Strategic leadership in the media industry
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The Ashridge Journal Autumn 2007
MAIN FEATURE:
Strategic leadership
in the media industry
ALSO IN THIS VOLUME:
• The transformation of food consumption
• Mastering the power zone
• Removing your decision making blinkers
• Living in uncertain times
• Perspectives: Can’t Manage/Won’t ManageContents
4 My angle
Lindsey Parnell, President and CEO, Interface Europe, illustrates the difference that individual leaders can
make to organisations.
6 Strategic leadership in the media industry
Autocratic, manipulative, power hungry, perhaps even deranged – the media mogul as portrayed in the press
is one of history’s more enduring figures. What are the strategic approaches and leadership traits that make
for success in this fast moving, often turbulent industry? Lucy Küng combines recent thinking on leadership
in creative environments and makes some recommendations for leaders in the media.
12 The transformation of food consumption
Based on their recent research, Chris Gribben and Matt Gitsham examine changing consumer attitudes
to food consumption and the implications and opportunities for food producers, retailers, government and
campaigning organisations.
17 Mastering the power zone
Whether managers chose to recognise and work with power or not, it still determines outcomes in
organisations. Claudia Heimer describes the ‘push and pull’ of power games observed in her recent
research and offers a mapping device that enables managers to recognise and work with the power
dynamics that are at play in change processes.
24 Removing your decision making blinkers
So many business cases fail to meet their financial targets. Operational processes, risk management, poorly
formulated strategy and execution are some of the well-rehearsed explanations. Steve Watson reviews
recent thinking to include decision making traps at a behavioural level, suggesting how managers can try to
avoid falling into them.
29 Living in uncertain times
What happens in organisations when their environment moves from relative stability and predictability to one
of turbulence, uncertainty and continuous change? Andrew Day describes his observations of how people
react and outlines how leaders can support people to adapt to such environments.
35 Perspectives – Can’t Manage/Won’t Manage
Former Ashridge Governor Sir Brian Wolfson died in May this year. Brian was an international
entrepreneur and executive; he was Chairman of Wembley Stadium in the UK and of Fruit of the Loom in the
US. We are privileged to be able to publish, in this specially extended Perspectives section of 360°, an article
that typifies his thinking; he wrote it early this year with author and consultant, Dr Andrew St George.The Ashridge Journal My angle Autumn 2007
My angle
We are living in a period of very rapid change. In our own lifetimes we have seen technological
progress on an unprecedented scale. This is evident in travel, communications, medicine,
computers, flat screen TVs, Nintendos, PS2s, Gameboys and – perhaps the most surprising –
in that you can get fresh strawberries all year round! Change, but also uncertainty is all around
us. The articles in this edition of 360° reflect the shifting nature of the world we live in.
Business organisations and those working within them have played a major part in being
leaders of change, contributing to greater and greater progress. However, this progress has
incurred various costs. The damage to the environment and climate change are set to become
the defining issues of the 21st century and the future is very unclear. Living in uncertain times:
Organisation dynamics in response to uncertainty illustrates this perfectly, by looking at the
dynamics of an organisation, when it moves from a relatively stable environment to one of
turbulence. Environmental and sustainability issues are at the top of everybody’s agenda and
the article, The transformation of food consumption, analyses the changing consumer attitudes
and behaviours regarding the production and consumption of food.
Mankind is perhaps facing its greatest ever challenge and our opponent, the force of nature,
is one that can make us look very insignificant when it chooses. In the face of such a force what
can governments do? What can we do? What can you do? After all, what difference can one
person make?
Well, one person can make a great difference. A good example is Ray Anderson, the CEO
of the biggest commercial carpet company in the world with factories on four continents.
In 1994, he was asked to address an internal group on the environmental strategy of the
business. At the time, he realised that this was no more than just a compliance issue of ticking
the right boxes. However, he decided to try and further the debate and did a bit of background
reading. He came across the Ecology of Commerce by Paul Hawken, a marvellous book that
challenges traditional economic models and their relationship with the environment.
The impact upon him was so fundamental, the arguments so compelling, that he decided there
and then that someone had to do something. He would set an example by changing the
business and how it was run. Now deciding to do something like this and actually doing it are
two very different things. This was 1994, when the whole subject of climate change was still
being hotly debated, so the need to do anything was not established. This was in America and
Wall Street, for example, was not amused at his antics.
4 www.ashridge.org.uk/360Autumn 2007 My angle The Ashridge Journal
His company, and for the last few years I am proud to say, my company, is now one of the most
profitable in its field. Since 1994 we have reduced waste to landfill by 70%, reduced energy
consumption by 45% and run all our European factories on green electricity. We have reduced
our CO2 emissions by 60% and were one of the first organisations to offer customers the option
to make their purchases climate neutral. Yes, ‘But how much has all this cost?’ is the usual
question when I talk to people. The answer is that we have saved over $330m. The article,
Removing your decision making blinkers, is pertinent, as it looks at how a better understanding
of individual and group behaviours can improve financial decision making by individuals
and organisations.
The measures we have taken are only just a fraction of what needs to be achieved. But just
think what if every business had done this? And none of this would have happened if one man
had not decided to make a difference.
So back to my original questions – what difference can one person make? What power do you
have? The simple fact is that through your leadership, if you choose, you can make a tangible
difference. Mastering the power zone provides some insights into how managers can increase
the scope of their impact as they attempt to introduce change in their organisations. When
change occurs, it invariably starts with individuals. The role of the media is also tremendously
powerful in changing behaviours and shaping our future. The lead article, Strategic leadership in
the media industry gives us insights into what makes for good leadership in some of the world’s
biggest media organisations.
