Sunday, October 2, 2011

Taylor - Motivation and the 2008 financial crisis - lessons for the future (part 1)

Mid 2008 the financial crisis erupted all over the World. It had such an ampact on every country and company worldwide that was never seen before. Most companies quickly developed strategies to survive the financial crisis, sometimes based on lean principles. The basis of lean management was made by Frederick Taylor, exactly 100 years ago and the concepts are still very much alive today.
In 2010 – only two years after the breakthrough of the crisis – with a recovering  economy (eg look at the dazzling number of job vacancies in those same companies who were firing people only two years ago) those companies werre healing their wounds. Today, we might face yet another worldwide crisis. Did we learn from the previous crisis ? I don't know. I hope so, because we made some mistakes in the 2008 crisis.
Managers who didn’t take into account the motivation and recognition of employees, were facing a high number of drop-outs in 2010, low motivated employees and as a result low efficiency and high costs.
In the following weeks I will share my ideas and opinions on how companies reacted on the financial crisis, what the impact was on employee motivation and what we can learn from it for the future. 
The heritage of Frederic Taylor
Frederic Taylor lived in the beginning of the 20th century and is known as the father of “process automation” and lean management. Exactly a century ago – in 1911 – he published his book “The Principles of Scientific  Management”. Taylor truly believed in people and the possibility to develop competences. He said
“… it follows that the most important object of both the workman and the management should be the training and development of each individual in the establishment, so that he can do (at his fastest pace and with the maximum of efficiency), the highest class of work for which his natural abilities fit him.”
Taylor was well aware of the fact that this believe was rather utopian, but he made a point saying that we should keep on investing in our people to get the best out of them. He considered competent men as one of the most important national resources.
Another strong belief of Taylor was :
“The principle object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee”.
He believed that if a company merits through the efforts of workmen, the the workmen should benefit as well. Despite this believe, Taylor was very much aware of the fact there is a lot of slow work by employees in our organizations and not that many employers are willing to share the extra benefits.
Taylor anno 2011
Today, 100 years after Taylor published his book, the economy is recovering from the financial crisis. If we look back upon the last 3 years, we see that many companies stopped developing people during the crisis to decrease costs. Training budgets were minimized. Many companies let people go, based on general rules like age, first in – first out, cut x% in every department, … Through these abstract and non-human rules, they lost some of the best employees and de-motivated people who stayed. As a result the efficiency decreased even more.
On the other hand a lot of companies put the salary reviews in the fridge and blocked bonuses, despite big efforts from the few motivated people who stayed in the company.
Today, economy is recovering. There are more job vacancies than ever before in Belgium and other countries in Europe. Competent people who felt mis-treated during the crisis are now looking for new opportunities outside their company, which causes even more fall-out of competences. Unfortunately we might be facing a second, even stronger crisis, often due to bad management.
What can we learn from this ?
Even during crisis companies need to invest in people. They are one the most valuable national resources. Development is not always a cost. If you invest in the right people, through the right competence development, your company will benefit from it. And if your company benefits from it, don’t forget to let your employees share in it.
Even in times of crisis, people can make the difference when they are motivated. If you de-motivate them, they’ll become your biggest cost centre.

This was the first in a line of articles about lessons on motivation, we can learn from history. I hope you’ll keep on following me.

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