KF Andersen Leadership Newsletter June 2015

KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Next Generation
L E A D E RS H I P
NEWS
T H E F U T UR E O F
LEADERSHIP
Siegfried W. Andersen
In this issue
Return on You.......................................................................... 2
The Future of Leadership - Return on Talent.............. 3
Announcements........................................................................ 7
Our Training Program
MBL 1 – The Will to Lead – 2015 - USD 5,500
Shanghai – 8th – 12th June
Copenhagen/ Berlin – 7th – 11th September
New York – 19th-23rd October
MBL 2 – Leadership Communication – USD 7,500
Hong Kong – 14th – 18th September
MBL 3 – Lead the Business – USD 12,500
Barcelona – Fall
KF Andersen Leadership Academy SÁRL
Riedsortstrasse 39 • CH-6353 Weggis • Switzerland
Phone: +41 22 548 0744
Email: ngl@kfandersen.com
Website: www.kfandersen.com
MBL 1 – The Will to Lead - 2016 - USD 5,500
Singapore – 22nd -26th February
Dubai – 28th February – 4th March
Copenhagen – 4th – 8th April (DANISH speaking).
Berlin/ Barcelona – 2nd – 6th May
Shanghai – 30th May – 3rd June
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Return On You!
By Dennis F. Jakobsen,
Senior Partner.
Since 2000 Gallup has recorded the number of ‘engaged’
employees in US companies. Engaged means employees
who are involved in and enthusiastic about their work and
workplace. In 2015 the number stood at 30% - again – and
only1!
A similar study world-wide shows that only 13% of employees
feel ‘engaged’.
Translated this means that 70-85% of your employees
are indifferent, sleepwalk through their workday without
particular regard for their personal of the performance of their
organization.
One can only wonder what the impacts are to profitable
growth, wealth expansion, innovation in general and not least
to job creation?!
A key element to the low engagement is management. A wellknown saying states that people don’t leave their company
but instead they leave because of their boss. Facts show
that management accounts for up to 70% of the variance
in employee engagement, so to be a leader – or involved in
management work – comes with a mighty social and financial
responsibility.
Bear in mind that discontented employees are not only
unhappy at work they bring it with them home which
influences families thus multiplying the unhappiness factor. It
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
is misery all over, and you might be responsible!
Management cannot be blamed for all illness in the world;
however each individual has to take responsibility for their
own destiny and happiness, but we have to take this serious,
as other numbers suggest that up to 82% of management
hiring’s don’t possess the talent for the job2.
The research involved approx. 85 CEO’s and their executive
teams and measured self-assessment and rating from
employees as to adherence to these principles. The two scores
were not necessary aligned.
In further evidence of the scale we are dealing with only 1 in 10
are able to engage employees and customers, and on a wider
range of qualities to be considered great managers.
- A top team with a high self-assessment matched by a high
score (say 85% of 100%) by the employees will be a cultivated
team which the employees can trust to act in a respectable
and moral way. The signals are clear from the top team as a
whole enabling the employees to trust you, follow you, bleed,
sweat and cry for you
- A top team with a high self-assessment but with low rating
by the employees (say 60% of 100) will be a team perceived
to be in business for their own gain, a team lacking selfunderstanding and one which mis-directs its employees by
saying one thing and then often doing something else. The
research called these executive teams “self-focused”.
Boards, CEO, Executives must stand up and be counted for
this fact – they are not engaging enough in searching for,
selecting and training managers and leaders into what they
should be – promoters of growth and happiness in people.
It is our experience that the data to confirm how great
leadership correlates/ promotes economic growth have been
far and wide between thus making these discussions more of
academic nature than tangible.
Until now.
In “Return on Character”3 , Fred Kiel and his team has studied
the economic impact of golden human character traits in
executive teams.
From a field of nearly 500 behavioural traits they zoomed in
on 4 to be considered universal moral principles comparable
across cultures and geographies.They are:
Integrity: Telling the truth, walk-the-talk, do the right things
also when others are not looking in your direction etc
Responsibility: Taking responsibility of/for your choices,
standing by failures (no finger pointing)
Forgiveness: Accept and letting go of your own and others
mistake, focus on the right things
Compasssion: Empathy, having an interest for others and
their well-being
1) https://hbr.org/2015/04/what-great-managers-do-to-engage-employees
2) http://www.gallup.com/businessjournal/182378/one-people-possess-talent-manage.aspx
3) Return on Character, Fred Kiel, HBR Press
For example:
The research concluded – what you might think is obvious –
and what we at KF Andersen Leadership Academy have been
advocating for 30 years that leaders who choose to step into
character with noble character traits will also deliver superior
performance.