In this edition, it is a privilege to publish Can’t Manage/Won’t Manage, the last article by former
Ashridge Governor, Sir Brian Wolfson, before he passed away earlier this year. As an individual,
Sir Brian made a huge impact in bringing about change. His article is a fascinating thought
piece on why successful business execution is declining and the role that business schools can
take to help reverse the trend.
I do hope this edition of 360° provides some inspiration and ideas on the differences and
changes you can make.
Lindsey Parnell
President and CEO, Interface Europe
www.ashridge.org.uk/360 5The Ashridge Journal Strategic leadership in the media industry Autumn 2007
Lucy Küng is a research fellow at Ashridge. She has extensive
experience of the strategic, management and organisational
challenges facing the media industry,
having worked with numerous organisations including
the BBC, Swiss Broadcasting Corporation and Discovery
Networks Europe.
Email: lucy.kung@ashridge.org.uk
Strategic leadership in the media industry
Autocratic, manipulative, power hungry, perhaps even deranged –
the media mogul as portrayed in the press is one of history’s more
enduring figures. What are the strategic approaches and leadership
traits that make for success in this fast moving, often turbulent
industry? Lucy Küng combines recent thinking on leadership in
creative environments and makes some recommendations for
leaders in the media.
1. Decode environmental turmoil, Leaders must therefore be able to update
check your assumptions and find their operating assumptions – Schein1 terms
the business opportunity this “learning leadership”. In such conditions
The media industry is experiencing double loop, or second-order, learning can
extreme environmental change, arising be required. This involves questioning the
from contiguous but unrelated changes governing operating norms, unlearning prior
in technology, regulation, and consumer assumptions and developing new ones2.
behaviour. As chief strategist and ‘official
interpreter’ of the environment, the leader Rupert Murdoch is perhaps not the first
must perceive changes, puzzle out their name that would come to mind when
importance, and then decide how the searching for a learning leader, let alone a
organisation should adapt. double loop one, but there is much evidence
6 www.ashridge.org.uk/360Autumn 2007 Strategic leadership in the media industry The Ashridge Journal
to show he can be categorised as such. such decisions has grown also. Content
Murdoch is particularly skilled at identifying is an uncertain business (why was Titanic
the rules of the game in emerging contexts, a winner and Waterworld a loser?) Heavy
and using these to create a new business investment in content that fails to resonate
model which frequently sets the game rules with the market can have disastrous
in ensuing years for all players in the sector. consequences as the music industry has
These business models often involve the found to its cost.
simultaneous exploitation of an emerging
commercial opportunity, advances in Thus increasingly, content decisions are
technology and a regulatory gap3, as well as high stake gambles that ultimately fall to the
the objectives of governing politicians. This leader of the media organisation, since such
approach was evident in his transformation decisions are simply too risky for executives
of the UK newspaper sector, the editorial lower down the food chain. Therefore the
approach of Fox News, but is perhaps most leader of the media organisation needs
neatly exemplified in the creation of BSkyB, to be comfortable with risk and be able
the UK pay-TV platform. to gamble well. This aptitude, combined
with an ability to decode the strategic
2. Get comfortable with risk environment, can provide a strong basis for
The harsh reality of the media industry is strategic advantage.
that success is supremely unpredictable,
and there are no guarantees. In the famous
Murdoch, it is claimed, has built his entire
words of screenwriter William Goldman,
empire by defying convention and taking
‘‘Nobody knows anything”. For decades,
risks5, and Turner’s appetite for risk is said
the standard response to this situation was
to be insatiable6. In his words: ‘‘If you are
what has been called the ‘mud against the
going to try to change things in a big way
wall’ formula: if enough different products
you have to be willing to go against the odds
are ‘thrown at the market’, sooner or later,
and sacrifice everything.”7 These reports
something will stick. Essentially, a portfolio
suggest that a sophisticated facility with risk
of products – books, CDs, films etc – is
is a trait shared by some high profile leaders
made available and the media company
in the field.
then waits to see what sells. This has
given rise to an alarming waste of
creative investment. For example, during 3. Make your company creative
Katzenberg’s decade at Disney, of the one over the long term
thousand plus projects he oversaw, just ten The strategic relevance of creativity for
percent accounted for 91 percent of the organisational performance in the media
studio’s operating income. industry is beyond question. In the words of
Scase8: “Without their employees coming
In recent years however this model has been up with ideas that can be turned into
replaced by the ‘hit’ or ‘blockbuster’ model. commercial, saleable commodities (media
This occurs when a few media products, firms) are dead.”
bestselling books or blockbuster films,
capture ever larger markets and generate Theories of organisational creativity have
the bulk of revenues. Products which are demonstrated how relatively prosaic
seen as having the potential to become aspects of the work environment affect
hits receive the lion’s share of investment levels of creativity in all individuals.
and attention. In such contexts it makes In essence, high levels of creativity require
strategic sense to pay high advances and high levels of intrinsic motivation, and
royalties to top content creators and then intrinsic motivation is strongly influenced by
spur demand by spending aggressively on context, in particular by five specific aspects
promotion4. But the risk associated with of the work environment9.
www.ashridge.org.uk/360 7The Ashridge Journal Strategic leadership in the media industry Autumn 2007
1. Encouragement. If creativity is sub-culture. Homogeneous teams can limit
required from staff then this needs to made creativity since too much social cohesion
clear. This involves more than paying lip can inhibit the exchange of ideas and
service to the idea of creativity: it must be diminish creativity.
