15/01/2003
Years ago, a former supervisor who was helping me draft a report made an observation that I have never forgotten - he noted that choosing the right words often makes the solution to any problem easier. I think his observation applies here.
I have therefore decided to toss out the title "Master class" - since the words make me uncomfortable. They imply that I am a master, and that I can somehow impart knowledge that you can absorb and then transform yourselves into masters.
Unfortunately, real life is a great deal less straightforward.
There are entire libraries of books addressing the topic of performance management. Skimming through a few of these will give you the vocabulary - but as New Labour and the Public Service is discovering, actually improving performance comes not from verbal dexterity, but from genuinely motivating others to achieve higher performance levels.
The whole notion of a settled body of knowledge that, if applied, can painlessly lead to greater performance is nonsense.
We are not dealing with engineering, but with the age-old question of what motivates particular individuals, or groups of people, to raise their everyday expectations. To excel at this challenge - to be a truly masterful motivator - requires a commitment to life-long learning about yourself and the world around you, since today's assumptions are often the performance limiters of tomorrow.
In my years as a manager, I have not acquired an overarching theory of performance management, but I have developed a few approaches that work for me. To accord this modest achievement the title of "Master" suggests we have all fallen prey to "title inflation" - an affliction particularly rampant amongst investment bankers.
Also this means that those whose staple diet is the 5-minute manager will not be receiving the instant guide to action that these approaches provide. For one thing, I am too old to tell my stories that quickly.
After that, I quickly looked for a job that paid better, called for more mental effort, and didn't require that I brave the elements in the cold, grey dawn. My father felt that economic independence was a desirable status for me, and he wanted to ensure I knew something about 'real life'. So for the next four years, I spent each of my summer vacations working for 4-6 weeks in different factories or institutions around South London.
My first experience was striking. I worked in the progress chasing department of an company that made electronic components for flight control systems. Twice a day, I would accompany my boss around the site to update the progress against plan data. Each round took about two hours. My boss knew every nook and cranny of that site, and the name and personal circumstances of every individual in every one of those nook and crannies.
One reason for this was that he doubled as a bookie's runner. He collected bets and distributed winnings. He was a clever man - effective at his main job and earning extra income on the side. It was a very pragmatic arrangement. This was my first introduction to the informal economy that I later encountered in many industrial plants.
The other reason for his familiarity with the workers is because he spent time with them. The conversations he had mainly consisted of gossip about fellow workers and what they were up to. Everyone had a hobby or an interest that was the main focus of their attention - certainly it wasn't the economic welfare of the company that motivated them on the job.
My overall impression of the attitudes of the employees was that they were generally disengaged from the primary purpose of the firm, yet they had an expectation that the company would ultimately provide for them - although never enough to be considered generous.
There were two kinds of workers at the plants. The apprentices were typically younger men with little formal education who were expected to be part of the replenishment of the skills base. And there were older, long-service employees, who typically had other relatives working in the factory. I saw first-hand how the reward system designed by the management to maximise performance was manipulated by the employees so they could deliver just enough performance to satisfy their minimum requirements - and no more.
I saw first-hand that there were distinctions between different types of workers and the way they were treated. For example, there were completely different facilities for the hourly paid and the monthly paid workers, there were differences in the way they were fed, in the way their facilities were cleaned, and in the way their workplace was decorated. It was enlightening.
By the time I arrived at the University of Surrey in 1964 to read chemistry, I had already been exposed to a lot of situations as an employee. Now, for the first time, there were opportunities for leadership.
My first experience was as editor of the student newspaper, called the Surrey Guardian. All correspondents were volunteers and the newspaper was expected to survive on a small subsidy. Unfortunately, correspondents often preferred gossiping to actually reporting or producing the paper.
In any case, I created a small motivated team and we moved the paper onto a much more professional footing - we even generating a small surplus. The newspaper reported union politics, sports events, education news cover plus a lively letters column.
