Responsible communication leadership: putting employees first

29
165
views
responsible communication leadershipBy Dr Kevin Ruck

Following the financial crisis in 2008, management thinkers and others have rightly questioned the role of business leaders in society.

Often fingers point at business schools, regarding their failure to incorporate ethics into programmes.

In addition, governance is back in the spotlight. As the UK department store British Home Stores (BHS) went  into administration last week (a situation similar to going into “Chapter 11” in the USA), questions are being asked about how it was run to the detriment of employees and their pension fund. It seems that shareholder greed trumps employee and common interests.

A new term coined: responsible leadership

A new term has emerged for an elevated emphasis on ethical business practice: responsible leadership.

This new term includes:

  • issues about sustainability and the environment
  • risk analysis
  • care for employees; and
  • monitoring of subcontractors

For some of us who work in PR, who have incorporated stakeholder analysis into planning for many years, this sounds like basic issues identification and management with a bit of corporate social responsibility (CSR) added.

However, the focus on ‘care for employees’ is welcome. It is also heartening to see stakeholder engagement given renewed emphasis.

For example, according to Business in the Community, a UK-based organisation that aims to create a fairer society,

Business leaders must be seen to act and demonstrate their commitment to creating a fairer society and a more sustainable future by fostering a culture that will encourage innovation, reward the right behaviours and regain trust.”

But how do leaders go about doing this?

A new approach to leadership

Perhaps we need a new approach towards leadership—an approach that builds on the principles of responsible leadership highlighted above, but one that also focuses more on the importance of communication.

Much of the business studies literature focuses on transactional or transformational leadership.

Transactional leadership is based around formal exchanges between groups and leaders all pursuing their individual objectives.

Transformational leadership focuses on changing the goals of individuals or groups for the ‘common good’ of the organisation.

Often transformational leadership is viewed as a more contemporary approach, based on leaders who convey a strong and inspirational vision and purpose that motivates employees.

However, this approach is critiqued by Professor Dennis Tourish in his book, The Dark Side of Transformational Leadership. He posits that we cannot assume that goals proposed by leaders are necessarily of mutual benefit to employees. Furthermore, Tourish argues that the transformational leadership model ‘tends to preclude the possibility of corrective feedback from followers to leaders.’

Indeed, one of the dangers of transformational leadership is that some leaders can become ‘rock stars’ within their organisation, believing that their position and charisma is enough to gain sycophantic-like buy-in to their new strategies or dodgy practices.

In their excellent book on strategic public relations leadership, Professor Anne Gregory and Paul Willis cite Northouse’s definition of leadership as ‘a process through which an individual influences a group of other individuals to achieve a common goal.’ This is essentially a communicative process.

However, with an emphasis on ‘influencing’ employees, it may not take enough account of Tourish’s critique of transformational leadership.

In an article for The Leadership Quarterly, Professor Gail Fairhurst and Professor Mary Uhl-Bien argue for a more relational view of leadership, where it is seen as a phenomenon generated in the interactions among people acting in context.

At the core of this view is the assumption that leadership is co-constructed in social interaction processes. Fairhurst and Uhl-Bien conclude that communication is a key element of relationally-oriented leadership.

Other academics, such as Johanssen et al., identify a number of principles of communicative leadership, including,

Communicative leaders are willing to listen, receive questions or complaints, and share appropriate information in a truthful and adequate manner.”

An emphasis on meaningful dialogue

It’s an emphasis on meaningful dialogue that is most likely to lead to a culture of innovation and trust. Emphasising communication within responsible leadership is the starting point for ‘caring for employees.’

Indeed, we should really be talking about responsible communication leadership.

After all is said and done, leadership is actually communication. This includes the following core principles:

  1. Keeping employees informed about what’s happening in the organisation. At a minimum this includes where the organisation is headed, i.e., how it is doing what changes are planned.
  2. Giving employees a say about what goes on. This includes senior managers being visible and approachable, having regular meaningful conversations and actively listening to what employees say.
  3. Being open to feedback and constructive criticism. Critical to this is making it safe for employees to speak out.
An evidence-based rationale for responsible communication leadership

Senior managers have a responsibility to have conversations with employees on a regular basis.

In my PhD research, I found that ratings for senior management communication were inconsistent across the five organisations that participated in my study. Indeed the inconsistencies for senior manager communication were greater than for any other aspect of internal communication.

This suggests that senior manager communication is idiosyncratic. Some get it; others don’t.

