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The best leaders are not always 'charismatic'.
"Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves."
- Jim Collins. Good to Great. 2001.
Jim Collins researched leadership styles in companies that had performed the best over the long term and found a special kind of leader - a leader that usually nobody had heard of. That is to say, these companies were not led by people who were 'well known' for their leadership, well publicised, and fitting the stereotype of the 'strong visionary leader'. Instead they were hardworking, modest team-workers who didn't conform to the classic leader image.
According to Jim Collins, a Level 5 Leader "builds enduring greatness through a paradoxical blend of personal humility and professional will." Every one of the corporations that Collins identified as transforming itself from 'good' to 'great' had level 5 leaders in the critical transition phase. None of the comparison companies did. Furthermore, the colourful, dominant, celebrity leaders, are effective in the short term but do not achieve 'good to great' status for their companies, according to his research.
He describes Level 5 leaders as being timid and ferocious, shy and fearless and modest, with a fierce, unwavering commitment to high standards. Characteristics common to Level 5 leaders include: humility, will, ferocious resolve, and the tendency to give credit to others while assigning blame to themselves.
Andrea: Unhappy the land that has no heroes.
Galileo: No, unhappy the land that needs heroes.
- Bertolt Brecht. The Life of Galileo.
Paradoxically, great art lies in what the painter chooses to leave out as much as what s/he decides to put in. Similarly, the art of business strategy is not just about deciding what you are going to do; just as important is deciding what you are not going to do. Having a 'must not do' list is as important as your 'to do' list.
In an article in Harvard Business Review, Susan Bishop wrote:
"Today, saying no is our growth strategy. That is, our growth strategy is saying no to the wrong kind of clients - those who take us away from a business model based on our mission, values and areas of expertise".
And of course it is impossible to know to whom to say no, which projects to decline, and which customers not to deal with, if the enterprise is not clear about its mission, values and areas of expertise (core competencies)
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"I don't know the key to success, but the key to failure is to try to please everyone."
Bill Cosby. Actor (and multimillionaire)
"The talk turns to Bill Gates. Chan says Gates's business model works because he had the self-discipline not to diversify. "He can resist temptation, that's why he is so great. I think that's what I should learn from him."
Timothy Chan. China's second richest man. (Guardian. 08 November 2004)
"The art of leadership is saying no, not yes. It is very easy to say yes."
- Tony Blair
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However, let's not pretend it's easy! Though I advocate Saying No to projects and jobs that don't take you in the right direction, I admit that I find it difficult.
Let me know of your own experiences of focusing your creative business by Saying No to attractive but un-strategic opportunities.
The most effective leaders learn from other industries and sectors.
"Most [executives] think they are in touch with the outside world if they play golf with the vice-president of another company in the same industry."
- Professor Peter Drucker. Management Guru.
(Financial Times. London. 16 November 2004.)
Research commissioned by the UK Government's Department of Trade and Industry (DTI) and undertaken in 2004 by the Chartered Management Institute found that the most effective business leaders have several characteristics, including 'Lateral Thinking'.
Inspired leaders are 'lateral thinkers' who are "particularly adept at drawing on experiences outside their own sectors". They take a much broader view than less effective leaders, looking at things laterally - and they encourage their teams to do the same.
I believe that creative enterprises can learn a lot from businesses and organisations in other sectors - and vice versa.
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The Community Interest Company is a legal structure designed for Social Enterprises.
Company legislation was never designed for community and voluntary sector organisations whose ethos is 'not-for-profit' (or more precisely 'non-profit-distributing'). Social enterprises, in particular, have no legal structure designed specifically for them and tend to register as a 'Company Limited by Guarantee without Share Capital', sometimes as a 'Company Limited by Shares', or go down the co-operative route to incorporate as an 'Industrial and Provident Society'.
The 'Community Interest Company' was initially proposed September 2002 by the UK Government's Strategy Unit and the idea became a part of the 'Companies (Audit, Investigations and Community Enterprise) Act' which became law in October 2004. Its main provisions will came into force in July 2005 and the first CICs were registered soon afterwards.