In a very real sense, the Student's Union was a business like any other, with a need to balance its books, and I was in charge of producing the first annual report to the members. This experience aroused in me a real interest in management and the potential for creating change. After that the choice was easy - I decided to join industry in the field of personnel management. It was not a popular choice amongst my fellow graduates, most of whom went into jobs as chemists. They were keen to build on their degrees. Personnel was seen as the preserve of social science graduates. In much of the industry, it was like welfare work.
I decided that the Royal Dutch Shell Group was the company for me. Shell was a large, prosperous, high profile, multi-national company. The competition to join was pretty intense, requiring multiple interviews and psychological profiling. I liked the Shell people and they liked me, so I was offered a place as a graduate trainee in marketing. It took some pretty robust discussions to convert this to gaining entry to Shell UK as a personnel assistant in 1968, where I started on £1200 per annum.
Once inside, I soon grasped that many non-personnel colleagues felt Personnel was the preserve of failed line managers and softies. But I found the environment remarkable in many ways.
The whole business of estimating the abilities of employees and their worthiness of promotion created a rather bizarre cult of CEP - known as Currently Estimated Potential. There actually was a project to analyse statistically those personal characteristics that most closely correlated with high CEP. Each person received an annual appraisal to establish whether he or she was demonstrating these characteristics. Your CEP determined your rate of ascension through the Shell hierarchy. It also determined your remuneration.
The key determinant was called the helicopter quality - the ability to see any problem from an aerial view, in a wider context, and then to resolve it. But there was arguably more of the seeing than the resolving. We were all individually assessed and then ranked. Incredibly, more effort was spent on the formal analysis of these characteristics than on training managers as to how to conduct performance appraisals.
Let's look at this performance appraisal discussion in a fictitious company depicted on a video which shows how not to do it.
VIDEO CLIP
The point I want to make is that the real challenge in performance appraisal lies in the many countless micro-discussions that take place constantly between the leader and the led. The key is how to communicate effectively, and how to mentor individuals to be all that they can be. That requires excellent counselling skills and the ability to receive mentoring yourself as a leader.
In some ways, the corporate climate at Shell was remarkable. It was a world marked by unshakeable confidence that the corporation would continue to grow, and that it would continue to provide careers - particularly for management - stretching into infinity.
Essentially, the Blue Book specified the entitlements and perks awarded to employees in different grades - things like secretarial support, carpeting, drapery, even china. Dining arrangements were carefully delineated, and the dining rooms even had names like 'senior mess.' It smacked of military officers - a highly stratified system of command and control.
At the time, Shell UK was engaged in a corporate development programme aimed at creating the conditions in which employees would become more motivated and (hopefully) more productive. The programme began in 1965, and it involved socio-technical systems thinking - thanks to the Tavistock Institute - and job enrichment - thanks to Professor Fred Herzberg.
Tavistock had worked on pilot selection in World War II and had done pioneering work in the coal industry on the impact of new technology on employee culture. Fred Herzberg had created a model of employee attitudes that focused on the difference between sources of satisfaction and motivation. This led to work on job enrichment to promote higher levels of motivation.
Essentially, the process was a sort of Brave New World of employee engineering - a very modern, very scientific form of social engineering designed to produce stability and, I suppose, conformity. In 1968, when I stumbled upon the scene, I was immediately put on a crash course to master these new concepts. What I didn't realise was that by then, the programme was already faltering.
Partly, that was because it lacked the support of Shell's Central Office. But I also think it had something to do with the times.
Don't forget, 1968 brought us the Tet Offensive, Dr Spock, the Prague Spring, and the Summer of Love. That autumn, a quarter of a million anti-Vietnam protestors marched on the US Embassy in Grosvenor Square. The world was in upheaval, and somehow Shell's Blue Book and the other experiments in corporate control seemed increasingly outmoded. A more radical approach was needed.
I was going through my own internal transformation. I decided that I needed to sharpen my professional skills, and to do that I needed an MBA. From 1969-71, I went to Manchester Business School. That's where I became financially literate, beefed up my analytical toolbox, and first became interested in marketing.
