The inevitable rightsizing speech
December 3, 2008
If only because my short-term memory is poor, I remember the day as if it were yesterday. It was 1994, or thereabouts, and Cartwright, divisional CEO was giving a speech.
“We are not responsible for your career,” said Cartwright. “Only you are responsible for your employability.”
“We are moving into an era when companies will be more flexible with how they employ people, when fast moving technologies and markets may make particular jobs redundant overnight. To deny that this is going to happen would be folly. But that doesn’t mean you are on your own. The company will do its part. We will provide you with training and opportunities. We will do our best to make the decisions that ensure that there is a market for the product you produce. But at the end of the day it is up to you to ensure that you remain employable. The skills that companies need are changing all the time, and it is up to you to ensure that you are equipped with them.”
It was the kind of speech that was popular around then. The economy was moving out of a savage recession and good people were easy to come by. At the same time, technology was changing the world of work at speed. With the newly discovered wonders of email and the marvel of the internet just around the corner, we were expecting within the next few years all to be telecommuting. Companies would no longer need to take expensive leases on inner city property, or in fact enter into expensive long-term employment contracts with superannuation benefits and the like.
The boundaries of the firm would become increasingly fuzzy, with portfolio workers selling their services to the highest bidders and companies becoming lean mean contracting machines, with teams of workers coalescing around projects then scattering when it was all over.
But it never really happened like that. Sure, some people leapt into the brave new world of contracting – IT workers, web designers and the like – and made a motza doing so. But the vast majority of workers have retained traditional employment contracts tying them indefinitely to the one company, and, despite Cartwright’s protestations, companies have continued to be ultimately responsible for their people’s careers.
As the war for talent unfolded over the ensuing decade and a half, companies and their people have become even more tied together. The bonds between a company and its people have been strengthened by the technology revolution and everything that has come in its wake. With our Crackberries and iPhones, the company has invaded our lives in ways that were unimaginable for Cartwright and his ilk.
This happened for several reasons. Firstly, companies discovered that in a period of growth they really do need people to do the work. Losing people and recruiting new ones is expensive and demanding. So much cheaper to keep the ones you’ve got. Telling them that the company owes them nothing and that they are not responsible for their futures is disingenuous and just plain wrong.
Secondly, work today is all about collaboration. Despite all the advances in telecommuting and online technologies, collaboration really only happens when people are in the same place at the same time, thinking about the same things. To enable this, companies simply have to get people to be in a common place at a common time. Even if every moment of that time is not hugely productive, they need to be there or the sparks won’t fly when they need to.
Thirdly, and perhaps most importantly, people are risk-averse pack animals. They simply like being attached to something larger, being part of a group that is bent towards larger goals. They don’t want to constantly be selling themselves, to deal with the winds of change on their own. Cashflow certainty is good too. It is much easier, in the end, to give loyalty to an organisation in the hope that it will give loyalty back. In the end, this sense of organisational dependency is good for companies too, it enables them to employ people at a cost that is less than the product they produce, in exchange for certainty.
As we move deeper into the uglier parts of the economic cycle, bosses will be tempted to roll out the Cartwright speech. But it might help them to remember how wrong he was, that, clichéd as it might be, people are in fact a company’s most valuable resource, and that loyalty in good times is really not loyalty at all.
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