What Is the No 1. Skill that Leaders Need for Future Success?

Jeremy Darroch, Group CEO Sky, spoke with Dr Martyn Newman at EQ Summit and told him what’s made the difference at Sky.

Dr. Martyn Newman:

Wow Jeremy, you’re a standing fixture at the EQ Summit these days. It’s great to see you again! Your business never seems to stand still for five minutes, does it? It’s always moving, and I guess in a way, a lot of people see Sky as a hot-bed of innovation. You’re completely changing products and thinking about new ways to deliver them. So much originality going on all the time. Do you think it’s a title that’s well-deserved, that you are a hot-bed of innovation?

Jeremy Darroch:

I certainly feel like we are a very restless business, I think. We were founded on one singular innovation- which was the idea of multi-channel television delivered through a satellite. That was the basic core of the business and I think that has established a lot of the principles that flow through the business today. At heart, Sky is a business that’s grown out of three things: brand, of course; a group of people; and basic ideas, which involves our ability to apply ideas, refresh and renew, change and develop. So for us, innovation, if you think of it as confidence in ideas and people and what comes out of that, is really our life blood.

‘we’re a business that’s grown out of three things: brand; a group of people; and basic ideas, which involves our ability to apply ideas, refresh and renew, change and develop.’

What has changed our business in today’s world, is any thought that singular innovations that have a huge shelf life will be the basis of success in the future. So today, we have to innovate perpetually, right across the business and at all levels, to stay ahead, to keep winning. That creates a hot-bed of ideas and innovation.

Dr. Martyn Newman:

That makes sense. I remember the first time I met you, I was struck by the first thing you talked to me about – your commitment to how important it was that people understood their purpose and were clear about their values inside an organisation. I guess that very much is reflected in the culture you build. How important do you think it is, apart from tactics and strategies, to develop a culture that can foster fresh thinking and fresh initiatives?

Jeremy Darroch:

It’s everything. It’s interesting you talked about Peter Drucker in your presentation. Peter Drucker is the management guru of my generation, and still is today. He wrote a brilliant piece called, ‘Management’ and it has been the thing that has stuck with me throughout my career. In the end, he summarises six or seven principles of management.

The first of these, he says, is that management is about human beings. Its purpose is to make them capable of performance. To make their strengths effective, and their weaknesses irrelevant. That phrase to me, embodies how I think about business. This idea that we are human beings, and if we can have a collective set of values, we can buy into the organisation as a whole, this is an enormously powerful way to drive engagement and commitment from the people at Sky.

‘management is about human beings…to make their strengths effective and their weaknesses irrelevant… if we can have a collective set of values, we can buy into the organisation as a whole, this is an enormously powerful way to drive engagement and commitment’

Dr. Martyn Newman:

I guess in many ways, with that view you hold from Drucker about human values, it’s not surprising then that your leadership initiative inside the business is about better self and better teams. Is this, in a way, an attempt to operationalize that? And how do the programs around better self and better teams work?

Jeremy Darroch:

In big business, often one of the difficulties is you’re never quite sure what inputs and what outputs are connected. The relationships are quite complicated. We spend a lot of time working with people throughout our business, particularly senior leaders, around how they think about creating the environment in which their teams can perform. My experience is, like the points you made earlier, that it all starts with self-awareness, which obviously can be developed through the practice of mindfulness. It’s not all about you, but it all begins with you. If as a leader, you’re not in a good place, you’re not stable, you’re not really clear what’s unique about you, and are getting better at what’s unique about you, then nothing’s going to flow from that.

The way I see this idea working, is that better self leads to better teams and then better business. This is a natural part of the journey – creating the environment that you want.

Dr Martyn Newman:

That makes sense. Have you seen any real connection between work your leaders have done looking at better teams, and better self, and so on, in terms of the creative initiatives or innovative ideas they bring to the table? Is there any obvious examples you can point to?

Jeremy Darroch:

Definitely, looking right across our business. For example, we talked about bringing together the three Sky’s for the program, and if I take Sky in Italy, or in Germany, which are smaller businesses than in the UK, what you find when you go there are very different and innovative ways of doing things. They’re actually a lot more efficient than in the UK.

