Helping your team to win and deliver strategy - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/helping-your-team-to-win-and-deliver-strategy/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/helping-your-team-to-win-and-deliver-strategy/

Helping your team to win and deliver strategy: importance of focus, leverage, engagement, accountability disciplines.

 

Extract from Forbes - Chris McChesney and Jim Huling:

It’s likely that by now you’ve put the finishing touches on your strategy for 2013. And if you’re like most leaders, by now you’ve fallen in love with your vision for the year—goals achieved, teams engaged, customers delighted, and success rewarded.

While this vision plays in your head like a Spielberg movie, we want to echo sobering advice from a former heavyweight champion: “Everyone has a fight plan until they get hit in the face.”

The vast majority of leaders, 80% in one recent study, will fail to achieve the strategy they have laid out for their teams, and for most it won’t be because of any flaw in their planning.

After working with thousands of leaders and teams in every kind of industry, and in schools and government agencies worldwide, this is what we have learned: Your biggest challenge isn’t deciding what to do. Your biggest challenge is getting people to execute it at the level of excellence you need.

Our experience has shown there are four primary reasons teams fail to execute:

1. They have too many important goals. Basically, the more you try to do, the less you actually accomplish. If you’re currently trying to execute five, 10, or even 20 important goals above the day-to-day operation, the truth is that your team can’t focus. That’s why your first challenge is focusing on one (or, at the most, two) wildly important goals, instead of trying to significantly improve everything all at once.  This is the discipline of focus.

Ford CEO Alan Mulally recently said it best: “You just can’t be world class on 97 different things.” Focus is a natural principle. The sun’s scattered rays are too weak to start a fire, but once you focus them with a magnifying glass they bring paper to flame in seconds. The same is true of human beings. Once their collective energy is focused on a challenge, there is little they can’t accomplish.

2. They hope for good lag measures (outcomes) instead of driving lead measures (behaviors). Lag measures are the tracking measurements of the wildly important goal, and they are usually the ones you spend most of your time hoping for. Revenue, profit, market share, and customer satisfaction are all lag measures, meaning that when you receive them, the performance that drove them is already in the past. That’s why you’re hoping. By the time you get a lag measure, you can’t fix it. It’s history.

Lead measures are quite different. They are the measures of the most high-impact things your team must do to reach the goal. In essence, they measure the new behaviors that will drive success on the lag measures, whether those behaviors are as simple as offering a sample to every customer in the bakery or as complex as adhering to standards in jet-engine design. This is the discipline of leverage.

Simply put, all actions are not created equal. Some have more leverage than others when you’re reaching for a goal. And it is those that you want to identify and act on.

3. They have a scoreboard designed for the leaders, not the players. People play differently when they’re keeping score. However, the truth of this statement is more clearly revealed by a change in emphasis: People play differently when they are keeping score. It’s not about you keeping score for them.

This is the discipline of engagement. The kind of scoreboard that will drive the highest levels of engagement with your team will be one that is designed solely for (and often by) the players. This players’ scoreboard is quite different from the complex coach’s scoreboard that leaders love to create. It must be simple, so simple that members of the team can determine instantly if they are winning or losing.

The highest level of performance always comes from people who are emotionally engaged, and the highest level of engagement comes from knowing the score—that is, knowing whether one is winning or losing. If your team members don’t know whether they are winning the game, they are probably on their way to losing.

4. They don’t hold one another accountable. Most teams view accountability as reactive and negative. If you say, “Come see me in an hour; we need to have an accountability session,” they can be fairly certain it’s not a good thing.

But what we’re describing here is a particular kind of accountability, the accountability that is created when a team actively meets every week to answer the question “Did we do what we committed to one another we would do?” When the answer is yes, when members of a team see their peers consistently following through on the commitments they make, they grow in respect for one another. They learn that the people they work with can be trusted to follow through. When this happens, performance improves dramatically.

Your team wants to win. They want to make a contribution that matters. However, many lack discipline, the disciplines of focus, leverage, engagement, and accountability that drive how a team executes. Bring these disciplines to the execution of your 2013 strategy, and your team not only will have the experience of winning on a key goal, they will become a winning team.

This article is by Chris McChesney and Jim Huling. Chris McChesney is global practice leader, execution practice, and Jim Huling is a managing consultant, for FranklinCovey. They coauthored The 4 Disciplines of Execution:  Achieving Your Wildly Important Goals.

More … http://www.forbes.com/sites/forbesleadershipforum/2013/01/25/four-reasons-why-your-2013-strategy-will-fail/?

Importance of new functional agenda and strategic role - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/importance-of-new-functional-agenda-and-strategic-role/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/importance-of-new-functional-agenda-and-strategic-role/

Importance of new functional agenda and strategic role: not just source of success for function but for enterprise.

 

Extract from strategy+business – The New Functional Agenda:

What should corporate functions do? Until recently, the answer was relatively straightforward. Functions existed to develop the expertise to carry out the many specialized tasks that every corporation needs, in marketing, human resources management, IT, and so on. Over the past several years, however, CEOs, business unit leaders, and functional leaders themselves have been raising expectations: How can functions play a more strategic role? How can they deliver more value to the organization at large? How can they earn “a seat at the table”?

These rising demands provide functional leaders and staff with a golden opportunity. Instead of striving to be “best in class” in everything they do, they can become “fit for purpose” by focusing on activities that are strategically important to the enterprise and that help drive its distinctive value proposition.

The new functional agenda can help functions take on this more strategic role while still fulfilling their day-to-day transactional and expertise tasks. It is made up of three interconnected elements:

1. Establishing priorities in line with the company’s overall strategy and its differentiating capabilities;
2. Aligning the operating model to deliver value in line with those critical priorities;
3. Allocating resources accordingly.

For functional leaders, this new agenda requires real understanding of the company’s strategy, deep comprehension of functional capabilities and the ability to match them to the strategy, and an even higher level of interpersonal skill to work across the organization. This approach can be a primary source of success not just for the function, but for the enterprise as a whole.

More … http://www.booz.com/global/home/what_we_think/cds_home/new-functional-agenda

Rules to help simplicity with any innovative effort - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/rules-to-help-simplicity-with-any-innovative-effort/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/rules-to-help-simplicity-with-any-innovative-effort/

Rules to help simplicity with any innovative effort: good things happen if you remove right things in right way.

 

Extract from strategy+business – Matthew E. May:

In the pursuit of innovation, leaders are often faced with three critical decisions: what to follow versus what to ignore, what to leave in versus what to leave out, and what to do versus what not to do.

