Organizations are communities of people, and when those communities become upset, the organization is in serious trouble.
All organizations face problems from time to time; what matters is whether there is a collective will to solve those problems, or whether the culture of the organization has broken down in some way: when one group of people feels that another group is trying to impose its vision without any real consensus or agreement, for example, or – especially – feels that one group is not acting in the best interests of the organization’s core purpose.
A badly-handled downsizing in 2014 by struggling UK supermarket chain, Morrisons, caused a great deal of bad feeling amongst staff, witnessed by outpourings of anger online, some of which are quoted in this article. The company’s stated aim was to remove a tier of store management in order to ‘modernize the way stores are managed with the aim of reducing in-store management tiers, simplifying responsibility and improving customer service.’
It didn’t work, at least not in terms of turning the company around nor apparently, as many staff had feared, in terms of improving customer service. In January 2015, the supermarket replaced its CEO, Dalton Philips, after a five-year stint at the head of the mid-market grocery chain. There were many reasons cited for his replacement; the usual litany of failed initiatives and the headline problem of falling profitability. But the driving force for change seemed to be the realization that Morrisons had become a broken organization: that it was not capable of returning to health under its old management.
The organization as machine
In our last book, My Steam Engine is Broken: Taking the organization from the industrial era to the age of ideas, we argued that many organizations still unwittingly abide by the principles of the early twentieth-century school of Scientific Management, which sees people as components of the organizational machine whose individual performance, like that of any other component, should be analyzed and adjusted for maximum efficiency.
In this ‘organization as machine’ model, people can be ‘let go’ without adverse consequences. The people are merely parts of the machine and machines, after all, have no feelings. In fact, when organizations ‘downsize’, firing large numbers of people without handling the process with great sensitivity, the real emotional damage to the organization may be severe and even irreparable. Organizations really do have feelings too.
In an interview with Culture University faculty member, Marcella Bremer, Kim Cameron, Professor of Management and Organizations at the University of Michigan, said that companies that downsize tend to perform worse after the downsizing process. ‘One of the major outcomes of a decade of research,’ Professor Cameron told Bremer, ‘was that almost all of the organizations that downsize deteriorate in performance. Instead of getting better, they get worse. This happens for several reasons; conflict goes up, morale and innovation go down, loss of trust etc.’
It is perfectly possible to downsize successfully, argues Cameron, and about 10-15 percent of companies manage to do so – the ones who act with compassion, gratitude and integrity, practicing what Cameron calls ‘virtuousness.’
“Ripping the heart out of the company”
Morrisons’ own 2014 downsizing seemed to be carried out without much ‘virtuousness’ at all.
Under the headline ‘Morrisons to cut 2,600 jobs in management restructuring’, the UK’s retail trade magazine, The Grocer, reported the supermarket’s plans to cut out a tier of middle management. A number of people, many of them employees of Morrisons, posted comments beneath the article.
One employee (‘Joe’) who was about to made redundant talked about his passion for his job and suggested that the restructuring was ‘ripping the heart out of the company’.
“I’m a department manager for Morrisons and I’m extremely passionate about what I do. I must say at this point how disappointed I am at Dalton for ripping the heart out of this company. Us department managers and supervisors keep this company running on a day to day basis this just confirms the fact the directors have absolutely no clue as to what’s happening at store level.”
Another (‘Alan’) suggested that staff have been misled about the likelihood of redundancies.
“The message to stores at the beginning of this was that there will be no redundancies. Staff have been lied to throughout. If the focus really is on improving customer service, why have hours been cut back month on month for the past year. To [sic] many customers have already been alienated and this blatant disregard for the very overworked middle management team will do little to swing back any favor.”
‘Jojo’, a Morrisons’ shopper, argued that management were deliberately trying to avoid emotional reactions to the redundancies:
“Morrisons work in under-handed ways. Just recently all the general managers had to move stores. This would be in preparation for the proposed redundancies so that they could give people their notice with no emotional attachment.”
‘Ade anti Morrison’ talked about the ‘rude’ and ‘arrogant’ attitude of management,
“It’s no wonder they’re going down the pan, arrogant and small minded head office management who rule by fear . . . One area manager I worked for was the most rudest [sic], arrogant, small minded bigoted aggressive person I’ve ever had the misfortune to work for …”
This small sample of outpouring of employees’ felt experiences suggests a dreadful disjoint between the intentions of senior management and the perception of management actions on the shop floor. This unhappiness, this ‘upset’ is a far better indicator of the health of the organization than any number of metrics. It is interesting to compare the frustrations, anger and disappointments expressed in these few comments with Jon Robinsons ‘14 characteristics of a thriving workplace culture’ – every single one of Robinsons’ characteristics would seem to be absent from these employees’ perceptions of their workplace culture.
Failed strategies can be changed, mistakes can be rectified; but failed relationships between the core groups within an organization spell disaster. If you want to know what’s really going on in an organization, test its emotional state. Organizations really do have feelings too.
Do you agree? Perhaps you share a different view. If so, what can you add to this conversation? We welcome your thoughts, please share them below.
This post was co-authored by Jonathan Gifford and Dr. Mark Powell.
Dr Mark Powell is a freelance strategy consultant and an Associate Fellow of Oxford SAID Business School, where he specializes in designing and directing senior executive leadership programs. Mark also lectures on a range of subjects including strategy development, leadership, power and influence and strategic relationship building. He is a former partner at global strategy consultancy, A.T. Kearney.