Business First Magazine Editor Nick Peters interviews Professor Vlatka Hlupic:
NP: On November 5th I was sitting in the Houses of Parliament which is an odd place to be on bonfire night. Outside, demonstrators were letting off fireworks, and police were struggling to contain hordes of demonstrators wearing Guy Fawkes masks, all of them calling for revolution. Well it was a very stark contrast with what was happening inside, where I was listening to a passionate appeal for a very different and much more peaceful kind of revolution. It was being made by Professor Vlatka Hlupic from the University of Westminster. She is part of a worldwide campaign for businesses to change the way they manage people, both inside and outside their organisations, and I’m delighted to say Professor Hlupic is with me in the studio. Welcome to Share Radio. Now, management theory has been with us for decades, yet I feel there is a sense of heightened urgency about the need for a new way of doing management. Why is that?
VH: First of all, thank you for inviting me to this show; I’m delighted to be here. Well, ‘Business as usual’ is not an option any more, and if you look at some of the figures for global engagement for example, only thirteen percent of people globally are fully engaged at work.
NP: What does that actually mean, what do you mean by fully engaged at work?
VH: It means that they are a hundred percent there, their hearts and minds are at work, they are passionate about what they are doing, they want to make a difference and they are totally aligned with company’s values, they just want to contribute to the company, and they want to give their best. But if they’re not fully engaged this is not going to happen, and that has a huge impact on performance, profit, innovation and prosperity overall.
NP: So what you’re saying is that the people who are engaged at work are improving the prosperity of their companies as well as their own happiness?
VH: Yes, absolutely, and there is research to confirm that. Fully engaged people are better and companies are better when people are engaged and passionate about the work that they do and their values are fully aligned with the organisational values. It is a win-win situation.
NP: Now, you have written a book and of course, we are here to talk about that because this book is now at the forefront of this worldwide movement, and we’ll come on to some of the other people involved in that in a minute, but you call it ‘The Management Shift – How to Harness the Power of People and Transform Your Organization for Sustainable Success’. Now, people have been trying to do that, as I said earlier, for decades but how can you make a difference with one book?
VH: I often get asked: ‘What is different about your book?’ because there are thousands of books on leadership and new management ideas out there. Now, many other management scholars talk about the ‘why’ of this shift, why do we need to do this shift? And that goes back to the first question, we have to shift because ‘Business as usual’ is not an option. I only quoted some of the problems that we are facing, I’ll give you another example, in the last 50 years, the corporate life expectancy and performance have declined by seventy-five percent. So there are many reasons why we need this shift…
NP: When you say corporate, you mean companies? Their life expectancy – they’re just coming and going just like that?
VH: That’s right, it’s declining, so there are many many other reasons, and there are other scholars looking into the ‘what’ of the management shift, so what needs to be done, by individuals and organisations to address problems that they are facing. However, practical advice on how to achieve this shift is very rare, and this is one of the main contributions of my book, where I developed practical tools and methods to help both individuals and organisations to shift to the new level of thinking working, performing, and succeeding.
NP: I have to ask the question, you’re an academic, a very noted academic, and you’ve written this wonderful book but how can you tell anybody, how can anybody else tell if it works? Does it work?
VH: It does work. I have proven it in my book and in my research, I developed a tool which was used in more than twenty organisations worldwide, and in many cases a profit was improved by at least two hundred percent in two years. There are companies I worked with, there are other scholars and consultants working in this field, and there is data showing that, for example, so called ‘Firms of Endearment’ (30 companies that are focussed on passion on purpose and strategic alignment of all stakeholders) they have outperformed S&P 500 index in a period of fifteen years by one thousand and fifty percent. Another example I can give you are Fortune’s 100 best companies to work for that are focussed on pride and trust. And they have outperformed S&P 500 index in five years by three hundred percent. So there is a lot of data showing that focussing on people and purpose brings better profit not just happier and more purposeful workplaces, but it works on bottom line as well.
NP: So, if I am a CEO listening to this programme right now and thinking to myself ‘You know what? I feel I can get more out of my business, I obviously need to change, and I’m going to ask Professor Hlupic to come in and talk to me about it’. Now what kind of change would you bring to a business that has had, traditionally an old vertical hierarchical command and control structure? What does Management Shift actually mean?
VH: The organisational shift aspect of my work is based around a tool, the 6 Box Leadership diagnostic tool, which I developed, on the basis of many years of research, to discover where are the hidden strengths and weaknesses in an organisation in the areas of: Culture – which looks into what kind of culture an organisation has, Relationships – how well people work together, Individuals – how motivated skilled individual employees are, Strategy – how strategies developed and are executed, Resources – available to support people and processes and Systems – which looks into how the work gets done. And I call this organisational diagnostic tool an organisational body scan, it is like a temperature check, and then in the next phase we prescribe medicine. We work with an organisation collaboratively, to develop a one year action plan for specific individual and organisational actions that would leverage strengths and address weaknesses or developmental opportunities, and then we would monitor the impact of change and see how organisation is shifting to what I call level 4 . Level 4 is new way of doing business and managing which is based on cooperation, transparency, trust, purpose, community, giving back to the society, but having lots of fun working at the same time.
NP: Well it does sound marvellous, but here am I, Mr sceptical CEO saying: ‘You know what? That sounds great but getting from here to there is going to take time and money that I haven’t got and neither has my team because dammit were working on the bottom line, and that’s all that really concerns us, so great though it sounds Professor, it’s not for us’. Now, this is going to be the kind of inertia that you’re going to be up against.