Many of the most original innovators tend to focus far more on the second half of each choice. They adopt a “less is best” approach to innovation, removing just the right things in just the right way in order to achieve the maximum effect through minimum means and deliver what everyone wants: a memorable and meaningful experience.

It’s the art of subtraction, defined simply as the process of removing anything excessive, confusing, wasteful, hazardous, or hard to use—and perhaps building the discipline to refrain from adding it in the first place. These six rules help guide that discipline.

1. What isn’t there can often trump what is. As Jim Collins wrote in a 2003 USA Today article, “A great piece of art is composed not just of what is in the final piece, but equally important, what is not.”

Designers of the automotive youth brand Scion essentially used this strategy in creating the fast-selling and highly profitable xB model, a small and boxy vehicle made intentionally spare by leaving out hundreds of standard features in order to appeal to the Gen Y buyers who wanted to make a personal statement by customizing their cars with trendy options. Buyers would commonly invest an amount equal to the US$15,000 purchase price to outfit their xB with flat-panel screens, carbon-fiber interior elements, and high-end audio equipment. It wasn’t about the car, it was about what was left out of it—and the possibilities that absence presented.

2. The simplest rules create the most effective experience. Order and engagement might best be achieved not through rigid hierarchy and central controls, but through one or two vital agreements, often implicit, that everyone understands and is accountable for, yet that are left open to individual interpretation and variation. The limits are set by social context.

Visitors to the 2012 Olympic Games enjoyed the “shared space” redesign of London’s cultural mecca, Exhibition Road. It enabled motor vehicles, pedestrians, and cyclists to share the road equally, with the only rule being “all due respect to the most vulnerable.” Shared-space design is void of nearly all traditional traffic controls, signs, and lights. Curbs have been removed, red brick has replaced asphalt, and fountains and trees and café seating are placed right where you think you should drive. It’s completely ambiguous. You keep moving, yet you have no choice but to slow down and think. The result? Twice the fun and a steady flow—with half the normal number of accidents.

3. Limiting information engages the imagination. Conventional wisdom says that to be successful, an idea must be concrete, complete, and certain. But the most engaging ideas are often none of those things.

Specifics draw people in, but give too many and they turn their attention elsewhere. The former Cadbury Schweppes, makers of the U.K. candy favorite Cadbury Dairy Milk, aired a 90-second television commercial for its chocolate bars a few years ago that featured a gorilla (or rather, a man in a gorilla suit) seated at a drum set in a recording studio while Phil Collins’s “In the Air Tonight” played. For the first full minute, we see only close-ups of the near motionless gorilla, which looks to be contemplating the music and preparing for the performance of a lifetime. The next 26 seconds shows the gorilla rocking out on the drums. The only reference to the product is a four-second shot of the chocolate bar at the very end of the spot, with the tagline “A glass and a half full of joy.” Sales rose 10 percent in the two months following the ad, during which period it was viewed more than 7 million times on YouTube.

4. Creativity thrives under intelligent constraints. As writer, art critic, and essayist G.K. Chesterton once claimed, “Art consists of limitation. The most beautiful part of every picture is the frame.”

In the mid-1990s, the Mars Pathfinder team at Jet Propulsion Laboratory in Pasadena, Calif., had to respond to the new NASA mandate of “faster, better, cheaper” by launching a reliable, low-cost alternative to traditional space exploration. Their challenge: Create a rover that could efficiently return with new engineering and scientific data on Mars, and do it for less than one-tenth the typical cost of a space mission. It was a seemingly impossible task requiring a “change everything” approach. The results, though, were spectacular. The entire project, from concept to touchdown, was completed in 44 months—less than half the time of the previous Viking mission to Mars—with significantly fewer team members, and on budget. And it resulted in dozens of resourceful innovations, the most remarkable being the use of deployable airbags as the landing method.

5. Break is the important part of breakthrough. Innovation often demands a break with convention.

While the U.S. government struggles to solve the healthcare problem, one entrepreneur is taking a fresh approach. WellnessMart, MD, is a retail doctor’s office for healthy people to access services such as vaccinations, CPR training, and physicals. Founded by physician Richard McCauley in Los Angeles, WellnessMart is nothing like a typical medical office. Picture modern furnishings, an open floor plan, big-screen televisions, and walls covered with prominent menu boards listing services and cash pricing. In McCauley’s view, sick people and healthy people should not go to the same place, and healthcare isn’t just for unhealthy times. With low prices, no insurance accepted, no appointments, and no coughs and sniffles, the WellnessMart approach is a complete departure from other healthcare operations. The business has expanded to four retail locations in California, and McCauley is contemplating a national franchise.

6. Doing something isn’t always better than doing nothing. Innovation often demands taking a break from the rigors of work. Neuroscience now confirms that the ability to engineer creative breakthroughs indeed hinges on the capacity to synthesize and make connections between seemingly disparate things. A key ingredient is a quiet mind, severed for a time from the problem at hand.

Meditation—a practice that eliminates distraction and clears the mind—is an effective way to enhance self-awareness, focus, and attention, and to prime your brain for achieving creative insights. Oracle chief executive Larry Ellison meditates, and asks his executives to do the same. In 2007, Google initiated a mindfulness and meditation course at its Google University to help its employees maintain the company’s strong track record for innovation. Leaders at GE, 3M, Bloomberg Media, Green Mountain Coffee Roasters, and Salesforce.com meditate. So do Ford chairman William Ford and former corporate chiefs Bill George of Medtronic and Bob Shapiro of Monsanto. George, now a Harvard leadership professor, says that as CEO of Medtronic, he went so far as to set aside one of the company’s conference rooms for employees to take mental breaks.

Business leaders today face endless choice and feature overkill. They need to cut through the noise, using the art of subtraction to reveal the quiet truth. These six rules point to a single, powerful idea for achieving simplicity in any innovative effort: When you remove just the right things in just the right way, good things happen.

Author Profile:
Matthew E. May is a speaker, a creativity coach, and the founder of Edit Innovation, an ideas agency based in Los Angeles.
This article is adapted from May’s most recent book, The Laws of Subtraction: 6 Simple Rules for Winning in the Age of Excess Everything (McGraw-Hill, 2013).

More … http://www.strategy-business.com/article/00156?

Planning and prioritisation essential for outstanding organisations - http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/planning-and-prioritisation-essential-for-outstanding-organisations/

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/planning-and-prioritisation-essential-for-outstanding-organisations/

Planning and prioritisation essential for outstanding organisations: but must use feedback to manage unpredictability.

