Simple management

Words: 425
Reading Time: 1 min. 25 sec.s

What actions yield the best financial results when dealing with an economic downturn?

That’s something we would all like to know – always assuming that an economic downturn calls for actions different to those at any other time.

Bruce Tulgan of RainmakerThinking, Inc.® reports finding that cost cutting, innovation and increased supervision were the three strategies that yielded the strongest financial results in 2009.

Well, that’s wonderful! If that’s all we have to do to get great financial results then all our problems are solved. Or are they?

Bruce’s results are drawn from a survey of more than 1,000 managers selected from participants in RainmakerThinking, Inc.’s ® intensive two-day management seminars.

Managers that implemented these actions were found to be the most likely to report that their bottom line financial results (at the level closest to the manager’s control) in 2009 were “good,” “very good,” “better than expected,” or “much better than expected.”

There seems to be a number of weaknesses here:
1) The survey was only of managers, not of workers or financial analysts;
2) All those managers had been trained by RainmakerThinking, Inc.®;
3) Other actions taken by managers who were not participants in RainmakerThinking were not examined;
4) The assessments of financial results were entirely subjective; none were quantified;
5) Corporate benefits or detriments other than financial ones were not looked at;
6) The organization conducting the survey had a direct interest in its outcome.

Besides which, cost cutting and innovation should be high priorities in any company, irrespective of the state of the economy. Had these managers helped create the crisis in their companies by their lack of effectiveness when times were better?

And managers reported that it was their supervision that made a difference – not actions and dedication by a neglected workforce concerned about continued employment that would have happened anyway, without the managers.

No surprises there then. It’s the usual error – we always think we have had a disproportionate effect (hubris) when it’s everybody else that has made the major difference. The higher the individual is in the organization or social grouping, the more marked is this effect as a general rule.

Business suggestions:
1) Start from a position of scepticism;
2) Beware of too much simplification;
3) Ask, “Who says?”;
4) How much interest has the researcher in the outcome of the research;
5) Check for what’s missing;
6) What else could have caused this?
7) Look for a control group comparison;
8) Everything should be as simple as possible, but not simpler (Einstein);
9) Nobody has all the answers;

10) Bosses need the workers; the reverse is not always true.

Ability before age

Words: 418
Reading Time: 1 min. 24 sec.s

The whole idea of retirement is a recent by-product of the factory-led economy.

In societies before the industrial age there was no set age at which folk ceased to seen as productive. Only illness and infirmity might mean someone was supported by the community. Even then, their experience and wisdom was valued, so most individuals continued to contribute to the community in some way.

With the dawn of the factory age came the debilitating demand that everyone work at the same relentless pace. It was man as part of the machine. Anybody not able to match that pace was inevitably seen in the same way as a component that could no longer meet the burden place on it. At that point the component person was scrapped.

The idea of retirement has been largely sold and accepted as the just reward for years of toil at a thankless task. Of course, it is no such thing. To industry retirement is simply preventive maintenance – get rid of the component as it approaches its MTBF (Mean Time Before Failure).

The fact that ageism persists in the workplace, even when the task is not physically demanding and would benefit from long experience, just shows how deeply engrained this paradigm has become. Few even think about it anymore; it's received wisdom.

65 years old? Finished - get an apprentice in for a fraction of the cost.

Fortunately, for those of us running our own businesses, there is no fixed point at which we absolutely must stop enjoying ourselves and go sit in an armchair. This is one of the many points where small business will always triumph over big business. We can favour ourselves and our customers, rather than favouring the insentient corporation.

If business in general could learn to recognize ability instead of age, ability instead of favouritism, ability instead of appearance, ability combined with attitude, it would gain immeasurably. And that applies at both ends of a working life; but I’m not holding my breath.

For those who are listening, there are a number of things you could do.

Business suggestions:
1) Scrap any fixed age for retirement;
2) Reward contribution rather than length of service;
3) Recognize the value experience has;
4) Make sure experience does not hinder innovation;
5) Reconnect with the talent you’ve scrapped;
6) Check that people enjoy, rather than endure, what you ask them to do;
7) A business is only as good as the people who are part of it;8) There is no functioning business without people.

Customer care is a dog’s life

Words: 444 Reading time: 1 minute 29 seconds

A dog is our best friend, because he wags his tail instead of his tongue – or so it is said. If you are engaged in customer service, as we all are in one way or another, there may be a lesson to be learned here.

