Hurricane Management and Leadership that Works
Strong Leadership and Hurricanes are very similar in that they are both transformational, purposeful, and engaging. However, one way they are very different is that leadership cannot be a force that cannot be reasoned with, otherwise, it will have consequences one of which is follower attrition or turn-over.
Many automatically associate Turnover with cost cutting, downsizing and poor employee engagement although this is not always the case. There is a type of turnover that is the voluntary kind and is in fact good news for an organization, especially when the organization aspires to be a Learning Organization. Take a technology company like Google, if Google hired three hundred entry-level engineers in 2014 and in 2016 had a voluntary turnover of 50%, is that a bad thing? No, absolutely not. On the other hand there is turnover of the voluntary kind that is due to poor employee engagement, lack of productivity, poor innovation, lack of job mobility, poor communication, etc. This is a real dilemma with real implications. But there is also a turnover of the involuntary kind that occurs during change. It is associated with engagement, poor communication and culture issues, centered around change, but not necessarily discontinued after change. Take the case with GE.
GE Case Study
Consideration of GE has reportedly announced layoffs to balance spending cuts This information comes merely months after the move of their corporate headquarters to Boston. Beside the fact that GE is among the various organizations the government bet on funding over $150 million in state and city subsidies, we wonder whether there is also a hyperbole parallel to their GE –Workout Method at play here.
As I/O psychologists we are of the understanding that change in large organizations is not a magical wave of a wand Despite evidence-based practices that help organizations save money, work more efficiently and increase employee engagement, the true road block to effective change remains to be institutional inertia. And what is inertia? Is Inertia just lack of movement, or is it lack of agreement?
One of the key aspects of the GE-Workout Method is that Leaders and managers identify areas for key business improvement and challenge those closest to the work to recommend ways for reaching that goal. Then on the other hand, those closest to the work, make specific recommendations in how to meet the goal and implement the approved recommendation within 90 days. Well, call us idealistic, but isn’t there an underlying assumption at play here? A key business improvement is all we heard. We didn’t hear any information in the form of initial feedback or observation even from or about the people who are running those business units. Now in developing this process, GE has presented the case that it fights beaurocracy. But if the identification of the problem is still rising out of the Leadership and Management, isn’t that more of the old beaurocracy? In a survey of clients of the GE Method it was cited that 20% mentioned the “risk of sub optimized analysis and decision-making” that can result from the Work-Out’s requirement for executive, on-the-spot decisions. Another 20% also mentioned “executive anxiety and defensiveness” with regard to the speed and process of decision-making.
Why Employee’s Emotions Matter
The limbic system, which combines higher mental functions and primitive emotions into one system, tells psychologists that decisions cannot be solely made by the cortex. It’s not only responsible for our emotional lives, but also many higher mental functions such as learning and formation of memories. According to the study presented in Association of Psychological Sciences . “When individuals are making a financial decision, “reflections” often occurs. Under conditions of acute stress, increased risk taking behavior was observed”. In fact, neuro-imaging and bio-feedback data has shown that stress may influence neural responses to feedback in the ventral striatum suggesting that stress may dampen our perceptions of the subjective value of our decisions.
In truth, employees are people and people can only function if they feel valued and understood. In fact one of the key aspects of Emotional Intelligence is that those with higher emotional intelligence are expected to be able to manage stress more effectively and draw boundaries as necessary to protect their emotional wellbeing. According to Equity Theory, if employees’ subjective measures of stress are heightened because an employer’s expectations and respect for the employee are inequitable, or one sided, the employee will not feel supported, capable and keen to cooperate. In other words, the employer’s valuation cannot be effective if it is conditional. If in response to a key business issue, there is havoc and crisis, threats of job cuts, and focus groups designed to make changes fast, morale will be shaken and human capital will not be onboard. Financial results can only be gained through consistent, human capital or people practices. And it is our strong belief that through consistent and supportive processes, problems could be researched and identified within the existing systems and then through behavioral science tested and implemented in large-scale, low-cost approaches rather than job elimination.