When there’s less money coming in, the conventional wisdom holds that it’s prudent to cut your spending, whether you’re a consumer or a multinational corporation. This is particularly true if the economy is experiencing the worst downturn in eighty years, and it’s not at all clear when there will be a return to prosperity.
Sure, there are always opportunities, if the wolves aren’t yet at the door, for those willing to take a risk. While everyone else is being tight-fisted, you can get a great deal on that new Cadillac Escalade you’ve been lusting after. If all of your competitors are cutting back, a well-timed investment in marketing can help your company gain share.
But fearful times have a tendency to bring out the worst in people. The emotion-generating amygdala starts pumping cortisol into the system, slowing our thinking and narrowing our vision. Just when we need to be at our best, we become stupid. Across the board cost cutting driven from the top down isn’t always the smartest approach.
When you’re up to your neck in alligators, you may forget that your goal was to drain the swamp. However, that doesn’t make the snapping jaws any less real. Nor will a trip aboard the Starship Enterprise to the final frontier of culture change, despite the assertions of a recent article in The Wall Street Journal.
It’s hard to argue against the two studies quoted in the article, claiming the limitations of cost-cutting initiatives. I’m even willing to believe in the benefits of culture change, though the survey touting them was conducted by a consulting firm that makes its money from, of all things, selling culture change.
But what bothers me is the article’s mystification of culture. The “right” culture comes across as the magic beans that will grow a giant stalk of profitability. The definition we’re offered by a business school professor is “people believe in the organization, in their land manager, and therefore help them perform as much as possible, they think they are valued by the organization, both employers and workers are gaining mutual benefit.”
Now all of this is good stuff, but it’s just the kind of thing that gives my profession a bad name (or makes people question if it is a profession.) I can’t see any one of my clients betting their company’s survival on “you’ve got to believe,” nor would I have any idea how to quickly effect such a belief.
Culture is the set of ingrained habits that determine the way people do things in the absence of prescriptive policies and procedures. But more than just belief is needed to realign those habits with the critical success factors of the business. It takes a consistent message, conveyed through everything leaders do and say, about how people can come together, behave in specific ways to overcome obstacles, and achieve an exciting vision of the future.
But when the alligators are restless, there’s a more immediate way to achieve efficiencies and refocus efforts. Gather the responsible people together and give them all of the unvarnished information you can about the state of the business. Share the financials and the challenges. Then ask them to work together to come up with recommendations on what to do.
This will engage them, give them control over their destiny, and create ownership for what needs to be done. Since they’re closer to the work, they’ll avoid many of the mistakes that are inevitable when cost-cutting is mandated from the top down. If two heads are better than one, an entire organization of minds is bound to come up with better ideas than an individual manager, no matter how smart he or she may be.
This approach can be implemented quickly and doesn’t depend on turning around the Queen Mary of corporate culture before results are achieved. Nor does it require a starship, or beans of any kind. And when it’s employed, a high performing culture magically takes hold.
Grudgingly, I’ve become a fan of all the latest communication technology. I used to find it odd when people would walk down the streets of Manhattan reading email on their smartphones and ignoring the sea of living people around them, but now I blithely do the same.
And looking back, I can see how impoverished my life was before I bought my iphone. Now in those awkward moments when I stand in a crush of people eager to get off a plane or sit in a restaurant waiting for my dining companion, I nonchalantly pull out my phone and check my messages. I’m good being alone, long as I’ve got my phone.
While once I couldn’t understand why in the world my eleven year old daughter would rather text me than call, I now appreciate the wordplay and creative spelling the medium encourages. Apparently the majority of us prefer communicating through the rather more constrained channels of email and texting than over the phone. Ostensibly it’s because of the time it saves, but it also requires less engagement.
Given the economic environment, most businesses have cut back on travel and now rely on new communication technologies for meetings and even educational events. VOIP and webinar applications make such meetings virtually free. It would seem a no-brainer that it’s the way to go.
But I’ve long suspected that something essential is lost when we opt for communication mediated by technology, and apparently the cost benefit calculation is not quite as straightforward as it seems. New data suggests that much more is lost than saved. Not only does the lack of face-to-face contact lead to a decrease in performance, it also makes us a bit slower on the uptake.
A recent article in The New York Times makes a compelling case for the importance of human touch. From education to medicine to athletics, touch leads to improved results. The author of the article, Benedict Carey, thinks it may have to do with human contact releasing the hormone oxytocin. Not only does this lead to a higher level of trust, it ameliorates the negative effect of the stress hormone cortisol on brain.
When it comes to business, the implications couldn’t be any clearer. The quality of decision-making and the degree of teamwork based on trust are, in my experience, the key determinants of performance. Cutting back on face-to-face meetings may be penny wise, but it’s pound foolish.
Technology does amplify human ability. We can move about the planet faster, calculate more rapidly, and even do considerably more damage to property and one another. But the technology is developing at such a rate that it’s outpacing our species’ ability to evolve with it. For at least a quarter of million years, live human contact has been essential to enhancing the cooperation that has made us successful, and it will continue to be for generations to come.
One effect of cortisol on the brain is to narrow our vision so that we focus on the immediate threat, but cortisol also causes us to lose sight of the longer term. In tough economic times, we do have to carefully manage expenses, but we have to be just as careful that in doing so, we don’t undermine the foundation of the company we’re trying to save. Business is a human activity and the relationships that make it work must be nourished.
So reach out and touch someone.