Henley Corporate Regatta Day 2015
2 July 2015
A day of celebration and reflection – and for looking into the future
Kicking off the School’s 70th anniversary celebrations, Professor John Board greeted a packed conference room at Henley Business School’s Greenlands campus, and welcomed delegates to the 2015 Corporate Regatta Day event.
‘The 1st of July was the day we began our 70th anniversary celebrations’, Professor John Board told a packed conference room at Henley Business School’s Greenlands campus, as he welcomed delegates to the 2015 Henley Corporate Regatta Day event.
The Dean of the Business School then proceeded to reflect on the reasons why the Administrative Staff College – as it was originally called – had been founded, and the questions that were being asked back in 1945.
‘In the aftermath of the war, reconstruction and development was the priority, especially in multinationals, then called colonial enterprises. And the questions asked then are still being asked today, wherever one goes in the world: How can we grow? How can we exert an influence, gain power and develop a competitive advantage? Of course, there are now other questions, too, including those around Europe, pensions and financial regulation. But there is a common core to much of this, and it is about managing people.’
From generation to generation
Steve Ludlow, Head of Executive Education then summarised what has been a good year for the Business School. ‘We’ve updated our programme portfolio and have recruited a number of new clients on custom programmes, including Roche Pharmaceuticals’, he announced, adding that ‘we are delighted that our improvements have been recognised by our elevated position in the latest Financial Times rankings.
‘Our 70th year also gives us a good opportunity to look back at Henley’s style of learning. When it was set up, it was described as a place where: “industry commerce and government could enjoy the fruitful interchange of ideas in an environment separated from their usual place of working… and that together, people from all walks of life could gain new and relevant knowledge.” This philosophy remains deeply rooted in the DNA of Henley, and the syndicate method of learning, which has evolved into what we now call action learning, in tandem with the benefits of online technologies and our collaboration with the University of Reading, is adding new insights.’
Neuroscience and the art of leadership
Steve then handed the baton to Claire Hewitt, Head of Learning Design in Executive Education, to introduce the agenda and the day’s speakers, each of whom had a different perspective on the theme of the event: The neuroscience behind the art of leadership.
First, Claire introduced Patricia Riddell, Professor of Applied Neuroscience, and Professor Doug Saddy, from the Centre for Integrative Neuroscience and Neurodynamics, to answer the big question: What is neuroscience? – and to give some context to it.
Doug explained that research carried out in the 1800s led to an understanding of the various regions of the brain, but we now recognise that the brain works as a complete entity along with the central nervous system. Indeed, there is ongoing work to understand how the brain is linked to the intestinal system and to establish the scientific processes that lie behind the phenomenon of ‘having a gut feeling’.
He explained how the brain and central nervous system control both mental and physical actions, and described how MRI scans enable us to see how the brain responds in a variety of situations.
‘Changes occur throughout our lifespan and in different situations; the brain is temperature-sensitive, and responds to changes in metabolism,’ he revealed, and assured the audience that ‘size is irrelevant – Einstein’s brain was no larger than any of ours.’
Patricia then provided a brief introduction to the biochemistry of brain neurons, explaining how the gaps between the synapses provide the brain with its flexibility and how repeated use of the brain strengthens the links.
She cited a recent study of taxi drivers, which found that longer-serving taxi drivers had a larger hippocampus – the part of the brain where locations of memories are indexed.
‘We generate hypotheses and then test them,’ Tricia added, ‘and try to disprove them.’
How and what can we learn from this? A live case study, featuring Haslams Estate Agents
Patricia and Doug were joined by Professor Kevin Money, Director of the John Madejski Centre for Reputation, Andrew Kakabadse, Professor of Governance and Leadership, and Peter Hawkins, Professor of Leadership, in a panel discussion focusing on the challenges being faced by a local business.
The subject of the case study was Steve Woodford, CEO of Haslams Estate Agents, a company founded in 1838. Steve explained that he bought the company 20 years ago – at the time employing just three people – and how he now has over 30 staff, newly relocated to an open-plan office.
Faced with a range of cultural and logistical issues, Steve was looking to the panel to pass on their wisdom and guidance. In his words: ‘I’m in the middle, acting as the ringmaster. And I think I’m going mad! Help!’
Andrew began by relating how at the retailers, John Lewis, the senior management learned that ‘standing back’ requires setting standards then ensuring they are upheld. ‘You’ve made massive changes and you must trust the team to make the right decisions.’
Steve recognised that he had been too ‘hands on’ but insisted that there was a clear set of core values to which the team (usually) adhered.
Kevin focused on whether there was emotional contagion across the cultures of the different teams. Steve explained that, while Haslams was essentially a sales organisation, it also had an administration department, and there had been strains and issues in bringing them together. Steve went on to report that the company had just had a record month for lettings for which the sales team had been rewarded, but the administration team was disgruntled at not being similarly recognised for their part in the success.
