Walking the Talk – Management Must Lead by Example
In today’s economic environment businesses are making tough decisions. They are laying off people at a great rate, cutting back on non-essential costs, and pushing through price increases on their customers, all in an effort to improve the overall performance of a business. Banks are a great example of this, they are looking for any way to increase their revenues through new fees and charges while quietly (and sometimes not so quietly) laying off people. These businesses, especially the public ones, have no choice. Their share prices reflect the belief by shareholders in higher and higher returns from these companies.
However, while these changes in an organisation can be difficult for the employees (no one likes to see collegues lose their jobs), senior management often dont cut back on their pay packets or their perks, thereby creating an us and them culture in a business. If senior management don’t walk the talk, they run the risk of undermining the culture of a business.
I was chatting the other day with a friend who was reflecting on what was happening in the business that he worked for. He was talking about the “death by a thousand cuts” approach management was taking to making people redundant. He said it felt like every week someone was let go and he was just wondering when it would be. Funnily enough, he said that a number of people in the business were holding out just to get a package – amazing what people do.
However, in the same breath he mentioned that he felt like there was one rule for the senior management and another for everyone else. Senior management were known for always travelling business / first class (even on the shortest of trips), using limo’s rather than taxi’s, only staying at the best hotels and dining at the best restaurants. He also mentioned that he had heard of one manager ensuring his international trips went over weekends and then using that weekend as a company paid skiing holiday.
While management often do work hard, they must remember that they are not playing with their own money but the shareholder’s money. Every dollar not spent by the company can be used to retain employees, not passed onto the customers in the form of price increases, or can be returned to the shareholders in the form of a dividend.
I always remember a what a Director at McKinsey and Co said to us young consultants about something as trite as breakfast. He said that we should have breakfast in a cafe on the way to a client’s offices rather than in the hotel. Why, because it is essentially the same food at less than half the price and why should the client pay for our laziness? And he was right.
So what should management do? Well first and foremost it should walk the talk. If they are trying to drive down the costs of a business, they should start with how they operate. They should be seen to be reducing their own spend and doing things more cheaply. Fly economy class. Take taxi’s rather than limo’s. Eat at good but not the best restaurants. Stay of 4 star not 5 star + hotels. And most importantly, don’t take liberties with shareholder’s money.
It can be hard to justify price increases to customers when management may be seen to be indulging a little too much from the corporate trough.
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This is just simple management practice. Rather than continuing to follow the old saying that has become the core of bad management, ‘Do as I say, not as I do’, Managers need to start, as you say, walk the talk.
Managers set examples. Managers lead by example. If a manager chooses to do something without considering and reflecting on what their employees are likely to think and subsequently learn from, then they need to sit in the corner and think about how much better their business could be.
i always like to stay on 5 star hotels because the ameneties and the ambiance is always great ..