Blog News and Knowledge from CR Systems

  • MEASURING BOARD EFFECTIVENESS – CORPORATE GOVERNANCE AND HOW TO STAY OUT OF JAIL

    Today we take a brief look at the issues of how and why measuring Board effectiveness is so important.

    Stay out of jail?

    There is no doubt that we live in an increasingly litigious age and that directors and managers of companies are coming under ever increasing pressure to be accountable for their decisions. In a recent Sky News report Corporate Manslaughter cases are up by 40% in the last three years. There is unfortunately very little data to suggest if this has also been reflected in equivalent cases around corporate nonfeasance, misfeasance and malfeasance. One indicator may perhaps be the increasing insurance premiums and expected salaries required of Non-Executive Directors.

    Directors of companies are more exposed than ever to the consequences of getting it wrong, well beyond any financial implications of failure. In simple terms if you cannot prove that collective decisions taken by the board were well argued, broadly analysed and risk quantified then each individual on the board is culpable and can individually bear the consequences of any retaliatory mechanisms, including loss of freedom.

    The quality and transparency of Corporate Governance is the prime method by which the courts judge a company in cases involving corporate failure.

    What is Corporate Governance?

    Corporate Governance attempts to define the systems, processes and moral integrity required to manage a company. It is the domain of the board of the company. The board members are required to act as trustees for all stakeholders in the company (shareholders, customers, employees, suppliers and potentially anyone touched by the company’s business).

    The public focus on Corporate Governance has, to a certain extent, waxed and waned with economic vicissitude. Over the last 20 years there have been numerous high profile investigations and associated reports, from the famous Cadbury report of 1992 following the Polly Peck and Coloroll collapses to the latest Walker report of 2009 following the massive financial meltdown of 2007/8. History is littered with the examples of systemic corporate failure affecting those far beyond the company’s immediate base. To name just a few in our lifetime that many will remember;

    • Bhopal disaster
    • Chernobyl
    • Global banking meltdown
    • Deepwater Horizon

    At one time Corporate Governance was considered entirely the province of very large businesses, due to their complexity and potentially devastating consequences of failure. It is important to remember that since the Walker report the same principles of Corporate Governance apply to all companies large and small. Basically if you are fully signed up 288a director of a registered company, no matter how small, you are just as liable for the consequences of your actions as a director in Equitable Life.

    Even after the litany of investigations and reports from eminent committees over the last 20 years, the act of signing up t0 Corporate Governance guidelines is still voluntary. The underlying principle being that the act of self regulation matched by the transparent requirement to “comply or explain” is sufficient. This was at the heart of the Cadbury report of 1992 and remains in place to this very day.

    Why is it so difficult?

    The board of the company needs to steer a transparent and (usually) profitable path between the sometimes intractable needs of all stakeholders. In some companies this is easier than in others. For example, small businesses tend to be less complex and with fewer differences of opinion about the “right” thing to do, however although the consequences of failure may be infinitely less far-reaching than those of larger companies, they still bring significant personal loss and trauma to all involved.

    Since the fall out from the Equitable Life fiasco, the recent focus on the role of Non Executive directors and their failings has in some instances created truly adversarial environments that do very little to enhance the quality of decision making and guidance expected of those involved. At it’s worst it can result in extremely conservative decision making that can actually damage the business.

    Perhaps the most important recommendation from the most recent investigation after the bank collapse of 2009, the Walker report of 2010, was that deficiencies in board practice are predominantly of behavior rather than of system or process. It’s as much about the way that the board interacts, supports, analyses and challenges each other as about any system or process.

    It’s difficult because it’s all about the people and the politics!!

    Ten years ago in 2003 Derek Higgs published his report on Corporate Governance in which he recommended best practice behaviours for directors of boards. It’s surely a travesty that such a critically important area of board effectiveness, due perhaps to the voluntary nature of the process, has to be re-iterated and recommended a decade later. The art of developing and monitoring excellent behaviour is applied throughout business, so why is it so difficult for the board members?

