CEO's talk (Oct. 7, 2002)

Senior executives climbed the corporate ladder by building reputations as tough, take-charge, decision-makers. Now in an era of teamwork and employee empowerment they’re being judged on the ability to nurture staff. Canadian HR Reporter asked leading CEOs about the people management skills of senior teams.

Bill Black
President and CEO
Maritime Life Assurance

Based in Halifax, Maritime Life Assurance has offices in Montreal, Toronto, Calgary and Vancouver. It employs more than 1,900 workers and was established in 1922.

Bill Black is very frank — the president and CEO of Maritime Life Assurance is not afraid to acknowledge his firm has made mistakes when it comes to hiring senior management.

“We’ve had situations where we’ve promoted people we shouldn’t have,” Black says. “Sometimes we’ve rotated people and it turned out they weren’t as good as we thought, and we’ve had to let them go. Normally the issue we’re discovering probably applied in a previous position and it just became more evident when we rotated them.”

For Maritime Life, rotation is the best indicator of whether an employee is ready for a top executive position. Black says to avoid numerous costly mistakes, they place staff with potential in a variety of roles across the organization first. Front-line management is expected to stay in an area a minimum of three years before they’re eligible to climb the corporate ladder, and for executive management, it’s a minimum of five years. Succeeding at rotation is a prerequisite for a top-level position. If an employee can perform well in two or three different areas, that is evidence he may be ready for a move up, Black says. And Black should know firsthand, considering he moved from a vice-president position in 1980 to senior VP to COO and now CEO.

“At the senior levels it’s more important to be a good leader than a good manager. My feeling is that the person who is a good leader is able to identify a long-term direction for the organization and one that people will respond to, and they are able to communicate it the way people will understand.”

Usually, an employee is placed in an area where the person has knowledge but no specific expertise, “and that’s how you find out their ability to work with people — whether they’re able to lead the team or are just super-achievers,” Black says.

“People who are super-achievers can’t lead a team. They’re actually very dangerous in leadership positions because they tend to do too much themselves and not delegate to others. They don’t build a strong team around them.”

It’s actually better to discover in rotation whether employees are suitable for top-level positions rather than after a promotion. “If we promote someone above their actual skill set, we’re hurting them as well as us,” he says.

HR plays the double role of policy advocate and advisor. Black expects HR to provide support to all employees, especially senior managers, by advocating good people policies and coaching staff through specific situations.

HR also helps managers with training and development.

“Managers and other employees make their own choices about what training they’re going to get within the context of a personal budget that they have,” Black says. HR guides them towards the development they need, which should primarily be based on performance appraisals.

Maritime Life has partnered with Halifax’s Saint Mary’s University to offer a management diploma program, mostly geared towards entry-level management.

In addition, operating management groups have the opportunity to go to a training retreat once a year and learn more about the firm’s policies and practices, performance management, attendance management and project management systems.

Black says he looks for certain characteristics in a good leader, but he hesitates to call it emotional intelligence.

“It’s one of those buzzwords that can get out of control in terms of whether it communicates anything,” Black says. “I think maturity is very important, integrity, honesty, the ability to make tough decisions are all very important. The ability to know when to shut up and listen instead of talking is very important too. Maybe all those things add up to EI, maybe they don’t.”

Derek Burney
President and CEO
Corel Corporation

Ottawa-based software design firm Corel Corporation employs about 1,000 people.

Derek Burney can usually tell in the first 10 minutes of a job interview whether or not someone will fit into his senior management team.

“I look for the ability to listen,” says Burney. “Someone who can listen and take part in a conversation and not have judgments rolling into it. You can tell by engaging them in a conversation on just about any topic. All you have to do is say something that is counter to what they think and see where that conversation goes. That will give you a pretty good idea as to how adamant they are about their own opinions.”

People must be able to defend their positions and opinions but Corel’s success depends on encouraging everyone’s input, explains Burney. If senior managers aren’t listening to different opinions and new ideas that challenge conventional thinking then the organization is not effectively using its human resources to drive the innovation it needs.

The senior management team works to ensure they are supporting each other. They’ve taken training to become better listeners, and when senior managers do a good job of listening to peers and staff, that behaviour permeates the rest of the organization, Burney says.

“Even around the management table if somebody is having an issue with a given employee, other managers will step forward with ideas of how to help or they will volunteer to call the person or give them some anecdotes of things they have learned.”

