Africa increased collection rates for scrap tires to 70 percent, from 3 percent, in just 18 months, leading to the creation of small and midsize processing and recycling companies. The country also aims to divert a majority of scrap tires into high-value material-recovery processes by 2020.

When you consider the facts its clear there are some significant opportunities to considering our future as one that can be sustainable and one that provides opportunity for others

Developing products for a circular economy offers another point of view on how to eliminate waste and create value and creates significant innovation. It is not easy to create products that are lasting, simple to reuse or recycle, and profitable. But when design teams get together with other company departments and use design thinking like IDEO, they can conjure up resource-efficient ways of delighting customers. Greater collaboration allowed one medical-equipment company to figure out that collecting and refurbishing used devices would allow it to meet the needs of underserved customers in emerging markets.

I believe and this belief is very evident with the likes of Adidas, Bundles, Fairphone, Caterpillar, Desso to name a few have proved and as other companies will follow these pioneers in the transition from circular-economy theory to practice, they are certain to encounter obstacles. This is natural: breaking out of old models and letting go of time-tested approaches is challenging. But the lessons of the circular economy are accumulating and they show that the gains from making the transition outweigh the effort and the risk. With those benefits in mind, you will see that The Circular Economy in today’s business world is here to stay!

Rob Eglash once said:

“The reason that Google was such a success is because they were the first ones to take advantage of the self-organizing properties of the web. It’s in ecological sustainability. It’s in the developmental power of entrepreneurship, the ethical power of democracy”.

More management, more leaders or are we failing in business?

I always travel once a year to my business partner in the US and we always have this debate over “you can train and educate an individual into being management”, but I have always maintained you “cannot train a leader”: leadership is in your DNA or not, and I believe leadership is something that passionately is in your blood, the route of success in any business is with the strength of its leadership, so the question that I am always engage within these days with groups is why is there so much management, why do we have a shortage of competent and strong leaders?

Some of the readership will remember a blog I wrote in 2014, “Middle Management or Strong Managers”: here.

My views are not only individual if you read Chapter 7 of John Bogle’s book ‘Enough: True Measures of Money, Business and Life’. The theme of management versus leadership is a familiar one and the distinctions that Bogle makes are based on some fairly standard and familiar definitions. To clarify the distinguishing features, Bogle quotes Professor Bennis as follows: ‘The manager administers, the leader innovates’ … ‘The manager relies on control; the leader inspires trust; the manager has a short-range view; the leader has a long-range perspective; the manager accepts the status quo, the leader challenges it.’

Clearly the need for leadership is as strong if not stronger in IT as it is in the world of finance and business with which Bogle is primarily concerned.

These calls have been made consistently over a long period of time now by a large number of business gurus, life coaches and consultants, but still the landscape remains patchy in my experience. For every good piece of leadership, I see, where teams are given clear direction and empowered to operate effectively, I see examples of micro-management where managers are insistent on predetermining the activities, tasks and man-day estimates and then badgering the team to report their success in following this predetermined plan.

A great leader will possess qualities like passion, integrity, a take charge attitude and the ability to inspire others. Employers and executives recognise this, and these “born leaders” are often first in line for promotions to leadership roles.

But people with leadership potential have never simply become leaders overnight. To co-exist as a leader, existing leaders have a responsibility to train the next generation, showing them how to guide a group of people toward a specific vision or goal, which in this new digital era of automation, robot and in some exception non-verbal communication – a particularly difficult challenge to overcome.
The challenge is that we live in a world where never before has leadership been so necessary but where so often leaders seem to come up short. Our sense is that this is not really a problem of individuals; this is a problem of organisational structures, effectively those traditional pyramidal structures that demand too much of too few and not enough of everyone else.

So here we are in a world of amazing complexity and complex organisations that just require too much from those few people up at the top. They do not always have the intellectual diversity, the bandwidth, the time to really make all these critical decisions. There is always a reason that, so often in organisations, change is belated, it is infrequent, it is convulsive.

My thoughts are still that the dilemma is one of complex company organisation, it’s growth, as fast as the environment is changing, there are just not enough extraordinary leaders to go around, something that I have majored on with my new book “Meaningful Conversations“. Look at what we expect from a leader today. We expect somebody to be confident and yet humble. We expect them to be very strong in themselves but open to being influenced. We expect them to be amazingly prescient, with great foresight, but to be practical as well, to be extremely bold and also prudent.

So, can organisations develop real leaders that can make a difference to business and create value?

My belief is that emotional intelligence (EI) is going to be a huge key component of effective and developed leadership. The ability to be perceptively in tune with yourself and your emotions, as well as having sound situational awareness can be a powerful tool for leading a team. The act of knowing, understanding, and responding to emotions, overcoming stress in the moment, and being aware of how your words and actions affect others, is fundamental for growth. Emotional intelligence for leadership consists basically of these five attributes: self-awareness, self-management, empathy, relationship management, and effective communication.

The business world is evolving and changing at unprecedented speed in a very unconnected human world, emotions and our day to day communications are becoming a much more important aspect of working relationships. Having emotional intelligence increases your chances of being more accepted on teams and considered for leadership positions. It can also set you apart from the competition when seeking a new position or promotion.

Sharing information is critical, but it is substantially less than half the battle. You must communicate clearly about the organisation’s strategy, speed, direction, and results. But you cannot stop there. Verbally and nonverbally, the way in which you communicate – humbly, passionately, confidently – has more impact than the words you choose.

As a leader, you must inspire others through your words and actions. And before you speak, make sure you listen and observe; knowing your audience is as important as the message you’re delivering. Communication informs, persuades, guides, and assures, as well as inspires. You must be willing to reveal more of yourself, to let others see your soul. If you withdraw, you will undermine your effectiveness as a leader, and your followers may soon drift to the side lines.

In summary, clear communication is the most important key to a business leader’s success. So, to grow as a leader and manager, you must learn how to be an effective, compelling communicator. And if you want your company to succeed, you and your team have to master the art of clear communication together, as well. By using these and other strategies, you and your employees can reach new levels of leadership excellence.

Rick Pitino, once said:

“Technology is a compulsive and addictive way to live. Verbal communication cannot be lost because of a lack of skill. The ability to listen and learn is key to mastering the art of communication. If you don’t use your verbal skills and networking, it will disappear rapidly. Use technology wisely.”