Archive for March, 2010

Management by social objectives

March 29th, 2010 admin No comments

In the past I’ve been following the goings-on at France Telecom, which has been at the centre of a lot of media attention – who sometimes and somehow manage to make a link with Lean – following a spate of suicides. Despite the coverage and an increased level of communication between management and representatives of the workforce, there have been another 11 incidences so far this year (none of them however in the workplace) following 25 or so last year.

One of the consequences of the drama has been a change of management at the highest level, and the new boss has wasted no time in addressing the problem head on.

Following 22000 job cuts during the reign of his predecessor, Stéphane Richard, the new General Director, has committed to stabilising the level of the workforce through 3500 recruitments. And there will be no further cases where employees are obliged to move regions just to keep their job (this was one of the root causes of the crisis) and any moves will be based on volunteers (who hoping will be influenced through positive rather than negative incitements).

However, one of the most interesting measures is that of the composition of the variable part of the remuneration of the senior management (1100 of them, there does seem to be an awful lot of layers in there – there are 10000 managers in total). The variable part of their salaries can be anything between 30 and 50%, and 30% of this will be based on their ‘social performance‘.

How on earth do you measure ’social performance’? It does look as though they don’t quite know, just yet. However, the measurable objectives will be determined in collaboration with the trade unions. And an independant third-party will be used to measure the ’softer’ side of the measures through surveys, etc.

Hopefully the results of the negociations will be published, so that we can all learn from an episode that nobody to date can take any pride from.

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Au secours

March 22nd, 2010 admin No comments

Is French Lean going downhill? Have we reached the peak of the wave?

In previous posts, I’ve mentioned the government initiative to ‘relaunch French industry’. Well, not only did the final conclusions not make any mention of Lean at all, but this weekend’s regional elections represented a heavy defeat for the right-wing governement party. Hopefully, there was no connection between the two events.

Joking apart, most of the initiatives that get press exposure seem to be getting off on the wrong track. Actually, McKinsey (no less), back in 2008, came up with the recommendation that the government should be rolling out Lean just about everywhere to get the economy kick-started. I’m sure that there are several of us that would have come up with the same conclusions for a fraction of the cost. Anyway, the government took heed, and starting launching initiatives through the regional economic boards. In every region, twenty or so companies got the opportunity to pay half the going rate (which, by the way, is a rate superior to what would normally be paid, but that’s government for you), the other half being footed by the taxpayers, to have the privilege of twenty days’ consultancy support to ‘roll out’ Lean. And fabulous videos were made showing just how effective the approach was, mentioning the consultants in question in just about every other sentence.

Well, that’s how things work over here.

And more recently, we now have AFNOR (which is something along the lines of the ‘French Agency for Normalisation’, noted for their work on the ISO standards, who have come up with ‘the very first official Black (and other colour) Belt certification’. Official! You must be guessing by now that there probably is a catch in all of this.

You are right. The so-called “experts” driving the Black Belt certification… are the very same ones lining their pockets with government grants to provide a mere twenty days consultancy support to the poor, deluded company directors who reckon that they are going to become Lean overnight.

In summary, we now have a country where the government and its initiatives have never had any less credibility, Lean doesn’t figure in their programmes anyway, and the SMEs see Lean as a means of getting some free cash off the government.

Although we do now proudly boast the world’s first ‘official’ Black Belt Certification.

Au secours.

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John Lewis – doing something right

March 12th, 2010 admin No comments

I was intrigued today by a headline on one of the English news sites on John Lewis, which had such a good year in 2009 that all employees will be receiving a bonus of eight weeks pay.

Now, this is not a common news story these days so, looking a little further, I started to understand the John Lewis ‘partnership model’. Admittedly on their own web site, they stated just last month findings from a report (ok again, admittedly one they commissioned themselves) on the benefits of this model.

Resilience – the ability of firms to sustain employment and growth during difficult economic conditions – has been neglected as a crucial aspect of company performance over the past two decades. Instead, business strategy and public policy have been dominated by an unremitting focus on maximising share value. In the current economic conditions, business leaders and policy makers should be looking again at the resilience associated with the employee ownership model – and how it could benefit the economy as a whole.

Now, if I’d seen this piece in isolation, I’d have possibly agreed, but laughed it off as another corporate gimmick – well, they would say that, wouldn’t they.

However, when a month later the company’s results are published, and the headline focuses on how the company’s staff will be benefiting massively from the improved performance, I must admit that I sit up and take notice.

Proof that the road to success is not easy, but trying to take it without ensuring that the personnel – all of them – are on board is sheer lunacy.

Don’t I just love success stories!

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Following up on France Telecom

March 9th, 2010 admin No comments

Back at the end of last year, I commented on the initial findings of the report into the goins-on at France Telecom, where there had been a high level of suicides over the previous 24 months.

The second part of the report came out this week, a summary of the 102000 questionnaires which had been sent out to the employees of France Telecom. The report includes 107 – yes, that is a lot – recommendations as to how to improve the current situation.

You see, the independant auditor recognises that, despite the media attention, promises from the executive, and even a change in leadership as of the beginning of this month, things are still a long way from being perfect. In just the first two months of this year, there have been nine further suicides of FT employees, all away from the immediate vicinity of the workplace. And the major obstacle to progress is the lack of confidence the employees have in Human Resources, and in the works medical staff (an obligation in French companies).