To ensure the senior team is moving forward together, Burney introduced a new policy earlier this year. They meet every day. Some people may find that excessive, he concedes, but it is only 10 minutes and the managers can conference in by phone if they are offsite.

“It is first thing in the morning, and we just do a quick around the table: ‘What’s up? Any hassles? No? Okay fine,’ and then we get on with the day. That way nothing festers for more than 24 hours.”

They used to have weekly meetings but they had become pretty dull, says Burney. “Because a certain amount of time lapsed, you actually don’t discuss critical issues because they have been dealt with sooner than the next week’s meeting. That leaves only the boring things for a weekly meeting that really don’t need to be discussed at all.”

Initially people were reluctant but now they love it because nothing goes unaddressed for longer than a day, Burney says.

“In our business all the departments rely upon each other so for example in order for sales to get the results they want they have to make sure that the right marketing is being done and that the product is going to be delivered on time. So when someone hears a rumour, it comes up the next day and it is resolved immediately.”

The core values of the company are an important unifying force and the senior team is expected to be guided by them, and promote them. Those who don’t, won’t last long at Corel.

“We look at core values pretty much like the antibody system in the human body where (a toxin) just kind of naturally gets kicked out,” says Burney. “People who go counter to the core values tend not to flourish because they are always kind of swimming against the tide and so they usually just leave. I think that a fully functioning set of core values actually does that. It weeds out people that don’t fit it, so that you never have to point someone out, they are just not comfortable in that situation.”

Burney also believes most people who get to senior management ranks get there because they are emotionally intelligent.

“I think it is absolutely a critical factor in a person’s character and I also don’t think that it is something that you learn,” he says. Some people just have a better awareness of their own emotions and the emotions of others.

“You might be able to learn it in the sense you can improve it a degree or two. But if it is something that is completely absent then it just cannot get created, anymore than some people are cut out to run a four-minute mile and others aren’t. You can train and improve your speed but you pretty much know whether you are going to be Olympic caliber or not. And you go off and do other things if you are not.”

Philip Huges
President and CEO
Newfoundland Power

Newfoundland Power employs 650 people, provides electricity to more than 215,000 Newfoundlanders and has improved customer satisfaction by almost 30 per cent since 1996.

If senior management is telling employees what to do instead of asking them what they want, your organization is in trouble, says Philip Hughes, CEO of Newfoundland Power.

The old command-and-control structure is a recipe for failure, he says, and should be replaced by senior executives taking responsibility for people management and the development of the workforce. Employees need to know they are getting something out of the employment equation and it has to be proven from the top of the organization.

“The senior management group has got to truly believe in employee development,” says Hughes. “They have to be genuinely interested and genuinely care. I don’t think faking it cuts it anymore. A lot of people try to fake it and they will give you the buzzwords, and they will use the word ‘proactive’ five times in two sentences but at the end of the day they won’t have heard and won’t have listened.”

Developing staff and dealing with people issues probably takes 40 per cent of the time of the top four or five executives, says Hughes. “I would guess with the managers, it is probably about 25 per cent: How can we give (employees) opportunities? How can we give them experiences? What are they trying to do?”

It’s been one of the challenges for the HR department.

“They wanted to know how (employees) are doing, I said, ‘Ask employees.’ I don’t know a better test for knowing if employee development is working, then asking them. And the question is quite simple: ‘Are you better equipped, have we helped you be better than you were last year?’”

In recent years the number of senior managers at Newfoundland Power has dropped from more than 35 to about 15. The organization has become a lot flatter and Hughes expects his senior team to behave that way, going out and demonstrating to employees that they are close to the front lines, committed to customer satisfaction and improved performance and that they believe the best way to achieve those goals is empower the employees to do their jobs. The senior team should be close by to help them do it.

“You have to be prepared to change the way you do business, and very few processes are sacrosanct, but what is sacrosanct is where you are going,” says Hughes. The employees know best how effective the processes are and whether or not the processes need to be changed. “Because you want to be improving you want to be getting better,” he says.

Members of the senior team regularly make front-line visits, talking to employees and customers. “We visit a lot of our customers. We want to hear it warts, and all, and we want to know where we can improve,” says Hughes.

After a while, employees believe management cares about the customer and they feel more empowered to take actions to ensure customer happiness. Employees who go out into the field to investigate a complaint take a corporate chequebook with them. If something has gone wrong, say for example a VCR is damaged, the employee writes a cheque on the spot.

