The right direction for civilized work

Mutual respect, not macho posturing, is the true basis for business success

Business has no room any more for the kind of short-sighted, closed-minded autocrat who sees people as merely “employment units,” to be bought as cheaply as possible and used with ruthless disregard for their welfare until they are replaced by others, fresher and less wounded. That’s how plantation owners treated their slaves 150 years ago. It was a disreputable way of operating then and nothing has changed to make it any more acceptable. Isn’t it time that we demanded better from our business leaders? Isn’t it time that they stopped destroying wealth by clinging to outdated leadership notions and came into the 21st century?

On Sunday last, Bob Sutton had this to say on his blog:

Today’s New York Times has a glowing review of True North: Discover Your Authentic Leadership, by Bill George (Former CEO of Medtronic, a Jim Collins “Good to Great” leader, and now a Professor at Harvard Business School teaching leadership), with help from Peter Sims. The book is based on interviews with 125 other leaders and executives like Starbuck’s Howard Schultz and Xerox’s Ann Mulcahy. These cases—in combination with George’s accomplishments—show that leaders who create humane organizations that really care about their people and their customers—and don’t just view them as units that exist for the purposes of extracting “as much economic value as possible” every minute of every day—not only can thrive financially, they do it in such a way that people can travel through their days with dignity [My italics]. And as George shows with his cases of successful leaders, they can also have a life outside of work.

For years, management orthodoxy has been based on the idea that the key to business success lay in controlling costs, especially the costs of employing people. Employ as few people as possible, pay them as little as you can, and work them as hard as you can get away with. And if employment costs and laws in the developed world are becoming an issue, ship the work to somewhere in the Third World, where workers will accept a pittance and there are few, if any, laws to regulate corporate behavior.

This is the orthodoxy that has created Hamburger Management. Bob Sutton, along with Bill George and many other successful leaders, are doing us a marvelous service by pointing out how foolish and short-sighted it is. As a business creed, the “minimizing costs is everything” school leads to management barbarism, contempt for customers (think of most airlines today), and fat-cat executives caught out in dubious schemes and ethical blunders of all kinds. It’s the thinking behind companies firing experienced staff and replacing them with cheap newcomers. And it doesn’t only stink as a way of handling employees, it’s bad for business.

According to Management Issues:

. . . a study by insurance and financial services company MetLife has found that keeping key workers happy, challenged and motivated is becoming more important to U.S businesses than controlling costs. Employee retention was identified as the most important priority by more than half of employers overall polled, with retailers (62 per cent) and the service sector (59 per cent) placing an even greater emphasis on the need to retain people.

The conventional cost-cutting, macho, grab-and-go managers are stuck in the past; in a time when employees were mostly interchangeable, whether they shoveled coal, shuffled paper, or handed out goods in a store. Sure, some did the job better than others, but the differences weren’t too great. The job saw to that, since work was mostly fairly simple, repetitious, and could be learned quite quickly.

There are decreasing numbers of jobs that nearly anyone can do quickly, and rapidly increasing demands for the kind of people who are in shortest supply: the most able, the most highly-skilled, and the most inventive and passionate about what they do.

Nearly all those jobs have already been swept away by machines and computers. Even the job of a foot-soldiers in today's armies takes considerable training. That's why few, if any, generals are in favor of the draft: they have little need for large numbers of untrained, unwilling recruits. By the time draftees were sufficiently trained to be useful, their draft period would be over. Business is no different. There are decreasing numbers of jobs that nearly anyone can do quickly, and rapidly increasing demands for the kind of people who are in shortest supply: the most able, the most highly-skilled, and the most inventive and passionate about what they do.

What’s left is mostly professional work, demanding extensive skills, high intelligence, and (if you are to beat the competition) creativity and ingenuity. To be good, people need considerable training. You can’t lose them and pick someone up on the street tomorrow as a replacement. Professional staff replacement is expensive, chancy, and creates a drag on the business that no one needs. In the same article quoted above, another survey is mentioned, covering 11,852 employees. It found more than 60 percent of employees were planning to look for a new job in the next three months, nearly double the proportion that employers believed were looking.

I’ve been arguing for a while that managers and leaders who engage in Hamburger Management aren’t just jerks; they’re actively harming the businesses that they work for.

There has been a saying around for many years that, if you pay peanuts, you get monkeys. Today, if you treat people like sh*t, they leave; and the only ones you’ll get to replace them will be out of the door too, as soon as they find that the fine words of recruiters aren’t matched by actual experience. Patricia Soldati quotes The Conference Board to assert that:

. . . employee engagement is a very big deal. There is clear and mounting evidence that high levels of employee engagement keenly correlates to individual, group and corporate performance in areas such as retention, turnover, productivity, customer service and loyalty. And this is not just by small margins. While differences varied from study to study, highly engaged employees outperform their disengaged counterparts by a whopping 20 – 28 percentage points!

I’ve been arguing for a while that managers and leaders who engage in Hamburger Management aren’t just jerks; they’re actively harming the businesses that they work for. It’s nice to have some proof from a highly reputable source like The Conference Board.

Uncivilized modes of leadership destroy wealth, as well as destroying the peace of mind of the people subjected to them. It’s high time that business schools stopped teaching old-style management ideas, stemming from Taylor’s “scientific management,” as anything other than a historical curiosity and a dreadful warning; much like you learn in history about the French Revolution and the guillotine. And it’s long past the time when any executive who fails to create a civilized working atmosphere, and high levels of creativity and engagement in his or her team, can be allowed to stay in a responsible position.

If shareholders want to maintain and create real wealth—as opposed to gambling on random stock movements, which is what many of them do—they should seriously consider forcing the necessary changes in the management of the companies whose shares they hold. After all, it’s their money that these macho jerks are wasting.

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Technorati tags: staff turnover retention talent war for talent leadership civilized work slow leadership