And, the numbers are staggering!
CEO’s and executive teams with the high self-assessment
matched by high ratings by the employee returned 5 (five)
times more economic value (RONA) than the self-focused
teams.
That is on average 9.35% vs 1.93%!
So, since behaviour is a conscious choice of yours – what do
you choose to be – Mr or Ms 9.35%, or Mr or Ms 1.93% ?
I now know where to look if I had USD 100,000,000 to invest…
What is the return on you?
Next Generation Leadership NEWS • June 2015 • page 2
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
THE FUTURE OF LEADERSHIP - the Return on Talent!
currently with Arla and on his way to Dutch Action,
Frederik has steered Arla’s revenue expansion
from DKK 49 BN annually to over DKK 80 BN. Most
importantly, in my view, Frederik has remained true
to himself. Frederik has superior professionalism, of
course, yet the same warm, relaxed presence and a
constant smile similar to the past.
By Siegfried W. Andersen,
Founder
“Can you see the future when you meet it?”
Over the past 10 years, I have confronted myself with
this question perhaps 4-5 times.
In my role as advisor to Boards, CEOs and executive
teams, I have met many successful and fascinating
people. Some people truly exemplify the future of
business, and some people (rarer) exemplify the future
of leadership.
Only several weeks ago, the question resurfaced
when the CFO of Arla Food, Frederik Lotz, announced1
the abolishment of the annual budgeting process.
Fluctuations in the price of milk make budgets
unpredictable by definition. Instead of guiding, budgets
become an annoyance when they try to explain
unexplainable numbers and dynamics.
In 99% of companies, budgets are management’s
illusion of control that transforms to finger-pointing
instead of spending time on what really matters:
people, innovation and customers.
Frederik Lotz is a past participant of my leadership
trainings with Maersk, and recently, I had the pleasure
of conversing with Frederik again. Frederik has
done exceptionally well for himself. As the ex-CFO
of Ferrosan and Danfoss, both industry leaders, and
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Therefore, it was no surprise to find Frederik
architecting a budget-free Arla.
Let me explain. My admiration is not the bravery
of abolishing budgets, although such decisions
are sufficiently significant to be considered the
“slaughtering of holy cows” in many corporations.
On any day, I would accept the savings of time and
hazard, although in the greater scheme of costs at
Arla, eliminating the budget may not amount to much.
Equally, I’m pleased to observe innovation expressed
by top management and the organization – it is truly
wonderful! Additionally, I applaud the political process
of obtaining internal approval and thereafter, retraining
people to think and operate differently.
However, the real triumph is the steadfast trust in
people to operate from a much higher level with a much
wider scope of responsibility and a freedom to express
themselves.
We are looking at a leader and his organization that has
undergone the cycle of management and leadership
practices and is currently moving to “Next Generation
Leadership”, with an expressed liberty for individuals to
accomplish things in their own way. As Frederik puts it,
“my job is to set the strategic direction, make it crystal
clear to everyone, then draw up the playing pitch for
everybody and then to encourage action and initiatives.
The job is not to control people, but to unshackle them”.
In effect, what Frederik is doing is leading culture.
Reflecting on our meeting, it occurred to me that we
all discuss a future with less management and more
leadership – and there it was right in front of me.
Can you see the future when you meet it?
Thank you Frederik, and thank you Arla.
In the same vein an honorary note goes to Morten
Mortensen, CEO of Jack & Jones, of Bestseller whose
mantras are “we have to grow people before we can
grow the business” and “hard work beats talent”2 . I am
dumbstruck by Morten’s meteoric increase of revenue
and profits over the past years where I close hand have
followed his leadership methods and I can only say –
the faith and trust he put in his people is 150%. Well
done Morten!
Future Leaders Are the Same Tomorrow As Today
The discipline of leadership has existed for thousands
of years and was first documented with Cyrus the
Great3.
There is little news in the art of being a great leader.
It has always focused on nobleness to others and has
typically required a significant amount of training to
become respected for your actions.
It will remain this way in the future.
The means of exercising leadership may change, i.e.,
savviness for social media, cross-cultural collaboration,
a faster pace of time, and network-based companies.
However, nothing will change at the core; leadership is
all about integrity of character.
