FSA New Leadership, renewed Culture

“Lord Adair Turner needs his firefighting skills”

"The Financial Services Authority is the worst financial regulator in the world." ... But it is not so bad that it can’t be made worse by Adair Turner ... growled one of the City’s leading figures following confirmation that Lord Turner would be the FSA’s new chairman.

The statement may be on the extreme wing of City opinion. But it underlines the scale of the task Lord Turner is taking on. The supervisory failures over Northern Rock have blown the FSA’s reputation out of the water and led to a crisis of confidence in the organisation.

Morale is low and the FSA is said to be finding it increasingly difficult to recruit good people.

While the FSA still has many admirers on Wall Street, London's lead over other financial centres feels like it is narrowing. The fight against financial wrongdoing – as measured by fines and scalps – seems stalled. And perhaps the biggest prize of all, getting a fairer deal for ordinary consumers, seems as elusive as ever.

FSA officials seem to spend a great deal of time studying the fine print in financial advertisements. But they missed the biggest potential disaster since the the authority’s formation – Northern Rock’s business model – which was staring them in the face.

Increasingly now, the FSA has no one to blame but itself. It already has sweeping powers and when it asks for additional weapons, it gets them, in recent months winning additional powers in banking supervision and dramatic new powers to offer witnesses immunity from prosecution. It also has plenty of resources in the form of a 2,000-strong army of well rewarded and well qualified staff. What it lacks, is a can-do culture.

This is a bureaucracy that still measures effectiveness in terms of numbers of lever-arch files filled and length of meetings attended. It is an organisation with a bottomless capacity to create consultative documents but less appetite to root out bad behaviour and punish it. Its instinctive reaction is to create more rules for everyone, including the innocent majority, rather than to go out and challenge the guilty minority. Its senior people rejoice in issuing myriad warnings and sermons, but then tend to see their work as done.

Lord Turner’s experience of business and bureaucracy make him an attractive candidate for the job. (Quite why he wants it is less clear). He has one foot in Whitehall and one in the Square Mile, but is not seen as too much of a City insider – in spite of his service over the years at Merrill Lynch, Standard Chartered and Paternoster. And as a fully paid-up member of the great and good on government working parties should help him to avoid the more obvious elephant traps of public life.

In the City he may be regarded with a little suspicion. His relations with new Labour when running the CBI in the mid 1990s were seen as a little bit too cosy at times. His pro-business credentials cannot be doubted, but some in the City see him as too cerebral and technocratic with little feel for the shopfloor of financial services.

It is providing leadership that may be Lord Turner’s biggest challenge. As part-time chairman, he cannot do much about the minutiae of the regulatory work.

But culture works down from the top. The FSA needs someone with the capacity to inspire the troops into enforcing better behaviour and preventing new disasters without piling up costs and stifling innovation. If Lord Turner can achieve that, he will earn his peerage all over again.

Source: Times 30 May 2008

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Us-and-them Syndrome

“Us-and-them syndrome eats away at al-Jazeera English”

Al-Jazeera English was launched in a blaze of publicity a little over a year ago, but what has happened to the dream of creating a multinational broadcaster since is dispiriting. The collapse in morale among employees, whether caused by financial constraints, a clash of cultures or political pressures, is a pity, because competition for Anglo-American news media is a healthy thing.

Discord was sowed from inception. The English channel operated at arm's length from the Arabic channel, offering better terms and conditions than those offered to staff at its headquarters and employees elsewhere - after all, Sir David Frost was on the payroll.

The repeated emphasis that the international channel would be independent from external influence also created ructions, because it implied that the original Arabic news channel was somehow not. Pointedly, its name was changed from al-Jazeera International to al-Jazeera English just prior to its launch.

Nigel Parsons, the English channel's managing director, started well, building a channel not wildly different from the BBC - a bit bland but certainly careful to report in a balanced way.

Yet it was never clear who the viewer was: outside Africa and Asia, resources were stretched. The mix of news could only have pleased diehard internationalists; most people also want a good dollop of news from home, but there was little from the US or Britain, where many English-speaking viewers are likely to be. There was also precious little marketing or viewing data.

Then, al-Jazeera English began to be reined in. From the summer, management clamped down on overheads and benefits, querying whether expatriate journalists needed to be paid so much. Parsons was excluded from board meetings, to the point where he reportedly had to glean information from a secretary.

Now, the climate of suspicion is such that some believe that political pressure will be exerted on their journalism, although accounts as to whether this is happening vary.

Al-Jazeera in Arabic, of course, made its reputation by being in tune with the views on the Arab street, but today's talk is of a softer line on the Saudi regime.

