Why people operate in organisations

“If you read only one business book this year, read this”

Patrick Nash, author of Creating Social Enterprise[1]

I knew very little about Patrick Nash when he joined me in 2019 as an angel investor and advisor at Tranquiliti, a start-up providing an innovative mobile phone app mental wellbeing tool for school students and their teachers. I didn’t know much more when we were bought out in August last year by Tes Investments[2], other than what I gleaned from our monthly video call with George and Aaron, Tranquiliti’s founders, which was essentially that Patrick knows a thing or two about social enterprises. He proved a source of sound advice to them and had a similar appetite for risk and the level of investment as me.

A couple of weeks ago, he invited me to a book launch in November. I explained that I would be travelling to New York but promised to buy the book and read it on the plane. Amazon already had “Creating Social Enterprise” in stock and a train journey created the opportunity to get stuck into it right away. It proved hard to put down and I quickly concluded that it deserves the “If you read only one business book this year, read this” accolade. Scrutiny of the spine shows the publisher to be Patrick’s own company[3], so I doubt whether it will get the push (although it would from any self-respecting business book publisher) in the direction of the shortlisting for FT Book of the Year 2024 that it deserves .

While I was studying for an MBA at the Stanford University Graduate School of Business and serving my apprenticeship at McKinsey, Patrick was doing alternative stuff and getting his first taste of commercial life at Nova[4], a whole food co-operative in Bristol. He drove the company van, turned the handle on the trail-mix mixer, learnt a range of valuable lessons about people, customers, marketing, margin management, cash-flow, risk, systems implementation – loads that you have still to learn when you graduate from Harvard, Wharton or LBS – and, importantly for his own development, undertook a crash course in double entry book-keeping (something I did learn in the first term at the GSB) from his father when the founder’s ill-health meant he had to step back from the business at short notice.

Scarred by the experience of putting Nova’s stock system onto computer (Patrick’s Learning#8 in the book is “Never Trust ‘should’” as in “This should work” or “It should be ready by then”) and burnt out by three years without a holiday, he took a spell away from work. A few months later, he discovered the Findhorn Community. Most people are drawn to Findhorn in the search for a more spiritual focus to their lives but Patrick was sufficiently intrigued by a conversation with its finance director that he joined it to work in its accounting and finance department. Rather than finding himself spiritually, he stayed on to lead the project to develop its Ecovillage (the first homes were built from giant whisky barrels), where he “learned much of the complexity of running organisations, raising funds, creating multiple corporate structures and leading teams”. During his ten years with Findhorn, Patrick learned a lot more about running a successful business, not least about managing external and internal stakeholders. He describes this time as a “significant phase in my social enterprise journey. Many of the skills I have deployed as a social entrepreneur were developed there”. But lessons and consequent skills are not just for the social entrepreneur, most of them translate into any enterprise, public or private, large or small, and independent of industrial sector.

Although Patrick has established twelve social enterprises, charities and values-driven businesses in all, his greatest achievement was establishing Connect Assist, a specialised 24/7, outsourced call centre supporting multiple clients from the public, private and third sectors (including Versus Arthritis where I spent 8 years as a trustee), employing over 450 people in a part of south Wales where employment has still not recovered from the demise of coal mining. The third part of Creating Social Enterprise tells how Patrick developed a string of businesses that evolved into Connect Assist after first joining the Teachers’ Benevolent Fund, a charity operated for the teaching unions. In this role he took the lead in some tough decisions, including closing TBF’s legacy residential homes for retired teachers (he is the first to call out the case for closing businesses that are loss making and no longer fulfil their purpose) and pivoting the organisation to become a telephone counselling service, setting him on the path towards establishing Connect Assist.

Patrick has great stories to tell, including how, along the way, he had the Dalai Llama as his boss when, for a few years in between the big projects that are the meat of Creating Social Enterprise, he was CEO of the Tibetan Relief Fund. He tells tales of scrapes with the law as a twenty-something driving a whole-foods van around the country, when the grass roof of a house in the Ecovillage bursting into flames, and the thrill and relief at securing financing for assorted projects at the eleventh hour. These come across with a freshness as though they only happened yesterday rather than ten, twenty, thirty or even forty years ago.