Therefore, I can unhesitatingly explain my views on
leaders – future great leaders!
To become a great leader, most of us will have to train
to lead ourselves. We must raise our consciousness to
become mentally alert of our true selves and how to
1) Danish business paper “Børsen”, 18th March 2015.
2) Danish business paper “Børsen”, 28th February 2015
3) Xenophon’s Cyrus the Great: The Arts of Leadership and War + http://en.wikipedia.org/wiki/Cyrus_the_Great.
Next Generation Leadership NEWS • June 2015 • page 3
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
put ourselves in a position for the greatest leadership
contribution.
No one arrives at the top of any company without a
mirror of greatness – a mentor, a current or past superior
or a highly respected family member – daily inspiration
– to ‘learn 1 cm of news every day’, train values such as
prudence, tenacity, modesty and liberty, and intensely
sharpen your self-regulation and -discipline.
No one is born a perfectly balanced leader who can
manage, judge, and address stress well and also show
humanity and integrity. These qualities take time and
require help – coaching – and daily practice to:
1.
2.
3.
4.
5.
Become what your values are;
Become what your strengths are;
Stand up to what you can overcome;
Realize where you belong; and
Know that what you absolutely want to do, you will accomplish it.
The Future
Ask any senior executive which resource is scarcest, and
the answer will be: star talent.
Arla has actually gained better control of its costs!
This answer is somewhat strange. We knew this for a fact
20 years ago, it holds truth today; and the same scarcity
will occur in the future. Few, however, appear to respond
sufficiently to the challenge. Why?
The Morning Star Company is located in California, US.
Morningstar produce stomato paste– lots of it! Morning
Star processes 25% of the California tomato production and
supplies approximately 40% of the U.S. industrial tomato
paste and diced tomato markets. Morning Star has 400
full-time employees (and 800 more employees in the high
season), USD +700 MIO in revenue and has for the last
20 years had double-digit growth compared with industry
standards of 1%. All this in a company organized with one
CEO and everone below in one flat line! How do you get to
achieve this success in a low-tech, high-volume industry
with seemingly no organization?
The answer is simple. We live in a world of intelligent
arrogance. Most senior executives know that future talent
should be the highest priority so that they can safely step
down, move on and pass the torch to the next generation.
However, the tyranny of management and numbers
takes time and attention.
Hard-core managers would run away screaming; there is
seemingly no order, discipline or structures.
However, this could not be further from the truth. Read
more in Gary Hamels excellent “First Let’s Fire All the
Managers”4 , but one clue is CLOU’s (Colleague Letter of
Understanding).
You will realize that a human’s inner capabilities are
equally great for everyone; only their outer capabilities
are different.
You will learn to lift your vision, obtain higher perspective
on business acumen in making decisions and learn to act
from a wider map of human understanding.
The wisdom of great leaders can stretch and expand
your attention to an immense inclusiveness where you
achieve – as strange as it may sound – the sensation
that everyone and everything is a part of you, and you
become a part of everyone and everything.
From this point on in life, you do not need anyone to tell
you what to do or how to behave because it is a natural
part of yourself. You have developed from an individualist
to an inclusive team thinker and player.
Past leaders have always been similar to this description,
which is currently true and will remain so in the future.
Arla and the Morning Star Company represent the future of
leadership – über-cultured employees.
In a managerial world, everything must be predictable,
stable and have its place in the right sequence, etc. This is a
culture being cultivated. However, every rulebook runs out,
every procedure fails and you can either:
From boards, senior management, middle management
to the front line - to the media, investors, bankers,
lawyers, and accountants, they all have an obsession with
numbers and predictability and risk-adversity greater
than ever before. It’s called “the life of management
practices”, and we all have become victims.
Therefore, it is liberating to find Frederik Lotz, who in a
global organization dares to stand up and say: ‘enough
is enough – stop the wave of management’. As an
interesting side note, since ending the budget process
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Can you imagine this concept expanded even further?
.
4) https://hbr.org/2011/12/first-lets-fire-all-the-managers
1.
2.
3.
Stop and wait;
Turn to your manager for instructions; or
Take the lead yourself.
Taking the lead yourself is its own culture. It is a culture that
promotes initiative, risk taking, independence, maturity
to accept responsibility for failures, humility in success,
swiftness in decision making and pro-activity. Some people
take the lead by themselves, but when +50% of your
employees are ‘passive’ – awaiting orders – you have a job
on your hand to train, educate or to mature people.