 

Extract from LDRLB – Karen Martin:

Recently, I’ve been seeing more and more organizations and business pundits pushing back against the idea of planning and prioritization. The argument often is that since the world is so unpredictable, there is little point to planning, and flexibility and adaptability are more important than focus. I think that this perspective is gaining traction because of a misunderstanding of the work of some popular writers such as Tim Harford and Malcolm Gladwell among others.

Both Harford and Gladwell talk about the unpredictability of the future—and the danger of plans that don’t take unpredictability into account. In his book, Adapt: Why Success Always Starts with Failure, Harford declared that “plans are out.” Gladwell, for his part, declared in a 2010 interview with the Association for Manufacturing Excellence that the economic crisis should remind us that “you can’t really engage in effective prediction.” Even Jim Collins begins his latest book, Great by Choice, with a cold fact: “We cannot predict the future.”

Advocates of unpredictability and the need to be able to react to changing conditions are absolutely right.

Plans that do not take into account the possibility of changing conditions and don’t build in feedback loops to assess whether underlying conditions have changed are unhelpful and often dangerous. But this is a critique of a method of planning and execution, not of planning itself. Unfortunately, some readers of Harford, Gladwell, and their compatriots are confusing the two. And some have missed Collins’ second sentence: “But we can create it.” Just as most leaders confuse complexity with complication, anti-plan advocates and their adherents confuse poor plans with planning in general.

Borrowing an analogy from my colleague, Mike Rother (Toyota Kata), think of planning as standing at the entrance of a dark alley where you have little idea of what is ahead. Charging head first at full speed into this alley is obviously unwise. Moving very slowly and shifting your focus based on every bump you hit or noise you hear is equally unlikely to yield very good results. The right approach to planning is like turning on a flashlight. It will begin to show you what’s ahead so that you can move at a faster pace. This doesn’t mean that you again start charging headlong down the alley or that you take one quick glance and turn the flashlight off again.

Planning and prioritization, done right, are indispensable for achieving focus and, in turn, for becoming an outstanding organization. By done right, I mean you need to have clarity about your organization and its performance, go and see, build consensus, establish clear metrics that provide feedback, and listen to every level of your organization during both prioritization and execution. As you gain expertise with this approach to prioritization and planning, you’ll find, I think, that your metaphorical flashlight gets brighter (although that doesn’t justify overconfidence).

There are plenty of organizations where planning is done poorly, and then leaders force adherence to these poor plans, ignoring new information about whether the plan is working or worthwhile. But excessive rigidity of this type is less common in my experience than organizational ADD, which invites a shift in focus at the first sign of change or distraction or a new condition that introduces error into the original plan. Fortunately, consensus-driven prioritization improves the quality of predictions and, in the event that those predictions do not come to pass, will help you determine where and when to change course.

NB This is a guest post from Karen Martin, an experienced consultant and thought leader in lean business practices. This post is adapted from her recent book The Outstanding Organization: Generate Business Results by Eliminating Chaos and Building the Foundation for Everyday Excellence.

More … http://ldrlb.co/2013/01/anti-planning-zeitgeist-embrace-it-at-your-peril/

Importance of making effort to engage in strategy - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/importance-of-making-effort-to-engage-in-strategy/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/importance-of-making-effort-to-engage-in-strategy/

Importance of making effort to engage in strategy: no longer acceptable to use uncertainty as excuse for not doing so.

 

Extract from HBR Blog Network – Roger Martin:

When I ask business executives about their company’s strategy — or about an apparent lack thereof — they often respond that they can’t or won’t do strategy because their operating environment is changing so much. There isn’t enough certainty, they argue, to be able to do strategy effectively.

This is an argument I hear particularly often in high-technology sectors. It is almost a mantra there, a badge of pride and superiority: “We run at breakneck speed in the world of high-tech and there isn’t time to stop and do strategy. It will emerge naturally over time.”

The implication is that only boring corporate bureaucrats in large corporations, where the future is (apparently) certain, engage in strategy. Growth companies, it seems, have far more urgent things to do.

I find this to be pretty interesting logic. Essentially, the argument is that the present it is too uncertain to make any strategic decisions about the future. However, at some future time, things will be certain enough to make choices.

I really wonder what makes them think so. Life is and always has been uncertain. If we live in an uncertain, fast-moving, turbulent world today, why would it be any different a week, a month or a year from now? If the world is too uncertain to choose today, what is it about the future than will make things more certain? At some point, do we simply declare the world to be certain enough to make strategy choices? How will we know it is the day? What criteria will we use to decide the requisite level of certainty has been reached? Or will we simply put of choosing forever, because certainty is utterly unachievable at any stage?

The danger, of course, is that while we are using uncertainty as an excuse to put off making strategic choices, the competition may be doing something else entirely. They may be strategizing their way to first mover advantages and positions that leave few if any attractive options in the market.

What I generally observe about companies that say that it is too uncertain to do strategy, is that they complain after the fact about having been blindsided by something unexpected. Their narrative tends to be that when it happened, it was just too late to do anything constructive about it. The failure wasn’t at all their fault, because the industry is uncertain and this kind of stuff just happens naturally.

This is beautifully self-sealing logic that absolves leaders completely from any responsibility. Leaders who use this logic ensure that they don’t acquire any useful lessons whatsoever from the experience. Because they have a narrative that says it wasn’t their fault, they don’t explore their actions. And when their company crashes and burns because it was beaten by some other company that actually had a strategy, these leaders go somewhere else and do the same thing all over again.

In truth every company has a strategy. Whether it ‘does strategy’ explicitly or not, the choices that it makes on a daily basis result in the company operating on some part of the playing field (i.e. making a where-to-play choice) and competing there in some fashion (i.e. making a how-to-win choice). It matters not a whit whether the industry is highly uncertain, every company competing in it has a strategy.

Without making an effort to ‘do strategy,’ though, a company runs the risk of its numerous daily choices having no coherence to them, of being contradictory across divisions and levels, and of amounting to very little of meaning. It doesn’t have to be so. But it continues to be so because these leaders don’t believe there is a better way.

More … http://blogs.hbr.org/cs/2013/01/the_uncertainty_excuse.html?

Significant M&A activity predicted to return

http://www.chaordicsolutions.co.uk/blog/from-our-ma-consultants/significant-ma-activity-predicted-to-return/ Significant M&A activity predicted to return: largest companies feeling more positive, hungry for new opportunities.   Extract from KPMG Press Release: KPMG International’s latest Global M&A Predictor shows that the confidence to undertake significant M&A is predicted to...

