Steven Hester: A good leader in a bad place at RBS

This week Stephen Hester was removed from his post as CEO of the Royal bank of Scotland. The decision seems more politically than financially inspired

LWD has followed the RBS story since Steven Hester’s arrival in 2010. Steven Hester: Villain, hero, or just an outstanding business leader?. The post is summarized below:

Royal Bank of Scotland took its turn this week as another giant banking institution paying ridiculous bonuses while still in hock to the Government’s bail-out scheme. Its leader Steven Hester is reviled as another fat-cat financial leader insensitive to public opinion. Contrition is a rather hard emotion for a leader to fake. So when one of them appears to be making a good fist of apologizing without appearing a pathetic wimp and maybe a bit of a damp rag as a leader, it’s worth taking a more careful look. The broadcast [March 2010] showed the BBC’s Hugh Pym asked RBS’s CEO Stephen Hester, why were there still such big losses for RBS. In three minutes, Henson left me with the impression of someone capable of a mix of toughness and sensitivity as a leader.

Later

Three years later it was well-known that he had taken a cut in earnings to take on one of the most challenging jobs in the Financial world and that the bank has made an impressive turnaround under his leadership.

The politics of Hester’s dismissal

Chris Blackhurst, Writing in The Independent, offered an explanation for Hester’s departure.
that the Chancellor now needed a more compliant leader in the run up to privatization of RBS. He points out that under Hestor’s leadership the bank improved its balance sheet to the sum of a staggering trillion pounds sterling.

As a result of volunteering, he’d become a public figure, his private life dissected, his country house photographed from a helicopter. A snap of Hester in the garb of his pastime of fox-hunting was wheeled out to traduce him as “another fat cat banker on the make, except this was one who was now being paid by us, the taxpayer”.

Yet, he’d chosen to do it and was sticking with the task. So, why wasn’t I surprised at the announcement of his going? Because his face never fitted. Behind the scenes, Hester could be an awkward customer. Softly spoken and eloquent (for a banker), he was strong intellectually, fully prepared to speak his mind, not prepared to lie down easily in front of politicians and civil servants without banking experience and know-how.
Osborne made plain his wish to be seen to begin the process of privatization in 2014 – in other words, well in advance of the 2015 general election. Hester indicated he would stay until 2015 when the bank was expected to be restored to profitability – after that, though, he was unlikely to want to remain any longer.

Hester’s reluctance has been used to oust him. It’s a fig leaf, as is the notion that while he was good at cutting he’s not someone who knows how to grow a business and he’s not a natural front-of-house salesman of the sort who would persuade [the general public] to snap up the shares. Having steered Hester to and through the door, Osborne must now find a successor. It won’t be easy.

The stock market agreed. This week RBS shares tumbled.

The sloppy and amateurish manner in which Hester’s departure was handled cost UK taxpayers dear as the shares tumbled at the market open on Thursday [14th June 2013], down almost 8.5% at one point as investors made their feelings clear at the bizarre turn of events.

Dilemmas

The story makes interesting material for business students interested in dilemmas and interpreting the decisions made by leaders.

We banned TV shows with kids in beauty contests. What about Mensa’s brain contests?

TV review of Child Genius Channel four

“This will split the critics” I thought, watching Channel Four’s first episode of Child Genius yesterday evening.

A bunch of very bright per-teenagers were competing in the programme to find Britain’s top child genius. The producers had no trouble sticking to the guidelines from countless quiz and celebrity shows. Mensa , the high IQ society, provided dubious cover for the methodology.

Was the show watchable? Enough to keep our domestic group from voting with the remote. Compelling? In a guilty voyeuristic way for me. Convincing? Only if you believed genius can be measured and ranked. It’s about as convincing as The Apprentice is in identifying business genius.

Hero villains

The parents were set up as hero villains and could have also been ranked on a tiger mother scale. Some were up there in the near crazed obsessional league. One or two looked more bemused than bullying.

