UK: IM SOUNDING BOARD - CHALLENGE FOR BUSINESS LEADERS. - Creating a balance between freedom and control could give companies competitive clout and provide a role model for society.

by Hilary Cropper.
Last Updated: 31 Aug 2010

Creating a balance between freedom and control could give companies competitive clout and provide a role model for society.

In a service business, success comes more than anything else from the motivation, positive attitudes, commitment and skills of the employees. One of the key roles for service business leaders, then, is to create the environment where these characteristics occur naturally and consistently.

Few chief executives would argue with that objective but they may well disagree about the best way to achieve it.

At FI Group we have been a test-bed for a variety of new concepts in people management. We have learned some hard lessons as a result, most important being that before the immense capacity and capability of our employees and associates can be released, they have to have and value a number of freedoms. For us, those freedoms include flexibility, ownership and participation in company decisions.

Traditional working patterns force bright people on to a career ladder. If you step off, for example to have a baby or to spend more time with young children, it can be hard to get back on to the ladder. At FI we have tried to create an environment flexible enough to cater, at one extreme, for people who only want to work part-time with a lot of control over when and how they work, and at the other end for full-time contractors who want to maximise their earnings by working long hours on high pay.

This approach has led us to become a model for future organisations, reflecting Professor Charles Handy's projections on new working patterns. For example, half of our workforce are women and they are represented at every layer of management right up to, and including, the board. We have no inhibitions about taking on the 'older' worker and we welcome them as readily as young apprentices. About half the workforce are conventionally employed, the other half are freelance associates, creating flexibility in both the cost base and the skill base which leads to real competitive advantage.

Flexibility also means recognising the diversity of people's ambitions. We are a rapidly expanding company, so fast-tracking our managers is important. But not everyone wants to get to the top. Many people simply want to become effective specialists and professionals. Freedom to pursue that ambition without pressure from the organisation has become part of the culture.

In FI our own people share in the long-term and short-term success of the enterprises. We achieve this by encouraging investment in the company's shares on preferential terms so that employees are motivated to think and act like owners.

A buy-out of the founder's shares in 1991 supplemented by a double voting mechanism has resulted in 40% of the equity and 50% of the voting power lying in the hands of the people who make up the company.

There is a saying that there are two kinds of money: 'Money' and 'My money'. It is amazing when 'Our money' is invested how commercially minded and results-orientated the whole workforce can become.

But it is not simply about sharing financial rewards; the extra commitment also comes from participating in key decisions. We spend a lot of time making sure that people understand the background to major decisions; then we ask them to vote on these issues at our annual general meetings. When people become shareholders they develop a real interest in the company's performance and its strategic direction: their increased knowledge breeds a challenging maturity in their thinking.

Our external investors have reaped the benefits too, partly through improved communication about progress and forward plans and by sharing the increases in shareholder value which enhanced performance is delivering. A balance between the views of external and internal investors is entirely healthy for the business and will make sure that we remain attractive to the source of funds.

Freedom of information within the business has created a strong competitive advantage for FI. Of course there are some commercial secrets that have to be kept on a 'need to know' basis but they are the exception. We try hard to be open about every aspect of the business. Having information is essential for participation; you cannot discuss issues meaningfully if you don't understand them. For customers who want partnerships with their suppliers, our openness has become a significant attraction. Both Whitbread and The Co-operative Bank, for example, have stated publicly that an important consideration in choosing FI as a strategic partner was a close match of values, culture and business approach.

All of these freedoms take time to develop and carry with them a set of responsibilities. Flexibility in working and career patterns demands a commitment from the individual to be flexible in meeting customer needs. Ownership and participation mean that people must accept accountability for decisions and be willing to carry them through whether they agree with them or not.

I believe that achieving the balance between freedom and control will give tomorrow's company its strength to compete. Creativity, commitment and enthusiasm flourish where people recognise and accept constraints as being in their own and the common interest. I also believe that this issue is equally relevant to society as a whole. In demonstrating a competence in managing the conflict between freedom and control, business leaders have an opportunity to provide a role model for 21st century society. Can we meet the challenge?

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