The new legal entity is designed for small scale social enterprises, which are established for community benefit, and which use their assets for community purposes (in perpetuity). In addition, CICs will have the ability to raise funds by issuing shares.
A Community Interest Company is primarily a registered company but with additional features. The company can be a Company Limited by Shares, a Company Limited by Guarantee without Share Capital or even a Public Limited Company. CIC status can be regarded as an additional 'wrapper' around the basic company constitution and structure. (This is similar to charitable organisations first registering as companies limited by guarantee and then seeking additional charitable status 'on top'.)
This structure enables organisations to work within the well-established company framework without having either charitable status or the commercial motive of profit distribution.
Key Features of the Community Interest Company
1. The 'Asset Lock'. This is a restriction on distributing profits or assets to members. Importantly, this asset lock applies in perpetuity. (In the case of a company limited by guarantee without share capital, though there are no shares through which to distribute dividends, the constitution can be changed at a later date to distribute profits to members). If the organisation ceases to be a CIC, remaining assets cannot be distributed to members but must be used for community benefit.
2. The 'Dividend Cap'. A CIC which is incorporated as a company with shares is able to raise funds by issuing shares, but the dividend payable on shares will be subject to a cap, set by the Regulator, in order to protect the company's assets. The Regulator will set the dividend cap as a percentage of the amount paid up on the relevant share.
3. The 'Community Interest' test. The CIC must satisfy the regulator that the company's activities are in the interests of the community. (The legislation states that "a company shall satisfy the community interest test if a reasonable person might consider that its activities are being carried out for the benefit of the community".)
4. The Community Interest Annual Report. A CIC is obliged to publish an annual report which demonstrates how its activities have been for the community benefit and how it has involved stakeholders in its decisions. The report must contain details of any shareholders, dividends paid, and directors' remuneration. The report is submitted annually to Companies House and is held on the public record.
There are no particular tax benefits for CICs (such as those given to charities).
Charities. A company cannot be both a CIC and a Registered Charity. However charities in England and Wales will be allowed to convert into CICs with the permission of the Charities Commission. Charities will also be able to establish CICs as subsidiaries.
Download information sheet (PDF, 46KB)
Download community_interest_company_cic.pdf
How do you protect your creative works?
And importantly - how do you generate income streams from your intellectual property?
Creative people are rightly concerned about being ripped off, so we need to know more about how to protect our works by understanding and using intellectual property rights (IPR) such as copyright, trade marks, patents and design rights.
The really clever thing, though, is not just to use IPR to protect ourselves, but also to use it more positively, to generate income stream by actually encouraging people to use our images, designs, writing etc - in return for fees through licensing.
So how can we find out more, without reading all the text books or becoming a lawyer?
Personally, I'm a great fan of the organisation 'Own It' (www.own-it.org) who publish lots of great information about IP, contracts etc etc.
Their seminars are recorded and published as podcasts and I recommend them highly.
Seminars you can download and listen to on your iPod include subjects such as:
- How to protect your work on the Internet
- Photographing other people's property
- How not to get ripped off in design
- Putting a value on your intellectual property
- and lots more
Link to Own-It Podcasts
Let me know of any other great resources and I''ll publicise them.
Cassandra Postema and Dong Shing Chiu (pictured) are in the business of selling hope, wrapped up in t-shirts called ‘Hope Tees’.
Their Hong Kong creative enterprise is called ‘Dialog’ because it embodies an exchange of conversations between marginalised Asian textile craft wisdom and modern western design. The result is an attractive and fun range of resort apparel, bags
and accessories.
Dong Shing Chiu was born in Malaysia’s Borneo, grew up in Malaysia and London, and studied fashion with printed textiles there at Central St Martins with Cassandra. She has won accolades throughout Europe and New York with her print designs. Cassandra grew up in Singapore, Japan, Vienna and other cities. She was a New Generation Award winner at London Fashion Week prior to returning to Asia.
Dialog’s fashion is purpose-driven and interwoven into their fabric designs are values which embrace both fair trade and recycling. Their design hub produces fashionable products which also help micro businesses in impoverished areas, for example a women’s empowerment project in Sham Shui Po, the garment district of Hong Kong.