    What can boards do about it?

    Since the financial collapse of 2008 there is ever increasing pressure towards active Corporate Governance, whicn in turn means that there is more pressure to demonstrate that boards are abiding by the code. The declaration of Director responsibilities and increasing quality of Board minutes and actions do appear to be improving matters. The checks and balances for the sytemic, risk and committe are becoming more naturally embedded. However, the issue of demonstrating and measuring best practice behaviour is still relatively barren ground.

    Behaviour can only be measured by the effect it has on those people who experience it. There is only one way to measure behaviour, either collective or individual, and that is to ask the people who are affected by it. There is only one tool that can do this effectively and that is 360° Feedback.

    Over the years we have created a simple and effective three step approach specifically for Boards wishing to review and develop best practice behaviours.

    Step 1 – Review of collective Board behaviour.

    Using a standard Corporate Governance framework, individual directors give feedback on the collective performance of the board, defined against an amalgam of generic best practice behaviours as defined by Cadbury, Greenbury, Higgs and Walker. This is followed by a two hour review session with the board to define the areas for potential development.

    Benefits

    Quick, comprehensive, impersonal and effective as an entry review process because it’s all about the board not any individual directors.

    Step 2 – Review of individual Directors

    Once the Board members are comfortable with the approach and quality of outcome, then the same process, using a slightly different competence framework focused on individual contribution, can be applied to all Board members. Each director is marked by every other director, and each member receives a personal debrief and individual development plan that they may or may not wish to share with the board.

    Benefits

    Detailed review enables individual directors to gain insight into the areas where they could make significantly more impact for both their own and the board benefit. It’s where the real differences will take place

    Step 3 – 3 month and 6 month “micro” review

    To ensure that the behavioural changes have been embedded into the culture a very short review mechanism is introduced to check the board and/or individual development is on track against the specific behaviours that they have committed to develop.

    Benefits

    Transparency and auditability. Extremely efficient because it focuses only on the important.

    What are your experiences of working with boards? How do the behaviours of fellow directors affect your boards ability to perform? Are there underlying tensions between the Execs and Non Execs that are preventing your board from working at its best?

    If you would like to discuss any aspect of this article further we would love to hear from you.

  • 10 “MUST HAVES” TO INCLUDE 360 DEGREE FEEDBACK IN PERFORMANCE APPRAISALS: PART 2

    Last time, we shared the first 5 in the 10 must-haves when using 360 degree feedback to conduct performance appraisals. Where there’s a part 1, there’s usually a part 2. Wait no longer – here’s 5 more elements to consider:

    6. Rate the Behaviour not the Competence There’s sometimes a temptation to reduce response loading by rating overall areas of competence or sub-sections, rather than individual behaviours. There appears to be a particular emphasis on this approach in the legal and accounting professions. The behavioural indicators add comparatively little effort in comparison to the significantly increased quality and accuracy of feedback.

    7. Make surveys manageable. This follows from the previous point. There is an optimisation process required to ensure that respondents time is respected and kept to a minimum, whilst ensuring that the feedback is rich and relevant. Many organisations either cut a heavy swathe through the framework to reduce response time to a minimum, or overload the poor respondents with every shade of grey. In both cases it is often done without any real intellectual horsepower applied to the end result. There is no doubt that the goal must to keep the feedback needs sufficiently short so as to keep participants interested and on-side, but not without losing the quality of response required to enable the individual concerned to gain real insight from the process. If you have a large set of behaviours in mind, think carefully as to whether they are all necessary to describe best practice for the competence to which they relate. A rule of thumb is usually somewhere between 5 and 8 behaviours should comfortable describe any competence. Any more and you may well have more than one competence you are trying to describe. Any less and you have to ask how critical is this competence to the framework.