“And, it shouldn’t be a big deal for one of the senior management team to do a crew visit and be on the front line, because people are more comfortable and then they will tell you a little bit about what is going wrong,” says Hughes.

“Senior managers really have to earn their respect each and every day and if they don’t then no one is going to follow them and you’ll be ignored and you’ll be in the corporate obituaries.”

John Mayberry
Chair of the board and CEO
Dofasco Inc.

Hamilton-based steel manufacturer Dofasco employs about 7,000 people across Canada and the United States and spends more than $15 million a year on training and development.

“There are some companies that tend to treat their employee like they are the enemy,” says John Mayberry, chair of the board and CEO of Dofasco. “They have a lot of strikes and they lose a lot of money — there are some glaring examples of companies that still seem to be in that mould.”

At those organizations it doesn’t really matter how well the senior team is managing people.

“If you believe that your organization is going to have the greatest success if it can energize and mobilize every single employee in the business then you have to sit down and say, ‘Okay I’m on a journey. What am I gonna do to get them form A to B?’ (It) means improving their understanding (of the business), so training them, coaching them, giving them a sense of direction, giving them responsibility and accountability to come back with a game plan for improvement,” says Mayberry. “Setting stretch goals and that sort of stuff, being there to serve as a resource to support them where they need it and then to celebrate successes when they have had a victory, however big or small, then the people management skills are huge. The requirements are huge.”

Mayberry says they’ve been on a journey of continual improvement for the more than 10 years he’s held the job of CEO at Dofasco. Soon after taking over he and his senior team decided they wanted to make a lot of changes.

“And it was scary the number of employees that said, ‘Look I’ll support you, just tell me exactly what you wanted to do.’ None of us had the knowledge to tell 7,000 people exactly what to do, so we had to change the model a little bit, and get every single person creating delighted customers and through them shareholder value.”

To succeed in that environment requires a very different leader than what was the norm in the past, says Mayberry. “We brought them up to be ass-kickers and now we are asking them to be leaders which entails a whole new different thing.” Dofasco works with the University of Western Ontario in London to deliver leadership development and training to about 200 top senior leaders.

A great deal of organizational improvement is done in multi-discipline, cross-functional teams and the senior leaders serve as the sponsors for each of the improvement projects. The team is self-initiating but the senior people have to know when to step in to help, when to push and coax them and when to pat them on the back, says Mayberry.

While Dofasco works hard to instill the important tenets of people leadership, on occasion senior leaders can slip up. Mayberry counts on HR, particularly out in the business units, to step in to help.

HR is decentralized at Dofasco, with an HR person at each of the business units to help the unit leaders with people issues. “And to be one step removed from being accountable for the business results in that division,” says Mayberry.

Each of the business leaders has a business plan with clear financial goals and it is their job to drive the operation to meet those goals. “Their key resource is their people, but sometimes in their ongoing focus on business results, they let slip the sensitivity to the people thing and that is where the decentralized HR reps are there to provide counsel to them.”

John Dowd
EDS Canada Information Solutions

Electronic Data Systems (EDS) Canada employs about 6,500 people and had revenues of about $1.6 billion in 2000.

Just by the nature of their business as outsourcers, leaders at EDS are required to know a great deal about people issues — ensuring employees are successful and happy and able to thrive in their jobs, says John Dowd president of EDS Canada.

“We understand workplace dynamics, workplace restructuring, workplace change,” says Dowd. “The levels of extra stress or anxiety around work, or all these other elements of the challenges of our workplace today.

“Our executives are very attuned to those kinds of issues and I would say sensitive to them and…(they) want to understand how, for an employee, these kinds of issues can be addressed.”

Employee satisfaction has become an important performance measure for the senior team. They use surveys but those only give insights on an annual basis. It’s important to keep an eye on the senior team to make sure they are responding effectively and appropriately for both the employee and the organization, he says.

“Can you train people to be stronger in these areas? The answer is, absolutely yes,” says Dowd. “There are many different training interventions that can be effective.”

If things are going well, terrific, says Dowd. If not, if there are some problems, the leaders in question are given the opportunity to make improvements.

“That is not an uncommon part of our agenda… to give people different perspectives or insight if there is something missing. You can pinpoint where there are particular training interventions that might aid a leader in growing in a certain area.”

EDS has corporate-wide programs for improvement in areas highlighted as issues across the company, or else personal initiatives can address individual problems.

