Large British companies are fond of declaring that 'people are our most important asset'. That being so, you would expect people to take priority over all other issues. Surely, too, the knowledge and practice of how to manage and motivate men and women would be especially well developed and widely applied. In fact - and not only in Britain - the people priority is honoured more in the breach than the observance.
That's partly because the body of knowledge and know-how, while abundant, is confusing and not widely understood: partly because human beings are far less tractable than balance sheets and machines: partly because, for all the lip-service to their people, Anglo-Saxon companies in practice tend to put investors and customers first. The lip-servers make a terrible mistake. Customers won't be satisfied, let alone delighted, by dissatisfied, 1ll-led and unmotivated employees. And unhappy customers ultimately result in miserable investors.
That's why a brilliant US purveyor of customer service, Hal Rosenbluth, entitled his book The Customer Comes Second. People-first, however, is evidently rare in British firms. According to International Survey Research, British employees are less satisfied with their jobs than any other European workers. In an era of supposed better management of human resources, the surveyed Britons have grown increasingly unhappy. ISR found that motivation and commitment 'were even lower than in the confrontational and destructive industrial relations climate' of the mid-1970s.
National variations may well reflect national characteristics as much as actual discontent. All the same, exceptional efforts produce exceptional results in any country. Before the BMW take-over, Rover Group achieved an 80% favourable rating from its employees, compared with typical British figures of little better than half.The basic elements in achieving Rover-style results are communicating, attention, visibility, teamwork and commitment. They revolve round one crucial concept: replacement of top-down, order-and-obey management with a new collegiate, co-operative approach, in which bottom-up perceptions and contributions are part of a seamless whole.
The motivational power of traditional management's tools - the carrot and the stick - can still be great. But those weapons make for bad morale and, in the long run, bad management.That's why, at BA Engineering, after a successful assertion of management's right to manage (which involved breaking a two-week strike), management put away the big stick and started to talk softly. In effect, managers went down to the shop floor and asked two key questions: 'What are we doing that's stopping you from doing a better job?': and 'What are we not doing that would help you to do a better job?'.
The response and the results were striking in terms of productivity, morale and profits alike. Such gains are not won easily, however, especially in companies spread across the country and, still more, the globe. Even in one-site companies, continuous, unrelenting effort is essential. One-off, top-down programmes are not the answer. Ambitious change efforts, like the Total Quality Management (TQM) used at BA Engineering, will and do fail if they are top-down creations in which the top itself only participates indirectly: and are not long-haul commitments, continually renewed and refocused.
If you look only at TQM, the British membership of quality organisations, both in the UK and Europe, suggests a substantial lead over other Europeans - though there's a long lag behind the Americans and, even more, the Japanese. The principles of TQM are fundamental to people management in the new age: you give everybody the tools, authority and measurements they need to improve the quality of all processes, external and internal.
The philosophy has spread very fast from manufacturing to service businesses like Gardner Merchant. Contract catering is a people-intensive industry in which two customers have to be delighted - the organisation which places the contract and the person who receives the service. Efficiency and cost-competitiveness demand continuous improvement of products and processes: that can't be achieved save by the willing involvement of the service providers in systematic discussion and implementation.
This involvement is itself highly motivating. So is the education that's fundamental to TQM and to success in customer service: which is why Gardner Merchant has made training a lynchpin. Any progressive business takes a similar line. Surveys shows a clear correlation between the percentage of turnover spent on training and the better financial performance of the company. The payback from training, moreover, applies to managers as well as staff.
The greater the complexity of the business, the more the need to educate people. Diversifying into new sectors, driving into new geographical areas and acquiring other businesses all cause complication - which helps explain their high level of failure. Companies commonly put people last when they launch into such projects. That's how one multinational electronics group, in just 18 months, managed to lose the founder, all the executive directors and much of the business of a billion-dollar acquisition - whose culture it had promised to 'respect'.
Sensitivity to different cultures, corporate and national, is essential if companies want to reap the benefits of expansion. The basic elements remain the same, however, in any environment. Management must, first, make the effort to understand what other people really think, what they want and what they can contribute; second, it must create understanding, shared by everybody in the firm, of what management is doing and why.
A fascinating piece of research by accountants Ernst & Young explored the extent of knowledge about corporate strategies. Customers, it turned out, knew nothing about them: suppliers knew little: and, most disturbing of all, middle managers had only partial knowledge. Where that knowledge was raised from partial to full, big gains were achieved in quality, productivity and profitability. The study didn't investigate employees below management level: but their strategic ignorance must exceed even that of middle managers - and curing it must be just as beneficial.
Managers can't communicate what they don't know. Nor will they motivate effectively if they themselves suffer from overwork, stress and insecurity. That was the sad picture painted by an Institute of Management survey, which found its 1,300 respondents as gloomy as their workforces. The subordinates, moreover, thought very little of the quality of their managers in general - and complained in particular about lack of information, as well as training.
That places heavy emphasis on the need for excellent internal communications. For best results, communication starts, not with articulating a vision or values, but with genuine participation. One consultancy, practising what it preaches, involved every staff member in discussing and then signing its value statement. National Westminster Life, a big financial services start-up, used a draft vision and values document as a recruiting tool - and the draft was only finalised after the executive team was complete.
How far down can involvement go? At Emerson Electric, all the employees can answer four key questions about the company and their jobs. The communication issue goes far deeper than displaying placards at all suitable points. In the TQM development known as 'Policy Deployment', every employee from chief executive downwards has a document setting out key objectives for the company, the division, the unit - right down to the individual. Visions and values are fine and essential: but turning them into practical actions gives these 'soft' concepts their hard power and individuals their true motivation.
The tools for communicating and involving are more potent than ever, thanks to the wonders of technology. Internal TV, modelled on familiar programmes like the news or The Big Breakfast, is spreading fast. The Halifax Building Society and Marks & Spencer are among the users of a medium which can be made interactive, with questions and answers. Satellite broadcasting makes it as suitable for multinationals as for nationals. However, while the delivery of the message matters, what you say matters more - and what you do matters most of all.
The success or failure of the action can be judged by the level of trust. A three-year study by Dr Rita Cruise O'Brien of the London Business School found that only a quarter of 1,000-plus front-line managers believed that their company had concern for its employees. Half the survey thought that management was inconsistent. This perceived inconsistency has a direct and harmful effect on the willingness of employees to support corporate goals - in a word, their motivation.
'Involving people more directly in improving competitive performance and trusting them in that exercise', writes Cruise O'Brien, 'are vital to the success of the competitive firm.' It's the work, not the words, that provides the true motivational force: 'living the vision' and 'walking the talk' express this truth, but are, of course, only phrases themselves. Where firms follow the total quality philosophy in practice, with practical objectives and achievements, the company simultaneously improves performance and lifts morale and motivation.
The good examples show that where British management sets about this task with total commitment, it can match the best international results either domestically or across large multi-national groups. In generating media and messages, the British have always been second to none. But the paramount motivational need of companies today is to put their management where their mouths are - and there's still many a mile to go.
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