    8. Create Frameworks that reflect your strategy and your culture. There’s a temptation to use standard, off the shelf frameworks for 360 Feedback. One of the great benefits of using a standardised frameworks is that it can enable broader benchmarking and comparison. However this usually misses the point that a Competence Framework is supposed to underpin the strategy of a company within it’s stated market. If you believe that a one size fits all Competence Framework benefits your company then surely you would also subscribe to a one size fits all strategy? Another reason that companies use standard Frameworks is that it is a quick way of getting started. This is understandable and can be helpful when using the 360° Feedback for occasional coaching or individual development, but it so often ends up becoming a legacy framework that has no real relation to strategy. We would always encourage clients to do the hard miles and not miss the opportunity to better understand how the intricacies of your business and culture both define and limit your ability to succeed in your strategy. Spend time tailoring the Competences and Behaviours for your specific needs, making them relevant to your business, strategy, culture and people.

    9. Make sure the scale is understood Ratings and scales can be confusing. Make them simple and make sure you communicate exactly what a rating means. Better understanding up-front means better feedback thereafter.

    10. Test, test and retest. Pilot the process. Consistently analyse the meta data and distribution to see how well they compare to similiar performance metrics. If the comparison has little or no meaningful relationship, or the distribution is so narrow as to make sensible differentiation unreliable, then go right back to the beginning and ask yourself what purpose the process serves within a performance review.

    If you’d like to understand a little more of the issues involved request our Behave! brochure, which outlines the six areas to consider in detail when implementing any 360° Feedback process within an organisation.

    Have you used 360-degree feedback in your internal performance appraisals? What have you learned from the process that you would add to our list above? We would love to hear from you.

    To find out more about CR Systems Products and Services click on the image below.

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  • 10 “MUST HAVES” TO INCLUDE 360 DEGREE FEEDBACK IN PERFORMANCE APPRAISALS: PART 1

    The vast majority of clients that we work with use 360-degree feedback specifically for personal development. There are a few organisations that have adopted the processes and procedures for performance appraisals. We would always suggest that this should be approached with great care, and only after significant effort in developing the quality of the framework, understanding the culture of the company, validating and analysing the meta data, being absolutely clear how it is to be used and what the outcomes will look like for those involved in the process.

    … and then we would suggest they think again!

    Here are some pointers as to the differences you might wish to consider in the 360° Feedback process if you intend to use 360-degree feedback in performance appraisals:

    1. Tread softly into the dark night. Do not, ever, consider using the results of 360° Feedback without being absolutely sure that there is a meaningful relationship between the results of the 360° Feedback within your organisation and the performance metrics that you use in your business. This usually means running it as a personal development tool for a couple of years at least. Let’s face it if you can’t see how it fits into a performance appraisal, then it is highly unlikely that anyone else will.

    2. Prepare the Team Set the expectation that the feedback route is the one you’re taking for your upcoming appraisal. Explain precisely the part it will play in the appraisal, why you have decided to include it, how much it will contribute to the outcome of the appraisal and the steps you will be taking to ensure that the feedback results are as valid as possible. Set the expectations early and make sure that you manage any concerns before the process starts.

    3. Remove the Democracy from the process. By introducing 360° Feedback results into the Performance Appraisal process you are now explicitly linking behaviour in the workplace to performance. This is a serious step and inconsistencies will have consequences. One of the perennial areas of inconsistency is the bias that can be introduced through selective choice of feedback respondents. You need to make sure that the process is as consistent and repeatable as possible for all taking part. We would suggest that you remove one opportunity for bias to creep in by removing the selection choice from the candidates. Create universal rules such as “Feedback will be received from all reports and all colleagues who work with the candidate on a regular basis and have known the candidate for greater than six months”

    4. Ensure strong interactions as best you can It may seem obvious, but feedback works best when the rater actually interacts with the feedback recipient on a regular basis. Do the due diligence on whether your raters are indeed best-placed to provide authoritative insights.

    5. Smaller and more often is better than larger and infrequent. 360° Feedback requires a massive amount of organisational time compared to any other form of testing. Rather than lumping all participants into a large melting pot, work in smaller groups, to ensure the feedback is focused and inclusive of the right individuals. This will also reduce the tendency towards “Survey fatigue” where respondents become overwhelmed with the process and focus on completion rather than quality of completion. Make sure you understand and respect the time commitment required for those giving feedback.