demonstrated through management action
(how priorities are set, which projects are It falls to the leader to ensure that an
viewed as most important, what kinds of organisational architecture conducive
behaviours are rewarded, etc) that creativity to creativity is present. If we look at
is central to current operations and future the cases of BBC News Online, HBO’s
success. Creative contributions need to be Original Programming Division and Pixar
publicly celebrated. Feedback on new ideas Animation10, we see that in these three firms,
is also important. If these are disregarded which have enjoyed unusually consistent
or handled clumsily staff can feel that the track records in generating creative
interest in creativity is only cosmetic and products that please audiences and critics
experimentation will be discouraged. alike and are also financially successful, all
the contextual components identified as
important for creativity: encouragement,
2. Autonomy. Staff required to produce autonomy, resources, challenge and team
creative results require autonomy, but the
composition, were present and stemmed
level of autonomy needs to be carefully
directly from the firm leadership. Again,
gauged. There should be freedom around
this confirms that one role of a leader is
the means by which the goal is to be
to engineer a work context that ensures a
achieved (process), but not concerning
steady stream of novel products11.
the nature of the goal itself which should
remain clear, constant, and unambiguous Disney’s Eisner perceived himself as a
throughout. creative leader. In an intriguing interview
in the Harvard Business Review in 2000
3. Resources. These should be he describes how he institutionalised an
sufficient to allow the task to be achieved, environment for creativity. The creative
but not over-generous since resource slack challenge was established in “regular
can reduce project focus and discipline. Monday staff meetings where people
If deadlines are too unrealistic staff will are not afraid to speak their minds and
have no time to ‘play’ with concepts and be irreverent... an environment in which
solutions and there is a risk of burnout. people feel safe to fail [where] criticism for
submitting a foolish idea is abolished....
We like to think we have fun here –
4. Challenge. Creativity is enhanced by
we’re loosey-goosey, with a freewheeling,
clearly defined overall project goals. These
spontaneous exchange of ideas. At the
need to be mobilising but not demotivating
same time discussion is brutally honest.’’
and there needs to be a good match with
This, he felt, was “confidence building.’’
expertise and creative-thinking skills. Should
the creative task be too extreme, staff will
Others’ perceptions of Eisner’s creative
feel overwhelmed and threatened by a loss
leadership paint a different picture and
of control.
underline that in creative organisations it is
not what leaders do, but how their actions
5. Team composition. Teams working are perceived, that is critical. Accounts of
on creative projects should encompass a Eisner’s leadership describe him of being
diversity of perspectives and backgrounds. ‘‘such an oppressive force that creative
There needs to be a constructive challenging talents felt muzzled.’’12 The talent agent
of ideas and shared commitment, which in Michael Ovitz, who for a short time was his
time can allow the development of a strong second in command, was struck by the fact
8 www.ashridge.org.uk/360Autumn 2007 Strategic leadership in the media industry The Ashridge Journal
that at the weekly staff meetings that were in two relatively recent schools of
“the focal point of [Eisner’s] management leadership theory: transformational and ‘voice’ on the emerging medium of
of the company, extolling the freewheeling, charismatic leadership. Through vision, a the Internet.
spontaneous exchange of ideas and the transformational leader exerts extraordinary
‘synergy’ that he was so proud of, there was influence over followers, who then internalise Birt’s vision fed directly into the intrinsic
actually very little exchange if ideas. Most of the leader’s vision and unite them around motivation of the individuals working
the lunch was a stream of consciousness the new goal. In this way the leader’s vision on the project and thence to levels
monologue by Eisner. No one disagreed has a powerful effect on individual and of creativity. Birt framed the Internet
with anything he said.’’13 organisational performance.17,18 as a natural extension of the BBC’s
historical mandates as public service
Charismatic leaders are also exceptional media provider and news provider.
4. Get the vision right individuals who use vision to influence This resonated with existing cultural
“Vision serves the function of providing others to act in certain ways. While assumptions concerning the importance
the psychological safety that permits the transformational leadership is normally of the BBC’s role in these two areas and
organisation to move forward...’’14 understood as a positive concept, ensured that the goals of the new project
charismatic leadership has a shadow side fitted the deeper internal aspirations of
A clear inspiring vision is central to strategy that can express itself in narcissism and a its staff. By describing the Internet as an
and leadership. Vision is central to creativity blinkered single-mindedness19. And while opportunity not a threat, it also ensured
also, since no new product or service can charismatic leaders improve employee an open-minded attitude on the part of
be created without a clear vision that is satisfaction, motivation and performance, those working on what was for the BBC
simple, achievable – but also stretching they can also underestimate threats in the a radical departure from their standard
and inspiring. The underlying mechanics organisational environment, screen out range of activities (in psychological terms
are that the ‘right’ vision will resonate with negative information and have an inflated this avoided a phenomenon known
pre-existing, intrinsic motivation and lay the sense of their own importance. Further, as threat-induced rigidity, which limits
seed for ultimate success in that it sparks the success of charismatic leadership creativity). In terms of the News division,
off both a creative response to the core idea is particularly dependent on context20. Birt’s vision resonated positively with
and a deeper sense of commitment to its Charismatic approaches tend to suit the strongly internalised commitment
fundamental goals. strategic crises but be counter-productive to public service news. This, coupled
once an organisation has mastered an with the journalistic potential of the
A prime example of a leader who emergency situation. medium, which in turn energised
has mastered ‘the vision thing’ is the professional commitment of the
Steve Jobs. His vision, to build “insanely journalists working there, combined to
great’’ machines that will “make a dent in BBC News Online boost intrinsic motivation and created
the world’’, swept away rational objections BBC News Online provides an example an attitude of intellectual playfulness
based on Microsoft’s overwhelming market of transformational and charismatic which encouraged creative risk taking
dominance and technological hurdles. leadership at work, and also of the inter- and resulted in greater creativity.
An Apple employee describes how: relationship between leadership, vision
and creativity. The second leader at work was
“We really believed in what we were doing. Bob Eggington, the project manager.