Chess and genius

I watched because of the news that Josh, a per-teen chess prodigy , ould take part. My interest in these rare creatures began when I had the fortune to be utterly outclassed in a competitive chess game by English prodigy Nigel Short, who was thirteen at the time. Many years earlier, I had had more success as a schoolboy playing against Brian Josephson, who was already considered the brightest kid ever to have come out of the Welsh valleys, and who later won a Nobel Prize in theoretical Physics.

Chess is a field that reinforced the view of the need for ten thousand hours of study for a child to develop into a grand-master. Josh’s mother is a born again ten-thousand hours acolyte. As often happens, a dominant idea resists scientific evidence that challenges it. So I won’t try, although the notion at very least it could benefit from a Richard Dawkins to provide a contrary explanation of giftedness.

Then there’s Einstein, Newton and Mozart

A thought experiment. The young Einstein, Newton, and Mozart are brought together to compete in the international all-time child genius TV show. What’s that? Mensa flunked them Einstein and Newton before they got into the televised bit, as slow, possibly of low IQ. That’s what their school teachers thought. But, hey, their teachers didn’t have the help of Mensa to identify their potential genius. Mozart, by the way, had been wowing them musically since the age of four, and was given special dispensation to appear.

Edward Snowden, Bradley Manning and the Rise of the Heroic Villain

The old certainties of heroes and villains are being swept away in a global world of whistle blowers and spies

This week [June 2013], Edward Snowden, an articulate 29 year old American revealed a story of a vast and secret operation conducted by the National Security Agency [the NSA]. At the same time, Bradley Manning the US soldier in the wikileaks affair stands trial as a traitor.

Snowden and Manning have both been portrayed as dangerous and misguided, while at the same time they have found admirers for their courageous stance against the dangers inherent in State security activities.

The Guardian Newspaper broke the story, which had been volunteered by Snowden

The Guardian, after several days of interviews, is revealing [Snowden's] identity at his request. From the moment he decided to disclose numerous top-secret documents to the public, he was determined not to opt for the protection of anonymity. “I have no intention of hiding who I am because I know I have done nothing wrong,” he said.

Snowden will go down in history as one of America’s most consequential whistleblowers, alongside Daniel Ellsberg and Bradley Manning. He is responsible for handing over material from one of the world’s most secretive organisations – the NSA.

The Prism program

Reality mirrors fiction in the revelations by Snowden of The Prism spying program.

Apple, Facebook and Google issued strongly-worded denials that they had knowingly participated in Prism, a top-secret system at the National Security Agency that collects emails, documents, photos and other material for agents to review.

The Traitor Hero

In the 1970s, Daniel Ellsberg [mentioned above] leaked The Pentagon Papers which revealed Government decision-making in the Vietnam war. His status as traitor was revised as he received international recognition of his actions. Manning stands trial as a traitor in America. Snowden, currently in Hong Kong [June 2013] believes he will face a similar fate. President Obama struggles to contain the story

Heroes or Traitors? Or both?

Ellsberg has come out in support of Snowden as a hero. Initial press comments are polarized but there is a strong case for accepting a ‘both and’ rather than an ‘either or’ perspective.

Is Myanmar edging towards democracy?

There have been acclaimed signs of movement towards democracy in Myanmar. But racial tensions will present familiar challenges for any new non-military leadership

According to the BBC The head of the UK’s armed forces, General Sir David Richards, is visiting Burma [June 2013] to try to build ties with the country’s powerful military. He also met President Thein Sein (a former General) and leaders of the opposition including Aung San Suu Kyi for ‘serious talks’ on support short of lifting UN sanctions.

Steps to democracy

The release from house arrest of Aung San Suu Kyi and her swearing into Parliament [2012] were given global significance as steps in Myanmar towards democracy.

Under Imperial rule, Burma was treated as an outpost of the British Empire. Regional rule was operated from India, which still shows considerable interest in its Commonwealth partner.

Racial tensions

However, the country still faces the challenges of racial tensions as complex and arguably as intractable as those in The Middle East. The Indian Express outlines the tensions that have bubbled over in Malaysia.