    We will cover the final 5 in part two.

    If you’d like to discuss the issue of using 360 degree feedback in performance appraisals in more detail or have anything that you would like to add from your experience below, then we’d love to hear from you.

    To find out more about CR Systems Products and Services click on the image below.

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  • BEHAVE! HOW EFFECTIVE IS YOUR 360 FEEDBACK PROCESS?

    Find your weakest link

    I’ve talked a little about the cost of free products and those promising to be easy and simple in previous posts. I’ve discussed the importance of understanding your specific needs to work out requirements for selecting the right 360 degree feedback tool. But if you already use a 360 degree feedback system, you may be wondering how well it does the job. If you’d like to take a look at how well your current 360 feedback system works, if it can be improved or if there are processes that are broken and need fixing, we’ve developed the Behave! framework to help you do just that.

    Based on six key phases in the evaluation of a behavioural development programme, the Behave! framework can be used to review your current system and goals, identify areas where improvements can be made or help you determine a specification for a new behavioural development system.

    There are six modules in the Behave! framework that take you through each of the major review phases you need to look at, to make sure you’re getting the best out of your behavioural development process. The framework isn’t intended to direct you towards a specific 360 degree feedback solution, but is designed to help you identify elements critical to your success and find any weak links that might reduce the effectiveness of the process.

    Almost all systems, especially linear systems, depend for quality on the output of their weakest component, not their best. For example, a top of the range $50,000 audio system might fail to deliver the sparkling sound quality read about in reviews or heard in a shop, because of something as simple as a loose connection between the amplifier and the speakers. Or the sound quality may be poor because the system’s been set up in a garage, where the acoustics are terrible. These are typical examples of both how a tiny thing can make a huge difference and also of how sometimes no matter how perfectly something is designed there are elements outside of the system that can significantly effect its performance.

    Behavioural development processes are systematic and work in just the same way – they give great or mediocre results based on the weakest part of the system and the environment in which they are used. To improve the quality of a behavioural development process each system component needs to be examined in turn and any weaknesses identified and rectified.

    Just like the example of the audio system, failure points in a behavioural development system may not be big, expensive or obvious. Instead they’re probably small, inexpensive or subtle and consequently easily overlooked. Just like the audio system set up in the garage, outputs from a behavioural development system are dependent on the context and environment in which the system operates. These can have a significant effect on the quality of your 360 degree feedback system’s outcomes. Many companies are disappointed with results after buying a top of the range 360 feedback solution, not because the system is poor, but because its not appropriate to their business context.

    The Behave! Framework consists of the following six modules:

    • Getting the preparation right
    • Measuring the right things
    • Asking the right questions
    • Obtaining the right answers
    • Giving the right feedback
    • Supporting the right development

    The Behave! framework you can consider the contribution of the different system components, as well as internal and external factors impacting on the system, to identify any weaknesses and build on strengths. Using the Behave! framework allows you to identify and resolve issues to maximise the quality of your 360 feedback system outputs.

    We believe everyone should get the best from their behavioural review process. Our Behave! framework is based on years of experience working with businesses and corporations of all sizes and in all industries. The Behave! analysis consists of a four step process:

    1. Online diagnostic
    2. Initial review
    3. Stakeholder workshop
    4. System report and process map

    The online questionnaire takes you through the six essential steps in evaluating all the issues you need to consider for your behavioural development system. We then produce an initial diagnostic report that summarises the potential areas for development within the system that we review with you. This is followed by a workshop with the major stakeholders in the process and then a full report and process map is created.

    If you just wish to gain some insights into your current system you might wish to just undertake the diagnostic and receive the summary report, without committing to the complete process.

    To find out more about CR Systems Products and Services click on the image below.

