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Monday, February 19, 2020

Lies, Damned Lies, and Executive Platitudes

Why pretending to value people and acting otherwise is a corporate crime.

That handy platitude about our people being our greatest asset is trotted out in everything from press releases to annual reports to executive speeches. But does it mean anything? Is there ever any real intention to act on it? And if there is not, as so often appears, what are the implications for the businesses and organizations involved?
Recently, one of the regular readers of this blog, Dan, mentioned in a comment that the business platitude about our people being our greatest asset didn’t often appear to translate into action. Corporations, and the executives who run them, may claim that “our people are our greatest asset,” but their actions certainly suggest some very different assumptions. Staff are habitually accounted for as a cost, to be limited and minimized wherever possible, along with all other costs. Aside from the obvious ethical implications of such casual dishonesty, what are the true implications for an organization that fails to treat people as an asset at all?

A good place to start is to explore what actions might we expect to see, if this phrase about people being assets (let alone the organization’s greatest asset) was acted on in good faith. Any business’s assets are carefully protected and nurtured&mdashit;’s greatest asset most of all. And that asset would obviously be the central focus of most business strategy. Not only would it be used as carefully and effectively as possible to build and develop the business, it also surely be enhanced and added to whenever circumstances allowed. If someone says that their home, or their 401(K) pension plan, is their greatest asset, you would expect to see them invest time, money, and effort in adding to its value whenever they could.

On this basis, the action that prove something is believed to be a critical asset include:
  • Protecting and nurturing it.

  • Making its use and development central to any strategy.

  • Using it as well and as carefully as possible.

  • Making it the central point around which other activities revolve.

  • Working to increase its value whenever circumstances allow.
Does that sound like the way most businesses treat their people? Not to me. What I see is almost an opposite range of actions:
  • People are treated as expendable and often subjected to rough and stressful treatment.

  • They are rarely seen as central to any kind of business strategy.

  • Far from using existing people to generate fresh ideas or come up with new projects, this is increasingly outsourced to consultants -- as if it is automatically assumed that internal resources are inadequate for handling anything other than routine.

  • People are expected to fit themselves around financial and technical demands, not the other way around.

  • Expenditure on increasing the value of employees (training, development, benefits) is seen as the first and most obvious target for cost reductions.
Does it matter if it appears that in this case, as in so many others, organizations and executives say one thing and do another? I believe that it does.

This type of casual reliance on platitudes that no one intends to take seriously represents a serious ethical lapse: an automatic and institutionalized level of dishonesty.

Politicians regularly try to deceive the electorate with “spin” and lies, and more and more business leaders seem to be using similar tactics. In both cases, the result is widespread distrust, anger, and resentment. Taken too far, such actions undermine the basic respect for authority on which all countries and organizations depend for stability.

If business leaders fasten on the use of meaningless platitudes and “spin” as a way to sugar-coat their true intentions, they will wreck such trust as they still enjoy and create instead an atmosphere of continual suspicion. People are not compelled to work for a particular employer. They can refuse to join, leave, or (worst of all) stay to collect a paycheck, but give as little of themselves as possible in return. Destroying trust is both foolish and economically wasteful.

What would an organization look like if its people really were treated as its greatest asset?

Maybe it would be something like this:
  • Expenditure on people would be classed as a natural and laudable investment, not a cost. It would be among the last things to be cut in bad times.

  • Staffing cuts and lay-offs would become so rare that their use would signal the very worst kind of crisis. Instead, an organization’s people would be seen as its most obvious source of ways to survive bad times, and the most value asset available to top executives in fighting off competition.

  • Concert for the welfare and development of staff would automatically be number one on every manager’s list of priorities.

  • As many staff as practicable would be involved in proposing more effective business practices and helping to develop strategy.

  • There would be an automatic zero-tolerance policy for anything that undermined the value of the organization’s principal asset—its people—such as bullying, discrimination, dishonesty, cruelty, imposition of stress and overwork, or simply behaving like a total jerk. Bob Sutton has traced research suggesting that the presence of even a single asshole in a business has grave consequences on overall productivity.

  • Each person would be seen as a source of unique value, so it would become mandatory to discover what they do best -- then help them do it.

  • Executives would be expected to be leaders and mentors, working for the benefit of all, not autocrats and egotists focused mostly on their own aggrandizement and profit.
Imagine the impact a mindset like that could have on a business. I wrote earlier that I thought it really mattered if organizations talked about valuing people, but acted in the opposite way. This is why: they are ignoring or wrecking what could be a genuine asset of huge value to the business, if only they treated it as such.

To my mind, that is close to being a corporate “crime.” It is certainly a gross dereliction of the duty of any executive to the owners or shareholders. Suppose some executive neglected maintenance and allowed expensive machinery to be ruined. Wouldn’t you expect them to be disciplined, or even fired? So what should happen if a boss treats people in ways that ruin their effectiveness through increased stress, lowered morale, limited creativity, or increased turnover?

Actions, it is said, speak louder than words. In the Christian Bible, it is written that you can know people’s true nature by their “fruits,” meaning the visible results of what they do. If many of today’s organizations were trees, their fruits would range from bitterly unpalatable to downright poisonous. It that any way for a civilized society to organize how it deals with work?



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4 Comments:

Anonymous said...

CC,

Power to the People!
We the People..
Business is nothing without People!
Capitalism only works when People buy into it.

Nothing about managers, executives, ceo's, peons, a$$holes... those are titles, not People.

I think, like everything else in this world, it will come full circle. Compare today's business to 100 years ago, we see a lot of improvements. The message IS being heard, and the People are responding. Scream loud, CC!

Great post, CC.

Dan

12:56 PM  
Carmine Coyote said...

Thanks, Dan.

Nice to know there is support.

Keep reading, my friend.

2:59 PM  
Pacioli said...

Hi

The test to see if a company really values its staff is easy.

Just look at its published balance sheet in its annual report!

I suspect you won't find a single company globally with its people actually valued in $ terms.

Until you get a measurement like this I suspect there will be no undelying systemic improvement.

just my 2 cents
cheers

11:05 PM  
Carmine Coyote said...

Good point, Pacioli.

Thanks for making it.

Keep reading, my friend.

7:10 AM  

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