UK: HELLER ON MANAGEMENT - DOWNSIZING'S OTHER DOWN SIDE. - Programmes of change focusing on quality and customer satisfaction will fail, says Robert Heller, unless top managements can unleash the talent and energy of disaffected middle managers and worke

Last Updated: 31 Aug 2010

Programmes of change focusing on quality and customer satisfaction will fail, says Robert Heller, unless top managements can unleash the talent and energy of disaffected middle managers and workers.

The absence of a feel-good factor in the British economy has been much lamented - not least by disconsolate Tory politicians. With share prices and profits so rich, British companies, on the face of it, have every reason for goodness of feel: yet reports suggest deep gloom in the workplace.

According to International Survey Research (ISR), not only are employees more dissatisfied than any European counterparts, but discontent has been swelling. The result is that motivation and commitment are 'even lower than in the confrontational and destructive industrial relations climate' of the mid-1970s.

The findings hardly fit the received view that Thatcherite reforms, by clipping the wings of over-mighty unions, enabled a new era of harmony and productivity in British industry. Output per man-hour truly has advanced, while its growth in competitor economies has receded towards UK rates or lower. But output per man-hour is a ratio: man-hours have simply shrunk in relation to output that has only expanded slowly.

Employment shrinkage does not breed harmony. Rather, discord has mounted as confidence in job security has lessened. In one sense, the workforce's loss has been management's gain; the right to manage has been asserted. Yet that's given middle managers no gladness, to judge by an Institute of Management survey with 1,300 respondents; they feel as glum as their subordinates.

To quote the Financial Times, the survey 'paints a picture of overwork, stress and insecurity. These problems are particularly intense in organisations where there have been repeated rounds of redundancies.' Naturally, 'downsizing' feels bad to down-sized managers: but the evident feel-bad factor among the survivors is a malignant by-product of manpower economies. Overworked, stressed and insecure managers are not the best ingredients for success in international competition.

Nor are they likely to be effective agents of change. This is one explanation of a paradox: the reported deterioration in morale coincides with times in which costly change programmes have been de rigueur. Under a variety of strange banners, these have shared similar aims. Top management has sought to align the entire company behind the vision: to empower and communicate, to share and encourage, to build a new co-operative, collaborative culture.

Top management has enjoyed many fruits of the downsizing era; the thrill of core strategies, the excitement of bids and deals, the comfort of much enlarged personal wealth. But CEOs and their cohorts won't win the hearts and minds of managers or workforce if their commitment to building this new culture is suspect - and if job fears are all too real.

This conflict between words and deeds was highlighted at a recent seminar ordained by top management to generate positive change in a fine old financial institution. The assembled middle managers were ready to accept change, and knew what it entailed: but they were overtly cynical about their seniors' intentions. Their cynicism was justified by the sudden mid-seminar announcement of 150 managerial redundancies - with more promised in time for Christmas.

There's a hard-boiled response to all this. So what? So long as the workers work, the managers manage and the profits rise, does it matter if people moan and groan? In the materialistic short term, it may not. But the visions in all those change programmes are rightly focused on the long-term improvement of goods, services and added value by innovation and initiative.

Fashionably, the visions focus on quality and customer satisfaction: both depend on enthusing managers and workforces, and die from their disaffection. That fits the findings of another survey, by Wolff Olins, among 200 top companies from Britain's trading partners. It concluded that, 'The UK is not generally perceived to offer good value for money, and products and services are not felt to be necessarily leading-edge or state-of-the-art.' Nearly half those questioned still associated the UK with poor industrial relations. In terms of days lost in strikes, this attitude is absurdly out-of-date. But the idea that corporate excellence and industrial peace are one and the same is equally obsolete. There is no merit in a strike-free company that markets poor value and obsolescent products, or is badly managed and provides inadequate training and information.

In both latter areas the workers interviewed by ISR found employers lacking. Indeed, the Brits respected their managers less than employees in any other European country. Sceptics could argue that in a nation of carping barrack-room lawyers, such survey results should be discounted. But two aspects remain discouraging: the downward trend, and the persistence of negative attitudes despite all the endeavour and lip-service poured into progressive programmes.

After all, one essential test of management is its ability to build a feel-good workforce. By that criterion, top managers must talk less and try much harder. But that effort will fail unless the abundant talent and energy below the top are truly unleashed. Only then will Britain boast more feel-good customers world-wide.

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