If you go with the right mindset to search for those things, you can identify them and bring them back. Often my job involves going around the business and searching for these ideas, and then celebrating them. Because if you can do it here, then we can do it there. But more importantly, in business terms, often we can find ideas that are successful in small parts of the business and then apply them to the wider business. This enables us to get enormous financial leverage from them.

The wider businesses are always the dominant force. There are hundreds of examples within Sky where we have found different, more creative, more innovative ways of doing things and we have developed a culture to seek them out, value them, and then apply them in the heart of the business, which is where you really get leverage. That’s where you get a lot of financial efficiency and performance from.

Dr. Martyn Newman:

Okay, that’s interesting. So has the merging of the Sky groups fostered greater collaboration do you think?

Jeremy Darroch:

Yes, definitely. The first thing that has happened is it has created a more interesting, dynamic business. It’s fantastic. You walk into the business in Germany or in Italy, and it becomes clear that they’re very different with regards to how they operate. I think it’s created a greater richness to the business, which is good. Then I think what I’ve learned more than anything else is that you have to convince people. You can only tell people so much, you need to convince them. If you create an environment where people want to go to interact, you sometimes build a kind of creative tension that emerges from different views. But if you show empathy, listen, and then convince your colleagues about how to get better results, then you can start to profit from all of those differences.

‘If you create an environment where people want to go to interact, you sometimes build a kind of creative tension that emerges from different views. But if you show empathy, listen, and then convince your colleagues about how to get better results, then you start to profit from all of those differences.’

How we work in Italy, compared to the UK for example, is often very different. What we’re doing is often very similar, however, how we go about it is very different. To me, if I can plug into the richness of that, then you’re going to be in a better place to solve the problems we have to deal with.

Dr. Martyn Newman:

Fascinating. So Jeremy, I know you’ve rolled out emotional intelligence training to all the leadership groups within Sky. Can you tell me how you found the skills associated with emotional intelligence to have in some way softened potential clashes culturally and between businesses?

Jeremy Darroch:

Yes, I think the thing we found more than anything is the importance of empathy. Firstly, it’s establishing how leaders think about empathy, and don’t confuse it with sympathy. I think leaders can often be quite sympathetic to people. For example, ‘so and so is going through a challenge – that’s tough. See how you go and let me know how you get on with it.’ As opposed to that much greater step of saying – actually, what I’m really going to do is put myself in your shoes and try to see the world as you see it, and then start to understand the things you’re trying to do from there. We have found for a lot of our leaders, that move to be more empathetic around the people they lead, is the single thing that has the greatest effect in terms of joint performance.

‘I think the thing we found more than anything is the importance of empathy…We have found for a lot of our leaders, that move to be more empathetic around the people they lead…has the greatest effect in terms of joint performance.’

Dr. Martyn Newman:

Yeah, that makes sense. Jeremy, we’re obviously changing now in our relationship to Europe. Nobody really knows how these Brexit negotiations are going to affect business. You’ve got a European business and a UK business and relationships will be changing. Do you believe the real challenges of solving some of the complexities of that will come from ‘soft skills’ more than technical skills?

Jeremy Darroch:

I took over as CEO of Sky in 2007. It was about three months after Northern Rock went into state ownership. The Northern Rock was a significant business and it was shocking to me what happened there. Really, I think that marked what has been this great period of uncertainty in and around business.

The world I think we are in – and I don’t see this changing – is a more uncertain and less predictable business world than we have seen for a long period of time. I think when you reflect on that, it means the traditional skills and responses we’ve relied upon as leaders are just going to give us diminishing returns. Some of the softer skills around emotional intelligence and mindfulness are going to be more and more important. Heaven knows, we’ve learned that the answers don’t exist in the spreadsheets.

‘Some of the softer skills around emotional intelligence and mindfulness are going to be more and more important.’

The leaders I really respect, who are doing really good things with their organisations, and making real progress, understand this at some level. I think you need to do it. With Sky for example, I don’t have a view in terms of what we will be doing ten years from now, or even in five years, because I just know the pace of business in our industry is so great, that it is slightly futile to try and do that. I’m focused much more on what I describe as the big shifting plates I can see. How do we position the organisation for that, so that we can move into, or away from them if they don’t scale the way we think?

