Centennials

So, as you said, the work was around how do you sustain success for a long period of time, and we kind of tried to work out what is a good length of time, what is a significant amount of time to say that you have sustained success.

And the benchmark we went for was a hundred years, and a centennial is like a celebration of a hundred years, so it seemed like the right word to use and it’s really just saying, how can you stay successful?

When you look into the work around this area, people talk about number of economic cycles, for example. So how do you sustain success through two, three, four, maybe even five economic cycles?

When we were looking at organizations too and trying to work out which ones to look at, it became really important that there had been a number of significant leadership changes too. So how do you sustain through those different changes? So how are you building something, essentially, that’s robust?

So how do you essentially build something where it’s the system that is making the team or the organization successful over time so that individuals can come and go, key individuals in particular, but actually the success is sustained for, in our case, a hundred years or more?

But I think if you’re saying, how can you sustain it for a hundred years, then hopefully that will work out how to help you sustain it for twenty or thirty years too.

Rachel Salaman: I think this is what you call DNA in the book, would that be right, something that is embedded beyond the people who run the organizations? How does that get embedded?

Alex Hill: I think organizations in my mind are just groups of individuals trying to do something, so the way I’ve always thought of it is it’s behaviors. And you find this a lot when you work with high-performing teams.

They talk a lot about behavior, and obviously values and principles drive those behaviors, but ultimately how is it that we behave towards each other, towards society, etc.? But how do we create thoughts and behaviors that ultimately build an environment that is going to do well over time?

The Olympic teams have a very simple phrase, which is “performance equals talent times environment,” and what’s critical there is the times. And you can have okay talent, but an incredible environment and it will really elevate the performance of that team.

Equally, you can have incredible talent that can do okay in an okay environment, but I think the DNA is really looking at how do you build thoughts and behaviors within an organization in a way that they are conscious, so everyone is aware of them and everyone understands them and everyone tries to live up to them.

Where it’s a safe environment so people can say exactly what they think and they can challenge whenever they feel is right and be supportive too. But that clarity is there and everyone holds each other to account, so when those behaviors start to slip then conversations are had and you kind of correct or evolve those behaviors to go forwards.

And it’s not to say that they will always be right now and forever, they do need to evolve and they do need to change, but you’re all very conscious of what you’re trying to do and why.

Rachel Salaman: How fragile is it, though, if it is about the individuals calling the shots and passing on and, in a way, policing the behaviors, because things can go very wrong very quickly, can’t they, with people?

Alex Hill: They can. It’s interesting, though; there’s been some really interesting studies around this. So the phrase that’s often used is toxic behavior. So somebody arrives and they can potentially disrupt or damage the established norms or behaviors in a team.

You tend to find that that can happen when the team is not well formed, so often in the early life of a team a toxic member can have a really significant impact because almost the norms haven’t been established, the environment hasn’t been set.

But what you tend to find is once the environment is set and the norms are in place, a toxic member arrives and they will get rejected quite quickly by the team, so their ability to impact a robust and strong team is much weaker than one that’s just starting out.

Within the book we talk about the idea of stewardship and for me, they are the kind of individuals who live and breathe the values of the institution, and they are in place for at least ten years in that sort of stewardship or guidance role. The phrase in the book that we use is they’re almost like the parents.

So they guide the institution going forwards and by having parents who are in place for ten or fifteen years, and by the time they become a parent or they become a steward they’ve got a pretty good understanding of the institution that they’re guiding.

Whether they really want to do it or not, whether they’re up for the challenge and the task or not. But also the institution is pretty clear on whether they’re right or not. And then once they step out of that role, they move into what’s almost a grandparent type role. So they don’t leave the institution; they stay and they help guide through the next generation.

So if you take the All Blacks rugby team, for example, you’ll have the head coach who will stay in role for at least eight years, often more. They will then hand on to the next coach who has normally worked alongside them for at least four years, again normally longer, and then they come into that role.

And then the head coach, although they step down, they are still there to guide and help make decisions.

Rachel Salaman: In your book “Centennials” you look in some detail at quite a few organizations, like the New Zealand rugby team, the All Blacks, that you were just talking about. A disproportionate number of the organizations that you profile in your book are not profit-making companies.

So as well as the All Blacks you’ve got NASA, the Royal Shakespeare Company, Eton College in the U.K. Why do so few for-profit companies endure, or was there a different reason for their absence in your book?

Alex Hill: So I don’t think, personally, the distinctions are as significant as people who work in the for-profit world would say they are, and that's just my experience.

However, in terms of identifying the organizations to look at in the book, the starting point was actually to work with all the people I’ve worked with in high performance and to say okay, which organizations do you admire, which ones are interesting, which ones are doing interesting stuff?