Kevin mentioned a study at Harvard that showed executives would rather earn less (but know that they were on the same salary as their colleagues) than earn more (if they knew this was less than their colleagues). Fairness, it seems, is very important for emotional well-being.
Doug added that through emotional contagion at times of change, new modes of behaviour would gradually emerge; and, while everyone currently felt vulnerable, stability would be re-established in time. But he reiterated that it was up to Steve to set standards and expectations. Continuing on the theme of vulnerability, Patricia talked about psychological safety and the impact of each individual feeling threatened, and the importance of understanding how to control these feelings.
Steve then spoke about the new technology that had been installed at the same time as the office relocation, and the additional challenges faced by the team as they tried to adapt to new working systems. Patricia responded by saying that ‘the brains that have the problems also have the solutions, so you don’t have the have them all!’
Peter likened Steve to the metronome that defines the rhythm. ‘You must role model how you want them to engage customers,’ he added, leading Steve to acknowledge that he would have to run workshops for everything, right down to meeting and greeting. ‘You need to orchestrate. Be the coach, not the person who does everything,’ concluded Peter.
Emerging themes from the case study
The discussion was then opened up to delegates and a number of themes emerged:
Steve: ‘I know I’m the biggest problem. I’ve appointed a management team, and it’s important that I don’t undermine them.’
Delegate: ‘Habits are difficult to change but the new context should help, so you need to collectively consider what habits you want to instil.’
Patricia: ‘Leadership learning is much easier than unlearning.’
Kevin: ‘One of the key things is to not pretend it isn’t happening, so have that conversation. We’re programmed to not say anything. Give yourself permission to have the conversation.’
Andrew: ‘In a study of the UK’s top 100 companies, research identified a massive difference between vision and values; outstanding organisations build a sense of mission into everything, but it has to be real.’
Steve: ‘For me, a lot a recommendations come to us based on trust, and we always strive to reinforce this. Our policy is one of absolutely no lies.’
- Culture and language
Delegate: ‘Has the open-plan office just exposed existing problems, rather than been the cause of new ones?’
Steve: ‘Yes, there’s a lot of truth in that. They’re not new problems; it’s just that I can now see them.’
Claire: ‘I’m interested in the language you use, when you decided to change the name of the reception desk to the “sales bar”…’
Doug: ‘Language is extremely important, especially in the context of change. You should try to change the reward value of particular situations and for particular behaviours.’
Peter: ‘It’s interesting that you were “illuminated by your son’s comments [on issues in the new office]”, but how can you be illuminated by other employees’ comments? Your questions must be enquiring in order to establish a culture of collaboration.’
Patricia: ‘A reward may be actioning a constructive suggestion.’
Peter: ‘Organisational culture is what you start noticing after you’ve been at a workplace for three months!’
- Change overload
Delegate: ‘Can the brain be overloaded? Should we maintain boundaries? Would a separate office allow Steve to reflect more?’
Patricia: ‘When we feel overloaded in certain situations, we cease to be rational. Some people will relish newness, others will struggle. You need to consider how you provide the training solutions suitable for each person. The “relatedness” part of our brain is never turned off… we all love to be related to others.’
Steve: ‘I’d see it as a failure to go back to the old layout, with me separated from the team.’
Peter: ‘Open-plan offices can still work if they provide time and space for reflection.’
Kevin: ‘It seems that the boundaries have been blurred. Do people perform better when you’re not there?’
Steve: ‘A strong work ethic still dominates. I do try to think rather than do, but it’s a learning curve. Maybe we have made too many changes at once.’
Delegate: ‘From the outside, it seems that you are a sales manager, not a scientist or leadership expert, so I think you need to be a creator not a fixer. The team needs to know that you only want to be bothered by problems too big for them. You should reward the higher performers only, or they will be disgruntled. The sales team then should nominate members of the administration team for recognition.’
Patricia: ‘It’s interesting that if you always reward the same behaviour, you stifle creativity. Occasional rewards tend to encourage creative thinking, and you should consider rewarding relationships.’
Delegate: ‘I’m faced with the prospect of knowledgeable people leaving my organisation. How can we encourage them to share knowledge within the organisation?’
Peter: ‘There is a phenomenon known as BBBB (bye bye, baby boomers!), and it’s a big problem. Perhaps, in the last years of their working life, they should be encouraged to work as mentors for knowledge exchange, not just one-to-one, but also mentoring teams.’
Patricia: ‘Mentoring allows elders to become authority figures.’
Doug: ‘Mentoring can also work well with people in different types of roles to those experienced by the mentor.’