When I completed my degree and returned to Shell, I was given a line job in the African Region based in London - which suited me perfectly, since I had concluded that real power lay in the line. This had resulted from my experiences in 1968/9 where I saw that Personnel proposed but the line decided.
However, there was a reaction. At the time, MBAs at Shell were regarded with suspicion by certain colleagues who saw us as a rival elite that had gained high CEPs - that old Currently Estimated Potential - without proving our worth. It caused some friction.
I wasn't around for long. At age 28 I was sent off to Melbourne, Australia, to assume my first real managerial job in the hardship posting of General Manager of the Shell companies of the Pacific Islands. I reported directly to the Chairman of Shell Australia - a wise man who taught me a lot about leadership, integrity and focus.
It was a fascinating time. Nationalism was replacing colonialism, and socio-political relations were shifting. We had to adapt to the new post-colonial spirit. We had to ensure that local people took part in our development programme and participated in senior management. We moved our service station design away from Australian concepts towards ones that used local materials and design. My challenge was to improve performance and drive through structural change.
Each island had a different culture, and each marketplace different economic realities - so there was no universal answer to any given problem. Yet I had to create organisational coherence. In the mid-70s, change management was not as widely recognised as it is today. It's hard to believe how much we simply made up along the way.
Fresh from business school, I primarily saw the performance challenge in academic terms, and I conducted what amounted to an MBA strategy review for each of the eight island companies. The management information systems were inadequate and needed revising. We overhauled the planning system. We created a new control framework. We put entirely new people in place.We communicated incessantly.We moved from a process driven to an output driven organisation.We changed the symbols which were the source of corporate identity.Education,enabling and empowerment were the keys. In a hectic 12 months, we laid the groundwork for lifting performance.
As I look back, I am struck by how 'hard-wired' everything was - in the sense of being planned and controlled. The pressure was relentless, and we were utterly confident in our ability to raise the level of performance. Industrial relations confrontations, major contract negotiations, civil strife - we took it in stride, and performance rose.
I returned from Australia to a trading job in Shell's European co-ordination in the Hague. The title "co-ordination" reflected an uncertainty about our role, so there was much wheel spinning. I quickly became bored with the endless mind games and set about finding something interesting to do.
Before long, I was the report writer for a study team looking at the personnel policy implications of lower growth in demand for our products. We produced a report that argued for greater focus on performance management and less on potential. We felt the absence of demand growth would lead to less revenue growth and thus a much stronger need to manage the business in a more competitive climate. Ultimately the report was suppressed by the personnel function, who were fearful about losing control over the promotion system. Naturally, this act of censorship enormously increased its readership!
It says a lot about Shell that this report - written back in 1978 - was circulated to the oil products leadership team by their new boss in 1990. In Shell, nothing ever dies - iit merely winters over until spring. So Oil Products, faced with no growth, picked up the report. Essentially, they said this report gives us the direction we need - now let's implement it.
Also, this underscores an important management change. Now Personnel had become a central obsession of the top managers - we were now all in Personnel if we wanted to improve performance.
There followed a variety of jobs. Three had a big impact on my thinking. As General Manager of Swedish Shell - based in Stockholm - my inability to speak the Swedish language had a detrimental effect on my ability to lead. From the first day, the language barrier created a dependency on my Swedish-speaking colleagues. Over time, my linguistic fluency increased but my dependence on them did not.
As Head of Global Marketing, my involvement in Shell's Formula One sponsorship took me into a world obsessed with performance, down to the tiniest detail. Success received even more analysis than failure.
And finally, as Oil Products Director for Europe, I confronted the challenge of creating the momentum to achieve a structural breakthrough in the face of many decades of proud national sovereignty. I had to create Shell Oil Products Europe from 39 individual national operating companies. This led me to British Gas, soon to become BG plc.
I joined BG on my 50th birthday and found a world very different from Shell. British Gas had already announced the demerger of Centrica, and I was recruited to head up BG, along with a new executive team.
