Daniel Snell part 2

The second part of our interview with Daniel Snell, co-founder of management consultancy, Arrival, looking at some of the issues affecting managers and leaders today, such as productivity and performance.

In the second part of our interview with Daniel Snell, co-founder of the management consultancy, Arrival, we continue our conversation on some of the key issues affecting managers and leaders, such as productivity and performance.

Interviewer: Dan, as a starting point, there's always been a certain them and us disconnect between employees, managers and leaders, but you believe this is growing. Why do you think this is?

Dan Snell: Effectively, executives have got fixated on strategy over the cost of culture and execution and management. So this preoccupation with strategy at the cost of these other critical functions of what it takes to create high performing organisations have created a bit of an ivory tower for executive teams, who then when things don't change or the organisation doesn't shift in a way that it's aligned with their strategic ambitions or it doesn't adjust or innovate or evolve to meet those, respond to those, they point the finger at management.

But I think that's somewhat unfair because managers are really just responding to the kind of organisational realities of the organisation, be it culture or comms or who gets recognised and rewarded and who doesn't. You know, people respond to their immediate realities, not conceptual, broader agendas. So if I think influencing my direct boss is going to have me get a pay rise or keep my job, that's what I will do because I can directly control that.

And then I can manage messages upwards. But if I don't understand how to contribute to the strategy effectively and the organisation's systems and processes are not also designed for that, then I'm going to run my own local fiefdom or I'm going to be spinning because also on the other side of that is businesses flip-flop around a lot. You know, one minute it's all about this particular piece of technology or this ideology or this approach or this market and then the next minute it's entirely abandoned, swept underneath the carpet and we're onto something new.

And so managers don't know what to prioritise, what to focus on, how, after a while of turning to their teams and telling them what's important and why, they give up and they just manage locally or manage in a micro-based way because that's what they can control because they no longer think the executive team is credible.

Interviewer: Yes and of course it's not just the managers but CEOs are under more pressure than ever before. Pressure from activist investors, for example, who deem that they're not delivering business performance transformation fast enough. Do you have any guidance for people who are at the helms of these businesses and what they can do to facilitate staying in their role so they can finish the job?

Dan Snell: I don't know if Hein was doing a good job at Unilever or not but, you know, he's out isn't he? All I can say, executive teams are under real pressure to turn things around and deliver in much harder conditions, you know, getting attacked from all sides, right? There used to be a time where you knew who your competition was and it was much easier to understand and to win but now, for a range of reasons, your dinner is getting eaten from 360 degrees and everything is more expensive, there's more friction in the system, there's more policy and job protectionism in the system, it's harder to let people go even if they're underperforming, money's getting more expensive and yet they're having to deliver greater growth and productivity and performance. You know, you could argue a lot of this is about pressure from private equity and a lot of, don't forget, a lot of these executives have been put in place by their investors, private equity or whatever, but most private equity firms don't really understand organisational culture and performance, they're looking more at efficiencies or market access or strategy.

If you think for a moment who joins a private equity firm and what their motivations are and what they're good at, very rarely is it about organisational management and performance and therefore how would they assess and how would they know if an organisation was underperforming, let alone how to change that situation, so what they do is they put pressure on the executives. And then, you know, you're into efficiencies, you know, when you're letting go of a lot of people the secret is letting go of the bad ones but keeping hold of the good ones, but if you don't really have the systems and processes or the culture or the structure, the architecture of the organisation set up well that's going to deliver you sustained productivity and performance, how do you know who's good and who's not?

Temptation is just lazy efficiency and you just get rid of entire underperforming divisions, you give it somebody else who may be able to turn it around or can do something with it if it's loss making. So it's a real challenge and that's the dynamic that we're in, aren't we? Executive teams are under more pressure to deliver in a more challenging world and AI is being touted as the solution to all problems.

I don't think it is, I think it could be a magnifier of problems, in itself it could be a problem depending on how it's being used, like I said if it's not aligned it's going to be a massive distraction and anchor on the business, but it could be a huge accelerator. Either way, I think we're at a moment of change where businesses are going to be looking for efficiencies and whether that's headcount or other, I think that's where we're at.

Interviewer: You have highlighted throughout our conversation that the mindset needs to switch to a greater emphasis on productivity and performance, how important are managers to all of this?

Dan Snell: Essential. In theory, don't forget future leaders are managers, you have to allow people to develop the capabilities and skills as they're coming up the business, which is another bugbear of mine, is that future leaders are accelerated so quickly up the business, hyper accelerated lift at each of the stages, they never really get under the bonnet of what it takes to deliver performance or get to know a particular solution, region, product, market, responsibilities, accountabilities, because they're already promoted before they've figured out the last, which in itself makes organisations even more fragile, excited on, as I said, the strategy over knots and bolts and the hard work of people and culture, but that will always come back and bite you, you know management are critical, but not to say that all managers are good, clearly they're not, but I think organisations don't help themselves when they don't set up their management to succeed, as I said, alignment is critical.

One of the big breakthroughs that we came up with and applied to a global client is using organisational alignment, which isn't a new strategy, but what we did come up with that's groundbreaking is contributionary alignment, and what that means is the ability to ensure that everybody in your organisation can and is able to effectively contribute in a way that is aligned to the strategic ambitions of the executive strategy, the business strategy, and that all managers are able to unlock the performance enhancing or performance driving contributions.

If you don't get those two things, organisational alignment, contributionary alignment, working, then obviously in its stead you are going to have a series of projects, activities, efforts, that are purely distractive and will become a massive drag on performance and productivity. Until you get those two things resolved, businesses and leaders probably don't exactly know what's going on in their organisation, and so they focus on quick wins or the things that they can win that they're able to apply themselves, but that's not very sustainable in terms of long-term performance.

It's very tactical or it's very short-term.

Interviewer: Your view is that functional competencies have deteriorated despite significant investment in development programmes. What do CEOs need to do to support managers at the moment?

Dan Snell: They have to ensure that the whole organisation and everything in it, everything, is aligned directly to driving their strategic ambitions. If they don't, then that's a distraction. You can't just let people go if you haven't applied that principle, because it could be that their organisation isn't set up for them to contribute effectively.

I've interviewed thousands of people over the years from all sorts of different parts of the world, and I hear amazingly talented people who just have given up contributing because the managers don't want their contributions, because the organisation and the culture doesn't want their contributions. So why would they stay if they're talented? That's the danger, is organisations become less effective and they bloat.

They hire more people because they fantasise or imagine more people deliver greater results when that's not true, and then they don't align their organisation to delivering performance, and then you're into very large efficiency cost savings, aren't you, with a lot of collateral fallout, both in terms of environment, culture, and you lose a lot of good people. The best place to start is to ensure that your organisation is set up in a way for you to win that supports a winning strategy. If you have a winning strategy and your businesses and your culture and your execution can't deliver on that strategy, then it's not really a strategy, is it?

It's a hope. It takes concerted effort, discipline, and capability, as I said, that sort of has been lost over the last 20 years, because the market was pretty comfortable. So that's where we find ourselves.

Interviewer: Daniel, thank you so much for this really fascinating deep dive today.