“You need to look specifically at the individual and say, ‘Here is a synopsis of the skills and capabilities that you have. Here might be an area where we see some development opportunities and here is the specific training interventions that we can provide,’” says Dowd. Then the leader is on her own. “It is not about forcing people through experiences. It is about offering them the support and giving them the opportunity to take the initiative,” he says.

And while there are certain skills that leaders can be taught — and EDS will send senior leaders to business schools in the United States or Europe if that is where they’ll get the best learning — Dowd also believes there is a something more that separates the great leaders from the rest.

“It is truly about energy and conviction and commitment and passion,” he says. Good leadership is never dull. “I think leadership has to be committed, it has to be thoughtful, it has to be determined, it has to be passionate and at times it has to be charismatic. When all those can come together at a certain time and at a certain situation it is a pretty high energy point.”

Employees want to feel engaged and involved and committed to a good cause or project. They want to feel a sense of opportunity. “The leaders who can convey that sense of opportunity are usually the strongest leaders that most people enjoy following,” he says.

“This kind of leadership energizes people. And in our business, everybody works hard when leadership can be visible and it can be strong and it can be forthright and candid and give people the benefit of their insights and be accessible to people. That, that energizes people.”

Rod Phillips
President and CEO
Warren Shepell Consultants Corp.

With head offices in Toronto, employee assistance program provider Warren Shepell has 1,800 employess across Canada and internationally.

The very heart of the business at Warren Shepell requires good people management skills, and Rod Phillips, president and CEO, says if managers don’t have it, they’ll have a tough time succeeding in the company.

“Obviously in our business, it’s a lot about dealing with the issues of our clients, so we wouldn’t be doing a great job if we weren’t able to deal with our staffing issues,” Phillips says.

However, he does admit that many of their managers come out of the clinical profession which “on one level qualifies them fabulously for dealing with people, but on the other hand, an exceptional clinician doesn’t necessarily mean that one has a great deal of experience managing groups.”

Training for managers is an ongoing process with a focus on resolving people issues, he says. Some of the in-house services Warren Shepell offers to clients, such as conflict resolution and mediation training, can be used for staff as well when problems surface.

“So, it’s not the case of the shoemaker’s children having no shoes, if the product or service is required, then we make sure it’s being used,” Phillips says.

Phillips has only been with the firm for four months and one of the first changes he made was to have HR report directly to him.

“In terms of specific initiatives and activities, you want to make sure your human resources policies are consistent with what actually gets done and delivered and that’s ongoing.”

Besides assisting in the training of managers, HR plays an important role as a facilitator. Regional managers are responsible for hiring new employees and they rely heavily on HR.

“We tend to be recruiting from a pool of counsellors and clinicians who come from certain expertise, so in our case HR has developed an expertise in recruiting those people and directly assisting the managers,” says Phillips.

“If we’ve done our job in the (recruitment area) on the front end, there’s a fairly dominant culture that people fit into that helps the manager manage.”

Having an annual national meeting — where almost 100 managers and top executives from Canada and the U.S. gather for three days — is also helpful.

“As an employee assistance company, we preach a lot about the importance of this kind of interaction and taking the time to do this gives you a fabulous sense of the value of your people. You realize how much they do because you’re in one place watching them do it,” Phillips says.

The popular topic of emotional intelligence was on this year’s agenda. In fact, a whole day was dedicated to the subject. Attendees worked through a series of EI workshops and Phillips says it pointed out both the strengths and weaknesses of the group. Managers at the end of the workday face a lot of pressures on the job and any tool they can tuck away to use when dealing with a particular issue or employee is beneficial, he says.

The senior team participated in a series of exercises in which they evaluated their own behaviours, understanding how and why certain things happen. Once people have a different perspective on particular behaviours, they are more likely to appropriately question or reinforce them, Phillips says.

It’s convenient to say leadership is innate, he says. It makes a person feel as if they’re not responsible because they weren’t born with it. “It’s like me saying I’m not 7 foot 2, so I can’t play for the Raptors. If it was something only certain people had then we would all know who has it and who doesn’t.”

Phillips doesn’t believe people are born with EI. There are basic characteristics of leaders that are eminently learnable, he says, such as treating people fairly, supporting them in their endeavours while holding them accountable, and leaders must have the courage to make decisions.

“I think everyone has courage, but how it manifests itself, that varies from person to person and circumstance to circumstance,” says Phillips. “I see people in our own firm who demonstrate leadership every day who aren’t necessarily formal leaders but people who lead the organization nonetheless — some days it’s a heck of a lot more important than what I do.”

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