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  • E=MC2 OR MANAGEMENT CHANGE WITHOUT BEHAVIOURAL CHANGE = NO CHANGE!!

    E=MC2 is one of those fundamental equations that most people have heard of (even if they don’t understand it). It is a very simple equation that has had a profound effect on our world for almost a century.

    What has this got to do with Management Change (apart from the neat link with MC2 in the equation)? It is in two areas:

    1. The simple stuff is not always as easy as it looks
    2. We often get tripped up by simple things, not because we don’t understand them, but because we treat them with sufficient care.

    I was recently reading an excellent article from the Harvard Business Review where the focus was on the importance of managing communication. Several of the comments that followed the article mentioned the fact that is was so simple or obvious to involve people in the process. Why does it appear that the “simple” things get overlooked or forgotten so often?

    The focus for most change programs appears to be so often predicated on the “What” in terms of skills and process change. The “Why”, including the communication issues at the heart of the HBR article and the “How”, as in the individual behavioural changes that enable the skills, processes and communications to be implemented effectively and more importantly consistently effectively, are usually at the core of the 8 out of 10 failures that were alluded to in the article .

    The What, Why and How are just as important as each other for any change management process to be effective, so why is it that so often such a relatively small amount of time and resource are spent on the Why and the How? It’s nearly always in the detail that the Why and How are lost and therefore there are a myriad of possible answers to this but most of them come under one of three headings:

    Cultural

    The concentration on process has understimated the organisations will and ability to change. There is insufficient foundation to support the scope of the change.

    Communication

    Most communication failures fall under one of three categories

    1. The message quite simply isn’t spread, or it is not spread consistently
    2. There is little/no allowance for tuning via critique or feedback of the process from stakeholders
    3. The rationale and benefit is chunked too high or too low for individuala. If the pluralism within a workforce is ignored, there is a tendency to believe that one benefit will be sufficient for all.

    Character

    The social elements of the change have been insufficiently considered. The change in attitude and behaviour that will be required to support the process change is not built into the DNA of the project. Very often it is not even considered or at best inadequately articulated. However for most significant Management Change programmes there is unlikely to be any performance change without behavioural and attitudinal change.

    We would be delighted to hear of your experiences of the simple things that either form a barrier to change programmes or, as in most cases, end up sub-optimising the benefits of the programme.

    To find out more about CR Systems Products and Services click on the image below.

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  • EASY & SIMPLE

    When free and easy and simple just don’t cut the mustard.

    As 360° Feedback providers we have been responsible for the design, customisation and administration of the analytics behind great leadership and development programmes for over 15 years

    Easy and Simple

    I don’t know about you, but I have never come across software or services making a virtue of how complicated they are to use. More often than not we’re told how simple and easy even the most complex systems are to use.

    My concern when I see these strap-lines particularly when they’re used to describe complex products that can be very intrusive on an organisation’s time, is that they can so often translate to ‘basic’ and/or ‘limited’.

    As users we all want systems that are simple and easy to use. Almost every software company producing high quality products tries to make their product as accessible as possible, from the design of the user interface, to the quality of technical support. But also as business users, even though we demand ease of use, we also want systems that can handle variation, accommodate complex processes and yet still be flexible enough to grow with us, as our business grows.

    So in summary the perfect system is one that is simple for everyone to use and also fits perfectly within the individual business environment.

    Getting to simple

    Customers are right to want to invest in systems that are both easy and simple to use. However they also want systems that “fit” with their specific requirements, resource, culture and budget.

    The truth is that it is only after sorting out the difficult bits first – by mapping processes, understanding culture, defining resource, and articulating outcomes – that the virtues of ‘simple and easy’ can come into play.

    When the systems also involve the processing of confidential and sensitive information from each member of staff, then balancing the needs of the individual with the culture of the organisation is usually a matter of optimising under a curve, rather than a definitive right or wrong. For an important yet sensitive process like 360 Feedback, your company’s needs will depend on a range of factors, from trust in the process, to how the output from the system is used by the individual and the company. Together these wide ranging factors make the route to understanding your specific requirements variable and time consuming.