He has built the account of his career around no fewer than 44 learnings, drawn out at the end of each chapter and recapped at the end of each of the three major sections of Creating Social Enterprise. Most, if not all, are relevant to anyone who picks up the book. As someone who preaches the importance of purpose and values to a business (as part of the Dark Matter that makes organisations more than the sum of their parts) I turned the page corner down at Learning#3: Align values and commercial interests. I did the same at Learning#38: Empathy is the new superpower, as I have no doubt that being able “to understand another person’s thoughts and feeling is a situation from their point of view, rather than your own” is essential to effective leadership based on trust. And his observance of the final sign-off learning, Learning#44: Moving on when it’s time to leave was the one that positioned Patrick for life after Connect Assist where, from the comfort of home on the Pembrokeshire coast, he could join me in our support to the young founders of Tranquiliti and find time to write Creating Social Enterprise.

[1] ISBN 978-1-3999-47-6 www.creatingsocialenterprise.o.uk

[2] Tes invests in fast-growing tech to transform pupil wellbeing | Tes

[3] Enterprise Values – Enterprise Values

[4] Still thriving: see Essential Trading Co-operative Ltd | Welcome (essential-trading.coop)

So, what would a fair society look like? Daniel Chandler’s “Free and Equal”

Daniel Chandler was introduced to John Rawls’ Theory of Justice during his history degree at Cambridge. Although I was encouraged to write a dissertation on Les événements de mai 1968 while studying for the same degree thirty or more years earlier, Theory of Justice, only published in 1971, hadn’t made it into Quentin Skinner’s “History of Political Thought” lectures when I attended them in 1976. Instead, my introduction came at Stanford University’s Graduate School of Business a few years later. By the time that I was involved in the Britain’s short-lived Social Democratic Party in the 1980s, Rawls’ theories, particularly his rationale for a just society being one which offers the most for the least well off in society, provided a philosophical justification those who defected to the SDP from a Labour Party wedded to “Clause 4” socialism.

Chandler and I share a huge respect for Rawls. Chandler takes this to the extent that Rawls’ theories become his lodestone for examining public policy. In the first half of his book, Free and Equal: what would a fair society look like?[1] Chandler performs a valuable service by providing a readable and accessible summary of John Rawls’ famously turgid and impenetrable book, along with an account and rebuttal of Rawls’ critics and of those such as Amartya Sen (a hero and, apparently, mentor to Chandler) who have built on Rawls’ foundations. But the second half of the book, which justifies the sub-title , leaves me imagining that Chandler either wears a leather bracelet imprinted with WWRD (like members of some Christian youth groups wearing one for “What Would Jesus Do”) or lives under a banner like that raised by members of the Occupy Movement at St Pauls Cathedral in 2011.

Chandler works his way through a wide range of public policy issues, trying to apply Rawls’s view of what constitutes social justice by setting out a collection of prescriptions for addressing social and global problems, such as income and wealth distribution, the environment, and distribution of power in the workplace. The attempt is admirable, but disappointing. While conveying the impression that emotionally he is politically on the left, he is resolutely a centrist and not afraid to challenge traditional leftist positions, probably reflecting his academic move from history to politics and philosophy, so less a slave to dogma that some who take on this challenge.

His cv includes Harvard and the LSE, the UK Prime Minister’s Policy Unit, the Resolution Foundation and the Institute for Fiscal Studies, but his prescriptions and supporting accounts lack grounding, are uniformly derivative, and feel embarrassingly like the work I was turning out as a student politician and parliamentary researcher in my late teens and early twenties. Given his background, he can’t be blamed lacking the grounding in the real world that might have informed an approach that would be both more nuanced and insightful. His account of ownership and power in the context of the firm is particularly disappointing and falls into the trap of believing that the shareholders generally hold the power rather than the managers, and the power of different stakeholders depending on the characteristics of the particular markets in which the firm operates, may have more or less power[2]. The consequence is a very simplistic set of prescriptions, with nothing particuarly original.

