Following a two hour leadership conversation with Edward Kieswetter, CEO of Alexander Forbes, we walked through their magnificent building. It is a spectacular edifice that reflects their values and ethos.
What impressed me even more than the building was the way Kieswetter engaged his staff. He greeted them as we walked along. At one point he excused himself for a moment and walked up to a table to politely interrupt a conversation between two individuals, a man and a woman. The man rose to his feet and respectfully shook Kieswetters hand. Kieswetter then turned to the woman and explained that the gentleman she was talking to was one of their best consultants. I realised this was a business meeting between a consultant and a client. The lady smiled and asked Kieswetter what he did around there. He answered: “A bit of this and that; a bit of everything.” The gentleman then announced that Kieswetter was their CEO. She was visibly impressed and I have no doubt that if the consultant hadn’t clinched the deal at that stage it would have been after that interaction.
On several fronts this experience trumped even the very interesting two hour conversation.
Kieswetter has been the CEO of Alexander Forbes for over three years and movement there has been a natural consequence. I interviewed him just as he became the CEO and wrote the following at that time: “He stands a very good chance of making a huge success of this challenge. I will give at least three reasons: 1) His sound values-based upbringing and the direct effect on his leadership approach; 2) His ability to understand the direct impact of a leaders actions and example; and 3) Principles in the letter he wrote to all Alexander Forbes staff that was sent out on the first day of the year, just before his official starting date.”
On whether he has been successful he comments: “With the understanding that success is a journey and not a destination, the journey has been successful. It’s been rewarding, it’s been harder than what I thought it would be, but it’s been extremely rewarding.”
When he took over they were receiving some negative media coverage regarding their involvement in potential litigation, arising from historical issues. It was also a difficult time for financial institutions in general. Kieswetter explains: “I was coming in at a time when the organization performance was down, when there was disenchantment between the shareholders and the management, we had a flat to erosion of profits for three years, and we were in the media for all the wrong reasons.”
Today presents a different picture, on at least three levels – leadership alignment, employee culture and of course financial results.
About leadership alignment he says: “To engage leaders is hard work because if you think about it, generally strong people become leaders. They are strong-willed, strong-minded and clear about their leadership philosophy.”
Once a year he gathers the top 100 to 120 leaders, in addition to his on-going engagement and performance reviews with smaller leadership teams. This year, after reviewing the strategic plan three questions were confidentially posed to every attendee: 1) Is the strategic intent that they have clarified and communicated appropriate at this time for the organization given their circumstances and challenges? They had 96% agreement. 2) Do they believe they have made progress against this intent? There was 95% agreement. 3) Do they believe the challenge they have set out for the next 12-24 months is achievable? There was 88% agreement. Kieswetter says: “So that’s a very high level of alignment, a. in the strategic choices we’ve made; b. in the progress we’ve made against that and c. in the journey ahead.
On employee culture they decided to build a more engaging workforce and focused on five areas, which are mostly measured extensively. I will show further down how these areas and other initiatives by the Alexander Forbes leaders support a universal “law of movement” that must be respected as a leader strives to generate movement.
First, they negotiate with every individual to find work that they enjoy doing. It’s not a one way street – it’s a negotiation. Kieswetter believes that “enjoyment comes from two things; one – being competent to do it and two, being interested in doing it.” So they attempt to put people in the right seats, where they are happier, leverage their talents and abilities and are more motivated. Secondly, make sure that people understand the meaning of their work, the higher purpose of it, the impact that their work has. Again, this emphasises the motive behind actions and increases motivation of people. Kieswetter comments: “On 1 October 2010 we introduced the language of why we exist. Park what we do and how we do it – just talk about why we do it.” It is the “why” behind all actions or required actions that fuels the motivation. Thirdly, they defined success – what does winning mean? He believes “too few people know specifically what winning means. One of the things I liked about my SARS job is that I knew what winning meant – 651 billion rand, broken down by corporate income tax, VAT – it was very nice, you knew what winning meant.” Knowing what winning means highlights clear direction. There must be a clear, mutually desired destiny, a better future.