The key thing is that we weren’t in it The vision for BBC News Online came Eggington provides evidence of the
for the money. We were out to change from BBC Director General, John Birt, overlap between the concepts of
the world.’’15 who as early as 1995 decided that the transformational and charismatic
Internet was likely to become the third leadership, since, while his style can be
Vision and charisma go hand in hand. Jobs’ broadcasting medium after radio and described as transformational, it also
charisma is fascinatingly described: television, and that to maintain its rightful exhibits traits typical of charismatic
“(It) drew people to him even when they position as national media leader – and leadership. Eggington advocated a
knew he might attack at any moment, and news leader – the BBC must have a vision – not perhaps in terms of the
created a degree of loyalty few executives strong Internet news service. His vision product concept, but certainly in terms
ever match.’’16 therefore was that BBC News Online of how the unit should function – that
would extend the BBC’s unique news was highly discrepant from the status
Vision and charisma are key elements
www.ashridge.org.uk/360 9The Ashridge Journal Strategic leadership in the media industry Autumn 2007
at Disney during Michael Eisner’s most
quo in the BBC at that time. This was successful years, when he was CEO, Frank
essentially, in the words of those working Wells handled the complex administrative
on the project, that News Online were and financial side of the business, and
‘‘pirates under the radar screen of the Jeffrey Katzenberg ran the studio.
BBC’’ and operating in ‘‘the Wild West’’.
This gave rise to high levels of 6. Exit gracefully
commitment, a sense of urgency, Eisner’s is just one in a long procession
creativity and flexibility. of clumsy exits by leaders in the media
industry: Gerald Levin, Thomas Middlehof,
Eggington’s style of achieving this Jean-Marie Messier, Steve Case, Greg
vision – encouraging staff to ignore the Dyke, Conrad Black, and of course, Robert
strictures of BBC policies, procedures Maxwell all spring to mind, but the list could
and bureaucracy – was unconventional be far longer. The ability to make a graceful
for the BBC, highly successful, but exit – knowing when to move on and leaving
involved a high personal cost. a good successor when you do – might
be described as the ultimate leadership
skill. The issue of leadership exit has been
5. Don’t go it alone – collaborate exhaustively studied, but diversity in terms
The strategic rationale for this of research contexts, methodologies, basic
recommendation is that the challenges definitions and research fields make it hard
facing the leader of a media organisation to draw general conclusions from this work
straddle both responding to the external for the media sector.
environment and managing the internal
ecosystem. It is very unlikely that a single What is clear is that entrepreneurs and
individual will possess the capabilities founders (both are prevalent in the media
necessary to master both of these spheres sector) have particular difficulty in giving
of operation. up what they have created, and that the
preparation for succession is psychologically
Multiple leadership structures are relatively challenging for founder and successor21.
common within high performing media They may officially be grooming successors,
organisations. For example, as we have but unconsciously they may be preventing
seen above, BBC News Online was powerful and competent people from
launched with a dual leadership structure. functioning in the successor role, or they
In this case the role division was that John may designate successors but prevent
Birt, the BBC’s Director General, developed them from having enough responsibility to
the initial vision, followed the unit’s progress learn how to do the job.
closely, but never actually visited the
operation. Bob Eggington, the project Conclusions
manager, realised Birt’s vision, by shielding So what defines good leadership in
the venture from the bureaucracy of the the media industry? Without doubt,
parent and establishing a positive culture in view of the current climate of ongoing
and an environment conducive to creativity. turmoil, good leaders will be need to be
He provided day-to-day leadership. entrepreneurial and constantly attuned to
This complementary leadership structure environmental change. They will provide
combined to create leadership that was their organisations with a credible but
exemplary: visionary, motivating, supportive inspiring sense of direction. Their strategy
and accessible. will synthesise intuition and experience and
expertise, involve an active search for new
We see a similar structure at Pixar, which opportunities and, in the current climate,
is led by a combination of John Lasseter, generate dramatic leaps forward in the face
Ed Catmull and Steve Jobs, as well as of uncertainty22.
10 www.ashridge.org.uk/360Autumn 2007 Strategic leadership in the media industry The Ashridge Journal
Eisner’s leadership era at Disney also
underlines the context-dependent nature of References
the task. Eisner was in many ways a victim
of his own success. His entrepreneurial, 1. Schein, E.(1992) Organizational Culture and
Leadership, second edition, Jossey Bass,
detailed leadership approach was San Francisco.
an excellent fit with the nature of the 2. Tushman, M. L. and Anderson, P. (1986)
management challenge during the first ten Technological Discontinuities and Organizational
Environments, Administrative Science Quarterly, 31:
years of his tenure – to achieve a turnaround
439-465.
at Disney and to renew the organisation. He
3. Spar. D. (2003). Ruling the Waves: Cycles of
succeeded in transforming a failing collection Discovery, Chaos, and Wealth from the Compass
of media related assets into a complex to the Internet, Harvard Business School Press,
Cambridge, Mass.
media conglomerate. However, his success
4. Vogel, H. L. (1999) Entertainment Industry
in this created a new challenge – managing Economics: A Guide for Financial Analysis, fourth
a tightly-coordinated global multi-media edition, Cambridge University Press, New York.
organisation. This required a new leadership 5. Gunter, M. and Leonard, D. (2003) Murdoch’s Prime
style. Disney had become too complex to Time, Fortune, February 17.
be micro-managed, too diverse for a single 6. Bibb, P. (1993) It Ain’t as Easy as it Looks:
Ted Turner’s Amazing Story, Crown, New York.
leader. Eisner had found success through
7. Cited in Red Herring Online, 3 February, 1999.
a passion for detail and aggressive cost
control. This recipe was appropriate for a 8. Scase, R. (2002) Create Harmony, not Harnesses.
The Observer, 4 August.
turnaround situation but was detrimental
9. Amabile T. M. (1998) How To Kill Creativity.
to ensuring the constant stream of creative Harvard Business Review. September.
media products Disney needed to feed the 10. Küng, L. (2004) What Makes Media Firms Tick?
massive global distribution architecture Exploring the Hidden Drivers of Firm Performance.