Their fair-trade fashion label has also developed a recycled fabric trimming which is incorporated into the design of accessories. Some of the people producing the trimming are teenagers who have come off the streets, and drugs, to learn new skills in a ‘halfway house’ project. The enterprise ensures that producers are paid a price which covers the cost of sustainable incomes for them and provides decent working conditions.
Hope Tees is a Dialog project which began when Cassandra was inspired to design a t-shirt to raise funds for the children of the Asian Tsunami disaster of 2004. Hope Tees now design and produce a t-shirts to raise funds on a project by project basis, in limited editions of 200.
Simply by buying a t-shirt, customers are participating in a dialogue with the producers but this communication can go much further because Hope Tees also has a blog which links Dialog, its consumer and its suppliers.
When the customer spends £10, they are getting much more than a garment in the package.
Crucially, the consumer is also buying a ‘story’. Wrapped up in the t-shirt is a description of the project the Hope Tee supports. The benefits to the customer include a feel-good factor which is much more than the skin-deep feeling of the cool cotton fabric. Other consumer benefits include a recyclable packaging tube which is consistent with the values and objectives of the company and its customers.
So what Dialog are really selling, in this neat little eco-friendly package, is hope. Hope for the future of marginalised culture, hope for the future of the planet, and hope for a fairer balance of trade between producer and consumer.
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Download this post as an artilce (PDF, 141KB)
Download dialog_hope_tees. Ideas in Action. David Parrish. T-Shirts and Suits. 220507.pdf
Link to Dialog Ltd
Link to Hope Tees
Link to 'What are you selling, really?'
Photos used with permission.
*Please contact me with other examples of What you are Really selling.
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For more on this subject, see What are you selling, really?
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"Leadership is not magnetic personality - that can just as well be a glib tongue. It is not 'making friends and influencing people' - that is flattery. Leadership is lifting a person's vision to high sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations."
- Peter F. Drucker
In a 2004 study, commissioned by the UK Government's Department of Trade and Industry (DTI), more than 1,500 managers were asked what they would most like to see in their leaders. The most common answer, given by over half of respondents, was 'Inspiration'.
However only 11% of people said that their leaders actually were 'inspiring'.
According to the DTI, inspiring leaders have the following characteristics:
Strong Strategic Focus. They keep the business focused on its strategic objectives, without distraction. (See 'Saying No').
Lateral Thinking. Inspired leaders have a broad view and draw on experiences and ideas from outside their own industry or sector.
(See Lateral Thinking Leadership.)
Vision and Communication. Not only are they clear about where the business is going, they are also able to communicate this vision clearly to others, often in simple graphic terms, avoiding jargon.
Principled. They have a strong set of values which encompass respect for others, honesty and openness, and are strongly committed to the business. They are often quiet and 'under-stated' rather than colourful and 'charismatic'. (See 'Level 5 Leadership').
Reflective. They are capable of being reflective and humble about themselves. They realise how much they don't yet know and have a strong appetite for continuous learning.
Risk taking. They are able to take risks - calculated risks - to achieve goals.
Accessible. They tend to have an 'open door' policy, not hidden away from staff. They will be found talking - and listening - to staff 'on the shop-floor'.
Value attitude. They value knowledge, skills and experience in others, but foremost they value attitude when evaluating staff and their contribution to the business.
In reality, according to the study, 60% of respondents said that their Chief Executive was 'out of touch with how staff feel'. Only 40% talked regularly to ordinary employees and only 19% had an 'open door' policy.
References
Inspired Leadership: An insight into people who inspire exceptional performance. Chartered Management Institute UK.
Inspirational Leadership. Department of Trade and Industry (DTI).
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*Please contact me with your comments and let me know about your experiences and stories about leadership, particularly in creative enterprises.
This blog section contains new information, ideas and examples for creative people who want to make their businesses and organisations even more successful.
Written by business adviser, trainer and creative industries consultant David Parrish, these articles add to the ideas and examples published in his book 'T-Shirts and Suits: A Guide to the Business of Creativity'.
Blog posts are listed by category - see below right.
Or go to a complete list of blog posts.
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