If we want organisations to take their role in society more seriously, then we should recognise that it’s often employees who are first to spot when the organisation is going down the wrong track. Establishing responsible communication leadership as a first principle is one way towards some inoculation from Enron-like situations. But leaders really have to understand and value critical upward feedback.

Benefits from responsible communication leadership

There are also other benefits from responsible communication leadership.

I found that senior manager communication—which includes keeping employees informed about changes and listening to employees—is correlated with what employees feel about the organisation, as well as what they do to help it succeed.

Employees often said that when senior managers communicated well (this includes listening) it made them feel valued.

So when senior managers communicate well, the organisation is likely to be more successful. In addition, employees are less likely to be stressed, as feeling valued is important for mental health.

Moreover, until employee value is elevated to the same level as shareholder value we will, I fear, continue to see questionable business practice that sometimes leaves employees without a reasonable pension.

* * *


PR_academy_Kevin_02899-1-1-1-e1462199247736Kevin Ruck, MBA, PhD, co-founded the PR Academy in 2007, following a long career in public relations and internal communication in the UK. He graduated with a distinction in his MBA and has recently completed a PhD that explored the associations between internal communication and organisational engagement.

He established the Chartered Institute of Public Relations (CIPR) qualifications in internal communication and he is the editor and co-author of the textbook, Exploring Internal Communication.

Follow more of his writings via his Exploring Internal Communication blog (he recommends you also check out the PR Academy blog) and connect with Kevin Ruck on LinkedIn and Twitter or contact him by email.


 

29 COMMENTS

  1. Thanks for this contribution, Kevin!

    Now I have a question for you (based, in part, on the conversation between Heather Yaxley and me in my recent post):

    In your PhD research, when you were examining senior management communication at the five organisations, was the concept of “respect” for employees included, either with direct wording or at least the definite implication of that tenet?

    As you know, I think language shapes consciousness, so respecting employees should be at the heart of responsible communication leadership….

  2. Thanks for the opportunity to share my thoughts on PR Conversations!

    My research was focused on what topics employees were most interested in, what channels they found most helpful, satisfaction with employee voice, ratings for line manager communication, ratings for senior manager communication and organisational engagement.

    Respect for employees was not explicitly explored as a research objective. However, in my interviews and focus groups with employees they often talked about “feeling valued” (or not, depending on how managers communicated) and this can probably be associated with being “respected” (or not). Although employees did not use the term “respect” as such.

    Kevin

  3. Kevin Ruck is so right; it all comes down to senior management, not the overarching philosophy of the company as a whole.

    I had the best experience of my career and the worst experience of my career with the same company. The difference was the manager.

    • Hi Geri,

      Thanks for the feedback.

      My research suggests that senior managers have a big impact on employees just by taking a few minutes to have an informal chat. This makes employees feel valued and as a result they become more engaged with the organisation.

      I also remember particular managers who were good at helping me develop my career. They took an interest in understanding me as an individual. My research did not look at how line managers managed individuals. However, it did explore the information employees want in team meetings and this is primarily local information about team work. If line managers do attempt to talk about wider organisational issues then they need to be able to ‘translate’ this into meaningful information for the team.

      Kevin

  4. Kevin – thanks for the post and continuing the theme of considering employee communications started with Judy’s last post.

    I’ve raised the following question with you before, but wanted to explore it further here in the light of this thread of posts. My question is how the changing nature of employment fits within the ideas of responsibile communicative leadersip and the primacy of employees, particularly in relation to good governance.

    The BHS case is one that highlights some of the challenges. As with other long-established large businesses (such as the major automotive companies), past responsibility to employees (for example, in the form of generous pensions) contributes towards their difficulty to compete today with firms that set up with a clean slate.

    These newer, more flexible, organisations often show little responsibility towards employees, and indeed, are not expected to do so with the ease of moving operations around the world to lower cost bases with fewer regulations or requirements for either good governance or care towards employees. Or they use a network of ‘suppliers’ to outsource an increasing range of functions and thereby transfer employee responsibility down the chain. Or they make use of an ‘on demand’ approach to employment with practices such as ‘zero hours’ contracts. Or there is increased automation and elimination of jobs by use of technology.

    The result is increasingly a transient or at arms-length employee base, as the aim is to keep employment (and consequent responsibilities) lean. This trend doesn’t just apply to the corporate sector, of course, as the lean public sector mantra also focuses on fewer employees and great use of outsourcing, contract staff and so on.