The early days were bleak as I came to terms with the new world and its culture. British Gas was a very process orientated place. It was quickly impressed upon me that there was a baronial power system and that I was destined to follow King John and be the tool of these barons. The company was reeling from the public relations crisis triggered by Cedric Brown's rather large pay rise at a time of redundancies and falling customer service standards. It was a case of internal logic colliding with external perceptions. Management didn't think it was doing anything wrong, but the public certainly did.
You may remember that protestors actually brought a live pig to the AGM to protest. An image that lived long after the event.
Even though it was essential, the divorce of Centrica and BG was extremely painful. But the new BG team worked with determination and commitment to launch the new company successfully - and they did.
I focused on the need to enhance performance and instil integrity. I would like to take a few minutes to expand on both points, because I think they are central to my evolving notions about management and leadership.
This meant that I had to listen over and over to explanations of performance that fell below the target, and why that was actually the best possible outcome. Benchmarking was not common. Shortcomings were usually someone else's fault.
I have learnt from painful experience that if you are reasonable and accept all this, then you are complicit in creating an unreasonable outcome. To counter this, I myself have become unreasonable. I work from the assumption that you will deliver what you promise. Full stop. I never cease to be astonished by the superior performance this generates. It's amazing.
I learned another invaluable lesson about motivation and achievement. If I myself set the performance targets, they will always be too low. If the targets are set by motivated employees, they will not only be higher, but the employees will find more ingenious and satisfying solutions than I could ever have devised.
Another crucial lesson was that the top team had to 'walk the talk'. In other words, our conduct and actions had to reinforce the behaviour we wanted to see in the rest of the organisation. Behavioural patterns reverberate down from the highest levels. The only way to encourage good teamwork, open communication, and commitment to results throughout the organisation is to demonstrate it at the top level. It means accepting the principle that if something was going on within the organisation - whether good or bad - the management was entirely responsible. It's a matter of integrity.
At BG, we created a language about commitment and delivery from people and granted the businesses freedom to find the best solutions. Recognising that greater freedom to find and create value changes the nature of the risks entailed, we have had to create a control framework to manage risks.
Let me expand on this preoccupation with performance. I believe that much of the rhetoric relating to change management has become divorced from the primary aim of adding value through better performance. At BG, we strove to keep the focus on performance - however it's measured. It may be the unit cost targets in EP - 1/3/3/$ per barrel of oil equivalent. It may be Transco's task of beating its regulatory cost targets while delivering superior customer service.
We encouraged the businesses to grow their capacity and capabilities, to set stretch goals and to deliver on commitments - the more stretch the better. Acceptance of stretch implies you reach for a target beyond your ability to see how to achieve it. This has to start with the tone set at the top - with uncompromising willingness to ensure that the expectations of good performance are clear.
I think my emphasis on performance derives partly from the specific nature of BG and its challenges, and partly from the stage I had reached in my personal journey. It was clear to me that BG needed a performance culture, and that under-performing assets had to be sold. Structures needed to be changed. And management information systems had to be redesigned.
Also, I had arrived fresh from the experience of Shell's rejuvenation campaigns, which had suffered badly from not having a single-minded focus and compelling leadership. I saw the need to get out more and engage people directly in order to increase my understanding of their concerns, and to convey our priorities.
We all underestimate the 'shadow' created by the leader. In my experience, people watch what the leader does very closely. Far more weight is attached to the leader's actions than his or her words. There is no escape from this, and there are no short cuts.
This requires the discipline of rigorous and constant self-examination. You must continuously check that your actions are consistent with what you say you want. It also requires the willingness to examine alternative interpretations of your reality. This isn't easy - certainly not for an action prone Chief Executive!
Time and again, when I faced dissent in the Executive Committee, I tried to generate a candid discussion so that we could determine whether the division was real or apparent. I would say that almost always, we arrived at a better answer through such open-minded discussion. Once we have established a shared understanding, we can act very decisively. Inevitably, there is the odd occasion when the issue cannot be resolved by discussion, and the leader has to make a decision. In those cases, the team must take shared ownership of the decision and its implementation.