Major climate threat to global supply chains

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/major-climate-threat-to-global-supply-chains/ Major climate threat to global supply chains: not being addressed by multinational corporations and their suppliers.   Extract from Carbon Disclosure Project Press Release: Seventy percent of companies believe that climate change has the potential to affect their revenue significantly, a...

Holistically mitigating risks amidst increasing complexity

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True innovation not just a process

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Importance of recognising hidden patterns in conversation

http://www.chaordicsolutions.co.uk/blog/from-our-change-management-consultants/importance-of-recognising-hidden-patterns-in-conversation/ Importance of recognising hidden patterns in conversation: first step toward more effective executive leadership.   Extract from strategy+business – Art Kleiner: Every once in a while, you meet someone who really knows how to “read a room.” This is the individual, usually a...

Driving business value by leveraging entrepreneurial approaches

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/driving-business-value-by-leveraging-entrepreneurial-approaches/ Driving business value by leveraging entrepreneurial approaches: change how operate but still focus on imperatives.   Extract from Fast Company – Jennifer Silberman: Multinational corporations aren’t always known for their agility. Organizational change, product evolution, or...

Only 44% leaders believe they are good at implementing strategy

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/only-44-leaders-believe-they-are-good-at-implementing-strategy/ Only 44% leaders believe they are good at implementing strategy: and just 2% confident will achieve all objectives.   Extract from Bridges Consultancy Strategy Implementation Survey Findings 2012: In 2012 Bridges conducted its 12th year of research. It is now 10 years since we first...

Global risks are urgent health warning

http://www.chaordicsolutions.co.uk/blog/from-our-risk-management-consultants/global-risks-are-urgent-health-warning/ Global risks are urgent health warning: national resilience to these must be our priority to protect critical systems.   Extract from World Economic Forum – Press Release: The world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges,...

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http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/cracking-paradox-of-doing-more-with-less/ Cracking the paradox of doing more with less: using frugal innovation to generate more value with less scarce resources.   Extract from Insead Knowledge – Navi Radjou and Jaideep Prabhu: What do Renault-Nissan, Siemens, and Unilever have in common? They are all pioneers of a...

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/boosting-innovation-effectiveness-by-embracing-risk/ Boost innovation effectiveness by embracing risk: creates confidence that efforts well paced and risks well managed. Extract from Corporate Risk & Insurance: Accenture Risk Management’s Steve Culp and Wouter Koetzier have explored the benefits of a closure connection between...

http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/boosting-innovation-effectiveness-by-embracing-risk/ Boost innovation effectiveness by embracing risk: creates confidence that efforts well paced and risks well managed.   Extract from Corporate Risk & Insurance: Accenture Risk Management’s Steve Culp and Wouter Koetzier have explored the benefits of a closure connection between...

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http://www.chaordicsolutions.co.uk/blog/from-our-grc-consultants/opportunity-to-participate-in-new-grc-implementation-barrier-research/ Opportunity to participate in new GRC implementation barrier research   From Robert J Toogood, Senior Partner – Chaordic Solutions: Some of you may already know me through my work with the Institute of Risk Management (IRM) and the recent setting up of the new GRC Special Interest...

Fundamental changes needed in business conversations

Fundamental changes needed in business conversations: must have courage to change way we converse and do business.

 

Extracts from VCO Global Website - John Niland and Kate Daly:

Everyone’s marketplace is changing.  This creates an obvious need for fresh thinking and agile processes.  We all need new routes to market, innovative use of technology, collaboration and real results.

Every day we hear about the importance of building relationships: it’s constantly mentioned and tweeted.  But are we having the right conversations?  Are we engaging and connecting with people or just continuing to broadcast dull messages through an exciting technology-driven medium?  It’s no longer good enough to be a good communicator or techno-savvy.  Courage is fundamental to success.  Without the courage to make requests and ask vital questions, good ideas remain the world’s best kept secrets.

But what about your dialogue skills?  Is your conversation keeping pace?  Or are your meetings spent in longwinded exchanges of information, slogging through over-engineered agendas, hasty box-ticking exercises… or just plain boring?

Here are just a few of the conversations that VCO Global Clients suggest are no longer working:

1. Solution Selling: buyers are no longer willing to grant briefing time / info that they see to be in the seller’s interest

2. Annual Reviews: formulaic exercises, peppered with superficial assessments, often dreaded by both parties

3. Target/Goal Setting: used to extract more for less, devoid of real understanding, robbing jobs of meaning, etc.

Better conversations take courage and skill.  Here are some examples of the vital skills needed in the new economy:

1. Reframing Requirements – why it’s no longer sufficient to understand requirements, how we need to reframe and hence set the agenda;

2. Influencing your Annual Review – a few simple steps that make a real difference to this vital discussion;

3. The Courage to Ask - one of the recurring challenges in the current climate is that of asking for what we need… and keep asking;

4. Developing Opportunity in the Current Climate - developing an opportunity-mindset.

These are just examples. The clients with whom VCO Global works are already articulate in defining their own specific needs: in sales, management, or supporting key people who are vital for the future of the enterprise.

In the recently published book, “The Courage To Ask“, John Niland and Kate Daly from VCO Global outline some fundamental changes to business conversations and invites us to test how courageous we are in changing the way we converse and do business.  Using five characters, John and Kate illustrate how we can build courage through the seven gateways of Connection, Purpose, Influential Communications, Awareness, Discipline, Curiosity and Stamina.  The book combines psychological insight with identifiable, warm characters and provides a sharp and insightful view of the changing world in business.

Courage should be the foundation for all your activities: without it you’re unlikely to be able to implement suggestions offered elsewhere.  If connecting, influencing and communicating is the lifeblood of your business and the work you do, then  ”The Courage To Ask“ will be the most  important book you read this year.

More … http://www.vco-global.com/

Increased recognition of influence culture has on management of risk

Increased recognition of influence culture has on management of risk: practical guidance and insights now available.

 

From Robert J Toogood, Senior Partner – Chaordic Solutions:

In recent months, there has been increased recognition of the importance and part that Culture has on the effective management of Risk within an organisation.

It is of particular interesting to see that the Institute of Risk Management (IRM) has recently published its own board guidance on Risk Culture.  As Richard Anderson, IRM Chairman, states in their introductory Risk Culture paper “Problems with risk culture are often blamed for organisational difficulties but, until now, there was very little practical advice around on what to do about it.”