Next Generation Leadership NEWS • June 2015 • page 4
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
The problem, as I see it, and it cannot be a reason for
not doing something, is that most companies don’t
know themselves.
We discuss how individuals must learn to lead
themselves to lead others. However, do companies
have clear ideas of what their values and culture
are? Have the executive teams discussed the dos
and don’ts? Has cultural training or enlightenment
been effectuated? Do people live by their values and
cultures? Does management have consequences in
response to aligned or misaligned behaviors?
Many companies have nice wall posters that read
“Corporate Values”. In actuality, however, they remain
nice posters, not a guide for how we want people to act,
breathe and live in our company. It’s called ‘avoiding
doing the right things’ – or harsher intellectual
arrogance!
We cannot say, ‘First, Let’s Fire All the Passive
People’. The passive people are the backbone of most
companies. However, we can cultivate their outlooks
and train their abilities to act and consider themselves
independent entrepreneurs in a large network that
is called a company. This training is called selfmanagement.
At Las Vegas-based Zappos, an online shoe store owned
by Amazon and known for a customer service-centric
culture, CEO Tony Hsieh has introduced holacracy
across the organization. Holacracy is a form of selfmanagement. Out of its staff of 1,500 people, 14% have
quit because they could not relate to the roles and
responsibilities of being a singular entrepreneur in a
wide network of colleagues who are all organizationally
equal.
One must know the thoughts of these 240 individuals
to understand their reasoning; however, the tyranny of
freedom can also be troubling.
Zappos is already an über-cultivated company with a
wide range of autonomy for the individual employees
to provide outstanding customer service. Therefore, one
would think it should be easy for everyone to be their
own master, thus let’s at least appreciated that +80% of
the employees accepted the challenge!
Therefore, your job as a leader begins by accepting
responsibility to become the coach, the encourager,
the cultivator and the visionary by being ambitious on
behalf of other people – preferably, with dignity.
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Our observations are that any evolution of how
companies are operated will follow some form of an
S-curve evolution, i.e., with pioneers, early adopters,
early and late majorities and slackers. However,
for +80% of the companies the evolution will be
a transition with pain and annoyance, and some
employees will never feel secure in a new culture of
leadership or self-management.
Thus, what Zappos is trying to achieve, what
Morningstar has practiced for decades, and what Arla
demonstrates is both remarkable and - the future of
leadership.
Why is the Future of Leadership so difficult?
The short answer is that we are all trained to act similar
to managers, not similar to leaders.
Historically the early 20th century witnessed
the development and implementation of many
management practices. Strategy, goals, KPI’s, planning,
allocating, budgets and controls became the ‘new black’!
Then, the foundation of capitalism was built on scare
resources; thus, everything had to be managed/
controlled to avoid waste and expenses. Currently,
and sorry for breaking it to you, with interest rates of
almost zero, a seemingly infinite amount of capital,
great minds available with a ‘click’, easier access to
raw materials than ever before and barriers of entry to
new markets coming down by the week and months,
capitalism in its old form has been “set on pause”. 90
years, however, of “management training” has set our
minds and established people’s outlooks in a very fixed
way.
The last decade of the century introduced a new
leadership practice constructed around humans,
convictions, attitudes and behaviors.
Mission, vision, shared values, manifesto, rituals and
successes made it fashionable to form a “Corporate
Religion” for everyone to comply with. Undoubtedly wellmeaning, most often this philosophy took a different
turn because it became “Business my way” and was
primarily driven by bossy CEOs.
Needless to say people discovered the real meaning
of the management behavior concealed in the skin
of ‘leadership and freedom’. The most dramatic
evidences were self-centric business gurus who ran
great companies over the cliff; some gurus left with
significant stocks and bonuses, and some gurus ended
up in jail (un(fortunately)).
At this time, read 2005’ish, the corporate world began
to wake up to the idea of noble behaviors, attitudes and
beliefs that focus on the bright side of human character
traits.
Next Generation Leadership NEWS • June 2015 • page 5
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
On a parallel track, a new group of young, intelligent,
knowledgeable and well-educated individuals started
showing up at job interviews. They had strong opinions,
a 360-degree view of opportunities and big dreams for
life. These individuals left interviewers scratching their
heads because a new human resource had entered
the work force. They practiced a liberal lifestyle where
you are your own boss, the designer of your destiny,
and definitely not married to anything, especially a
company.