In Picard, R. G. (Ed.) Strategic Responses to Media
Eisner had created.
Market Changes, Jönköping International Business
School, Jönköping.
More broadly, the task of leadership in 11. Tushman M. L. and O’Reilly III C.A. (1997) Winning
the media sector contains many inherent through Innovation: A Practical Guide to Leading
Organization Change and Renewal, Harvard Business
paradoxes. The span of competencies and School Press, Cambridge, Mass.
talents required is best served by multi- 12. Young, J. S. and Simon, W. L. (2005) Icon Steve
leader structures, yet these complicate Jobs: The Greatest Second Act in the History of
Business, John Wiley, New York.
and dull decisiveness; the power, influence
and responsibility place huge requirements 13. Stewart, J. B. (2005) Disney War: The Battle for the
Magic Kingdom, Simon & Schuster, London.
in terms of self-knowledge and emotional
14. Schein, E.(1992) Op cit, page 301.
maturity, yet individuals possessing such
15. Young, J. S. and Simon, W. L. (2005). Op cit,
characteristics are unlikely to be able to page 62.
stomach the temperamental, ego-driven,
16. Ibid, page 201.
hard-nosed, power-hungry individuals who
17. Bass, B. M. (1985) Leadership and Performance
populate the sector. Success is random, high Beyond Expectations, Free Press, New York.
calibre projects ever more expensive and 18. Kotter J. P. 1996. Leading Change, Harvard
increasing competition means they are also Business School Press, Cambridge, Mass.
ever less likely to succeed – yet it is almost 19. Conger, J. (1989). The Charismatic Leader: Behind
the Mystique of Exceptional Leadership, Jossey-Bass,
impossible to compete in the field without
San Francisco.
chasing the next blockbuster. Not many
20. Bryman, A., Stephens, M. and Campo, C. (1996)
have got what it takes to excel in leadership The Importance of Context: Qualitative Research and
in the media industry. It’s therefore no the Study of Leadership, The Leadership Quarterly,
7(3): 353.
surprise that those who succeed become
21. Schein, E. (1992) Op cit.
legends in their own time.
22. Mintzberg, H., Ahlstrand B., and Lampel J. (1998)
Strategy Safari: A Guided Tour through the Wilds of
Strategic Management, Free Press, New York.
www.ashridge.org.uk/360 11The Ashridge Journal The transformation of food consumption Autumn 2007
Chris Gribben is a director of the Ashridge Centre for Matt Gitsham is a principal researcher at the Ashridge
Business and Society. He has worked in the field of corporate Centre for Business and Society. His interests include
social responsibility for over ten years. His recent research understanding the business opportunities of changing
work has included disclosure and social reporting and consumer attitudes to sustainability.
the changing nature of corporate community investment
and involvement. Email: matthew.gitsham@ashridge.org.uk
Email: chris.gribben@ashridge.org.uk
The transformation of food consumption
Based on their recent research, Chris Gribben
and Matt Gitsham examine changing consumer attitudes
to food consumption and the implications and opportunities
for food producers and retailers.
The production and consumption of food Ashridge recently conducted research A four stage approach was used
is currently raising a host of issues of to explore consumers’ changing in undertaking this research. The
enormous public and regulatory concern. attitudes and behaviour around these research team first conducted a series
This can be seen in the extensive media issues. Specifically, the research of interviews with key figures and
coverage devoted to food and topics such explored: experts in the subject area to inform
as healthy eating and obesity, pesticide • attitudes to a range of health, the design of a survey of British adults.
residues, carbon footprints, packaging environmental and social issues A questionnaire survey was then
and waste, and labour standards abuses in relation to the food they purchase designed by Ashridge and conducted
in supply chains. Food manufacturers and • familiarity with and use of a online by YouGov plc. The survey was
retailers, government and campaigning range of different types of product in the field in November 2006 and
and public interest organisations are all packaging information, including attracted 2,605 responses. The data
competing for airtime to put across their nutrition, organic, Fairtrade and was weighted by YouGov to ensure
views on these issues, but the perspectives sustainable fishing labelling that it was representative of the British
of consumers themselves are less well • other sources of information that adult population. The survey results
understood. Given that the rapidly changing consumers use that inform were analysed and key findings distilled.
consumption patterns of consumers their food purchasing decisions Commentaries were then invited from
are creating business opportunities that • possible barriers to consumers key figures and experts in the area to
are worth billions, this knowledge gap doing more to take these provide a range of perspectives on the
represents a missed opportunity for food issues into account when shopping. research findings.
retailers and suppliers.
12 www.ashridge.org.uk/360Autumn 2007 The transformation of food consumption The Ashridge Journal
What consumers really think However, our research also shows that, for producers; fair treatment of workers;
while quality is consistently important for and animal welfare.
Food quality is shoppers’ most the vast majority of consumers regardless
A particularly important finding from
important concern. Price is also very of income, perhaps less surprisingly, price
the research – as Graph 1 illustrates –
important for those on is much more important among people
is that concern for this set of issues
lower incomes. with lower household incomes than among
is just as strong across all income
those with higher household incomes.
groups, challenging the widely held
When we asked people what kinds of things assumption that concern for these issues is
are important to them in relation to the food For example, seven in ten of those with only shared among more affluent people.
they buy, food quality was overwhelmingly an annual household income of between
the most important, with around three £10,000 and £14,999 say price is very Only about a quarter of respondents
quarters (76%) of shoppers saying this important, compared with three in ten of think big environmental issues such
is very important to them. A considerable those with an annual household income of as climate change and biodiversity
distance behind was the price of food, between £75,000 and £100,000. are very important in relation to their
which was identified by just over half (56%) food.
of shoppers as very important. At least one in three think most health, Public concern with climate change
environmental and social issues are is currently very high in Britain: recent
This is very much in line with findings very important in relation to the food Globescan research, for example, shows
presented by The Economist in 20061, they buy. that 70% of people in the UK now think
which identified that while four decades ago climate change is very serious2. This would
almost a quarter of household expenditure There are a cluster of health, social and seem to suggest that comparatively few
went on groceries, just 9% does now. The environmental issues that are very important shoppers are actually making the link
Economist also went on to cite a 2006 study for as many as a third of shoppers. These between climate change and the food they
by IGD (a grocery industry think tank) that include: appropriate consumption of fats, buy. Or, given the explosion of media interest
found that just 42% of shoppers consider sugars, and salts; health and environmental in climate change since 2005, perhaps the
cost when choosing which foods to buy, impacts of pesticides and other chemicals, level of shoppers’ concern is growing fast
down from 46% in 2003. and of genetically modified foods; fair prices from a very low base?