    We can argue of course, that 90% (or so) of people globally work in Small Medium Enterprises (SMEs). Perhaps also trends towards willingness to be mobile, adopt self-employment or more independent working approaches offer opportunities for ’employees’, particularly when they have skills/knowledge that is ‘in demand’. There are also economic arguments that firms need to orient around human capital (or people as I like to think of us), through more pro-active investment and focus on ‘return on talent’ (as an intangible as well as a tangible resource).

    Anyway, how do you feel that these (and similar employment matters) affect the concept of responsible communication leadership?

    • Hi Heather,

      Apologies for the delay in responding, it is a very good question and I’ve been pondering on it for a few days.

      The nature of work has certainly changed a lot in my lifetime. I remember my first job at Post Office Telecommunications (which later became BT) as an Accounts Officer. I was put on a final salary pension scheme from day one and there was a clear salary structure that applied equally to everyone. I received lots of in-house training and support. People were given opportunities to move around so that they could find their niche. For example, I ended up in the PR team via Accounts, Directories and Customer Service. I was also given lots of financial support for external training and education. There was even a welfare office for employees who needed help. The organisation certainly felt like more of a community than a business for much of my career, although that changed a bit over time.

      Things are different now. Pension schemes are not nearly so generous, jobs are not for life and zero hours contracts have emerged. Work is also much more automated. Commercial imperatives are often cited as reasons why employers are restricted in what they can do for employees. We see this in the resistance of some employers on the move to a ‘living wage’ in the UK. Caring for employees naturally means meeting all legal obligations and, I believe, going beyond this. For example in the PR industry in the UK, PR agency leaders should address a gender pay gap of £22,204.96 (as reported in the recent CIPR State of PR Report) and ensure that all interns are paid. No ifs, no buts. It’s the law.

      Leaders should not see caring for employees as a burden. Or something that is a lower priority than customer service. This is perhaps an unfortunate unintended consequence of the employee as ‘Human Resource’ mind-set that has evolved in the last 20 years. It is possible to take the time and effort to care for employees and be very successful. For example, the John Lewis Partnership in the UK seems to be doing this well. This is also an approach exemplified in the ‘Employees First, Customers Second’, book by Vineet Nayar. Indeed, in a 21st century service oriented market place, caring for employees is likely to lead to better customer service which is a critical differentiator.

      So, care goes beyond the basics and that’s where the emphasis on communication comes in. It is understanding that leadership is communication. No matter how fleeting the nature of a person’s employment, responsible leaders take the time to have conversations with lots of employees. And even if an employee may have to (or want to) move to other organisation for whatever reason at some points in their career, I think that they will still value a regular chat with a senior manager when they get a chance to find out more about what the organisation is doing and are given the chance to have a say about what’s happening. It’s a fundamental social process that is good for employees and good for the organisation.

      With all the changes that are taking place in the workplace, there is a suggestion that many more people today are seeking a greater sense of meaning and purpose in their working lives The associations between where someone works and their identity may be stronger today than they were 30 years ago. Indeed, I read a piece by Peter Cheese, the CEO of the Chartered Institute of Personnel and Development (CIPD), today where he said ‘We need to make sure that the future of work is human, and that we are designing workplaces that make the best of people and not just the best of technology’. I see responsible communication leadership as an extension of this thinking that is perhaps more important in today’s working environment than ever before.

      Kevin

  5. Kevin, organisations should never – ok rarely – put employees first. What comes first is the purpose that an organisation exists to fulfill. Often that is to satisfy a customer need as a profitable orgainisation in the service of shareholders. Of course, we know that from a moral perspective, employees – or human beings of any sort – are not merely a means to end. But saying does that does not put employees at the top of the corporate pecking order when it comes to the focus of decision-making and/or setting of communication priorities.

    IBM at its peak success once suggested otherwise. However, it was forced to admit that was mere spin when it went into near terminal decline. That’s why we PR pros can morally justify announcing mass redundancies.

    Your main point seems to be to encourage organisations to communicate better. That’s motherhood and apple pie that is not enhanced by your list of woolly buzzwords such as communicative leadership or meaningful dialogue or evidence-based rationale or responsible communication leadership or….

    In short, PR needs to be kept honest.

  6. Hi Paul,

    Thanks for your feedback.

    I believe that an organisation’s purpose should go well beyond customers and shareholders. Organisations also have a responsibility to society and to their employees. Of course, not everyone agrees with this. Profit and shareholder greed still trumps other responsibilities and that’s a great shame to me. But more importantly it sometimes leaves employees without a proper pension.

