Education by Experience

A removed section from the original Chapter 9: An Urgent Need for Research and Change.

IN THE COURSE of more than a year and a half of research and writing for this book, I conducted a large number of interviews. For obvious reasons, more than one of those was with Roger Cowan. Many of our discussions focused on the way things were done at Panthers.

On one occasion, I asked a very specific question. How did that little club evolve into the half billion dollar enterprise that is Panthers today? What made the difference, what did he see as the most important parts of the management philosophy during his 40 years at the helm?

It was an important question, and he wanted plenty of time to consider. Eventually, we decided that it would work better if Roger answered it in his own words.

It is difficult to answer this question because 40 years is such a long time. Many changes have occurred along the way — in knowledge, attitudes, technology, even the way the industry is regulated. In the earlier days  I used a calculator for payroll.

To multiply by seven, for example, we turned a handle seven times. Accounting and stock control were all done manually. The management tools available today demand a much different approach to the use of management time and the expectations of administrative productivity. In many ways, management change has been driven by the changing environment.

The other difficulty I have in answering the question is that I was always inclined to try something new if it looked good. Some things were effective for a while, and made a significant difference at the time, but failed to see the long distance. Some became permanent influences and some failed completely. Some seem too small to mention, yet they held a lot of significance for me.

Applying a very strong filter, I came up with what I considered to be the three most important influences. I am sure it would be an interest­ing debate if members of our management teams were asked the same question. But there is a common thread that runs through the three I have chosen. Each one has quite a lot to do with the need to manage evolu­tionary change rather than merely cope with it. We tend to cope with the results of evolution in our private lives, but business requires a different level of thinking.

Thinking in Outcomes. The success of the human race has depended on the ability to take in information and make rapid decisions. Imagine if our hunter and gatherer forefathers had held meetings to evaluate the knowledge they had gleaned from their observations and then debated what action should be taken. They would have died of starvation or been eaten, and we would not be here to write about it. The natural decision making process for humans is still the same. Our senses collect informa­tion, feed it into our brains in an amazingly short time, and this central processor quickly decides on the options and tells us what to do. Just as well we have that power. You see a car hurtling towards you, out of control, and there is no time to hold a brain storming session to work out how to survive.

Quick thinking is important to us as individuals. My theory, though, is that when it becomes the predominant thinking style used in business, it is often inappropriate and can be downright dangerous. Looking back, I think I harped and nagged about this principle more than anything else in management meetings and training sessions. I was never better than partially successful. It is actually quite difficult to break out of the natural thinking style. It requires discipline and technique. And as soon as you relax the discipline, the natural way of thinking takes over again.

The difference between quick thinking and thinking in outcomes is demonstrated in the following example. The Security Manager puts a proposal to a meeting: there has been an increase in behaviour problems in the club, and the security staff should be increased to deal with the situation. Others in the meeting, respecting the expertise of the Security Manager and seeing the logic of his suggestion, support the proposal. The Finance Manager agrees that the extra cost is affordable. A quick vote and it is all done.

But someone skilled in Outcome Thinking says, “Hold up there. Let’s first agree on what we are trying to achieve. Is it just to cope with increased behaviour problems, or is there more to it?”

The best way to answer that question is by imagining another meeting, some point in the future -say three months ahead. You sit in that meeting, and ask, “What evidence can we find today that proves we made a great decision three months ago? Not just a good decision, but a great one?”

One person might say there are more people visiting the club now than there were three months ago. That proves it was a good decision. Another might suggest that the cost of security has decreased. Others might add that there are fewer incidents of bad behaviour now, the people causing the problems three months ago have gone, there have been no negative stories in the newspapers, and so on.

The challenge is now much different. It is no longer about coping with increased behaviour problems by increasing costs. A great decision would achieve fewer problems, less cost and increased patronage.

The most important debate is about what outcomes the group is willing to support, and what it believes it can achieve. They will usually be much more challenging than expected. When there is an agreed set of outcomes, the next challenge is to find every possible idea for achieving them. That then brings out the creativity in management and usually achieves a better result.