    We’ve amassed considerable experience over the years in helping customers understand their needs. We help companies design 360 degree feedback systems that give great results, quickly and reliably, accommodating for the comfort level in giving feedback and minimising the time taken to achieve the feedback. From what we’ve learnt from working with our customers, we know that the philosophy driving your 360 feedback system, the comfort in giving feedback and how you will use the results from the system drives the effectiveness of the system almost more than anything else. Over the years we have created a six step process that we call “Behave!”, which enables our clients to work out for themselves the best solution for their needs. Once they have done this, the rest is then both simple and easy!!

    Behave! … Getting 360° systems right for your organisation

    1. Understand (company, culture, goals, resource)
    2. Ask the right questions
    3. Get the right answers
    4. Give the right feedback
    5. Provide the right support
    6. Measure the right things

    Understanding how Behavioural Development is to fit within the organisation takes most of the work, but the nice thing is that you most probably have the all answers, you just haven’t needed to ask them with Behavioural Development in mind.

    We will take a look at each of the key issues in greater detail in future posts on the philosophy and the use of 360 feedback. They will, I hope, help your thoughts in considering exactly what kind of system best matches your needs. The better you understand your organisation’s needs and comfort with any kind of feedback, the easier it will be for you to work out the kind of tools to help you deliver 360° feedback, regardless of how simple and easy the tools claim to be.

    We have been responsible for the design, customisation and administration of the behavioural analytics behind great leadership and management development programmes for over 15 years.

    To find out more about CR Systems Products and Services click on the image below.

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  • TOP TEN TIPS ON STARTING TO INTEGRATE SOCIAL MEDIA INTO YOUR BUSINESS #LEARNINGANDDEVELOPMENT

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    We have just spent the last few months trying to understand how best to integrate Social Media into our business and I thought that I would share our experience and learning as complete beginners to the process.

    1. Little is best and least is perfect – Choose one platform at a time (Twitter, LinkedIn, Facebook, Google+ etc) and become a master in it. These platforms can be mastered in relatively little time (a couple of months), so within a year you will be completely comfortable and have found your optimum medium/media
    2. Don’t Broadcast – The internet is full of people shouting into the vacuum in the vain belief that they are “selling” their wares. It achieves very little and actively turns off the vast majority of those people who are trying to engage intelligently
    3. Listen before you talk – Take the time to search and listen for people who are talking about your business, before you start talking.
    4. Choose your friends carefully – As in life be selective in who you spend your time with.
    5. Giving is easy and rewarding – Be generous in your “Likes”, Retweets and +1s. Take the time to applaud and redistribute the good stuff. You will (hopefully) be amazed at the friends that you make along the way
    6. Volume is not value – There is a tremendous urge and a lot of peer pressure to have the most friends or followers, and many ways of showing off. There is no doubt that there are positive effects in volume, but in general for most businesses there is much greater benefit in being able to be a real friend to a “special” few.
    7. Bring your personality to the party – People buy from people. If you can share your love of scuba-diving, poetry, gastronomy, gardening or whatever gives you joy, you will find others who find the same resonance … and some of them will want to know more about you and your business. They might not buy from you (or they might not), but they may know a friend (or a friend of a friend) who might.
    8. Find and friend the thought leaders – We would all like to think that we might be thought leaders in our particular industry, but it is an incredible conceit to believe that we might be the only one who has something valid to say. Find the people who are publishing the most valuable content and take the time to comment and join in on their discussions.
    9. Be a friend first – As you trawl through the internet you will find all kinds of ways in which you might be able to help someone, beyond the +1s and retweets. Try to find ways to connect people to other people that might help or be of interest.
    10. Be consistent – What you put out there will be there forever. If you are to be trusted you need to consistent both in terms of the quality of your contribution but also in the quantity of contribution.

    We are still very much learning and would be delighted to hear your experiences.

    To find out more about CR Systems Products and Services click on the image below.

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