360 Autumn 2006 Virtual Leadership

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360
The Ashridge Journal Autumn 2006
MAIN FEATURE:
Leading virtual teams:

mastering the challenge
ALSO IN THIS VOLUME:
Customer satisfaction strategy

Fearless listening
The organisation's path to successful expatriation
Organisational spirituality away with the fairies?
Strategy as relationship
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Contents
4
My angle
Paul Hampton, Chief Operating Officer of Aramark Ltd, outlines seven core attributes that successful leaders
have in common.
marter pricing
Virtual leadership
In todays global economy, virtual teams are a fact of life. Drawing on three years research, Ghislaine Caulat
examines the skills, competencies and techniques needed by managers to lead teams successfully in a virtual
environment.
12
Customer satisfaction strategy
Gary Luck challenges any producer of goods to know the size of the market for their product. He illustrates how
this knowledge will remain elusive unless customer satisfaction, in its original sense, is allowed to drive
organisational strategy.
20
Fearless listening: the hidden factor behind the power of fearless consulting
Through reflection and enquiry into his personal consulting practice and that of some 100 executive coaches,
Erik de Haan, the author of recently published Fearless Consulting, looks at consultants vital skill of listening
without fear.
26
Snakes and ladders: the organisations path to successful expatriation
In this second article on factors that enable successful expatriation, Arno Haslberger and Sharman Esarey
discuss ways in which the organisation can tip the scales in favour of its expatriate employees.
32
Organisational spirituality: away with the fairies?
Eve Poole suggests how the concept of organisational spirituality may help organisations to achieve some
breakthrough in the intractable problems associated with employee motivation, engagement and well-being.
38
Strategy as relationship
Chris Nichols looks at some of the terms in which strategy is usually discussed, and finds the consequences
disturbing. What happens if we look at strategy just as relationships, stripping out the usual imagery? Could the
answer change both the focus and practice of strategy?
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The Ashridge Journal My angle Autumn 2006
My angle
This year, I was invited to address Ashridge MBA participants at their graduation ceremony.
It was a pleasure to witness the delight, comradeship, not to mention relief, as each MBA
graduate celebrated their own success and that of their colleagues. They had all been through
a great deal of personal sacrifice to reach this achievement. All knew they had gained a
qualification of significant value to themselves and to their organisations. Each should go
on to achieve further accolades, prosperity and success as a result.
Many of them will go on to become leaders in business and perhaps in other fields of endeavour
too. It is this theme of better leadership that runs throughout Ashridges work, and underlines its
innovative offering. Ashridge is leading the way in developing new kinds of leaders across all
sectors, with the vision and the ability to understand and motivate their people, within a rapidly
changing world.
I believe there are seven core attributes that all successful leaders have in common. The first
is that they have absolute clarity about what they are trying to do. They dont try to complicate
things: they know what their objectives are.
Leaders are all optimistic. Not one leader I know or have worked with sees the glass half
empty. Philip Green, for example, whom I was privileged to work with when he was not so
famous, was optimistic about what he could achieve and hes certainly gone and done it.
Leaders tend to be reflective. You might not see this demonstrated on programmes like
The Apprentice, but many leaders often do nothing. They look, they wait and above all they
confer before making their decisions.
Yes, leaders have egos, and good for them! Too many people can be self-deprecating in this
politically correct world. Good leaders make sure they give credit to their teams and dont
misuse their power. Instead they know where they bring value.
Leaders also have focus. They know what is the core activity and more importantly the core
score of their organisation. They may have lots of measurements, but they really focus on the
one most important thing. For us at Aramark, this is our client retention rate, because losing
a customer in the food business is like getting fired.
Choosing heroes is something else leaders do very carefully. Who leaders reward, how they
support and recognise those who are delivering and how they treat those who are not, says
a great deal to everyone else about what is valued.
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Autumn 2006 My angle The Ashridge Journal
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However, the most important thing that great leaders do is cultivate trust. They trust their
staff to deliver. They understand their teams skills and capabilities. They know where the gaps
are and how to fill them. They are acutely aware that trust is the glue that holds the diverse
and different parts of an organisation together.
This issue of 360 reflects the diverse and different parts of Ashridge and its activities. The
lead article, Virtual leadership, by Ghislaine Caulat examines the dynamics of leading teams,
whose members are based in different countries. The increasing global nature of a modern
managers work is also explored in Snakes and ladders: the organisations path to successful
expatriation by Arno Haslberger and Sharman Esarey.
Strategy is a key management activity for every organisation and the article by Chris Nichols,
The four sided triangle looks at the benefits that can be derived from viewing strategy
through different language and images. Customer satisfaction strategy by Gary Luck outlines
innovative methods that can make an organisation the most preferred supplier in every
instance, through its ability to always ensure full availability.
At the other end of the spectrum from manufacturing and supply, Eve Poole analyses how
organisational spirituality can be embraced to achieve some breakthrough in the intractable
problems associated with employee motivation, engagement and well-being, in her article,
Organisational spirituality: away with the fairies? Finally, in Fearless listening, Erik de Haan
builds on the work in his critically acclaimed book, Fearless Consulting, by examining that
crucial aspect of successful consulting the quality of listening.
Being a part of Ashridge means belonging to a broad and rich network of contacts, friendships,
collaborations, ideas and experiences which every one of us can cultivate and draw upon in our
business lives. I sincerely hope you enjoy reading this edition of 360 and that it is not only
useful, but enriches and adds to your experience of Ashridge.
Paul Hampton
Chief Operating Officer, Aramark Limited
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The Ashridge Journal Virtual leadership Autumn 2006
Ghislaine Caulat is an Ashridge Consultant. Her interests

lie in helping executives to make strategies happen,
cultivating change and learning throughout their
organisations. Ghislaine has worked and lived in several
European countries.
Email: ghislaine.caulat@ashridge.org.uk
Virtual leadership
In todays global economy, virtual teams are a fact of life.
Drawing on three years research, Ghislaine Caulat examines
the skills, competencies and techniques needed by managers
to lead teams successfully in a virtual environment.
Virtual teams are increasingly becoming the
life-blood of most companies: they tend to
undertake the most global, strategic and
complex projects. They have the strong
advantage of gathering the best people for
a specific task independent of their
geographical location in a sort of Just in
time talent approach.
There are practical reasons for this
development. Given the ongoing, relentless
globalisation of organisational life with a
growing emphasis on India, China and
Latin America, an increasing number of
employees tend to spend an increasing
amount of time working virtually. Furthermore,

multinationals are becoming wary of the
costs of having their employees travelling
around the world for a meeting lasting just a
few hours. We also observe that an
increasing number of professionals are
developing a strong sense for sustainability,
both in terms of protection of the
environment
and
carbon
footprint
reduction, as well as maintaining a healthy
work-life balance.
Knowing how to develop and maintain high
performing virtual teams has therefore
become a critical competitive advantage.
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Autumn 2006 Virtual leadership The Ashridge Journal
Current reality
The research
The last decade has seen an impressive

amount of literature about virtual teams.
The focus has been changing over the
years. After a strong preoccupation with
technology and processes (the thinking
was mainly that if you got the right
technology and the right processes in
place, the team would automatically
1
perform) , there followed the realisation
that there was something else to learn in
order to develop high performing virtual
teams: the aspects of team work and
management in virtual teams got more and
2
more into the focus . However, developing
and leading effective virtual teams still
remains a big challenge. Less than 30% of
virtual teams are seen to be effective and
3
successful . Furthermore, there is often
frustration around virtual working: people
consider it to be only a necessary (but often
poor) substitute for face-to-face meetings.
We did several types of qualitative research:
Intrigued by the current situation

characterised by this paradox of increasing
virtual working on the one hand and
unresolved difficulties and growing
challenges on the other Ashridge has
been researching on this topic for the last
three years to explore what is happening:
Why is virtual working still representing
such a challenge?
We found out that the crucial differentiator
between mediocre and high performing
virtual teams is the development of virtual
leaders who are able to develop and lead
virtual teams. Effective management of
virtual teams is necessary but not sufficient:
there is a real need for virtual leadership.
Geographical distance needs not be a
distractor but can become an enabler.
Virtual working can lead to very rich results
and high performing virtual teams can be
developed, provided that the right
leadership is in place, with the right skills
and competences in the team.
Virtual Action Learning

Research from 2004 2005
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Scope:
Conversations in teleconference settings with several test groups
Audio Action Learning
People involved in the research:

Two test groups at Ashridge Consulting
The aim of these test groups was to inquire into the experience of the group
members of virtual working and to identify the key themes.
A test group with four employees of a global telecommunications company

A test group with four employees of a global FMCG company
The aim of the work with these two test groups was to experiment with
a new format of virtual action learning and to inquire into the results with the
participants afterwards in a collaborative action research mode.
Virtual Working Study from
February April 2005
Scope:
18 qualitative interviews with managers of different organisations in 11
different industries
One inquiry workshop with seven managers from five different industries
Detailed analysis of existing literature and research
Review of virtual working development provision by various training providers
Secondary research in virtual

working (2004 2005)
Ongoing research while
working with virtual teams
in different organisations
since 2004
We have worked with four groups of clients from three different global
organisations in an Audio Action Learning format on a regular basis since
2004. The second person inquiry methodology is used to identify the emerging
themes around virtual leadership and virtual working, in a systematic way at the
end of each session.
In this article we share the results of our

research in the areas of virtual working and
virtual leadership and explore the
implications for the development of virtual
leaders who can create high performing
virtual teams.
Challenges for leaders

of virtual teams
Recognising the need for support
Often leaders and managers just end-up
leading and managing virtual teams without
having necessarily learnt to do so. They often
dont realise that developing high performing
virtual teams requires some different
leadership and management skills. Often
they actually dont dare admitting/expressing
that they need help:
I can manage leading a virtual team
is no different from managing an officebased team face-to-face.
It is a different situation thats all I am

an experienced manager, I should be
able to do this all I have to do is adapt
my existing skills and have the right
communications technology.
Also only a minority of organisations have
realised that virtual working needs specific
support and endorsement. In our research
we found that some individuals felt that
their organisations did not actively support
them in virtual working as well as they
would have liked. They felt that although
their organisations sanctioned virtual
working, they did not visibly and culturally
support the virtual working ethos. At this
stage it seems that only a few
organisations have explicitly assessed the
value of virtual working and developed a
strategy for it, or have a programme to
attend to the technological, social and
psychological needs of their employees.
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Keeping the technology simple
Establishing trust and intimacy
We found out that virtual working works

well when there is:
What seems to make the biggest difference

in virtual team work is the ability to develop
fast and nurture trust and intimacy in the
virtual environment. Here the team leader
(or the line manager leading a team across
geographies) has an important role to play.
While most of the literature seems to
suggest that for a virtual team to become
high performing it is important to have met
face-to-face beforehand, we found out
that prior face-to-face meeting is
actually not necessary. In one of our test
groups we explored how a certain degree
of anonymity from the outset might actually
help people getting closer to each other
faster because of the lack of baggage or
accumulated perceptions of the person in
the past and/or in a visual mode. Much
more critical for the team is the need to
dedicate a sufficient amount of time to
properly contract how they will work
together. Every team needs to create its
own unique ways of working a code of
conduct where a minimum of rules are
developed and agreed upon.
clear communication (both at an informal

and formal level)
good systems and processes

reliable simple-to-use, well supported
technology.
Technology used was relatively basic: often
respondents found that they and their
organisations chose the lowest common
denominator and stuck with it. The
awareness of options and opportunities to
change/develop technology support was
relatively low. In almost all cases the basic
tools appear to have been a
notebook/laptop and a mobile phone. In
some cases individual also used
Blackberries, Palms and webcams. There
was very little dedicated remote working
software apart from that used to access
files from the main system remotely.
Generally the most widely used
communication platform seems to be
teleconferencing in synchronous mode
(people
from
different
locations
communicating at the same time) followed
by NetMeetings (audio and computer
based communication in synchronous
mode), and finally, much less frequent use
of videoconferencing.
In the last few months we are also
experiencing that some companies have
started using Internet based phone
technology such as SKYPE, although the
level of security (in terms of protection
against unauthorised access) still needs to
be checked in detail. The occasional inferior
quality of connection is also a factor that
sometimes gets in the way of developing
good connectivity in virtual settings.
Another important parameter related to the

development of trust and intimacy is the
degree of spontaneity and informality that a
team can develop when working together.
Often in the audio and web based
environment, deadlines and goal driven
meetings offer little room for the messy,
loose, animated conversations that help
develop human connection and the allimportant personal touch that is important in
developing intimacy. Introducing some
element of informality to formal meetings
can help people relax and connect at a
deeper level. There is a real need in any kind
of virtual team work to find a way to
introduce the coffee machine conversations
to the group. Planning proper chat time
before work begins or organising a virtual
coffee break half way through a meeting are
two simple ways of letting people across the
world build a mental picture of the person

they are working with. What did you do over
the weekend? What is going on in your
area? for example, help to develop some
emotional connection.
Establishing a new etiquette

