Amputation or Diet? Survival is Critical

The downturn in the economy is continuing to bite – and yet again organisations are ‘letting their staff go’ (what a horrible euphemism) rather than adopting more imaginative steps: or are they doing the right thing? Should business leaders cut off limbs or departments to reduce costs, or make the business ‘go on a diet’ and reduce all salaries and benefits? As and when the up-turn happens, will these businesses realise that they have cut off too many departments, (lost too much blood), lost too much of their skills base, and so have destroyed the heart of their organisation?

Every day there are examples of organisations agreeing salary and benefit reductions in preference to redundancies (diet not amputation), which is excellent news: good long term thinking. However Graduates, for example, have been told that they are going to struggle to find training contracts (Lawyers, Accountants, Surveyors) management programmes, etc., because too many organisation cannot met their commitment to take them on for another year or two.

Apparently one reason for this in the legal sector is because the Law Society has set a minimum wage – which is not that high – but which now is working against those hoping to become lawyers. History offers some interesting lessons and one answer maybe to revert to some form of paid or sponsored Apprenticeship or Pupilage as seen in Barristers’ Chambers or Articled Clerk!

On the other hand, according to many pundits, we already have too many lawyers and accountants. With the Legal Services Act coming into scope in 2011/12, this too will shake up law firms, so maybe not taking on Trainees saves having to make them redundant later. However, this approach to recruitment of younger staff will also hit at the development of the knowledge and skills base of those organisations. The demographics of the growth in our aging population, globally as well as in the UK, have not altered.

Courage of your Decisions:

Understanding what makes the business work is one of the hardest questions any leader has to answer. Inherent to this is in understanding the Risk and Reward balance, so that any action taken will enable that organisation to survive and be fit enough for the longer term or not.

Several years ago a young mountaineer, Aron Ralston, after being trapped with his arm under a rock for five days, decided that if he did not get free he would die. Using his pocketknife, he amputated his arm below the elbow, put on a tourniquet and administered first-aid. He then rigged anchors and fixed a rope to rappel to the floor of Blue John Canyon. It is impossible to imagine how this young man felt in making his decision, it could not have been a light one, and yes he had to weigh the balance of the risk in losing part of his arm and the reward of surviving: or dying.

Management Boards and Executive Teams the world over too, are having to make organisational decisions that are in effect life-surviving or life-threatening. They need to balance what they can trade without, perhaps where they have built in unnecessary or ineffectual staff, or currently use in-efficient external agencies and so terminate them and their cost. This is often redressing poor decisions of the past and acknowledging and taking responsibility or those actions. Smart Executive teams though are those who understand that whilst their selection of people may have been poor, (or not well managed) the need for those ‘limbs’ remains essential.

Opportunity Knocks:

As every door closes, so another one truly does open and we should see a new dawn of the ad hoc / interim resource on Performance based Retainers. Any internal or external resource supporting the business needs to be familiar with and be part of the wider ‘family’ of the company. Randomly bringing in additional support without proper induction, training and imbuing people with the culture and values of the firm, will re-create the ineffective carbuncles of before.

Now outsourcing services for Finance, People Management, Marketing, Training and Development, IT, by using interim or project managers, will come back into vogue because organisations still need access to expert know-how. Critical to success is to ensure a proper matching of not just the skill, but the value, energy and ethos (or blood types!) of the consultants selected. Bearing in mind a Consultant is someone who has had not just 20 years of doing the same thing each year, but rather over 20 years they have learnt and developed specialist skills that now make them an expert in their field. (I am one of the few people you will ever meet who can accurately claim to be an ex-Burt!)

Buyer Beware:

Sometimes when looking at career choices going into Consultancy or Coaching seems like a good idea. Now is a time when organisations should be mindful of the old saying: ‘Buyer Beware’. They should ensure they are not just getting a cheap resource who will take a long time learning their skill at the organisation’s expense but be more discerning. This does not mean that there are not many excellent and capable people turning to consultancy as a livelihood in 2009!

With these shifts in the style and manner of engaging skills and knowledge resources but only when the organisation needs them, Management Teams have the chance to re-visit their organisational structure, identify the essentials and the ad hoc and start to build relationships. This includes at times the need for a ‘transplanted organ’, or team which will inject new drive and focus.

We are at an interesting turning point in the world of employment, where traditional approaches just may not be relevant in the future. Perhaps this is just the start of a much bigger debate about ‘jobs for life’, minimum wages, or indeed employees’ rights. Should we wonder whether we have so indulged ourselves, so gorged our businesses on legislation and EU regulations, that we have made them inactive, sedentary and obese?

Should we be putting all employees on notice that things are going to be different? Both organisations and employees need to be capable of dieting or being a transplant – or be amputated.

Self Basting Turkeys – where is our Moral Compass?

