Thursday, April 3, 2014

Are you breeding a cancerous middle management culture that is silently killing your organization's reputation?


What prompted me to write an article on this topic today? Well, it was this video on CNN.com on the French Telecom company, Orange that was on the news recently for a recent rise in suicides among its employees. Let me take a step back to provide a short background for this article. 

In 2012, the former Chief Executive Officer - Didier Lombard was indicted by a court in Paris and bailed over allegations that he led a corporate culture of bullying and harassment that resulted in the suicide of at least 30 employees. He served in this position from 2005-2010.  Critics allege that it was some of his brutal management principles and 'bullying culture' that contributed to these suicides.  Also, in particular scrutiny was his so-called “NExT” (New Experience in Telecommunications) program, an effort to drive efficiency and increase customer value, resulted in a restructure that cut more than 22,000 jobs over a short period of time. In addition it also forced managers to change jobs every three years. This program was soon terminated by his successor. 

 In 2013, once again Orange restructures its organization in an effort to simplify its innovation structure to improve efficiency and tightens its executive committee.  Vivek Badrinath was appointed as the Deputy Chief Executive Officer to lead the Group’s innovation, technology and customer experience resources. Mr. Badrinath, who was 43 with a strong technical background held a few short leadership positions prior to his appointment with Orange.  Most recently this year in 2014, Vivek Badrinath, left Orange to join Accor, a hotel group.  His void was filled by appointing Mari-Noëlle Jégo-Laveissière to lead the innovation, marketing and technologies division as reported in a press release dated March 14 by Orange.

Large corporations such as Orange, previously French Telecom, present many challenges to their leadership.  Corporate culture and organizational identity are just two of  the many important challenges that senior leadership must pay attention to be successful in the long run.  In  September 2004 French Telecom sold a part of its shareholding and it was no longer a major shareholder as a result of the 1997 Asian Financial crisis. Hence, it became a private company after 115 years in a post-nationalization era of the telephone system!

 This organization went through a major transformation, while its top executives maintained their focus on advancing its winning global marketplace position further without establishing a solid transition strategy.  This is evident from its executive turnover history.  While executive management was focused on being a global leader in telecommunication services, perhaps it had given birth to a silent killer - a cancerous middle management culture that was developing operational tactics to support its executive management's corporate strategic vision. This new sub-culture was far different from the organization's corporate culture. Evidence of this is known from employee survey data that was conducted during the suicide investigations.
Image Courtesy: BBC UK News Health

Often middle-management is a layer between two layers of management in an organization. They are a step above a non-managerial role and a step below senior management. Some may report to a C-level executive directly, while others may just report to a non C-level executive in the organizational hierarchy. Often, this depends on the size, industry, and sector of the organization.  It is imperative for C-level executives to be proactively monitoring the performance its middle-level management on a regular basis and its cultural health.

Questions such as: are our employees generally happy? What is our employee turnover ratio? What is the annual employee survey data telling us? etc. are helpful in gaining valuable insights on your organization's culture health.  Instead of adding more middle-management, have you considered a shift toward abolishing middle management all together in your organization? In today's social world, rebuilding corporate reputation can be a very expensive process. Hence organizations must develop proactive measures to safeguard against any threats to its reputation. 

 A cancerous middle management culture can be defined as a sub-culture that threatens your organizational identity and is far different from your organization's core values and traditions. It has a negative impact on employee morale & productivity.  In organizations that are not process mature, it can give birth to ad-hoc processes that help it thrive and sustain.  It sometimes can ruthlessly eliminate a workforce or talent that it perceives as a threat to its existence.  As it thrives in silence and spreads like cancer, it is critical for executive management to diagnose early-on and treat it swiftly as it can be detrimental to an organizational overall reputation, its identity and the workforce's well-being when left ignored. 

I would like to conclude this article by asking you this thought provoking question: Are you breeding a cancerous middle management culture that is silently killing your organization's reputation? Please share your thoughts and comments !

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