High-touch management

Good reasons, tough results

– Constant business change from mergers and acquisitions to restructurings to reorganisations that rapidly alter the focus of the business, eradicate its structures, and eliminate continuity. Close to 60% of workers worldwide indicate that they have been personally affected by the results of these market traumas.

– New executives parachuted-in and out with unpredictable agendas. Recent press coverage points to the dearth of qualified CEO candidates, the lack of senior leadership tenure in any given job, and the recent emergence of “temporary CEOs for hire” whose specialty is to quickly fix what’s broken, take the cash and run.

– Surprising regulatory and legal challenges to the way business is conducted. In every industry, from life sciences to accounting, the powers that be are having their say on the way a company promotes, sells, and delivers everything from crayons to bioengineered blood.

– The mad, albeit necessary, rush towards e-commerce, joint ventures and globalisation initiatives. Now necessary elements of strategic planning for survival, expertise in these aspects of business in the 20th century are now part of a required (and as yet unmastered) skill set for today’s international workforce.

– Stock markets and share prices which defy understanding, and the increasing pressure from shareholders to churn out ever more and ever higher rates of profit. In today’s markets it is no longer good enough to post results better than you had last quarter or last year. The question now is how much better and for how long?

These and other sources of confusion make the workplace a difficult place to understand, and a harder one to predict.

Struggling to perform miracles for ever-changing bosses, professional managers privately admit that much of the time they are operating in reaction mode. They talk about “trying to make it through month to month” and “taking it a year at a time”. This sort of coping, self-preserving behaviour has lead to a shift in the mindset of top talent. Their focus has moved closer to home as, more and more, the game is defined in terms of what’s good for me, what’s in it for me, how much can I get. It is off the job, not on, that the battle weary now look for some deeper meaning, in their family, in a good cause, in a sport, hobby or outside-work passion.

People of all ages and at all stages of career are pulling back to a place they can make sense of, be it their families, their close friends, their passions, or the daily movie of their lives. This private withdrawal is a critical change, a quiet and undetected revolution that has very real business consequences.

Misreading transactional behaviour

Because people appear more interested in their own goals, we make certain assumptions about them. We describe their transactional behaviours as “new” and increasingly characterise them as cynical, short-term focused, tough bargaining mercenaries after the top dollar.

But are we really entering a new era of rough and tumble employer-employee relationships, or returning to a much older and more natural way of doing business? Not really. We are the trading species, and have been for millions of years. In fact, recent archaeological finds show early humans as having more intense and far-flung trading and transactional relationships than previously imagined. Perhaps after a relatively short 150 year history of thinking of business as a machine, we are witnessing the emergence of a modern, technology-mediated version of these basic biological instincts.

The notion of operating as a quasi-independent trader is already well established in the mindset of much top talent, especially young talent.

Spend time in an MBA or executive development class at a top business school and this will quickly become apparent. It is also well established in the executive suites, where one look at the deals struck there on a daily basis is enough evidence. But a double standard operates here. While top execs reserve the option to play the transactional game when it serves their purposes, they frequently become annoyed when those below them want to join in. But rather than fear trading, today’s business managers would do better to embrace it.

Don’t fear trading – get better at it

If managers at all levels improved their skills in cultivating trading relationships inside and outside the company, they would probably discover that transactional behaviour is not such a bad thing. Well-managed trading relationships are interdependent, and when the expectations of both parties are clear, can be surprisingly fruitful and even sustainable long term.

On average, they are also mutually beneficial: although you may be keen to better a fellow trader in a deal, if only one party ever completely wins, it won’t be long before the other packs up and rides off in search of a better deal.

There is a widely held and mistaken belief that trading succeeds by manipulation.

In fact transactional behaviours frequently result in more honest communication given that the power distance between trading parties becomes quickly apparent. There is less pretending about equality and corporate democracy than one finds in most traditional employer-employee relationships with attempts at manipulation by either trader more easily seen for what they are. Trading is not anti-community – and it need not be acrimonious. On the contrary, the intertwined relationship between trading and co-operation is the very root of human organisation.

The key to successful trading is to understand that relationships shape outcomes. Unfortunately many businesses today are preoccupied with outcomes in the form of targets, and less interested in relationships with people.

At some point we have fallen in love with goal-setting, become seduced by planning, and in the process have deluded ourselves into believing that all a successful business needs is a sophisticated do-list.

Gary Hamel, and others, argue that business leaders at all levels need to aggressively seek out and develop relationships (especially unfamiliar ones). Unfortunately, most managers are used to managing “employees” or buying in “suppliers”, rather than developing relationships. They may need help in cultivating internal and external trading relationships which are transparent, honest and create mutual benefit. To do so, they will need to know how to tell the difference between a good relationship and a bad one and how to cultivate and sustain vital connections with the talent they depend upon to deliver the product or service. They also need to master the art of giving to get. These are skills that depend heavily upon being interested in others, as well as knowing about oneself and how people perceive your day to day behaviour, both positively and negatively.

It is about understanding and mastering the critical moments of human contact – an old set of skills much needed in a new world.

Big mistakes, bigger opportunities

By far the most misleading interpretation of transactional behaviour is that it implies people are now so self-interested and independent they no longer wish to be part of a working community. Nothing could be farther from the truth.

While distinctly less interested in being “employees”, people have a great hunger to be part of something that helps one to make sense of things.