So what is this thing we call Risk Culture?

The IRM definition is:

“Risk culture is a term describing the values, beliefs, knowledge and understanding about risk shared by a group of people with a common purpose, in particular the employees of an organisation or of teams or groups within an organisation. This applies whether the organisations are private companies, public bodies or not-for-profits and wherever they are in the world.”

Anderson goes on to say “This paper seeks to give guidance in this area, drawing upon the wealth of practical experience and expert knowledge across the Institute. It aims to provide advice to organisations wanting greater understanding of their own risk cultures and to give them some practical tools that they can then use to drive change.   This short document summarises our approach to risk culture for those working at board level.  There is also a longer companion document – Risk Culture: Resources for Practitioners – which covers the detailed thinking behind the concepts and models that we have found to be useful.  This remains a developing area and we do not consider that we have written the last word on the subject – we expect to see more models and tools and in particular sector and issue-specific work emerging in the future.”

But the IRM is not the only organisation currently looking at the impact of Culture on Risk.  The Centre for Analysis of Risk and Regulation (CARR) and the University of Plymouth has recently published an interim report entitled “Risk Culture in Financial Organisations”, which explores the issue of how financial institutions are increasingly investing in programmes to understand and manage their risk cultures.  It is of particular interest to read in this report that that despite almost universal agreement that the organisational risk culture of banks and other financial institutions (BOFIs) played a major role in the global financial crisis, the research has found that there is still no clear consensus on how such risk cultures can be effectively managed.

The Executive Summary of the report makes the following points:

“First, in contrast to public debates which emphasise values and the need to change mindsets, we learned of risk culture workstreams with more of an emphasis on improving oversight structures and information flows, including performance metrics for risk and good compliance.”

“Second, from our discussions it also appeared that critical issues in risk culture were being played out in the space between what are called first and second lines of defence, suggesting that this distinction, which many take for granted, may not be helpful in advancing the debate about risk culture.”

“Third, improving risk culture was also seen by CROs as a matter of improving the organisational footprint of the risk management function. This was more than just rolling out ERM systems but involved expanding the reach of informal risk processes, information sharing and escalation, and representation on key committees.”

“Fourth, we also heard concerns about a familiar issue – the role of documentation. The argument was that some documentary and evidentiary demands were creating the wrong kind of risk culture. We intend to follow up further on this.”

In the meantime, it is interesting to read that Norman Marks made the following comment last year on the importance of Culture in one of his regular blog posts:

“Culture can be excessively aggressive or passive. Striking and maintaining the right balance is not easy, but is essential to delivering sustained performance, considering risks, and remaining in compliance.”

Over the coming months, we will be investigating this important topic in much more detail and look forward to updating you later in the year with what we discover.

More …

Institute of Risk Management (IRM): http://www.theirm.org/

IRM Risk Culture Guidance Resources: http://www.theirm.org/RiskCulture.html

Centre for Analysis of Risk and Regulation (CARR): http://www2.lse.ac.uk/researchAndExpertise/units/CARR/home.aspx

Risk Culture in Financial Organisations – Interim Report:  http://www2.lse.ac.uk/researchAndExpertise/units/CARR/pdf/Risk-culture-interim-report.pdf

Norman Marks Blog Post: Questions to ask about GRC – #5: Culture: http://normanmarks.wordpress.com/2012/07/20/questions-to-ask-about-grc-5-culture

Maintaining creative complexity without limitations of co-location

Compliance culture has major impact on ethical performance

Empowering enterprise wide innovation

Empowering enterprise wide innovation: use of unique, no-cost, non-intrusive software technology solution.

 

Extract from Management Innovation eXchange – Matthew Heffron (Co-Authored by JD Wilson Jr):

Summary

Empowering enterprise wide innovation through a unique, no-cost, non-intrusive software technology solution. Participants contribute and collaborate in a safe closed community before promoting to a wider audience.

Problem

I recently led an innovation think-tank and rapid solution deployment organization for my employer. My team was tasked with strategizing how we might best position our company as an innovation leader. In a radical departure from simply launching a full-scale marketing campaign, we instead faced up to the challenge of defining an actual strategy to inspire and support innovation across our entire enterprise.

We considered the challenge from the basis of what has been successful within our own group and proceeded with what we felt would be critical elements of our approach:

1. That innovation is nurtured, not driven;

2. That good ideas can originate from any level of contributor within the organization;

3. That input from co-creators outside company borders – such as customer, clients, industry experts – can provide a valuable source of new ideas and input to shape ideas;

4. That people are naturally attracted to a spirit of community and cooperation;

5. That the quality of ideas improves by introduction, refinement and consensus from within the safety, familiarity and shared perspective of a smaller community initially;

6. That after an initial incubation period, ideas ultimately benefit from constructive criticism, analysis and input from the perspective and more diverse skillset of the wider group;

7. That corporate control of the process would enjoy an inverse relationship to the quantity and quality of input.

Furthermore, we felt there would be four measures of our success:

1. Our ability to solicit ideas from all levels of the company and beyond, providing ease of participation to everyone;

2. Our ability to manage the anticipated floodgate of ideas and comments effectively;

3. Our ability to sustain awareness, contribution, participation, and collaboration among users;

4. Our ability to minimize the influence of personal agendas and shortsightedness in the evaluation process.

Our vision was to create a platform for open contribution that could effectively manage all contributions; be workgroup focused; provide for promotion of worthy ideas to scrutiny by a larger team; provide for contribution from parties outside company barriers; provide a mechanism for expanding ideas and assessing relative merit; and be untainted by corporate agenda. Our overriding opinion was this: If the platform were perceived as just another corporate scheme to extract additional sweat equity from our employee base, it would fail. We envisioned acceptance being driven through grassroots ownership engendering a sense of individual contribution, achievement and worth on a peer level. Beyond that, we wanted to incorporate a gamification element to make it fun and further encourage sustained participation.

And just two more small things: The taint of corporate agenda would be difficult to avoid if our solution’s price tag necessitated involved business case justification and its overall complexity demanded any significant IT deployment effort. In short, we felt that our solution needed to be both cost-free and simple to implement in order to enjoy ultimate success.

Solution

Despite seemingly impossible requirements, we were able to satisfy all in the end. We elected to call our solution Lightbulb. We started by repurposing an existing platform built from what we call our “zero-tech” approach. It was designed to operate from any shared folder – including free cloud-based solutions such as DropBox. That design consideration opened participation to potentially any internal or external party as determined by folder access and group administrators.

