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The Division Bell
Something odd is happening in politics and it should be ringing alarm bells in the corporate world. As we watch, whatever your political views, there is an increasing degree of disconnect between the projects pursued by our elected leaders and representatives and the electorate’s view of those projects. Clearly too, there are some important lessons to be learnt from the turmoil that is being whipped up across the political and geographical spectrum.
There are so many issues that it’s difficult to know where to start. The Conservatives contrived to exclude from its leadership contest the candidate widely expected to be the most popular amongst its membership. The parliamentary Labour Party appears to be at odds with its membership. And then of course we have experienced the recent referendum on membership of the EU, where the majority of the political establishment were clear in their desire to remain in the EU but a small yet significant majority of the British population voted to leave. Amongst the countries at the core of the European project there appears to be a similar difference between political leadership’s support for membership of the EU and public support. A Pew Research Centre survey, conducted in April and May 2016, showed that in Germany opinion about the EU was virtually split down the middle and in France around 60 percent of people had a negative view of the EU with only around 40 percent having a positive view. The clear impression in many member states of the EU, leaving aside contentious arguments about the merits of remaining or leaving, is that political leaders are advancing a project that at best divides opinion amongst their own electorate and at worst is not supported.
This raises an issue which extends beyond the political world. In the context of business, leadership involves articulating a vision, a direction for the enterprise and plans setting out the details of how to achieve that vision. This sometimes necessitates making difficult decisions which may not always be universally popular. However, our recent political experiences demonstrate the risks of assuming that people will follow their leaders and participate in projects without devoting sufficient time and resource in persuading them of the merits of the project. In the workplace, as in politics, without proper levels of engagement there is a risk employees will, in the end, choose not to follow or, worse still, sabotage the project itself. This danger is an acute one for businesses in a global age, managing great geographical, legal, cultural and moral diversity together with the generational challenges of a workforce that is increasingly of the view that loyalty needs to be earned and maintained and not just bought. Therefore, one of the challenges for businesses in a global age is not only to generate a vision and a message but ensure that it is one which a diverse workforce can and wants to buy into.
Advances in modern technology, in particular the breathtaking array of computing power each of us has in our smart phones and tablets, along with the explosion in social media, creates substantial marketing opportunities as well as risks to the reputations of businesses. Businesses can market their brands, products and services to a global market quickly and cheaply. Conversely, news of corporate or individual wrongdoing, legal or ethical, can go viral within minutes of an unfortunate event, tarnishing or even destroying a hard-earned reputation almost instantly. Not only can this damage a business within its primary markets but equally it can create an unattractive proposition for employees, especially those in key roles, who will not wish to be associated with a tarnished brand. The dangers arising from our instant messaging society are clear and well known. However, the ability for businesses to reach a global audience with such ease also presents some opportunities beyond purely commercial risk and reward. Industry employs a dazzling array of talent, it has financial muscle and commercial skill and resource. With these strengths, its easy access to huge numbers of people cutting across national, cultural and social boundaries offers the potential for businesses to send powerful messages that not only enhance their commercial brands but can help to engage workforces and even effect and shape change for their benefit.
This is important because upholding high legal and ethical standards across a global business is no longer a choice but a necessity, especially if businesses want employees and customers alike to engage with the projects they are involved in. Trading in countries with diverse legal, cultural and ethical outlooks creates enormous pressure on western businesses not only to comply with local laws but to remain faithful to standards that are generally accepted as required in their “home” countries. This includes businesses needing to think carefully about how they treat and what they require of their employees across national boundaries. There is a risk that the idea of business leading a moral or cultural crusade may sound like pie in the sky, or worse, like some form of modern cultural imperialism. But in reality, it translates into some key practical steps that businesses can take, which are easy to articulate but more difficult to achieve. For example, businesses can take the lead in being careful about the employment standards they adopt (i.e. working conditions, HR policies and practices), ensuring that these are not only consistent with local laws but also apply standards that otherwise protect corporate reputation in key markets. For example, businesses may operate in jurisdictions which take a different legal and cultural view of diversity from that which is prevalent in our own country; in some jurisdictions homosexuality remains taboo and even subject to criminal sanctions. This can raise a series of potentially difficult legal and practical issues for businesses, ranging from how to deal with secondments to such jurisdictions to how to operate within the limits of local law without contradicting the anti-discrimination principles it seeks to apply across the business. While it may not be possible for a business to flout local laws by actively promoting the gay community within its business in these jurisdictions, it may nonetheless be able to promote a non-discriminatory workplace culture through the consistent application of its HR policies and practices across borders, promoting diversity through a corporate culture of tolerance and the enforcement of appropriate standards of conduct (for example, not tolerating bullying, harassment or other discriminatory treatment).
These standards can also be promoted and protected in more prosaic but equally important ways. For example, through creating structures that maintain and support consistency, such as parity in job grades across different jurisdictions and putting in place processes that encourage reward and promotion solely on merit, without regard for discriminatory factors. Similarly encouraging some opportunities for integration and networking within departments or functions of the business can help in managing a diverse business for example, through opportunities for real or virtual meetings, conferences, retreats etc. There are also opportunities to utilise technology in offering flexible benefits across the business, empowering employees to choose the benefits that suit them and their circumstances which, even after accounting for inevitable differences, may assist in generating a “one business” sense amongst a diverse workforce. Some businesses now even offer access to training and educational opportunities across their businesses for employees that extend beyond the sole purpose of enabling them better to perform their duties, but are aimed at self-improvement and enhancing life opportunities both within and outside the business.
Compliance issues also need to be high on the agenda, ranging from ensuring high standards apply across multiple jurisdictions and putting in place effective reporting systems for whistle-blowers across the business to providing uniform standards of proper training to employees. Not only can a company’s reputation be put at risk but, due to the jurisdictional reach of certain legislation, organisations can face civil action and criminal prosecution throughout the globe. For example, domestic data protection and anti-bribery laws that can apply to businesses wherever breaches take place. The implementation of proper compliance standards is not only an issue of interest to the public and one treated by regulators as being in the public interest, but it also sends a powerful message to employees. Employees are often keen to be associated with a corporate brand that is not only successful in the market, but one they can be proud to be associated with, which values and listens to its employees when they express concerns about behaviours within the organisation. In the end, businesses exist for the principal purpose of being commercially successful and need to be managed to achieve that success. However, it seems that increasingly more than money is needed to ensure that the workforce remains engaged with their employers’ commercial endeavours. The law, regulators and the public interest all encourage employees to blow the whistle if they see unlawful or unethical behaviour. This is not just an issue of legal compliance. It is about employees wanting to be persuaded that they work in a business which reflects their moral and legal aspirations, protects its own as well as their reputations. Employers ignore this need to lead rather than instruct employees to follow at their peril.
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