You are having to down size. You consolidate around your best internal talent. You begin to treat them abusively (uncivilly, over tasking them, etc.). You get unsatisfactory business results and the process recycles again. Congratulations – you have discovered how to create talent “black holes” on earth.
Let me also guess, you think you have an effective performance management system and process in place. Let me help you here. You don’t understand what performance management means. Why? Because the above scenario is occurring in your organization. That is the only evidence anyone needs to determine the veracity of this conclusion.
Superior performance (in any human context) always involves discretionary effort and this most means higher human capabilities such as thinking, motivation to persevere, loyalty, etc. One’s discretionary effort is the one thing people have virtually complete control of. Managers and leaders who believe they can extract discretionary effort by fear based performance systems will discover it doesn’t work very well. This is why slavery based societies could not compete with their non-slavery based counterparts.
Why? the cost of “over-seering” is high, and slave based organizations can only expect to garner the discretionary effort from those in charge.
Why are we talking about slave based social system? Because any organization that relies on abuse, incivility, and other fear based schemes is at its heart a slavery value based entity.
The issue of values comes dramatically into play.
I have remarked elsewhere in this BLOG that: values are most important when we are most likely to lose sight of them.
Almost all organizations that take the time discuss, develop and articulate their values will have one or more that speak to “honourable” relationships with others (customers, suppliers, employees and other stakeholders). Values are the backbone of trust (to do the right/appropriate things) and this an earned attribute.
To the degree that the organization’s members practice what they espouse has one dramatically significant practical benefit: the cost of over-seering efforts is reduced. Having to over-see ones employees, suppliers, customers (governments and regulatory bodies do this a lot) is expensive, time consuming and for many a very unpleasant activity. Having a law and values abiding society bestows incredible benefits in terms of minimizing the costs of having to over-see.
This can be easily calculated: how many more first line supervisors would you have to have if your non-management work force were out to “screw you at every turn”? The span of control would drop dramatically (from a typical 10:1 to 3:1?). And the costs continue to pile up:
- Subsequent levels of management cost increase too (need more watchers doing watching). So your organization’s allocated payroll dedicated to over seeing (i.e., non productive overheads) increase.
- Your support costs (additional office space, equipment, energy consumption, etc.) increase.
- The toxic effects of not trusting others ferments additional paranoia and this leads to growing costs over time. One observable dimension of this effect is the need to increase reporting on what you are doing. I have observed situations where there is virtually a 1:1 ratio between time spent reporting and actually doing the work.
The underlying value of values is they reduce the costs of doing business.
Let us return to the beginning of this post. If your business is hard hit, how should we best retrench? I suggest the following thoughts:
- Certainly consolidate around your most productive talent (includes external as well as e talent sources).
- Understand what makes their superior performance possible and make sure these performance enhancing supports are also kept in place. Showing appreciation for this reality indicates you do understand the principles of performance management.
- Identify the values that enable minimum levels and efforts in over-seeing. This demonstrates that you understand what appropriate sustainable cost cutting really entails.
- Implement a new organization that enables the best to continue to be the best.
The above of course are complimentary efforts to the other obvious ones of reassessing ones strategy.
For those of us who are practical above all else, the key question is do you want to be in business two, three, five years hence? If yes, then you will understand why the above thoughts are imperative. Ignore them and you will see the costs of doing business with your employees, external talent, customers and others rise. You just may learn the cruel lesson of the adage:
“Penny wise, pound foolish”