My focus on people has become much sharper over the years, both directly and indirectly. I am far more involved in coaching - both at the giving and receiving end. In this connection, I have had to think harder about what I say and do. Here, I have found the work of Chris Argyris particularly insightful.
Argyris has led me to appreciate that when a managerial team aligns its actions with its words, it creates a force that powerfully and convincingly communicates priorities.
Sometimes I think back to my earliest experiences as a summer worker in the factory, where the workers did the minimum to get by, where the manager put as much energy into being a bookie's runner as he did into motivating his workers, and I wonder how anyone could have seen this as the proper way to run an organisation.
Argyris has a theory of management change that addresses how we learn from our mistakes. Once we have identified that we've made a mistake, we typically seek to correct it by coming up with a new plan of action, a new strategy. That's an important process, but it only takes us so far. Argyris calls it "single-loop learning".
But when we go a step further, when we go back and rethink the basic foundations of our action, and question the assumptions that underlie our strategies - that involves another level of introspection and reflection. That's what he calls "double-loop learning". It's actually a theory about personal change.
Double-loop learning is vital if organizations are to make informed and effective decisions in rapidly changing and uncertain times.
I encourage our future leaders to reach for new ways of thinking, and to develop a personal mentoring network to coach them. For me, one of the joys of BG was the opportunity to work with my colleagues on the board of directors and tap into the distillation of management expertise from British Steel, McKinsey, Lazard, GE and even - dare I say - BP.
This created a more inquiring, insightful approach to the analysis of problems and the development of solutions. As a team, we were not stereotypical thinkers - there was no single, totalising corporate BG mindset. I have been pleased to note that my experience at mmO2 has reinforced this appreciation for educated, unencumbered, individualistic thinking.
It is worth reflecting for a few minutes on why things have changed so much in recent years, why the pace of change in the world seems so relentless, and why it is unrealistic to expect anything else.
In my view, the nature and pace of change itself has become much more difficult to manage. Years ago, change was relatively benign and limited in impact - usually more evolutionary than revolutionary - and did not directly challenge the established quo. Today, the forces of change are global, lightening quick, unruly, disruptive, and often overturn the old orthodoxies.
In this turbulent context, not moving forward is the quickest way to move backwards.
Adding to the inherent instability of the business environment is the shorter - and still shrinking - tenure of the typical chief executive of a FTSE-100 company. Everywhere, fund managers are under pressure, and this translates into the City's intolerance of chief executives who don't perform.
Customer power progressively reinforced by information technology is creating a whirlwind of change. We need all our creative faculties to be in overdrive if we are to grow and thrive. We must constantly be striving to create a credible new future for ourselves.
And therein lies the rub - how do you establish credibility when the future has never been more uncertain and unpredictable? You are left with the choice of seeking only to create your own space, and making a success of it. Yet at any time, the forces of change and global competition can lead to your good idea - your space - being overtaken and occupied by a better one - and at a speed that will test the nerve of any Ferrari driver.
Traditional careers are now seen as a privilege of the few. Organisations have less and less capacity to provide the nurturing, caring paternalism of the Shell world that I joined way back in the 1960's. The process of adapting to this reality is painful for everyone.
Yet in one sense, it is good news. It means individual employees have gained more initiative and control over their destinies. They must now take greater personal responsibility for themselves and their careers. In a sense, they enter into the business world as sole traders. Some will be able to transfer their loyalties readily by moving between companies, and to new industries, but I suspect that this will not be the norm.
Sustaining the commitment of individuals to the cause of the enterprise is already a major challenge. Given the mobility and uncertainty, it won't become easier. I see few easy answers.
I believe in the need to communicate face-to-face in order to reinforce the performance drive. Complementing this, I believe we need to increase the financial stake of our employees in the company's equity capital.
At BG, the results were very encouraging. The participation in BG's Share Save scheme is 82%, and in our Profit Share scheme more than 98%. Needless to say, our share price received far more attention, and that brought to life abstract concepts like "shareholder value".