I briefly found myself bothered by the utopianism that underlies the ambition for the second half of the book, but then cames across his own apology for this and explanation of the need for ambition to make the world a better place, and the value of Rawls’ ideas about justice in thinking about what constitutes “better”. I was then reminded of Lenin, writing in the fifth chapter of What is to be done? Where he cites 19^th Russian nihilist Pisarev

“the rift between dreams and reality causes no harm if only the person dreaming believes seriously in his dream, if he attentively observes life, compares his observations with his castles in the air, and if, generally speaking, he works conscientiously for the achievement of his fantasies. If there is some connection between dreams and life then all is well.”

before then observing

Of this kind of dreaming there is unfortunately too little in our movement.[3]

So, full marks to Chandler for his account of Rawls, and also the aspiration to frame practical solutions in light of Rawls theory, even if he falls well short in his prescriptions and how be presents them.

[1] Chandler, D. (2023). Free and Equal. Penguin UK

[2] Ironically, I read his objection (page 262) to John Lewis Partnership being viewed as a co-operative “because workers do not exercise full control over management” on the very day that the John Lewis staff chairman Dame Sharon White lost a vote of confidence in her past performance from the Partnership Council although she received support for her future leadership going forward.

[3] Wikipedia. (2023). Dmitry Pisarev. [online] Available at: https://en.wikipedia.org/wiki/Dmitry_Pisarev [Accessed 10 May 2023].

Applying the Escdondido Framework to Dark Ages Britain

I often wonder about the applicability of the Escondido Framework model of the firm to organisations in other cultures and at other times to the developed world in the 21^st century . One of the claims of the Escondido Framework is the degree to which it can be applied universally. Certainly, the model can be applied to public sector and third sector organisations, and can be applied wherever there is some sort of corporate collective structure that can be shown to create value that is greater than the sum of the efforts of the people who are working together within the structure if they were together in a set of discrete collaborations brought about by a set of separate agreements (whether explicit or implicit).

I have just completed reading Max Adams’ account of Britain in the 5^th to 7^th centuries, The First Kingdom[1]. This covers the period often known as the Dark Ages, following the departure of the Roman Empire and before settled control of England by Anglo-Saxon rulers in the Heptarchy. He pieces together the considerable research undertaken in recent years to describe a fragmentation of society, depopulation of most cities and towns and replacement by what may in many respects to a pre-Roman pattern of village economies and local tribal leadership, subject to incursions by Viking and north German raiding parties, but still with some loose links to continental Europe, with the Christianity that had arrived in the Roman period hanging on in places prior to reintroduction both from Ireland with Colme Cille (St Columba) and with St Augustine from Rome, and with continuing trade.

One of the key themes of the Escondido Framework is the identity of the corporation independent of stakeholders, the “societé anonyme” whose ultimate purpose is to survive, and which outlives its “controlling mind”. Adams marks the end of the period that he is describing by an important transition, from one in which the individual “kingdoms” were pretty fluid, some very small and sitting within and subject to other kingdoms (in a system described as Tribal Hidage), and most regimes pretty ephemeral.

“Victory on the battlefield and political success measured in tribute and booty secured the loyalty of secular élites for their king and his eligible successors; but for a life interest only. Defeat, if not fatal, weakened a king and exposed him to internal coup of external domination…..The luck of the tribe was invested so heavily in the person of its kings that when they died any imperium that they may have exercised over rival kings was void.

“As Bede so vividly described it, the pagan supernatural experience was in some sense like the passing of a sparrow into and out of a hall whose warmth and fellowship matched their brief period of Earth while all before and after was cold darkness unknown…..