As we progress through this economic downturn, so we start to see the true colours of our politicians, thought leaders and advisers as they are put under pressure. Over the past 10 – 15 years, major management consultancies (KPMG, Accenture McKenzie, et al,) have been encouraging organisations to develop their ‘Core Values’. These should demonstrate to clients, suppliers and staff alike just how individual businesses propose to operate and deliver their services or products. The Core Values are also designed to create the mantra by which all decisions are made by the Executive Board. So what do we think are the Core Values of our politicians and what should they be now in the UK?

Self-basting and aggrandisement:

To a man, we have decried the bankers, financiers and law makers, and many CEOs for their ‘fat cat’ payouts, excessive profits and bonuses, lack of being in-touch with reality, but have we really spotted what these financial rewards are really payment for? It would appear the rewards are for unprincipled and detrimental behaviours that even a street trader would be offend by. Values such as: Integrity, Honesty, Selflessness and Responsibility seem to have disappeared from our vernacular as we greedily try to imitate Mr Matthew’s self-basting turkeys for self-aggrandisement. (This conjures up a ghastly picture of a dead bird cooking away in the oven, ladling itself somehow, to make it’s skin crispier (or is that us in the coming Summer sun?)) It is that greed that appears to have clouded the moral fibre of us all. Sir Roger Moore was once quoted as saying: ‘I enjoy being a highly overpaid actor’, and recently added: ‘Of course I do, I would be a bloody fool if I didn’t’.

The problem appears to be, that if everyone around you has loose morals you too would be ‘a fool if you didn’t.’ Observing these extraordinary times where the banks’ lack of regulation and rigour have created a house of cards, or our politicians lack of ownership for the errors in their expense claims, one question we should ask ourselves is: how righteous can you and your organisation be? Blame is often laid at the door of entrepreneurialism, capitalism or commercialism, yet if you look closely at their true purpose, none would condone reckless or excessive expenditure to the detriment of profit. Now that pressure is on to stay afloat in any way possible, there is even greater pressure and temptation to cross the moral fibre line.

Can you honestly say you run your business driven by high moral values and standards? How would we be able to test that statement if we were to meet your staff, or were a client of yours? It certainly would not be by seeing the Core Values written in the Annual Accounts or nicely framed on Reception’s wall. Years ago, working with the Partners of a large US law firm in their London office on employee engagement and management, one Partner said to me: ‘Values? Oh yes we had a big exercise where Consultants came in and told us which 12 we should pick. I have it laminated, and on my desk, but I don’t look at them – a complete waste of time, as we do our own thing.’ If you the leaders can’t agree the value of values, or any consistency of standards, then why should your staff? Surely they will take their lead from your behaviour, mimic it, or worse, be guided by values of their own that could be more detrimental to the business. Is this a risk you should take?

Developing a moral compass:

With ‘elders and betters’ capable of such shoddy standards, where can organisations and individuals find true role models on whom to base their own standards, and so create their own moral compass? Does this start in the Boardroom, offices, College, University, school, the Church – or at the knee of our parents? What distinguishes one business, culture (and nation) from another is how it chooses to behave. The respect offered to, and received from its citizens in everyday life and the code by which people manage and regulate themselves 24/7 should be in such a way that it reduces the risk of possible offenders. Ideally a mature business, culture (or nation) should not need to enforce its moral standards through excessive legislation (or rules) because all those involved have understood and learnt what the values are and abide by them. However, where there are constant additions or shifts to the group structure,(e.g. redundancies, restricted services, loss of key clients) communication breaks down, values can be lost and hence rules and policing become inevitable reinforcement measures. By changing any element, so any previous risk assessment becomes invalid, the group becomes exposed, and often unprepared for dangerous behaviour by the few.

If we are unable to re-define or confirm what our values should be, then we cannot grasp the moral nettle we are faced with. As a minimum each Executive Board should undertake an exercise to:

• Review any existing value statements, Core Values or similar, checking for validity, accuracy and currency;
• Assess the risk of failing to meet these moral standards, via regulation, compliance, Professional Indemnity Insurances, damaged client relationships, lost suppliers and of course, demoralised staff;
• Consider how to ensure these values are re-communicated and understood throughout the firm;
• Reinforce outcomes through objectives, sales targets and strategies, Key Performance Indicators, the Performance Management and Disciplinary processes;
• Ensure Corporate Governance is rigorously applied and adhered to through regular scrutiny (both internal and external);
• Foster a culture of openness, shift the concept of Whistle Blowing to one of Moral Compass reminding.

The Executive Board should ensure the Business Development/Marketing Team reflect the Core Values defined internally to match what is offered to clients, suppliers and the external world: a Ying and Yang. HR should work with all operational and functional teams to help purge the business of any miscreants, acting swiftly and decisively if there is inappropriate behaviour. Leadership is at the heart of the passion and determination to get this one right.

Neither deceit nor fraud are acceptable responses to ailing sales and slimmed down profits. Only those who are incapable, have lived off others’ successes would now need to stoop this low in their desperation. It is a sad day for the UK when we have organisations willingly stepping into this mire – the braver ones seek help from their staff to build a truly robust and overt culture: and so, in the long run will be the true winners!