Our CEO’s been back to school – here’s what he learned at Harvard
In autumn 2013, our CEO Mike Dodds attended the 185th Advanced Management Programme at Harvard Business School. His fellow students included industry leaders from 40 different countries and 17 industry sectors. Mike was the only ad man to attend this year. This is what he learned:
Q: First of all, did you enjoy it?
A: It was a huge experience, really full on, and I loved it. When we arrived they told us it would be like ‘drinking from a fire hydrant.’
Q: What was your first impression?
A: How modest our role is, as ad people, in the global business landscape. We think of brand building as the be-all and end-all but it’s just one small factor. There are many levers that businesses can use to boost shareholder value. The “cost of money” to fund a business and the right production techniques for example. What we do is just one of many options.
Q: And what about the course itself?
A: Inspiring and energising. The lecturers included Professor John Kotter and Jeff Immelt from General Electric. We were being taught by some of the world’s greatest business brains.
Q: What did they teach you?
A: We started with the question every new business needs to ask itself at the outset, “Why do we exist?”
Q: Deep philosophical stuff?
A: For a business. No. The answer needs to be very simple. A business exists because it has a product or service that matters enough for people to care about it and spend money on it. If it doesn’t, it won’t exist for long. And it’s a question that needs to be asked constantly. Things that people find motivating today might be taken for granted – mere hygiene factors – tomorrow.
Q: But knowing why you exist is surely not enough in itself?
A: No. A business needs to execute brilliantly against that business vision. Again, as simply as it can. Good execution trumps pretty much everything else.
Q: Can you give us an example?
A: Okay, take Walmart. Their vision is to deliver “everyday low prices”. Everything they do, absolutely everything, executes against that strategy from the big strategic decisions like where they locate right down to the small stuff. The speed limiters on their trucks are set to optimise fuel consumption for every mile of every journey. Their procurement office is a stripped back room with bare furniture. You try getting a cup of coffee out of Walmart in a meeting.
Q: We’re hearing the word simple a lot.
A: Yes and my third point is the role of simplicity. Simple consumer propositions are more likely to be motivating. Simple business processes are more likely to be followed. Simpler communications are more likely to be understood. Simple chains of command leave less scope for ambiguity. In our complex world, simplicity is a virtue.
Q: That’s three key principles so far.
A: The fourth is about people plus the assets a company provides them to do their job better with that company than elsewhere. We always focus on the role that people play in business success but often forget that it’s the assets a company provides to help its people that set it apart and potentially give it the advantage over its competitors.
Q: So the spotlight turns from employee to employer?
A: You’ve got it. To re-work a famous Kennedy speech, “Ask not what your employees are doing for you but what your organisation is doing to enable your employees to perform better than they could elsewhere.” That is the essence of corporate strategy.
Q: And presumably a lot of working better is about making better decisions?
A: My fifth principle is about Decision Making Bias. Behaviourally we human beings are highly likely to base our choices on the most easily remembered fact.
Q: Rather than the most important ones?
A: Exactly. More than that first impressions count enormously in decision making and we then tend to root around looking for facts that will support this first impression. Companies can help create environments that aid good decision making. Conflict, for example, forces the decision makers to look at all the issues.
Q: So that’s five key principles for business success?
A: Look, I could go on all night and probably tomorrow as well. We learnt so much. But the five key questions any business should ask are:
- Do I have a reason to exist?
- Do I execute brilliantly?
- Do I keep things simple?
- Do I provide my people with the right tools?
- Do I help all stakeholders make the right decisions?
Q: And if you had to summarise the whole thing in one word?
A: Simplicity. There’s a Steve Jobs quote, “Simplicity is the highest form of sophistication.” It was something that came through from speaker after speaker.