Author Archives: Dr Sarah Dixon

About Dr Sarah Dixon

Dr Sarah Dixon, Dean of Bradford University School of Management, completed her MBA at Kingston University, subsequently joining them where she held a variety of roles, culminating in director of postgraduate programmes for the Faculty of Business and Law. Gaining a DBA from Henley Business School in the interim, she went on to research activity at the University of Bath taking on the role of head of MSc programmes.

Her business career at Royal Dutch Shell Group included petrochemicals business management in Vienna and Moscow and later positions in strategic planning and mergers and acquisitions in London. She moved into business consulting as director of the strategy consultancy, Albany Dixon Ltd before joining the School in September 2010.

Specialties: Strategy, Organizational change, Dynamic capabilities, Organisational learning

How do we narrow the divides – rich and poor, North and South?

Rich and Poor DivideThe great divide – between the rich and the poor, and the North and the South of England – continues to exercise the minds of politicians and economists in the UK.

Ed Miliband in his speech at the Labour Party Conference used the phrase ‘one nation’ 57 times with reference to his concern to reduce the divide between the rich and the poor, and particularly between the bankers and the rest of us.

His 65-minute speech was made just yards from the site of Disraeli’s famous One Nation speech in Manchester and he told his party conference that Britain is being governed with one rule for those at the top and another rule for everyone else.

Recent  statistics show that indeed the gap between the rich and the poor is growing in the UK with wages at the bottom end falling in real terms whilst top executive pay continues to rise.

Channel 4 covered the report by the High Pay Commission, which said that average wages have risen by around 300 per cent since 1980, while the highest paid company executives’ pay increases have soared by more than 4,000 per cent over the same period.

The report recommends, among other proposals, that companies publish a ratio reflecting the difference between the top and the median wage. It also calls for executive pay to be simplified, and for the establishment of a new body to monitor high pay.

(If you can’t see this video click here)

Similarly, statistics comparing economic growth and unemployment indicate that the North fares much worse than the South of England.

Against these depressing statistics, for those of us living in Yorkshire if we think positively we can list several very important advantages of living in this region.

All our big cities and towns have:

  • Easy access to beautiful countryside and historic sites – wonderful for tourism and people interested in outdoor pursuits

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  • A number of excellent higher and further education institutions on the doorstep  offering excellent access to a skilled and educated workforce –  Bradford University and Bradford College right here in Bradford, as well as Leeds, York, Sheffield, Huddersfield and others too many to mention
  • Dedicated and passionate people, proud of their great heritage and keen to support the economic and social regeneration of their cities
  • And, as a consequence of the North South divide, we also have very low house prices!

Bradford has all these advantages, and more. However on the other hand one of the key disadvantages hampering the attraction of businesses to Bradford is the poor transport infrastructure, specifically the lack of good rail connections, including the absence of a good rail link to Leeds-Bradford airport.

leeds-bradfordBusiness lobbying groups in Bradford, such as Bradford Breakthrough, which represents Bradford’s leading private and public sector businesses, are pushing hard for the allocation of funding to support such a link from the £1bn transport infrastructure fund for West Yorkshire that has recently been established.  Let us hope they are successful.

Every country in the world battles with these problems of divide, whether it’s which side of the railtracks are more prosperous or the growing gaps between rich and poor.

How is your country tackling these – and what do you think is most likely to be successful for your country – and the UK?

Please share your thoughts in the comments below

Related Post

Three winning elements of a business strategy to ensure Olympian success

Most of us have been swept up for the past few weeks in the Olympics and the Paralympics outstanding achievements. What a great success they have been for Team GB and the country.

For every Olympian win, there will have been a clear strategy for success developed and executed over years, leading to the eventual success in the stadium – whether gold, bronze or silver.

While the sports teams celebrate and enjoy their wins, what might businesses learn from competition in sport? There are three main areas that provide valuable insights:

  • Having the right mindset
  • Ensuring good preparation
  • Working in a team
"Image courtesy of Master isolated images / FreeDigitalPhotos.net".

“Image courtesy of Master isolated images / FreeDigitalPhotos.net”.

1. Have the right mindset for business success

Having the right mindset – focus, dedication, goal orientation – are all words used to describe Olympic athletes, and equally to describe our business leaders.  Going for gold can apply both to an Olympic medal or business success.