Let me share with you some work a colleague of mine did on high performing organisations. He defined this as an organisation that has developed a structure which meets customers, community, employees and shareholders' needs in the most effective way possible.
In practice, this means the organisation has the following characteristics:
DECISION MAKING
Pushed down to the point of delivery.
FLATTENED STRUCTURE
Has moved away from 'hierarchy' and an emphasis on management control to a 'flat' organisation - few layers of management with work groups taking responsibility for traditional management roles.
SELF-MANAGING
The workplace is self-managed by in-tact teams delivering complete pieces of work.
WORK DESIGN
There are no rigid boundaries between jobs. Flexibility amongst the workforce is pre-eminent. Work teams are responsible for the whole work process
MANAGEMENT/SUPERVISORY ROLES
The Manager's role becomes one of facilitating work groups and coaching - not telling, directing or 'supervising'.
OPEN COMMUNCIATION
Information is shared and all directional. Feedback is encouraged between teams of people who need to interface because of work needs, not through a need to appease the 'hierarchy'.
CONTROL OF WORK PROCESSES
Is with the team - not management.
COMPETENCY BASED/'ADDED VALUE'
Rewards are based on what individuals and teams deliver - not on seniority.
FUTURE FOCUS
Employees are skilled in being adaptable and employable in so far as their work adds value. The organisation helps employees to become "multi-skilled and multi-disciplinary".
From this, he devised a list of questions that provide a test of a high performance organisation; let me share a few:
Can you answer these questions in a positive way for O2 UK?
Sometimes, BG's performance in this regard fell short of our economic performance. We had too many accidents. I believe we chose the responsible course by publicising our safety performance, and we introduced Chairman's Awards to stimulate the drive for improvement, and to highlight best practice.
The societies in which we operate also expect us to be involved in the solution to longstanding social problems. Here, I believe it is vital that business be part of the solution. I do not accept that the role of business is business, in the narrowest sense. The challenge in this tough world is to create the time and space to address broader social problems, and to make meaningful contributions.
I want to expand on how I came to adopt this belief.
As some of you might know, there are a number of ways that energy companies dispose of offshore equipment that isn't needed anymore. In accordance with all the regulatory requirements, and with the full support of the British government - and, we believed, with the blessings of other European governments - we made the decision to release the Brent Spar onto the bottom of the seabed.
It seemed like a perfectly reasonable and prudent decision. We were told that unloading the Brent Spar into the Atlantic Ocean would be like dropping a needle into the middle of Loch Lomond. That's how small and insignificant it would be.
And ultimately, how a shamefaced board of directors, including myself, had to reverse our decision to dump the rig - to the intense displeasure of the British Government that had consistently defended the disposal plan. It was a fiasco.
Our mistake was that we were too arrogant. It wasn't exactly our actions that were at fault - no, it was the fact that we had lost touch with our community and failed to anticipate their concerns.
Many people have identified Brent Spar as a key moment in the UK environmental debate. For me, personally, it was also a turning point. It forced me to think hard about how corporations interact with their environments.
The history books are filled with stories of companies that have made mistakes and misjudged their communities. In certain quarters, McDonald's, Nike and Monsanto are all symbols of corporate abuse. Starbucks is criticised for exploiting Third World coffee growers. As protestors in Seattle, Washington, Johannesburg, and elsewhere have shown, to participate in today's global economy is to open oneself up to scrutiny, judgement, and in some cases, attack.
Those who sit on the boards of these multinational companies are under intense scrutiny from the financial community, from shareholders, and from various other pressure groups.
Of course, I do not condone the anti-capitalist protestors -- not their methods nor their reasoning. I am an ardent believer in the overwhelming benefits of free market capitalism. But the unmistakable truth is that, despite the spread of democracy around the world, the gulf between 'haves' and 'have-nots' has grown wider than ever. The quality of our physical environment on this planet is under constant threat. Corporations have played a major role in creating these problems, and they have a responsibility to help solve them.