To these individuals, excellent salaries were required
in addition to employers who offered balance: life
fulfilment and mental enrichment combined with
comprehensive and significant challenges that lead to
considerable achievements and noteworthy success
in no more than 5 years. Without such objectives the
jobs held no interest and they were on the move for
companies better suited to their mentalities, for leaders
who were admirable human beings, and for positions
as “partners” to management rather than subordinates.
If not previously, old management practices were put
under heavy pressure to become attractive.
The internet and computer science technology – and
with that a social revolution has strongly supported the
desire for dramatic changes in human individuality,
diversity, relationship responsibility, and overall
corporate social responsibility.
From here, the idea of NEXT GENERATION LEADERSHIP
was created, which is a completely different leadership
practice.
Old behaviors, attitudes and antiquated conceptions
of organizational structures must go. Followed closely
behind out the door are the ideas of command-andcontrol practices, bureaucracy, job descriptions, ‘we
have always done things this way’ etc.
Next Generation employees seek salaries based on
value-added contributions, remarkable innovations and
ideas and productivity increases. You will be met by the
attitude: “I can show you three objectives – each with
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
four key results – that upfront, I am willing to commit
myself to and contribute to your company. When we
can agree, I can work for your company; but give me
a month or two to look around to find a leader to
partner with, and then I can be more specific in my
contribution”.
A new order is being installed!
The mantra “if you are good enough, you are old
enough” will serve youth to take over from seniors
because they seek leaders who exemplify the
human qualities of noble leadership.
The mantra is born out of the sporting world where
you must renew and refresh any team to keep
it striving higher and to withstand competition.
The same idea cannot always be attributed to
corporations where complacency is a top 3 illness.
This is the first glimpse of a social wave that we
foresee will grow larger, and in 10-20 years, it will
be noticeable in the corporate world. You may say
I have been too black and white in my description,
which may be the case. However, fundamentally,
I am saying: “Managers, let go of your power,
control and bureaucracy. Give leaders and people
the liberty, freedom and obligation to offer their
greatest possible contributions to companies and
society. It will become a social movement that
we cannot and should not stop – we have better
embrace it!”
Über-cultivated employees are the future. To
Frederik Lotz, this means:
1.
2.
Put the right team in place – this is the most important task that you have as a leader because
any success depends on their ability to manage
responsibility and execute.
Give your employees freedom to work – the
strategic targets cannot be negotiated or dismissed,
but the way to achieve objectives can be discussed
and should largely be a choice of the employees.
3.
Change the focus from details to strategy – forget looking for the forest through the trees,
but instead, ascend above the trees to allow a clear
view of where you are heading and keep that as
your compass for anything you do.
To many people, this is a strange game of business,
but we live in a strange world. The future of leadership
partially requires understanding “old time”, golden
human values to be paired with solid integrity, which
must go hand-in-hand with liberty – the freedom and
the obligation to make the very best for oneself and the
company.
We are looking for leaders who will shape culture. We
are looking for leaders to admire or blame should
things go wrong, which is only human.
Ind the end we need you to test and respond favorably
to questions like:
- What is the return on you?
- What is the return on your leadership?
- Are you a great leadership prospect?
What happens if I gave you USD 100,000,000 to invest?
What would be the return on your talent (R-O-T)?
R-O-T should be the new KPI that is added to everyone’s
scorecard because it amplifies your contribution to the
company, especially the leader’s ability to make human
resources – the scarcest resource of all – a highly
rewarding investment.
Come join us! We train world-class leaders to become
NEXT GENERATION LEADERS!
Next Generation Leadership NEWS • June 2015 • page 6
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
The outstanding team of
The Will to Lead
in Copenhagen
9th - 13th March, 2015
Next up is
The Will to Lead
The outstanding team of
The Will to Lead
in Copenhagen
4th - 8th May, 2015
KF Andersen
Leadership Academy
n e x t g e n e rati o n l ea d e rs h i p
Disclaimer: KF Andersen Leadership Academy (KFA) has taken every care in compiling information and material
for this newsletter. KFA will not be held responsible for any loss, damage or inconvenience caused as a result of any
inaccuracy or error contained in the newsletter. Copyright: All material on these pages, including without limitation
text, logos, icons, photographs and all other artwork, is copyright material of KF Andersen Leadership Academy
(KFA), unless otherwise stated.
in Copenhagen/Berlin
7th - 11th September, 2015
Come join us! Sign up at:
www.kfandersen.com/booking
Next Generation Leadership NEWS • June 2015 • page 7