Here in the United States both of the major political parties have now completed their national conventions to formally elect a presidential candidate. For the next three months these political parties as well as other lesser known parties and their representatives will attempt to convince the electorate of the United States that their party and representatives can do the best job of leading the country for four years. At stake is not just the job of President but members of congress and appointments to such important posts as the supreme court. In the United States one of the prevailing models of success is based on what works short term to create the most profit in the shortest amount of time. As has been demonstrated here in the United States and in other countries this model produces a significant profit for a few people over a short time. It is, on the surface, very attractive.
Consider the example of one German company, Henkel ( manufactures industrial and household staples including detergent and glue), which over the past eight years, “…its share price has more than tripled and net earnings have risen almost 60%.” (Wall Street Journey, July 28, 2016, B4, New Henkel CEO Makes Amends buy Ellen Emmerrentze Jervell) Under the leadership of chief executive Kasper Rorsted the following can be said about the company:
· Made acquisitions.
· Introduced Persil laundry soap.
· “Moved German administrative jobs to lower-cost countries, closed plants and shed 800 of Henkel’s 1,000 brands.”
· “Between 2008 and 2015 the workforce fell roughly 10%.”
· “…changed Henkel’s official language to English…”
· Mr. Rorsted “stopped attending the annual workers council meeting.”
· “…changed the company’s motto from ‘A Brand Like a Friend’ to ‘Excellence is our Passion’ because “you want to win…And being friendly is not winning.”
· “Unable to push large-scale American–style layoffs under German labor law, Henkel offered early retirement and buyouts. Staff who left were often not replaced.”
· “pressed” staff “to shift from collective–agreement contracts that defined work hours and responsibilities to more open contracts with less defined roles…”
· “…increased work load and demands for speed…”
“Some employees began to complain of depression or burnout.”
The new CEO, Mr. Van Bylen said, “We have to do the right things to capture future opportunities for our business...Mr. Van Bylen plans to attend the annual workers council meeting…”
If Mr. Rorsted had taken the time to consult with a former CEO and well known organizational consultant in a then neighboring EU nation, Margaret Hefferman, she would gladly have explained to him why his management method would not work well long term. As early as 2012 he could have, for free, listened to one of her Ted Talks. In her latest Ted Talks (May 2015, Forget the pecking order at work.) she explains an essential component of her business model.
“All my life I've been told that the way we have to get ahead is to compete: get into the right school, get into the right job, get to the top, and I've really never found it very inspiring. I've started and run businesses because invention is a joy, and because working alongside brilliant, creative people is its own reward. And I've never really felt very motivated by pecking orders or by superchickens or by superstars. But for the past 50 years, we've run most organizations and some societies along the superchicken model. We've thought that success is achieved by picking the superstars, the brightest men, or occasionally women, in the room, and giving them all the resources and all the power. And the result has been just the same as in William Muir's experiment: aggression, dysfunction and waste. If the only way the most productive can be successful is by suppressing the productivity of the rest, then we badly need to find a better way to work and a richer way to live. (Applause)
Now, when you put all of this together, what you get is something called social capital. Social capital is the reliance and interdependency that builds trust.”
One wonders if the business model Ms. Hefferman proposes and which Mr. Van Bylen seems intent on re-introducing, could be applied to the many issues which the new president of Untied States and the newly elected Congress will face beginning in 2017. Whether it is looking at the focus on short-term goals and the creation of great wealth for a few over the short term or the approach to countering the attractiveness of so-called terrorist groups, it is possible that the small ‘we’ which we heard a lot about at the Democratic National Convention would be expanded to a large WE. It is interesting that the Henkel model will continue to be one designed to function in a capitalist economy while, at the same time, seemingly using a version the social contract model of operation and long-term success. (I may be overly optimistic about the actual changes he is going to institute.)
Perhaps Ms. Hefferman would be willing to help the winning politcal team explore the application of her business concepts to the operation of the United States government. It is interesting to consider such options.
What does seem very clear is that short term, passionate approaches have not worked. It is going to take a very long, mutually respectful approach painted with a large WE brush on an enormous canvas which is not covered in a few strokes to create a trusting social contract in the United States.
Written July 29, 2016