Ability before age

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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.

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 Crunch Goes Wider Than Credit

The downward pressure on house prices is a simple market reaction to fewer buyers who are willing to pay the asking price and have enough funds to do so. The National Association of Estate Agents reports that the number of house buyers on agents’ books dropped in February to the lowest yet recorded, from an average of 276 per agent in January to 243. The number of properties for sale fell from 83 to 74 per agent over the same period.

There are three main groups who cannot wait out the present situation:

• Borrowers who have used the previous market value of the house to secure debts and where the lender is now calling either for repayment or further security;
• First time buyers now denied sufficient mortgage finance to purchase and unable to find suitable alternative rented accommodation;
• Sellers already in the process of moving home where the gap between the sale price and the buying price has widened due to different market conditions in each case.

For other groups, while present circumstances surrounding mortgages are an inconvenience, the delay and frustration involved are relatively small consequences.

Some characterise the credit crunch as the result of a series of market failures. On the contrary, the markets have worked as markets do. Through a combination of greed and incompetence some banks fell down on the job. The crunch occurred as a result of the parcelling up of mortgages into tradable securities. Now nobody wants to buy something that has little worth and banks are increasingly reluctant to lend to each other. It sounds like a typical market to me.

More serious is the indirect outfall. This takes the form of lost jobs and, in some cases, the wholesale closure of firms. Jobs and firms affected include planners, surveyors, gravel and cement works, brick makers, the transport industry, builders and the building trade, estate agents, solicitors, removers, domestic furnishers and appliance makers – even the Post Office, the Land Registry and the local Councils that need less people to deal with change of addresses.

As workers fall out of employment the tax-take drops and the social security bill grows. As firms go out of business the bad debts of their supplies and lenders increase. It takes very little to trigger a domino effect throughout the sector and associated providers.

Signs that this process may have already started are coming from the USA. 153,000 redundancies were declared across the US financial services industry in 2007, more than half of them relating to mortgages. In the next 12 to 18 months American commercial banks are expected to cut a further 200,000 US jobs to reduce costs. Those job cuts will be in operational and support departments among modestly paid people.

Meanwhile, those heading the institutions are out of their depth. The US banking industry has not experienced a reduction in revenue for 40 years. In 2008, it looks like it will decrease for the first time in the working lives of those in charge. They have no practical hands-on knowledge of how to handle it. We can expect more costly mistakes as they learn at everyone else’s expense.

The call now is for governments to “fix” the problem. In an interim report in February to the G7 the Financial Stability Forum said, “Events have shown that the quality of risk management varied significantly among the largest and apparently most sophisticated market participants.” What comfort can we take as governments now begin to meddle – the self-same governments that failed to notice and regulate the dangerous free-for-all in the first place? It is not sophistication we seek; it is plain commonsense.

The last Conservative government was rightly excoriated for devastating the manufacturing base of this country. We have yet to see the worst that this Labour government can do to rival that. When help and hemlock are offered by the same hand any hesitation is wholly understandable.

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