Fourthly, give people regular performance feedback. In other words, are you on course as regards the direction of where winning is? Fifthly, reward and sanction the right behaviour. This of course helps change behaviour towards the desired culture and environment. Kieswetter says: “So if you didn’t do well and I don’t tell you, I’m not being fair to you. If you didn’t do well and I pay you a bonus I’m giving you mixed messages. If you did do well and I’m treating you the same way as someone else that didn’t do well, I’m also confusing the issue. So I don’t believe in equal treatment. I believe in fair treatment and fair treatment differentiates based on contribution.”
To bring home financial results – growing the revenue, improving the profitability, improving the efficiency, the margins, managing cash well, and so on – they introduced the notion of the goose and the eggs. Kieswetter says: “We will measure the leader on two things – the goose is the organization, our eggs are revenue growth, profitability, cash management, cost management, the hard core numbers. Our goose is also the quality of our people engagement, the quality of our customer retention service, the quality of our risk management and the quality of our investment projects.” In short, ensure the structures of the organisation supports the direction and motivation. Alexander Forbes has become a much more profitable business since three years ago.
In short they have a very vigorous process of performance engagement, performance management, performance evaluation, and performance reward in place.
Kieswetter is a CEO that believes the first job of the leader is to build leadership. Many top leaders say this but don’t really believe it or show by their actions that they are serious about it. He finds ways to expose his Exco team to unique experiences. He invited me and Lewis Pugh, the British environmental campaigner, maritime lawyer and pioneer swimmer to have breakfast with his team. Pugh was asked to spontaneously share why he does the “crazy” things that he does? He inspired us with his story. And then I had to share something on leadership and why I am involved in this world. Jokingly he wanted us to draw a parallel between what we do. We attempted to do this. It was a great discussion. Kieswetter seems to seek opportunities like this for himself and his team.
My contribution was to share the universal law of movement, because ultimately leaders are in the business of movement. The law states: “All movement is governed by the integration of motivation (motive, reason, purpose, desire, and aspirations), direction (plans, vision, destiny, goals) and structure (resources, systems, procedures).” Nothing moves without the effective blending of these three components. Successful leaders find a way to activate this universal law. Kieswetter is one such leader. They push motivation on an individual and organisational level; they emphasise, simplify and make relevant direction – what winning means; and they streamline and make relevant the resources, structures that ultimately sustain movement – the goose and egg principle.
For Kieswetter this change journey, and in fact any change journey, starts with “first of all being clear about what you want to achieve; secondly, starting to evangelise the hearts and minds – persuading people – and that’s why the conversation starts with who am I and why am I here?”
It is clear that good leadership is what intervened in the destiny of this organization.
BRLP: You believe in being yourself. Explain please.
Kieswetter: If you happen to follow some of my Tweets I posted the following tweet recently – just be yourself, it’s the path of least effort and maximum reward. Some say it must be difficult to lead the kind of life where everyone watches you. I say actually no, it’s not difficult, if I was pretending to be someone and wasn’t authentic it would be difficult because I’d always have to think about how I want to behave, but I don’t think about it because if you are just yourself – just be yourself.
BLP: If “yourself” is a good yourself, then be yourself?
Kieswetter: Even if it’s not the best yourself, people don’t expect leaders to be perfect; they expect leaders to be authentic. You know if you can trust your leader you’ll do a lot more with and for him than if you thought he was perfect but didn’t trust him.
BRLP: But our society allows for unauthentic leaders to rise to the top.
Kieswetter: Look, democracy does, right? And it’s the apathy of society that allows it. We are actually our own worst enemy in that regard. But nature doesn’t. We foster mediocrity. And that’s why I said the fifth point of engagement is to be very clear about rewards and sanctions. We don’t engage, we don’t sanction, we don’t reward. And that’s unfair.
BRLP: I referred to the letter you wrote to staff when you were newly appointed. Why? How was it received?
Kieswetter: So coming back to just being yourself, it’s the path of least effort and maximum reward, is important for me. So when you ask about my letter, I wrote it because I thought it was a natural thing to do. I’m a new leader, I don’t know anyone, I am going to need so much help and support, I must start by building a relationship and what’s the quickest way to build a relationship with 4000 – then it was 5000 people – write them a letter, tell them who you are, what you’re about, what you expect from yourself, what you expect from them, and quite frankly, the result overwhelmed me – it was something that naturally occurred because I did something authentic.