Graph 1: Understanding relevant Importance of issues to consumers
����� �� �� � ���� � �� �� �� � ��� �� � �� �
���������� ���������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ������������
������� ������� �������� �������� �������� �������� �������� �������� �������� ���������
�������� �������� �������� �������� �������� �������� �������� �������� �������� ��������
��
��������������������������������
��������������������������
��
��
��
��
��
��
��
��
�
������������� ��������������� ������������� �������������������� �������������
www.ashridge.org.uk/360 13The Ashridge Journal The transformation of food consumption Autumn 2007
The research also shows that shoppers about fat content, for example, compared
are a lot less familiar with the concept with only three percent of people who don’t
of biodiversity than these other issues think this is important.
– perhaps this is a more difficult concept
for consumers to grasp than many of the But although there is also a clear link in
other issues we asked about. relation to environmental and social issues,
the gap between attitudes and behaviour
Food labelling: necessary but is wider.
not sufficient
There is a growing profusion of different Only four in ten people who think
types of label and product packaging fair prices for producers are very
information linked to these concerns, important often use Fairtrade labels.
including front and back of pack nutritional
information, healthy eating branding, five This finding suggests that while motivation
a day fruit and vegetable labels, organic and the availability of a label are necessary
labels and Fairtrade labels, for example. factors for consumer behaviour to change,
they are not necessarily sufficient.
Many campaigners argue that labels on
product packaging are the key to changing What are the other factors that influence
consumer behaviour, both in respect of consumer behaviour in relation to these
healthy eating and social and environmental issues? Our research shows that by far
issues. Our research shows that labels are the most significant factor is price. And, as
the most important sources of information Graph 2 illustrates, this factor is far more
about food that shoppers use. Forty-four significant for those on lower household
percent of shoppers say they often use incomes than it is for those on higher
back of pack nutritional information about incomes.
fat, for example. By comparison, company
websites and helplines are used often by
only a tiny proportion of shoppers (5% and Tackling the price barrier
2% respectively). There are many aspects of the research
findings that food suppliers and retailers
However, Ashridge’s research suggests may do well to take into account in their
that it is not labels in themselves that quest to know and respond to their
cause consumer behaviour to change. customers. For the purposes of this article,
Rather, concern for the issues motivates we have chosen to focus on the findings
consumers to change their behaviour and that suggest opportunities around pricing.
labels are the tool that enable them to act
on this motivation. At least both elements Across the range of incomes, price is cited
are necessary for a change in consumer as the greatest barrier to taking health,
behaviour to occur. social and environmental issues into greater
account. Furthermore, in all three cases,
For example, the research shows that price is cited by many more people on lower
people who are concerned about the incomes than by people on higher incomes.
broad range of issues we asked about are Given that concern about most of these
more likely both to be aware of relevant issues is as strong, if not stronger, among
product labels and to use these labels. people on lower incomes, it suggests that
This is particularly clear in relation to there is currently a vast market segment
health: three quarters of people who think that has an aspiration for a certain type of
appropriate consumption of fats is very product that is not currently being met with
important often use nutritional information an appropriately priced product.
14 www.ashridge.org.uk/360Autumn 2007 The transformation of food consumption The Ashridge Journal
Graph 2: Understanding barriers to doing more
to take health, social and environmental
issues into account
�� ����� �� � � ��� ��� � �� � ���� �� ����
���������� ���������� ����������� ����������� ����������� ����������� ����������� ����������� ����������� ������������
�������������������������������������
��������������������������������
������� ������� �������� �������� �������� �������� �������� �������� �������� ���������
�������� �������� �������� �������� �������� �������� �������� �������� �������� ��������
��
��
��
��
��
��
�
�������������������� �������������������� �������������
The price of a product is determined not have gained competitive advantage by
only by its cost of production, but also developing business models that deliver high
by how much a customer is willing to pay quality products and services at low prices
for it. The current premium price often to price sensitive consumers – a concept
associated with organic and Fairtrade often referred to as ‘value engineering’.
products is not necessarily solely to do For example, easyJet and other budget
with higher production costs, but often also airlines have stripped out aspects of the
because these products are positioned as product that customers don’t think are
luxury goods, marketed solely to non-price important and focused on what they do think
sensitive consumers. is important – getting from A to B quickly
and safely.
As author of The Undercover Economist
Tim Harford3 notes, in the UK organic milk Accor, through its IBIS and Formule 1 hotel
commands a premium of around 15p per chains, concentrates resources on those
pint of which less than 6p goes to the aspects of the product that consumers
farmer. Similar supermarket mark-ups are are most concerned about, like hygiene,
frequently found on Fairtrade goods.4 bed quality and room quietness, rather
Many successful organisations create value than investing resources in other areas less
by tailoring a similar basic product to the important to price sensitive consumers
needs, aspirations and price sensitivity of like lounges, architectural aesthetics and
different market segments. In recent years, room size.
companies such as easyJet and Accor
www.ashridge.org.uk/360 15The Ashridge Journal The transformation of food consumption Autumn 2007
Our research findings suggest that there are In order to respond to opportunities to grow
significant market opportunities available to market share – particularly among lower References
companies who similarly think creatively income groups – retailers and manufacturers
about how to bring food products that need to understand the specific concerns 1. The Economist, A long, long way from Bentonville,
September 30 2006.
address health, environmental and social of the people buying their products. For
concerns to price sensitive consumers. example, our survey found that among 2. Globescan, Globescan Corporate Social
Responsibility Monitor, 2006.