    Kevin

  7. Kevin, pensions, such as at BHS, are not emptied by the pursuit of profit but by the failure to maintain profitability. Shareholder value is mostly governed by the same logic.

    You don’t seem to grasp that all stakeholders are not equal or that if everybody’s interests are put first; nobody’s interests are properly represented or prioritized.

    As I see it, you seem to want corporations to become all things to all people/stakeholders. But, then again, you also proclaim employers should put employees first. So you seemingly want to have it both ways: equality and hierarchy.

    Logically that is absurd, at best, or in the hands of those with vested interests it constitutes a total misrepresentation of the facts. In contrast I maintain neither PR nor our clients need to fear telling the truth. The time has come to start treating stakeholders as robust grownups.

  8. What a great read! Communication is key in every business, if you want to get anything done you have to communicate with your employers. Leadership should also always be shown in a business environment.

  9. Paul,

    Interesting comments.

    The situation at BHS is still unravelling, but there are reports [http://www.independent.co.uk/news/business/news/bhs-whats-the-real-story-behind-the-collapse-a7000166.html] that suggest that the previous owner, Sir Philip Green and his family “Received more than £400m in dividends from the company. And, incidentally, no UK income tax was paid on these dividends as they were paid to Sir Philip’s wife, Tina, who lives in the tax haven of Monaco. In 2012 Sir Philip and the BHS pension fund trustees also took a decision to close the pension fund deficit over 23 years. Some argue that was not good enough”. What do you think?

    You don’t seem to grasp that organisations make profits because of the hard work and devotion of employees. Why shouldn’t their interests be prioritised? CEOs have said for years that “employees are our greatest asset”, yet their actions often don’t reflect this. The John Lewis Partnership understands it. Its stated purpose is ‘The happiness of all its members, through their worthwhile and satisfying employment in a successful business’. It focuses on employees and also makes a profit (£342 million in 2014-15). The two things are not mutually exclusive.

    Kevin

  10. Kevin, John Lewis speaks to my point not yours. There employees are the shareholders and the collective motivation is to produce a profit that guarantees the bonus.

    As to BHS you and most media commentators seemingly know little to nothing about either the economics of pension funds or the facts behind the BHS collapse (declaration: I worked in pension fund PR).

    You and they are fuelling populist nonsense along with some of our parliamentarians. I doubt that Sir Philip is a saint but he is not responsible for the 400 million pound black hole in the BHS pension fund. To explain why that’s so I recommend a recent article on the overblown BHS saga by pension fund expert Hilary Salt on spiked-online.

  11. Paul,

    Do you think it’s reasonable to take £400 million in dividends from a UK business and pay no tax? And at the same time fail to adequately address the company pension deficit?

  12. Kevin, it is not a question that can be answered meaningfully in a yes or no fashion. There are a number of reasons for this.

    First, there is no link between the dividend payments and the pension shortfall. Second, the pension shortfall is almost 600 million pounds, not 400 million. BHS was sold and the new buyers had a responsibility to do due diligence and to secure the best deal for the pension scheme. They clearly did not get a great deal on that front, but even a better deal would have hardly have made much difference. Fourth, the pension short fall is mainly the result of the failure of the business to remain viable because – like most pension schemes – its financing depends on the business’s continued profitable existence. At the very launch of the scheme – and most schemes are so organised – there was a known risk that if the business failed the pension would too; in the sense that it would not be able to meet its ongoing liabilities. That is why there is a pension protection scheme in place, which will now kick into action (tho it will not make up the full losses).

    As to the taxes: so long as what was done was legal, it was fine by me. Nobody is under a moral obligation to maximise their tax contribution and commonsense tells us people and companies will try to do the opposite: not least by putting money in their pensions. If you want the law changed, then by all means campaign for that. But don’t attack people or corporations for acting lawfully. But none of this has anything to do with the pension short fall.

    PR pros need to be able to explain this stuff maturely. What we don’t need is PR pros who puff further ill-informed Twitter-storms.

  13. Kevin, the FT has reported the BHS pension shortfall much better than the Guardian – which has displayed its usual complete ignorance of how the real world works – by pointing out the following:

    “BHS employees would have escaped automatic cuts to their retirement incomes if regulators had approved a rescue plan put forward two years ago with the backing of pension trustees and Sir Philip Green.” (19 May)

    The Guardian’s coverage, the views of which you appear to share, has crudely compared the specious link between the level of profits and dividends and the pension shortfall amount to whip up vitriolic hysteria against Sir Philip and big business generally.

