Stephen Harvard Davis

At a meeting this afternoon with the MD Maria was told that her performance was not what had been anticipated.The MD told her that:

1. She has alienated her team
2. Provided poor advice to him and other Directors.

He has offered to help where he can but has suggested that the efficiency and reputation of HR must improve quickly or further action (unspecified) will have to follow.

Maria has replied that her existing team is “weak on change” but that her new assistant manager starts next week and that improvements will be expected soon after.

Maria called her team to a meeting and informed them that the CEO and FD have asked her to find a quick result that would provide a financial saving.

Her team went away and after some discussion between them have suggested that substantial savings could be made by withdrawing free canteen lunches from part-time staff. It was estimated that savings could amount to over £12,000 pa. This was considered an excellent idea and free meals for part time staff were withdrawn.

That night, last Thursday, the CEO returned home to find that his wife, who works part-time in the accounts department, and children were eating but that there was no meal for him. On enquiring why he was told by his wife, “you’re not feeding me at lunch so I’m not feeding you at night”.

Maria has been asked to replace the free meal allowance for all part-time staff. Naturally, she is a bit agrieved at this loss of face and is blaming her team for the suggestion.

The removal of Rick Wagoner of General Motors and Christian Streiff of Citroen would seem to suggest that those seen as being responsible for poor business performance are being replaced by people not tarnished with the mistakes of the past.

One has to ask if this is the beginning of a cull of top business people seen as responsible for causing the financial crisis and whether it will satisfy people’s anger of like the French revolution simply call for more blood?

Last week the CIPD reported that the average cost of making someone redundant was £10,000. Being an average figure some people are receiving much less and some much more than this amount.

Thus, an employer making 150 people redundant using this figure will have to find £1,500,000 (average). The costs may be a reason why unemployment has been rising slowly to date.

It’s been reported (Daily Telegraph Dec 9 2007) that one in five CEOs in the FTSE 100 have moved jobs or been sacked during 2007 and that this is the highest number for five years.

Whilst accros the world the average tenure for a CEO is just over 2.5 years in the UK we have fared much better at over five years but this is now changing. Notable changes have been Paul Thompson of Resolution Life who managed just two years, Northern Rock’s Adam Applegarth, John Clare of DSG International, Philip Moore of Friends Provident.

The result has been that the average tenure for a FTSE 100 co is now under five years and it’s estimated that by 2017 the UK will join the rest of the world in having their top people remain in post for only 2.5 years.

Companies that have also experienced senior people departing include BP, Barclays, Logica CMG and BT

The problem with this is that whilst it might satisfy the shareholder’s needs for returns this continual change at the top does nothing but increase instability, insecurity and ultimateley profits for the rest of the organisation. The reason, there is no chance of one strategy being implemented and showing substantial results working it’s replaced with another.