Leading by example is often discussed in these pages, considering how important one’s image is as a management tool. It is as simple as that: firms may creatively invent as many incentive management systems, policies, rules, organization charts and models as they want, the only thing that remains as the end of the day is the way their leaders act and the examples they show.
As a comparison, no matter how large the family, how rich the neighborhood, how smartly designed the house plan or the parents keep repeating, it is what they will do, tolerate or punish that will mostly shape the kids’ behavior. If you have ever told your kids several times to go tidy their rooms or do their homework or eat properly but haven’t ever done anything about it, you know what we’re talking about! You’re just background noise.
As my great-aunt, 95 and former CEO puts it: “example comes from above”. No need for a Harvard MBA, a 5-year-old will teach you the concept!
Now that example is established as a management tool, it is safe to infer it conveys promises. An easy one: “if you do like me you will be like me. If I am authority, you will be authority”. And we all know we recruit and promote who resembles us…
Firms are interrelations. Interrelations are implicit and explicit promises. Explicit: I work for you, you pay me for my work at the end of the week or month. Implicit: if I conform to the company norms, I will be well perceived with a positive impact on my career. If I play by the rules, I have more chances to win, but that also means I expect a fair game. If the game is not fair, why stick to the rules? And then… why spend time and money on defining rules?
How does that fit your company culture? Fair or not fair?
These promises are internal – amongst employees – and external – with customers, suppliers etc. All firms are thus nothing more than a set of promises. Some of the external ones are subtle and often not well controlled by the firm, which mixes up what it would like to promise, and what it actually does.
Advertising is a strong case of such misalignment, sometimes accidental, sometimes less. Washing powder is a typical example of the latter: who really believes that my wife will be as happy as women seem to be in detergent ads? Probably if I start doing the laundry she will, but that won’t be because I use a specific P&G or & Unilever product. Consumers have therefore learned to decipher such messages, thus severely undermining the power of promises a lot of commodity firms were making them.
Well, guess what: firms do that all the time, even those trying to be smart. Actually, maybe those trying to be smart are the worse… A few examples? Do your vacancy ads say something like “We have tough challenges to offer. Are you up to them?” or “we offer the best projects, great careers and an opportunity to develop yourself in an international environment” or something along these lines? Like… “Join the best!” Nice. You are just like everyone else then, commodity. Do your interview processes cover questions like “where do you see yourself in 5 years” or “what are your main drawbacks?” Same.
Not only did you just hint you were hardly able to distinguish one applicant from the other (such questions are useless and interviewers are usually unable to answer them themselves. I know, I systematically ask them back. Great fun), but you also blended yourself into the mist of all the other faceless companies which asked the same applicant the same questions. Let’s just hope you did not invest too much in your ads, or any other parts of your recruitment process, in order to try to make yourself notice because that investment was just wasted. You made promises then did not hold to them. Worse than no promise at all.
Another example comes from a practice I see sometimes, related to the merit increase processes. Most companies run such a process on a yearly basis. But in firms with a low employee turnover and long mean service time, managers increase employees every other employee every other year in order to ensure every one receives a significant increase at least every two years. In other words, salaries are not increased because employees performed – or not only – but because they did not receive any increase the previous year.
When asked, managers answer that due to the low turnover, the length of service and seniority are long and employees often show a high compa-ratio (employee’s salary divided by the mean for such type of job). It is then fun to consider the fact that if only performing employees were increased, then turnover would probably be higher because some of the non-performing employees would move on to other firms to seek the acknowledgment they probably think they deserve, or catch up with the market rates. In other words: a low turnover generates an increase policy which calls for a low turnover.
Firms are promises.
A good, structured approach when facing issues or looking for improvement would then be to list down and analyze the promises yours makes, and whether or not it is keeping its word. With a trap: there is always a chance the promises you make are the ones you would like to keep, yet don’t for some reason. The second level of analysis becomes then: would you like to really keep it, what keeps you away from it, and are you eventually ready to make the change so that you are finally deliver your commitment?