    For internal communicators, pensions are a big deal. Those of us charged with managing internal communications need to know inside out how they work. We also need to be able to see through the nonsense spread by the likes of the Guardian, which fundamentally dislikes the commercial corporations we PR pros often represent. Our job as PR pros has to be present an accurate account of such issues in both their generalities and their specifics. Upon such matters depends our credibility with our employers and public trust in them and us.

  14. Paul, I fully understand it is a complex area and, by the way, I do understand how pension funds work.

    My blog was about the responsibilities that business leaders have to go beyond basic legal obligations. Clearly, you believe that meeting the law and keeping shareholders happy is all they have to do. I believe that they have wider responsibilities to employees and other stakeholder groups.

    Of course dividends and pension shortfalls are connected.

    It’s a choice that directors make as to where to allocate profits. If you adopt a shareholder model, then we will see the interests of shareholders prioritised over the interests of employees who are the people who actually the deliver the profits. In the case of BHS, it seems to me that the balance between paying huge dividends and meeting some of the pension shortfall was not right.

  15. Kevin, if firms had to keep their pensions fully funded – that is to cover all current and future liabilities – using their profits, most of them would be bankrupted overnight. Moreover, when the dividend was paid at BHS there was no pensions shortfall. The fact is that when the pension black hole appeared , BHS tried to solve the problem but was prevented from so doing by the regulator (please read the history). So, sorry, I don’t think you have shown in this discussion a basic understanding of a/ the issues and history relating to BHS b/ how pensions are managed and funded.

    You are right, however, to say that what a business does with its profits is a choice. In my view it is indeed sad that too many businesses, including BHS, consistently choose not to invest their profits in expanding their business or in R&D or innovation.

    In the US alone around 50 companies are sitting on cash to the value of $1.08 trillion. Many are buying back shares or rewarding shareholders with short-term returns etc. This risk adverse environment is one that needs addressing, for sure. Though your risk-adverse take on this would lead us still further in the wrong direction.

  16. Kevin, a commitment to accuracy compels me to make a correction to my previous comment. When the dividend was paid the known pension deficit was 100 million pounds: not unknown. This correction however does not undermine my core argument. I add that the Guardian presents this story as if the near 600 million black hole was anything but a consequence of BHS’s collapse after the business had been sold. They present that figure as if that is the deficit Sir Philip ignored. Yet at best Sir Philip could have put 100 million into the fund, but there would still be a near 500 million black hole today. So there is indeed no relationship between the dividend and the pension deficit; that is redherring. That point becomes more credible when you consider that efforts were made to restructure the pension scheme to rid it of the deficit it had two years ago. The pension trustees and the new wannabe-owners, as I argued in another comment, failed in their duty to negotiate a good deal when the business was sold by Sir Philip. But that would not have made a major difference to the final outcome. And we already know Sir Philip, that is if the reports are true, has offered 80 million pounds to the fund. Hence Sir Philip has been much maligned.

    It strikes me that politicians fear the burden that failed defined pension schemes will place on protection schemes. The loser in this battle will be employees when employers calculate that the game has become too risky to play.

    I take the time to explain this stuff because I consider that PR pros should keep their feet on the ground and resist knee-jerk moralising and anti-corporate nonsense. Otherwise I fear we stand no chance of defending either corporate reputations or our own.

  17. Kevin, I’ve been following the debate between yourself and Paul, and as your initial post is clearly not simply about pensions, I would like to address some points arising that seem to reflect on both of your viewpoints.

    First, for responsible communication leadership, you highlight three core principles. It seems to me that inherent in these is a responsibility for leaders to communicate matters such as how the business is run, why particular decisions are made, and hence treat employees as grown ups. This can, and should include, clear explanation about pensions, profits, investment in growth – and staff development, salary considerations and so forth. It does management no favours when employees feel that their intelligence and efforts are not being engage with, or harnessed positively to benefit themselves (and not just owners/senior management).

    We see this in Universities currently where there has been a rise in ‘executive’ pay and benefits, and not only a reduction in the same for academics and support staff, but a cultural shift that downplays the contribution of these vital stakeholder groups in favour of a supposed ‘customer satisfaction’ approach based around the student. This narrative actually belies – as is often seen in commercial organisations – a failure to recognise that organisations need a full mix of stakeholders, each of which contributes towards organisational success. So yes, financial stakeholders are vital, but so too are employees, customers, suppliers – and others who affect or are affected by the ability of the organisation to achieve its – and society’s aims.