“Pagan kingship was not stupidly irrational. Rulers were bound by conventions of honour, reciprocity and political pragmatism. They calculated odds as coolly – and with about as much reliance on superstition – as any politician or football coach whose tenure might be equally precarious.”[2]

But this changes with a new social contract, between church and king, that reflects the new world being constructed with the arrival of Christianity and the conversion of the rulers, whose souls continue after death. Adams cites a law of Wihtred, king of Kent 690 -725: “The Church shall enjoy immunity from taxation; and the king shall be prayed for” before noting:

“The rapid seventh-century establishment of monastic communities across the Insular kingdoms, supported by extensive, formerly royal estates and nurture by their relations with kings, parallels the history of secular territorial lordship founder on the right to exact and collect renders from lands and communities, but with a a critical difference. The unique brilliance of this new social contract was to convert landed assets otherwise held for a mere life interest – the so-called folcland held by the thegns and gesiths form the king, which returned to the royal portfolio on their death – into a freehold bocland of abbots and abbesses. Bocland or bookland – what we would call freehold – was fundamental to a relationship meant to last for eternity on Earth and in heaven. It allowed the church to invest in physical labour and material wealth in permanent settlements free from the obligation of military service and taxation; to capitalize agriculture an technology. It laid the foundations for a literate, institutional clerical caste and formation concepts of obligations owed by kings to their people.”

Permanence is the key word – even if in due course the success of the monastic corporations became the seed of their undoing at the Reformation. The monastery or convent was greater than the abbot or abbess. The kingdom also secured more permanence, even if an institutional fluidity remained until the major kingdoms of the Heptarchy progressively consolidate and became on under Athelstan in the 10^th century.

[1] Adams, Max (2021). The First Kingdom: Britain in the Age of Arthur. ISBN-13 : 978-1788543477

[2] Ibid. pp 398 -399.

“…… because they still do the same thing: they primarily serve shareholders”

Dame Vivien Hunt, until this year managing partner of McKinsey’s offices in the UK and Ireland, has written in today’s Financial Times on workplace diversity and equality under the heading “Change how boards work to achieve to true diversity”.

She asks why, when one third of the seats on the boards of FTSE 100 companies are now occupied by women, “those boards still look similar……still filled with people who have the same skills carved out of similar professions, networks and university degrees.” Her explanation is that it is “because they still do the same thing: they primarily serve shareholders.”

I am pleased that one of the current leaders of the organisation where I started my professional career takes such an unambiguous and very public position strong position on both the composition of boards and their purpose. Back in the 1980s, most of my colleagues were beholden to the orthodoxy of “shareholder value” and, although there were a small number of senior non-white consultants (including Keniche Ohmae, who led the Tokyo office, and Rajat Gupta, who became an office managing partner shortly after I left and subsequently global managing partner), the firm was anything but diverse.

Dame Vivien argues that “we need to find people who represent not only our investors but everyone else – from buyers to suppliers, to local communities, to our natural environment”. Her use of language and her argument is not entirely clear here: her article could easily be interpreted as making a case for a board of representatives of stakeholders as opposed to a board that understands the broader mandate of the company and the need to take all stakeholders’ interests into account.

I have argued elsewhere against boards being composed of representatives of stakeholders. As is implicit in Dame Vivien’s article, directors should have a duty to all stakeholders, because their wellbeing of all groups is critical to the wellbeing of the company. Furthermore, in UK unitary boards composed of executives and non-executives, at the board may be the executive directors responsible for sales and marketing who should be the effective advocates for interests of consumers if they are fulfilling their role understanding and satisfying consumer needs. Similarly, executive directors of workforce and of operations should be able to represent to colleagues, who may place a primacy on the interests of shareholders and customers, the interests of the people they recruit, support, and manage. Whether or not they are full board members, most large companies employ directors of communications and public affairs (or similar) whose primary role may be to advocate externally for the company but also represent to the board the case for taking into account the interests of local communities, the environment, politicians and lobbyists.