Teleconferences have been a popular way of
communication for a decade and generally
the rules of communication in such settings
have mimicked the rules of face-to-face
meetings. In our test groups we found that
the traditional teleconferencing etiquette
becomes counterproductive when trying
to develop trust and intimacy. In a
teleconference we have usually been taught
that only one person should speak at a time;
there should be a clear agenda where the
conversation would move systematically
from one point to the other; there should also
be a clear Chair of the meeting, etc. We
experienced that while there was a minimum
of structure and order needed for productive
conversations to emerge, there was also a
fair amount of openness needed to let the
real themes emerge in the virtual
environment. Encouraging spontaneity in the
virtual environment starts, for example, with
something as simple as letting or
encouraging people to interrupt each other
during a phone meeting.
We didnt wait for each of us to end a
sentence. We even kept on talking on top
of each other said Minna. It was more
comfortable and it made an impact.
Pierre, another participant, explained that
he didnt expect such closeness in the
work: It felt so close and the discussion
was so open. Even if the (physical)
distance is there, the distance didnt
mean anything in terms of the
relationship between us. Jenny, from
another group where we also encouraged
spontaneity, also reflected at the end: I
was amazed how well it has worked. It is
almost like being in the same room.
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Furthermore we found out that the traditional

rules of teleconference encourage a culture
of advocacy rather than free flowing
conversation. If a team leader becomes a
debate monitor, asking questions by rote, the
conversation can quickly disintegrate, with
each member taking up a defensible position
on a topic. The patterns make it difficult for
the members to relax and really listen
without feeling the necessity to have to
defend a point of view when they are asked.
Not only is it very hard work for the team
members, but it does little to foster an
environment of collaboration, curiosity and
discovery; particularly as we began by
acknowledging that virtual teams in global
organisations work on high profile, strategic
themes where curiosity and innovation are
critical success parameters.
Recognising that each individual

is unique
It is a common view that working in virtual
teams around the globe requires a good
degree of cultural awareness. While we
acknowledge the importance of this, our
research shows that this topic should not be
overemphasised. In each culture each
individual is different and this is precisely the
individual uniqueness that is most critical to
understand in each group: nothing less than
that. Each member is unique and hence the
crucial importance of contracting properly
with each specific group or team in a way
that respects everybodys needs. Virtual
leaders need to dedicate specific time for a
contracting session during which individual
assumptions and expectations with regard to
people and the tasks at hand can be voiced
upfront, so that a common ground to develop
ways of working specific to the group can be
created. Having worked with teams involving
cultures as varied as Japanese, Indian,
Swedish and Russian, we realise that
cross-cultural awareness may help in
understanding each other, but is certainly not
sufficient to establish a sound basis for trust
to develop in the team.
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Recognising and managing tensions

and dilemmas
Implications for virtual team

leaders
Besides the importance of contracting ways

of working and developing trust, one of the
most critical parameters of virtual working
seems to be a set of specific tensions and
dilemmas often present in a virtual setting.
We have represented those in the diagram
below. As with many tensions/dilemmas
there is no way to really solve them. It
seems that the most effective approach is to
acknowledge them and work actively with
them. Here the team leader in particular has
an important modelling role to play.
The research has shown us that to develop

high performing virtual teams, a specific
type of leadership and management is
required. In some cases we found out
that successful ways of managing and
leading in face-to-face situations may
actually be counterproductive in virtual
settings. There is a real need for virtual
leadership in its own right. Our research
has identified some of the specific
competences and skills that managers and
leaders need to develop.
The need for

and dependence
on innovative
technology
Independence
needed to manage
own schedule and
boundaries
The business need

to manage, oversee
and control
AND
The emergence
of new ways
of working,
relationships
and expectations
The need for
reliance on tried,
trusted and proven
technology
The existence
of established
ways of working,
relationships
and expectations
The personal
need to be
trusted, empowered
and self-directed
Interdependence
needed to
synchronise work
with colleagues
working remotely
from me
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Role versatility
Self-awareness
More than ever before leaders must learn

to become more versatile in the roles that
they take on when leading teams virtually.
There is a wide range of roles that are
critical to assume and it is key to know
when to act and from which perspective. In
the diagram below we attempt to capture
the key roles in their variation.
It goes without saying that virtual leaders

(as well as all other team members) need to
have an acute awareness of themselves
and their impact on others in a virtual
environment. This might include, for
example, revisiting how ones MBTI profile
may serve one well or get in the way of
effective virtual work. For example, people
who are very process oriented and
structure driven might be effective at
managing the virtual process of
communication between the members
during a project, but might find it
challenging to facilitate and participate in
virtual meetings (audio meetings) where
spontaneity is required. Leaders of this
type can easily become task driven in a
teleconference and allow no space for
interruptions, silences or real inquiry
to emerge.
Learning how to move on the axis...
Nurture diversity
Establish norms
Demonstrating empathy
Showing authority
Coaching
Prescribing
Furthermore we categorise what we

perceive to be the key competencies and
skills for successful virtual leadership under
two main labels: Leading in the moment
and Managing the virtual process.
Leading in the moment

Focusing on tasks
Focusing on relationships
In synchronous virtual meetings (audio and

web based) where team members work
from different time zones but at the same
time, virtual leaders must:
Have sharpened listening skills and

To be successful the virtual
leader should
be a relationship builder
be a facilitator of social and work
processes
be a care taker
be a communication designer
align group structure, technology
and task environment.
10
learn to listen not only to what is

said/written but also to what is not
said/written. They need to learn to listen
to the words as well as to the voice, the
intonation, the speed of the delivery, etc.
In each conversation there is a huge
richness of data about the speaker and
we only understand a little part in faceto-face. Virtual leaders need to learn
how to understand the rest.
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Learn to work with silences: silences

might appear in an audio environment
much longer than they actually are
(three seconds of silence in an audio
environment might feel like ten face-toface). It is important to resist the need
to jump into the silence too fast because
it feels unpleasant. Silences bear in
themselves exactly as much data as
words. For leaders it is key to learn to
explore them in an unthreatening manner
to develop intimacy in virtual teams.
Redefining the etiquette for their

own specific team
Project managing
References
1. See, for example, Duarte, Deborah, L. and
Snyder, Nancy Tennant, (2001) Mastering Virtual
Managing conflict
Working with diversity
Establishing the context
Teams, Jossey Bass.

2. See, for example, Willmore, Joe, (2003)
Managing Virtual Teams, ASTD Press.
3. Goodbody, Jenny, (2005) Critical Success
Factors for Global Virtual Teams, in Strategic
Communication Management, Feb/March. 9. (2).
Managing workload in relation to time

available and time zones
Find a way to go with the flow of the

conversation and facilitate at the
same time.
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4. Powell, Anne; Piccoli, Gabriele; Ives, Blake,

(2004) Virtual Teams: A Review of Current
Literature and Directions for Future Research,
Managing own and others stress.
in The Database for Advances in Information

Systems, Winter. 35 (1), p.20.
Into the future

Combine structure and emergence.
Foster an atmosphere of inquiry rather
than advocacy.
Managing the virtual process

We are here particularly focusing on the
asynchronous mode (people working from
different locations at different points
of time). Virtual leaders must work on:
Building and nurturing relationships

where social aspects are essential
Maintaining presence in spite
We hope that what we have shared of our

research will contribute to mastering the
challenge of virtual working. Research
seems to have only just started to really get
to the essence of successful virtual
4
working and calls for the development of
specific virtual leadership competences and
skills. And there is still so much more to
discover. At Ashridge our research is
ongoing and we continuously update it
based on the growing amount of consulting
and developing work that we do in a virtual
mode with more and more organisations.
Virtual leadership is above all Learner-ship
where much still remains to be discovered.
of being remote
Generating information as an act

of co-creation rather than a content
Co-creating shared realities

Allowing for planning and emergence
Monitoring what people achieve rather
than what they do
Bringing the informal into the formal
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The Ashridge Journal Customer satisfaction strategy Autumn 2006
Gary Luck is a Business Director at Ashridge Consulting.

He specialises in strategic change, with a particular interest
in the link between the intent and reality of strategic
outcomes. He consults with a wide range of private and
public sector organisations in the areas of strategy
development, implementation and organisational
development.
Email: gary.luck@ashridge.org.uk
Customer
satisfaction
strategy
In this article, Gary Luck challenges any producer
of goods to know the size of the market for their
product. He illustrates how this knowledge will remain
elusive unless customer satisfaction, in its original
sense, is allowed to drive organisational strategy.
Forecasting the science
of imprecision
How big is the market for your product?
Every year, thousands of organisations run
endless spreadsheets and engage
multi-billion pound computer systems to
produce forecasts that will determine the
amount and specification of individual
items that the company will manufacture.
This forecast determines the raw materials
purchased, production schedules and
sales targets: all aimed at achieving the
highest level of customer satisfaction
providing customers with exactly what
they want, whenever they want it.
12
The accuracy of the resulting forecasts is

easily measured by a trip to the High
Street. Your sought after item is not
available in your size or colour. Whilst
making this discovery, you have had to
weave through hundreds of unsuitable
items of which the sales price is often less
than the cost price: so desperate are the
manufacturers to recoup some cash to
offset the financial calamity arising from
their ill-founded forecast.
If you are further up the supply chain and
do not have access to the end customer
then take a trip to any of your warehouses.
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Autumn 2006 Customer satisfaction strategy The Ashridge Journal
You can once again identify the level of

inaccuracy of your forecast by examining
the length of time the stock has been in the
warehouse and the number of stock-outs in
a given period. As the warehouse manager
you will be screamed at to produce some
stock units and yet you have enough of
others to supply the next generation!
Military supplies, fast moving consumer
goods, building supplies and household
furniture experience exactly the same
issues as the retail clothing trade.
For example, a small NHS Trust recently
had to write off 4m of out-of-date drugs.
On the other hand, the pharmaceutical
companies are frequently unable to meet
the full demand across all required drug
lines. If only the future could be predicted!
Of course it cant be. It is acknowledged
that in any forecast there will be a margin of
inaccuracy, but only at the point of sale will
the extent of the inaccuracy be illustrated.
Customer satisfaction strategy...