Looking at the way that we, our colleagues or our company greet our customers – which end of the dog are we?

Companies that greet their customers with genuine energy and enthusiasm are as rare as the Kihansi spray toad – a species now extinct in the wild.

Companies persist in making so few people available to deal with their customers that, perpetually, “All our operatives are busy at the moment.”

And we then expect us to hold on a premium rate 0871 number.

Read that again, it’s not a typo.

People like us run companies and people like us are customers. It’s bizarre that as we pass from one side of the divide to the other we consistent elect to mistreat our alter egos in ways that we ourselves object to.

My heart-sinking phone call for help is declared “important” but that apparent recognition is not matched by any perceptible effort to make someone available to receive it.

Cashier positions are unattended at lunchtimes when a flush of peak demand can be expected.

Show me a supermarket on a busy Saturday morning and I will show you unattended tills.

And why are petrol and diesel pumps now so routinely unattended that we fill our own tanks without a second thought, despite high levels of unemployment among the anxious, but aspiring young and the keen, but chronically low-waged?

There seems little doubt which end of the dog currently greets our customers. While it’s true that some companies spend time and money dreaming up schemes to encourage and build customer loyalty (the dreaded ‘card’), the very same companies – and a host of others besides – spend even more time and effort “saving” dollars by doing the opposite.

A senior buyer from a major UK brewer told me recently that his company had worked out that a cost saving of £1,000 was equivalent to an increase in sales of £39,000 and such savings were seen as easier to accomplish – hence the focus on cost-cutting.

He failed to explain what the impact would be if, in saving £1,000, he also lost £39,000 or more of sales as a consequence of poorer quality in either product or service.

Of course not, with the way we train people in narrow skills and structure companies in tight little boxes that’s hardly his problem.

The great thing about the dog is that the tail and the tongue are connected. It’s a model we would do well to imitate in business and in life.

Mining Facts and Missing the Point

Despite appearances bad decisions are rarely made because people don’t have all the facts. In the political sphere the Treasury will have been fully aware of the impact on taxpayers of abandoning the 10% tax band. The Treasury may even have alerted Ministers. Nevertheless, although the facts were noted, plainly they were not given sufficient weight.

In the run-up to the present ‘Credit Crunch’ the financial institutions were fully aware of what they were doing and, one hopes, so were the regulators. But merely knowing the facts proved insufficient. Clearly, they did not understand the facts and the whole unstable structure was allowed to plough on into the crash barriers.

The Burmese Government will be well informed about the consequences of Cyclone Nargis and how badly their population has been affected. However, here facts are equally useless because they are being ignored.

Business is subject to the same purblindness when it comes to facts. Too often when plans go awry Governments call for Royal Commissions or Parliamentary Committees; business calls for internal audits or additional research. More facts will not help them regain the perspective they have lost.

When facts have failed to register, the continued pursuit of yet more facts painfully echoes Dickens’ Thomas Gradgrind in ‘Hard Times’. Gradgrind worships facts and figures. He puts his faith in abstract theories rather than direct observation of real people and real needs. The asymmetrical approach to human life of early industrial England, the denial of some of the basic needs of human beings, is being repeated in what some are pleased to call our post-industrial age. The structure of the economy may have changed. Too many of the attitudes live on. The cost in human happiness is great.

In Dickens’ Coketown, the needs of the factories dominate everything else. The factory hands work long hours in oppressive conditions, and they live in cramped houses. Their lives are monotonous; every day is exactly like every other day, just as all the houses and streets look alike. In Coketown, there is a strict uniformity in everything. The workers have little time off to relax and enjoy themselves. Does that sound familiar?

Employees and those running their own businesses will recognise the close parallels. Today we still struggle with long hours, astronomic housing costs, poor diets and an existence where evenings and weekends are nothing more than the exercise yard of our own imprisonment.

Each business, each day, has the opportunity to step back and take a clear-eyed view of the workplace we have built for ourselves. If it is not as we would wish it, then we can change. If you think it isn’t as easy as that then you will be setting yourself up to fail as a self-fulfilling outcome. Give real change a try. Take action. You may surprise yourself.