So what is good corporate citizenship? How do you balance your bottom line - which reflects the demands and rights of your shareholders --with the greater societal good?
But what if Ford stopped making SUV's altogether? It would be financially disastrous. Should the company risk going out of business, putting thousands of people out of work, destroying communities? Ford is an example of a company that is financially reliant on a product with environmental and safety problems.
In today's cutthroat competitive marketplace, there's a prevalent view that the stock market is all that matters. Total market capitalisation is the scorecard for business competition. As corporate stewards, our primary obligation is to our shareholders. We all know that a CEO who doesn't focus on the share price won't last long.
So again, what is good corporate citizenship? Is it possible to make social responsibility pay? At BG, we knew the answer was yes. We believed our role as good corporate citizens meant engaging productively in the communities where we operated. We knew that if we wanted to survive, we could not be distant from them. We had to support them, and learn from them.
Let me give you some examples. At BG, we had an investment arm called the BG Foundation. We set it up in 1998 to coordinate our extensive activities in the communities where we operated. Since then, the foundation has undergone a few name changes. After the demerger, it was called the Lattice Foundation. And when Lattice merged with National Grid, it became the National Grid Transco Foundation.
The important thing is that the programmes have endured. The NGT Foundation contributes to a wide-range of social, educational, and environmental initiatives that directly improved the lives of human beings, and are also linked to government social exclusion policies.
The Foundation focuses on community development, protection and regeneration of the natural environment, and education and training, particularly for those people who are most vulnerable in our society. It works in partnership with both voluntary and public sectors. Its approach is to pilot innovative, practical solutions to social exclusion issues, often involving elements of risk.
I'd like to spend a few minutes describing one of the Foundation's achievements.
NGT CRED is an initiative that targets young people who aren't thriving in the traditional education system. For a variety of reasons, it simply hasn't worked for them. Each year in the UK, one million school-age children fall into this category. They skip school, and of course, they fall behind. The social costs of truancy are enormous.
CRED stands for "creative education," and that's exactly what it is. We have taken a creative approach to helping these young people get the skills and qualifications they need to advance in life.
Here's how it works. The students spend three days a week with us at the Learning Centre - which we set up inside one of our office buildings in Reading - developing basic skills in literacy and numeracy. The remaining two days of the week are devoted to work experience in career areas that they chose themselves. For example - motor mechanics, the building trade, hairdressing, child care, or hotel management. They achieve credentials in IT, spreadsheets, and desktop publishing.
How do you measure success in such a programme? Through objective data. We look at attendance figures, qualifications achieved, and work placement reports. Among the students enrolled, attendance has risen from 40 percent in their previous schools to 85 percent in our programme. There is clear evidence of significant increase in qualifications, self-esteem, self-confidence and interpersonal skills. Many of these students have gone on to jobs, traineeships and further education. CRED helped them accomplish their goals.
In today's intense, mercilessly competitive environment, corporate responsibility matters more than ever, because it's reciprocal. It's a two-way knowledge street. We give to our communities, and they give back to us. We share our resources and our expertise, and we are rewarded immeasurably. A relatively small investment goes a very long way.
Every day, we encounter people who are achieving remarkable results in difficult circumstances. We do not look upon them as people to help. We learn from them. Their techniques and ideas enrich us and give us new approaches and scope for innovation. They help us identify new resources. They show us new ways to enhance our own performance.
At BG, we did not create the Foundation because of pressure groups or protestors. We did so because we knew that helping other people helped us. Because eradicating fuel poverty is one tangible way of increasing the living standard in our country and making us a more competitive nation. Because protecting the natural environment for future generations is in our interest, as corporations, as citizens, and as human beings. Because successful businesses can only thrive within successful communities.
We need strong, stable, prospering communities to provide us with a future labour force, and to form the backbone of our work environments.
We are pursuing the same approach at mmO2, and I immensely proud of it. I want to congratulate you all on the initiatives you have begun here in Slough.
Thank you.