- Building on success
Delegate: ‘Steve – you’ve clearly been successful, you have to celebrate and own it. And decide what sort of leader you want to be.’
Kevin: ‘You have done remarkably well in an industry with a bad reputation, so how can you be genuinely different? Perhaps explore the psychology of the other. You are a Reading boy in Reading. That provides a real opportunity, although there is, of course a danger when you expand outside the area.’
Peter: ‘Your honesty is your greatest strength, and you have to find ways of building on that.’
On that note, the panel discussion was drawn to a close. Delegates then had the opportunity of attending one of two active learning sessions.
1. The neuroscience of teams – facilitated by Peter Hawkins and Patricia Riddell
During this workshop, delegates considered the attributes of high-performing teams, and the ways in which behaviour, experience and brain system preferences can contribute.
The session began with each table debating and putting forward the issues they felt were most pressing for them. Among those suggested were:
- managing the change and growth journey
- anchors and identity
- global teams, virtual teams
- scaling a team; how much change can a team bear?
- technical experts versus business leadership
- optimising cultural/strategic/generational changes
- managing upwards
Peter noted that: ‘If we think about the four levels of engagement: data, behaviour, emotions, mindsets and assumptions, it is the last of these – mindsets and assumptions – that is the most powerful, but the hardest to shift. Behavioural change is not long lasting.’
Patricia then asked the delegates to choose from an array of anonymous faces one they considered to be a great leader for structural strategy change and one for team leader. ‘The point is not who you chose,’ explained Patricia, ‘but how you did it – how did you even began to contemplate choosing one? And one of the biases is that leadership is about leaders.’
Peter added: ‘In professional services firms, I’ve often been asked by managers how they should become partners. The feedback is often that they “don’t have the gravitas” and this invariably translated into people with white hair, or people with weight – so their unconscious model of leadership was ageist, sizeist and sexist! What would that do to a company? Leadership only exists if you have a leader, followers and a shared endeavour, and the last is the most important.’
Peter continued: ‘Change is constant and inevitable, and if you think things have been changing fast in the past, the future will be a shock for you! If your company isn’t changing faster than the rate of change of the outside environment, you’re on the road to extinction. So the real competitive advantage is the rate at which you can learn, and this is where neuroscience comes in.
‘The environment is changing faster and faster; strategy is now a daily activity not a five-year plan. Culture will always eat strategy for breakfast. Leadership gets the culture to collectively behave. So shifting the culture can be achieved more effectively by changing the leadership, rather than the individual leaders. And strategy can be condensed into one question: what can you uniquely do that the world of tomorrow needs? And the one thing we can guarantee is that future generations will face even greater challenges.
‘Unfortunately, when faced with challenges, we tend to put them all in boxes and delegate each one to a different person, because that’s how we’re wired. And it creates artificial security.
‘The real challenges lie in the connections, not the parts. We know how to manage the parts, but managing the connectivity is far more difficult. The unholy trinity of challenges – in every market – is increasing demand, at higher quality and all with less resource. Expectations are accelerating rapidly, so to be a high-performing team, you must understand what you can achieve collectively that you can’t achieve through the individuals, and shared accountability. So how can neuroscience help?’
Patricia then explained how different types of leadership produce distinctly different patterns of activity in the brain. ‘There are two kinds of leadership: task-oriented, i.e. making things happen, and socio-emotional, i.e. maintaining morale and positive relationships.
‘When you do the neuroimaging, the activity in the brain looks very different for each of these, with each type of leadership activating a different system in the brain. This is not surprising. What is more surprising is that each of these systems inhibits the other. Thus, you can’t do both types of leadership simultaneously. So if you tend to focus on task oriented leadership, for example, you’ll strengthen your ability to do that at the expense of socio-emotional leadership.
‘We assume that leadership is all in one brain, but it rarely is. Task-oriented people have to learn to give themselves time and space to develop their socio-emotional leadership skills. Otherwise the default setting is what you are used to doing.
‘Task-oriented managers run the risk of treating people as commodities, and socio-emotional managers are less likely to get things done. As a leader, you have to create the conditions to move between activating the two brain systems. Alternatively leadership can be shared so that the specialist skills of a task-oriented and a socio-economic leader are combined.’
Patricia then expanded the discussion to look at the role of resonant and dissonant leaders. ‘Dissonant leaders have a personalised vision – they know where the company is going but they’ve forgotten to tell anyone else! It feels as if they are in it for themselves. And this activates the sympathetic nervous system - the classic “fight or flight” response. Or at least it does in men. In women, the equivalent response is often “tend or befriend”, a very different response to stress.
‘Having one shared goal means you can succeed together, and this activates the parasympathetic nervous system, allowing you to feel safe and secure, and give you a sense of belonging. And most research suggests that resonant leaders are more effective.