If you really wanted to learn about X, Y or Z, what would that be? And what you find is that businesses aren’t often the places that they initially talk about, and that surprised me; that wasn’t what I was expecting.

So that’s what led us to the All Blacks because they’re the most successful sporting team that’s ever been, to NASA, to Eton, to the Royal College of Art and the Royal Academy of Music, etc.

And then I sort of started to look at why is it that businesses aren’t appearing on these lists of great long-lasting organizations, and you start to realize that actually businesses are not living for as long as they once were, and often the ones that are old aren’t necessarily high performing or exciting or as cutting edge as some of the younger ones.

So what you start to find is that actually, as we started to do the work, that what was interesting is that a lot of these really great long-lasting organizations behave in a way that is not like a normal business, and that’s sort of what sets them apart.

So the book is trying to compare the two worlds and see what is it that we can learn from those. However, I do think great businesses embody a lot of the behaviors that we found in the other organizations too.

Rachel Salaman: Sure, yes. So why is becoming a centennial a worthy ambition for a company today?

Alex Hill: So the book here is really saying if you don’t want to go the route of burn bright and only live for ten or fifteen years and then disappear, then what do you need to do?

Because a lot of the models, frameworks, illustrations, examples that we’re being given – and I work in a business school, come from business; a lot of management thinking comes from business, and actually those principles and ideas are great if you want to burn bright, but then disappear.

But if you don’t want to do that and you want to build something that’s going to last, then you have to think in a very different way. And I think the whole idea of the book was to say if you don’t want to just focus on the short term and making a lot of money quickly and you do want to build something that lasts, then how do you think?

And it’s presenting a different set of ideas that are more long-term focused. And if you look at communities, economies, societies, over a long period of time, we do need some stability and we do need some longevity.

And not only do they provide the structure for everything else, but also they help us solve bigger, more complex questions, things like climate change or poverty or health or education, where actually you’re building a collective knowledge in an institution that is growing over time.

And you’re solving a problem which can’t just be solved quickly, where actually it might take many decades or many generations to actually work out how to fix it. So if you want to build that sort of organization, then how do you need to behave?

Rachel Salaman: Right, and that’s where your book comes in. It sets out twelve habits of centennials; six are about building the stable stewardship you’ve talked about which is at the core of the organization, and then six are about positive disruption around the edges.

Let’s look at a couple of them in a bit more detail. The first one is build your north star, which means establish a purpose. We’ve touched on that already. Would you like to say anything more about that one?

Alex Hill: I do work with a lot of businesses and CEOs, and simply put, if you want to last a long time, then you have to have something which guides you and something that is kind of in the distance that you’re trying to move towards.

And what we’ve found is that the organizations that perform well over a very long period of time, and this is businesses as well as non-businesses, they are very clear on how they’re trying to impact the world and how they’re trying to shape it, and they’re also very clear on the thoughts and behaviors that they’re trying to create within it.

So if you look at an organization like Starbucks that’s pretty basic, it’s a coffee shop, but it’s incredibly admired, when Fortune magazine survey thousands of people each year, Starbucks always comes out as being one of the most admired companies.

And when you look at what they do and how they think and how they behave, they talk a lot about belonging and they talk a lot about community and they talk a lot about artistry, and they have these kinds of core behaviors or beliefs or values, whatever you want to call it, that guide them and guide them forwards.

And Howard Schultz has written a couple of great books, one about how he set up Starbucks and the second about how he turned it around when it went wrong, and he talks about how, when they lost their purpose and they just became focused on hyper-growth, as he phrased it, that’s when it all went wrong.

And they then made a decision to shut all of their stores in the States, at a cost of several million dollars in lost revenue, to help the staff reconnect with the product. And then also to help the stores reconnect with the neighborhood in which they’re based, and they do a lot of work within the local neighborhoods and the local communities.

So you tend to find that the great organizations have a really strong connection with society and they make enough profit to survive and to exist and to do all the things they want to do; they’re large enough that they can create a big enough impact in the world which meets their aim.

But they do have something that they want to achieve in the long term and something that is guiding them forwards in the long term. And it’s not just about how much money we’re making today or how much money we’re going to make this year.

They see that as a way to help them achieve their long-term goal, if you like, or their long-term purpose. So it’s very hard to be successful for a long time if you don’t have something that is guiding you forwards because that allows you to make decisions about what you do and why, and the choices about are we going to do X or Y or A or B, and how do we go forwards?

It also allows you to create this core to the organization that is the initial cutting edge that pushes you forwards. And then this idea of a spin-off too, and if you look at something like NASA, its core activity is space exploration, but it then takes the learning from that and shares it with society through its spin-offs division, which is where a lot of technical innovations come from.