    Businesses do not – and cannot – be considered in isolation from society. We do need healthy and financially sustainable commercial organisations. They do also have societal responsibilities (regardless of any CSR agenda) not least because of the legal and other privileges accorded to them (whether that’s in the form of taxation or other resources from the ‘free’ state education of staff they employ or the infrastructure in form of roads etc that they benefit from).

    What business leaders need to reflect is not just a short-term focus that from the outside increasingly seems to be more about ensuring they are financially rewarded, but a longer-term focus on financial and societal sustainability of the organisation. If, as seems the case with BHS, the business for various reasons was proving to be unsustainable, then a plan of recovery or end of operation was needed.

    Society, including politicians, media/commentators, and employees, require greater financial and legal literacy over complicated matters such as pensions. Beyond those affected directly by the ‘final salary pension’ situation by BHS, there are major implications from these legacy schemes, legislative changes and the precarious position many of our generation, and those to come, will find themselves in.

    As with the NHS and other public services, the narrative that we are able to benefit from what we have contributed is a fallacy. These are neither saving schemes nor insurance policies. I am reminded of the scene in It’s A Wonderful Life, where George Bailey manages to get to the end of a day without having to foreclose when he says: ”

    A toast! A toast! A toast to Mama Dollar and to Papa Dollar, and if you want to keep this old Building and Loan in business, you better have a family real quick.”

    • Hi Heather,

      Yes, the original post was about responsible leadership and we’ve got a little distracted by the specific example of BHS in the subsequent discussion.

      My PhD research clearly shows that employees are very interested in a wide range of important corporate topics including plans, progress and change. Employees in the survey that I conducted (with 2066 responses) also (unsurprisingly) expressed high levels of interest in topics relating to pay and conditions. In the qualitative phase of my research it became apparent that employees expect senior managers to discuss corporate topics with them, not line managers. So, I agree that senior managers should do more to explain about pensions, profits and investment in growth. My research indicates that employees would like these discussions to be face to face in small informal groups where they are given the opportunity to have their say. The key point is that this should be dialogue not monologue – that is what employees want and senior managers could learn a lot if they listened to employees more. It is a communication responsibility of leadership to do this regularly. However, my research also suggests that many senior managers either do not recognise or accept this responsibility and pass it on to middle managers who pass it on to line managers. There are some exceptions. For example, John Timpson, Chief Executive of Timpson Ltd, makes a conscious effort to meet all his employees: ‘Every year John Timpson continues a tradition first begun by his grandfather of visiting his businesses. He annually tours around 650 shops. Far from being visits to check up on his staff, as some cynics might suggest, Timpson insists they are purely to meet his staff, find out how their businesses are operating and to get to know them better. “You don’t know what a business is like if you sit in the office and look at figures”‘. http://www.leadership.org.uk/files/uploads/60.pdf

      Organisations have long appreciated that financial measures alone are not enough. The well-known Kaplan and Norton Balanced Scorecard was introduced to balance financial measures with other aspects of management, including stakeholder satisfaction. The EFQM Model of Excellence focuses on leadership and people as enablers and it incorporates customer, people and society results as well as business results http://www.efqm.org/efqm-model/efqm-model-in-action-0 Many organisations have embraced this approach for a long time. As I said in my original post, some aspects of responsible leadership are not new. For me, it is about highlighting the importance of communicating with employees that should be incorporated more into responsible leadership thinking.

      Kevin

      • “Yes, the original post was about responsible leadership and we’ve got a little distracted by the specific example of BHS in the subsequent discussion.”

        It may be a stereotype, but the gods blessed (most) British with a wonderful talent for understatement….

  18. Heather, I agree with you about treating employees like grown-ups. That places the responsibility on communicators to present things others don’t necessarily want to hear: harsh truths. One such truth being that not all stakeholders are equals. The Guardian likes to divide the world between good guys and villains, such as Sir Philip. The harsh truths here is that retail is a risky business. The profit taking was modest, too. For instance, £423m – paid, I think, over four years – was indeed awarded to BHS directors. But what the Guardian does not tell us is that there had been no payments made for the past 12 years. Also there had been significant profits for BHS for the three years to the end of 2004. The Guardian has also been careless with the facts relating to the pension scheme. Such matters are complex and take time to weigh.

    That’s why we PR pros should not lend any credibility to knee-jerk twitter-storms and media-led anti-corporate hysteria.

