Archive for September, 2010

Competence and Risk….. Pigeons coming home to roost!

Tuesday, September 28th, 2010

Are your pigeons coming home to roost?

The news that the Irish government is to wind up Allied Irish Bank, and in doing must consider the markets reaction and the impact on the Irish economy and government (and of course people), is perhaps an extreme example of the proverbial pigeon coming home to roost.

This one is very tatty indeed having been battered by forays, into the debt boom. If Anglo Irish Bank’s exposure to Quinn Insurance is indicative of a lack of effective risk management and associated management competence, it will be interesting to see what is in the balance sheet at Allied Irish.

The bubble made making money appear easy as the market surged upwards, everyone was a Super Hero – and the risk was managed by wonderful IT systems. But there is no substitute for competence – not just technical risk, but management (governance) competence. The ability to understand what staff are doing, (however arcane or black box it may appear), and when it is appropriate to challenge it, and to do so effectively are key competencies that are developed not innate. Business is still about people.

From the outside we cannot know the motivations, and positive actions that led AIB to build up such a toxic balance sheet. We may however seek to ensure that our own Super Heroes do not fall into the same trap and become homing pigeons.

Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively. Solutions that engage, motivate and fit around, rather than disrupt the business.

Attracted by Super Heroes?

Tuesday, September 21st, 2010

Super Hero In these uncertain times, substantial comfort is possible from a belief in Super Heroes, not least from the possibility of rescue. High achieving staff and managers are at particular risk of believing their own PR simply because it is easier.  Confronting difficult markets and working on those challenging influencing skills is not so easy. 

 

When an entire management team subscribe to the belief, then it often leads to significant trouble. ‘Star’ cultures often make organisations vulnerable.

  If the team believe themselves Super Heroes, the resultant loss of contact with the real world leads to significant reputational and other market risk.  Goldman’s and Lehmans may be recent examples.  Worse is when the customers have bought your ‘Star’ PR taking their business away when the star leaves. 

 

Cultural consequences may include difficulties with motivation and engagement as Super Heroes, (being marvellous), tend not to see the talents of other functions, or to be able to communicate with them.  Effective team working will probably prove impossible as the organisation evidently values the Super Hero income earners only.   Depending on the tax advice, the result is an atomised group of service companies/consultants with greater or lesser commitment to ‘customer’ satisfaction. 

 

Yet it need not be like this; Super Heroes are capable of and may be encouraged to learn how to both respect and talk to their ‘mortal’ colleagues.   Talk to us, in confidence and without obligation about ensuring your Super Heroes develop the competence and confidence to manage in uncertain times.

 

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