After shedding more than 260,000 jobs in 2023, the greatest carnage since the dot.com meltdown more than two decades ago, major tech companies show little sign of letting up in 2024 despite being mostly profitable, in some cases handsomely so. In their words, tech companies are letting people go to further the continuing process of aligning their structure to their key priorities, or “transformation” or becoming “future ready”. Behind these generalities, however, some tech companies are using what has hitherto been an extreme measure in order to engineer a short-term bump in market sentiment.
Investors are indeed thrilled. Meta’s shares are up more than 170 per cent amid its downsizing talk. And where stock prices go, chief executives will generally follow, which means it is not likely to be long before the unnecessary layoff makes its appearance at another publicly traded company near you.
These layoffs are part of a tide of disruption that is continually churning the work days in corporations everywhere. If you have spent any amount of time working at a company of pretty much any size, you will be familiar with what I call the resulting “life in the blender” – the unrelenting uncertainty and the upheaval that have become constant features of business life today. A new leader comes in, promptly begins a reorganisation and upends the reporting relationships you are familiar with. Or a consultant suggests a new strategy, which takes up everyone’s time and attention for months until it is back to business as usual, only with a new mission statement and slideware. Or, everyone’s favourite: A merger is announced and leads to all of these and more.
Now, no business prospers by standing still, and there is no improvement without change. Course corrections, reorganisations and strategic pivots are all necessary from time to time. Technological changes continue to demand the restructuring of major industries. But over the last quarter-century or so, the idea of disruption has also metastasised into a sort of cult, the credo of which holds that everything is to be disrupted, all the time, and that if you are not changing everything, you are losing.
You can take courses in disruption at the business schools of Stanford, Cornell, Columbia and Harvard. You can read, on the cover of a leading business magazine, about how to “Build a Leadership Team for Transformation: Your Organisation’s Future Depends on It”. And if it is the catechism of chaos you are after, you can buy the inspirational posters and chant the slogans: Fail fast; disrupt or be disrupted; move fast and break things. Part of this, of course, is a product of the hubris of the Silicon Valley technologists. But part, too, is the belief that the fundamental task of a leader is to instigate change. It is hard to remember a time when there was any other idea about how to manage a company.
Moreover, because a majority of corporate executives – together with the consultants and bankers who advise them, the activist investors who spur them on and the financial analysts who evaluate their efforts – have been raised according to this change credo, the constant churn becomes a sort of flywheel. A leader instigates some change, because that is what a leader does. The advisers, investors and analysts respond positively, because they have been taught that change is always good. There is a quick uptick in reputation or stock price or both, the executives – paid, remember, mostly in stock – feel they have been appropriately rewarded for maximising shareholder value, and then everyone moves on to the next change.
Intent and outcome gap
But it is hardly clear that this is having the desired result. Studies of merger and acquisition activity have pegged the rate at which it destroys – rather than increase – shareholder value at something between 60 per cent and 90 per cent; Stanford Business School’s Professor Jeffrey Pfeffer has argued that layoffs seldom result in lower costs, increased productivity or a remedy for the underlying problems in a business; and few of us who have lived through reorganisations remember them as the occasion for a sudden blossoming of productivity and creativity.
Seen through the eyes of people on the front line, the reason for this gap between intent and outcome comes into tighter focus. After all, when the people around you are being “transitioned out”, or when you find yourself suddenly working for a new boss who has yet to be convinced of your competence, it is a stretch to persuade yourself that all this change and disruption is leading to much improvement at all.
“It’s exhausting,” one person I spoke to about change at work told me. “It’s soul-sucking,” said another. One person told me that after the combination of two departments, his people were like deer in the headlights, unsure of what they should be working on. Another had 19 managers in 10 years. Another told me that perpetual change drained the energy from work: “You say the right things in the meetings, but you don’t necessarily do what needs to be done to make it happen.” Another learnt to watch the managers and be alert when they stopped dropping by or communicating: “It is like before a tsunami, when the water goes. You don’t see the water, and then the tsunami comes – all of a sudden, it comes, hard. When everything is calm, I worry.”
Of the dozens of people I spoke to, every single one had some sort of change-gone-bad story to share. And these sorts of reactions are about more than simple frustration or discontent. They are rooted in the psychological response we humans experience when our sense of stability is shattered and our future feels uncertain, and indeed the scientific literature has much light to shed on exactly why life in the blender is so hard on us. Experimenters have found, for example, that our stress is greatest when uncertainty, not discomfort, is at its peak – and uncertainty is the calling card of change at work. Then there is the question of agency: A well-known series of experiments conducted by Professor Steven Maier and Dr Martin Seligman in the 1960s discovered that when we sense we are not in control of a situation, we give up trying to make things better – this is “learnt helplessness” setting in.
Other researchers have described our fundamental need, as a species, for belonging, and the importance of our social groupings – which helps to explain why we do not like it when our teams are disassembled, reshuffled and reassembled. And others still have shown that we have – perhaps unsurprisingly! – a deep-seated need for things to make sense in our environment, a need that is so often thwarted by the generic CEO statements and exaggerated cheer-speak with which most change initiatives are communicated.
But while the essential response of the human animal to uncertainty and disruption is hardwired, the degree of change we introduce into our workplaces is not. It is often a choice. We have reached this point because the business world seems to have decided that change is an unalloyed good, and so there is no amount of it that is too much, and no cost of it that is too great.
Were more leaders to be guided by the science of change, or by the stories that people on the front line share, they would quickly discover that it is stability that is the foundation of improvement. Only once we begin to honour people’s psychological needs at work, by thinking twice before launching into the next shiny change initiative and by paying more heed to the rituals and relationships that allow all of us to point our efforts in a useful direction, can we begin to do justice to the idea that a company must be, first, a platform for human contribution if it is to be anything else at all. NYTIMES
Ashley Goodall, who previously worked as an executive at Deloitte and at Cisco Systems, is the author of the forthcoming book, The Problem With Change.
MORE ON THIS TOPIC
Quit-Tok: Why young workers are refusing to leave their jobs quietly
Layoffs affect all employees, even the survivors
No comments:
Post a Comment