Introduction

Like many books, this one owes a great deal to chance. As a Chief Executive with experience in running viable organisations but in search of a new job, after a year away at Harvard, I found a CEO post in a deeply failing one. Successfully turning that round led to another major assignment to do the same. The second time round I could see there were recurring patterns and some of the management skills required were generic. After that, when I took on a trouble-shooting role helping a very varied mix of struggling organisations analyse and find remedies to their biggest difficulties, the patterns started to present themselves repeatedly and inescapably. I am now into my sixth CEO job (in twenty years) and I’ve managed every type of organisation: stable, failed, failing, recovering, middle of the road, thriving, and, currently, world-famous and world-leading.

What has struck me again and again is that failure is caused by definable weaknesses in management capabilities, insight and behaviour. Sustained recovery from failure is caused by management with specific positive capabilities, insight and behaviour. And, as I have tried to understand failure, I have discovered how little is written on the subject. There are thousands of management books about success but hardly any about failure, almost as if talking about it risks being infected by it. This is odd given that failure happens so frequently, and to all of us at some point in our lives. Although few of us are unlucky enough to experience out-and-out failure, no one succeeds in business without having made mistakes, and underperformance is a common management concern. So understanding all this is important. My own experience and the wider scrutiny I have carried out have convinced me that by learning from our own and other people’s mistakes and failures, and in particular by understanding and adopting the positive capabilities I have been able to identify, you can manage effectively and achieve sustained, long-term success.

So my book, and, in it, the situations I describe and the approaches I advocate, are relevant to everyone who manages: CEOs, consultants, corporate managers responsible for the performance of a team, department, business unit or strategy, as well as entrepreneurs managing their own companies. Some of the examples I use are from large businesses and organisations, but the lessons to be learned from them hold true in much smaller ones, too. On hearing me present my ideas, a consultant working with a firm in the food production industry told me that they were in denial about what was happening to them, and their behaviours exactly mirrored those that I had been describing from my own experience. More than that, the principles are the same for both the private and public sectors and they cross cultures and nations.

My approach

There is generally a logical, chosen flow to the events that managers encounter. It is their responsibility, using their experience, skills and competence, to manage the sequence of events constructively towards the desired outcome. I show that they can do this, even in what at first sight are very unpromising circumstances. Contrariwise, if they don’t shape the sequence of events, it will shape them. That’s why terms such as pathway, route, road, process, but also story and narrative recur as explanatory metaphors in what I write. Persisting with just one of those metaphors for a moment, I also point out some absolutely fundamental forks in the road. Recognising they have been reached and acting on them can determine the future pathway the business or organisation follows, with dramatically different, indeed opposite outcomes available.

So my book is about what happens, what to avoid, what to do, how to recognise where a business or organisation is, what help to offer and what to take in the different circumstances that I outline. The pathway to failure and recovery, as well as to avoiding failure, is clear and can be mapped. But it is central to this book that following the pathway, the down and the up, is a matter of choice. Managers and organisations can and must understand the right choices and make them.

This is not a book about personal failure and regeneration, or a story of a sinner who repents. It is a book about management. The link, though, is simple. Work is a substantial, permanent part of all our lives. What we do in our work and its effects are not different from what we do outside as people. So our work experience is a microcosm of our whole life experience, and organisational failure parallels broader failure, just as individual managerial failure parallels personal failure.

Nor is it an analysis of systems. It is about the fact that management is a highly imperfect science and that businesses – that organisations – go most wrong when managers forget or refuse to acknowledge that. Witness the managerial ethos before the 2008 credit crunch with its breezy arrogance and certainty of superior insight.

This book is a fundamentally practical book in which I draw on:

• my own first-hand experience of turnaround centring on failing hospitals and health care;
• real examples from many arenas – banking, transport, the media, electronics and IT, sport, education, politics, defence – and many countries – the USA, China, Germany, Singapore, Switzerland and more;
• thinkers whose ideas have helped shape my approach, notably Dan Jones, whose ‘lean thinking’ has had a deep influence on my management techniques, and Steven Pinker, whose insights on organism vs mechanism and nature vs nurture have assisted me in thinking about how organisations work.

My message

In this book I show that ‘failure’ is not such a frightening term after all. By taking a long hard look at what is at the heart of failure, analysing its causes and the behaviours of those who cause it, this book will help both established and aspiring managers to cope when things go wrong – as they inevitably do from time to time – and to get out of trouble. A key message is that the sort of failure that we are all likely to face in our working lives is not a catastrophe: the situation can almost always be rescued.

Even more importantly, I show how to avoid those problems in the first place. By reading this book, managers will not only be able to see what else goes wrong when mistakes are made but know how to get it right – with the help of my principles for successful management.

Too often, people make the wrong distinction between failure and success. They see them as simple oppositions but don’t actually use them in opposed ways. Most commonly people talk about someone or something being a failure (i.e. a state), whereas something or someone has a success (i.e. reaches an end point). You can and will stick with a failure if you don’t do something about it, whereas a success is impressive and laudable but (in its most commonly used meaning) passes quickly. For example, you get sufficiently good A Levels to get you into university but then you have to study at university to get your degree, following which you seek a job to take these skills forward, and so on. If you fail your A Levels and don’t do anything else about it, you stay below that threshold, and as judged against that threshold you remain a failure.

Building on this basic distinction, I go on to demonstrate and flesh out my most fundamental point, that there is an opposite state to failure and that simply to define it on the basis of a successful end point misses the point. In contrast, I explore what sustained achievement and being enduringly successful mean, and how you get to them. This is about how to do things, how to behave, how to get on in the long term, so it is overwhelmingly important.