Things like GPS or artificial limbs have all come from cutting-edge activities through space exploration where you’re kind of trying to push the boundaries of what’s possible, but then you find things out that actually are helpful to the world.

And you could argue that in many ways some of its most immediate impact has been being able to show long-term patterns around things like migration or climate from space where we can actually see the world from a different perspective that allows us to actually make decisions in a different way on Earth.

And that’s all come through its spin-offs division where it’s trying to share its learning and create a broader impact.

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Rachel Salaman: The second habit that you look at in the book is “do it for the kids’ kids.” Again, this is very forward looking. What’s that one about and how have you seen that play out in practice?

Alex Hill: One of the things we found when we worked with these institutions is – the first time I came across it was actually at the Royal Shakespeare Company and the lady who’s the executive director there, one of the first times we met, she said “The work we do with schools is critical. It keeps us alive and relevant to the world.”

And you find then that all of the great institutions work with kids and there’s a couple of reasons for doing it. One is that I think they see that part of their broader role in society is to help children.

But when you dig into it a bit more you realize that what they’re doing is they’re engaging children in the areas that they work in and the problems that they’re wrestling with, and they’re almost building the talent for the future.

And because of that they have a very broad choice and much more diverse range of applicants, and much larger range, and then that helps them stay successful for the future.

Rachel Salaman: I suppose from the outside it looks a little bit like a tension between fresh talent with new ideas and the need to continue with the things that work.

In fact, in the book you say fresh talent is always needed, but world-beating success demands continuity too, and this goes to the heart of becoming a centennial. What are some ways to identify what needs to continue versus what needs to change, because that’s the key question, isn’t it?

Alex Hill: The analogy that I think I would use, you start to realize these great institutions have multiple generations, and the way I think of them is like family where you’ve got at least three, often four generations living alongside each other.

So you have the parents who are guiding, which we talked about earlier, and we have the grandparents who are also guiding, but are less in the thick of it, they’re very experienced, but then you have the kids too. And anyone who’s grown up in a very healthy family knows that those three generations play very different roles, but they’re very important.

So it’s the teenager’s role to tell you that you’re rubbish and you’re out of date and you don’t know what you’re talking about and things need to change and they need to move forwards, and to criticize and challenge and push. And that plays a very important role in keeping the family fresh and interested and relevant, and it creates that sort of push and that drive.

However, the way I would describe it, you don’t just want to live on a street full of teenagers. I mean it might be fun for a bit, but it will start to go out of control. So the kids push you forwards, but they do need guiding too and so you need this balance.

You wouldn’t want to live on a street that’s just full of grandparents and you wouldn’t want to live on a street that’s just full of kids. You need three generations alongside each other discussing, debating, working things out going forwards, etc.

In our study we found that typically, in a high-performing organization, around a quarter of your people are your parents, your stewards, so they’re like your backbone and they guide you forwards, but the majority are your kids and they are pushing and challenging and questioning and thinking.

They often, in the case of centennials, don’t just stay in the organization full time; they often move in and out. So we describe in the book about the organization needs to be porous and because of that, ideas move in and out with those people.

So again, at the Royal Academy of Music they were the first organization that said “Sixty percent of our people work part time. They’re doing incredible things elsewhere, and then they come back to us for part of their time. So they never stop learning, so they have that mix of disruption which moves you forwards, but also stability that guides you, and there’s a balance between the two.”

Rachel Salaman: Another insight from your book is how helpful strangers can be in improving decision making and this is habit five, perform in public. Could you share an example of what this is and how it’s useful?

Alex Hill: The stranger, there’s a couple of things. They are able to see, and interestingly I found this through my own research, when I go into these institutions and you’re trying to understand them, one of the things that I can often see, which they can’t, is what they do really well, because it’s just what they do and they don’t realize that they’re doing it differently to everyone else.

So strangers are really useful because they can see often what you’re doing that’s really good, they can bring in some other ideas from outside, but also actually what’s really interesting is that just by having them present it elevates the performance of everyone else that’s there.

So again they’ve done lots of different studies around this, but they found that if you have a stranger present in a group, the group feels that they need to perform better, so they will often be more rigorous in their discussion or their debates, they will explain things more clearly, they make less mistakes, and they often perform at a higher level because of that.

So the stranger’s really interesting, that even if they aren’t bringing any different insights or perspective, just their presence changes the discussion and the dialogue and raises the performance of the team.

So where that all started was that you start to realize that every high-performing organization has a performance, and sometimes it happens very naturally, like an Olympic Games or a World Cup or a moon landing – this moment where they have to really perform, but other organizations where it doesn’t happen naturally will artificially create it.