Malaysian police said today they had detained more than 900 Myanmar nationals in a security sweep after at least two were killed last week in clashes believed to be linked to sectarian violence back home.
The two dead were likely to have been Myanmar Buddhists.. and the attacks were [reported as] believed to be the result of violence in Myanmar.
Deadly sectarian strife pitting Myanmar’s majority Buddhists against the Muslim ethnic Rohingya minority has flared since last year, in the country’s western state of Rakhine.
Myanmar called on Malaysia to take action against those responsible for the attacks and protect Myanmar citizens. U Maung Hla, who heads the Burma Refugee Organisation in Malaysia, said violence between exiled Myanmar communities here was not uncommon and was “sometimes due to religion.” The Rohingya have been described by the United Nations as one of the world’s most persecuted minorities. About 800,000 are estimated to live in Myanmar, which denies them citizenship, rendering them stateless.

The long walk

The democratic vision is that Aung San Suu Kyi will lead her country in the fashion of a 21st century Mandela or Gandhi (the two leaders she most publically admires). It is likely to be a long walk to freedom.

Engish football reunited with Jose Mourinho

This was the week that Jose Mourinho was reappointed manager of Chelsea football club. We look back at the period when he was abandoned for the first time

The earlier post [Dec 2007] built on a TV documentary which was striking in its demonstration of a charismatic leadership style

Jose as cult leader

The TV programme programme gave examples of Jose’s near-mystic powers. In one story, the press were demanding something special from the special one. His response was startling. ‘You want me to name my team? I will do more than that. I will name their team.’ Which he did. With complete conviction. Live, to camera. He was to be proved completely correct.

In another interview he was asked if he played chess with the media. His reply indicates the care with which his performance is planned:

“When I face the media … before or after the game, I feel it as part of the game. When I go to the press conference before the game, in my mind the game has already started. And when I go to the press conference after the game, the game has not finished yet.”

Cult leaders and sacred texts

Mourinho even has a secret document, The ook of Jose, written by himself. It is said that no-one knows what’s in it. So secret is it that his words will go to the grave with him. Secret, and with the whiff of the supernatural associated with sacred texts which mere mortals are not permitted to see.

Paying penance

After one particularly epic performance by his team, he ordered the players to commit a highly symbolic act. They returned to the field acknowledging their legions of followers. The players removed their shirts. What or who was all that about? The religious symbolism persists.

Righteous indignation

Another anecdote reveals the wrath of the special one if an acolyte falls short of expectations. He once publicly rebuked the Chelsea player Joe Cole for a lack of the dedication and work ethic expected of all acolytes. In a game shortly afterwards, Cole scored a magnificently-taken goal, Jose gestured to him in agitated fashion from the touchline. When the player approached his manager, he discovered that he was not being acclaimed for the goal, but abused for his lack of commitment to defensive duties in the build-up to the move.

Trials and temptations

The program also examined the strained relationship between Mourinho and Roman Abramovitch, billionaire owner of Chelsea FC. The disputed territory appears to have been over the owner’s wish for success both in terms of results, and in terms of style of play. While Mourinho’s personality sparkled, his team failed to capture the imagination -say in the style of envied rivals Manchester United. Abramovitch had taken steps to intervene more directly, acquiring support staff and two expensive players that had not been part of Mourinho’s plans for the future of the club.

The programme featured a psychologist exploring the messages to be found at film of a press conference held shortly after the arrival of the two international stars Shevshenko and Ballack. His body language is distant. No eye contact left or right.
The psychologist suggested a desire for ‘total control’ , and in this instance, partial loss of control. A few weeks later the Special one was gone. ‘By mutual consent, and with great love’. So much religious symbolism. In the programme, Mourinho ducked questions about his religion, but talked a lot about the importance of love. Like a true charismatic, he seems to have worked out his own ethical philosophy.

Lessons to be learned?

The temptation is to map out the future from the past. If so, there is likely to be another period of leadership battles between the wealth and commitment of an owner and the ego of the special one he has re-appointed. It is easy to get good odds that Mourinho will not complete the four year contract he has signed. On the other hand, he may have fewer attractive options to turn to when the crunch-time arrives, sometime in the next few years.

