Why “monetizing” your organization won’t work; and why people still do it.

(This is a guest post by John Fletcher. John is an Englishman now resident in Europe, with a long career in the public sector in several countries. He has spent a good deal of time in working environments outside the Anglo-Saxon world, and has written and lectured on organizational issues.)

A few weeks ago, hidden in the financial pages of a British newspaper, was a story about Wall Street traders increasingly going to psychotherapists because they couldn’t handle the stress of a falling market. Some of them, apparently were coming to doubt their own worth and ability now that they were not making so much money any more.

It would have taken a heart of stone not to laugh out loud at the story (which of course I duly did); but when I stopped laughing, I began to wonder seriously about what happens when an organization treats its employees as though only money is important.

In the past, private companies made money by providing goods and services that people wanted to buy. To do this, they needed to employ good, skilled, people — engineers, skilled craftsmen, hotel managers, even marketing experts. Such people might or might not be paid well, but their principal motivation, as often as not, was pride in their job and the desire to be better than anyone else.

In the public sector it was even more noticeable: the difference between a distinguished professor of Physics and an undistinguished one was only incidentally to do with money; it was much more to do with ability, skill, and appreciation by contemporaries.

But recent years have seen a move to what I describe as the “monetization of work.” Employees are valued only in proportion to their ability to generate money; those not revenue-earning are expected to be as few and as cheap as possible.

The ideology of money

This ideology — which has spread strongly, even to governments and the public sector — explains why companies pay fantastic sums of money to alleged high-fliers. whilst simultaneously pursuing a suicidal policy of recruiting less capable and experienced people elsewhere, so that it can pay them lower wages. When only short-term rewards are important, pathological characteristics such as greed, ruthlessness. and dishonesty become valuable — and are well compensated

All this would matter less if it were clear that the greedy and ruthless do in fact possess skills that the rest of us don’t have; and if they got professional satisfaction from exercising them. That doesn’t seem to be the case.

Financial services, the lynch-pin of the modern economy, is a case in point. Now that the sky is falling, it has become apparent that the fantastically well-paid leaders of the industry were running their organizations on the basis of assumptions, such as “share prices will rise forever” or “debts will never need to be repaid,” which the average eleven year-old might have queried.

As for the “sophisticated investors” who bought the toxic junk that these geniuses sold, most of them have probably bought the Empire State Building at least once as well.

What about the experts, the “Masters of the Universe,” the super stock-pickers?

No luck there either: decades of research have shown that it’s impossible for any one person to beat the market consistently, and that star traders are no more than a statistical anomaly, soon corrected. If they have any professional skills, they are those of persuading people to part with money for useless advice.

Most rewards are for being present

What this means in practice is that success in the most profitable industry of our day is largely dependent on being in that industry in the first place — then using aggression, ruthlessness, and stamina to get yourself into a position where as much money comes your way as possible (If you think this sounds similar to the way client networks function in parts of Africa, then you’re right). As long as the money keeps rolling in, you can, if you care to do so, fool yourself that your own skills are the reason why it does so. When the supply of money dries up, you have nothing to fall back on. A unemployed teacher is still a qualified specialist; an unemployed bond dealer is just unemployed.

The implications of this go well beyond the present and future carnage in the financial services industry. Organizations have made the earning of revenue and the minimizing of costs the center of their policies for some years now.

This would be less damaging if senior managers actually had the influence over revenue and costs that their worshipers (led by themselves) like to think they have. In fact the greatest professional skill of senior managers these days is to be in the right place at the right time; to pass through an organization when market conditions are making it profitable, or when staff are being cut staff savagely, and then leave before the situation changes again.

As a result, there’s been a general de-skilling of management at middle and senior levels. Since consistent profits and cost reductions are largely beyond the control of senior managers, and since those are the results usually sought by organizations, it’s no surprise if managers feel less satisfaction and more stress than they did.

In a very real sense, the main tasks of managers in the private and public sectors is the long-term destruction of the organizations in which they work, to make or save money. It’s hard to get any professional satisfaction from that.

“Doctor, doctor, suddenly my whole professional life seems pointless.”
“That’s not particularly surprising, young man . . . it is.”

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