понедельник, 6 июня 2011 г.

An article by Pierre Casse: "Tango in the Company: inner voice as voice of reason"

Here is the translation of the article by Pierre Casse, the SKOLKOVO professor, published last week in his personal blog on the Vedomosti Newspaper. The original text in Russian is available here.

Have you ever seen the real tango? It is far not the dance they show in the shiny halls at the World Championships. It is a tough rough dance where He can throw Her on the floor in high gear and catch at the very last moment. What the observers may think of as insanity or cruelty actually is showing the 100% trust between the two.

Real tango is rear to see in the corporate world: individual rule, one of the signs for mistrust for one’s subordinates, – is a distinctive trait of many companies, not only the Russian ones. For instance, we may look at the Apple corporation – where all the decisions are made by Mr. Steve Jobs himself and it is no surprise that there are more and more employees who are afraid or not willing to share their concerns with the director. Or we may remember the case with Ms. Sherron Watkins from the Enron Corporation. When in August 2001 she warned her CEO of the serious accounting mistakes in the company which could lead to a large financial scandal, he didn’t believe her. When she tried to draw his attention to the fact that the auditors from Arthur Andersen closed their eyes to the continuing fraud, she was simply fired. As we know, it didn’t take Enron long to go bankrupt. 

Here is another well-known example – a Marta Andreasen case. Being employed in January 2002 by the European Commission as Chief Accountant, she almost at once started raising concerns about flaws in the commission's accounting system. She argued that there are too many loopholes in the system which left the commission vulnerable to potential fraud. This scandal was followed by another one: Marta refused to sign off the financial reports she believed to be unreliable. As a result Andreasen was fully suspended from her job in the Comission because of “failure to show sufficient loyalty and respect” and in the end was fired in 2005.

So it seems that honesty and self-assertion very often cause the employee’s dismissal. Alongside with that, deafness to the employees’ words may lead to a tough downfall of the company.
In the meantime we have seen many examples when trust to the director and self-assertion at the employees’ side led to brilliant results. For example, Ken Kutaragi had to defend his idea of launching PlayStation 3D in front of the whole Sony management team. Yet Ken’s words certainty impressed only the CEO, whereas most of the managers were strongly against this idea and argued it was worthless to go for video games. As a result Kutaragi was exiled to a separate second-rate office to develop his idea, and the CEO has personally given orders to preserve this project. In two years these efforts bore fruits: PlayStation became one of the most demanded products by Sony and Kutaragi was appointed as the head of Sony Computer Entertainment. The tango was successful!

A similar story happened at IBM where due to a manager’s self-assertion the company switched their production from data processing machines to personal computers. Similarly, Microsoft cashed in Internet opportunities due to the persistence of several young employees, and keeps performing on top.

These facts hint for the following: you should never fire an impudent or impertinent employee who keeps at you with their ideas on improving the product or service – those ideas are often to cause great success. An ideal atmosphere for any company is when absolutely any employee is able to ask a question or make a proposal to any top-manager. Your subordinates must know that their questions are not only heard but paid attention to. However it is totally OK to “dance tough”: if accepting the employee’s offer you may hold them full responsibility for bringing that idea into life. Anyway you will always have an opportunity to act like the heads of several investment banks did some time ago: their word to the traders who lost huge sums of money were: “You’ll now have to work that off, son.”

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