Professor Phillips, who is also a visiting faculty at the KSBL, was the Beckwith Professor of Management Studies at the Judge Business School, University of Cambridge from 2002 to 2005 and an Associate Professor in the Strategy and Organisation Area at McGill University in Montreal, Canada from 1993 to 2002.
Amongst other things, much of his work focuses on various aspects of new institutional theory. His work in this area connects conventional approaches to understanding institutional process to new theoretical perspectives such as discourse analysis or to new empirical areas of study such as entrepreneurship. He also has been increasingly engaged in research looking at a range of different but related issues in entrepreneurship, family business and social entrepreneurship. His interest in this area lies in applying social theory to developing deeper understandings of these important forms of organisation.
He teaches courses in strategy, organisation behaviour, innovation, and leadership at the undergraduate and graduate level. Last week the Karachi School for Business & Leadership (KSBL) invited Professor Nelson Phillips, Chair in Strategy and Organisational Behaviour at Imperial College London, to speak on matters related to corporate vision and mission. Following the event, BR Research met the professor over coffee. The following is an extract of the conversation.
BR Research: Privatisation of public sector entities seems to be the agenda in Pakistan these days. But privatisation in Pakistan also brings immense pain for new leaders, as the corporation struggles between old culture - the politically charged laid back public sector employees - and the new culture marked by energetic and pro-change employees. What would you advise to these business leaders?
Professor Phillips: There will always be cultural split between the old public sector mindset and new people that come in - and this is always a major challenge. It is similar to what you will see in a merger and acquisition transaction. And often there are limits to what you can do, because of legal requirements such as to keep employees.
The key lies in changing processes and systems, and these things take time. Bringing in new leaders at the top is always good, but you also need to bring in new senior management who can implement new policies and set an example. This kind of cultural clash can also be resolved by setting the right human resource department and managing the existing human resources.
There are a number of management techniques but the key to remember is that it always takes time; there are no short cuts to changing corporate culture. BR Research: From the standpoint of organisational behaviour, how does a privatised public sector firm deal with the balance between providing public service, ensuring safety etc and maximising shareholders wealth?
Professor Phillips: The problem is much less complicated than politicians make it. Privatisation depends on what you are trying to do. Privatisation works best when competition is injected into the industry, because competition leads to better service delivery.
BR Research: A lot of Pakistani CEOs complain about the fire fighting they have to do on a daily basis, which makes it difficult for them to follow the company vision. Strikes, power outages, road blockages etc - these things consume a lot of CEO time, and therefore they find themselves out of sync with their vision.
Professor Phillips: This discomfort is faced by most CEOs that I have talked to in places that do not have the challenges of running a business in Pakistan. So this 'fire fighting' you talk about is worst in Pakistan but this seems to be a CEO problem across the world.
What you need as a CEO is to have a quality team around you; their ability to manage fire fighting as much as possible is critically important to give you time to focus on broader vision and strategy.
Communicating your vision is a big part of your job as a CEO. This is something that good CEOs do often as part of something else. So whenever they are giving a speech or any talk, or resolving a problem, they would be repeating their vision. They reaffirm the vision. It's about taking opportunities to communicate the vision.
In the talk I gave earlier, I showed a video of Steve Jobs (belated CEO of Apple), when he was introducing the iphone; he spent the first three minutes expressing and reaffirming the Apple's vision.
This is the real CEO talent; even when there is a fire, I want to keep the vision in mind and reaffirm it to my team. A vision works as a morale booster, a rudder, a justification or an explanation of what we are doing and why we have made the decisions we have made. This is the kind of company we are and this is what we are trying to do.
BR Research: How important it is for business leaders and human resource managers to understand the cultural background of their employees? Have you come across any major reliable study that examines different Pakistani cultures from organisational behaviour (OB) point of view?
Professor Phillips: There is a remarkable lack of these studies in Pakistan; the tendency is to look at studies in India. So there is a serious need for OB research in Pakistan.
Studies like these are incredibly important, because managers often make mistakes. They misinterpret if someone acts confidently and is talkative and extrovert they think that they are better than the person who is quite, or vice versa depending on their culture. The other major mistake managers make is that they think the same management practises, the same HR practises will work in different cultural groups.
BR Research: Could you give us an example?
Professor Phillips: For instance in the US, employees love to be individually rewarded, even in the case of team effort. In other cultures that are group oriented like Japan, if you reward individually, it creates problems in the team. This is not because people get jealous, but because the person who gets the bigger bonus feels bad that he got the bonus; so it's the other way around. In Japan, they feel that it's the team that should be rewarded.
So the interesting thing to do in Pakistan will be how do different groups react; to what degree do their expectations differ; what are their cultural norms; if they are different enough they require different management techniques.
BR Research: What are other areas that Pakistani academia and business managers need to think about in terms of organisational behaviour?
Professor Phillips: My experience of entrepreneurs in Pakistan is that they have family and social objectives. This is quite different from the US or Canada, which is much individualistic, where it's about me and not even about my family. So when it comes to applying management practices in Pakistan, one has to be aware of such differences.
The other interesting part in Pakistan is understanding philanthropy. I would be interested in knowing the motivation and practices of philanthropy in Pakistani entrepreneurs compared to other countries.
Pakistan also offers good opportunities of research in family businesses. Family businesses have not been an area of traditional business schools. If universities in Pakistan make family businesses an area of focus, it would be particularly good for universities elsewhere as well.
BR Research: What makes you interested in family businesses; what are the advantages of family businesses?
Professor Phillips: Family businesses may be risk averse but only in one way. They are willing to take very long term significant risks. They are not willing to risk the company, but they will risk quite a lot of their own money on projects they you will never get through in a traditional firm. So they have much longer vision.
Family business have a lot of innovation that can never be done in a large corporation; the time some of these innovations take is too long and large corporations do not have so much of time. But families say 'well, this was the pet project of our dad', so they will keep pumping in the money.
BR Research: Could you give us an example?
Professor Phillips: For instance in the UK, there was this family owned firm whose owner was very interested in creating a cement that absorbs carbon dioxide instead of giving it off. He partnered with an academic at Imperial College; the owner kept on pumping money for many years till they had a product.
This was super high risk and would have never gone in a traditional company. It was only because it was family business, and the dad thought that if his kids and their grandkids are to keep on with this business, then he has to ensure that it is environmentally safe.
I think family businesses have some really great strengths; outside of few very countries in the world, all business is family business. There are very few companies in the world that have significant number of publicly held firms.
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