Her underlying argument for diversity on boards is compelling, not for the purposes of representation but because a genuinely diverse board “brings diversity of thought, skills and experience that will lead to better decision making”. However, better decision making also depends on boards understanding their purpose of their companies, which is the sustainable creation of value for all those the company engages with, by producing goods or services more efficiently than would be possible in the absence of the company. The purpose of the company is not the creation of shareholder value: shareholder value is the necessary return provided to shareholders in return for their investment and the sustainable creation of shareholder value is the result of serving the interests of all stakeholders.

I was thrilled to read Dame Vivien’s piece and pleased to see her continued work championing diversity in business. But, notwithstanding my concern about some of the logical flow and detail in her argument, I was even more encouraged to see her set out the case that genuine diversity on boards will not be achieved until shareholder primacy is consigned to the waste bin.

What happens to organisational “dark matter” when everything moves on-line?

Much of my working life moved on-line when Covid-19 hit. From time to time, I still go into the office although it feels as though a neutron bomb has hit: the building is there, but it is largely empty and most of those normally there are working from home. All the meetings that were conducted face to face before mid March now take place on video conferencing platforms (although half the time my colleagues have cameras switched off or their on-screen presence has frozen). Research appears to suggests that the productivity of most of the people now working remotely is higher than before. I miss my commute because it provided a welcome opportunity for exercise and included a delightful bike ride along the Grand Union Canal, but I am sure that I am in a small minority.

I miss the serendipitous conversations that take place in the corridor, making coffee, in the margins of formal meetings, and in the course of visits that I make as chairman to the front-line units and staff of my organisation. I have recruited a couple of new colleagues during the Covid-19 lockdown and we have had to manage their induction remotely, which clearly has its drawbacks. But other than these examples, I don’t get the feeling that the way that we do business has suffered much so far. However, is this sustainable?

David Robson has written an article in New Scientist[1], suggesting that “the coronavirus pandemic may be dismantling your social network without your realising it”. This echoes a concern of mine that the way most of us, and most organisations, have coped through the changes enforced Covid-19 has been only been possible as a result of the accumulated investment in relationships built up face-to-face. My board know each other well, know how to interpret each other’s contributions, will make allowances for each other and can generally anticipate how others will react to what they have to say. This has helped carry us through the past five months and will continue to assist through the next few months as, we all hope, we emerge from the crisis. This will apply to all sorts of established relationships around any organisation, will underpin day to day conversations and routine business, and will inform the diplomacy and political manoeuvring around the more tricky transactions. Assets on our balance sheet are liable to decay and, in our accounts for our business, we apply depreciation to them to reflect this. The intangible assets that are our social capital and which have carried us through new pattern of remote working are no different.

Robson’s article led me to a New York Times interview with Satya Nadella (personally heavily invested in video-conferencing, and consequently other people’s remote working, as CEO of the organisation that owns MS Teams and Skype). “Mr. Nadella said that raw productivity stats for many of Microsoft’s workers have gone up, but that isn’t something to ‘overcelebrate.’ More meetings start and end on time, but ‘what I miss is when you walk into a physical meeting, you are talking to the person that is next to you, you’re able to connect with them for the two minutes before and after.’ That’s tough to replicate virtually, as are other soft skills crucial to managing and mentoring.”[2]

Robson continues his article by summarising a wide range of research around social contact, and highlighting its value to us in terms of mental wellbeing and importance dimensions such as trust. In a sidebar to his main article, he quotes Peter Drucker writing in 1993 “It is now infinitely easier, cheaper and faster to do what the 19^th century could not do: move information, and with it office work, to where the people are. The tools to do so are already here: the telephone, two-way video, electronic mail, the fax machine, the personal computer, the modem, and so on.” Robson notes that it has taken the pandemic for people to realise that they can work with less face time and discusses why it has taken a crisis to realise the potential for more people to work remotely. But while he concludes that “the relative success of new ways of working in the pandemic would certainly suggest that we can get by with less face time” he acknowledges that it would be unwise to scrap it entirely.

