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Wasting a good crisis?

Tue, 27th Oct 2020

 

Never waste a good crisis. That glib slogan is less to be heard this time round. Not surprising, perhaps, given what happened after the financial crash a decade ago – which after the dust had settled, consisted of a return to business as usual, only with added austerity. That didn’t turn out so well for anyone who wasn’t part of the global 1 per cent, and the delayed reaction brought us Brexit, Trump and the election of Boris Johnson. 
So will today’s pandemic crisis be more productive? Nine months on from the first Coronavirus fatality, the signs aren’t good. After an initial burst of good behaviour (research collaboration among pharma groups, repurposing of manufacturing plants to turn out medical supplies, a few bosses forgoing raises) firms are in danger of reverting to bad old habits instead of taking the opportunity to institute better new ones. 
Take working from home. You might think that this was a rare win-win. Employers and workers both get to cut costs. Workers like it. In a recent survey of 10,000 European and Middle Eastern workers, 87 per cent said they wanted a choice over their place of work. Corporates, meanwhile, have discovered to their relief and surprise that under WFH not only does office workers’ productivity not suffer – in many cases it goes up. Unilever and Google found that at home their office workers were putting in more time than before, not less.
The unspoken corollary of that, of course, is that the office environment in general, and management in particular, add no value to employees’ work; rather the reverse. This isn’t new. The late Peter Drucker used to complain that too much management consisted of preventing people from doing their work, and advised every company to subject all their work processes to a zero-budgeting exercise every few years to strip out the friction-generating clutter and grit. 
Alas, rather than take the lesson to heart, managers have swiftly reverted to their default setting of control. Witness soaring demand for, and burgeoning start-ups in the field of, what are euphemistically termed ‘collaboration tools’: software which as well as collaboration also facilitates remote monitoring of computer keystrokes, websites visited, pauses taken and even infrared hotspots pinpointing staff providing the ‘pivotal point that people go to for information and answers’ (and by the same token presumably those who don’t). Bizarrely, apps are also springing up that mimic the background noise of a busy office, or even the ‘gentle chatter’ of a Danish coffee house. 
As Rana Foroohar points out in her latest book, anything that can be used for surveillance, sooner rather than later will be. That’s because behind the drive to control lies another obsession: reducing cost. Understandable as that is in today’s hard times, it is leading to behaviour that spectacularly misses the point. A la Drucker, the crisis would be the perfect moment to go back to ground zero and redesign the work to meet current and projected demand in the light of the new conditions, including WFM, social distancing and other consequences of covid.
But no. Spurred on by the big consultants, companies instead are splurging on ‘digital transformation’. That has led to a dramatic decline in customer service as the punters are peremptorily herded online whether they like it or not, often with no recourse to human contact. Pleading the crisis, companies resort to rationing – ‘due to covid, we are experiencing exceptional call volumes: expect wait times of more than one hour’ – directing callers to FAQs online, or simply deleting any other means of contact. In one prominent NHS operation, sad to relate, where the phone is permanently off the hook and a broken email link never repaired, there seems no means of changing an urgent appointment. The cost in terms of frustration, anxiety and wasted time for citizens and customers is off the scale, while the build-up of failure demand is invisible to managers who are probably congratulating themselves on having cut their (comparatively irrelevant) transaction costs. If anyone was wondering where productivity goes in these ‘transformations’, look no further: it lies in a grave marked ‘digital services’.
The other favourite corporate cost-cutting initiative is to chop full-time staff in favour of agency or ‘contingent’ workers. Around 5m people in the UK were in mostly low-paid, precarious employment even the pandemic hit, and that total will have surged over the last few months. As the FT’s Sarah O’Connor recently noted, the accepted risk-reward ratio in finance – the higher the risk the higher the reward – is reversed in today’s labour market: a truth rubbed in by the news that the boards of a number of US companies have begun quietly to adjust bonus formulae to compensate CEOs for ‘covid-related’ loss of earnings. Good luck finding revisions in the opposite direction to adjust for undeserved strokes of good fortune.
All of these things involve choices. Not all companies are choosing to recalibrate CEO pay. Companies that signed the US Round Table’s historic 2019 retreat from shareholder primacy seem to be behaving better towards their employees in the pandemic than others. In the UK, Aviva and Standard Life Aberdeen have signed up to a ‘living hours’ agreement that guarantees shift patterns (and payment) for workers four weeks ahead. Companies like these, and others that have chosen to maintain or improve levels of customer support (food retailers, including small ones, John Lewis, Waterstones), may gain in the long term when things have returned to something nearer the previous normal.
But these are exceptions. And the real test of an organisation's purpose is not being nice to stakeholders. It is bending all its energy and ingenuity to challenge the seemingly inevitable and find new ways of fulfilling what it exists to do. Consider this. When all the world’s theatres and cultural festivals were shutting down – the New York Met won’t reopen until at least autumn 2021 – after fierce debates, the Salzburg Music Festival, the largest of its kind, resolved to defy the odds and go ahead with its 100-year anniversary event in June. This involved going back to scratch: in double quick time developing a new programme, preparing a distancing and safety strategy that has become a model for others, reimbursing 180,000 previously sold tickets and selling 76,000 new ones, quite apart from the normal artistic work. ‘We were deeply conscious of our dual responsibility as both a source of meaning and employer,’ says Salzburg president Helga Rabl-Standler. The result of Salzburg's courage: ‘a sold-out festival, a giant step forward in terms of digitization, and a thousand good ideas on how to offer our greatest asset, regular customers from 80 countries around the world, faster and even better service.’
Well: just encore.

 

 


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User comments

Ann Graham :: 27th Oct 20
What would I do without you, Simon. Loved this column
Henning Sieverts :: 29th Oct 20
Me too, Ann!
Paul Reading :: 6th Nov 20
Excellent analysis of how the bloated management in much of commerce is working hard to use an unexpected change of the business environment for their own further short term reward rather than the interests of the organisation.
Paul Reading :: 7th Nov 20
Excellent analysis of how the bloated management in much of commerce is working hard to use an unexpected change of the business environment for their own further short term reward rather than the interests of the organisation.
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