This article proposes a way for organisations
to be successful even when the demand for
their product range is full of uncertainty. The
key lies in the roots of the very word
satisfaction. It is derived from two Latin
words, satis meaning enough, and facio
to make. In other words, customer
satisfaction is not simply dependent on the
marketeers, sales or point of sales personnel
or the customer experience. Its more
fundamental, requiring an organisation to
make enough to meet customer needs.
Successful organisations are those that can
base their strategy on meeting not the
forecasted needs but the instant demands of
their customers, providing them with 100%
availability of the product they want whilst
keeping their costs under control through low
inventory. Customer satisfaction, rather than
forecasts, is allowed to drive organisational
strategy. In order for this to happen, a number
of principles must be followed:
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1. Consumption should drive production

scheduling
2. Production scheduling should drive the
supply of raw material
3. Order lead time, production lead time and
distribution/transport lead times should
be reduced to an absolute minimum
wherever possible.
If such a strategy is adopted, there are
profound implications not just for the way a
business is run, but also for the people
within the different departments of the
organisation. Senior executives need to
understand all of the strategic inputs from
operations, distribution, sales and planning
functions and the way they must change
not only their methods and measures, but
also their thinking.
It is important to stress that top
management needs to pay a great deal
more than lip service to the task of
ensuring that manufacturings input into
the strategic debate is comprehensive and
that the agreed corporate decisions fully
1
reflect the complex issues involved.
...with new behaviours

In each of these areas, leadership and
human behaviour are critical to achieving a
paradigm shift from traditional ways of
thinking and working. We are all too familiar
with silo-driven mentality in organisations
where decisions are made based upon the
perspective of a single department and not
on the need of the end customer. With the
continued use of cost/profit centres and
internal transfer pricing, managers
in organisations often make win/lose
decisions between internal departments
that impact badly on the bottom line
of the company. To implement customer
satisfaction driven strategy, the balance of
power should be roughly equal, with
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everyone subordinating to the very precise

individual needs of the end customer.
There is no place for political and
power games, which have long been
acknowledged as restrictive to total system
effectiveness. As Rosabeth Kanter wrote:
a monopoly on power means that only
very few have this capacity, and they
prevent the majority of others being able
to act effectively. Thus the total amount of
power and total system effectiveness
2
is restricted.
It is critical that people across supply chains
understand that they are in business to
deliver a service to the end user, not
to meet measures relating to the parts of
the supply chain. With modern technology
enabling unprecedented levels of
information and communication from point
of sale throughout the entire supply chain, it
is easier than ever to take a whole system
view rather than become preoccupied with
local, departmental measures. However,
individual needs for recognition, reward and
security may lead to reluctance to adopt
customer satisfaction strategy. It is vital for
everyone to understand and be rewarded
for what really matters to the business
as a whole. It is usually necessary
to change the existing measure and reward
system away from departmental based
measures to accurate customer fulfilment
based measures to achieve a sustainable
breakthrough in performance.
14
A successful furniture manufacturer

that increased bottom line profit by
meeting customer demand has been
able to share a significant proportion
of the extra profit with all staff
members. Daily, weekly and monthly
reviews of performance to the enduser are what staff are now focused
on, rather than measures of local
efficiency, productivity or sales. This is
fostering a pan-departmental culture
of supportive relationships, replacing
the previous them and us adversarial
relationships.
When manufacturer Remploy needed

to meet a sharp increase in demand
for military uniforms at the start of
the Gulf War, in addition to
implementing Theory of Constraints
approaches in new processes, new
methods of performance assessment
were introduced. These focused on
the finished product rather than on
individual parts of the process,
enhancing team spirit and sense of
3
collaborative working.
Perhaps the biggest barrier to successful

implementation of customer satisfaction
strategy is the anxiety leaders experience
when facing such a radical paradigm shift
across operations, financial measures,
sales and marketing. In a sophisticated
business environment our bodies react in
the same way as they did in our distant
past. Automatic reactions such as the
flow of blood to our hands ready for
defence or attack, and to our legs ready
for flight were indelibly etched onto
humans hundreds of thousands of years
ago when man was a hunter, as explained
4
in The Imperial Animal .
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During the implementation of this customer

satisfaction strategy your conventional
wisdom and current paradigm will be
challenged. It is therefore important to be
aware of your own automatic reactions.
William Isaacs describes this well:
I get defensive or competitive, at times
aggressive and I see others as the
source of this behaviour!They may have
gotten under my skin, but it was my skin
5
that had something under it.
A self awareness of physical bodily
reactions can be very helpful in dealing with
stressful situations, coupled with an ability
to create environments for true dialogue.
6
Unless we create an inquiring environment ,
thinking together with colleagues across
different functions where each participant
holds their hypothesis lightly enough
to really hear each other, customer
satisfaction strategy will only ever be
a dream.
Let us look at the three key areas where
the combination of customer satisfaction
driven strategy with new behaviour can
deliver remarkable results:
1. Consumption driven scheduling

Lets take a simplified example of a multiple
outlet High Street fashion store. Many retail
chains might proudly claim that if they sell
100 garments a day, they will restock with
100 garments for the next. However, only if
the replenished stock is identical to the
unpredictable size, shape, style and colour
preference of each of the next days
customers, will the retailer be able to
provide 100% availability. With customer
satisfaction driven strategy, when a
particular item is sold, it should be
replenished from back room stock within
the store. If information about the exact
colour, size and item of each sale is relayed
to the manufacturer on a daily (or even
hourly!) basis, the back room stock should
be replenished from the manufacturer.

Sometimes this will be from the
manufacturers small finished goods stock,
and sometimes it will be made to order
depending on delivery times.
This requires a considerable shift from
departmental based decision making to
customer demand based decision making.
Subordinating to a masterschedule based
only on daily sales overrides the common
power struggles between, for example,
sales and production (We can sell more
but they cant make it or We could
produce much more but they cant sell it.)
If your part of the supply chain is not
involved in manufacturing the product, you
may have to address the need to improve
relationships, communications and enabling
technology with other parts of the supply
chain. Have you ever considered that no
part of the supply chain has sold until the
end user buys? Of course suppliers of raw
material can offer bulk discounts within
a particular month and force product onto
the next part of the supply chain but have
they really sold? It is likely the next month
will be a lean one for the supplier.
This approach can be effectively extrapolated
throughout the organisational entities in the
entire supply chain.
2. Production driven supply

Immediate replenishment at point of sale
has obvious implications not just for the
manufacturing
operations
but
for
the purchase of raw material. Traditional
raw material purchase is often determined
by a combination of forecast, usage and
availability of bulk discounts. Production
driven supply is dependent on accurate
data being sent to the supplier, according
to customer demand. This enables
continuous production that never has to be
interrupted due to lack of materials.
Particularly where delivery can take several
weeks or even months, this may seem
360
impractical. However, with use of a system

to replenish finished goods stock,
combined with good supplier relationships
and creative transport solutions, remarkable
results can be achieved. Innovative thinking
will be and has been developed for
suppliers who insist on supplying large
batches of, for example, dyed material.
Large batch delivery would impede this
type of, solution as it prevents the
necessary flexibility. Paying attention to
buffer management and accurate
composition of each customer delivery
reduces the need to hold high stock
levels to compensate for uncertainty.
Consequently, inventory levels can be much
reduced, as can warehouse and floor
space. This has immediate impact on
cashflow and ROI.
US textiles and apparel company

Warren Featherbone improved margins
by nearly 20%, while improving turns
from 2.5 to 4.5.
Mercantile's retail store experienced
gross margin increase of 135% and
store space decreased by 50%.
Oregon Freeze Dry implemented this
approach and reduced inventory by
60% and increased sales by 20% within
six months.
Walmart, the worlds largest retailer with
sales approaching $300bn, focuses on
low inventory and high availability of
product on the shelf.
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3. Short lead times

Order lead time
We often consider lead times as production
and transport lead times. Of course these
elements are important but there is another
amount of time that is often ignored: order
lead time.
In Figure 1 you will see that order lead time
is by far the longest time relative to
production and transport lead time. If this
time can be eliminated then stock levels
can be reduced allowing cash to be
released for the company.
Figure 1.
In Figure 1, a common stock measurement

system is depicted illustrating minimum and
maximum inventory. Organisations pay
attention to stock levels as real money is
tied up with too much stock. This money
could be spent on other activities to
generate more return on investment. The
key is to provide 100% availability with low
inventory levels. In the graph, orders for an
individual stock unit are placed, the
individual stock unit is delivered, the
individual stock unit is consumed, another
order is placed, the individual stock unit is
delivered, and the individual stock unit is
consumed. The average individual stock
unit level is between the minimum and
maximum levels.
X Order Lead Time
Devastating effects of order lead time
Y Production Lead Time
Stock Levels per SKU
Z Transport Lead Time
Max Stock Level

Stock consumption
Stock consumption
Min Stock Level
X
Order placed
16
Y Z
Order delivered
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It is clear that when order lead time is

eliminated (Figure 2), the average individual
stock unit level is reduced. If order lead time
is eliminated across all stock units, the result
will be reduced inventory. The benefits of
reduced inventory are:
360
If accurate and frequent information of

customer demand is provided as in Figure
2, then stock will be reduced by at least one
third whilst nearly 100% customer needs
are met.
To the product: improved quality and

engineering as defects will be identified
and rectified earlier; new products
introduced faster
To the price: higher margins and lower

investment per unit increasing ROI
To meet customer satisfaction by 100%

availability of product and shorter
quoted lead times.
Figure 2.
Y Production lead time
Stock levels per SKU
Elimination of order lead time
Z Transport lead time
Stock consumption
Max stock level
Min stock level
Y Z
Order delivered
Information of end customer demand
17
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Production lead time

Lead times are often crucial in calculating
how much stock is required to ensure
demand is met. For example: if you have a
three week lead time for product delivery,
then, as a retail outlet, you would probably
try to hold four weeks worth of stock to
reduce your risk of stock-outs. If the leadtime was two days then one weeks worth
of stock would be sufficient. Whilst this
example is simplistic (it depends upon the
product and demand), it illustrates the
point that longer lead times result in
higher stock and higher stock levels result
in more cash being tied up.
There is also an important theoretical reason
for reducing lead time. There is a one to one
relationship between the amount of inventory
in a system and the time that it takes to go
through the system. Simply, this means that if
one unit takes one hour to go through a
system with 100 units of work in progress
then if that work in progress was reduced to
50, the unit would take 30 minutes to go
through the system. Reduced production lead
times are particularly valuable where
products become obsolete very quickly. They
are vital, for example, for toy producers who
produce film associated merchandise or have
to meet the pre-Christmas sales boom. They
are also vital for high technology industries.
Motorolas Advanced Product Research
and Development Laboratory increased
throughput by 150% and reduced
cycle times by 20%. Benefits to the
Fab plant came in terms of added
capacity allowing the addition of more
technologies to the line. Due to
reduction in cycle time, new technology
introduction occurred faster.
18
Competitive advantage through the

strategic sale
If a manufacturing company adopts the
strategy described above, what are the
implications for the company, its customers
and its market?
It gives the supplying company the
confidence to make a remarkable offer to
the customer. Knowing that it can deliver
the right product to the right place at the
right time, every time, with lower overall
cost, the company can offer:
a. To take full responsibility and
accountability (including financial) for the
stock held at the customers premises
b. To pay penalties if a product is not
available to the customer on demand.
Potentially this gives the company a
competitive edge in the market place as it
increases the customers return on
investment by increasing their inventory
turns and ensuring that every sale is met.
This becomes an extremely enticing offer to
the customer, who could well accept higher
7
prices for the improved service .
Dr Goldratt based his best selling book
8
Its Not Luck on a real packaging company
that dramatically reduced lead time, reduced
stock levels, and increased due date
performance to near 100%. They made an
unrefusable offer to the market and
increased sales and margin dramatically.
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Successful implementation
Key steps to successful implementation
of customer satisfaction strategy are:
1. Obtaining fast sales information:
making decisions based on todays
sales to the customer
However, with customer satisfaction

strategy meeting 100% of customer
demand, you will be able to answer for
today How big is the market for your
product?
References
1. Hill, Terry, (1993) Manufacturing Strategy,
The MacMillan Press.
2. Kanter, Rosabeth, (1977) Men and Women
Note: Personal conversations with Dr E Goldratt and

Mickey Granot (Director of Goldratt Group) have
2. Implementing 'world class' production

and distribution processes and
creating the environment for
9
behavioural changes
360
informed my thoughts.
of the Corporation, Basic Books, New York.