Renewed interest in work-life balance is a symptom of that desire for clarity, the need to put down anchors in what feels like a sea of confusing change.

The problem is that there is less and less real community on offer in the business world. Diminished to the superficiality of corporate videos, logos and spin from the executive suite, when you scratch the surface of many businesses there is little “corporate culture” to be found. Some organisations appear to have totally given up trying to engage their people on some deeper level. Instead of addressing the feelings of disconnect among talent and escalating confusion as to “what’s it all about?” these businesses take the easier route of tweaking employer brand in the hope of selling the company to the talent. However, the talent has become very cynical and very suspicious, and the writers of the office-based cartoon, Dilbert, very successful.

While many companies spend millions on mass events and glossy collateral that define their missions and visions, they lose sight of the fact that the intangible details matter more in real relationships. Success depends more on discovering Carlson’s “moments of truth” in the minds of their staff, those critical incidents which have the most impact in terms of helping a person see how they fit in and what it all means.

These “moments of truth” are the hot buttons famous business leaders know instinctively where and when to push. While charismatic super-leaders are hard to find, all managers are capable of doing some digging to discover the moments of truth for the talent they engage. This does not mean starting from square one. Much of what we use to understand and psychologically and emotionally engage external clients can be modified to help us better understand and engage our internal talent market. As employers we need to wake up to the disturbing fact that people are more attached to the airline they travel to a meeting on than to the company that pays the fare. We have to earn the right to more.

High-touch management

In a medieval farming village where there was reasonable predictability, prescribed instruction from authority figures and close daily contact with colleagues it was probably easier for workers to answer the question “what’s it all about?”. In contrast, team members from today’s enterprises often live in different parts of the world only meeting face-to-face at occasional business meetings. Daily dialogue comes as e-mail and bosses seem to change their minds constantly.

Connecting in this modern business village means making the most of every possible opportunity. This is what Cap Gemini Ernst & Young calls “high-touch management” where critical moments of human contact depend less on power and more on persuasion, influence and respect. These brief encounters demand a genuine interest in and understanding of the people involved.

Here are two real-life examples of the costly consequences of being unaware of the critical incidents that really matter to the people:

– A national operating company of large global business prepares to welcome a visiting head office executive. Days are spent tidying the office and planning events to show off the local culture. Staff at all levels are proud to work for this company and see the visit as an honour and cause for celebration.

Unaware of cultural sensitivities, the busy exec flies in and goes straight to the office of the company director. He spends his three-day visit talking to a small number of top people and does not tour the facilities or talk to more junior staff. The exec refuses to attend pre-arranged events to see local sites instead telling people he must return to his hotel to answer important e-mails. His mission was to energise the national company to try harder but he left behind disappointed and de-motivated people.

– A young manager is keen to receive feedback from her boss. A week before the performance review meeting she receives a blank form rather than an appraisal report. The accompanying note from her boss asks her to complete her own appraisal indicating that he will review and revise at the time of the meeting – he is very busy and this seems a time-efficient way to get it over with.

The young manager has been courted by a partner for another service line of the firm. Angry, she sends an e-mail to this partner suggesting lunch.

Although a key player in her present role, the appraisal incident proved to be the proverbial “straw that broke the camel’s back”.

Such moments of truth are symbolic. On the surface they may not appear important, a visit, a word, a gesture. However, in the context of people’s sense-making abilities they can have a profound effect both positively and negatively. In the past a strong sense of business community helped people to be more forgiving of incidents like those outlined above. Having eroded sense of community in many of our enterprises, individuals increasingly read more into single events. They may be mistaken but the consequences remain: there is no substitute for the ties that bind and efforts to foster high-touch management and community development do not go unrewarded.

So you want to play hard ball

The argument for putting meaning back into work and re-building some semblance of real community sounds like a nice thing to do, but who is winning at the deal making game? Businesses that fool themselves into thinking that they are, need to study the present talent management dilemma investment banks find themselves. Secure in the belief that big money would always keep people satisfied, many investment houses have been caught out by new demands for substantial equity play. Straight deal-making is a game of ever-escalating demands by finicky buyers with super high expectations.

As those Monster Board ads say “Why settle for the job you have, you deserve, in fact it is your right, to expect more!” And to keep expecting.

In their recent book Character of the Corporation, Goffee and Jones point out that companies who rush headlong towards “hit the target” performance may be just a bit too swift in pushing the delete button on the social ties that bind an organisation together. They make the mistake that in a transactional talent market one need not worry about community. Just the opposite is true – community facilitates trading and trading facilitates community. When you create and support communities that people in your business can really feel part of and aligned to, both physical and virtual, internal and external, you extend your network, support your brand, and expand the reach of your business well beyond its walls into new territories, markets and opportunities.

Unraveling community, or ignoring the basic human need to feel connected and make sense of the world, leads to a form of talent day-trading. Friendly trading is replaced by a talent war. This is a war that employers have already lost and can never win – there will always be someone offering more, better, faster. Face up to it and start searching for innovative and under-utilised ways to access and engage people’s skills, energy and imagination.

The results will pleasantly surprise employees, customers, and shareholders alike. In fact, you might start making sense to all of them.

David Cannon is a member of staff at the London Business School and Carolyn Nimmy is global human resources director of Cap Gemini Ernst & Young.

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