But the silver and bronze medals also have their place as the ‘me-too strategies’ of fast-followers rather than leaders in business.  Not all endeavour is crowned with success, and the Olympic athlete must deal with both success and failure – having the capability to pick yourself up after failure is a pre-requisite for great athletes and business alike.  Not all ventures succeed, no matter how dedicated and focused the approach.

olympics Ennis 2. Ensure good preparation

Years of preparation go into being an Olympic athlete, with a gruelling daily training regime.  For businesses too, detailed planning and a build-up of capabilities over time are vital.  The identification of capability gaps and the development of core competences ensure that businesses have a strong foundation from which to make a bid for strategic supremacy. At the same time high standards of operational excellence provide for the ongoing survival of the organisation.

3. Work in a team

When the Olympian crosses the finishing line, or fails to meet the final challenge, they have a strong support network –  coach, fellow team members,  home club,  friends and family and last but not least their audience.

Athletes acknowledge the motivational power of strong audience support.  Similarly for organisations, knowing that their customers and key stakeholders are supportive of their strategy (insert link to Sarah’s transformational strategy blog for bold wording) helps to drive business forward.

In Bradford’s MBA, students learn just how reliant leaders are on their teams for support in developing and implementing strategy.  Last but not least, the coach or mentor is gaining credence as an important factor in personal success for individual managers.

What do you think businesses could learn from competition in sport?

Why Bradford businesses should nurture their female talent

Sarah-Dixon-

An interesting article has been published in Strategic Management Journal, one of the leading US academic publications. It presents a study into whether female representation in top management improves firm performance.  The study provides an additional perspective on a key finding by the Davies report on Women on Boards published in February 2011, namely that greater board diversity may have helped to avoid some of the catastrophic company failures in the recent economic recession. As stated in the Davies report women ask awkward questions and are less likely to be affected by groupthink.  A study in 2009 by Wilson and Altanlar identified a negative association between female directors and insolvency risk. Gender balance reduces risk since women generally have less appetite for risk.

TheDaviesReportWomenonBoardThe data source for the Strategic Management Journal article was the S&P 1,500 firms, an index of US public companies reflecting the US equity market, covering a period of 15 years.  The conclusions of the study were that  female representation in top management improves firm performance, but only to the extent that company strategy focuses on innovation. Importantly, the research finds no evidence that the presence of women on boards impairs performance.  However, the greater the focus on innovation in the company, the greater the effect of board gender diversity on performance.

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Since innovation, whether in product, service, or systems, is critical for firm success and survival, the message to Bradford businesses must be – nurture your female talent and ensure strong female representation on your management team.  Not only is this likely to have a positive impact on your firm performance, but also it will also be highly motivational for  women middle managers, ensuring that there is pipeline of talent.

The latest update on the Davies report, published in March 2012, highlights significant progress towards the target of 25% women on FTSE 100 boards by 2015 – for the FTSE 100 the proportion of women on boards increased from 12.5% to 15.6% from 2010 to end February 2012, and  for the FTSE 250 from 7.8% to 9.6%.  The local Yorkshire-based  company, Inspirational Journey, has no doubt contributed significantly to this increase by raising the profile of gender balance in business.

Circular economy means a rethink for business

BUSoM-Circular-economyI recently presented a keynote speech in Amsterdam at  the launch of a circular economy study tour for Business Schools, organised by the Ellen MacArthur Foundation. The circular economy is a generic term for a new industrial economy that is restorative and in which materials flows are closed loop. Instead of consuming scarce resources, that either end up as carbon dioxide in the atmosphere or as waste in landfill, the circular economy envisages a virtuous circle which utilises renewable energy and which produces goods which are recyclable and generate no waste. A recent study by McKinsey and company commissioned by the Foundation used detailed product level modelling and estimated that European manufacturers could save $320 Billion pa in the transition phase and up to $630 Billion in an advanced Scenario.

