Inhumanity - The “Yellow Brick Road” to Business Restructuring

Inhumanity – The “Yellow Brick Road” to Business Restructuring

November 14^th, 2022 ~ Written by: W.B. (Bud) Kirchner and J.G. (Pete) Ball

Approx. read time: 14 minutes

*Pronouns used in this article are done so to maintain the integrity of the actual quote or statement*

Background

“Humanity’s next state is rising above ourselves for the sake of our common unity.” – Anonymous

We continue with the change initiated in the previous article – namely moving back to “traditional” topics as opposed to coping strategies.

Tragically as we are shifting gears, the Russian attack on Ukraine continues. With this in mind, we are focused on the concept of people’s inhumanity to people – obviously in the context of world events, but also in a context that is still ‘closer to home’ with arguably a direct impact on even more individuals. Similar to war, the impact goes well beyond those directly involved.

Context

“Man’s inhumanity to man is only surpassed by his cruelty to animals.” – George Bernard Shaw

“The phrase “Man’s inhumanity to man” which reflects the theme for today is reportedly (e.g., Wikipedia) first documented in the Robert Burns poem called “Man Was Made to Mourn: A Dirge” (#1) in 1784. It is often noted that Burns reworded a similar quote from Samuel von Pufendorf who in 1673 wrote, “More inhumanity has been done by man himself than any other of nature’s causes.”

In any event, the concept of a person’s ‘cruelty’ to a fellow person has been recognized for some while.

While inhumanity at the scale of what is happening in Ukraine (currently) dwarfs everything – it can also serve as a beacon causing us to reflect on everyday related issues. Easier to feel transgressions when in the spotlight, but what about the daily (dare we say routine) actions that hurt individuals (populations) economically and socially?

We can distill this further.

Clarification

“The worst sin towards our fellow creatures is not to hate them, but to be indifferent to them; that’s the essence of inhumanity.” – George Bernard Shaw

Just to be clear, there is absolutely no intent here to diminish or distract from the impact of lost lives, devastated homeland, etc. There are atrocities perpetrated by individuals who don’t deserve to be categorized as human – at any level.

We lack the words and perspective to document the atrocities taking place, but fortunately, the world press, leaders, etc. have vocalized the outrage. Again, we have never been up close and personal with such atrocities, but we are up close and personal with several examples of inhumanity resulting in hunger, social exclusion, etc. via our impact and philanthropic efforts. However, the inhumanity we are focused on today originates from experiences we have observed/dealt with in our commercial activities. Given the context of these articles, we thought it only logical to use the business environment to illustrate the point.

Illustrating the Point

“A business that makes anything but money is a poor kind of business.” – Henry Ford

The world of business is replete with examples to illustrate my point. We have resorted to two perspectives:

A simple search of “worst bosses” and just some of their actions
Some of the many issues we have had to address (read “clean up”) in our firm’s “restructuring” business which is an essential component of our services in the context of our guiding principle of creating value while promoting values. It is one of several examples where we try to make the world a better place by leveraging our business skills – in a small/focused way.

Profiles of Worst Bosses

“Managers do things right. Leaders do the right thing.” – Warren Bennis

It was not difficult to come up with illustrations of our point – a simple search of “worst bosses” provides descriptions:

“Liked to fire and then rehire executives to break their self-esteem.”
“Winning is the most important thing in my life, after breathing, and if games were lost, heads rolled”.
“But to prevent workers from making off with their products, the doors of the New York City factory were locked from the outside. A fire broke out in the clothing factory and hundreds of workers were trapped in the burning building.”
“18 separate counts of fraud, insider trading, and lying to employees, investors, and the government about faulty accounting practices.”
“The worker is paid less than they should be paid according to the law and collective agreement.”
“Running their businesses by employing overworked and underpaid manual workers.”
“Recent immigrants, both documented and undocumented, are among the most exploited workers in the country.”
“Moving up sales dates for consumer goods like outdoor cooking grills well ahead of delivery to advance quarterly sales statistics.”
“Engineered a corporate restructuring that put 35% of the workforce (or 11,000 people) out of a job.”
“Eight of the 10 largest private U.S. employers track the productivity metrics of individual workers, many in real-time.”

The one-liner anecdotes (sadly) go on forever and you can find more meat on the bones in recent articles such as Jack Welch’s questionable legacy by Emily Peck. (#2)

Just to repeat – every day in oh so many ways decisions are made that exploit and, in many instances, inflict pain and suffering on “victims” in the world of business – usually with a rationale that is as transparent as leaders waging war. Sadly, the current economic environment creates rationale (camouflage!) for such actions.

Personal Observation

“If you want a successful business, your people must feel that you are working for them – not that they are working for you.” – Sam Walton

After more than five decades of working with individual companies and portfolios, we would use the following real-world examples to illustrate our point.