    However when you talk about society, I read conformity. In other words, the word is used to impose a prescribed vision of how things ought to be. The word society needs debating because it has become just another stick to bash big business with by people who claim to have public opinion on their side. It is surely the role of internal communicators to ensure that employees can see through spurious accusations, unfounded claims and single-issue campaigns, which for PR purposes disingenuously pit their firm against “society”. That is more or less what happened to Sir Philip and to BHS and to many many other companies and business leaders.

    • Paul,

      I’m afraid that your attempt to position the situation at BHS as a Guardian fuelled twitter-storm is erroneous. There have been many reports on this from a range of sources including the Sunday Times and the BBC and, as you know, the UK government’s Work and Pensions Committee is conducting an investigation. Even the Chartered Institute of Personnel and Development (CIPD) is taking a critical line. In the June issue of their magazine ‘People Management’ CIPD highlights a quote from Mark Poulston, head of the pensions team at law firm Weightmans: ‘This case will be a test of the regulator’s powers and an indicator of whether those powers –or the regulator’s use of them- require an overhaul. In the meantime, scheme members will wonder why their pensions are being cut while Sir Philip awaits delivery of his third luxury yacht’.

      The litany of negative consequences arising from the profit and shareholder only model of business is very long indeed. In the same issue of People Management it is reported that £68 million of arrears is owed to more than 313,000 UK workers because of non-payment of the national minimum wage. And the situation seems to be getting worse. According to a recent Reporting Human Capital report one third of FTSE 100 companies are withholding vital workforce related information from their annual reports, And we won’t even start on the thousands of businesses who hide their cash in tax haven countries. To point these failings out is not to be ‘anti-corporate’. Nor is it hysterical. It is simply to highlight the ways that organisations can do better and take a broader perspective that reflects the interests of the very people who create value (employees) and the people who are affected by what organisations do (communities).

      Of course, organisations get away with a lot of poor practice because some people think that a profit only motive is fine and dandy. In his article ‘Why the Assholes are Winning: Money Trumps All’ in the respected Journal of Management Studies, Professor Jeffrey Pfeiffer speculates on a number of explanations for why people rationalise the acceptance of harmful and immoral behaviour. I won’t go through them all here. You can read the article at: http://onlinelibrary.wiley.com/doi/10.1111/joms.12177/pdf However, cognitive dissonance may go some to way to explaining the way that some people do not wish to see the negative outcomes from a profit and shareholder only model. I also concur with Pfeiffer’s analysis of the way that business schools focus on performance, productivity and efficiency and effectively marginalise other more human-centred values. This has led to a legitimsation of the profit only way of operating that leads to so many problems (for employees, stakeholder groups and also for organisations themselves).

  19. Well. How to reply to all of this?

    The theories of management and leadership over the years have waxed and waned regarding the relationship between the rank and file who do the work and those who are tasked to lead and manage those employees. From the Theory X and Theory Y debate (employees are children who require strong parenting to tell them how to work vs. employees are smart and potential partners to realize organizational objectives) to the TQM, Lean and Six Sigma revolutions.

    We have come no closer, in my view, to establishing the “proper” management/employee relationship through all of these theories in all of these years.

    The fact is success is relative and situational; you can have wonderful, motivated employees and enlightened management on a sinking ship — think of the commercial real estate industry c 2007-2011. Sometimes it’s just the wrong place at the wrong time. I worked for a fantastic company in 2008-2009 that made strategic mistakes that, coupled with a governmental policy that picked winners and losers, cost it its independence and identity (and me my job.)

    I believe the key to understanding these dynamics is to a) look for flexibility in managers — the ability to communicate and behave in employee relationships in ways that are most likely to solve problems and encourage innovation; and b) resilience — the ability for managers to recognize when something isn’t working and get back up and try something else.

    I teach a management communication system (Face2Face) that demonstrates to managers (and individual contributors, in some cases) how to communicate, what to communicate, and how to productively listen. It’s not a panacea, but it does seek to give managers a process to follow that is not dependent on them changing their baseline personalities. One can be an introvert accountant or engineer and not feel like they’re being asked to turn themselves into extroverts.

    At the root of the debate in these comments is the nature of business — whether, as Ayn Rand wrote, the only responsibility of business is to its owners and customers, or if there is a wider accountability. We won’t solve this here, as political considerations tend to affect our answers to these questions, and I just can’t even these days.

    What I will offer is that no business can survive if it retreats from the world in which it operates. The market itself will punish it for poor employee relations, poor customer service, lack of innovation, offensive sustainability behaviors or crime. This isn’t a political statement. It’s a simple truth. Some 88% of Fortune 500 companies in 1955 are gone. The market punishes the mediocre. The path to sustainable high performance requires pursuit of ENLIGHTENED self-interest.

