Recession led to a stronger view on ethics in mgt – An interview with Lynda Gratton in ET

Lynda Gratton has spent two decades working on, as she says, humanising employment . More recently her raison d’etre has been the examination of
why some organisations buzz with high energy and some just go into what seems like a deep freeze. In her best selling book ‘Hot Spots’ , this professor of management practice at London Business School says that when the right people come together in a business they can create Hot Spots, moments when innovation and excitement create exceptional results for a business. In her subsequent book ‘Glow’ Gratton puts the spotlight on people who, thus energised, are able to radiate enthusiasm and inspiration in their work and inspire and ignite other people. These are the people, she says, who will always be in demand. Yes, even in a slowdown. Gratton is considered one of the world’s authorities on people in organisations and was listed at #18 in the Global Thinkers50 – the definitive listing of the world’s top 50 business thinkers. Her newly founded Future of Work consortium brings together more than twenty global corporations in a virtual community to research, examine and co-create templates for organisational practices of the future. Together, she is hoping they will create an in-depth analysis of how we will be working – as companies and individuals – in 2020. Come February, Gratton will be bringing her message about energy and innovation to the NASSCOM India Leadership Forum in Mumbai.

How has the recession forced organisations to reexamine their relationships with their people? Do you think people engagement was compromised before the recession?
The recession has indeed been a time when re-evaluation has taken place. Often recessions are times when old ways of working are finally let go of and new ways take their place. For example, the last recession in Europe saw the beginning of outsourcing to India, propelled at that time with the need to reduce costs. With regard to this recession I predict a number of changes. The first is that the pressure on costs forces increasing globalisation of the labour market. For example we are now seeing Indian lawyers working virtually with western law firms. Secondly, again driven by costs and concerns about carbon – we will see an increased focus on working from home and the use of community based technologies. With regard to engagement – this has taken a hit as people realise that their jobs are in peril. In the longer term I see engagement moving from a focus on corporate loyalty to a focus on interesting work and development.

In your bestselling book The Democratic Enterprise you spoke of a situation in which the interest of employer and employee could be reconciled into a mutually successful bargain. What are the tenets of a democratic enterprise?
When I wrote The Democratic Enterprise I was a little forward in my thinking. Since it was published I believe that technology has made the possibility of democracy at work more of a reality. I guess for me the tenets are that the company is capable of treating people as individuals and acknowledging their needs and that employees are provided with some choices about where and how to work, and also what they work on and whom they work with. Interestingly though democracy, as in the state, is not simply about the role of the institution. It is also about the responsibilities of the citizen or employee. So the employee also had responsibilities to become engaged in making wise choices and to strive to build their human capital.

How can we change the way we manage and organise people to make the most of their talent and energy?
Again, I think the emphasis is on acknowledging the strengths and talents a person has. I also believe that we should move away from always focusing on the talents of individuals to a deeper understanding of the role that teams and communities play in creating energy.

You’ve spoken in your book Hot Spots about how some organisations buzz with energy and some just don’t …
We have now one of the largest data sets in the world on energy and innovation in teams and organisations. We have found that some places really buzz with energy, whilst others are more like being in the Big Freeze. I think the key is that there are leaders around who are prepared to ask tough questions — like the question Ratan Tata asked when he created the Nano — ‘how can we make a car that sells for one lakh?’ But it is not simply about leadership. It’s also about a mindset in which people are able to share and cooperate with each other. Finally, we find that buzz comes from networks in which people who are very different are able to really get together and share ideas.

Are you seeing a lot of companies question their fundamental assumptions about the purpose of their business, the way they run their businesses and the roles of those who lead it?
Clearly there are some companies that have been created with a strong community and social purpose. Of course the majority have been created to serve the needs of shareholders and employees. I see an important debate arising about the role of businesses in society and also the role of the leader. It seems to me that the debate around a low carbon future is a case in point. I see more and more CEO’s understanding that they have to take a role in this and cannot leave it to governments to solve this complex problem. My recent research is on the Future of Work and we have engaged more than 200 executives from 20 companies around the world in a debate about these types of issues . I am writing a weekly blog to describe these conversations.

You’ve spoken a lot about how hot spots in organisations foster innovation . Why is a slowdown the right time for innovation?
Historically, some of the best innovations arise during a recession. When people are looking for value for money and are prepared to take risks this can be a wonderful opportunity to experiment and to innovate . Remember that hot spots have three elements; a cooperative mindset, boundary spanning between people and an igniting purpose. These are elements which are crucial in a recession.

How are business schools and their curriculum adapting to these changes? Will we also see a new breed of management students as a result?
The recession plus the banking problems have created a stronger view about the role of ethics in management and London Business School has been very involved in this. I think the second change is in the realisation that many of our students will choose to build their own company rather than joining a company — so we have put a great deal of emphasis on entrepreneurship. So hopefully the new breed of student will be more ethical and more savvy.

Original article appeared in Economic Times

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