The number -and quality-of ideas might be surprising. In this case it might mean changing the entertainment mix, increasing public relations, zero tolerance in some issues, a different marketing approach, or any number of bright ideas that would never be raised in the quick decision scenario.

The point is that the natural process of quick decision making is the killer of creativity, and often provides solutions to the wrong problems.

Thinking in outcomes ensures that the best goals are set and that they will be creatively pursued. It also encourages creative opposition, and avoids the dangers of ‘groupthink’, where people tend to go along with each other because of respect for expertise or position.

In this situation, you are able to manage the thinking processes, rather than going along with nature.

Values, Beliefs and Culture. Our deep-seated beliefs and values are mostly developed in the very early years. Culture develops from experi­ences, and dictates how people treat each other and expect to be treated. The behaviour in an organisation is a reflection of its culture. The combined beliefs and values of the staff, managers, board, and custom­ers form a rich cultural soup that has to meet the needs of everybody. We see examples every day, and in every part of the world, of the enormous problems caused by clashes of culture, most of which can be traced back to differences in beliefs and values.

Beliefs and values are not impossible to manage. We cannot ask people to change what they believe or how they feel, but we can structure an organisation around the differences. Being aware of the differences allows us to manage them, and achieve a positive culture without the clashes.

Recognition and understanding of values was one of the topics of man­agement training at Panthers. There are many ways of finding out what drives people. When there is better understanding, people work together more harmoniously. There are some good programs and tests available, and most of them are interesting and non-threatening.

One important advantage of setting agreed outcomes is that they define what the group wants to own and achieve in working together. Where there are opposite values, the list will be more limited, but there will still be common purpose.

There is another element in play in the club industry – one that is much less likely to affect other businesses of similar sizes. There is a much stronger board influence on culture, varying significantly from one club to another. Some directors in some clubs enjoy socialising with staff, talking to them during breaks and even – in ways ranging from very subtle to quite demanding – interfering in the way they work. The impact on culture can be profound. Even worse, the influence can be difficult to see until it is entrenched and starts to show up in behaviour.

That is one of the good reasons for clearly separating the responsibili­ties of management from those of directors. A good culture is built on consistency —what is said and done has to be within consistent patterns and plans, and everyone has to be singing the same tune. A good management plan can easily be undermined, quite unknowingly, by directors getting too close to staff and not knowing what the tune is.

The cultures and sub-cultures throughout an organisation will affect the behaviour of people, their satisfaction and productivity. One important subculture is the relationship between board and management. It is the one most difficult to manage. Some of the chapters in this book spell out the type of problems that can arise when it is not well managed.

Panthers workshops involving both management and board always centred on strategic issues. If I had the time over, I would try to interest the directors in joining other workshops that focused on values and culture. In learning to recognise values and understand their impact, everyone could work together to build a shared vision about the cultural objectives of the business. It would not be an easy task, considering that directors often have many other commitments, and the difficulties in getting all the key players together for the time required, but it would be worthwhile.

Evolution and Revolution. Larry Greiner wrote of his theory in 1971, and it was almost 20 years before I discovered it. I wish I had studied it much earlier. It would have helped my understanding of periods of stag­nation and other difficulties.

When a business only has a few employees, the style of management is not as important. The entrepreneurial manager with one assistant and lots of subcontractors can be autocratic and successful. As a business grows and matures, it requires adjustment. Autocracy will not be as effec­tive in a business employing 3,000 people, where the best results come from communication, delegation, participation and good controls. That is not to deny that some successful larger companies are run in a very autocratic fashion. It simply says that Greiner’s research influenced his theory that growth should be handled differently.

There are several stages in the path from small to large, and from young to mature. The needs change through the range of creativity, direction, delegation,  co-ordination and collaboration, each one building on the previous phase. As the business evolves naturally through one stage, pressures start to build almost to bursting point. This causes its own crisis. It is a case of success creating its own problems.