I worked remotely for much of the 1990s (with a dial up modem and Compuserve email address that consisted of numbers alone). Consequently, the revelations about the productivity of people working from home come as no surprise. However, I was working as a consultant and on private equity projects at the time. The work from home was interspersed with face to face activity with clients, selling projects and ideas, negotiating deals and persuading investors to back me. I was operating on my own or in small teams rather than a large organisation that was creating a greater value than could be achieved by a series of discrete market transactions and with the benefit of what I have described elsewhere as organisational “Dark Matter”. Having moved in and out of varied working arrangements and organisations differing in size over the past forty years, I know the importance of face to face contact in building relationships that are strong enough to be effectively maintained at a distance.

The large, global consultancy firm where I worked in the early 1980s employed a variety of devices to build relationships within the local office and the world-wide firm: consultants were expected to return to the office on a Friday to lunch together and receive a short presentation about a colleague’s project and piece of training; at each stage in your career development you attended residential courses with your peer group; practice groups would hold regional conferences to share learning; and the international partner group would meet for an annual conference. All this contributed to building a shared set of values, common approaches to solving client problems, and the ability to work remotely while remaining part of the firm.

It is important to recognise the corollary of Robson’s thesis: with remote working there is a risk that the quality of relationships will decay over time, particularly if the context in which the relationships were developed changes, if you don’t make this sort of investment. The “new normal” may involve much more remote working, but organisations need to recognise that the success of this approach over the past five months has been made possible by years of investment in social capital by having people working together previously. They will need to invest in “maintenance social capital” by getting people to getting people together sufficiently frequently to address the depreciation in this asset if they want to continue remote working in the longer term.

[1] New Scientist, 20th August 2020, pp32-36. “Missed Connections”

[2] New York Times, Dealbook Newsletter, 14^th May 2020

Orchestral conducting as illustration of organisational “dark matter”

Bryan Magee, philosopher, broadcaster, and sometime Labour Party and SDP MP, died just over a month ago, prompting me to return to “Ultimate Questions”, his profoundly satisfying meditation on the enigma of human existence.

It contains a splendid passage that describes the undefinable qualities that is present in organisations working at the highest level, which I describe elsewhere as “dark matter“.

“I contend that our knowledge and understanding of other people, and our relations with one another, cannot be explained by the observable exchanges we make with one another. Something else is going on as well. A particular and extreme – and for that reason clear-cut and useful – example of this is provided by orchestral conducting. Many music lovers are able to hear the difference between two recordings of the same work conducted by, shall say, Toscanini and Sir Thomas Beecham, but no one seems to be able to explain how each of these is arrived at, ranging as they do from the unity of the overall architecture down to each individual detail and its integration into the whole. Such things cannot be fully explained in terms of what the conductor says at rehearsals (which often is not much) plus the way he looks at the musicians and wave his arms about. An immense amount that we cannot account for is being communicated by one person to dozens of others who carry out his wishes in subtle detail. I have long been fascinated by this, and have discussed it across the years with orchestral players and conductors. Players agree immediately, and without question, that they play differently for different conductors, but they cannot account for why, still less for how the what that is required of them is communicated to them. Conductors know what they are doing, and can do it at will, but they can no more explain how they do it than I can explain how I move my fingers, though I can do that at will too. Here we have a highlighted example of something that, it seems to me, is going on amongst us human beings all the time. It is impossible to account for the warm, capacious, deep, detailed, sophisticated and rich understanding that we have of one another in terms of our attention to another’s words plus our observations of other’s bodily movement. Something else, of a different order is going on.”

Employee activism: what does the Escondido Framework say?

Staff at Wayfair, the online furniture and household goods company, have been protesting at their employer selling furniture to a company equipping migrant detention centres in the US.[1] What does this say about the relationship of companies to their staff, about limits on the ability of shareholders to exercise power over the behaviour of that conventional theory suggests that they own, and about the rights and responsibilities of every one of us in relation to the organisations that we work for?