There are already some examples of steps those who do most of their shopping
being taken in this direction. For example, at Marks & Spencer, one in four (24%) 3. Tim Harford, The Undercover Economist,
Sainsbury’s has recently demonstrated believes that the climate change impacts Little, Brown Book Group, 2006.
this can be made to work by announcing of food production and consumption are 4. Mail on Sunday, How supermarkets are squeezing
its intention to switch all ranges of its very important. In sharp contrast only one fat profits from Fairtrade brands, September 24 2006.
bananas – from budget to premium in fifty (2%) of Iceland’s customers does. Yet 5. The Independent, Supermarkets switch to Fairtrade
– to Fairtrade5. Similarly Asda has recently when it comes to other issues, the attitudes bananas, December 13 2006.
announced it will triple its organic range of their customers are much closer. For 6. The Grocer, Asda: Our organics will be a shock to
with, it claims, products equally good as example, the proportion of customers from Waitrose, September 16 2006.
those at Waitrose but at prices that will be Marks & Spencer and Iceland who believe 7. The Independent, Waitrose offers ‘ugly’ fruit and
significantly cheaper. According to Asda, in that animal welfare issues are very important vegetables at discount rate, June 19 2006.
focus groups its customers are now saying is 31% and 26% respectively.
“We want organic and Fairtrade but we do
not want to pay a premium.”6 Patterns of food consumption are clearly
changing substantially and rapidly. For
It is also worth noting that there are ways companies who stay close to their
of reducing price premiums where these customers in order to understand changing
are related to higher production costs. consumer preferences and behaviours and
For example, price premiums related to the adapt their pricing policies accordingly,
limited amount of organic food available there are real opportunities to win market
could also be reduced if less emphasis was share.
placed on produce being perfectly shaped
and coloured – Waitrose has recently The full research report is available from:
demonstrated this by launching a range of www.ashridge.org.uk/acbas
“ugly” looking fruit and vegetables marketed
at a reduced price for use in cookery and
jam-making7.
16 www.ashridge.org.uk/360Autumn 2007 Mastering the power zone The Ashridge Journal
Claudia Heimer is a Business Director of Ashridge
Consulting. Her focus is on helping international organisations
engage people inside and outside more fully as part of their
strategic changes. Her experiences as coach and consultant
contribute to her research agenda on power and emotions
in the context of organisational change.
Email: claudia.heimer@ashridge.org.uk
Mastering the power zone
Whether managers choose to recognise and work with power or not, it still
determines outcomes in organisations. In this article Claudia Heimer describes
the “push and pull” of power games observed in her recent research and offers
a mapping device that enables managers to recognise and work with the
power dynamics that are at play in change processes.
Perspectives on power on what it means. With the pace and
How does the word “power” make you feel? complexity of change we experience today,
Does it make you angry? Does it make you more managers want to know how to
happy? Over the years, I have come across master the power zone. Do you want true
managers, particularly in emerging markets, engagement? Do you want people really
who associate power with repressive committed to the strategy of the company?
government and therefore choose to lead Do you want your agenda to stand a fair
through a highly participative yet disciplined chance? It’s increasingly vital that you
approach. They choose to focus entirely understand the interplay of political forces
on perfecting their leadership style and to increase your chances for success.
are not interested in power at all. Others
are filled with enthusiasm and talk about The subject of power has preoccupied
their role models of powerful people who many writers and academics over the last
combine strong value sets and missions 20 years and they have come up with
with extraordinary results. some great questions and approaches that
have helped map out the field of power.
What is power? We all have our own views For example, “What are the sources of
www.ashridge.org.uk/360 17The Ashridge Journal Mastering the power zone Autumn 2007
power?” One of the most influential ways
of looking at this question has grouped Scope of the research
bases of power along factors coming from My research, throughout 2006,
one’s position in an organisation and others focused on a variety of cases in the
coming from personal factors1. Position private and the public sector. It involved
power sources can allow managers to force six companies in the IT, financial
others into compliance, or shape decisions services, building materials and
because others attribute power to the role telecommunications industries; two
the person occupies. The personal power additional case studies were an NGO
sources are either about exchanging and a public sector organisation. Three
knowledge or skills for what others want, or of the companies were large global
about having attributes such as charisma or players; the others were medium sized
fame. The limitation of much management organisations in the UK, Germany,
literature and most approaches to power Switzerland and South Africa.
lies in their focus on the individual. They talk
about power in terms of helping individuals Some organisations were rather more
to “get their way”, reducing it mainly to hierarchically managed, with control
personal attributes or technique. vested very clearly with the leaders,
while others were run democratically
From observations in organisations I have by involving employees in business
worked with, I was becoming increasingly decisions. In some of the case studies,
aware that power is something that happens change was introduced as a top down,
in relationships. If you take something, radical approach. In others, it was more
somebody else is letting you do this. If evolutionary. In the organisations that
my observations were to be accurate, we took part, I conducted 360° interviews
can never really understand and master with executives, their bosses or
the subject if we simply study the traits trustees, as well as their direct reports
of the powerful and try to replicate their or peers (totalling up to 12 interviews
successes. This drove me on to research for each case).
the subject: research that increasingly led
me to see power as something that moves
around constellations of people that form Across all continents and across
and re-form continuously, particularly in organisations with widely differing value
change processes. My research findings systems, my findings were strikingly similar.
have enabled me to help leaders think in a I found the same pattern in all the places
systematic way about influencing various I looked. There is a surprisingly simple
types of political situations and adopt some movement in the power dynamics I saw
simple approaches to becoming better at repeated in the case studies, involving
the power game. competing and collaborating forces.
