Our managers: Can we really teach old dogs new tricks?

Despite global advances in management philosophy, employment practices in many of our local organisations can still be characterised by narrowly defined jobs, seniority-based promotions and strict task supervision. This is a picture that is long overdue for change according to some managers straining under the weight of outdated employment practices in the 21 century.

An experienced head of sales of a leading Sri Lankan company, with over 2,000 employees islandwide, estimates that a doubling of profits can be achieved in just a couple of years, if a few key changes in management practices are implemented in his own organisation. According to this disappointed yet enthusiastic senior manager, any suggestion of meaningful change to current management practice is greeted with general cynicism by his company.

Over the years, evidence has been mounting in favour of employment practices that emphasise flexibility in job assignments, employee participation in work teams, employee problem-solving and open-communication between managers and workers. The effective uses of these and other associated practices have been shown to lead to significantly high levels of productivity in all sectors.

Yet, despite compelling evidence, what is it that holds back many organisations from embracing the required change? Why are so many companies reticent in taking up work practice innovations that have large positive impacts on productivity and revenues?

Change

The adoption of Human Resource Management (HRM) practices has been shown to evolve over time, in a way that is comparable to the acceptance of modern technology. At a basic level, our adoption of change, in any form, is closely linked to the level of our ‘expected’ return on our investment.

So higher our ‘expected’ return: the greater the ease which we will invest in the change. Since our expectations are based on current knowledge, and as knowledge itself is dynamic, it is fair to say that many best HRM practices, received with cynicism today, will be exploited to greater effect tomorrow.

However at present, as highlighted above by our Head of Sales, the ‘perceived’ cost of implementing any innovative HRM change is still too great for many. To gain a better understanding of this phenomenon, we can consider a ‘macro’ view of organisational change and a ‘micro’ view of workers’ inclination to accept changes in practice.

Innovation

It’s been shown that an organisation’s structure at its birth has a lasting impact on its future form. Thus older companies, with a history of more traditional work practices, are less likely to adopt new style work practices, until their advantages are shown very clearly and such cost-benefit information easily and cheaply available to all. This of course means that older organisations that will benefit from innovative HRM changes generally tend to lag behind to a significant degree in the productivity stakes.

The new/young organisations on the other hand, lacking the shackles of the past, are much more likely to embrace innovative change right from the beginning. Furthermore, if these organisations have well-researched HRM choices driving their policies, they are also much more likely to keep adapting and therefore continue to enjoy the benefits of high productivity and revenues.

At a ‘micro’ level, the skills-set of workers encompass product or line specific skills and the more intangible ‘tacit’ and relational skills linked to a given set of work practices. Under ‘traditional’ work practice (typified by narrow job classification, wage-based pay and extensive supervision), workers are used to the idea of a supervisor, manager or foreman, continually monitoring their work and behaviour and giving ample instruction.

The resulting effect is that, individual workers are not particularly accountable for their own tasks, especially if they lack full vision of their company’s objectives. This is an important observation made by the Head of Sales, who describes mounting staff errors, coupled with controlling and centralised decision-making, posing huge costs to his organisation in terms of lost productivity.

His own intuitive solution to the problem is one of a more team-based practice, with flexible job assignments, where workers interact within and across the organisation with greater knowledge of the whole picture with empowered decision making as individuals and as a team. Clearly, our senior manager is facing the typical challenges of someone attempting to introduce innovative practices within an older organisation.

Team approach

In the ‘team-based’ innovative organisation, the role of the managerial worker is to get individuals to work together in groups. Thus, managers and workers in the ‘traditional’ and ‘innovative’ environments clearly require very different skills.

Many of these skills can of course be learnt, but workers accustomed to a more traditional setting will require renewed effort and investments. In the new participative model, where there is a shift in the locus of decision-making authority, from managers to workers, there will be much discomfort and fear – especially amongst managers who (having advanced under a seniority system) question their role in the new organisation. Thus, all employees, including managers, must invest in new relationship-specific skills.

Whilst training costs of this shift can be covered by the organisation, workers must still put considerable personal effort in to the change process. This can be quite tricky for workers more used to traditional practices, especially if they see it as a passing fad, or if the time-line for change is too short.

However, changes in market structure, possible threat to the organisation coupled with changes in managers (including HR manager) does seem to trigger a greater uptake of innovative HRM practices in the older organisations.

Unfortunately, there is often a low level of trust between workers and managers in organisations with long histories of traditional practice, and this may account for why there is a greater up take of innovative practices, under newer management.

Contd. on page 12

(The writer is a chartered occupational psychologist, working in Europe and Asia, on optimising human performance at work. Daily FT readers are invited to send in work and performance related questions to address in future columns. Email [email protected].)

Our managers: Can...

Embracing new practices

Clearly, there are significant ‘costs’ involved in adopting new work practices and much of this centres around the resistance of change, a phenomenon that is especially prevalent in older organisations. However, as noted earlier, organisations with better information about HRM innovations and their expected revenues are also much more likely to adopt them.

Companies that predict growth in their product market will have much to gain from adopting new productivity-enhancing innovations, as will those that anticipate increased competition in their market sector with the possibility of losing their market share if they do not work smarter by embracing new practices.

As the awareness of innovative HRM practices and the benefits they bring permeate through industries, it is clear that such practices will eventually become more the norm than the exception. But to those first-movers who take advantage of their benefits, by being at the front line of companies that adopt such practices, they may also enjoy the added advantage of being able to create and secure enduring contractual relationships with customers – clearly a notion not to be sneered at in the current global market.

As a practitioner, I work with businesses to implement innovative management practices for greater productivity. My advice to those wishing to embark upon this journey, is to gather as much relevant information about these practices and find out how they can be best implemented and most importantly, monitor their effects as you apply and adapt them within your own organisation. This is the evidence you will need to bring the others onboard.

I shall conclude with the words of our enthusiastic head of sales: “What we really need is a more holist approach to the way we manage in our organisation... Just imagine what we could achieve if all shoulders at the cart were pushing in the same direction!”