  20. Kevin, as a consequence of the slow down in economic growth, three-quarters of UK retirement schemes are in deficit. So BHS is but one example among many; and a much overblown one at that. Meanwhile, the British government is proposing to pass groundbreaking legislation to cut the pension benefits accrued for steelworkers at Tata steel in Wales so that the firm can be made attractive – in terms of its reduced liabilities – to sell.

    The simple reason the majority of employee pension schemes are in trouble, however, is not that firms have put profits first or placed employees low down on the list. Contrariwise: it is the failure of firms to remain profitable and to maintain shareholder value that has created this crisis.

    Hence, if PR pros want to be effective communicators, they first need to understand what is going on in the real world and why that’s so. And in that regard I find your moralistic attack on law abiding firms, on matters of profits, pensions, taxes, dividends and wages, as misplaced as it is unworldly.

  21. Hi Sean,

    Like you, I’ve witnessed may different approaches to management in my career. I was working as a ‘high level’ complaint manager in BT when TQM was introduced. I vividly recall my resistance to an overly obsessive focus on writing down every little process which I was told was critical as ‘I might get run over by a bus’ (which of course never happened). However, I then took on board some of the principles when I moved into a community programme manager role. Instead of reacting to hundreds of letters received each week from charities seeking BT donations and picking whichever one seemed most worthy I introduced a process whereby we set annual community themes that were established in dialogue with community groups. We instigated an application process based on the themes and successful organisations then not only received a donation they were put in touch with BT employees who wished to volunteer time and we provided dedicated project management support for the year. I like broad processes and light touch ‘instructions or guidelines, though this always depends a lot on the context of the operation.

    I worked for many years a customer service manager, dealing with irate BT customers who had problems with their service. So I know how important customer service is for any organisation. I also know how important it is for front line employees to feel valued as this has a direct impact on how they deal with customers and resolve issues before they have t0 be escalated. The route to good customer service is good relations with employees. This is the thinking behind Vineet Nayar’s book ‘Employees First, Customers Second’.

    I suppose it’s because I worked in an enlightened organisation which has a long history of community support that I struggle to understand why other organisations wouldn’t want to adopt a similar approach. Of course, as you suggest, organisations can be commercially successful and not pay any attention to stakeholder groups. It’s just not, for me, the right way to do business.

  22. Rarely does the word count of comments exceed the original article – perhaps why the conversation lost its thread.

    Let me summarise what I think the key points the original article was trying to make:

    1. Responsible Leadership could be seen as issues management with a sprinkle of CSR.
    2. Responsible Leadership would be more ethical if it is less influential and more relational.
    3. Responsible Leadership would be a better term with the word “Communication” in the middle
    4. Responsible Communication Leadership = “Informed Employee Voice” + “Just culture”
    5. Responsible Communication Leadership leads to employees feeling valued, better wellbeing and organisational success
    6. The evidence is based on Phd research acrosss 5 organisations that showed leadership communications were perceived as inconsistent but when perceived as good, employees felt valued.
    7. Business practice would be more ethical (less dodgy) if employee value was elevated to the same level as shareholder value.

    and give my response to each of the points:

    1. I think the term goes wider – it advocates risks and issues management more focused on sustainability and environment and more emphasis on the people (direct and indirect employees) doing the work.
    2. tell that to Aristotle (the master of both ethics and rhetoric)
    3. is communication not implicit in responsible?
    4. does that mean the other coined term “Employee Voice” needs yet another unnecessary word on top of “informed” i.e. “Informed Employee Safe Voice”?
    5. probably needs another Phd research project to prove the correlation between employee perception of good leadership comms to organisational success (or not)
    6. good stuff..and the link to ethical business practice is what?
    7. The Enlightened enterprise is an authentic enterprise that places the appropriate level of value on different stakeholder groups at different times based on context, Of course employees are exceptional due to their level of interest and influence (skin in the game) and they can (and often do) populate every stakeholder group (shareholders, customers, local communities, Trade Unions, etc) To take the cited example of BT – of course they put more emphasis on local communities than the likes of BHS. To quote the godfather of PR (Arthur W Page) in the speech he wrote for the AT&T President in 1927 “Responsibility for such a large part of the service of the country…imposes on the management an unusual obligation to the public..” that doesn’t mean that they are more ethical, so I’d caution against putting some enterprises on a pedestal and vilifying others.

LEAVE A REPLY

Please enter your comment!
Please enter your name here