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 Your company's business model appears to you to be hopelessly outdated and blind to the importance of shareholder investment return.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.
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.
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.
Hardly seems fair, does it?
The situation at
presents a classic case of culture shock, but not so much of the "East meets West" or even "capitalism meets socialism" variety as of the "MBA meets servant-idealism" model. Under the MBA model, a for-profit company's primary purpose is to turn a profit for its shareholders, so change frequently focuses exclusively on how to make a bigger buck. But according to representatives of France Telecom's unions, management's new emphasis on the bottom line was deeply dehumanizing.
The unions allege that France Telecom's work force -- many of the employees had been with the company for decades -- lost its sense of mission when the culture changed. Instead of taking pride in the services they had always delivered, the workers were now expected to focus on cutting expenses, mastering unfamiliar responsibilities and, ultimately, turning a higher profit for the firm's investors. Apparently, the culture shift was traumatic enough to drive some workers to take their own lives rather than continue to work in a company they no longer recognized.
There's been a lot of speculation about why so many of France Telecom's employees either tried or succeeded in taking their lives. After all, a lot of people claim to hate their jobs but get up and go to work every morning anyway. Some commentators have even made the improbable suggestion that there's something uniquely French about protest by suicide.
It seems more likely, however, that people who were set in their ways and nearing the end of their careers simply couldn't cope with the unexpected changes that were thrust upon them, and chose not to find out whether they could manage in the strange new world in which they suddenly found themselves.
Most American workers wouldn't consider killing themselves over their jobs, but there are two important lessons in France Telecom's situation for American companies that are wise enough to heed them. First, achieving meaningful cultural change is hard and can come with disastrous consequences if not undertaken with wisdom and compassion.
For France Telecom's employees and their loved ones, "modernizing" the company -- a great idea in the abstract -- caused enormous personal suffering when actually put into practice. But for management, it can be all too easy to get so focused on getting to bottom-line results that the human element gets lost along the way.
France Telecom is now in the mortifying position of having to promise the world that it will put human beings back at the center of its personnel policies. It would have been better if the company had never taken them out of that position in the first place.
The second lesson may be more subtle. A recent Watson Wyatt research report,
Looking Toward Recovery: Realigning Rewards and Re-Engaging Employees -- 2009/2010 U.S. Strategic Rewards Report
, warns that the recession may have a lasting depressive impact on U.S. companies and their employees. Based on a survey, Watson Wyatt's report says employers have been so desperate to stay afloat in tough economic times that 72% of survey participants had restructured or made layoffs since the crisis began in 2008.
The result? Employee engagement, particularly among top-performing employees, dropped significantly, which could cause lasting harm to a company's quality, productivity and customer service.
Top-performing employees reportedly were 20% less likely than they were in 2008 to agree that they understood the link between their own goals and those of their companies. Perhaps most troubling, employees were much more likely than their employers to believe that changes made in response to the recession were adversely affecting work quality and customer service. The disparity suggests that American employers, eager to protect the economic viability of their companies, may have been making short-term financial decisions without sufficient attention to their long-term human consequences.
It's axiomatic that disengaged employees lead to dissatisfied customers. It's time for American companies to consider how their recent actions, however necessary in the short-term, may be harming the long-term engagement levels of their best employees.
One of the goals of a for-profit company is to make money, but profits can't successfully come at the expense of employee morale for long. Whatever resources a company has, its
resources are the most important.
-- Written by Lauren Bloom in Washington.
Lauren Bloom is a Washington, D.C. attorney and the CEO of Elegant Solutions Consulting, a consulting firm dedicated to helping professionals, business and association management executives build trust with their clients, customers and members by "walking the ethics talk" in their daily practices. She is the author of the "The Art of the Apology -- How to Apologize Effectively to Practically Anyone."