3. Luck, Gary, (2004) New Market Innovation
through Supply Chain Management, CriticalEYE
REVIEW: Journal of Europe's Centre for Business
Leaders, March-May.
4. Tiger, Lionel and Fox, Robin, (1997) The Imperial
Animal, Transaction Publishers.
3. Only when confidence to deliver to

the customer demand is at almost
100% with reduced inventory can
the strategic sale be made that will
provide a win/win solution, increasing
margin for you and your customer
5. Isaacs, William, (1999) Dialogue and the

Art of Thinking Together, Doubleday.
6. Block, Peter, (1993) Stewardship, Berrett Koehler.
7. Cram, Tony, (2006) Smarter Pricing, 360
The Ashridge Journal, Spring.
8. Goldratt, Eli, (1994) Its Not Luck, Gower.
4. Sales focus on improving ROI for

customers rather than offering
discounts
9. Shragenheim, Eli and Dettmer, H. William, (2001)

Manufacturing at Warp Speed: Optimizing Supply
Chain Financial Performance, St Lucie Press, 2001.
5. Ensuring motivated and proactive

staff: using incentives based on whole
organisation measures, reflecting the
extent to which customer demand
is met
6. Addressing individual anxieties of
senior managers and staff and meeting
their development needs around the
paradigm shifts described above.
Returning to the original question posed at

the beginning of the article: how big is the
market for your product? Unless your
company is providing 100% availability of
your products it is impossible to know. It is
almost impossible to measure sales that
are lost or worse, diverted to your
competitors. Your lost sales are probably
higher than you have ever imagined: based
on studies of many industries, your figure
can be as high as 150% dependent on
your degree of seasonality.
19
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The Ashridge Journal Fearless listening: the hidden factor behind the power of fearless consulting Autumn 2006
Erik de Haan is Director of the Ashridge Centre for

Coaching. His focus is on executive coaching, action
learning and peer consultation and organisational
development consulting. He writes widely on these
subjects. His most recent book, Fearless Consulting,
was published earlier in 2006.
Email: erik.dehaan@ashridge.org.uk
Fearless listening:
the hidden factor behind the
power of fearless consulting
Through reflection and enquiry into his personal consulting practice
and that of some 100 executive coaches, Erik de Haan, the author
of recently published Fearless Consulting, looks at the vital
skill for consultants of listening without fear.
Fearless Consulting
2,000 years ago Plutarch pointed out that
although most professionals spend a lot of
time and effort in learning to speak better,
it is the faculty of listening that really
deserves this investment. In my opinion, the
same is still true for many professional
executives and consultants today.
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Autumn 2006 Fearless listening: the hidden factor behind the power of fearless consulting The Ashridge Journal
Almost a year after publishing Fearless

1
Consulting , I realise that I never made
explicit the aspect of consulting that
underpins my whole approach to the
profession. This aspect is quality of
listening, or the fearlessness of really
listening well. This article seeks to explore
further and underline the relevance of
fearless listening in consulting practice.
The art of listening remained somewhat
implicit throughout Fearless Consulting
because it is so difficult to speak or write
about listening. After all, where there is
speech, there is no (full and fearless)
listening. When you speak or write you are
in sending mode, while if you listen you are
in receiving mode and it is impossible to
be fully engaged in both modes at the
same time. Therefore readers listen more
than writers. Even for readers, listening may
360
acquire a consuming flavour: the kind of

listening that leaves us largely absorbed in
the main threads of the argument with little
room for listening between the lines,
listening for ambiguity or for unresolved,
open issues.
Generally, how does one enter this state of
mind that is consulting, the state of mind of
high-quality listening? I believe the short
answer is: by noticing what is going on with
this client at this moment in this
relationship. I believe that consulting
actually exists only in the here and now. If I
can be truly involved in what is going on at
present with my client, I have already done
most of my consulting work for this
moment. Consulting begins and ends with
a joint focus by client and consultant on
improving the situation of one of them:
the client.
Fearless Consulting
The aim in Fearless Consulting was to reflect on the temptations, risks and limits of the
profession and to get consultants thinking about their profession, with questions such as:
What does consulting really mean?

What does it mean to be a consultant?
What sort of dilemmas can consulting entail?
How can consulting degenerate into something that is no longer consulting?
The book considers a number of puzzling questions such as:
How can one distinguish a consultant from a flatterer?

As a consultant, how does one handle ambiguous and ambivalent clients?
Can one in fact consult with ambiguity?
Is consulting free from power?

How can one be irresponsible without behaving irresponsibly?
How can one let go without letting the other person go?
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An example of the need to listen well, consult less

If consultants are able to detect the irony in a presenting problem, they may often save
themselves a lot of work. We discovered this a little late, some ten years ago, when we
were asked to facilitate a programme on project management for Nike Europe in
Belgium. Over the previous years, the Nike managers concerned had made a
considerable effort towards becoming professional project leaders: reading books,
attending courses and seeking to implement learning, but for some reason this had
never brought them the hoped-for improvement in their work.
After some preliminary conversation and agreement on the programme design, we
started to facilitate the first module on project management. The managers responded
enthusiastically, inquiring about ways to complete projects more successfully. When it
came to the writing of a project plan and the need to map project goals, results and
milestones, someone gave an unexpected response: This wont work over here. We
always follow our company motto Just do it! which inspires us to believe that nothing
is impossible so long as we dedicate ourselves to it one hundred percent. So it wont
suit us to create a lot of paperwork first and only then to begin to actually do things.
This was such a compelling remark that we decided to use the remainder of the
module to listen to the participants and the circumstances under which they might be
prepared to commit to any planning ahead and thereby to complement their motto.
We decided to cancel the rest of the programme because we were convinced that there
was no lack of knowledge or training in the field of project management. The strong
company culture and motto of Nike had led to repeated ironical requests for training in
the field of project management. As far as I know, this might still be the case.
Permission for example kindly granted by Nike
Why is listening fearful?

Listening often seems the easiest thing in
consulting: the interest is there, the
empathy is there, listening skills have been
developed to a sufficient level, etcetera.
Consultants often think that consulting
has not really begun when they are only
listening. We often overlook how crucial
and fearsome just listening is, and many
of us overestimate our own listening skills.
To quote Plutarch (1st Century A.D.)
again: Some people think the speaker
has a function, while the listener
2
does nothing .
22
In fact, listening is the only communicative

skill that we need in order to be skillful in
all other communication, and the only one
that even experienced practitioners feel
that they still have a lot to learn about. This
is partly because even accomplished
listeners have sub-optimal skills. There is
always a lot going on that any listener may
miss, as there are very few signals and it is
a struggle to read them well. Also, our
fears often decrease our faculty of
listening, even if we are not conscious of
them or dont attach sufficient weight
to them.
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Reviewing my own difficulties with listening,

I have come to conclude that there are four
basic fears that block my listening at
different times. These are only my fears; the
reader may have others not mentioned here.
1. The fear of not contributing enough or
not being useful enough. This is a central
theme for many consultants (see our
3
research on critical moments for coaches )
and has to do with the fact that the
consultant is not in charge, and not himself
responsible for results that ultimately belong
to the client. Naturally the consultant can
become apprehensive of not doing enough
or contributing enough to the solution of his
clients problems. When the consultant is
only listening, this fear is heightened and
may develop into a distraction which itself
precludes only listening.
360
mind. I have often experienced a trance-like

state when I was listening with all my heart
and mind, becoming myself almost an
extension of the thoughts and feelings of my
clients. This risk of almost losing oneself in
trance is heightened when we are listening to
very emotional accounts, or to ambivalence
and ambiguity, so that neither we nor our
clients know what will come next.
Fearful dilemmas of listening

Interestingly, the four basic fears above
seem to complement each other in pairs:
The first two are about:
Underplaying the task that is involved

in just listening
Being overly daunted by the task

of the listener.
2. The fear of not understanding enough.

The struggle for understanding is always
part of the work of the listener. Once the
listener becomes aware of how much he is
missing, and of how much more there is he
could also be listening to, this fear of not
understanding well is heightened.
The second two are about:
Becoming self-conscious about

the vulnerability of being there for
someone else
Becoming self-effacing in the process

3. The fear of exposure of self. When we are
listening carefully, we are offering our full
attention and we are trying to let in as much
information as we can. This means we
suspend our judgements of what we see and
hear, and we develop empathy for our clients.
We also let go as much as possible of our
own interpretative processes and our own
agendas. This can leave us feeling
awkwardly exposed, vulnerable, and open to
potential client critique or rejection. This fear
is heightened when something that the client
says or does appears critical towards us.
4. The fear of loss of self. Another fear when
listening carefully, offering our full attention
and being open as much as we can, is that
we almost dissolve into the clients frame of
of listening.
These two pairs of complementing fears can
be pictured as dilemmas, showing the
ambivalence of a listener. This matches a
common experience with listening, i.e. when
one fear disappears there is a good chance
that another fear will pop up, such that the
middle ground of just excellent listening
seems an almost unattainable state and a
precarious balance. See Figure 1 overleaf
for a short summary of the two dilemmas.
The axes in this figure are about
appreciation of listening (high appreciation
at the bottom to low appreciation at the
top) and about the focus of listening
(merging with self on the left and merging
with the other on the right).
23
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Figure 1.
Dilemmas of listening
Not seeing the work
involved in listening
Being self-conscious
FEARLESS
LISTENING
Identifying with
the other
Overestimating the work

that is involved in listening
An example of how our fears may influence our listening

This is just a recent and typical example of something that I experience with some regularity. It was the second
coaching conversation with an HR consultant who is currently entering the coaching profession. As a support
to studying for her MSc in coaching, she requested five coaching conversations.
After she sat down for the second conversation, the client did not know quite how to start, referred back to the
first coaching session, fell silent, started again, faltered again, showed some embarrassment and started
apologising for rambling. When she got more into the conversation she related some incidents from her
previous career as a manager and some experiences from the MSc programme, and then shared an array of
doubts about whether she would be able to become a good coach. I listened attentively and pointed out some
common themes, such as her tendency to attribute successes to others, including her teachers, sponsors and
me, while attributing failures to herself.
After the conversation I made some notes about themes in the conversation and about areas to explore in the
next session. It was only when I read back these notes that it dawned on me how vulnerable and diffident this
client was. I had been very smart to point out patterns and analogies, to remember some relevant themes from
our first session, and to highlight themes for future sessions, but I had almost lost my client in my failure to
recognise where she was on an emotional level. Only with the help of my supervisor could I preserve the
beneficial nature of this coaching journey and become less analytical and more supportive before it was too
late. I had fallen prey to the fear of opening myself up, and by not doing so, failed to engage emotionally
with the client.
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Overcoming fears: ongoing

research and practice
Any listeners wish would be to get over
these fears, and to just be listening, even in
difficult circumstances where the issues
are complex or we are ourselves somehow
implicated. So, how do we work on our best
quality of listening? Seriously getting
involved in these questions amounts to
acquiring a free ticket to a fascinating
journey of picking up ever more gold dust
in life, as well as securing a way to improve
many of our relationships and, on top of all
that, to become better at consulting.
Recently, I have been studying the question
of how to get over a listeners fears with
about 100 coaches, half of whom are in
their first year as a coach and the other half
with at least eight years of experience. They
have kindly communicated their own most
critical moments to me, to do with listening
to themselves and to their coachees, and I
have tried to listen to their accounts of
4
these moments . We have reached only
some early answers to the question, and
they seem to be related to the following:
It is an all too human and ultimately

biological reaction to want initially to
eliminate fears, tensions, doubts and
ambivalences by fighting or fleeing. Our
clients display such fight/flight impulses,
often called defences, when confronted
with tensions. However, we cannot deny
them in ourselves either; not even when
we are in the role of consultant. Before we
know it, we are skirting around or ignoring
these fears, or pinning them down with a
firm interpretation. The more we consult,
the more we ourselves build up long-term
defences against our existential fears and
doubts without realising that we are
doing this.
360
References
1. de Haan, E., (2006). Fearless Consulting
Temptations, Risks and Limits of the Profession,
Wiley, Chichester.
2. Plutarch (1st Century A.D.). On listening.
Translated by R. Waterfield, Essays, Penguin Books,
London, 1992.
3. de Haan, E., (2006a). Ik twijfel dus ik coach
spannende momenten van coaches uit hun eigen
praktijk coachingpraktijk [I doubt therefore I coach
critical moments in coaching practice],
Handboek Effectief Opleiden 40 (11.6), pp.
2.012.18. Followed by: de Haan, E. (2006b),
Ik worstel en kom boven spannende momenten
van ervaren coaches [I struggle and emerge critical
moments of experienced coaches], Handboek
I am grateful to Karen Welch who first spotted the

omission in Fearless Consulting when it comes to
Effectief Opleiden, 40 (in print).