The circular economy requires us to rethink all aspects of business, for example:

  • Rethink supply chains – can we manufacture locally more efficiently than overseas? Can we recover used products on a local scale even if initial manufacture is centralised?
  • Rethink design so that products are more durable and capable of recovery or remanufacture
  • Rethink manufacturing and operations management – how can we secure renewable energy and what new technology and processes do we need to build in recycling potential in our products?
  • Rethink financial models and accounting systems – how can we demonstrate the economic viability of our new systems? At which point does economic viability tip in favour of product recovery?
  • Rethink sales and marketing – should we move to a leasing model, with the manufacturer retaining product title and responsibility for its recycling? How can you break the kudos of “ownership”?

The study tour showcased some companies in the Netherlands that are already implementing circular economy approaches. In and around Bradford there are also several companies engaging with new ways of business which fit the circular economy concept. With its strong tradition of innovation and enterprise I am sure Bradford and the Leeds City Region have the potential to be leaders in this arena.

The purpose of the Ellen MacArthur Foundation study tour was to attract the interest of more business schools to teach the concepts of the circular economy, so I am sure businesses will be hearing much more on this topic. The Foundation is also working closely with Schools, to educate our young citizens about new economic models.  Bradford University School of Management will be launching its own distance learning MBA in Enterprise, Innovation and Circular Economy next year. For the School engaging with the ideas of the circular economy means keeping ahead of the game in terms of new economic developments, and for the city the circular economy has major implications for economic regeneration.

Bradford Means Business

front-cover-wilful-blindnesssLast year Margaret Heffernan, author of the book ‘Wilful Blindness: Why We Ignore the Obvious at Our Peril’, visited Bradford to give a talk in the School of Management’s guest lecture series which are open to local businesses.  The theme of the talk was that managers and businesses fail sometimes to see the most obvious things and it is often those things that sow the seeds of their destruction.  Amongst examples Margaret provided at the time were the Catholic Church, the subprime mortgage lenders and BP’s safety record.  The latest example of wilful blindness is Rupert Murdoch’s failure to recognise the issue of phone hacking in his organisation.

What can Bradford companies do to avoid this trap?  How can organisations ensure that they can differentiate between doing things right to grow the business and doing the right thing by employees and society for a sustainable business? I would suggest some of the following:

  • Recognise that sometimes your employees tell you what they think you want to hear, rather than  the truth, especially if it exposes them in some way as ‘wrongdoers’.
  • Communicate at all levels on an informal basis – it is amazing what you find out by chance about your business from a chance discussion with an employee.
  • Organise formal challenge sessions for your strategy  and your business operations – encouraging participants to work through different scenarios to their logical conclusion.
  • Ask the questions: what is right for the business, what is right for the employees, what is right for society, what is right for the environment and what is morally right for me as an individual?
  • Ensure your board of directors come from diverse backgrounds – this helps to avoid groupthink and complacency with the way we do things around here.

The theme of wilful blindness belongs to the wider debate on building sustainable businesses that contribute to society and protect our environment.  It is critical for businesses to generate profits for reinvestment and growth, but we need new business models for the future  that change the focus from profit alone, to  a  triple bottom line – economic, social and environmental.

Will Quotas get the right Women on Boards?

woman-boardroom-men-workingI recently attended a panel discussion on Women on Boards organised by Pinsent Masons in London. The discussion focused on the implications of the Davies Report of 2011 that established there was a long way to go to achieve gender equality on boards – and that the resulting lack of diversity has led to groupthink and poor decisions.

In 2010 women made only 12.5% of board membership in the UK – a very low percentage. A key debate is whether the government should introduce quotas to achieve greater gender diversity on boards. This was the very successful approach taken by the Norwegian government which in 2002 set a deadline of July 2005 for private listed companies to increase the proportion of women to 40% – full compliance being achieved by 2009.

The panel discussion was continued over drinks and canapés and swung backwards and forwards about the pros and cons of quotas.

1. Advantages of quotas for women on boards

Clear and achievable targets

Focus efforts and highlight issues

Rapid progress achievable

2. Disadvantages of quotas for women on boards

May result in best candidate not being selected

Can undermine women’s feelings of self-worth

Can undermine respect for women on the board

3. The pipeline of senior women for boardrooms

One of the problems often cited in securing women onto boards is the lack of a pipeline of senior women with the type of leadership and management experience that counts in the selection process. More women than men graduate from university, yet fewer women than men make it to the top of the career ladder. Is it something in the female psyche that inhibits their career? Is it due to different values with respect to work/life balance? Or is it due to the predominance of men ‘at the top’ promoting in their own image? Or maybe it is even simpler than that – women just don’t even think about the possibility of putting themselves forward for board positions?