It Takes Two to Tango

Employee engagement, in various guises, is among the new buzzwords of recent years. To be more accurate, it’s a repackaging of old ideas by the consulting industry. Under a shiny “NEW” label the consultants have found yet another way of exploiting corporate insecurity and thereby picking its pockets.

There appears to be only circular definitions of what constitutes an engaged employee. The CIPD defines employee engagement as “a combination of commitment to the organisation and its values plus a willingness to help out colleagues (organisational citizenship). It goes beyond job satisfaction and is not simply motivation. Engagement is something the employee has to offer: it cannot be ‘required’ as part of the employment contract.”

In short, an engaged employee is any employee who is engaged. It’s a matter of attitude.

Today’s employers are encouraged to recruit for attitude; train for skill when searching for new employees. That approach saves the job of instilling an attitude seen as ‘right’ by the employer in question, but it only goes so far. Whatever attitude is exhibited during the recruitment process it will only be retain if the employee’s circumstances are conducive.

To a large extent that depends on the employer, but it can equally be affected either by changes in the employee’s private life, or by shifts in their personal beliefs and values. Over the employee’s private life and over beliefs and values the employer has little or no control. And rightly so. An employment contract is an exchange of time and skills for money and associated benefits. It is not entry into a closed religious order.

Most of the literature on this subject talks about measuring employee attitudes and conducting regular employee attitude surveys. Any organisation that needs to do that has to raise an immediate red flag in its own mind. If concern for the attitude and mindset of employees is not part of the daily interaction in the company, if senior management has actually lost touch with how employees think and feel, then there is an immediate problem.

Organisations that have a high proportion of employees who are unengaged or disengaged are offered various approaches to reverse that situation. These include:
• giving the opportunity to feed views and opinions upwards
• keeping employees informed about what is going on
• seeing that managers are committed
• having fair and just management processes for dealing with problems.

Perhaps more telling – and rarely mentioned – is the sobering process of the organisation examining its own value as expressed in its formal and informal manner of doing things. What message is the organisation really giving to its employees (and its customers)? Can people be reasonably expected to sign up enthusiastically to such a message?

This search for paragons of virtue among employees has an interesting parallel in the education sector. In England, when a pupil truants from school, we ask what is wrong with the child. In France, they ask what is wrong with the school. If you are an employer looking for greater engagement then be prepared. If it is absent then the cause may lay uncomfortably close to home.

The Source of Stress

A recent Whitehall report on stress claimed that high-pressure jobs which cause chronic stress can dramatically increase the risk of a heart attack (Independent, 23 January). Unfortunately, the report would appear to have the causation hopelessly muddled. The possibility that its findings could lead to tougher guidelines for employers on reducing stress just perpetuates the confused thinking.

The inference is that the jobs in question are inherently stressful. Thus, only by changing either the job, or the way that it’s managed, can the level of associated stress be reduced. A little reflection shows that this is not the case. Stress is an emotional state experienced by a particular individual.

Imagine there’s a woman called Mary who has just taken on a task that’s entirely new to her. She is keen to perform the task well not only for her own satisfaction, but also to impress her boss, to obtain a much needed increase in pay that will help her stave off mounting debt and, finally, to get noticed by that dishy man in the Purchasing Dept. Her first few tries are a disaster. Her workmates laugh at her. She believes she will never perform the task well. Her stress level is rising.

At a different time and place a man called Philip also takes on an entirely new task. Philip considers the task trivial and it is really of no interest to him. He attaches no importance to anyone else’s opinion, he is already wealthy and there is no significant other on whom he wishes to make an impact. His first few tries are also a disaster; he fares no better than Mary. His workmates also laugh at him and, although he believes he will never perform the task well, he is totally unconcerned. Philip is not stressed.

In each case the task in question was identical. The reaction to it and its associated outcomes were entirely different. The task is neutral. The stress experienced only rises when the person concerned attaches particular significance to what they are doing. Someone who is largely indifferent to what happens in any particular set of circumstances is not going to get stressed.

The association between the stress people report and their biological responses found by the Department of Epidemiology at University College London is to be entirely expected. A person’s emotional state feeds through to their physiology and their behaviour. They are inextricably linked. Such a finding merely confirms an interaction that is already recognised and well known.

Earlier results from the studies, led by Professor Sir Michael Marmot and published in the European Heart Journal, showed that those in low-status jobs who were required to follow the orders of their bosses were more stressed, and died sooner, than the hot-shot executives handing out the orders. Again, this is to be expected. Those hot-shot executives are a self-selecting sample.