4. Ibid
fearless listening.
5. Rogers, C.R. (1961). On Becoming a Person

a Therapist's View of Psychotherapy, Constable,
London. (See chapters 8 and 9 for what it means
to become more mature).
The right intention, involving genuine

interest, curiosity and commitment.
This is what the book Fearless
Consulting is all about
Self-awareness, particularly when it

comes to our own fears and to the
relatively poor quality of our listening,
however hard we try
Just generally becoming more mature,

5
which, according to Carl Rogers ,

means becoming more open,
susceptible, flexible, trusting, accepting
and authentic
Involving a consultant (or coach, or

supervisor), as this person may help us
to look at the fears themselves and
resist the temptation of putting them
away or eliminating them.
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The Ashridge Journal Snakes and ladders: the organisations path to successful expatriation Autumn 2006
Arno Haslberger is an Ashridge Associate and
Sharman Esarey is the Editor of the 2005 Annual
Co-director of the Ashridge Strategic Human Resource
Report for the Organization for Security and Co-operation
Management programme. He has lived and worked in
in Europe. Previously she spent 16 years at Reuters
both Europe and the US, teaching on a range of MBA
as a journalist in Germany, the US and UK. She is also
and executive education programmes.
the president of the American Womens Association

in Austria.
Email: arno_haslberger@yahoo.com
Email: sharmansue@yahoo.co.uk
Snakes and ladders: the organisations path

to successful expatriation
In this second article on factors that enable successful expatriation,
Arno Haslberger and Sharman Esarey discuss ways in which the
organisation can tip the scales in favour of its expatriate employees.
In the first of this pair of articles
(360 Spring 2006), we focused on the
effect of the environment on the
expatriates adjustment and on the most
important determinant of the adjustment
process: the expatriate himself.
Individual reactions to external inputs
set in motion virtuous cycles that drive
adjustment, or vicious cycles that
restrain adjustment and sometimes
derail assignments. In both articles we
used the old Indian game of Snakes and
Ladders as a metaphor to explain this
process. Snakes send the expatriate
player skidding back on the road to
adjustment; ladders help him jump
squares and sprint ahead.
26
Organisations sending executives abroad

have a critical role to play in influencing
their expatriates adjustment to a new
culture (Bhaskar-Shrinivas et al, 2005).
They can enhance performance abroad or
undermine it. Their interventions, at critical
points, can tip the scales either way. In this
article, we focus on how companies must
build ladders to adjustment and improve
performance from good to great. They also
need to eliminate snakes (the slippery
downward paths that can cripple or ruin
assignments abroad), thereby defending
against negative influences.
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Autumn 2006 Snakes and ladders: the organisations path to successful expatriation The Ashridge Journal
Typically, because of the need to avoid

problems, companies focus defensively on
eliminating snakes. They may ignore the big
wins that pro-active construction of ladders
can bring, often with a relatively small
investment in resources and manpower.
As we roll the dice at the start of one mans
game, we can also highlight another twist to
the game of expatriate adjustment the
timeline of critical corporate interventions. We
break this down into three important stages:
a. preparing for expatriation
b. the early days in the host country
c. from three to six months into the
assignment.
This time-line is illustrated in the story of
our expatriate's route on the Snakes and
Ladders board with its inevitable ups and
downs. We particularly focus on the
potential role of organisational influence in
the three spheres of adjustment: individual,
micro- and macro-environmental factors.
Lets play
Coltrane Corp. rolls the dice, announcing it
has selected David Browne, a 40-year-old
engineer, for the prestigious position of
starting up its new line of business in Japan.
His boss, convinced of his technical brilliance
and impressed by his management skills with
his local ten-person team, nominated him for
the new role. After 15 successful years with
the company, this will still be a major break for
David. Should things go well, it could vault him
into the companys upper ranks.
When Coltrane rolls, where does David
land? On a snake or a ladder?
While every expatriate experience is
different, much will depend on how
Coltrane has prepared the ground to
influence the critical individual and the
micro- and macro-environmental factors at
this stage of the game.
360
Preparing for expatriation

Coltrane based its decision to send David
both on his technical and his managerial
skills. These individual factors are crucial;
David must have the requisite technical
skills to survive the first weeks on the job
and avoid a slide down a snake.
But two matters in the individual sphere
are unclear at this juncture. First, has
Coltrane avoided the snake of faulty
expectations? Training must provide solid
insight into the new macro- and microenvironment, equipping the expatriate and
his family with the knowledge needed to
navigate a new environment, including
a thorough job preview and host
organisation briefing for the expatriate.
Unmet expectations disappoint employees
and can undermine adjustment and
performance (Black, 1992), while
experiences that exceed expectations tend
to fuel peoples well-being.
Expatriates will need information about
the new country as well as about the
process of adjustment that awaits them.
The company should tailor the length and
tools of the training to reflect whether the
expatriate has had a similar experience
abroad and take into account the cultural
distance of the host and the home country.
Second, has the organisation built the
ladder that could ensure peak performance
from David? Has it assessed his personal
characteristics (Caligiuri, 2000a, 2000b)
and included this assessment in its
selection process? Organisations often fail
to take into account personality factors that
influence an expatriates adaptability, his
propensity to return early or how he
performs on the job. Although most people
can adapt to new surroundings, outgoing,
curious and relaxed individuals will have an
easier time and experience less stress.
Even if Coltrane does not use such
personality assessments as a tool to help
determine whom to select for assignments,
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such information can be used as a basis for

development, to help hone the individuals
skills before or during expatriation.
In the selection process, Coltrane must also
arm to battle perhaps the biggest snake of
all. Family maladjustment is a prime reason
for expatriate problems. Spouse adjustment
is regarded by many as the single most
influential variable in the adjustment of
expatriate employees (Bhaskar-Shrinivas
et al, 2005). At a minimum, organisations
need to involve families in a conversation
about motivation and expectations before
concluding the expatriate selection
process. Combined with proper training, the
inclusion of the family in the expatriation
process will go a long way toward
eliminating problems.
Provided Coltrane has done its homework,
David will be advancing on the board.
At this point, Coltrane faces further
reverberations from the choices it has
made in Davids micro-environment. Has it
used savvy career planning to build
a ladder? Career planning needs to be part
of the expatriation process long before
the expatriate gets on the plane.
The organisation must thoroughly review
the objective of the assignment (Black and
Gregersen, 1999). What outcomes are
expected both short- and long-term? Is the
assignment designed only to complete
a specific task or tasks, or also to provide
an executive with certain skills and
groom a future leader? Coltrane must make
certain its career planning matches its
overarching strategic goals.
28
Finally, Coltrane must thoroughly road test

the new job and its characteristics. It is not a
given that well-adjusted expatriates perform
well (Thomas and Lazarova, 2006). Job
design is a crucial point and companies
often overlook the pitfalls. The company
must pay attention to three key factors:
a. that job objectives are clear and
internally consistent
b. that the expatriate's level of discretion
is such that he has room to breathe,
but also that he is not out there on
his own
c. that reporting and appraisal lines
are not ambivalent, especially since
the challenges of reporting in matrix
organisations are magnified
in expatriate settings.
The early days

Given Coltrane's good planning, David should
be approaching the middle of the game board
as he steps off the plane into the host
country. Without this help, other expatriates
might be stranded lower down the board
while David prepares to get down to business.
To prepare David for this period, it is essential
that Coltranes training focus is not just on
the new environment, but also on the process
that David will go through as an individual as
he adjusts. Coping with differences
generates stress and requires strategies to
relieve it. Such a move is a wrenching
transition. Training is often most successful in
situ, when the expatriate is experiencing the
issues under discussion. Coltrane can
proactively provide new arrivals with coping
strategies. Substitution is one such technique.
David, for example, is an ardent rugby fan, a
sport that is only developing in his new home.
With the help of his new co-workers David
could get introduced to a new, but similarly
exciting sport. Perceived support by the host
organisation is an important facilitating factor
in adjustment (Kraimer et al, 2001).
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Micro-environmental factors loom largest

at this stage, the first few weeks of an
assignment abroad. Coltrane should build
important ladders by helping families cope
with support for matters that go beyond
schools and housing and by helping
provide, or guide new arrivals to, a
social network.
In the early days of a move abroad, Davids
wife Louise will typically be under
considerable strain. She is bearing the
burden of finding new schools, a new
house and moving in, even if the company
supplies a relocation agent to help with the
details. With little extra planning, the
company can free up some of Davids time
in the transitional weeks to get the new
home life off to a good start.
School days differ widely. Even within

Europe, one expatriate couple found
their sons school began in different
countries at 0730, 0815, 0830, 0900
and 0930. Depending on the country, it
ended at between 1300 and 1900.
Such changes affect the entire familys
schedule, the search for childcare and
employment opportunities for the
expatriates partner. They can even
affect childrens health.
This couples five-year-old son suffered
from repeated bouts of tonsillitis. Finally,
the doctor recommended the glands be
removed. Several months before they
were to return home for the operation,
the family moved to Spain. The childs
new school started at 0930, rather than
0730. It was also nearby and he walked
to school, whereas before he had been
driven. He never had tonsillitis again.
360
Similarly, the company can provide access

to a support network at little cost and for
great benefit. Many companies join up with
others in the same foreign location in a job
exchange for expatriate spouses. The first
few weeks are necessarily a time of stress,
when expatriates and their families have a
number of tasks to do and few friends or
acquaintances with whom to share the new
experiences. The company can direct the
newcomers to organisations or groups that
might prove helpful. It can hook them up
with experienced expatriates. It can itself
provide cultural mentors, helping the
arrivals to build a corporate social network.
As president of the American Womens Association in Vienna, I come across Englishspeaking women from across the globe who struggle with the transition to a new
environment. New arrivals complain that, while coping with new homes and schools and
other important matters, some task that they do on autopilot at home suddenly
transforms into a feat of cross-cultural acrobatics. What took 15 minutes at home now
requires an hour, even two.
One new arrival told me she and her partner arrived in Vienna during the Christmas
holidays; they couldnt find a single grocery store to stock the refrigerator and
ended up eating out for days. Another said she had decided on ham sandwiches for
lunch what could be easier? Then she spent more than an hour in the grocery store
unable to locate the mustard.
These frustrations are trivial, but they pile up like the proverbial straws on the camels
back even though they are easy for the company to foresee and address.
Citing similar examples, these women spoke about how difficult their changed
circumstances were and how tough to come to grips with. They all needed to make new
friends who could sympathise with their experiences.
Sharman Esarey
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Finally, also at the micro-environmental

level, Coltrane can ensure that both its
human resources support and its host staff
are prepared to receive expatriates and
to deal with related issues (Toh and
DeNisi, 2005). Often HR personnel lack
international experience themselves.
They do not understand the issues and
are therefore unable to detect developing
problems early on, when necessary.
Companies need to train their HR support
staff and ideally have HR professionals who
have been on expatriate assignments
themselves. So too, employees in the
host organisation can do a lot to make
expatriates lives easier, or harder.
Months three to six

