A new dawn is possible

Lessons for business to learn from the UK election

Dog Days Are Over

We’ve just had a change of government here in the UK. After 14 years of Conservative Party rule, we now have a Labour government.

(If you believe that we shouldn’t mix business and politics, then I refer you to my earlier newsletter here. If politics isn’t part of business then why do companies spend so much money on lobbying? And what does the P in a PEST analysis stand for?)

It probably won’t come as a surprise to regular readers that I am a Labour supporter and very pleased to see this change. I am not a tribal Labour supporter, I have voted for other progressive parties (I prefer that term to ‘left leaning’) and there are areas of Labour policy that I don’t agree with. However, I believe in social justice, equality of opportunity, compassion and support for those who are struggling and an enabling role for Government. Given that we have a binary choice, they are the best bet. I’m not going to let perfect be the enemy of good (and don’t have much time for those that do).

It’s not really the political change that interests me, however. It’s the new government’s approach to the role.

It’s early days, of course, but we have already seen:

• People with relevant expertise and deep subject knowledge appointed to government positions, including people who are not politicians. A scientist brought in as a science minister, a prison reformer brought in as Prisons Minister.

• Ministers telling their civil service staff that they value their contribution and the key role they play in delivering policy.

• An emphasis on standards and ethics.

• A clear focus on delivery and change, and making an impact on the life experiences of the public (regardless of how they voted).

These are only remarkable because they have been so absent from recent governments, who have become obsessed with dogma, press announcements and culture wars. (Problems not confined to the UK Conservative party).

• They promoted people for their beliefs rather than their ability (notably their support for Brexit, having purged those who opposed it).

• They regularly denigrated the civil service, calling them ‘the blob’, questioning their integrity and their work ethic and targeting them for cuts.

• They not just allowed but enabled a decline in standards and a disregard for ethics that reached previously unseen depths, undermining people’s belief in the whole system.

• They became increasingly unable, and disinterested, in delivering policy. The last government achieved almost nothing of note.

(These are not opinions or even contentious points, by the way. Amongst reasonable people, that is.)

What we have seen is much noise and fury replacing effective action and the promotion of a narrative that things are getting better whilst in reality services and institutions are degrading and peoples’ life experiences are worsening.

It’s as if these governments have forgotten what their role is, mistaking it for short-term, reactive activity focused on getting good headlines from their favourite newspapers rather than achieving good outcomes. More focused on persuading people their lives are better rather than actually making their lives better. At times, they have suggested that the problem is not what they are doing but that people haven’t believed in it enough.

I wonder if you can see any parallels with business here?

Don’t Know Why

I suggest that many businesses have forgotten what their role is. They have become obsessed with the financials, and particularly the share price and growth metrics.

They are focused on the short-term and getting favourable headlines from Wall Street and will take actions that are damaging in the long-term to get them. They spend more time and effort on financial engineering and take-overs than actually providing goods and services that meet customer needs or building a sustainable long-term business. For example, as Ed Zitron explains about the ‘Rot Economy’, the big tech firms are actually making their products worse in order to improve their growth metrics.

They tell their employees that their work experience is great, if they just were more ‘engaged’ then they’d be happier. They tell them they really value them, whilst suppressing their remuneration and benefits and discarding them in an instant to serve their masters on Wall Street.

This has been put into microcosm in the whole ‘Work from Home/Return to Office’ debate. There has been a clear disconnect between the views of employees and senior management on the issue. The latter have had an almost doctrinal belief in the importance of being the office and the benefits it brings, whilst employees have found the reality at odds with that and have wished for a different approach. When employees have pushed back, they have been told they need to ‘believe more’ and be more ‘engaged’. They have been castigated for ‘Quiet Quitting’; that is, for taking a rational and business-like approach to their contract of employment.

To parallel the bullet points above:

• Businesses have promoted people on their cultural fit and ability to play the corporate game rather than their abilities and track record.

• They consider their employees to be lazy, untrustworthy and incapable of thinking for themselves (this is implicit in their policies rather than explicitly stated, although it has actually been said out loud by some!). They blame them and accuse them of personal shortcomings rather than taking responsibility for senior management decisions and the system they have created.

• They have adopted business practices that are lacking in any ethical basis, they have failed to enforce standards amongst the senior team and enabled people to ‘fail upwards’.