If you have the ability to become a hot-shot executive, but do not relish the stress you associate with that position, then you unlikely to either put yourself forward for promotion, or accept it should it be offered. Those lower down the hierarchy will include a higher proportion of those already approaching the limits of their abilities, those less mobile in the job market for want of talent and those essaying new tasks and fresh assignments with which they have yet to become comfortable. Professor Marmot’s findings are a glimpse of the blindingly obvious.

Given this set of facts it would be perverse to place the onus on employers to mitigate the stress experienced by each individual in their workforce. Even among those engaged on exactly the same work, in the same location for the same boss stress will vary from individual to individual. Those that care most will be stressed most, other things being equal.

But other things rarely are equal, so is the employer entirely culpable in respect of Mary where the money element of her emotive reaction is self-imposed and outside the employer’s control? Or is the expectation now that employers should hire only those that couldn’t-care-less on the grounds that people with that attitude are less likely to experience stress?

Full and appropriate consideration and nurture of the workforce is in the interest of every employer. Some legislation in some areas is necessary to direct the unenlightened, but the nanny tendency of the British state can go too far, especially when it is guided by questionable science.

Your Credibility is Fragile

The spectre of a major employer saying one thing and doing another rises again as Shell prepares to cut 3,200 jobs.

In the past Shell have explicitly recognised how important their employees are to the continued success of the enterprise. In May 1997 Cor Herkstroter, President of the Royal Dutch Petroleum Company, delivered a speech highlighting the need to “safeguard the interests of shareholders, our staff and others who work with us around the world”.

He went on to declare “our most important asset is our people.”

One wonders why a company would consciously and deliberately choose to dispose of such a key resource.

Any professional stands or falls, not by their technical proficiency, but by their credibility. If the President of a company states publicly and unequivocally that, “we are linked by our shared values - integrity, honesty and respect for people - and our belief in the importance of trust, team working, professionalism and pride in what we do,” then all stakeholders, including the employees, are being invited to accept it as a fact.

It serves nobody, least of all the business community in general, to have those values cynically cast aside in pursuit of ephemeral profits.

Important assets and core values persist over time. Cor Herkstroter recognised that too: “I believe that one of the Group's greatest strengths has been our ability to take the long view - even when this has been unfashionable.”

May 1997 was over ten years ago. Things do move on. But these were not passing sentiments of the moment for Shell. The Shell Report 2001, a detailed and glossy exercise in CSR, affirmed: “our achievements depend on the efforts of Shell people all around the world. Their expectations drive our commitments.”

The section boldly headed ‘Business Principles’ continued the theme with the assertion that “It is recognised that commercial success depends on the full commitment of all employees.”

Credibility is hard to accrue and easily damaged. Not having credibility is tough, but professionals can earn it, painstakingly, over a period of time. However, having once had it and then lost it puts the professional in a much worse position. The loss tends to be permanent as staff, suppliers and customers adopt the understandable habit of taking everything you say with an appropriate amount of salt. As Alfred Adler recognised: “Life happens at the level of events, not of words,” or, as the Chinese have it: ‘Talk doesn't cook rice’.

One can point to the performance of Shell over the years and argue whether it represents success or failure and whether that gives them commercial credibility. That is not the point. Shell have shed staff before this latest proposed trance, yet there is no way of knowing what the outcome would have been had they refrained from offloading people. However, if one accepts their own evaluation of the basis of their success, their staff are clearly and plainly a crucial ingredient. Therefore it follows – as night follows day – that sacrificing any of this valuable resource has to be detrimental to their outcomes.

Shifting those staff to outsource partners does not secure for Shell the same benefits it once had. The staff in question will be expected to identify with the interests of their new employer, not Shell. There will no longer be that “full commitment” to Shell that it once published and promulgated as a determinant of commercial success. Sorry boys, you really cannot have your cake and eat it.

While I believe that people are an indispensable part of any organisation’s success – simply because without people there is no functioning organisation – it is not necessary for you to share that view. What is essential is to survey your past declarations, examine your own values, assess what will deliver success and act in accordance with those tenets at all times. As a professional your principles are not expensive, they’re priceless.

“If your work speaks for itself, don't interrupt.” ~Henry J. Kaiser