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

Transformational leadership: why your business can’t grow without it

ss2It’s often said that business success or failure comes down to successful or unsuccessful leadership. In offering advice, business pundits tend to come down on the side of either transformational leadership or of transactional leadership. But is it really that clear-cut?

Transformational leadership really comes into its own in helping to break an organisation’s administrative heritage, thus creating the capacity for change. By bringing in entrepreneurial outsiders with a radical approach, a company’s Board can unshackle the business from the ball-and-chain constraints of “that’s the way we do things around here (and have done for years)”.

1. Transformational or transactional leadership?

Transformational leadership sits in contrast to transactional leadership. Transactional leaders set goals and develop agreements about what is expected from the organization, whereas transformational leadership is inspirational and helps the organization to reframe the future.  The transactional leadership style serves to increase the robustness of the existing organization, whereas transformational leadership seeks to change it. In times of stability, transactional leadership is appropriate for the process of refreshing, reinforcing and refining existing practices, but in the face of environmental turbulence it can result in failure to adapt.

That’s not to say that each approach doesn’t have its place. Once change has been effected through transformational leadership, a more contingent approach to leadership could take over, adjusting the style to the situation and combining:

  • Transformational leadership – where it’s still required to motivate change, and
  • Transactional leadership where managers have embraced change and can be relied upon to take accountability and responsibility for implementation.

2. Using transformational leadership effectively

The two strategic interventions where transformational leadership can be particularly effectively used are:

Turnaround intervention

Here, the knowledge achieved by one or more businesses is exploited by another business to achieve best practice; this might be either in an organisation that is conducting business as usual, or in one that is already failing in the context of its environment.

A couple of examples of transformational leadership being used highly effectively in a turnaround capacity are:

  • Marks and Spencer, which was able to regain its position in the marketplace by bringing in new leaders from outside the company with a transformational approach (notably Sir Stuart Rose ), focusing on implementing best practice in the supply chain and reconnecting with the consumer. By 2008 the company was able to regain a pre-tax profit of £1,129 million comparable to its peak performance year in 1998, before its dramatic decline to a low of £145 million in 2001.
  • Yukos, the Russian oil company, which brought in outsider managers (non-oil men) to its top management team, as well as many Western expatriates who contributed Western expertise.  The transformational leadership of Mikhail Khodorkovsky, the former CEO of Yukos, helped the company to establish the basic operational capabilities required for operating in a market economy in a short space of time.  As a result Yukos’ oil production doubled between 1996 and 2002 and Yukos was the leading Russian oil company by market value ($21 billion) at the end of 2002.  (Unfortunately, Khodorkovsky threatened the status quo of the power elite, and as a result of making this fatal mistake of ignoring the institutional context, he himself was imprisoned and his company went bankrupt. He recently hit the headlines again after having his original 8 year sentence increased to 14)

Both Marks and Spencer and Yukos were effectively exploiting and deploying new learning and implementing best practice in order to catch up with their competitors in the global arena.

Renewal intervention

Here, a business reinvents itself to secure strategic supremacy.  Transformational leadership is important in this situation, to encourage a break with an administrative heritage. Even though the business might currently be extremely successful, its very success may inhibit the search for new ideas due either to the complacency or to the fear of cannibalising existing business.

Transformational leadership can help create a climate that challenges managers to develop new ways of thinking and encourages the implementation of new projects.

So transformational leadership can be seen as a key element in taking both failing and successful businesses forward.

In the current economy you would think that transformational leadership is the obvious choice to invigorate a business and find new opportunities.  But in times of great change is it actually a familiar, transactional leader who can reassure the troops and ensure stability in these difficult times?

The route to business success: 5 challenges and a roadblock

successTwo years after the collapse of the Lehman’s Brothers investment bank the business outlook is still largely bleak. New  rules in Basel iii aim to regulate the global financial system and thereby, presumably, to inch the rug back under business’s feet from where it was unceremoniously pulled in 2008. But companies continue to face constant challenges to survive and succeed. Is it just a question of riding out the recession or should we be looking at other factors for business success?

5 challenges to business success

1  Recession

Certainly the economic climate has had a huge effect  and the economic recession continues to take its toll on businesses.  Many companies have gone through so many rounds of cost-cutting, slimming down and staff reductions that the pressure on individual managers to perform the ordinary tasks to keep the machine turning and the business going is overwhelming.

2  Competitive threats

This is probably the oldest of all business challenges!  Organizations need to reinvent themselves by seeking new sources of competitive advantage that are difficult, at least in the short-term, for competitors to imitate. There are many examples of the damaging or even fatal consequences of failing to do this. To take just three examples:

  • Marks and Spencer – the late 1990s and early 2000s started to see a dramatic fall-off in revenues, profits and share value; this was attributed largely to complacency.
  • EMI, one of the most successful record labels of all time, counting artists such as The Beatles, Pink Floyd, Queen, Robbie Williams and Lily Allen amongst its stars, is struggling to adapt its old business model, to take into account a new environment in which file sharing and free or almost-free music downloads are more attractive than the traditional CD.
  • Woolworth’s – once synonymous with the UK high street, went into administration in 2008, after almost 100 years of operation,  resulting in the closure of 807 outlets  and the loss of  27,000 jobs.