As yet, although David should be reaching
the final rows of our game board, we have
not included any macro-environmental
factors in our analysis of corporate leverage
over successful or unsuccessful expatriate
assignments. There is good reason for this.
For the first few weeks, most expatriates
are absorbed in the individual and
micro-environmental challenges of a move
abroad. It is only once they have their feet
under the table at work, a school for their
children and a permanent roof over their
heads that people look up and notice the
macro-environment and how different it is.
This crucial phase will occur from about
three months into an assignment through
perhaps the sixth month.
Neither the expatriate nor Coltrane can
change the macro-environment. It can,
however, influence the expatriate's sense
of ease in the new culture, no matter how
different. Fluency in the local language and
familiarity with the culture are two key
variables that support adjustment
ones that Coltrane influences. Continued
language and cultural training build ladders
by enabling the expatriate and his family to
feel ever more at home.
30
To help deal with the stresses of other

factors, Coltrane should provide rest
and relaxation trips and employee
assistance programs thus avoiding
snakes. Sometimes people need an escape
valve and an opportunity to recharge.
The company's help in funding these trips
will gain it increased productivity upon
return. This is important for assignments to
remote locations, particularly those with
difficult-to-adjust-to cultural differences
such as exotic foods, tough climatic
conditions, poor housing or health care.
In case of emergencies, psychological
support services must be available as is
common practice with medical and security
support. While rarely needed, there is no
time for delay when problems are
discovered.
We are reaching the crucial last row of our
game board. Will David adjust and make it
to the end of our game?
In addition to macro-environmental factors,
other factors continue to play a role. Some
of the companys earlier failings will come
home to roost. Unhappy families make for
maladjusted and strained expatriates.
On the micro-environmental front, Coltrane
can build a ladder that will keep expatriate
motivation, under certain circumstances,
from flagging. Expatriates often fear
they have fallen off the radar
screen of corporate headquarters.
The company should actively counter this
out-of-sight, out-of-mind syndrome.
Preferably, it should foster contact by
phone or face-to-face. Written reports are
often not read, nor do they convey
the needed feeling of connectedness; a
home-office mentor, on the other hand, will.
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360
Building ladders, removing snakes

Organisations face a number of challenges
when they send executives abroad.
First, they must clear the terrain of snakes.
They must also build ladders to success.
These will enhance expatriate performance
and often are relatively easy and
cost-efficient to implement.
References
Bhaskar-Shrinivas, P. Harrison, D. A. Shaffer, M. A.
& Luk, D. M., (2005) Input-based and Time-based
Models of International Adjustment: Meta-analytic
Evidence and Theoretical Extensions, Academy
of Management Journal, 48, 257-281.
Black, J. S., (1992) Coming Home: The Relationship
of Expatriate Expectations with Repatriation
In summary, the organisations most likely to

create the best possible environment for
success are those that:
Adjustment and Job Performance, Human Relations

(cited from Information Access Company release
p.1-9), Vol. 45, No. 2, February, 177-192.
Black, J. S. & Gregersen, H. B., (1999) The Right
Way to Manage Expats, Harvard Business Review.
Assess the individual

Prepare the familys expectations and involve them in selection
Undertake career planning to put the role in context
Design the job for success
PREPARING FOR
THE ASSIGNMENT
Caligiuri, P. M., (2000a) Selecting Expatriates

for Personality Characteristics: A Moderating Effect
of Personality on the Relationship between Host
National Contact and Cross-Cultural Adjustment.
Management International Review, 40, 61-80.
help with practicalities

Provide
a social network
Facilitate
Provide support from suitably experienced HR staff
Caligiuri, P. M., (2000b) The Big Five Personality
THE EARLY DAYS
Characteristics as Predictors of Expatriates Desire

to Terminate and Supervisor-rated Performance,
Personnel Psychology, 53, 67-88.
Kraimer, M. L., Wayne, S. J. & Jaworski, R. A.,
continued language and cultural training

Provide
an escape valve
Provide
contingency plans for emergencies
Have
Stay connected
(2001) Sources of Support and Expatriate
THREE TO SIX MONTHS
Performance: The Mediating Role of Expatriate

Adjustment. Personnel Psychology, 54, 71-99.
Thomas, D. C. & Lazarova, M. B., (2006) Expatriate
Adjustment and Performance: A Critical Review,
in Stahl, G. K. & Bjorkman, I. (Eds.) Handbook
Coltrane played a savvy game and gave David

an advantage on the cross-cultural Snakes
and Ladders game board. As a result, David
has arrived at the winning square after the
usual ups and downs. Without similar support,
other expatriates fared less well. Some may
stall and never reach the top. Others may be
caught, Sisyphus-like, ever rolling the boulder
of cross-cultural adjustment uphill only to
have it roll back down before reaching the top.
of Research in International Human Resource

Management, Edward Elgar, Cheltenham.
Toh, S. M. & Denisi, A. S., (2005) A Local
Perspective to Expatriate Success. The Academy
of Management Executive, 19, 132-146.
Meanwhile, David and his family are making

the most of their time abroad. After much
personal growth and a successful as well
as satisfying experience, they will prepare
to return home.
But that is a whole new game.
31
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The Ashridge Journal Organisational spirituality away with the fairies? Autumn 2006
Eve Poole is a Leadership Tutor at Ashridge, where she

also teaches Ethics and Emotional Intelligence. She is a
Visiting Lecturer at the University of Surrey, teaching the
Organisational Spirituality module on the School of
Managements postgraduate certificate in Spiritual
Development and Facilitation. She is currently researching
for a PhD in Theology and Capitalism at the University
of Cambridge.
Email: eve.poole@ashridge.org.uk
Organisational spirituality away with the fairies?

Eve Poole suggests how the concept of organisational spirituality
may help organisations to achieve some breakthrough in the
intractable problems associated with employee motivation,
engagement and well-being.
Does the notion of organisational
spirituality have any relevance outside the
ivory towers of academia? The topic has
now become an accepted focus for
academic research, with dedicated issues
appearing in peer-reviewed journals such
as the Journal of Organisational Change
Management and The Leadership
Quarterly. Even the venerable American
Academy of Management has had a special
interest group for Management Spirituality
and Religion since 2001. But is this a
manufactured fad designed merely to feed
a publish-or-perish culture, or is there
something in this field that might be of help
to organisations in a more practical way? In
the same way that The Da Vinci Code
32
sparked off a flurry of imitations and

parodies, the emergence of the spirit at
work phenomenon has generated a vast
array of rather patchy material. This article
sifts through the emerging literature to
extract some nuggets for organisations.
A meaning-making construct
First, it is useful to examine the way in which
this particular piece of jargon is used. In
general, a distinction is usually drawn
between spirituality and religion, where the
former is perceived to be more inclusive and
less encumbered with ideological baggage
than the latter. Apart from being not religion,
spirituality in the workplace is generally taken
to encompass a basket of related concepts:
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Autumn 2006 Organisational spirituality away with the fairies? The Ashridge Journal
meaning, wholeness, integrity, interconnectedness, creativity, ethics and

transformation. While it would be neat to find
one concrete definition, the ephemeral nature
of the concept of spirituality, and its very
personal interpretation, suggests that to seek
too much clarity might rob the concept of its
meaning. However, the general message
behind the search for a definition is that
spirituality is generally perceived to be a
meaning-making construct. When people are
asked about their spirituality whether they
express it as religious belief or more generally
they tend to explain it in terms of giving
their lives purpose, and this is what makes it
so attractive in an organisational context.
The benefits
There are a number of both hard and soft
reasons why organisations might want to
take this concept seriously.
The hard benefits

Fulfilling obligations
One hard reason is the need for
employers, in an increasingly multi-cultural
environment, to show that they are allowing
their staff the right to free expression of
their beliefs, as enshrined in Human Rights
and anti-discrimination legislation. Court
cases within Europe about religious dress in
schools as well as an increasing number
of US workplace cases may be the tip of a
much larger iceberg, so there is a corporate
risk issue about the extent to which
expression of either religion in particular or
spirituality in general in the workplace needs
to be formalised as company policy, and
how defensible any policy is in law.
Improving performance
A second hard reason relates to the
bottom line. Several famous studies have
looked at what differentiates leading
companies from their competitors. These
studies have universally found that
organisations that are able to inspire
360
employee loyalty to a higher cause

substantially out-perform their peers,
because of the increase in motivation and
1
commitment this tends to generate . Their
findings suggest that where companies
are able to understand the spiritual
yearnings of their staff and are able to
help them to find ways to address these
through the work of the organisation, they
gain their deeper allegiance and
increased discretionary effort. They have
also found that, where levels of employee
motivation are low, any percentile
increase in employee engagement
increases organisational output and
therefore profits. Where people are
encouraged to flourish, organisational
performance improves, so spirituality
initiatives tend to produce a demonstrable
financial return.
For instance, research carried out by
Georgeanne Lamont in the UK amongst
soul-friendly companies such as Happy
Computers, Bayer UK, NatWest, IMG,
Microsoft UK, Scott Bader and Peach
Personnel showed that these had
universally lower-than-average rates of
absenteeism, sickness and staff turnover,
which saved them significant sums of
2
money . One UK company, Broadway
Tyres, had absenteeism rates of 25-30%
which, after they introduced spiritual
3
practices, dropped to a steady 2% . Other
research carried out under the auspices of
the 100 Best Companies to Work For
project showed that the stock of the best
companies where criteria for inclusion
include high ratings for employee
communication, respect, fairness, diversity
and philanthropy outperforms the stock
of their competitors by over 100%. While
these findings could suggest merely a
correlation, the direction of causality is
suggested by what happens to companies
who fall from grace on these measures,
and their inability to sustain performance
in the medium to long term.
33
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The soft benefits

Winning the war for talent
While there may be an ethical issue about
the probity of this rather instrumental
business case, if it is experienced by staff as
coercion, there are some soft reasons to
pursue organisational spirituality too. The
first is the famous war for talent. In a sellers
market, talented individuals can pick
and choose between a variety of
lucrative opportunities in an increasingly
commoditised employment market. When an
organisation has raised its offer to include
Michelin-starred cafeteria-style benefits,
platinum handcuffs and parachutes, and
flexible multi-media working, what else can it
offer that might help to differentiate it from
its rivals? In the highly competitive graduate
recruitment market, companies such as
Ernst & Young attract spirited students by
offering them a competitive package and the
opportunity to be supported in volunteering
and fundraising for their favourite charities.
Releasing creative potential
A second soft reason relates to the release
of human potential in the workplace. Over the
last century, organisations have been learning
that the suppression of elements of the
person at work leads to a homogeneity that is
neither ethical nor useful. While much of this
learning has been centred on issues of
gender, ethnicity or orientation, increased
understanding of workplace-related stress
and the recent popularity of emotional
intelligence suggest that the issue is much
wider. Organisations are increasingly
interested in how they can offer opportunities
for staff to bring their whole person to work
and, because it is widely assumed that this
whole person includes body, mind and spirit,
many of them are trying to ensure that they
do not create working conditions that cause
either physical, mental or spiritual stress.
Because the concept of spirituality is linked
with creativity and ethics, organisations are
increasingly looking at organisational
spirituality as a way of fostering more innate
creativity and a more natural ethical
34
consciousness by enabling staff to access

their own spiritual resources instead of
relying on intellectual reasoning alone. This is
also linked to the dilemma many
organisations face about how to bring to life
corporate policies relating to ethics, values
and
corporate
responsibility.
Most
organisations genuinely intend these policies
to be reflected in uncoerced organisational
behaviour, but often they have become words
preserved in aspic for the annual report and
the website. Helping staff to access their own
spirituality and meaning-making resources
can transform such initiatives so that they
become a more natural part of the
organisations consciousness and dialogue.
Enhancing a service culture
Building on this link to a more embedded
culture of creativity and ethics, a third soft
reason arises from the traditional links
between spirituality and notions of service.
This ancient wisdom from a variety of global
traditions also surfaces in research on
emotional intelligence, and is further
supported by research in game theory and
evolutionary biology. This element is of
particular interest to those countries that are
increasingly evolving into service-based
economies. Where services are increasingly
differentiated through brand, the best
organisations align their external brand
values with their internal cultural values
inside-out branding to avoid the
expenditure necessary to repair breaches in
congruence between advertised messages
and the customer service experience. Instead
of assuming the flawed agency model from
traditional economics - which holds that the
interests of employers and employees are not
naturally aligned organisational spirituality
offers an opportunity for an organisations
vision to be re-framed in terms of service,
which offers opportunities for vocation not
usually harnessed outside the traditional
fields of medicine, teaching and religion.
Of course, all of these soft reasons can also
be expressed in tangible terms. However,
both the hard and soft arguments need to be
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Start with what you have

