The Responsibility of Organisations

I have been surprised to see so many people celebrating the life of Jack Welch, especially people from HR or L&D backgrounds. I’m sure he was a very nice man. Certainly a very rich one. And certainly successful, by one measure of success. But if part of the route to that success is to fire 10% of your managers annually, i would argue not a very nuanced, fair, or developmental one. Indeed, just the opposite. Which got me thinking about responsibility, and the underlying purpose of Organisations.

There are clearly multiple measure of success: you can generate profits for shareholders, you can provide opportunities for staff, you can be deemed to be deeply fair, you can do great good in the world. Money is the easiest one to measure, but that does not make it the most important, whatever capitalism tells us. And money is not mutually exclusive of the others, although it may require us to take a more balanced view.

Is wealth at the cost of fairness ever the right thing to do? 

And if it is, then who will work the other end of the scale and build the society that we want to live within?

I’ve described this before in terms of understanding a core question: does society exist to serve the Organisation, or to Organisations serve society? I don’t mean that they exist as social enterprises, or charities, but rather that they act a corporate members of society, with appropriate restraint and generosity to make society function.

In this illustration today, i add to that the question of whether they are a net drain on society, drawing fairness out and away, or do they act for net gain: are they able to be financially successful, and also deeply fair, contributing not only wealth, but social good?

If you are thinking at this stage ‘just leave it to the market to decide’, then this writing is probably not for you. Because the market may well decide, but the market does not make the decision right. If fairness is a layer we add on, when we feel wealthy and fulfilled, but something we are willing to abandon when things are tough, then we are charitable, but unfair. Fairness is not about charity, not something to give away with discretion when we feel like it, but rather should be part of our core purpose, and something that we invest for long term gain.

But what about Jack: should he have sacrificed wealth for fairness?

What if the cost of that sacrifice was failure? What if the bloated GE at the start of his tenure would have failed without those cuts?

Partly that’s a disingenuous question: to wilfully fail is not fair either, not fair to staff or shareholders, or indeed wider society.

But the corollary of avoiding failure is not success at any cost.

It can be fair to make cuts, fair to lose people, and even fair to make money. But what may not be fair is to do those things beyond reason.

Cutting 10% of staff because that is your only sustainable option is one thing Cutting them because you think it’s clever, or because it makes you look like a six shooting hero is not.

Cutting staff because you don’t think they can learn, change, or contribute, is neither clever nor fair.

As i say: i’m sure Jack was a nice man. I’m sure he was almost a billion dollars a nice man. But that does not make him a hero.

If we rely on markets to make us fair, we will fail. Markets do one thing well: impose transparent value on a system. If i will pay you $10 dollars for it, then it is worth $10. But fairness is not a directly traded currency, and even where it is traded, it is more honorific than fiscal. And it may mean different things, and be worth different amounts, to different people.

I often play a game called ‘Coins of Gratitude’ with people, and they earn a coin to say ‘thank you’ for things that are important to them. Sometimes those things are huge: i remember one man spending it to his partner for her care when he had been ill, and one young man spending it to his grandmother who had funded his MBA in international development, helping him to achieve his dream of helping others. Other people are grateful for small things: like their dog, or chocolate. But all just earn one coin. The value of that coin is socially imbued, and unique to each person. Fairness is a little like that.

I can act however i like, but i cannot make you think it is fair.

But if i act fairly towards you, you will know it.

So fairness is contextual, judged in the receipt, and rarely traded, existing beyond money.

To pick on someone who has just died is an unfair target, and both ignominious and belittling of me. But equally to idolise someone who achieved their great success at a great cost to fairness may be deemed morose as well. So i will forgive others if they will forgive me.

Of course, the status and fame of the hero is itself a socially traded currency: you cannot buy your way to the top.

At the end of the day, we will have to invent and narrate the Organisations that we want, if we are not to be caught in service of the Organisations that we deserve.

We will have to invest fairness if we want Organisations to be fair.

And we will have to put down our heroes of old and fine some new ones who have earned the respect that we invest in them.

We can be wildly successful by being wildly fair. And certainly we do not have to write people off to be successful.

So consider the Organisation you inhabit, and ask where it is responsible: to you, to shareholders, to wider society.

And ask if it is draining, or acting for societies gain. Is it successful to serve: to create opportunity and act as a force for good, to reinforce and refresh society through progressive approaches to labour, to environment, and to reward? Or is it successful just to make money by selling out people?