 ‘The leaders I really respect who are doing really good things with their organisations and making real progress, understand this at some level’

Dr. Martyn Newman:

When you go out to Sky, I think everybody who visits the campus in Osterly for the first time is really impressed with the structure of the place. You’ve created an environment where people can meet one another very easily, where a lot of their domestic and personal needs are taken care of. How important do you think innovations like this, or creating the right environment like this, are for fostering innovation?

Jeremy Darroch:

Yes, I’ll give you two quick stories to bring that to life. When I first took over, I used to sit in the corner office on the first floor of the first building on the left when you walked into the campus. I realised the whole organisation was really trying to keep me there. We had an executive kitchen, we’d have all the meetings there. You can become insulated very easily.

The first decision was just to bust that all open. Now we’ve moved to two or three buildings where we’ve got an open plan. You’ll never see today a direct staircase in Sky- because we want to create an environment that moves people around the building to collaborate. That’s the first thing.

‘we want to create an environment that moves people around the building to collaborate.’

The second thing is that my wife is a doctor and I’ve grown up with a generation of doctors who I met while I was at university. They’re all super intelligent, super smart, vocationally inclined, high-achieving people. And a lot of my friends who are doctors, as I sort of hit the big years of my career, they’ve all drifted away. They’re all working less, and they’re all doing other things. I’ve observed that as a little control group, the interesting thing is that they are still achievers. They’re just achieving out of work, right? They are all fit as hell, they’re cycling, and they’re doing all this great work for charity. I would observe that they’ve been progressively disenfranchised by the constant meddling in the NHS, so they’ve drifted away.

I think there’s an enormous amount of discretionary time people will give you. What I think practically, is how do I get it this at Sky? If we can create the right work environment with all of those things, make it the type of place where people feel they can do the best work of their lives, they can be supported to do that, you would be surprised at the results you will get.

‘If we can create the right work environment…make it the type of place where people feel they can do the best work of their lives, they can be supported to do that, you would be surprised at the productive and creative results you will get.’

If we employ thirty-thousand people and I can get 10% more out of them … I reckon most people in this room would say I can give 10% more, yes? I reckon you could do that. So if I can tap into 10% more of 30,000 people, that’s 3,000 people. That is enormous leverage in terms of what we are able to do. It’s going to do a lot more than getting twice as much more out of the top five people I work with.

Dr. Martyn Newman:

I love that Jeremy. And what sort of initiatives can we look forward to in the coming months from Sky?

Jeremy Darroch:

Well, we’ve got a lot of great stuff on screen coming up. We’re just getting going in the mobile market. Virtual reality is coming down the pipe. We’re in the process of creating 12 virtual reality, short films that we’re going to seed around the world.

Then, continuing to think about what’s the next performance edge in terms of the organisation. Where do we take this to? We’ve been working for a couple of years on our Better Self program, so I’m really now starting to think about that. I’ve got an idea at the moment of leaders as coaches. As we start to see some of the impacts of AI machine learning really affect the work environment, I think the gains can really change the role of leader – even more to get away from being a director – to being an enabler instead. When you start to think about that, when you think and look at some of the best coaching environments at the moment, I think there’s a lot of learning we can take there. So that probably is going to be the next step.

Dr. Martyn Newman:

We could listen to you really all day, couldn’t we? From a personal point of view though, I know you, and I know you’re one of the busiest people on the planet, and yet you’re prepared to come out and spend time with us here, talking about your insights that we find extraordinarily valuable. What impact you think a Summit like this should have in terms of shifting business in the UK?

Jeremy Darroch:

I see myself as a practitioner. Somebody who’s still learning, still trying to improve, who’s hopefully got a big journey ahead. There’s an enormous amount of theory you’ve talked about, and actually, you can walk into any bookshop today and the shelf on psychology and betterment is going to be bigger than ever. To me, the bit in between is the really interesting and compelling piece, which is how do we transfer a lot of the theory, so we can get more of it in practice.

I think if this summit can share, identify and find ways to shine light on how we convert, what I think now is very compelling, easily understood theory, into great practice? That, I think, is enormously rich ground for people to think about.

Dr. Martyn Newman:

Well you’ve certainly set a high benchmark for us this morning. I think you come across as a very, very practical person. Obviously really well-grounded in theory. But your insights into how to apply this to the real challenges of growing a very complex business in an incredibly dynamic environment is really impressive. Would you join me ladies and gentlemen in thanking Jeremy Darroch for his time?