The first step, as ever, is to stop and think.
As a starting point, it is a good idea to
conduct an audit of existing practices
that may fit into this category, because
many enlightened HR strategies already
promote human flourishing. One tool that
can be used for this analysis is Marjo
Lips-Wiersmas Holistic Development
4
Model (Figure 1).
Her model uses the axes of self/other and

being/doing that are often used in
emotional intelligence models, but she
applies them in the specific context of
spirituality in the workplace. Thus her
self/being quadrant developing and
becoming self suggests an audit of
organisational policy, procedures and
culture in support of personal growth, selfknowledge and maintaining integrity. This
emphasis is supported by the emotional
intelligence research base, which
suggests that self-awareness drives
increased emotional intelligence, with the
benefits this brings in terms of attracting
discretionary effort from colleagues. Her
self/doing quadrant expressing full
potential asks organisations to what
extent they allow staff to create, achieve
and influence. This resonates with the
famous Gallup research linking good
management
to
explicit
financial
outcomes through 12 crucial questions,
one of which asks whether employees are
given the opportunity to do what they do
Figure 1.
BEING
seen more as indications of likely fringe

benefits than as concrete motivations for
action. Were an organisation to appear to be
manipulating this most sensitive of human
aspects for financial gain, the abuse would
likely backfire. Therefore, organisations
seeking to take spirit at work into account
need to see their work as fundamentally
enabling rather than prescriptive.
First steps on the journey

to organisational spirituality
So what could a manager do to take more
seriously the place of spirit at work?
Developing and
becoming self
360
best every day . Her other/being quadrant

unity with others assesses the extent
to which employees are encouraged to
form supportive relationships, and whether
the organisation has shared values which
generate a sense of belonging. The
other/doing quadrant serving others
asks whether or not the organisation helps
staff to make a difference in the world.
Both of these other quadrants resonate
with the second of the hard reasons
given above, that organisations able to
offer alignment to staff between their own
values and the mission of the organisation
will outperform those that cannot.
Unity with
others
SELF
OTHER
Expressing
full potential
Serving
others
DOING
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Tread softly
Furnished with this information, the second
step in the journey is to proceed with
caution,
taking
seriously
existing
sensitivities in this area. Will it be culturally
more appropriate to start with a focus on
the spiritual notions of contemplation and
reflection, rather than moving wholesale
into the organisational spirituality arena? As
the poet Yeats advises: Tread softly,
because you tread on my dreams. Is there
any indication from staff surveys, exit
interviews, etc. that staff would welcome
positive action in this arena, or are feeling
constrained in any way? Is it worth holding
some optional workshops to test the
organisations readiness and willingness to
take this further? As a rule of thumb,
research in both the US and the UK shows
that staff are more willing to bring their

souls to work when they feel they are
encouraged to do so, so you are likely to be
pushing at an open door.
Introduce reflective practices
If the indications are favourable and you are
able to progress, you may already have
some gaps from your audit you would like
to fill, and you may want to liaise with your
legal department to ensure that none of
your policies or intentions contravene any
of the legislation in this sphere. You may
also want to introduce some traditional
spiritual practices, such as Georgeanne
Lamonts eight tools of reflection to create
space for spirit. These are: stillness,
listening, story, encounter, celebration,
6
grieving, visioning, and journalling .
Figure 2.
Stillness
Journalling
Visioning
Listening
The eight tools

of reflection
Encounter
Grieving
Celebration
36
Story
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Her first tool, stillness, resonates with

Maia Duerrs model for a contemplative
organisation. She suggests the use in
meetings of silent openings, talking circles
and reflective dialogue, as well as active
7
discussion of organisational values . The
tools relating to the use of story-telling and
visioning are already in regular use in many
organisations, as is the use of celebration.
Encounter relates to openness between
people, and many organisations have begun
work in this through the flattening of
hierarchies and work on values, often
bolstered by the careful use of off-sites and
development activities to build relationships.
The suggestion that organisations should do
more grieving to mark the passing of old
ways is less popular, but is supported by
William Bridges research into managing
transitions and the importance of
8
organisational rites of passage . The final
reflection tool, journalling, suggests that
organisations should encourage staff to
keep a private journal for their reflections.
While this is unusual, journalling is widely
used in therapeutic circles, and use of this
kind of tool ensures that the crucial
Reflective Observation element of David
Kolbs learning cycle is not neglected in
favour of the busy-ness that is most often
9
rewarded .
There are a number of ways into this field,
and some suggestions for further reading
are included below. This article began with
the premise that embracing organisational
spirituality might achieve some breakthrough
in the intractable problems associated with
employee motivation, engagement and wellbeing. A famous story can be used to
illustrate how spirituality in the workplace
can impact on these issues.
A man is walking along a road and sees

a stonemason working. He stops to
admire the smooth blocks of stone, and
the stonemason stops working to have a
break and pass the time of day. The man
asks: What are you doing? The
stonemason answers: I come here
every morning and work until nightfall
cutting stones for my master. It pays the
bills. I cant complain. The man bids him
farewell and continues his journey.
Further along the road, he meets
another stonemason. This one is
working flat out, and has a much larger
pile of stones beside him. The man asks:
What are you doing? The stonemason
answers: Sorry, I cant stop to talk. Im
paid according to the number of stones I
cut each day, so I must get on. The man
bids him farewell and continues his
journey. Further along the road, he
meets a third stonemason, who has an
even larger and very well cut pile of
stones beside him. The man asks: What
are you doing? The stonemason
answers: If you look behind you, you
can see the foundations of the cathedral
were building. Im responsible for the
stones in the arch above the west door. I
want my grandchildrens grandchildren
to be able to look up and see what I
have made, so I have to make sure every
stone is worthy of posterity.
360
References
1. See, for example, Peters, Thomas J and Waterman,
Robert H (1994) In Search of Excellence, Harper &
Row, New York; and Collins, James C and Porras, Jerry
I, (1994) Built to Last, Harper Business, New York.
2. Lamont, Georgeanne, (2002) The Spirited
Business, Hodder & Stoughton, London.
3. For this and her other ROI case studies, see
http://www.lamontassociates.com.
4. Lips-Wiersma, Marjolein, (2003) Making Conscious
Choices in Doing Research on Workplace Spirituality,
Journal of Organisational Change Management
16 (4), pp406-425.
5. Buckingham, Marcus and Coffman, Curt, (1999) First,
Break All the Rules, Simon & Schuster, New York.
6. See Lamont, op. cit.
7. Duerr, Maia (2004) The Contemplative
Organization, Journal of Organisational Change
Management, 17 (1), pp43-61.
8. Bridges, William, (1995) Managing Transitions,
Nicholas Brearley Publishing, London.
9. Kolb, David (1985) Experiential Learning,
Prentice Hall, Upper Saddle River, NJ.
Further reading
Books: Axelrod, Robert (1990) The Evolution
of Co-operation, Penguin, London.
Catlette, Bill and Hadden, Richard, (2001) Contented
Cows Give Better Milk: The Plain Truth About
Employee Relations and Your Bottom Line, Saltillo
Press, Germantown.
Heskett, James I; Sasser, W Earl and Schlesinger,
Leonard A, (1997) The Service Profit Chain,
The Free Press, New York.
We are all building cathedrals, we just need

to find them in the daily work that we do.
Organisational spirituality offers one way
of starting this journey.
Hicks, Douglas A, (2003) Religion in the Workplace,

CUP, Cambridge.
Howard, Sue and Welbourn, David, (2004)
The Spirit at Work Phenomenon, Azure, London.
Lamont, Georgeanne, (2002) The Spirited Business,
Hodder & Stoughton, London.
Lloyd, T, (1990) The Nice Company, Bloomsbury, London.
Special Editions: Journal of Organisational Change
Management, (1999), 12 (3).
Journal of Organisational Change Management,
(2003) 16 (4).
The Leadership Quarterly, (2005), 16 (5).
37
360
27/10/06
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The Ashridge Journal Strategy as relationship: the four sided triangle Autumn 2006
Chris Nichols is an Ashridge Consultant. His work

involves coaching individuals, facilitating teams, designing
and running learning and development processes in the
areas of strategic thinking, creativity, organisational
change and leadership development.
Email: chris.nichols@ashridge.org.uk
Strategy as relationship:
the four sided triangle
Chris Nichols looks at some of the terms in which strategy is usually
discussed, and finds the consequences disturbing. What happens if we
just look at strategy as relationships, stripping out the usual imagery?
Could the answer change both the focus and practice of strategy?
Words so common we hardly notice
Military, combative and mechanistic
analogies are widespread in organisational
life today. They are reinforced in business
books and have become a deeply rooted
way of thinking within organisations.
Three giants of modern business strategy
describe this way of thinking in the following
words:
Effective strategies should.concentrate
superior power (vis--vis) opponents at a
place and time likely to be decisive (they
should allow) for flexibility and manoeuvre
while keeping opponents at a relative
disadvantage (and make) use of speed,
38
secrecy and intelligence to attack exposed

or unprepared opponents at unexpected
1
times .
It is not that this is a wrong view of
strategy. Such perspectives offer a long
heritage and may be an aid to thinking. But
I suspect that these perspectives used
alone are limiting. This language and its
associated imagery forms our strategic
mindset and goes largely unnoticed and
unquestioned. This is potentially dangerous
in at least three respects:
Words make worlds organisations
are not machines, and markets are not
battle grounds. What is the danger, that
by using these familiar and even helpful

metaphors and analogies, we actually
make organisations more machine-like,
and markets more bloody?
Two vital things are mostly missing

from the mechanistic military analogy.
First, the customer. If so many
organisations claim that the customer
is really at the heart of what they do,
why do they spend so much time
analysing the opposition and
strategising to do battle? Secondly,
where is the planet in all of this?
The environment seems not to be a
strategic matter at all in this world view.
27/10/06
16:44
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Autumn 2006 Strategy as relationship: the four sided triangle The Ashridge Journal
Finally, my experience has demonstrated

that whilst classical competitive and
military metaphors may be helpful in the
for-profit sector, they are usually a real
obstacle in not-for-profit groups, such as
charities and government organisations.
In fact it is from my work with not-for-profit
clients that I came to approach strategy
from another perspective that of
relationship. This perspective does not seek
to replace a failing view of strategy, but to
offer an alternative view and a different set
of vocabularies and images.
The invitation in this article is for you
to take a look at strategy making from
this perspective and to see what
different conversations flow as a result.
In order to illustrate what I might describe
as relational strategy I would like to
introduce a model: a four-sided triangle.
(Figure 1).
Orthodox strategic analysis tends to put