The relationship of companies to their staff

An organisation should consider ethical and political behaviour as part of the marketing mix when it thinks about its strategy towards its employees. Charities and other not for profit organisations are generally able to employ staff at a lower cost than organisations without an ethical mission because their staff make trade-offs between the income they receive in cash and feeling that they are achieving something for the wider good. As I have written elsewhere, when I headed up the buying and merchandising for the UK’s largest retailer of stationery in the 1980s, I argued to my bosses that the halo effect of developing environmentally responsible product ranges would be to enhance our standing among the students graduating from universities where we were recruiting. By selling to a company equipping detention centres, Wayfair has effectively shifted its positioning on one of the marketing dimensions of its interface with employees. This decision may blow over, but in the longer term Wayfair needs to consider whether to adopt a clear stance about the larger customers it sells to or it may ultimately have to accept that is will need in some way or other to change. This might involve paying staff a bit more in order attract staff to replace those who don’t want to be involved doing something they view us unethical. Or, if we make the assumption that one of the benefits of employing ethically informed staff is they are more trustworthy, it may need to put controls in place to cope with the risk that staff who are not as ethically sensitive to offset a lower level of trustworthiness. Or, if the values of the staff protesting against the sales for the detention centres reflect cultural norms in the location of the offices or warehouses in which they work, Wayfair may need to go to the expense of moving its operations to locations where the local population is less sensitive to such issues.

Limits on company owners

Ownership is a complex subject. Ownership of a piece of paper that says you have a share in the common stock of a company gives you a right to residual profits of a company and (assuming it is voting stock) in decisions about the appointment of directors of the company. And even if you are the owner of the entire voting share capital, it does not give you the ability to dictate everything that the company can do. Others who interact with the company can exercise their rights too. The Wayfair employees have made it clear their views and are attempting to limit the ability of the company’s owners to sell to whoever they wish. It is not a matter a law, or at least not law alone, the practical balance of power between an incumbent workforce, the managers and directors, as well as those of people who have invested in the company all come into play. In the case of a company with publicly traded shares that offer the opportunity to exercise votes once a year, if at all, and then only as a very blunt instrument, the shareholders can hardly been exercise ownership rights in relation to decisions about whether to sell to the developer of a migrant detention centre. The managers and directors will have to consider what is best for their own interests: do we concede to the employees’ demands, or do we shift the company’s market positioning in relation to the explicit and implicit interests of the workforce?

Our rights and responsibilities in relation to the companies we work for

The workforce at Wayfair may have put their jobs at risk. Those who have walked out are likely to have breached their contracts of employment. But acting in line with your conscience is not a matter of exercising a right as discharging a responsibility. The staff at Wayfair will be making trade-offs (or need to realise that this is what they are doing) between doing what they believe is right and their immediate financial self interest. The level of risk they take will reflect their own market power: can their employer find substitute staff with the requisite skills at a price that it can afford, or will it respond to the pressure from the protest, and furthermore, are they supported by the legal framework surrounding their employment or not?

[1] “Activist employees pose new labour relations threat to bosses: Wayfair walkout shows CEOs cannot duck political risks by claiming neutrality” FT 4^th July 2010

Workforce – “not assets to be managed”

I owe thanks to Ali Webster, Assistant Director for Workforce at West London Mental Health Trust, for opening her presentation at a meeting yesterday with a compelling quotation from a 2015 King’s Fund paper on talent management[1]:

“Successful deployment of workforce talent is about rethinking your view of your employees. They are not assets to be managed but rather people with options who have chosen to invest their aspirations and motivations with your organisation for a while and who will expect a reasonable return on their investment in the form of personal growth and opportunities.”

This is Escondido Framework thinking. You do not own the people who work for you – even if the way that you treat them may leave them thinking of themselves as wage slaves. You have secured their services in a market transaction in which there are two parties, selling to each other and offering opportunities to each other. And both parties are making an investment in the relationship, with both “expect[ing] a reasonable return on their investment”.

[1] Sarah Massie, “Talent Management: Developing leadership not just leaders”. Kings Fund 2015