Thursday, March 10, 2011

The New Fragility

With the recent twitter fueled revolution in Egypt, stability does not quite mean what it once did.  My perspective is not as broad as it should be, but it seems to me that this should scare more than just nations.  Many corporations are at risk of the same collapse given the right spark, and the spirit of change seems to be catching. 

Is what happened in Cairo any different that what the American people did to GM when money got tight?  GM had been dictating to everyone they came into contact with for decades.  Suppliers had to bend over backwards and try to do the impossible because of the power they weilded.  Consumers had continued to pay rising prices because that was the required sacrifice to own a GM product.  I was a victim myself two times over.  I overvalued the brand. People did not demonstrate in the streets but they certainly stopped voting with their checkbooks, and an industrial icon went bust.  Their fall was cushioned by a bailout or they would now be gone.  Consumers who thought a new vehicle was required every year changed their minds quickly when the world went broke overnight.  When the pain of sacrifice is greater than the pain of action people will be motivated to act to change their behaviors.  Suddnely their daily drivers seemed fine for a few more years.  I cannot speak for anyone but myself, but having worked as a supplier to GM, I can honestly say that I felt satisfaction not sympathy at their downfall.

This principle applies internally as well.  When the percieved pain of finding a new job is outweighed by the pain that is felt everyday coming to work, even the most stable workforce will evaporate.  The limits to which a worker will allow themself to be pushed is a complicated equation based on their debt level, mobility, family requirements, and fear of starting over somewhere new.  There is always a solution to that equation however.  When the breaking point is reached there will be no warning, and the first few departures will often open the floodgates.

For me it really boils down to inclusion.  In business, people want to feel that they are working with their company and not for it.  That feeling allows workers to overlook many small problems and keep things moving forward when progress might bog down.  They want to know that they are important.  Every employee knows that a company needs to make money to survive, but as soon as money is prioritized above people, and ill considered labor cuts force the remainder to do more with less, the pressures begin to build and productivity declines.  In other organizations the same principles apply.  Even in government if the people do not feel that they are represented by the government either they must be intimidated into compliance or the government will change.  In democratic countries this manifests itself with sweeping changes in party control.  In authoritarian regimes it is usually much uglier.

If you lead an organization or even a family it is a good time to take a close look at how included everyone is feeling.  It feels like there is a wave building that has the potential to sweep away many things that once seemed stable.  Don't get washed away.

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