• They are obsessed with financial performance and indifferent to the customer experience.

Obviously, I’m not talking about all businesses here but we can see these broad trends across quite a large swathe of them. I’d argue that these represent the norm.

There are many good companies that are taking a different approach, that are seeking to build a sustainable business that meets customer needs and puts people at the heart of what they do. They are a growing segment but still a minority, So will it ever change?

The parallels are not perfect here. We don’t get to elect companies out of office, or even elect the people who run them. However, there is a warning in what happened to the Conservative government. They have eventually paid the price for their detachment from reality and their failure to deliver for their ‘customers’ - and in spectacular fashion. They lost two-thirds of their MPs, plummeting to their worst ever result in a General Election.

A former MP was asked what it felt like when support fell away and he quoted from Hemingway’s novel ‘The Sun Also Rises’, where a character is asked “How did you go bankrupt?” And he replies “Two ways. Gradually and all at once”.

Companies may look like they are doing fine, that they are impregnable. However, we can see they are not what they were, we can see the fault lines are getting wider. We know there are problems around decision making and governance and a myriad of other areas. They are gradually declining.

What comes next can happen all at once.

All That She Wants

The desires and needs of employees are remarkably similar to those of voters. They are, after all, one and the same.

• They want to feel that they are being listened to.

• They want to feel appreciated and valued.

• They want to feel they can make a contribution and clear pathways to do so.

• They want to be treated fairly, to get a fair reward for what they do.

• They want the opportunity to build a ‘good life’ for themselves; to be able to earn a livelihood; be able to afford food, clothes and shelter and have money for some of the finer things in life; to have the opportunity to improve themselves; to have some security and stability in life so that they can sleep easy at night.

• They want to be told the truth and dealt with honestly.

• They want to belong to something bigger than themselves.

• They want to feel that help is there for them should they need it, that there is a safety net for them when they find themselves in difficulties.

• They want to feel that others care for them and have their best interests at heart.

• They want to retain their dignity and be respected.

• They want to be treated like adults.

This is an entirely reasonable set of desires. What’s more, a system (by which I mean a business, organisation, community or society) that strives to meet these actually strengthens itself because healthy, happy people make for a successful, sustainable system.

It’s eminently do-able. Societies and organisations that are built around achieving these thrive, creating a virtuous circle of positivity reinforcement.

So why isn’t it the norm?

Waiting On The World To Change

These desires can be summarised as desire for more humanity in our systems, reflected in the call for ‘more human workplaces’ and the like. The paradox is that is the same humans who we need to put at the centre of our systems that cause the dysfunction we see.

However, whilst there will always be bad actors, there will always be malign interests, there will always be psychopaths, sociopaths, narcissists and the rest of the panoply of undesirables, we don’t have to tolerate systems that serve them.

That’s what we have right now. We’ve allowed the guard rails of ethics, standards and decency to be broken down. We’ve allowed the systems of accountability to be disabled or corrupted. We’ve allowed the feedback loops to be blocked or broken. We’ve allowed the incentives and rewards to be skewed away from serving us all and hijacked to serve the worst amongst us.

It’s been a decline and degradation that I have watched over the course of my working life. It’s easy to get depressed and fear for the future and there are times when I’ve succumbed to that. But I remain an optimist and a believer in the human spirit and our innate goodness. Dysfunction cannot continue indefinitely, it eventually reaches a point of collapse and something new emerges from the rubble.

That’s what we’ve seen here in the UK. In this case, it has been the collapse of a political party (although many parts of our society are under severe strain because of their poor governance), and we wait to see what emerges but we have seen return to professionalism and competence that should be the minimum we expect from our government. It shows change is possible and decline can be reversed. We can return to prior norms.

I do think there are some major shocks ahead for businesses and that some big names will fail - gradually, then all at once (to paraphrase Hemingway). A bit like the San Andreas fault, I think ‘the big one’ is overdue. We didn’t learn from the dot-com boom, the Global Financial Crisis of 2008, from Enron. We haven’t changed the systems, we haven’t purged them of the bad actors, addressed the dangers, changed the incentives.

But we can. And we will. Although we might have to hit a crisis to do it.

Let’s hope it’s not too painful.