Management by Fear

I spent six years of my career working for a British conglomerate, seen as successful at the time, but with an endemic management style that I will never forget - management by fear.  It emanated from the man at the top, who was highly successful at managing a diverse portfolio of businesses with a mixture of arms-length and micro management.  How was that possible?  Well, the arms-length bit was to allow individual businesses to do their own thing provided, from a financial perspective, they met their budget and progressively throughout the financial year, key performance financial ratios.  The micro management came into play if the tree didn't look too healthy, at which point 'head office' would come in and examine the roots!

If you were to survive in a senior position, such as a business managing director, you had to be a particular type of person - a bastard!  The half-life of business managing directors was about eighteen months.  Nobody likes being a bastard for very long!  I suppose what I didn't like about my experience working for that company, was the underlying culture of fear.  Decisions were taken to try to ensure a flow of good news to the top.  For example, profit targets were met by cutting costs in areas where costs really shouldn't be cut.  It was a perform now and let's worry about the consequences later culture.

Against that background, I have to say that I did learn a lot.  It was a period of my career when I was actively engaged in the direction of international business development.  The conservative, risk-averse, attitude of the company could sometimes be seen as an impediment to making overseas sales but on many occasions did ensure the company wasn't saddled with unnecessary financial risks.  When the company constraints seemed unnecessarily burdensome, there was always an escape route - forgiveness is easier than permission!  I practised this route a few times, which was risky.  If the outcome is successful, you won't be punished.  But unsuccessful outcomes led to instant dismissal.  I had to get out.  No, I wasn't fired but unless I changed my ways of bucking the rules, I was in danger of being shown the door.

So why do I think it is now necessary to explain an experience that happened almost twenty years ago?  Well it made me realise that any business culture, positive or negative, is infectious.  You need to go with the flow to survive.  A docile labrador doesn't survive with a pack of wolves.  When I moved on, some of the positive sides of the culture, like attention to detail and strong financial management, were assets.  But the negative side, notably a confrontational approach when subordinates were not performing, could be counter productive.  Let me be clear, the confrontation does not mean bullying but it does mean holding individuals to account for the achievement of their forecasts and not suffering fools gladly.  So someone can fail once, maybe even twice, but beyond that they are replaced.  I soon realised that this can lead to all sorts of unintended consequences like 'soft' forecasting, dangerous short-term cost cutting actions, good and 'filtered' news reporting, etc.

What happened to the company in question?  It came to a sticky end, with parts of it sold off and the remnants almost bankrupt.  For a while I mistakenly followed the majority.  In the words of Mark Twain:

"Whenever you find yourself on the side of the majority, it is time to pause and reflect."