VH: Yes I absolutely agree, but there is so much research data showing as well that if you just focus on short term cost cutting and short term profit maximisation, without investing in R & D, without investing in people, in culture, without aligning your organisational purpose with the purpose of individuals, long term you cannot sustain a good economic performance of an organisation, and the result of research supporting now that just shows them profit maximisation does not work. When you focus on people and purpose, profit will follow you. If you just focus on profit and bottom line, and you neglect people, you neglect purpose, you neglect all what business should be about, including giving a positive impact, making this impact to the whole society at large then you cannot sustain your good performance over a longer period of time.
NP: You just mentioned society, and that is something I want to talk about because I often feel that businesses believe that they’re operating in something of a bubble, that I’m sitting in my office and when the front door closes and I do my business and deal with my clients and all of that, but that’s just me, and nobody else is affected, but of course, as we all know, businesses affect society perhaps more than anything and it’s that consciousness that what I do in my office is having an impact right the way down the line if only I was aware of it, and aware of the changes I could make, it certainly has an impact in the kitchen tables and the drawing rooms of my employees because I’m paying them and I affect their lives, so there seems to be a really social impact to what you’re suggesting, that if businesses do take their blinkers off, perhaps life for everybody would improve.
VH: Absolutely, and I’d like to talk about the ripple effect, because research in neuroscience shows that we are like energy transmission masts; with our thoughts, with our words, with our emotions. We affect those that are around us, so if you have a critical mass of employees operating at a certain level with a certain mindset, that will spread like a ripple to their department, and then eventually it will impact the entire organisational culture. And once you achieve this shift, the companies that shifted at higher level, then their impact will spread like a ripple to the society. And not just in terms of them paying more taxes, which then could be reinvested in schools and education and healthcare, but it is also about having an impact on bringing other companies to that mindset, which is about having this higher purpose, giving back to the society, providing employment, paying taxes and then making this world a better place what this is all about at the end.
NP: You are something of an idealist aren’t you?
VH: You may look at it this way, but I have a research behind me, and I’m not the only voice in this area.
NP: Well, I was going to come to that because you really are not, I mean this is the first time as far as I can make out, that so many people in your field of academic activity have actually started to cooperate on a worldwide basis to promote this kind of change. Tell me what’s going on.
VH: Well, I feel very privileged that I’m connected to some of the leading management thinkers in the world, and for some time we have been talking about, how do we bring together all these movements? Because there are various groups and movements working towards their objective of focussing on people and making this world a better place from running businesses in a more human way, and humanising organisations. So there is a group around the Drucker Institute and the Global Drucker Forum…
NP: This is after Peter Drucker, the very famous and highly regarded management thinker?
VH: That is right, and then there is a group around Gary Hamel, The Management Innovation Exchange group, and there is Stoos Network around Steve Denning and then the Conscious Capitalism… For example, in the UK there is a group, Engage for Success started by David MacLeod and Nita Clark and many many other groups. I have a list with about 28/29 groups working together and we’re all trying to see how do we bring our thinking together and how do we push for this tipping point? So that our ideas and what we preach become norm for many organisations and then it will spread like a ripple on a global basis. That is what we are trying to achieve.
NP: So have you identified what it will take to get to that tipping point or is it like all of these things, you won’t know till you get there?
VH: There are many little things and complexity theory tells us that sometimes small changes bring a big impact, but for us it is about achieving the critical mass for that tipping point. If we have a critical mass of CEOs and decision making and leaders just becoming aware that there is another way of doing business, and also being aware that when they let go of power they get more power back. That is the paradox because, for example, in an organisation if you have a formal leader who lets go of the power and allows people to make decisions, for example, on the basis of their knowledge, rather than the formal position in organisational hierarchy, the company will do better, there will be more projects completed, everything will be more efficient, people will be more empowered more energised, and then those leaders will then emerge as true leaders, because it will be a win-win. For employees and for leaders and for company.
NP: Yes the old phrase ‘letting go’ but it is about letting go, what we’re always told you have to hold very tight to yourself, which is control, and people see control, and letting go of control as being a weakness. And you’re saying it is a strength.
VH: It is a strength, it is a wisdom as well, and there is a huge body of research showing that specifically when you lead knowledge workers in knowledge based organisations you cannot use this traditional command and control based leadership styles, because there is evidence that research workers, they ignore corporate hierarchy, they have to be treated as associates rather than subordinates. And they are very mobile so they can go somewhere else and you need to keep them by giving them full autonomy and purpose to work for.
NP: Now I suppose we just need to make clear again because the old traditional capitalist would say “This bunch of revolutionaries are trying to change my business and they are trying to put me out of business.” You are being very pro-business but this is a different kind of business you are looking at.
VH: Absolutely, businesses are the key driving engine for any society. And it is about facilitating businesses to do even better but also to create businesses as happier, more purposeful workplaces. Because businesses have to realise, that if they have people that are totally disengaged, not passionate, they will not go an extra mile to serve customers and then the business will not do well. And it is just a logic that needs to be followed – that it is a win-win for everyone. And for customers, we should not forget the role of customers here because the main purpose of business is to focus on a customer, and so you need to also nurture employees and make them passionate and engaged so they serve customers better and then your profit will increase as well.
NP: Well that is I suppose, as you say, the absolute logic of it, and how many companies do we know on a daily basis who are not treating their customers terribly well, and they are passing a lot of the cost of doing business back on to their customer base, and you feel at the end of the day, hard done by. And I suppose, we can identify precisely which companies in our own minds would need your advice. Professor Hlupic, thank you so much for coming in to see us, it’s been really very very enlightening. The book is called ‘The Management Shift’. It is written by Vlatka Hlupic, and it is published by Palgrave Macmillan, and it is in any good bookshop near you. Thank you very much for coming in to see us.
VH: Thank you.