Over 20 years ago a group of friends of which I was one founded a completely new company. We did so not only because we wanted to be millionaires, but because we were fed up with our existing employers. We made a list of all the things we disliked about companies we had worked for during our careers and resolved to avoid these in our new company.
On our list were micro-management, management put-downs, and other sorts of humiliation, symbols of hierarchy such as executive dining rooms (one company I had worked for had 4 different grades depending on your level in the organisation), reserved car park spaces for the top kicks, and even special loos for executives. We disliked the way our companies had kept us in the dark about what was going on, and surrounded us with ridiculous bureaucratic rules and regulations because they didn’t trust us to serve the company’s interest rather than our own. Arriving on time was seen a more important than what we did after we arrived, and we resented the fact that we were never listened to when important decisions were made.
We ran the company for many years, avoiding most of our dislikes. It became a really great place to work, and although like all new startups we made mistakes, the contribution made by our people was awesome. They would support each other in difficult times, always go the extra mile and never watched the clock when there were important jobs to be finished.
I realised some years later that we could boil our management method down to four basic principles: treat your people with respect, trust, openness and give them autonomy. I called this by the acronym ROTA, and called the method ROTA management.
Twenty years on, creating a climate in which employees worked like ours did, has entered the management mainstream. It’s called ‘employee engagement’ and there is loads of evidence to show that many of the most successful companies are users of it, companies like Wates, John Lewis, Gortex for example. I say it has entered the mainstream, but only in the sense that it’s talked about. Less than 15% of the companies in this country actually DO it. Why is this?
Well, there is a long tradition among managers of command and control. It’s scary for these people to trust that the work will get done unless they plan and oversee every aspect of it. They also work on the basis that information is power. They think sharing information means sharing, or even losing their power. Also when times are tough, these managers respond by taking more on themselves, even further reducing the brain power and creativity available to deal with the difficulties.
A poignant example of this reported in the FT weekend magazine is the sad tale of the decline of the social website Myspace while in the ownership of Rupert Murdoch’s News International. When the acquisition was first made, Murdoch personally befriended the two founders, showed them trust and respect, and gave them continued autonomy in running the business. But when business declined as a result of competition from Facebook, they lost his trust and he put in a succession of professional managers to control what they were doing. Myspace’s decline accelerated and the founders left.
It takes a brave leader to defy conventional attitudes and start and sustain ROTA management. But perhaps the climate is changing. The latest issue of the Harvard Business Review, the thinking person’s business magazine, recommends NOT putting profit as the top goal in business. Based on a survey of 500 business organisations in 17 countries, they say: When the CEO makes it a priority to balance the concerns of customers, employees and the community, while also taking environmental impact into account, employees perceive him or her as visionary and participatory. They report being more willing to exert extra effort, and corporate results improve.
Harvard has spoken; can the rest be far behind?
Peter Burton