Only 39% of employees are ‘proud’ to be a part of France Telecom, and report outlines the need to reinforce the identification with the company. The Human Resource function, the management system and the reporting system all have to be radically overhauled – simplified, in fact, to give back a minimum of autonomie to the workers.

Now, doesn’t this now start to look to be an excellent opportunity for Lean Management?

The matrix organisation in place is revealed to be far too complex, leading to a series of reorganisations which only serve to destabilise the employees – many end up simply doing nothing, as the priorities change all of the time. And the information systems are also seen as a barrier to efficient communications and relations – too many and inadapted to the actual requirements. Finally, objectives and measures are deemed to be “too numerous, too difficult to achieve and disconnected from reality”.

Now, this does seem to me maybe to be something to do with the management style that has developed over the past few years. The report states that management has not been sufficiently open to dialogue, to constructive criticism and to collective reasoning. Rules for promotion are seen to be ‘unclear’. Any meeting with Human Resources was seen as a sign that you were on your way out. And mobility was something that could be imposed upon the employee with little regard for his or her personal situation.

The new General Director of France Telecom, in place since March 1st, will be presenting his plan to the workforce in June. It sounds like that if he could bring it forward a few weeks, he may save another life or two in view of the current climate in the company.

And I wouldn’t think that any of the conditions for a successful Lean adventure exist today.

Categories: It's Happening in France Tags:

Liftoff for French industry

March 6th, 2010 admin No comments

Back in January I wrote about the nationwide consultation ongoing to relaunch French industry. Well, as promised, President Sarkozy presented his plan (or maybe that of his advisors?) on Thursday of last week.

It was all good stuff. There are four overriding objectives :

- increase industrial production by more than 25% between now and 2015

- develop durable long-term perspectives for industrial jobs (no measurable indicators on this one),

- return to a positive commercial balance between now and 2015.

- increase the French share of European industrial output by 2% by 2015 (which I suppose could be achieved either by France improving or the others receding).

To deliver this, there are 23 measures split into five main areas:

- placing industry at the heart of a major project of common interest – this involves setting up a national conference and an ‘industry week’, developing better relationships with the rest of Europe, between industry and higher education.. and between the government and industry,

- developing employment and competencies, through providing incentives to set up in or bring back their activities to France, using experienced workers to help junior ones, and better anticipating industrial requirements in terms of skills,

- reinforcing the regional structures already in place to support industry – part of this includes setting up better regulation of the relationships between larger customers and smaller suppliers,

- reinforcing innovation and competitivity through simplifying regulations (it would be about time) and helping financially companies with promising new products,

- setting up new means for industry to obtain financial support.

Not a lot of surprises, therefore, a major part of the initiatives revolving around the financial difficulties of industry today.

And just in case you were wondering, no mention of Lean in the sections on competitivity. In fact, one could have the impression that the only way French industry is going to become competitive again is if the government gives them lots of money!

Still, there is a whole lot of work to be completed if these are the measures to deliver the 2015 objectives (by the way, the next Presidential election is in 2012). If I was a little cynical (which I probably am), I would finish by saying that these measures are guaranteed to generate new jobs… if only in the local government agencies who are going to have the responsibility of coordinating all of this.

The full report (in French) can be accessed here.

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Best job in the world

March 3rd, 2010 admin No comments

There have been worst periods of industrial strife, but the current social climate in France at the moment is not encouraging. What, with Dutch employers closing factories over the weekend and informing their employees by registered post on the Saturday, or Swedish furniture giants refusing to budge despite striking workers closing down distribution centres and hypermarkets alike, one would have thought that those with a little more comfortable ways of earning a living would be crossing the road and keeping quiet when faced with the hooligans of industrial action.

However, as usual in times of unrest, the air traffic controlers, have insisted on having their voices heard, with the result being that numerous flights have been cancelled and passengers stranded over the past few days… certain categories of airline employees themselves seeing fit to add the ‘passenger experience’.

Now, we have to accept that the level of stress has increased over the past few months. Small business owners wondering how on earth they are going to pay their employees, agricultural workers destroying crops as they lose less money doing so than if they were to sell at the market price, and only this weekend, oyster farmers having their livelihoods ruined by devastating sea floods which cost more than 50 lives.

Therefore, jumping on t he bandwagon, we have the air traffic gang who, under the pretence that they are suffering ‘unvearable stress’ and ‘crushing responsibilities’, decided that they were not going to work anymore (at least for the time being).

Now, to be fair, it has to be agreed that these people do have a responsibility which is maybe more important than that of you and I. However, it also must be said that, on average, they are earning almost five times the minimum wage… for working  – now, hang onto this – just 99 days a year.

266 days of holiday!! Not taking account of leap years. Now, that certainly seems to me to be sufficient time to calm down after a stressful 1.9 day working week. And getting three times the average wage of a small business leader into the bargain. And there are also reports of informal arrangements between individuals – obviously not up to the 1.9 consecutive days – who cover for each other, often leading to security risks for passengers.

So what are the employers doing about it all? Hiding their heads in the sand, it seems.Oh, did I forget to mention that these are public sector workers, and that the boss is the government?

We’re a long, long way from a culture of ‘respect for people’ in this area.

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