4. Davies recommendations

The Davies report does not recommend the use of quotas in the first instance but suggests that all Chairmen of FTSE 350 companies should set targets for the percentage of women on their boards by 2013 and 2015, as well as a more systematic annual disclosure of the number of women on the board, in senior executive positions and as employees in the whole organisation.

5. How can women help themselves to get on boards?

So what should women do to address these issues? Some of the ideas that came up from the panel and the discussions afterwards were as follows

  • Build a network and make your interest in a board position known to your senior contacts in companies
  • Send your CV to the executive search companies explaining the benefits you can offer a board in terms of different perspectives and a more challenging approach to the status quo
  • Start with the public sector board appointments that are easier to secure and build your CV

6. Quotas or not?

I started off the evening with the view that quotas should not be necessary and would be demeaning for women. After all, good performance and the right attributes should be enough, shouldn’t they? But by the time I was collecting my coat to go home I had veered towards the view that positive action really must be taken – there is too much ‘establishment’ on boards to enable women to achieve the representation that they deserve.

What are your views?

Bradford ‘Management Thinking’ Digest – the latest on business strategy, leadership, finance, innovation and sustainability

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This edition of Bradford University School of Management’s digest of the latest business thinking features

  • Corporate legacies
  • What are the key factors for an innovative business?
  • The Budget 2011
  • Opportunities for sustainable innovation

Please share your views here and on Twitter @BradManagement

STRATEGY

FT Column: Corporate legacies can harm your future

FT business blogger Andrew Hill wrote a column earlier this month demonstrating how focusing on a company’s successful history can distort strategy and make employees complacent.

He said: “Business leaders need to shape strategy to the demands of the present and future, not put it in the dead hand of the past. But while it is counter-productive to cling unquestioningly to a company’s history, so it can be highly damaging to throw it all out.”

The piece refers to examples of how this has been easier said than done for big corporates like IBM, Hyundai, Shell, Unilever, Philips and HP. Hill concludes that: “The key is to mine from the past values that appeal to the present.”

INNOVATION

Blog: What are the key factors for an innovative business?

Our new Professor Christos Kalantaridis is developing an Enterprise and Innovation Lab at the School that he hopes will become a resources for businesses.

In his latest blog, he shares his insights on what businesses need to be innovative from what he has learnt so far in his new role as Professor of Entrepreneurship and Innovation.

He has heard from business and public sector members of the School’s Innovation Club that:

  • you can put customers off by innovating too quickly
  • it is important for innovation to stimulate open and transparent communication and provide an environment that supports people to think creatively and innovate
  • you need to be very close to customers, anticipating their needs and being able to respond to enquiries faster than competitors
  • you must make sure you are solving the right problem and not what the customer thinks is the problem
  • recruiting the right people – those who are open and motivated – is key

FINANCE

Comment: The Budget 2011 – initiatives won’t help businesses in tough times

Wednesday’s Budget didn’t bring any ‘feel good’ announcements as to be expected in such difficult economic times. Enterprise Zones and apprenticeships have been introduced to promote growth – but will they actually help struggling businesses to take on new staff?

Our Director of Executive Education, Julian Rawel, took part in a panel discussion alongside Ed Balls and regional business leaders on BBC Radio Leeds. Julian said: “Enterprise Zones are great when we are in very buoyant times and businesses want to build, grow and relocate. But if you go and talk to businesses now they say ‘we’re not interested in building, we’re interested in maximising our assets to do as well as we can in these challenging times. Enterprise Zones sound great but they are more for great times and I don’t think they are the times we are in at the moment.”

In response to announcements about generating more apprenticeships and an increase to national insurance, he said: “Here in Yorkshire we’ve got one in three people working in the public sector. If we are going to see large job losses in that sector then private businesses need an incentive to take people on – apprenticeships won’t necessarily do that but a slight decrease in national insurance would have.”

Click here http://bbc.in/i9cGgk to hear the full feature – Julian appears from 2hr37m into the show onwards.