The intention here is not to create a long list (checklist if you will) but rather to create the mirror that enables businesspeople the context to ask what activities/accomplishments ultimately take place at the expense of another.

Sadly (at a much smaller scale regarding numbers and obvious casualties) inhumanity is often an issue with a business. The list of how inhumanity can manifest itself in business is endless and multifaceted.

Even an edited list of categories creates images that individuals can relate to – often because they were/are a victim.

This is not intended to be the all-inclusive list but even as an excerpt it is depressing:

Management exploiting employees
Illegal strategy regarding competitors
Substandard products
Workforce numbers being the default strategy
Companies exploiting shareholder
Suppliers providing substandard items
Wreaking environmental havoc

If so inclined you could ‘categorize’ their initiatives into those that put companies into trouble (see the previous section) as well as superficial ‘tricks’ to give the impression of the status quo being resolved.

One of the situations where such inhumanity raises its head is in a workplace situation where a company is in financial distress. No better example than the recent headlines in the Wall Street Journal “Elon Musk fires 50% of Twitter’s employees”. One day you wake up, go to your computer to log in and you can’t. You’ve been fired without any notice or discussions. Is there a better way to handle such situations? And what would a humane business initiative look like? Could a process be implemented in such a situation that would protect shareholder value, preserve employment as best as possible under the circumstances and ensure long-term sustainable success? We know this is possible because we have shown this over many years in many companies.

Alternative Approach – Case Study

“There is only one way in which one can endure man’s inhumanity to man, and that is to try, in one’s own life, to exemplify man’s humanity to man.” – Alan Paton

There are several turnaround models that various groups use. One is to slash and burn where large personnel reductions are immediately made as we have just illustrated. This brings short-term expense reductions but weakens the company in the long run and does not result in a sustainable solution. Often these measures are seen as rather inhumane.

Another popular method is to bring a large group of advisors who take control of the company, turn it around and then leave. That too results in an (expensive) turnaround, but again, does not result in a sustainable solution as the remaining employees who frequently do not participate in the turnaround have not been trained to continue the positive results. Therefore, the company eventually ends up in a distressing situation again. And sometimes the leadership that led the company into the situation remains and does not continue the implementation of the new processes.

Methodology

“Only that day dawns to which we are awake.” – Henry David Thoreau, Walden

Our methodology leverages a people-centric approach to problem-solving that results in a stable company with predictable outcomes and it typically requires a single highly experienced leader rather than a large team of “experts” that leads the company through its transition.

It all begins with listening. We begin with “confidential one-on-one behind closed doors” structured interviews with employees. These interviews are held with employees in various positions and up and down and across the organization hierarchy. We end up knowing the strengths and weaknesses of the company, who the A+ and poor performers are, and the key initiatives that will stabilize the company and change the culture of the organization. These key initiatives have been designated the “Yellow Brick Road” (YBR) since solving these problems will lead to the desired outcome.

Having been through a large number of situations in many verticals over the years, this has resulted in pattern recognition that helps us anticipate the results. And as important as identifying the YBR initiatives, we begin building trust and empathy with the employees as they find we can keep our word of confidential discussions.

These YBR initiatives are attacked through cross-functional teams because it is rare that problems affect just a certain function in the organization. This is a huge step in increasing employee engagement. Also, it serves to educate functional personnel on the impact their group has on the company’s operation as a whole.

This changes the culture of the organization from one of inward functional focus to a consideration of the overall health and success of the organization and engenders a collaborative aligned organization. This is not to say some employees don’t leave during this process but they are likely to be the ones that team members wonder why they were still employed.

So, this results in the company essentially healing itself and training in management and leadership techniques that result in an agile and anticipatory organization. In other words, a transformation has evolved in how they communicate, solve problems, increase employee engagement and finally increase customer satisfaction.

Conclusion

“Empathy is about standing in someone else’s shoes, feeling with his or her heart, seeing with his or her eyes. Not only is empathy hard to outsource and automate, but it makes the world a better place.” – Daniel H. Pink

So, what does this have to do with the theme of this article? Remember earlier we said that the inhumanity we are focused on today originates from experience from our commercial activities. The inhumanities we see in distressed organizations are certainly not of the scale we see in Ukraine, Syria, and many other countries, but there are leadership practices that, especially in operationally and financially distressed companies, are the typical “command and direct” companies where information “goes up but little comes down” and everyone is accountable except the senior leadership.

Our practice and being involved in well over 100 company turnarounds show the result of that type of leadership and what our methodology can do.

Bibliography

Relevant Business Brain Model articles:

Inhumanity – The “Yellow Brick Road” to Business Restructuring

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