Lessons From France Telecom Suicides: The Innovators

Imagine this: You're hired to take charge of a large, government-run monopoly that has recently been (mostly) privatized. The new entity faces fierce competition from abroad. Your company's business model appears to you to be hopelessly outdated and blind to the importance of shareholder investment return. And, to make things worse, you're saddled with a solidly entrenched, middle-aged work force that's been shielded for decades by what seems to you to be old-fashioned, paternalistic unions. Quel desastre!

The only possible way you can see to keep the company afloat is to make it leaner, nimbler and more modern. So you roll up your sleeves and get to work. You establish an aggressive cost-cutting regimen.

You lay off more than 20,000 workers and reassign a significant percentage of those who remain. You insist that your employees work longer and harder. It's a tough job, but you stick with it for nearly two years and make significant progress toward modernizing the company.

Then suddenly, public opinion turns against you. You're forced to resign because two dozen of your employees have committed suicide in 18 months, and at least another two dozen have attempted to do so. Your company has attracted unfavorable international media attention, the "inhumanity" of its methods have been lambasted around the world, and now management is going into serious, apologetic talks with the government and the same unions that opposed your efforts to modernize.

Meanwhile, Reuters is still harping that unless your cost-cutting measures are fully implemented the company won't be able to compete and shareholders will withdraw their financial support, so all your hard work may ultimately prove to be in vain.