‘Recent research tested followers’ brain activity when asked to think of a dissonant leader that they had encountered, and their brain activity was totally different to those who were asked to think about resonant leaders. Thus, not only are there different patterns of brain activity in leaders when they use different leadership styles, different leadership styles also creates different brain responses in followers.’
Finally, Peter and Patricia posed a series of questions for each table to discuss, in what proved to be a lively and varied debate:
- What type of leadership is in place in your organisation?
- In what ways does the leadership fit the needs of the organisation now?
- What could be better, and what would need to change to achieve this
2. The neuroscience of decision-making – facilitated by Andrew Kakabadse, Kevin Money and Doug Saddy
The Henley team talked through a presentation about the science of decision-making, highlighting the subconscious decisions we take, and how the brain is a system of conflicts.
They explained how studies have shown that CEOs make decisions using methods that are, in some respects, closely aligned to methods employed by college students, although the outcomes are achieved through different mechanisms. Getting buy-in for longer term decisions is difficult for both groups because the rewards are delayed, making such decisions less compelling, especially for younger people.
They explained the different types of decisions – self-driven, social or collective – and how neuroscience has found that people with certain types of brain activation are less prone to addictive behaviour.
They described how the brain adapts to situations in which people are chronically underinformed, and how too much choice can lead to negative feelings. ‘Social conditioning compels us to have lots of choice, but it can make us less happy.’
The team then attempted to dispel some of the myths about neuroscience in an interactive session. Some points that were discussed included:
- ‘Our choices aren’t logical; they are often linked to punishment, and we are more influenced by avoiding loss than achieving a positive gain.’
- ‘Good CEOs only focus on a small number of fundamental decisions.’
- ‘Why don’t we reflect more? There’s a reward for action, but not for reflection. And why don’t we evaluate the quality of decisions? Reflection is like meditation and the brain is in a resting state. Thinking freely brings its own reward. We can be trained to treat anything as a reward. So we need to train others to reflect.’
- ‘Fundamental change almost always requires a ritual.’
- ‘In general managers and leaders, decisions are about conflicting logics, based on evidence. But for a chairman, the issues are quite different. The role of the CEO is morphing into that of a COO with a broader approach to engagement.’
- ‘Is our level of neuroplasticity related to the foods we eat? Diet certainly seems to impact on brain function, as does the level of hydration. And both cardiovascular and weight-bearing exercise appear to have positive impacts. And sleep, of course.’
- ‘Brains are far more plastic than we thought.’
- ‘Reading and writing are very invasive on the brain. Learning more than one language affects positively on the grey matter density and on white matter. But this won’t necessarily affect decision-making.’
- ‘Alzheimer’s patients typically have an extra five years before the symptoms show if they are multi-lingual.’
- ‘How does the decision-making of a chairman differ from that of a CEO? Understanding the context is key. The decision process requires a chairman to address sensitive issues, and similar issues exist in the public and third sectors, although the language is different (value vs competitive advantage).’
- ‘CEOs don’t want to reflect on engagement because it deflects from the operational issues. Humility is important. Bankruptcy is normality, and it’s often achieved despite widespread knowledge of its imminence.’
- ‘Can leadership teams be paralysed by the complexity of today’s landscape? Research has shown that “fluid cognition” is prevalent up to the age of 45. After 60, we develop crystallised cognition, and we appear to be able to think more clearly in some ways up to the age of 75. But we still may face the challenge of how to motivate a team of mainly 40-year-olds.’
Kevin then described a study of 25 CEOs during which their biases were assessed; ‘We looked at their collective identity, their relational identity and their individual identity, and studied how they see themselves, in what situations they make decisions and how they influence others.
‘The CEOs were tested in an MRI scanner, scoring points against established criteria, and being fed information about others’ performance.
‘Leaders define themselves as decision-makers, and in the words of Chris Machin, they learn to be “confidently lost”.
‘The younger people who acted as one control group used social information, but this information was rejected by those in the control group of older, non-CEOs. CEOs took this social information into account and in that respect, CEOs were found to think in a similar way to young people.’
Asked whether there are gender differences in the way the brain works, Kevin suggested that women may use social information even more than men. Doug disagreed, saying that men’s and women’s brains are physiologically identical, except in size. And Andrew agreed that outcomes and performances are the same across the genders.
In response to the question of whether a good CEO is able to learn from a bad decision, the discussion moved on to the topic of resilience, which was felt to be useful for working through complexity, but dangerous when it leads to rejecting necessary data. The confidence that leaders can deal with being lost appears to be a positive trait.
Following lunch at Greenlands, the delegates were then able to relax and reflect on this complex subject while taking in the beautiful views along the River Thames and the spectacle of the Henley Royal Regatta!