We have heard enough for one lifetime about the “war for talent”. But this doesn’t mean that leaders can ignore who is on their team. Last week I went to a seminar hosted by the Corporate Research Forum which, thankfully, injected new life into that increasingly tired debate over talent, knowledge workers and the rest of it. It is time to reframe this debate. What we should be thinking about, you see, are clever people.

Clever is a slippery word. It is never a good idea to be thought “too clever by half”. Many people are told at some stage in their lives that “you are not as clever as you think you are”.

But clever people are important. They create “disproportionate value”, in the words of the aforementioned Prof Jones and his colleague, Rob Goffee, who is a professor of organisational behaviour, also at LBS.

Who are these clever people? They work in R&D for pharmaceutical businesses, they develop new computer games for software companies, they are partners (or rising stars) in professional service firms, they are mechanics and designers in Formula One racing teams. But clever people are not all earning huge sums of money in the private sector. Some are also working in intensive care in children’s hospitals, or curating special exhibitions in museums.

What are they like, and why are clever people difficult to lead and manage? Having researched the subject, Profs Jones and Goffee have come up with a 10-point check list for managers.

1.Cleverness is central to their identity. They take negative feedback badly.

2.Their skills are not easily replicated. Not many people can do what they do.

3.They know their worth.

4.They ask difficult questions.

5.They are organisationally savvy. Their projects will get funded.

6.They are not impressed by corporate hierarchy. Job titles don’t mean much to them, but status does.

7.They expect instant access to the chief executive. If they don’t get it they may lose interest, slipping rapidly from obsession in their work to indifference.

8.They are well connected both inside and outside the organisation.

9.They have a low boredom threshold.

10.They won’t thank you. They do not feel they need to be led.

But there is also good (and slightly less daunting) news for business leaders. Clever people need organisations. Their work usually involves complex tasks that are performed in a team setting. They want “a high degree of organisational protection”, Goffee and Jones say. And they are more effective when they are well led.

Who is good at leading clever people? Sir Martin Sorrell, chief executive of the global marketing services group WPP, gets the professorial thumbs up. He has a lot of powerful creatives to deal with. In conversation with the authors he downplays the big impact he makes on his colleagues: “I’m a boring little micro-managing, number-crunching accountant.”

Too modest. In reality, Sir Martin constantly reminds his people that he is running a creative business. WPP’s boss enforces commercial discipline, offering the tough love of a benevolent guardian. He also uses reverse psychology: “If you want them to turn left, tell them to turn right.”

Do we risk over-estimating the importance of cleverness at work? Famously, the clever people at Enron were “the smartest guys in the room”.

Fred Hilmer, now vice chancellor of the university of New South Wales in Australia, but previously a McKinsey partner, business school dean and CEO of the Fairfax media group, says that, while you need some clever people, organisations with lots of them can go wrong fast. The global banking crisis would seem to bear this out.

Still, you need to hold on to your cleverest people, especially at a time like this. Try to create the right amount (neither too much nor too little) of sociability and solidarity within your organisation.

Where do clever people flourish? “In complicated value chains, where there is plenty of ‘unarticulated reciprocity’,” Prof Goffee explains. Build a culture that is hard to copy, and which will give you a significant competitive advantage.

The CEO of the former Banco Itaú-and now of Itaú Unibanco-describes the problems of changing a company that is set in its successful habits.

It’s unusual for a CEO who has led a company through more than ten years of strong growth and financial performance to stop and consider whether the business should be run differently to meet future challenges. It’s even more unusual for such a chief executive to initiate a major transformation introducing a new way of managing this highly successful company-a transformation involving its culture, organizational structure, decision-making processes, and leadership style.

Yet this is precisely what Roberto Setubal, the CEO of Brazil’s Itaú Unibanco, launched in 2005. By then, decades of steady organic growth and well-chosen acquisitions had made the company, founded in 1945 and controlled by the Villela and Setubal families, Brazil’s second-largest private-sector bank and one of Latin America’s most profitable institutions.

In November 2008, midway into the change effort, Banco Itaú and a domestic competitor, Unibanco Holdings, agreed to a merger forming one of the world’s top 20 banks by market capitalization. Setubal, named CEO of Itaú Unibanco Holdings, here speaks to McKinsey director Frederico Oliveira about Itaú Unibanco’s journey from a command-and-control management model to an open and creative dialogue, and what the merger will mean for this journey.

The Quarterly: Let’s go back to the beginnings of Banco Itaú’s transformation program. The bank was performing very well. Why did it need to change?

Roberto Setubal: The bank had been growing by up to 25 percent a year for more than ten years, and its performance was still very good in 2005. Yet I began to realize that it had become such a large and complex organization that we could not continue managing it in the same centralized way as before. Competitors were closing the gap somewhat, and while we’ve always been very good at implementation, innovation and the flow of ideas within the company were not quite as good as I thought they needed to be if we were to maintain our competitive edge. The conclusion was that we needed a higher-quality decision process in order to prepare ourselves for a demanding future.