So, like the Royal College of Art have open studios where strangers can walk through, or they’ll get students to do shows where people can come, and what it does is it just forces people to raise their game and perform at a higher level.

A friend of mine is a schoolteacher and she’s read the book, and one of the first things she did was actually start to introduce strangers into meetings, so somebody who’s not known to the group, somebody who often doesn’t really know what the group does, but just by having them in the room she said the conversations change.

It becomes heightened, it becomes better, and they feel like they’re being watched, and it does just raise the level of the group. And there’s a balance. It’s always this challenge and support. You’re always looking for a middle ground between the two.

You don’t want it to become really stressful, but just having a stranger there, as long as everyone knows why they’re there and the role they’re playing, then actually it can just elevate performance. But the key is to make sure that they don’t become too familiar.

So at universities, for example, we have external examiners and they review the practices of the university, particularly how work is marked, moderated, but you can’t be an external examiner for very long, it’s a set period of time because you’ll hit a point where actually you’re almost starting to become too familiar and now you lose the impact of being a stranger.

Rachel Salaman: Interesting. The last two habits that you look at are based on encouraging human interaction which allows for all sorts of things like unexpected ideas popping up, confidence, team building and even increased wellbeing and motivation. How much do you think these advantages are being threatened by the move towards remote and hybrid working?

Alex Hill: Yes, it’s such an interesting question and topic, isn’t it, remote hybrid working, and its role going forwards, and we’re only really starting to understand it, and obviously technology’s evolving and things are being done.

I think it’s important to realize it’s a deeply human thing to be social, and I know we have different personalities and different elements of that. So I think some tasks, if you do solitary tasks where you don’t really need to collaborate or work with anyone and you can just do it by yourself, then maybe there’s not a social need to your work.

But most of us don’t do that, most of us work in groups where you’re having to innovate, you’re having to collaborate to get things done, and therefore you need bonds, there need to be bonds between you. And all the studies of how we bond show that it’s really hard to bond if you’re not physically with someone.

And lots of the things that cause bonding to happen, when you look at the neuroscience behind it, it’s all really about how endorphins get released in your brain, and when we do things that release endorphins then we bond. So that can be singing, dancing, eating or just doing things, exercise with someone, will cause bonding to happen.

So it’s just really important to spend time with people and it’s one of the reasons why if you go back over thousands of years, as humans we’ve always come together to eat, to drink, to dance, to sing, because that bonds us as a community.

When you look at remote working and how we went into that in the pandemic, I think a lot of the time at the beginning we were trading off bonds that had already been built over many years, and so actually the need to physically be with them was less critical at the beginning.

However, when you then start to form new teams or work with different people, or if you haven’t seen someone or been with them physically for a long time, those bonds will erode. I think it’s interesting, the number of people who joined an organization in lockdown that haven’t stayed because actually the bonding never really took place.

One of the questions I ask when I’m working with people and teams and organizations is imagine that you never ate with your partner, and never shared a meal together, or imagine that you conducted your entire relationship over Zoom or Teams. I don’t really know how strong or deep a relationship that would be or how long that would last for.

So I haven’t worked with a high-performing team that doesn’t spend a lot of time together. Again, it all comes back to the question of how long are you in it for? How long, do you want to build an organization that will last, do you want to build an organization that will perform really well for a very long time?

And if you do then you need to have some really strong bonds between the people that work for you or with you.

Rachel Salaman: Fascinating. So finally, Alex, for people who want to build a centennial organization starting today, what would be some great final tips?

Alex Hill: It’s interesting that every organization I’ve worked with who’s performed at a very high level for a very long time, they’ve had a very clear purpose from day one and that has guided them, and when things have gone really wrong, because they will go wrong at some point, that’s often where they go back to.

So that purpose is really important. It’s very much an overused word, but what is it we’re trying to do long term, how are we trying to impact the world, and what thoughts and behaviors we’re trying to create through what we do.

Who are the people that are going to guide us in the long term, how do we identify them and how do we create great roles that they’ll want to do for a very long time and be part of our journey?

And then the third one is how do we disrupt and shake up our thinking, and how do we find ways to work with brilliant people who are at the cutting edge of what they do, and projects and ideas to work with them?

I think are really good three ways to start you off on your journey, but also to keep you doing well once you’ve already started to do well.

Rachel Salaman: Professor Alex Hill, thanks very much for joining us today.

Alex Hill: My pleasure. Thanks very much, Rachel.

Rachel Salaman: The name of Alex’s book again is “Centennials: The Twelve Habits of Great Enduring Organizations.” I’ll be back in a few weeks with another Expert Interview. Until then, goodbye.