Flourishing organizations and flourishing individuals

The Fowler Center at the Weatherhead School of Business has recently published an article on the practice of self-reflection as a means of promoting reflection within an organization. The intention is to support discussion and initiatives for promoting change in the way organizations treat employees in order to create flourishing businesses

LWD is pleased to be able to promote this initiative by summarizing a recent item from The Fowler Center:

The Fowler Center at the Weatherhead School of Business has recently published an article on the practice of self-reflection and promoting reflection within an organization. The intention is to support discussion and initiatives for promoting change in the way organizations treat employees in order to create flourishing businesses

The article, to appear in this summer’s issue of The Journal of Corporate Citizenship,is a prelude to a forthcoming book titled The Flourishing Enterprise: Connecting Sustainability and Spirituality. It will be the final product of the Fellows’ research and careful thought on “the journey to a greater sense of connectedness” as central to business success.

The idea is that if individuals can find and create spiritual contentment in their organization, they can enrich their whole organization and help others flourish as well. The journey to a flourishing organization begins with the self. The Fellows argue that since knowledge workers’ productivity is deeply influenced by the workers’ inner states, cultivating optimal internal states becomes the responsibility of management.

Appreciative Inquiry is an excellent tool to cultivate reflection on the best of what is and to co-create the best of what could be. Created at the Weatherhead School [Case Western University] Appreciative Inquiry is a strength-based approach to whole systems change and is an excellent tool for creating large systemic change.

The Fowler Center hopes that its work will proliferate and create deep meaningful conversations about ways to transform businesses into agents of world benefit–where flourishing individuals create flourishing organizations that lead to a flourishing world.

Inferno by Dan Brown. Not another Review

I bought Inferno by Dan Brown to see if I could detect its deep secret, the explanation of the commercial success of the author. I believe I have cracked the code

Dan Brown is a genius whose insights will save the world from itself. The critics laughed at him, but we know what they did to Christopher Columbus, Homer Simpson, and Ron Hubbard. Yes, they laughed at them too.

They aren’t laughing now

As the world-renowned comedian Bob Monkhouse said: “when I was growing up, I said I wanted to be a comedian. They laughed at me then. They aren’t laughing now.”

To avoid plot spoiling

To avoid plot spoiling, I will offer only the broadest outline of what happens. The central character is “the eminent Harvard symbologist Robert Langdon”, hero of earlier books including the best-selling Da Vinci code.

Langdon, accompanied by the young medical doctor Sienna Brooks (IQ 208) face and solve numerous puzzles and threats on their lives mostly in and under the historic architecture of Florence. The threats in this “breathless race-against-time thriller” also produce philosophic dilemmas for the reader who is able to pause for breath long enough to contemplate them.

Cracking the code

Mr Brown has cracked the code of producing a best-seller. But I have cracked his code, deeply hidden in the text of his latest block-buster. You will need to study each page carefully before you will see the symbolism.

Brown is creating magical new usages of the English language. At first the results are unfamiliar enough to invite scorn from the critics, the scholars blinded by their own expectations. There is the playful use of adjectives, deliberate parodies on pulp fiction writing in descriptions of cathedrals and cupolas, museums and mausoleums. From these cleverly concealed clues we see the workings of genius intent on concealing what needs to be concealed – the secret of writing a best-seller.

Where’s the sex and violence?

Another part of the secret is to break away from the increasing pornographication of the novel. There is the acknowledged sexiness of Sienna Brooks but not a lot of sex. There are quite a few violent deaths, fifty shades of gore you might say, but no extremes.

Don’t listen to the critics

My advice is “don’t listen to the critics”. Borrow a copy of Inferno from a friend who will be happy to pass it on to spread the Brownian message. Study it with eyes wide open and strangely you will see the secrets concealed in its 461 pages printed on forest certified paper.

Acknowledgement

This post was guest edited by Dr John Keane of Urmston University