market and competitor analysis at the
forefront looking for sustainable positions
of competitive advantage. In my experience,
if an organisation really focuses on building
a strong relationship with its customers, this
successfully shifts the primary aim of the
strategic effort from the competitor to the
customer. You dont ignore the marketplace
but you put more explicit focus on the
relationship with the client.
In the US book retailing market, Borders
Books faced tremendous difficulty in
responding to the entry of Amazon into
the market. Should Borders compete on
cost with the newcomer? Instead they
talked to Starbucks and included coffee
shops in all stores, fulfiling a social need
and thereby valuing a dimension of the
client relationship that on-line retail
cannot offer.
What
exactly is the relationship your

clients have with you compared to the
relationship they could have with other
providers?
How
do you organise yourselves

to create this relationship?
What
is happening here and now, in

your environment, that could change
this relationship?
How
How
will you organise yourselves

to play your part of this relationship?
Figure 1.
1
Sid
e
th
n
ee
tw ty
be bili
a
ps
hi ain
ns st
io su
lat d
Re n an
io
Re
to latio
cli ns
en hi
ts ps
an of
d
fu orga
nd n
in isa
g
ti
on
The four-sided triangle
Side
The inner world of
the strategic participant
The first side of the relational triangle is

about the relationship the organisation has
and wants to have with its clients, its
external sources of funding and with its
collaborators and competitors.
Your relationship with

clients/customers
e isat
Sid gan
or
The first side: Relations with clients

and money
A focus on relationship requires a focus on

both the here and now and potential
futures. In the box below I have set out
some of the questions I commonly use to
spark off conversations with clients about
this first dimension of external relationships.
do you want clients to think

about your offer/service/product in
the future (over whatever is a relevant
time horizon for you)?
Introducing the four sided

triangle
The first three sides are about the triad of
relationships all organisations have. The
fourth side of the triangle reminds us to ask
questions about our own role as leaders or
facilitators of the strategic process The
relational strategy triangle has an inner side
and this is a reminder that there is always
a self in strategy. The inner side invites
the reader to pay attention to their own
psychology and behaviour in relation to
strategy making in short, to become a
reflective strategist.
360
Side
Relationships within the

strategic process
39
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27/10/06
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Most organisations will also need to consider

their relationships with other organisations.
Us and them models of competition may be
too simple. Organisations these days often
work in complex networks of collaboration,
blending competition and collaboration.
Attention to the quality of these relationships,
now and future, is a crucial strategic issue.
One final aspect of external relationships
that has a major strategic impact is the
relationship with providers of funds.
Classical strategy often treats this as a
given or as a constraint. Decisions on the
types of funding you want and the type of
relationship you are willing to have with
investors are themselves strategic. Many
for profit organisations I work with see
their strategic degrees of freedom limited
by their funding. Some firms, subsidiaries
for example, may have no option but to
satisfy whatever demands investors or
their agents may make. This is often also
the case with stock market funding
and is more marked when venture capital
is involved.
But some firms have more flexibility.
Funding your activities from internally
generated sources provides strategic
flexibility. Private investors and appropriate
levels of debt may also offer more flexibility
than the open equity market. The aim of
this level of exploration is to identify how to
find funding that is in line with the
relationship the organisation wants with
clients, not to have that relationship driven
by the demands of investors.
The story of Riverford Organic, the

Devon based vegetable box firm, is
based on a combination of relationship
with clients and appropriate, largely
internally generated, funding. Founder
Guy Watson tells the story:
Our business model starts with trust;
because people trust us they are willing
to believe in us and buy our produce
This trust enables us to generate profit
The more we gain trust, and the harder
we work to live up to the beliefs our
customers have in us, the more profit we
generate This profitenables us to
2
invest in doing the right thing.
In the box below are some of the questions
I ask in respect of this relationship:
Your relationship to funding
and investors
Are your internally generated sources

sufficient to fund the relationships you
aspire to have with clients?
How
would you describe your

relationship with any external funders/
investors?
How
would you like this relationship

to change?
What might you do differently to have

a different relationship with funders?
The second side: Relations within the

strategy process
Classical strategy pays almost no attention at
all to the process of how strategy comes
about.
One consequence of the classical-military
view of strategy is in the creation of
Commander-Troops relationships within the
40
organisation in respect of strategy. Powerbased hierarchical relationships are likely to

evoke a parent-child style of interaction. In
other words, just when the organisation faces
greatest uncertainty, and just when it needs
the full adult brains of its people, a parentchild interaction will close this off, turning the
commanders into would-be saviours (or
stool-pigeons) and the organisation as a
whole into compliant or rebellious followers.
This is likely to silence or make disappear
the voices and views of those closest to the
customer and this cannot be helpful in
genuine strategic conversation.
There is both popular and academic evidence
to suggest that strategy making (in the
sense of the conscious act of creating
intention), should be more participatory to be
more effective. This argument has its roots in
complexity theory and the recognition that
much in organisations is both unknowable (in
the sense of unpredictable) and constructed
(in the sense that meaning is made in the
interactions within the organisation). The
more we need to think about our intended
relationships in the future, the more important
it may be to involve more of the organisation
in the process (i.e. strategy should be a
participative process). The complexity view of
organisations sees strategic processes as
conversational: that is, strategy comes about
through the communicative interactions
(conversations in the widest sense) within the
organisation. The corollary is, the broader and
more participatory the interactions, the richer
3
the strategic conversation .
My earlier article The Six-P Model of
4
Effective Strategic Conversation argues
that effective strategy requires effective
conversation. Good relationships that foster
shared learning and exploration are
preferable. You might ask some of the
following questions about your organisation
to explore the quality of the relationships
within your strategy processes.
27/10/06
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Autumn 2006 Strategy as relationship: the four sided triangle The Ashridge Journal
The relationships in the strategy
Who
is involved in deciding what your

organisation does? Who is involved in
formal strategy away days and planning?
How do managers find out about what

is happening at points of contact
with clients?
To what extent does what the people

do resonate with creating and
maintaining the relationship you intend
with your clients? How do you know?
If your staff were the top management,

what would they do differently to
create the relationship with customers
right now and in the future?
360
systems theory, for any sub-system to be

infinite when it is part of a finite system. This
is as compelling an argument as I have seen
for requiring a new view of strategy one
that is less obsessed with growth and more
focused on the relationship of the economy
to the finite biosystem.
Refocusing strategic discussions on
the centrality of ecological survival will
introduce a different quality of conversation
and will likely result in different strategic
outcomes, with sustainability moving
beyond constraint and compliance to take a
prominent role in strategic dialogue.
A sound starting point might be to ask
some of the following questions:
Your relationship with the planet
The third side: Relationship with

sustainability
What
The third aspect of relational strategy

concerns the relationship between the
organisation and its environment, in the
widest ecological sense.
What could improve in your relationship
Most views of strategy tend to ignore the

ecological context of the organisation.
Where the environment is considered
at all, it is in a PEST analysis (where the
environment is a risk or opportunity factor),
or in the sense of considering regulatory
requirements, where environment is often
5
collapsed to an issue of compliance .
I find Jonathon Porritts recent book
compelling on this point. In Capitalism as if
6
the World Matters , Porritt argues that we
routinely assume that the economy is
infinitely expandable. He then argues that
the economy is more correctly seen as a
sub-system of society, which is itself a subsystem of the biosphere. The biosphere is
finite in its resources and its ability to
absorb wastes. It is logically flawed, in
part does sustainability and

environmental impact play in your
relationship with your clients?
if you were to bring sustainability and

impact up front and centre?
How can you produce no waste at all?

How could you tap your staffs/clients
/own/others passions to make your
organisation more sustainable?
The fourth side: The Reflective

Strategist
Strategic thinking in a relational process is
a deeply human activity. The detached
rational-analytical strategist is a myth. We
all bring into our strategic relationships all
our history, experiences and knowledge of
relating. This impacts our relationships to
others, for example in the strategic process
and in our ability to foster good strategic
41
360
27/10/06
Page 42
conversations, but it impacts even more

deeply on our personal relationship to the
process of strategy itself.
My proposition is that each of us engaged
in strategy making as leaders, facilitators
or consultants should bring to our work
the discipline of reflective practice.
Reflective practice in strategy means, to me
personally, paying close attention to what I
do and to why and how I do it.
As a starting point, I invite the reader to pay
attention to their actions, thoughts, feelings
and beliefs as they engage in strategic
thinking and strategy conversations, and to
notice the consequences of all of these for
the strategic process itself.
You might, for example, pay attention to:
Mindsets and models: why do you use
the process you use? Why do you use
the models and tools you use? What
consequences flow from your choices?
Vocabulary and metaphor: what
language and imagery do you see in your
strategy process? What changes if you
use different words?
Anxiety: what is your level of comfort or
discomfort in the strategy process? Are
you driven to get it right? How do you
handle the uncertain, the unknowable?
What effect does this have on strategic
exploration?
Attachments: what outcomes are you
attached to? Why, and with what
consequence?
There are several practical aids to
reflection. Journal keeping is very useful.
So is discussing your role in strategy with
an accredited coach, or taking part in
action learning.
42
16:44
My suggestion is that by bringing attention

to our practice as strategic leaders and
facilitators, better relationships within the
process may result, and the quality of
strategic conversations will become richer.
Towards a new strategic

perspective
So, am I proposing a new paradigm in
strategy, a totally new way of thinking about
strategy? That is too bold a claim. I am
proposing this as one possible window, one
perspective. What I offer is an inquiry into a
subject I care deeply about and I invite you
to join me.
What I am saying is that all ways of thinking
and acting in strategy are inevitably
relational. Classical strategy with its
analogies of competitive victory, machines
and the military1 evoke a certain nature of
relationship. The qualities of relationship
evoked have consequences.
References
1. Mintzberg, Henry; Quinn, James; Ghoshak,
Sumantra, (1997) The Strategy Process, Prentice Hall.
2. Watson, Guy, (2006) Part of a Solution,
Resurgence, Issue 237.
3. Stacey, R., (2005) Strategic Management and
Organisational Dynamics.
4. Nichols, Chris (2006) The 6-P Model of Effective
Strategic Conversation, Converse, Spring edition,
Ashridge.
5 There are exceptions: see for example Hart S,
(2005) Capitalism at the Crossroads, Wharton
Publishing/Prentice Hall.
6 Porritt, Jonathon (2005) Capitalism as if the World
Matters, Earthscan.
Further Reading
Schon, D, (1982) The Reflective Practitioner, Basic
Books Inc.
Heron,J, (1999) The Complete Facilitators Handbook
My invitation is to declare openly strategy to

be relational and to work consciously in
inquiry into the relationships with clients,
funding and the environment and to do so
in a participative ethos, attending to the
relationships within the strategic process
itself and thereby access the wider
organisational capability to inquire and
learn. Finally I am proposing that we notice
that classical strategy assumes the
strategic leader to be a rational machine,
and that this is false. Good strategising and
good strategic relationships depend in part
on the quality of relationship between the
strategist and their work. The development
of the discipline of being a reflective
strategist warrants serious attention from
all who work in this field.
(Chapter 16), Kogan Page.
27/10/06
16:44
Page 44
Ashridge, Berkhamsted, Hertfordshire HP4 1NS, United Kingdom

Telephone: +44 (0)1442 843491 Facsimile: +44 (0)1442 841209
Email: info@ashridge.org.uk Corporate website: www.ashridge.org.uk
360 editorial board: Viki Holton, Mike McCabe, Dr Delma OBrien,
Eve Poole,Toby Roe, Shirine Voller, Steve Watson, Andrew Wilson.
Copyright 2006,The Ashridge Trust.
You may copy and circulate this publication to as many people as you wish. All rights reserved.
Registered as Ashridge (Bonar Law Memorial) Trust. Charity number 311096.
Designed and produced by K4 Creative: www.k4creative.com

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