Our urgent desire for constant growth increases the pressure on the players in our organizational systems. With fewer and fewer people, we are nonetheless trying to generating higher and higher outputs. This improves the profits and is beneficial from a shareholder value approach. But does this lead us to sustainable success? And should a sustainable shareholder value approach not always also follow the principle of a stakeholder value?
Whenever I look at the development of today’s organizations, I oftentimes doubt the competence of the companies’ management with regards to long-term strategies. Clearly, the players at the top management levels change so fast that sustainability can hardly have relevance there. Family-owned companies are a laudable exception in this case because their fundamental concept already focuses on a long-term perspective (note: insofar as the family is not already intending to sell the company shortly). Already at the university, we have learned with regards to management buy-out processes that one must increase the value of a company with all means necessary so that one can attain the maximum profits after five years. But is this strategy financially-feasible? Can we truly increase the company profits with all means necessary even if this comes at the expense of our employees?
In difficult financial times, it is clear that the company management must focus on the company’s survival. However, if we don’t give the employees the space to be able to emotionally identify with their work duties, the risk of burn-out increases dramatically. The criteria of a burn-out syndrome (according to Christina Marlach) are:
- Emotional exhaustion
- Depersonalization whereby an emotional distancing to one’s own work is meant and/or a cynical and rejecting attitude towards the people for whom one works
- Inefficiency often associated with the feeling of a lack of meaningfulness regarding one’s work (low personal accomplishment)
This development is not apparent–we only slowly feel the ramifications of emotional exhaustion and depersonalization. Inefficiencies in the organization are then oftentimes countered with increasing pressure which only then increases the emotional exhaustion of the individual players even more. I am of the belief that good management must focus on the well-being and thus also the emotional health of its employees.
We also indeed know that psychological abuse affects the same brain regions as emotional cruelty. Thus, we can equate harassment and/or all other actions which cause our employees to burn out with all other types of violence. The six aspects of importance for the maintenance of emotional health (according to Maslach) are:
- Work quantity (work load)
- Possibility of influencing the work processes (control)
- Reward and recognition (reward)
- Working climate and collegiality (community)
- Transparency and equity (fairness)
- The meaningfulness and values associated with the work (values)
By means of these aspects, the management task is very clearly defined. In this regard, the complexity becomes even greater because, for example, the scope of work quantity which is feasible can vary a lot individually. In addition, according to Situational Leadership(from Paul Hersey and Ken Blanchard), it is still situation-dependent; that is to say, one task for one employee can–depending on external and/or internal influences–be feasible on one occasion, but a completely overwhelming challenge and thus not feasible at all on another occasion. Now to believe that optimally it would be best for us not to give our employees anything at all to do would likewise be wrong. “Bore-out” syndrome constitutes stress as the result of boredom and is just as dangerous as burn-out.
However, the stress is not always triggered by the hierarchy. Particularly the high-achievers in organizations tend to accept tasks and overexert themselves on their own. We speak then from “active jobs”–jobs which are done with much enthusiasm and the risk to one’s health lies in the “self-exploitation”. Thus, managers are also responsible for protecting these high-achievers because it is also an organizational loss if high-achievers take themselves out of the system in this way.
Neuroleadership (from David Rock) supplies us with the SCARF Model–a model for brain-specific efficient management. In this regard, we communicate to our employees what we find good about their work; thus, we increase their status. By so doing, the employees know that we expect the best-possible performance; thus, we convey security. By allowing each employee to be able to contribute his own strengths, we safeguard their autonomy. Good managers also know at all times how the employees feel, pay attention to their concerns and thus focus on attaining a connection with them. And they treat their employees fairly at all times.
As managers, we definitively have a social responsibility. Thus, sustainable stakeholder management also means that we deploy our employees in such a manner as their potential allows us to and are responsible for ensuring that they find the suitable environment which is conducive for attaining the best results over the long term. This extends beyond the work life because there is nothing better than if the players can enjoy their retirement in good health after their work life ends. Exploitation has no place in future-oriented organizations. Thus, over the long term, successful stakeholder management is always also shareholder management.
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