Had I understood the principles much earlier, it would have allowed a smoother transition between the Club’s evolutionary phases. It would probably also have meant a quicker and more effective pathway to what I eventually hoped to achieve — on the democratic ideals of an organisation driven by principles of collaboration. In our case, it was probably more spectacularly noticeable because of the rapid growth of the business over a relatively short period.

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Those three principles stand out in my mind because of the impact they had on my thinking. I was influenced about outcomes by reading a great little book on outcomes and performances in my first few years at the Club. I read a lot about culture and did some courses on values and beliefs. In everything you read, you will probably find some gem of wisdom that can improve how you do things. A chance meeting, a brief conversation, a quick word of advice – can plant the tiny seeds that grow into the ideas and concepts that become part of your life.

In my first year at the club I met a director of the City Tattersalls Club in Sydney. One of the things he said that struck a chord in me was that each of us is a totally different person in the eyes of every person who knows us. This had quite an impact on me. It changed not only the way I saw others, but also how I saw myself. We are many, many people living inside the same skin.

In my first year at the Club, I also received some advice from a man named Ken Charlton.

Ken had been a big name in rugby league in the 50s. Around the same time that I started with the Club, he was, if I remember correctly, working as a representative for one of the breweries. He seemed genuinely inter­ested in seeing me make a success of my radical move from teaching to club management. I came to respect him, and when we talked I listened carefully. He told me one day that it is much more effective to ask ques­tions than to make statements. It was simple advice that sounds no more than good common sense. I don’t think that either of us knew just how profound it was at the time. I had an amusing example of its power some years later.

The Club was in the middle of one if its extensions, and I was walking through the work area. We had employed a very clever air conditioning expert, and I wandered up and stood beside him – basically just for a chat. I had no idea at all of what he was doing. I have never been mechanically or technically intelligent. He was explaining some of the work, and I said, purely to show him that I was interested in what he was saying, “Why do we do it like that?”

He stopped for a minute, looked back at the job, and looked at me again. After a pause he said, “You know what? You’re right. That’s not the best way to do it. It would be better if I …

I had asked a dumb question, he mistakenly thought it was an intelligent observation and took it as a challenge to find a better way. Meanwhile, I stood there trying to look as if I really was intelligent. His final disillusionment might come if he reads this book.

But over the years I found that asking questions was important to culture as well as results. Imagine an assistant in the marketing depart­ment prepares a corporate design and presents it to the CEO for approval. The CEO could say, ‘No, I don’t like that. Change the red to purple and make the yellow stronger. Use upper case in the title.’ After the time and effort that has been put into that design, how does the assistant feel about that reaction?

What if the CEO asked questions instead? “Do YOU think the red sends out the message WE want? What if WE tried a bit of purple? How do YOU think that would go?” Plenty of YOU clarifies who still owns the project. Plenty of WE says we are here to work together and help each other.

Questions involving YOU and WE raise the odds in favour of a more motivated assistant, a higher degree of ownership of the design job – and a better design. It is the cultural difference between the organisation being driven autocratically from the top and people collaborating for a better result.

The three main issues I chose are closely linked. They are all about people. Setting outcomes before deciding what to do smooths out values and cultural differences. Some of the essential components of a good, productive culture are well constructed forward plans, logical decisions, and ownership of the plans by all who participated in their making. Outcomes thinking is an important tool.

In some ways the three concepts are a little idealistic. Despite the efforts of a committed management team, we never really reached our own measure of satisfactory. Some sections at Panthers were always closer than others, but we never stopped having to remind people to think in Outcomes. Culture was constantly on the agenda for testing, meas­uring and improvement. And having an organisation fully embrace the Greiner concept of Collaboration is a really challenging dream. Culture and decision-making work in a similar way to systems in a business. Without constant review and discipline, they gradually revert to chaos. What is certain, though, is that we were much closer to those ideals than we would have been had we not been conscious of them, and committed as a team to their pursuit.

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Related Topics

• Part 26 — Evolution Then Revolution … And Repeat
• Part 28 — The System is the Solution
• Roger Cowan
• Major Player — Leo Armstrong
• The 1983 Strategic Reset

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Related Themes

Club Structure · Governance · Growth· Culture

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