LEADERSHIP & SUSTAINABILITY

Blog: Opportunities for sustainable innovation

Alex Hook of NESTA – the independent experts on how innovation can solve major economic and social challenges – believes that lack of leadership on driving towards more sustainable production and consumption patterns in the UK, could mean we miss the opportunity to benefit from growth.

He wrote a blog on the back of a panel debate on the role of innovation in creating a sustainable way of life that NESTA held as part of Climate Week last week. The debate brought together speakers from backgrounds large corporations, government, start-ups and social entrepreneurship and it emerged that it was unclear who should bear their cost of prioritising and resourcing the changes required.

Hook said: “In my opinion, there is a clear and unique opportunity for the UK to build (or even evolve) new technologies and businesses that help enable the transition to more sustainable production and consumption. The threat is that we do not move quickly enough or in sufficient scale to address climate change in the UK and beyond, and that we miss the opportunity to benefit from the growth potential of this shift.”

This is of great interest to my own research – see my blog on Transformation leadership – why your organisation can’t grow without it.

Organisational transformation: 3 key stages for managing change

Sarah-Dixon---New-DeanIn a Dilbert cartoon the eponymous office hero casts his satirical eye over the process of organisational transformation, concluding it is carried out by non-communicative morons.  But are the problems really down to management style and lack of communication or is there a deeper malaise for managers?

A major challenge for managers today is lack of time to think and do things differently. But with day-to-day operational tasks and a focus on short-term results rather than strategic innovations taking up all their time, what then about securing the future? What do they do when the environment changes?

Understanding the process of organisational transformation and establishing the critical success factors for achieving change is of practical value for managers of any large organisations faced with the need to adapt to radical changes in the environment. Below are the three key stages for managing organisational transformation along with the critical success factors for managing change at each stage.

cartoon-2Stage 1: Break with the past

 

  • Bring in outsiders. The Board should introduce entrepreneurial outsiders with targeted expertise onto the top management team.
  • Break with your administrative heritage. Important mechanisms here can be the removal of blockers, rotation of managers, promotion of young managers untainted by the organisational heritage, the utilisation of project teams, the achievement of early successes and designing a suitable bonus/incentive system.
  • Use aspects of the administrative heritage that help the change process. Not everything that worked in the past needs to be thrown away.  This will vary from company to company. Some may be able leverage a traditional command-and-control management style to achieve more rapid implementation of change; however, in environments where a more democratic leadership style is the norm, it may be more appropriate to leverage other factors, for example, customer relationships, a strong R&D department, or the latent enthusiasm of organisational members for participating in new initiatives. Crisis is also an important lever for organisational change.

 

Stage 2: Manage the present

  • Vary your leadership style as appropriate. The top-down approach of Stage 1 may be still required to break with the past in some parts of the organisation, while other parts may by this stage already have the ability to learn and therefore may be given authority and empowerment to act.
  • Exploit best practice from your own or other organisations. This will require knowledge acquisition, knowledge internalisation and knowledge dissemination.
  • Reconfigure, divest and integrate resources. This involves everything from streamlining business systems to removing non-aligned employees to consolidating new acquisitions operationally and culturally.

 

Stage 3: Invest in the future

  • Empower the organisation.  The top management team should delegate to employees as well as motivating and enabling them to act.
  • Enable the organisation to engage in exploration of new ideas and business practices. You can achieve this by encouraging innovation, trial and experimentation and by developing a culture which encourages informed risk-taking and facilitates learning from mistakes. Exploration enables the organisation to develop new capabilities fitted to its specific context, rather than just importing systems and routines from other contexts.
  • Create new paths. This means creating a deliberate change in direction using new capabilities, whether that be in terms of new products, services, processes or business models. The combination of exploration and path creation will lead you to the “disruptive innovation” that will help you secure sustainable competitive advantage.

By going through these stages, organisations can establish new developmental pathways, enhance their strategic flexibility, and react successfully to changes in the environment.

Where is your business? Still rooted in its past and needing to change, or already engaged in exploiting best practice and exploring for new ideas to create new business pathways?

The dynamic capabilities lifecycle: 2 vital links in the business chain of success

CapabilitiesAs British Airways announced its first profits in two years this autumn, it’s interesting to look at what makes businesses successful and how failing businesses can turn themselves around to re-secure competitive advantage.  Step forward, dynamic capabilities.