3  Disruptive innovation

Businesses need to introduce new paths and  innovative products, services or business models to the market, and then to exploit and hone them to increasingly perfect them.  But this “disruptive innovation” 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. Sony’s Betamax video recorder, although technically superior, lost out to JVC’s  more market-friendly VHS recorder.

4  Environmental and social pressures

Businesses are having to pay increasing attention to the green agenda and their own Corporate Social Responsibility (CSR)profile.  The two main pressures for this are:

  • The drive for sustainability, to do as little harm to the environment as possible and  to respond to legal and social pressure to reduce excessive waste and the use of hazardous materials, which must now, by law, be a factor in the decision-making process for all businesses.
  • “Bottom of the pyramid” campaigns which aim to attack poverty by encouraging firms to do business with the billions of people in the world  who must survive on $2 a day or less (those at the bottom of the pyramid).

CSR is not just a tickbox on a company’s template; it is taken increasingly seriously by governments and individuals alike.

5  Regulation and bureaucracy

A major frustration in large organizations can be the convoluted bureaucracy and labyrinthine processes for getting acceptance of new ideas. Large organizations are inherently risk-averse and hide-bound by the way they have always done business in the past. In addition, particularly in the US, companies tend to be driven firstly by their lawyers, secondly by their finance people and thirdly by investor relations. The combined forces of tight regulation and the shareholder  pressure to perform today are major obstacles to risk-taking for the sake of the future.

A roadblock

In trying to address these challenges, there’s one further issue – talk to managers today and one of their biggest complaints is lack of time to think and do things differently.  They are drowning in day-to-day operational tasks and struggling under an avalanche of endless meetings that focus on pressing current issues and short-term forecasts rather than strategic innovations. Yet if most, if not all, of their attention is focused on the present, what then about securing the future?

So how do businesses get the balance right?  Is it just a question of becoming leaner and toughing out the recession until rosier times emerge? Or should they be stepping up to the plate right now, developing new capabilities, exploring new ideas and implementing innovative business models?

Business experience vs academic credentials – Are Business Schools missing a trick?

Sarah-Dixon-

I recently spoke at a stimulating seminar on ‘Leveraging a Business Career into Academic Success’ run by the Foundation for Management Education (FME). Being asked to speak  about this was a great opportunity for me right at the beginning of  my new job as Dean of the Bradford School of Management.

I had a story to tell about my first faltering steps as a Senior Lecturer at  Faculty of Business and Law, Kingston University and how I battled my way over an 8 year period to Director of Postgraduate Programmes at Kingston, then on to the post of Head of MSc programmes at the School of Management, University of Bath and now the greatest challenge of all – the Deanship at Bradford.

This all represented a dramatic change in career trajectory as I had  previously had 23 years’ management experience in international roles in  Shell – so I speak personally when I say I’m particularly keen that we look outside the strict boundaries of academic achievement to provide the very best business education. I am really passionate about  how important it is for  business  and management schools to bring business leaders on to their teaching staff in order to give real value to our students.

The three barriers business leaders face

I’m very pleased that one of the FME’s key objectives is to encourage business leaders to make this career transition from the business mainstream into business school academia. In fact, it  funds training fellowships and development programmes, and helps to find initial funding for new research initiatives.  It also provides a fantastic network for the FME Fellows who are mid-career business managers who have moved into academia.

So why is it that business leaders with a wealth of business and management experience behind them feel they are at a disadvantage and lagging behind? These are the three main hurdles they face:

  1. The lack of published academic work –  they have real hands-on experience but no academic credentials.
  2. They are leaders in their own field – but if they switch to academia, they have to start from scratch or at least way down the pecking order compared to what they’re used to.
  3. While trying to teach, they also have to play catch-up, working on their PhDs or DBAs in their spare time.

What we gain from extending our business reach

By erecting these barriers, we are missing out on a huge amount of experience:

  • Research with business relevance – blending the theoretical with the practical
  • Competitive edge – in the jargon of a business strategist, “sustainable competitive advantage for the School”
  • Strengthened relationships with the outside business community
  • Students with real insight into the realities of the business world they’re about to  join.

Ask a student which is more important to them – someone with a huge back catalogue of scholarly articles or someone with hands-on, real-life, relevant business experience and I think we can guess which they’d choose.

Of course, the rigour of academic excellence is important.  The high-quality,  peer-reviewed research, the structured analysis, the intellectual debate. But does this have to be INSTEAD of business experience. Can’t we have both?