Vogel Wakefield blog

Vogel Wakefield blog

May
11
2011

The emotional context of business

A healthy emotional climate is a competitive advantage

A healthy emotional climate is a competitive advantage

 

Organisations are emotionally-charged places.  But little of this ever reaches the boardroom.  This means that directors cut themselves off from some of the most important knowledge they need to hear.

Some organisations have a knack for creating great places to work which get the best out of their people.

John Timpson, the chairman of the Timpson chain of shoe repair shops, swears by his system of “upside-down management”.  He believes the people in his shops have the best knowledge about the business and that it is his job is to get management out of their way.  He insists on as few rules as possible and gives staff the freedom to set prices, deal with complaints and decide their own training needs.

The John Lewis Partnership makes everyone in the company an owner, conferring on each of them a responsibility not just to do their jobs but to contribute to the leadership of the firm.  One John Lewis employee – quoted in The Guardian – speaks of:

The “passion and commitment” that come from “being engaged, because you have a vested interest in making sure it works, for you and for the people you work with.”

These companies – both doing well in difficult economic circumstances – are successful examples of what the writer, Bob Garratt, calls the emotional climate of an organisation.  They make the emotional climate a source of competitive advantage, by ensuring that employee behaviours deliver excellent customer experience.

In The Fish Rots from the Head, Garratt emphasises that it is the responsibility of the board to set an emotional climate that helps an organisation succeed.  The emotional climate covers many things: sharing a clear sense of what the organisation exists to achieve, beyond making money for shareholders; alignment behind the values that shape behaviour – such as excellence, creativity and risk-taking; and the ethical base of the enterprise – how you determine what is right and wrong.

One of the most important functions of a healthy emotional climate is to enable the organisation to learn from its experience.  Garratt concurs with Timpson that the most important knowledge is held by people who are low in the hierarchy but responsible every day for the customer interactions by which a company makes its name.  The insight they hold cannot reach the leaders of the organisation unless there is a mature emotional climate which allows people to have honest conversations about their experiences.

It’s 15 years since emotional intelligence entered the lexicon of corporate life, popularised by the writing of Daniel Goleman.  Yet few organisations give serious consideration to the emotional factors that shape their success.  Corporate culture operates in a rational, logical paradigm that is driven by numeric data and a quasi-scientific model of management.  This has its place.  But it is only part of the story.  In Western culture at least, organisations operate in a context in which the emotional dimension is increasingly important.

Given that most people’s basic material needs are well-met, people bring to their jobs and to their choices as consumers a higher-level need to express their sense of self.  The way they respond to situations at work is in large measure emotional.  But the instrumental nature of organisations – their focus on the task and the bottom line – makes them ill-equipped to to accommodate this aspect of human existence.  Workplaces on the whole are directive, command-and-control environments, in which people are expected to know their place and keep their heads down.

The influential psychologist, Carl Rogers, was one of the great advocates of the view of people as essentially self-directing, able to form their own standards and values on the basis of their own experience.  He insisted that people were inherently resourceful.  Timpson and John Lewis seem to understand this psychology.  They have high expectations of their people, inviting them to focus their imagination and initiative on the big picture not just their immediate job roles.

If work fails to find a way to draw out employees’ potential, they are likely to develop negative emotions towards their organisation and disengage their commitment.  The result is the opposite of an organisation that learns; it is one where insight stays where it is and the organisation hampers its own potential.

This is how organisations can preside over disasters even though the knowledge of something awry may have been widely grasped but never quite articulated.  The rational-logical paradigm is impervious to intuitively known truths that find scant expression in management data.  Neuroscience is demonstrating that the greater part of what we process of experience is unconscious.  If we are aware of it at all, it is as emotional reaction, gut instinct, possibly a sense of ease or unease about something.

Leaders of organisations need to find ways to tap into this kind of knowledge.  To access it is more of an art than a science.  It resides in the unofficial organisation: the subversive or irreverent stories that people tell each other; the informal sources of leadership to whom people listen.  Stories are vital to understanding what’s going on.  As the management theorist, Yiannis Gabriel, writes,  “Stories open valuable windows into the emotional, political and symbolic lives of organisations.”

For stories to be heard, there needs to be a safe environment for them to be disclosed.  It often takes people with specialist skills, such as journalists, coaches or academic researchers, to encourage people to share what is normally tacit knowledge.  But it is incumbent upon boards to ensure that – in the long term – emotionally honest conversations can flow without the intervention of specialists.

An organisation’s reputation is a direct function of the emotions it stirs up, good or ill.  The board needs a 360-degree understanding of what is happening if it is to apprehend hidden vulnerabilities and opportunities in the organisation.  If it can’t create a culture in which emotionally-laden messages can be communicated and understood, it may shut itself off from some of the most important information it needs to hear.

Image courtesy Seattle Municipal Archives.

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