We chose to store all data in flat XML files so that no application or DBMS licenses would be required. We made the application itself “drop-and-go” in the shared folder and requiring no installation on the user’s local workstation. As intended, Lightbulb is free, simple to implement, and can be entirely owned by a workgroup on an entirely grassroots level. It is then free to spread voluntarily through community adoption as opposed to top-down mandate.

More … http://www.mixprize.org/hack/embracing-enterprise-innovation-empowering-masses-through-innovation-communities

Five critical factors needed for transformational behaviour

Five critical factors needed for transformational behaviour: importance of people in implementing and embedding change.

 

Extract from strategy+business – Ashley Harshak, DeAnne Aguirre, and Anna Brown:

Few organizations have escaped the need for major change in the past decade, as new technologies and global crises have reshaped entire industries. However, the fact that change has become more frequent does not make such changes any easier.

Change is, at its core, a people process, and people are creatures of habit, hardwired to resist adopting new mind-sets, practices, and behaviors. To achieve and sustain transformational change, companies must embed these mind-sets, practices, and behaviors at every level, and that is very hard to do — but it has never been more important.

Some organizations have managed to develop approaches to change management that address change comprehensively. A successful business transformation effort must capture the hearts and minds of people who need to operate differently to deliver the desired results. The good news is that it can be done.

What is Change Management?

Change management is both a capability and a set of interventions that deliver the people-oriented side of a change effort. Successful change management targets leaders but also engages people across the organization, while adjusting key enabling processes such as performance management. It helps employees make the transition to new behaviors, and it helps sustain the benefits of the new post-transformation enterprise.

Most business leaders have come to understand the importance of the people component in implementing and embedding change. According to a survey conducted by Booz & Company of 350 global executives charged with leading major transformation programs, senior leaders now recognize that people initiatives usually spell the difference between success and failure.

However, there was broad consensus among the respondents that this sort of change management is often undertaken too late and too lightly to be effective. To achieve a successful change effort, people issues need to be identified and incorporated in project management plans from the start and then revisited again and again throughout the implementation process to ensure the desired strategic outcome.

The Five Success Factors

Each of the following five key success factors should be considered vital by those designing a change management program. These are the actions that can make change happen — and make it stick. All five should be evident in the program’s implementation.

1. Understand and spell out the impact of the change on people.

A prerequisite to any viable change program is a clear-eyed assessment of the impact it will have on various populations in the organization. This analysis identifies the type and scale of changes affecting each segment of employees (as defined by role or business, for example). This assessment also provides a basis for communicating with the team members about what the change means for them personally — the predominant concern of every employee in a business transformation.

A well-known global energy firm did exactly that when it produced a change impact analysis with a “heat map” illustrating the intensity of change for each group of employees, and a detailed description of the changes each role would need to deliver. As a result, the leadership team was able to focus and redirect the transformation program to address the challenges facing those in the roles most affected. Moreover, project teams identified areas of potential overlap and conflict in the impact of various initiatives. Finally, the analysis informed the plans and sequencing of the overall transformation program and became the basis for communications with managers. In cascade fashion, managers received the message from their supervisors and then delivered it to their teams.

2. Build an emotional and rational case for change.

Many leaders excel at building the rational case for change, but they are less adept in appealing to people’s emotional core. Yet the employees’ emotions are where the momentum for real transformation ultimately lies. Change management communications need to be targeted to each segment of the workforce, and delivered in a two-way fashion that allows people to make sense of the change subjectively.

If you are asking people to adapt to a new reality, they need to understand the emotional case for the change so they can feel truly committed to the transformation. It can’t be presented as another “program of the month” that they will have to live through. Bringing the details of what will change — and what won’t — into the presentation allows leaders to paint a vivid picture of what the change means for employees personally, not only why it benefits the business.

3. Ensure that the entire leadership team is a role model for the change.

Companies start their transformations from the top. Senior executives must be not only “on top” of the change program, but also “in front” of it, modeling the new behaviors they are asking their people to adopt and holding one another accountable for the initiative’s success. When executives talk about creating a performance culture, they must demonstrate through example what that means.

An aligned and committed leadership team is the foundation for any major corporate undertaking. When executives lead by example, the impact can be profound. One senior director found that it was only after he introduced ongoing performance discussions with his direct reports that his team started to hold similar sessions with their own direct reports. This requires consistent attention, but that level of engagement will make the difference between success and failure.

4. Mobilize your people to “own” and accelerate the change.

The blunt truth is that most change initiatives are done “to” employees, not implemented “with” them or “by” them. Although executives are pushing behavior change from the top and expecting it to cascade through the formal structure, an informal culture left to instinct and chance will likely dig in its heels.

To counteract this undermining force, companies should leverage what Booz & Company Senior Partner Jon Katzenbach calls the informal organization — the network of peer-to-peer interactions. People need to be encouraged and motivated to change their behavior by those around them as much as they need incentives from the top.

This does not mean that companies should forgo a centrally driven program with a clear road map that lays out the formal elements of the new organization. But they must not overlook the informal organization either. Pride, commitment, and purpose reside here. If you use powerful emotional motivators, invite employees to contribute ideas and perspectives, and provide the kind of informal support and recognition that makes it easier to take ownership of new behaviors, you can accelerate and intensify the impact of the change initiative.

5. Embed the change in the fabric of the organization.

Sponsors often declare victory too soon, diverting leadership, commitment, and focus from the ongoing effort. To embed the change and ensure that it sticks, you should acknowledge the lessons learned. You also should investigate how to engage and involve employees over the long term and how to institutionalize best practices to capture the full benefit of this change and any future changes.

The human resources function plays a critical role in this process. To enable lasting change, all HR systems, structures, processes, and incentives must be aligned and consistent with the goals of the transformation. You need to articulate clearly the various people-oriented elements of the future organization — not just its structure, but also employee value propositions and individual and team roles, as well as required competencies, skills, and behaviors. Things like performance management, learning and development, workforce strategy, and retention programs are key enablers of the change program.

The challenge is to rethink not only how HR can help people support the change but also how it can contribute to embedding and sustaining the change. This requires HR to understand the business and its long-term requirements as both a strategic partner and a change agent.

Navigating Change Successfully

A comprehensive approach to change management requires all five of these success factors. Together, they enable you to take the necessary steps for change. First, clearly define the business objectives the change is intended to deliver. Next, understand the current organization — its culture, its capabilities, and its experiences (both successful and unsuccessful) with change — and then conduct the change impact analysis and make a clear case for change, including the reasons why change in people’s behavior is needed. The main thrust of the change program follows with a series of tailored interventions that drive change through both formal and informal levers. This should not be a fixed or formulaic methodology but rather one that accelerates success by selecting the most efficient tools and techniques for the specific circumstances of the client organization.

