Ethical Business

A lack of business ethics – and backbone – is always a key indicator of management incompetence. Unethical behaviour often manifests itself in a senior manager’s reluctance to be honest with staff about the reasons why a particular course of action is being adopted.

Consider, for example, a public sector agency embarking on a Lean programme, ostensibly to remove waste and  improve “performance” in some ill-defined way, but secretly to reduce costs because of public sector cuts.

Staff are offered two hours’ training in Lean basics, during which they learn that the primary purpose of Lean is to remove waste, duplication and tedium from people’s jobs and free them up to focus on more creative and satisfying activities. They are then invited to a five day Kaizen event where their brains are engaged to redesign their jobs so as to eliminate some pre-determined proportion of waste – 50%, 75%, 80% or even more. Occasionally it will click with someone that removing 50% or 75% of waste gives the organisation an opportunity to remove 50% or 75% of the people carrying out the activity in question. She might voice her concern, and the Sensei or Team Leader will then assure her and the rest of the team that  Lean is not about cutting jobs, it’s about delivering value to the customer.

Yet at the end of Day 4, after the Kaizen team have left the building, the Team Lead and Sensei will haul in a Finance bod to quantify the potential headcount reduction that the event can deliver if the waste reduction target is achieved……

On Day 5 senior managers are invited to an out brief at which the Kaizen team will tell them all about the reductions in lead and process cycle times and the amount of paper they can save by year-end. Only when the team have been thanked for their efforts and shown the door will the Team Lead and Sensei gleefully announce to the expectant Leadership how many jobs can be cut. There is generally a strong correlation between the number of potential redundancies and the height of senior managers’ leaps of exultation. 

However, on the Monday morning, after the Leadership have sobered up and come back to Planet Earth, a sense of despair sets in. They desperately want to make those cost savings, but cutting jobs involves a lot of unpleasantness: negotiating with unions, plenary meetings with front-line staff, one to one meetings with direct reports, dealing with people’s shock and anger, complaints from service users. And the worst of it is, some people are going to display a pesky sense of betrayal because they were promised that Lean is not about cutting jobs! On a Monday morning it all seems too much to bear, so at the Senior Management Meeting the Leadership look sheepishly at each other, sigh and shake their heads, “Wouldn’t it be lovely if we could make those cuts, but now’s not the right time. There are too many other things going on. We’ll review the position next quarter……”  So they dither and procrastinate, even though they know that delivering the required savings means that the longer they delay, the more redundancies they will have to make eventually.  

So people keep their jobs for the time being, but not because their leaders care about the impact that redundancy has on low-paid workers and their families. It’s because their leaders lack the backbone and the integrity to be honest with staff about the problems the organisation is facing, and they can’t admit their own inability to manage their way out of the crisis.

The result is that staff are locked in a state of uncertainty and insecurity; the tax payer is still funding activities that are wasteful and not delivering value; and senior managers have this gnawing feeling that despite the charade of brisk arrogance and business speak they really are incompetent and ineffective. And if they were working in a decent organisation, instead of being able to ring fence their posts, they would be the first to go.