BR: It was a powerful letter. At the time also, in the letter you touched on your concerns which was the media coverage, and your involvement in potential litigation arising from legacy issues. Is that all cleared up?
Kieswetter: What you do with such difficult times obviously determines which way you go, but these fortuitous dilemmas that we had provided me with probably the best opportunity to create an internal culture about how we want to do things as well as to the external stakeholders, the media, policy makers, clients – it had broad impact. But what did this require – it required us to own up – to say we were wrong. Up until then we were just defending. So it meant going to the Curator and saying we don’t agree with what happened. It meant me going to the Board and telling them I’m going to plead guilty.
BRLP: That was visionary, courageous!
Kieswetter: However, I then also had to go to the people who were trying to destroy us, and say I know exactly what you want. But you can’t destroy this company that employs 5000 people, that protects the interests of more than a million pensioners, that manages the investment aspirations of millions of people. Destroying this company, what’s that going to achieve, that’s being revengeful. I said what do you want to achieve? So I couldn’t allow that to happen. But I had to first say, we are reliant on our higher purpose, and when the NPA heard me they said wow, this is like a breath of fresh air – now let’s work together.
BRLP: It’s the Mandela attitude isn’t it?
Kieswetter: It’s the abundance mentality.
BRLP: That stems from your character. Some leaders just can’t access it, even though they have very responsible, massive positions – they can’t access it. It has to come from your value system. The question is can you train that in leaders when they didn’t grow up that way, when it really is not part of their framework?
Kieswetter: Well I think you can “conscientize” people to it – you can’t train them to it. So if I think of how I grew up, my biggest two leadership lessons actually came from my parents. My father taught me the ethic of hard work; I saw that in him, he drilled that into me. My mother taught me the balancing lesson – that I needed to be a blessing. So two of the most powerful lessons I learned came from my parents. One, the ethic of hard work and two, the purpose of life. You’re here to be a blessing. And then you accumulate other lessons as you go along. When I went to Harold Cressy, my high school, and met people like Trevor Manuel and the teachers that we had, it “conscientized” in me a sense of social justice, of acting in the greater good. So yes, you can condition, you can “conscientize”, and I think the role of leadership is to make that explicit and tangible for the next generation of leaders. So I hope they are not sitting in a class being lectured everyday by Edward Kieswetter on what leaders should do but in me living out my leadership hopefully some of it will rub off. That’s why public leaders are so important.
BRLP: You seem to have grown as a leader, even though you have always had leadership capability in you.
Kieswetter: Hopefully growth is an on-going thing so it would be quite indicting if one doesn’t grow, and hopefully if we have a conversation in a year’s time we would both have grown. Growth is integral to life. The difference between human beings and nature is we can resist growth – that’s the difference. So the best gift you can give yourself is an open mind. I sat here earlier and I said to you I had a vision, I had a clear intent; it turned out to be harder than I thought. I always knew the technical stuff would be easy for me to get my head around as I demonstrate higher learning capability and complexity doesn’t intimidate me. I always knew that changing the culture would be the hardest part – I didn’t realize how hard it would be.
BRLP: So what about that was harder than you thought?
Kieswetter: I have been here three and a half years. It took me two thirds of that time just to get the leadership alignment that we have. You know what’s nice Adriaan – my Exco and my Divisional Exco’s have been stable for about 2 years now. We haven’t had a single resignation at Group Exco level or Divisional Exco level. Of course in the beginning there were people who said this sounds great but I can’t buy into this and that was fine – let’s agree to disagree and part with dignity. One or two unceremoniously, the rest said that’s fine, but you can’t stay here and undermine the process. If you’re staying, you commit.
BRLP: A parting thought?
Kieswetter: You know Adriaan, throughout, whether you take my younger life as a power station manager or at SARS or here, there is one thing that has consistently manifested itself – everyone wants to be part of a winning team. Everyone. Everyone wants to be part of something bigger than themselves. Everyone wants to know that they are making a difference.
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