MANAGERS ON MANAGEMENT:THERE'S ONLY one way to convince an old-fashioned, patriarchal, Alan Sugar-style chief executive that greater employee involvement will make his company more innovative and competitive - and that's by arguing the business case.
And a compelling case it is. A survey last year of Ireland's top 1,000 companies showed that those with high levels of workplace innovation and participation were 14.8 per cent more productive, on average, than those that adopted a once-typical, command-and-control-style approach to employee relations.
In terms of the bottom line, that 14.8 per cent was equivalent to €45,000 in additional sales per employee per annum - or as much as €12 million in additional revenue for a median-sized company.
"In recessionary times, gains like that should be nothing short of mouth-watering for managers who are under relentless pressure to tap the next source of competitive advantage," says Lucy Fallon-Byrne, director of the National Centre for Partnership and Performance, which carried out the survey.
"And that, of course, is the point about innovation: it not only changes the way in which a workplace is organised and heightens performance, but it adds value - and in business terms that's crucial."
The breakdown of that 14.8 per cent gain is equally revealing: 6.5 per cent was generated in extra productivity, 7.9 per cent came from innovation, and 4.4 per cent was as a result of lower employee turnover.
The message is clear: an open and inclusive style of management has a significantly beneficial impact on a company's bottom line, while a more restrictive, narrow style has a negative impact.
"I would regard Alan Sugar or, for another generation, Mike Baldwin in Coronation Street as classic examples of old-fashioned command-and-control-style managers," says Fallon-Byrne.
"It's a style which suggests that management holds all the ideas and the information on the way forward for their company and are keeping it to themselves. They have an absolute right to make all the decisions and pass them from the top down. And the workforce is passive, accepting and ready to implement. That's it at its worst."
However, she says, for firms willing to take advantage of the competitive edge offered by a workforce that feels involved and engaged, change is not only possible but financially rewarding.
"Managers are either the greatest facilitators of innovation, or they're the greatest inhibitors of it. So CEOs and senior managers have to realise that their buy-in, their visible commitment to change, is absolutely essential," she says.
"They have to commit to the principle that they're going to involve everybody with them. They have to introduce high levels of consultation and of team working throughout the organisation.
"They have to ensure that people on the front line always have ways of feeding back their own ideas on how to improve the company's operation.
"And they have to create a culture in which managers at every level are trained in a more participatory style - and are rewarded for it as part of their appraisal."
Many senior managers will see all of this, inevitably, as a diminution of their control and a vote of no confidence in their management style.
"Yes, some do fear it, and that's understandable," says Fallon- Byrne. "But what that really means is that they lack a proper understanding of the dynamics of power in a business environment.
"Let's say you're Alan Sugar and you have all the power in your organisation concentrated at the top. Deciding to share that power and disperse it around the company doesn't mean that you're losing your own power or your status . . .
"The reality is that you're actually generating more power in the organisation by creating a platform for ideas. That's a concept that can be quite difficult for some managers to understand and accept."
Next week: Derry Clarke, Michelin- starred chef-patron of L'Ecrivain restaurant on leading by example
Name:Lucy Fallon-Byrne
Organisation: National Centre for Partnership and Performance www.ncpp.ie
Job:director
Management advice: Never underestimate the role of employee engagement in building an innovative and competitive organisation
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