The Quarterly: What was wrong with the decision process?

Roberto Setubal: I had always been a very hands-on CEO and the bank was much too centralized in my own person. Because the management model hadn’t changed as the company grew bigger and bigger, I ended up having more than 20 direct reports, creating an impossible situation. At the same meeting, we could discuss big issues, like a large investment for expanding our operations, and small ones, such as very basic product problems. What we really needed was to delegate decisions and create forums for different types of issues-forums with the right people present and with enough time for everybody to bring their own ideas to the table and engage in open and creative discussion. If you went to school in the 1960s, you learned a lot of things that were very modern for that time. But if you go to the same school today, they teach you other things. The world is moving and the company has to move with it.

The Quarterly: What are the main elements of the transformation program?

Roberto Setubal: We are creating a new management model, which involves the organization’s structure as well as processes. But to get this done, we need to change the way people think and act. So the first part of the transformation was to work on culture, particularly how our people voice their ideas and concerns. I believe it is very important to have all the information and ideas on the table before we make a decision, and I was looking for a more open environment for discussion. We started with top management and quickly worked our way down to create bottom-up “pull” for change. As this took off, I made it very clear that the change was for the sake of performance, not for fun-that it was for keeping our competitive edge.

So as a new culture began to take root, we started to implement the foundations-the hard stuff-in terms of processes linked to the new culture. This involved a redesign of the decision-making and risk-management processes in order to foster innovation, speed, and accountability. It also included a revision of performance-management systems-a revision involving very concrete individual and group targets, compensation programs, and in-depth leadership reviews. In a word, the way the bank actually works has been redesigned to support the new culture that is under development.

Here we were, proposing an environment where executives could no longer hide in their big offices but had to engage in open debate with their teams.

The Quarterly: How did this start-what was the very first step?

Roberto Setubal: The initiative was mine, and the first step was to get the board on board. First, we had to agree where we were and where we wanted to go. This took a few months, and some people were very skeptical to begin with. Then we started to involve other levels of the organization, and we had the big announcements and ceremonies that play an important role.

The Quarterly: What role have you played as CEO?

Roberto Setubal: The role of CEO is key. If you want change to happen, you have to change your own ways. I realized that the decision-making process was a reflection of how I used to manage the company. So if you want the company to be more democratic, you have to allow yourself to be challenged by others. You have to commit yourself totally and really believe that this is the right way to go. This is very difficult in the beginning because sometimes I knew that I could make the decision much faster on my own.

But once we created an environment of discussing and listening to what others were saying and implemented a good process for making decisions, I could delegate more and rely on five or ten smart people with different backgrounds to make better decisions than one person.

The Quarterly: Changing an organization that is doing well is usually very difficult. What has your experience been?

Roberto Setubal: There was some resistance. Some old-style people were saying, “We are doing well; why should we change when we don’t need to change?” It was very interesting that while the top team agreed that we needed to improve the way we made decisions, the moment of truth was when we really started to bring the changes into the day-to-day environment. It’s a very complex endeavour to change a winning company. In such a company, everybody is very proud, and they feel that the way they have done things for years is the right way. Some people were not able to go through this process of change, although in some cases they tried very hard, and eventually left the company. Others were mentally prepared and they wanted these changes to happen.

It was hard for many midlevel executives who were used to being powerful and not having their decisions questioned. Here we were, proposing an environment where people should offer their frank opinions and where executives could no longer hide in their big offices but had to engage in open debate with their teams. There are still many people in the company who are struggling to adapt to these changes.

The Quarterly: When did people really understand that the change was for real?

Roberto Setubal: When very important people who reported to me and who could not adapt started to leave the company, others began to believe that change would actually take place. In the past, we used to accommodate high executives whose performance was not fully satisfactory. Never before had anybody at the top level left the company. Those who had reached that level went on and on until they retired. Now colleagues with 10 or 20 years tenure left because they decided that they couldn’t adapt to the new culture. This was very hard for them and the people around them, but as we move forward on the path of change this becomes more of a natural process. People understand that you simply have to perform, and you not only have to deliver results but you have to deliver them in the right way.

The Quarterly: There are also people requirements for a successful transformation. How are you handling demand for the kind of talent that would help make the new management model a success?

Roberto Setubal: By hiring them. Indeed, one of the objectives of changing the company culture was to be able to attract the best talent. Itaú used to be a closed career. It was only 10 to 15 years ago that we started recruiting people from the outside to the higher ranks of the company. We always had good talent internally, and this is probably more true today than ever before, but when the bank is growing by up to 25 percent a year there are a lot of new positions to fill in order to continue growing at that rate. Today, unlike in the past, I think potential hires perceive Itaú as a rather attractive place to work-as a winner in the marketplace, with good remuneration and career prospects. That’s what they see when looking in from the outside.