At each step, all five of the success factors should be considered. Indeed, they provide a useful checklist. Have you spelled out the impact of the change on people? Have you built both an emotional and a rational case for change? Is your leadership team — all the members, yourself included — acting as a role model? Are your people “owning” and accelerating the change? And how deeply is the new behavior embedded in the fabric of the organization?

In today’s business environment, change is an imperative. A change management approach such as this can help companies enhance their overall transformation capability, increase the speed of implementation, and improve the probability of success.

More … http://www.strategy-business.com/article/00057?gko=39ed2

Fighting symptoms of corporate decline

Fighting symptoms of corporate decline: shifting culture using productive, inclusive, and empowering actions.

 

Extract from HBR Blog – Rosabeth Moss Kanter:

How do you know a team, company, or country is on the slippery slope of decline and needs a culture shift? I found nine universal warning signs of change-in-the-wrong direction in research for my book Confidence, which compared downward spirals with the momentum of success. The good news is that they are all reversible. Watching out for these behaviors is the first step toward building better habits.

First, the signs that there is more trouble ahead:

Communication decreases. The first seeds are sown when information stops flowing, People avoid conversation and close their doors. Decisions are made in secret. People mistrust official statements. Gossip substitutes for the full facts.

Criticism and blame increase. People are dressed down in public. They make excuses for themselves and point their fingers at someone else. Scapegoats are sacrificed. Self-doubt is masked by attack. External forces are blamed, personal responsibility avoided.

Respect decreases. Constant criticism makes people feel surrounded by a bunch of losers. They feel that low performance is common, and deadwood is tolerated. Everyone expects the worst of everyone else — and says so.

Isolation increases. People retreat into their own corners or subgroups, suspicious of others and unwilling to engage with them. Withdrawing from contact further isolates them, encouraging others to back away too. Silos harden.

Focus turns inward. People become self-absorbed and lose sight of the wider context — customers, constituencies, markets, or the world. What’s going on inside becomes more important than any external goal.

Rifts widen and inequities grow. Internal rivalries escalate into gang warfare. A few stars become a privileged elite, claiming disproportionate attention, resources, and opportunities. Power differentials and social distance between groups and levels make collaboration difficult. People hoard resources for their own use. The less there is to go around, the greater the temptation to play favorites or get more for one’s own group.

Aspirations diminish. People stop believing that progress is possible. They are willing to settle for mediocrity. They want to minimize risk rather than to look for big improvements. “Defensive pessimism” sets in; that is, lowering expectations to cope with anxiety in risky situations. You might not see absenteeism, but there is “presenteeism,” which means the body is there but the mind is absent.

Initiative decreases. Discredited and demoralized, people become paralyzed by anxiety. Believing that nothing will ever change, people go passive, following routines but not taking initiative even on small things, and certainly not seeking innovation or change. Policies and processes are perceived to be ingrained and inevitable, shutting off new ideas.

Negativity spreads. In an emotional chain reaction, pervasive negativity fuels further decline. The culture permits selfishness, greed, mistrust, disrespect, petty turf battles, and excuses instead of action.

It’s easy to get discouraged by the doom and gloom of downward spirals, as I’ve seen in declining companies, low-performing inner city schools, marriages falling apart, developing countries with wide social divides, and problems with U.S. competitiveness. But I’ve also worked on the opposite: turnarounds that create habits that fuel success. I’ve observed and helped leaders who care about positive relationships set the stage for positive outcomes. Here’s what leaders — official or emergent — do to shift a culture from the behaviors of decline to the habits of success:

Keep communication open and information flowing. Foster widespread problem-solving dialogue. Face facts openly and honestly.

Emphasize personal responsibility. Refuse to listen to attacks on others and ask each person to take responsibility for his or her part of a problem.

Model respect for talent and achievements at every level. Offer frequent public thanks. Praise those who meet high standards while helping poor performers improve (or weeding them out if they don’t).

Convene conversations across groups. Involve diverse cross-cutting teams in problem-solving.

Stress common purpose. Communicate inspiring goals larger than any individual or group. Find a grand challenge to unite people.

Work on reducing inequities and status differences. Require the privileged to mentor and help others. Spread extra resources to many groups, and encourage joint projects or shared service. Provide opportunities for learning and growth.

Raise aspirations. Use small wins to show the potential for bigger successes. Encourage realistic stretch goals and offer people the help to reach them.

Reward initiative. Provide time or small grants to work on new ideas. Make brainstorming a habit.

Reinforce the positive by saying and demonstrating that change is possible. Ignore the voices of negativity.

Leaders can guide productive, inclusive, and empowering actions that build winners’ habits. Even when the signs of decline are all around us, it’s still possible to shift the culture. Heeding the warnings is a good first step.

More … http://blogs.hbr.org/kanter/2012/12/fight-the-nine-symptoms-of-cor.html?

 

 

Managing chaos to generate success

Managing chaos to generate success: power of using generation flux approach to embrace chaos and successfully lead.

 

Extract from Fast Company – Robert Safian:

Generation Flux is a term I coined several months ago, in a Fast Company cover story that explained how the dizzying velocity of change in our economy has made chaos the defining feature of modern business. New companies–even industries–rise and fall faster than ever: Witness Apple, Facebook, and Amazon; witness Research in Motion, Blockbuster, and MySpace; witness the iPad and, yes, cloud computing. Accepted models for success are proving vulnerable, and pressure is building on giants like GE and Nokia, as their historic advantages of scale and efficiency run up against the benefits of agility and quick course corrections. Meanwhile, the bonds between employer and employee, and between brands and their customers, are more tenuous than ever.

Generation Flux describes the people who will thrive best in this environment. It is a psychographic, not a demographic–you can be any age and be GenFlux. Their characteristics are clear: an embrace of adaptability and flexibility; an openness to learning from anywhere; decisiveness tempered by the knowledge that business life today can shift radically every three months or so, as Levie says.

That first article was primarily a career guide, a handbook for navigating work in an era that refuses to settle into a status quo. Yet after the article was published, I got many emails from CEOs and other business leaders who find themselves struggling–some quietly, some candidly–with how to run their organizations amid such tumult. “There’s so much chaos all around,” one wrote. “You can’t prevent the chaos, only respond to it… quickly.” Their overriding concern is simple: Traditional organizational structures no longer seem sufficient.

