Nick Hood, senior London partner at Begbies Traynor, the AIM-listed business recovery and turnaround specialist, warns companies of the dangers of creating a two-tier employment structure by preventing new recruits from contributing ideas on improving the business.
The Norwegian School of Economics and Business Administration has found that a family’s eldest child does better academically and financially than younger brothers or sisters.
Its 10-year study discovered the eldest usually gains the best grades at school, wins a place to a better university, and climbs higher up the corporate ladder than other family members.
The findings have great relevance to business and the way existing employees are regarded compared with new recruits.
Through years of experience I have found that great tensions emerge in organisations, which are created when the introduction of new staff causes conflict with established colleagues, having a highly detrimental impact on the business’s performance.
There is a direct analogy to the impact of the first born in a family. They do better because they command more of their parents’ attention and are able to get things done their way. They will have stronger language skills and a better understanding of what makes the family tick.
So when younger brothers or sisters arrive, the first born is looked upon as the dominant influence and is often able to manipulate events to their own advantage. They will not be used to a sibling challenging their authority. A large number of tasks within the family will be delegated to them, of which the less rewarding will be delegated to younger siblings.
Apply these lessons to a company and instead of eldest sibling think of existing long-serving staff, especially those at influential managerial levels, who ought to be able readily to accept that new staff bring with them new ways of doing things.
Like the first born, the manager in place will have the authority to implement the decisions of directors. Unless they have already fallen down badly on the job, they will have a large degree of so called ‘founders’ rights’ – enjoying privileges which new employees might consider unfair, especially if they have come in on a similar level in the company’s hierarchy.
And so the seeds of discontent are sown. Long-established managers who have been with the organisation for many years must accept that others have the right to question received wisdom, or bring in different practices that lead to improvement. If existing managers fail to acknowledge that new managers are hired to do exactly this, then they are letting their companies down. And if constant change isn’t part of an organisation’s culture, it will lose out to more flexible competitors.
In short, bosses need to be alert to a culture developing where new recruits feel there is an ‘old guard’ which they must respect and treat with kid gloves.
Of course, employees must respect the layers of authority within an organisation. But they should not be completely servile. With each new arrival in an organisation there is a subtle change. The old established workers feel threatened. They feel that their working practices are likely to be eroded. They feel that the customs they enjoy – and they may no longer be to the advantage of the company – are endangered.
Managers must be aware that new staff are not joining the same organisation they did, but one that has evolved over time. It may be the case that the firm has developed to such an extent that the early recruits are no longer of sufficiently high calibre for the roles they fulfil. If this happens replacements have to be found – there should be no room for sentiment in a successful modern business.
Often people will tolerate tough management, and can deal with difficult decisions such as the need for redundancies or a radical change of direction. What they cannot deal with is indecision. It is ineffective management that produces a collapse in workplace morale. If the management signal that it is acceptable for an old guard versus new employees position to become established, it will produce a very unhealthy working atmosphere, and a noticeable falling off in team communication.
How do you spot if this is happening to your organisation? Some tell-tale signs of trouble ahead will be normally happy and vocal staff, who start to clam up at internal meetings. They will be much less enthusiastic than usual about the prospects of change, and will be polite but not motivated.
The other consequence of overtly favouring original employees is that even fairly new staff will not bother to put forward fresh ideas or useful suggestions for the firm’s development. Instead, they will take the path of least resistance, remaining quiet in the hope of not offending anyone.
The consequences are clear – the company will become increasingly bureaucratic stunting innovation and initiative, which will ultimately be reflected in a weakened position in the market place.