People invariably formed groups, and
Looking beyond the hero invariably there were people who were
Influenced by ideas from sociology2, my perceived as “powerful” and people who
research looked beyond the individual were perceived as “powerless”. No matter
into the groups and the dynamics they from where change was initiated, others
produce during change. What happens first reacted with scepticism about the
when things start getting in flux? What other group’s intentions, ways of thinking,
happens when the “powerful” and the and approaches. How much of what is
“powerless” interact? How do groups being proposed is going to go against
form and re-form in change? How are the our interests? The dynamics, as various
outcomes of change processes shaped? interests interacted, resulted in a movement
18 www.ashridge.org.uk/360Autumn 2007 Mastering the power zone The Ashridge Journal
of push and pull, with giving and taking on
all sides. One group transformed some much “push and pull” as they learned
things in the other peoples’ thinking and the that power is something that must be
other way around, often without each side accepted and not simply gifted. When
becoming aware of it! management tried to make employee
ownership a company-wide approach
I found that it was difficult for people to in 2003, it was surprised to hit a
answer the question of what they had to negative reaction. It first had to learn
let go of in the process of change. It was not to assume that everyone would
the very process of reflection after the event naturally take to the idea of being an
that allowed some of the leaders to realise owner, or even take the idea seriously.
that others had managed to get their way, It had to learn to talk as much about
at least partially, so focused were they on the rewards as the risks of ownership
the desired end state. and stop trying to convince people.
Everyone had to become educated on
The outcome of change was invariably the investments, inflation risks and return
combination of what the “powerful” and including capital gain and dividends in
the “powerless” wanted. In the study, even order to understand what truly
the most “top down” project didn’t get embracing ownership would mean.
implemented exactly the way the leaders
wanted. The push backs always led to A lot of the push and pull stopped when
modifications. They might not have changed the first dividends were paid out. Many
the overall course of action but at the very people completely changed their view.
least, other people’s reactions delayed the This was real. Management wasn’t
implementation of change. tricking them into believing something
that wasn’t really that great for them.
While some of the change processes This was the point at which many
involved leaders apparently single-handedly employees started buying more shares
driving change processes top down, the in the company and really investing in
reality was different. Based on the findings, their future.
my suggestion is to try and understand how
the pattern operates and stop fighting it by When introducing an accelerated
trying harder into the direction we want. share buying scheme to iron out
We need to go with the dynamic power the inequalities that still existed in
process so that we increase our impact. relation to the black/white and male/
female distribution of wealth in 2006,
Creating employee ownership management again found the reactions
Axiz, a South African SME in the IT to be mixed. Why should women and
infrastructure distribution business, black people be favoured? Imagine
and the only hardware manufacturer how the executives felt who were
in Africa, was founded in 1989. In 17 just trying to give their employees a
years, it grew to reach a turnover of large gift! Today, everyone joins as an
ZAR 2.2billion and 650 employees owner. The company employs 60%
by the end of 2006. This company is of the country’s black people active
the continent’s response to Ricardo in the IT sector, with management
Semler’s famously self-managed holding 74% of the company and the
company SEMCO in Brazil3. employees 26%. The result is a 25%
year on year growth, while the industry
However, the journey has not been average stayed at around 5-10 %, and
easy and management has observed competitors grew by only 8-9%.
www.ashridge.org.uk/360 19The Ashridge Journal Mastering the power zone Autumn 2007
Stepping into power
If change processes allow everyone to This is not about creating highly manipulative
have some degree of impact, how can tactics for tricking other people into As you prepare to use the mapping
we shape the outcomes of a political situations they don’t want to be in. tool, the challenge is to stop thinking
process? If one accepts from the outset about yourself as a lone hero while you
that change invariably leads to both push This is not about being clever. This is about consider the specific change situation
and pull, give and take, the focus can shift being able to read patterns of interaction you have initiated or you are faced
away from fighting for separate agendas. between people; being clear about what with. You live and work in groups and
Without wasting energy on attempting to matters to you and what you are unwilling to somebody helped you get to where
drive change agendas through, the focus let go of; realising that you have a lot more you are now. Who is helping you
can be on discovering a new picture of the influence than you might actually feel you stay where you are and support you?
future that emerges, influenced by both the have. This is about stepping up into the field The tendency of most stakeholder
“powerful” and the “powerless”. of forces around you and actively shaping mapping tools is to treat stakeholders
the dynamics and the results. as individual players. Invariably, what
Can you stay out of it? In the research, you are actually faced with are groups
some managers were very comfortable Wendy Luhabe, perhaps South Africa’s of people who are interlocked in a
with letting the political process unfold, and most prominent female business and political process of push and pull that
taking every situation as it emerges. Lack social entrepreneur once said: “Power is might have many more dimensions of
of foresight and thinking about political not something you are given. Power is push and pull than the one (or the ones)
processes were leaving them open to being something you step into.” you are looking at.
manipulated, excluded or used by others.
Whatever you do, you can’t really stay Based on the research findings, I have
out of the power zone. There is always a developed a mapping tool to help you think
political game going on. And you are always about how to influence things by design
part of it. It is your choice if you are active (see Figure 1).
or reactive in it. It’s up to you to decide to
shape it.
There will always be a degree to which the
outcome of any politically charged change
will be unknowable. Yet if you look ahead
you will have more chances of reaching
the outcome you desire than if you leave
things to the political process. This is not
about planning.
Figure 1. The Power Map
20 www.ashridge.org.uk/360You can also read