Two Arabic journalists recently published interviews with militants on their personal websites because they could not get them aired. One was with Baitullah Mehsud, the leader of al-Qaeda in Pakistan, who is suspected of involvement in the killing of Benazir Bhutto. The Mehsud interview, done in December before the assassination, did not appear, but a second interview conducted with Mehsud in January did air in the past week. It is easy to stir strong feelings here, and the reality of how news organisations work is always more complex than outsiders think. But trust is breaking down. In December, an emotional staff meeting heard an avalanche of grievances. At least one industrial tribunal hearing is in the offing, and the situation is summed up in the words of an employee internet posting:

“You don't need us Westerners any more do you?”

Al-Jazeera English was meant to help extinguish such them-and-us sentiments; that they are emerging shows how bad morale is. The emotion behind the scenes is beginning to surface publicly, and once credibility drains away outside, it is very, very hard to win it back.

Source: Times Online

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John Thain to deepen 'team work' at Merrill Lynch

“Thain plans overhaul of Merrill Lynch management culture to better emulate Goldman Sachs”

Thain, stated that he believed there was insufficient co-operation between senior Merrill executives. “Merrill has a strong culture but they don’t have the same teamwork at the senior level,” Thain said. “It needs a more co-operative team approach.” Goldman Sachs has long operated on a consensus basis style that dates back to its history as a private partnership firm.

Consensus Style: Effective strategic leaders know how to get everyone involved in policy making and build consensus in the process. Within large complex organizations, whether public or private, consensus is the engine that sustains policy decisions. No strategic leader can succeed unless he or she can build such consensus. Thus, the search for consensus among peers, allies, and even competitors becomes a requirement for shared commitment to a national policy, and to corporate, business policy.

Challenges of Decision Making ...

A team leader has two overriding responsibilities: First, the leader is accountable for the effective functioning of the team. The leader monitors team performance and takes action to improve team effectiveness. Teams tend to perform best when responsibilities are shared and leadership tasks are distributed among members. Empowered team members are more likely to take responsibility for team success. Second, the leader is responsible for developing a stable leadership structure. Many decision-making teams tend to be more effective when the framework for leadership is clear. These teams tend to work more efficiently, have fewer interpersonal problems, and produce better outputs. Common observations of the strategic decision making process that contribute to the leadership challenge include:

Diverse Team Membership
Lack of Policy Guidance
Low Team Authority
Internal Politics
Organisation Inertia
Lack of Integration
Gaps and Ambiguities

Given these difficulties, it should be no surprise that team meetings can be a journey into foreign territory for each team member. By adopting a "consensus style" of leadership, some of these problems can be eliminated.

Strategic Teams
A strategic team's goal is to make decisions that best reflect the thinking of its members, thus 'forging' consensus. One can easily confuse what consensus is and isn't. Here are some guidelines (Scholtes 1988)

Consensus is having a shared vision for change and common ground found through understanding and negotiation. The framework for consensus is

* Set an agenda for change.
* Build networks and coalitions.
* Conduct bargaining and negotiations.

Consensus Team Decision Making Model (CTDM) identifies factors that distinguish high-performing teams from less productive ones:

* High Conceptual Level
* Prudent Consensus Approach
* Vigilant Decision Management.

CTDM portrays a thinking, collective group capable of high performance. Within the three pillars, there are 14 success factors critical to excellence in team decision making.

CONSENSUS is
* both process & outcome. Consensus is a process in which everyone has their say.
* agreement, but not necessarily complete agreement.

CONSENSUS is not
* authoritarian, perfect, conformist, or bland.
* the team leader imposing decisions & team members complying.
* a perfect team agreement representing first priorities of all team members.
* a unanimous decision.
* majority vote.
* "groupthink,"
* a bland, watered-down proposal having no substance, and entailing no risks.

A consensus decision is one that all team members can support.(Brilhart and Galanes 1989). Effective consensus falls somewhere on a continuum between perfect agreement and total discord.(Priem 1990).

Strategic decision-making teams must operate at the proper conceptual level. This means employing multiple frames of reference and "staying out of the weeds." They search for consensus among themselves, within their organizations, among interested groups, and with the public. Finally, strategic teams avoid consuming limited resources or prolonging action, thereby missing strategic opportunities.

* What is the success factor?
* Why is it critical to strategic teams?
* How do high-performing teams exercise the factor?
* How do less productive teams fail to apply the factor?
* What methods help strategic teams improve?

How you make decisions at the strategic level is just as important as the decision itself. The best decision in the world is nothing without a powerful consensus for action. The most perfect consensus in the world is useless unless it has produced a decision that is good for the organization. At the front end of the entire consensus team decision making process is something called "inputs." People who enter into a consensus decision making must come armed with critical and creative thinking skills that will allow them to efficiently and effectively function at the strategic level.

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