Dynamic capabilities have become a hot topic in the strategic management and organisational change arenas since the concept was first introduced by David Teece and his co-authors in 1997. They are essentially second order capabilities – , the capabilities to develop new capabilities – that enable businesses to reconfigure their resources in order to adapt to changes in the environment and secure competitive advantage.

1. Creating a business model for excellence

Dynamic capabilities ensure organisations operate at the highest levels of excellence in their existing businesses, whilst at the same time allowing for the exploration of new ideas and the implementation of innovative business models. To get an idea of their importance, let’s take a look at a couple of companies experiencing difficulties in adapting their capabilities to new environments:

  • Toyota reinvented automotive manufacturing and supply chain management in terms of its ‘lean production’ system and built its reputation on constantly raising the quality bar. But since then the company has fallen from its pre-eminent position in the global automotive industry.
  • EMI, one of the most successful record labels of all time, is now encumbered with an old business model and is struggling to adapt, with capabilities that no longer fit the new cheap-download, file-sharing music environment.

2. How do businesses reinvent themselves?

On the other hand, there are businesses that manage to continually reinvent themselves, having the dynamic capabilities that enable them to learn and reconfigure their organisations:

  • Google entered the internet arena with disruptive search technology that has now become a household name, but it still continues both to enhance the features of its search engine and to introduce new attractions that provide hooks for the advertising revenue they need to generate for the success of their business model.
  • Apple too, in recent years, has managed continuously to hone its design and technology skills, with the launch of each new product taking the world by storm, even though not necessarily being the technology first movers.

There are also examples of firms in more traditional commodity industries that are constantly developing new capabilities, thereby securing competitive advantage, including:

  • The Indian multinationals, such as Mittal Steel.
  • Businesses from developing countries, such as Cemex.

3.      Strategic supremacy

I’ve already described the dynamic capability of disruptive innovation in an earlier blog . Here, we look at how the dynamic capabilities lifecycle helps businesses create a virtuous circle of best practice and strategic supremacy, constantly reinforcing competitive advantage that would otherwise be eroded by imitation or substitution.

sarahdixongraph

 

Dynamic capabilities life-cycle

Dr Sarah Dixon, Bradford University School of Management

4.      The dynamic capabilities lifecycle

In stage 1 of the dynamic capabilities lifecycle (see above), businesses engage in incremental (or adaptive) innovation, continuously adapting their business model which leads to best practice and, therefore, success and temporary competitive advantage. For businesses that fail to engage in incremental innovation, there is a risk of failure and exit from the dynamic capabilities lifecycle.

Stage 2, disruptive innovation, follows on from incremental innovation and reinvents an industry or sector by introducing a product or service that disrupts the existing market.  It requires organisational slack (available time and resources) and “absorptive capacity” (the ability to build on prior learning to acquire new knowledge and engage in innovation).

Examples of businesses which have successfully done this are again:

  • Google, which allocates engineers 20% of their time to engage in their own projects, creating an organisational climate that is conducive to exploration; it then has the processes for turning those ideas into practical user propositions that help to sustain its overall business model.
  • Apple, a company that clearly has generated huge absorptive capacity – each new invention building on existing learning and expertise – whilst still coming up with completely new product concepts such as iPod, iTunes, iPhone and iPad.

Failure to reinvent the business and to develop new sources of competitive advantage may again result in an exit from the dynamic capabilities lifecycle. Exit is more likely at this point because of the uncertainty of success from disruptive innovation. It is inherently risky and examples abound of companies that have come up with great ideas that then fail to catch on in the marketplace or that apply complex technologies that fail in their implementation.

5.      New paths to business success

However, for those successful companies that create  new paths and introduce innovative products, services or business models to the market, there follows the need to exploit and deploy them further within the organisation, to hone them to increasing perfection – thus returning us to incremental innovation at the beginning of the dynamic capabilities lifecycle.

The dynamic capabilities lifecycle is not a panacea that can soften the impact of short-termism and risk aversion, nor can it serve to develop the organisational slack to give managers the time to think creatively and constructively about the future. However it can serve to highlight the importance of striving for some sort of balance between incremental and disruptive innovation, or between operational excellence and new path creation.

And isn’t balancing the exploitation of current capabilities with the exploration for and development of new ones what it’s all about?