The book’s four parts

• There is a consistent pattern to failure, with different degrees of failure, from a business – or a manager – floundering because they have taken their eyes off the ball, to headline-hitting examples of collapse, all of which provide useful lessons for any manager, whether their organisation is in trouble or not. In Part 1 of my book I describe what deep failure looks like and how to recognise it, in the form of a simple but original graph which I call the Yosemite curve, with two key variants, total failure (the Niagara drop) and shallow failure (the Panama Canal passage). I go through the six distinct phases to and through failure (struggling, denial, freefall, rock bottom, recovery and consolidation), and the critical points of managerial choice, effort or collusion.
• The good news is that, once you have identified what failure is and what causes it, it becomes possible to find out what can be done to put it right. You can learn from it. You can learn not only how to get out of it but also how to avoid it, as I show in Part 2 of my book. I describe there the warning signs that indicate that you are running into trouble: how to recognise them, how to tackle their causes and how to avoid further problems. I separate these into passive signs, where lack of insight and action cause the slide into failure, and active signs, where the wrong actions and behaviours actually precipitate failure.
• In Part 3, I go through the experience of failure, what it entails, the difficulties you will face, how to cope with the pressures, the crucial communication challenges, and how to start to repair, rebuild, recover and finally consolidate. Organisational chaos is actually the product of complex, purposeful, informed behaviours trying to negotiate blockages caused by others. They don’t work because each behaviour is unconnected to the next and typically they frustrate each other, causing ever more complexity and new blockages. Once the behaviours are understood and coordinated they can be redirected and made to work in concert to reduce and then eliminate the chaos. That is the job of a good manager. The people working at Marks & Spencer when it became a failing business a few years ago were broadly the same ones who were there when it became a success again under its new CEO, Stuart Rose. Throughout this period they remained capable and well motivated, but the difference was that it was only with the right guidance and redirection that their efforts achieved the right overall result.
  You have to get people to believe that there is a driving force in their business or organisation, which they will then respond to and in so doing take part in creating. In a failed organisation the everyday processes which are vital to its smooth running – for example, people getting together to share problems that run across other areas and to take a shared interest and responsibility in solving them with their shared but different expertise – have ceased to work or are only working mechanistically. This means that no one is controlling them and so those processes are not functioning properly. But the staff have not yet realised that they are not now working properly or how they are not. This has to be put right to move from failure to success, but, if not, that will be what happens.
• In Part 4 of the book, I give a full and rounded picture of the distinctive skills and behaviours you need as a manager in order to make your organisation thrive. These are specifically not the pursuit of excellence and the outstanding per se, which often involve misleading and atypical cases.
  For me the crucial insight is that you will inevitably get things wrong and be less than consistently excellent or perfect. But that’s OK, as long as you strive relentlessly, accept imperfection, thrive and sustain; as long as you never give up but see one problem solved as the springboard to solving the next. I’ve made a profit; how do I embed it, how do I increase it, how do I increase market share? I’ve reduced waits for treatment; how do I eliminate them, how do I give patients choice and discretion for their operation? Try things to see if they succeed and try new things until they do succeed – endless iterations until you get into a virtuous loop. You eat the elephant by dividing it into small pieces and chewing it a bit at a time.
  Imperfect managers are the ones who get things done and get things right enough in the real world. I think Jim Collins takes us on the wrong track when he says: ‘You can mandate good. Greatness has to be unleashed.’ On the contrary, the right measure is not to be an Olympic champion – in each area of endeavour only one person can be that at one time and probably only once. Rather, it is to be a thriving and healthy achiever, as an individual or as a business. And it is much better to release, catalyse and enable ‘good’ than attempt to mandate it.

The three critical elements to thrive

That view leads to and forms the central positive of my book: thriving management. Organisations are complex, living entities from which the best results are obtained by tapping into what they and the people in them already know, their underlying experience, skills and wisdom in doing their individual jobs. In order to succeed, managers need to blend and bend these to create a coherent result. But people’s behaviours, actions and understandings are not simply explicit and rule driven. They are at least as importantly implicit, instinctive and responsive.

My managerial approach consists of three distinct elements. The first is honesty – with yourself and with others – glaringly simple maybe, but there is lots more to it, as I will show.

The second is total alertness to what is going on, gauging the environment, weighing up what can be done without help and asking for help when it is needed. We’ve had a run of complaints here. Why? What is the common theme? What are we doing wrong? What has changed? It’s about continually choosing where to focus attention and just as importantly where not to, when to reflect and when to act. And an absolutely key part of all this is mastering detail. Too often leadership and top management focus on the big picture, the long term, the strategic at the expense of the immediate and the specific. This is a big mistake. Detail and the big picture are not opposed. They must be aligned. Scan the horizon and look at the ground beneath you. When you have done both, you will know how to behave, you will know what you need to do and you will be ready to do it.

The third is coming to terms with and managing what you don’t understand and what you can’t control. This is the real world, the world of imperfect data, partial understandings and chance discoveries. If you can identify, then describe, then understand an area of the unknown, you make it a known which you then can deal with. So this aspect of management is about continually increasing the area of the known, finding strategies to act on that and looking for further ways to eat away at what appears to be chance, randomness and uncertainty.

To sum up …

This is a book for every manager. It describes fully and coherently what you need to do and how you need to behave to be a good manager and to manage successfully. Its route isn’t towards perfection or the unattainable. It is about real, hard, sustained achievement. That’s what realistic managers need. That’s what real managers should go and get.

The book arrives at these key ideas by first looking at managerial, business and organisational failure and their causes. At the book’s heart is the belief and the evidence that identifying failure and understanding its root causes is of crucial importance, not just for the obvious reason that it will help to avoid and (if it has happened) get out of failure – which it will – but also because it enables you to establish what the opposite of failure is – what, in short, good management is and how you do it. That is quite a find!