We’re on the brink of the next industrial revolution predicts UK business
guru Jim Maxim and, this time around, HR should throw out the old rule book and
occupy the driving seat, writes Penny Wilson
Jim Maxim, former chief executive of Laura Ashley and Volvo UK, and his
wife, Shoshana Zuboff, distinguished Harvard professor, flew into London amid
news of mass lay-offs and the fat cat furore. This was good timing as they were
here to promote their new book, The Support Economy, which, after six years’
research, concludes that the world is witnessing the biggest business
revolution since Henry Ford brought cars to the masses in the 1920s.
It would be easy to dismiss the soft-spoken Maine residents as fly-by-night
evangelists preaching the wrongdoings of capitalism. The fact is though, that
with the current corporate malaise, those who want change don’t really know how
to start. Those who don’t are terrified of losing their identity along with the
Porsche.
The book, The Support Economy: Why Corporations are Failing Individuals and
the Next Episode of Capitalism, to give it its full title, has attracted rave
reviews.
Maxim explains that to understand what’s going on, you first have to have a
handle on history. Henry Ford made real his vision that not just the rich, but
farmers and shopkeepers would own cars. So he upped production and sold to the
masses.
Ford dismissed the notion of management, saying men promoted into top
positions would only spend their time playing politics. Inevitably, layers of
management crept in, mushroomed throughout other organisations aping Ford’s
success, and the capitalistic system wholeheartedly supported the philosophy
that men worked and women consumed. It produced fabulous wealth, but the system
was inwardly focused. Organisational narcissism became pathological – what was
right for management was right per se.
"That’s what breeds an Enron," says Maxim. "We basically took
a manufacturing model from Ford and super-imposed it on every organisation and
everyone. It has bred the fat cat bonus and no-one questioned it because who
questioned the CEO?
"You can try to legislate against this, but nothing will change because
the problem is systemic. You will still find people reducing benefits to staff
yet carving out a hidden pension trust for themselves."
The result is that people feel betrayed. Someone, states Maxim, has to
become the spokesman to say enough is enough. And to whom does he assign much
of this responsibility? To HR, that’s who.
"HR should be the social conscience. Someone has to draw attention that
there has been a revolt; that capitalism is proprietary and managerial; that
the manufacturing system is no longer appropriate for today; that society is
now made of individuals who want the freedom to make their own decisions; that
business has to be about advocacy relationships; and that there must be a new
way of doing business. If HR was on mind-altering drugs it would see more than
just boxes of consumers, people and staff," says Maxim
So what is the next phase of capitalism? Maxim predicts it will be
distributed among individuals, not management. The future holds careers
belonging to the individual, not the company, and those individuals are already
demanding their own rights. People will be rewarded according to their support
and the scale of the risks they take. And who will decide on the reward?
Investors, customers, shareholders and stakeholders. The result will be that
the deepest, darkest managerial secrets will become transparent, believes
Maxim.
Ask for the practical ABC guide to seeing through the theory and Maxim says
there isn’t one, because the business world is in transition and needs to throw
out the factory rules everyone has slavishly followed to date. Instead he
advocates that HR rids itself of the legacy it once held that ‘real men do
production and capitalism, not HR’.
"HR needs to recognise the revolution taking place – it needs to advocate
the closing of the gap between and highest and lowest paid and needs to say
what’s right and wrong. We need to stop this bulimic function where
[organisations] suck people in, then push them out because they are seen as a
cost. Why does the share price rise when you sack a bunch of people? It should
in fact fall."
However, the old business system still keeps ticking. In 2001, £10bn
worldwide was spent on customer relationship management (CRM) systems, which in
theory should have seen great returns on sales. Yet the valuation of companies
plummeted. Many answered the trend by pushing up prices and laying off staff to
reduce the cost base. It’s a worn rulebook that needs to be thrown out, reckons
Maxim.
So what is to replace it? Simplistic solutions, he says.
"HR has to get strategic to understand the business it is supporting.
You have to look at how you can bring your customers closer to your staff,
reward effectiveness, grant value to individuals, and question what your
organisation’s values actually stand for. You should investigate alliances,
inside and outside your organisation, to create support networks for staff, and
to build trust relationships."
This new-found power among people, consumers and staff alike, has been
sparked by technology. Maxim and Zuboff call it ‘infrastructure convergence’ –
the knitting together of software that powers a company’s framework and
dealings with customers.
Yet too many organisations still fail to recognise today’s new breed of
customer who wants something different from business – deep support, not just a
mass product or service.
Stick to the limited success of initiatives such as CRM, customer and staff
satisfaction programmes, and the old rules of factory employment and values,
and you ignore a revolution at your peril.
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The Support Economy: Why Corporations are Failing Individuals and the
Next Episode of Capitalism, by Jim Maxim and Shoshana Zuboff, published by
Penguin, is available at a 30% discount through the personnel today website
(see below).
For a selection of peer-reviewed HR titles www.personneltoday.com/books
