Something I wrote a while back…

Posted in article, dot com, investment, people by Tony C on July 9, 2008

Whilst searching  through some old back up CDs I found this article I wrote back in 2000 whilst still working at Lotus for a investor website called EO News.  Like lots of other things to do the web at the time it got caught in the blast radius of the exploding dot com bubble as you’ll discover if you click the link.  I think it’s still as relevant today as it was then, who knows maybe more.

Power to the people
Tony Cocks  14/12/00 12:09:00
It is the human community that maketh the company. Those that put people first will reap the benefits of loyal staff and consistent shareholder value, says Tony Cocks, senior UK technology advocate at Lotus Development Corporation.

Some things are meant to last forever (diamonds, Reader’s Digest subscriptions, our national suspicion of anything French) but it seems the companies we work for isn’t one of them. A quick look at the list of corporate big hitters, the Fortune 500, shows a number of companies that, whether they like it or not, will have disappeared by the time the current crop of spotty youths start looking for employment.

But why?

According to Arie de Geus in his book The Living Company the average life expectancy of a business is 12½ years. Surely our highly paid company leaders can do better than that?

In the best traditions of formal statistics gathering I took a straw poll of the office – well actually the people sitting within shouting distance – to find out why companies seemed to have such a short life expectancy. Answers ranged from “the net”, “the global economy” and “those bloody start-ups stealing all the best staff”.

It might be any one of these reasons but they’re a little simplistic. De Geus goes on to give what seems to be an uncomfortable but more insightful answer. The focus on profits and the bottom line, rather than on the human community that makes up a company, means the company can’t see beyond the next quarter or end of year target. Fix this says Richard Barrett, author of Liberating the Corporate Soul, and you might have the organisational version of the fountain of youth.

I know what you’re thinking; it’s just a bunch of new-age hippy rubbish, a sort of Feng Shui for business, and why should we care as long as the company turns a profit in a reasonable amount of time? The irony is that those companies who see the employee and not the shareholder as the centre of their business are those that return consistent shareholder value.

Now the assumption is that the way to make the people happy, and show you care, is to pay them lots of money, but that theory only holds water until someone else offers them more. A recent survey tried to find why people changed jobs and money came down in at about eighth place, number one was the relationship they had with their manager, so when people leave usually no amount of money will get them to stay.

For large companies the lessons to be learnt from this are tough ones that cannot be remedied quickly or easily, but the new smaller organisation can avoid these traps if it wants to. The first thing we must accept is that companies are living entities not Taylorist machines or, as some people believe, just machines with brains. Neither are they numbers on a bean counter’s spreadsheet or a share price to be milked for all it’s worth.

Start-ups and their investors have a real opportunity to create a new way of working, where command and control management, corporate hierarchies and reserved car parking are a thing of past. OK, some people might think that having an organisation that’s more like a co-operative and less like Cromwell’s New Model Army is a load of nonsense, but these are the companies that have unsustainable staff turnover, inconsistent returns to shareholders and organisation charts the Polit Bureau would have been proud of.

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