This is the great challenge of 21st-century leadership. We have grown up with certain assumptions about what works in an enterprise, what the metrics for success are, how we organize and deploy resources. The bulk of those assumptions are wrong now. The world in which we were raised and trained no longer exists. The clarity of words we use to discuss business, standbys like marketplace and competitive advantage, are being redefined and rendered almost meaningless.

In this environment, the examples of companies we once turned to as models for success–Apple, Coca-Cola, Walmart–are less useful. Size and brand awareness no longer provide a competitive moat. “The advantages of long-standing brands, of distribution, of reach–these don’t offer the same leverage,” observes Levie, who has himself exploited this reality in constructing his business. “Thanks to technology, the newcomer may be as well or even better equipped.” In this world of constant change, following a single system or model is foolhardy–the companies that succeed will be nimble and ever-changing.

Twenty years ago, a management professor by the name of Margaret Wheatley published a book called Leadership and the New Science. It was prescient then; it is even more eye-opening now. Her premise: Organizations and society have been structured to match our understanding of the natural world, which goes back to the 17th-century ideas of Sir Isaac Newton. Newton famously posited theories of cause and effect, and referred to our world as a machine–a closed system (set in place by the Great Watchmaker). In Newtonian physics, there is no greater goal than stability. That scientific conclusion helped us to embrace hierarchy and one-size-fits-all models. And our businesses have indeed been constructed for efficiency. Following the example of Henry Ford, we have extended our manufacturing prowess into shipping and logistics. We have used technology to enhance effectiveness, to track data and mine it for new refinements.

Now, however, these traditional business priorities are under strain in profound ways. Wheatley again points to science as a model: to the post-Newtonian study of quantum mechanics and subatomic particles. We now know that cause and effect is not a given in the natural world. Creation comes not from stasis but from unpredictable movement. Chaos is everywhere. One of the more mind-bending paradoxes of quantum physics that Wheatley highlights is the fact that subatomic matter has two forms of being. In something called a double-slit experiment, an electron behaves like a wave when it is observed in one way and like a particle when it is observed another way. Both views are true.

Business today is nothing if not as paradoxical. We require efficiency and openness, thrift and mind-blowing ambition, nimbleness and a workplace that fosters creativity. Organizational systems based on the Newtonian model are not equipped for these dualities.

Generation Flux leaders are the ones who will steer their companies, and modern business, toward more sophisticated models. In today’s chaos, leadership is more critical than ever–but a different kind of leadership. There is no single model of what it will take to succeed now. But drawing on examples from many different kinds of organizations–including the U.S. Army, Foursquare, Nike, Intuit, and a 105-year-old not-for-profit in Texas–we can begin to define the qualities of successful GenFlux leaders. And we can even see the power that comes from a full, open embrace of the challenge. “Companies and people tend to look at chaos as an obstacle, a hurdle,” says Nike CEO Mark Parker. “We look at it as an opportunity: Get on the offense.”

More … http://www.fastcompany.com/3001734/secrets-generation-flux

EU modernising company law and corporate governance

EU modernising company law and corporate governance: in attempt to ensure companies are competitive and sustainable.

 

Extract from EU Europa Press Release – 12 December 2012:

European company law and corporate governance should make sure that companies are competitive and sustainable. The Commission’s analysis and consultations over the last two years clearly indicate that further improvements can be made, by encouraging and facilitating long-term shareholder engagement, by increasing the level of transparency between companies and their shareholders and by simplifying cross-border operations of European undertakings.

On the basis of its reflection and the results of the consultations, the Commission identified several lines of action in the area of company law and corporate governance that are fundamental to putting in place modern legislation for sustainable and competitive companies.

Internal Market and Services Commissioner Michel Barnier said: “This Action Plan on company law and corporate governance sets out the way forward: shareholders should receive additional rights, but also fully assume their responsibilities to make sure that the company remains competitive over the longer term. Companies should also become more transparent in several respects. This will contribute to effective governance of companies.”

Key elements of the action plan:

1. Increasing the level of transparency between companies and their shareholders in order to improve corporate governance. This will include in particular:

1.1 Increasing companies’ transparency as regards their board diversity and risk management policies;

1.2 Improving corporate governance reporting;

1.3 Better identification of shareholders by issuers;

1.4 Strengthening transparency rules for institutional investors on their voting and engagement policies.

2. Initiatives aimed at encouraging and facilitating long-term shareholder engagement, such as:

2.1 More transparency on remuneration policies and individual remuneration of directors, as well as a shareholders’ right to vote on remuneration policy and the remuneration report;

2.2 Better shareholders’ oversight on related party transactions, i.e. dealings between the company and its directors or controlling shareholders;

2.3 Creating appropriate operational rules for proxy advisors (i.e. firms providing services to shareholders, notably voting advice), especially as regards transparency and conflicts of interests;

2.4 Clarification of the ‘acting in concert’ concept to make shareholder cooperation on corporate governance issues easier;

2.5 Investigating whether employee share ownership can be encouraged.

3. Initiatives in the field of company law to support European businesses and encourage their growth and competitiveness:

3.1 Further investigation on a possible initiative on the cross-border transfer of seats for companies;

3.2 Facilitating cross-border mergers;

3.3 Clear EU rules for cross-border divisions;

3.4 Follow-up of the European Private Company statute proposal (IP/08/1003) with a view to enhancing cross-border opportunities for SMEs;

3.5 An information campaign on the European Company/European Cooperative Society Statute;

3.6 Targeted measures on groups of companies, i.e. recognition of the concept of the interest of the group and more transparency regarding the group structure.

In addition, the action plan foresees merging all major company law directives into a single instrument. This would make EU company law more accessible and comprehensible and reduce the risk of future inconsistencies.

Background

The Commission’s ‘Europe 2020’ Strategy (see IP/10/225) calls for improvement of the business environment in Europe. EU company law and corporate governance rules for companies, investors and employees must be adapted to the needs of today’s society and to the changing economic environment. European company law and corporate governance should make sure that companies are competitive and sustainable.

With its 2011 Green Paper on EU corporate governance (IP/11/404) the Commission initiated an in-depth reflection to evaluate the effectiveness of the current corporate governance rules for European companies. It also carried out an on-line public consultation on the future of European company law which generated a large number of responses by a wide variety of stakeholders (IP/12/149).

See also MEMO/12/972

More ... http://europa.eu/rapid/press-release_IP-12-1340_en.htm?locale=en