Do the employee's feelings matter?

Following Patricia Hewitt’s assertion that the NHS has had its “best year ever”, Alistair Schofield considers why people in positions of authority make such faux pas.

While I am sure that Patricia Hewitt (UK Secretary of State for Health) deeply regrets the statement she made, the question is not so much over what she said, as why she said it.

To claim that the NHS is having its “best year ever” when it is in the midst of a financial crisis and making thousands of people redundant is at best insensitive and at worst grossly incompetent.

However this degree of insensitivity is not something solely restricted to politicians, it is something that appears to afflict a large proportion of senior managers who become distanced from the people they lead and out of touch with their feelings.  By way of an example, I once worked for a company who, in successive years of contraction, instigated rounds of redundancies that always occurred just before Christmas each year.  It was a logical time to do it because the company’s financial year ran from January to December, but from an employee’s point of view, it is difficult to think of a worse time of year to make someone redundant. 

It may well be that Patricia Hewitt can justify the statement she made.  She is a clever lady and I have no doubt that, on the specific criteria she was considering when she made the statement, that the NHS has had its best year.  But to ignore the human impact of such a statement is, in my mind, to misunderstand the nature of organisations and the role of a leader.

Companies are not simply balance sheets and profit and loss accounts, they are communities of people and, as such, they are better thought of as sentient organisms, not simply as machines.  But much of the management philosophy and training of the past has taught us to regard them more as machines than as communities.  We have been encouraged to see staff wages in much the same way as we would regard the maintenance costs of machinery or the fuel bill for a fleet of vehicles.  For me this illustrates one of the key differences between “management” and “leadership”.   Where the management approach is to see the organisation as a series of inputs and outputs, the leadership approach is to see the organisation as a series of opportunities and aspirations.

The management approach to improving productivity and output is to amend the process whereas the leadership approach is to increase the desire.

This is not to say that one approach is right and the other is wrong, as both are needed for a successful organisation.

The difference was brought home to me in the last few weeks in meetings with two senior executives from different organisations.  Coincidentally, both had recently received feedback reports benchmarking them against a group of their industry competitors and both had come out rather poorly.  One of the executives was rather depressed by the findings.  His conclusion was that they had surplus capacity that would need to be cut. 

In stark contrast, the other was extremely excited by the findings.  I asked him why?  His answer was that as an organisation they were doing OK.  They were making profits, their customers were satisfied, their employees were generally happy and their businesses was growing.  All of which meant that if other companies enjoyed higher productivity, that they had an even bigger opportunity than they had previously thought.  The actions he put in place as a result all revolved around initiatives to incentivise staff to find new and better ways to increase production with the same headcount. 

Only time will tell which approach delivers the greatest shareholder value in these companies and unfortunately, because each organisation is in markedly different industries, direct comparisons are meaningless.  Nevertheless, from an employee’s point of view, I know which of the two organisations I would prefer to work for!

Senior leaders should never forget that organisations are made up of people and that as leaders they succeed or fail because of the people who work for them, not despite them.

Alistair Schofield is the Managing Director of Extensor Limited.