Pro Business Against Greed ~ Strategic Human Capital Management (HCM) Blog

Tuesday, 9 October 2012

Pro Business Against Greed

There's been some great business TV on over the Summer, making a great change after endless series of the Apprentice and not very much else:

Show Me Your Money which I have already posted on (and which is going to spawn a series of its own now)
Bring Your Baby to Work which suggested, quite powerfully, that babies can thrive in the workplace and don't have to reduce their parents' or other worker's productivity. An interesting experiment, and though I don't think many organisations will do this themselves, I hope some do.
The Town that Never Retired - with the Apprentice's Nick Hewer and Margaret Mountford looking at the difficulties the ageing workforce will face post the removal of the default retirement age (but comparing them very positively to the difficulties that generation y face in pulling themselves out of bed).
The Farm Fixer - Nick Hewer again helping farmers launch new businesses
And more Undercover Boss, which I think has lost its way a bit, mainly because it's often no longer 'the boss' who is the one going under cover.

But my favourite business oriented TV show until this week was the Bank of Dave, following the hurdles the entrepreneurial and quite amazing business owner Dave Fishwick faced in starting up a new local bank to do banking in a moral, ethical and purposeful way and show the established banks that there is a better way.

But as I wrote, that was until this week. Because now, I have a new favourite. In Secrets of Your Boss's Pay, ex Greggs CEO, Sir Michael Darrington, made very calm war against greedy bosses, who unlike the way he believes he behaved in his former role, aren't engaged in capitalism as much as carving out money from other people. Darrington made a very powerful case for this needing to be reformed although actually the best case was made by James Caan's self centred challenge to these arguments.
But supposing we do believe that Caan would support pay restraint if it was possible in the face of global competition, we also have to answer his question about how this can be done?
And for me this is quite simple. Businesses need to find CEOs who care about more than just how much they get paid, and then they don't always need to be offered pay in the top quartile. After all, if money is all they're concerned about, they're not likely to be a very effective CEO. Even if they do still care about the customers and employees (and caring about them because this is the way they can maximise their rewards isn't quite the same thing) - which is unlikely - they're not going to find their employees care about them.
Even if employees do engage in George Osbourne's latest wheeze, they're not going to feel compelled to support someone who has often over one hundred times as much to gain as them.
If you're not convinced, take a look at the vitriol in the comments on Channel 4's page about the programme. Or take a look at the comments on the Economist's recent attempt to justify the pay of CEOs. These aren't a deranged small minority of the population, these are your employees. As I commented on the Economist's article:

"I think the comments here show why this article has missed the mark. It might have been acceptable to pay CEOs high multiples of employees in 1998 but this no longer works. The revulsion expressed below isn't unusual - the same distaste, even disgust, permeates across the employees of many highly paid CEOs. The fact is these organisations, in 2012, just aren't going to be successful if this is the case. We really do all need to be in together, if today's organisations are going to work. Nobody's going to be in it with their CEO if their CEO is paid 50 x as much as them. That's why what may have worked in 1998 just doesn't work today. And why we should not longer be doing it."

So well done Michael Darrington. You can find details of his campaign here, though, given the soft nature of this, I wasn't surprised to see that the get involved button isn't working and the call to sign up for the newsletter isn't supported. James Caan would have done things more efficiently, but then efficiency isn't going to help you if you're barking up the wrong tree.