You have to meet these expectations so that when people are here they want to stay. This has not always been the case. Sometimes we brought in good people who left the company after a while because they felt they did not get a chance to contribute in the way they could. The new generation coming into the labor market has different expectations than the generation of 20 years ago. Talented people don’t come here just to perform tasks. They want to offer their ideas, discuss freely, grow professionally, and contribute to the future of the company. We have to create this kind of environment or we’ll end up with the yes-man type, which is not what we’re looking for.

The Quarterly: Was it easier or harder to make change happen in a family-controlled business?

Roberto Setubal: I don’t think the ownership structure is a crucial element. What is critical is that the CEO should really get involved, lead by example, and basically walk the talk. In our case, being a family-controlled company made it easier in many ways, as I was the CEO and also part of the family, which made my mandate stronger. But I believe that the CEO is always the CEO, and what counts is that this individual should have the support of the board, which of course represents the owners, family or not.

The Quarterly: How far along is Itaú Unibanco today in its transformation efforts?

Roberto Setubal: We started three years ago, and I would say that we’ve come halfway on a long journey. Our people realize today that change is not just a concept-it’s not a question of, “OK, let’s be nice and democratic and listen to what everybody has to say.” They understand that the new, open culture is about arriving at the best decisions.

The Quarterly: What’s your advice to other CEOs contemplating a business transformation?

Roberto Setubal: You have to be patient, persistent, and brave at the same time. Your actions as CEO will be absolutely crucial, so first of all you have to be very committed to what you are going to do. If you really are, people will follow you. If you think you don’t have to walk the talk, it won’t work at all. The second condition is that you have to be prepared to make some tough people decisions, sometimes about colleagues who are very close to you. This was not an easy thing for me to do. But everybody has to understand that the company comes first; we are here to do what is best for the company.

The full interview can be viewed at http://www.mckinseyquarterly.com/Transforming_a_high-performing_company_An_interview_with_Roberto_Setubal_2312

To arrange a meeting with Marketing Statements, please contact Jenny Patterson on 07957 473 270/020 8983 3984 or jenny.patterson@marketingstatements.com

Words play a huge part in the thinking process, and the words race through our brains at speeds much higher than 125 words per minute.  When are listening we ask our brains to receive words an extremely slow pace compared with its capabilities.

When we listen, therefore, we continue thinking at high speed whilst the spoken word arrives at low speed.   Our brains are capable of comprehending speech 4 or 5 times the rate at which most people can speak.

Slowing down our brains is near impossible. The human brain is made up of 13 billion cells and operates in such a complicated but efficient manner that it makes our computers seem slow-witted.

The differential between thinking and speaking rates means that our brain works with hundreds of words in addition to those that we hear, assembling thoughts other than those spoken to us.

We can listen but we have some spare time to think.

Please listen to the audio above, it is a real company but I have edited out the names.

A clear corporate image is essential for communicating with clients, everything communicates and at every point of contact.   Therefore, I am always surprised when companies put temporary staff or untrained staff on their reception desks to greet visitors and answer the phone.

People are the brand, they create an impression within seconds.  The immediate impact that your front office make is crucial.  It is often the strongest and longest, both verbally and visually.  Get it wrong and it is very difficult to change the image that your customers have imprinted in their minds.

They say “you never get a second chance to make a first impression”.

To arrange a meeting with Marketing Statements, please contact Jenny Patterson on 07957 473 270/020 8983 3984 or jenny.patterson@marketingstatements.com

The site will be updated daily, and every week a new “Transforming Moments” film will be uploaded, these contain an idea, that could make a positive difference.

We have gathered feedback from our clients, associates, and contacts; this is what some of them have said:

“All looks very good, the video in particular brings it all to life.”
Founder, Crystal Financial

“I had a look around the site. It looks great, it all works and the video clips are terrific.”
Non Executive Director of 4 UK FTSE 200 plc’s

“Love the site. You’ve done such a good job on it.”
Founder, RedRock Creative

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To arrange a meeting with Marketing Statements, please contact Jenny Patterson on 07957 473 270/020 8983 3984 or jenny.patterson@marketingstatements.com

2. You must offer your clients a product or service with a perceivable or tangible benefit or advantage.

3. You must innovate your product or service continually to give an ever increasing level of benefit or value to keep ahead of the competition in some way, however small.

We live by these rules at Marketing Statements.

To arrange a meeting with Marketing Statements, please contact Jenny Patterson on 07957 473 270/020 8983 3984 or jenny.patterson@marketingstatements.com

People often ask us what need when hosting our masterclasses, workshops or seminars internally.  Along with our brains, this is the other vital piece of equipment that we bring.

To arrange a meeting with Marketing Statements, please contact Jenny Patterson on 07957 473 270/020 8983 3984 or jenny.patterson@marketingstatements.com