Mad Management: Employment, community and wealth – a proper test of business leadership

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I was at an Assist dinner for asylum seekers last Saturday (it was great) when one of my readers there asked if I could be a little more upbeat in this column.

Actually I believe she said “less miserable”. She was right and I will try; but, this conversation took place at a charity dinner for asylum seekers.

Just where did he think his dividends came from? Mrs May’s money tree?

They, unlike me, have no job, no security, so they barely even achieve the bottom rung of Maslow’s hierarchy of needs (pictured). In fact, I believe asylum seekers are still forbidden to work. What madness is this?

First of all, having something to do preserves your sanity. Secondly, the asylum seekers I have spoken to really want to be able to contribute to the UK.

This goes some way towards restoring their dignity. Displaying humanity is more than just accepting refugees. And having a job affects more people than just refugees.

Immanuel Kant’s Rules for Happiness begin with “something to do”, i.e. something to do, someone to love, something to hope for. One of the greatest things we can offer an adult is a job, especially one that pays.

One of the things we can do for ourselves as bosses is to provide good work, where the employee is fairly treated and paid. Note, I said that is what you can do for YOURSELF, not the employee.

For those TV viewers who, like me, subject themselves occasionally to The Undercover Boss, must have also found themselves shouting at the screen in disbelief: “You didn’t know?” as yet another CEO breaks down tearfully saying he/she never realised how wonderful his employees were and what a tough life they had at work and home.

He or she would then pat the most pathetic cases on the head and give them a holiday or send their kid to college to express their care. At this point my wife restrains me from throwing the remote control at the TV, because what they should be doing is fixing the system that the leadership designed which created the conditions that exploited the employees.

We have a wonderful example in Mr Ashley of Sports Direct fame. He confessed he had no idea that his organisation comprised a number of sweatshops which would have been quite at home inBangladesh.

Just where did he think his dividends came from? Mrs May’s money tree? This wilful ignorance causes great harm to employees, just as Microsoft’s cruel stack ranking did, which even Forbes magazine criticised.

But the real harm is to these “captains of industry” themselves.

They attract no-one of worth to them. At the most they will be humoured in their social relationships,often secretly despised, and their understanding of real life is diminished. Just how can they exercise good judgement?

Oh, wait, I am being miserable again.

Although I am an economist who admired the late Robin Murray – the left-wing industrial economist I wrote about last week, and a critic of Henry Ford – I am actually an admirer of Ford. He was an extraordinary visionary and a pragmatic altruist.

In the Eighties I was fortunate enough to meet, and correspond with, a man who knew him well, Jim Newton. He confirmed what an extraordinary man Ford was. Robin Murray acknowledged this in a thoughtful article in 1988 for Marxism Today (Life after Henry (Ford)), focusing on Ford’s mass production technology and its impact on industry.

However, what is less well known is Ford’s practical community thinking as an industrialist.

In the 1920s he refused to follow the normal business practice of laying off workers when demand fell and re-hiring when it rose (known today as “zero hours”). He said that it just put the workers into debt.

Purchasing power had to be more widely distributed, so he decentralised, setting up parts factories in the nearby rural areas where there were energy sources, ie rivers.

He employed the local farmers, but also gave them time off to farm and to use the extra income to invest in more efficient agricultural equipment – made by Ford. The local wealth increased.

More presciently, where the factory work was lighter, Ford employed the women from the farms at the same rate as the men. Older women were preferred because it was harder for them to get work.

Married women were only employed if their husbands were unable to work. They could have leave of absence at any time the farmwork needed it.

The result was that the women very often brought in more than the farm did. Security increased as cash flow was increased and steadied.

What did Ford get? A 22 per cent drop in the costs of production at the Phoenix plant, for example – not least because the women were more dependable, efficient workers. What else did he get? He got good counsel from his critical loyal friends Thomas Edison and Harvey Firestone, ie the importance of honest relationships.

His 1926 book, Today and Tomorrow, should be the first leadership book on the reading list of any MBA programme. It is a revelation.

In summary, Henry Ford had wisdom about business and community, and so I was delighted to read of the winners of this year’s best of business awards, especially the Business in the Community Award going once again to the Sheffield Credit Union. Keeping hard-up people out of the hands of the payday lenders when the banks won’t help is wonderful work.

Am I being miserable again?

Time for my holiday!