Anyone who has ever read my work over the years will testify to the fact that I happily slaughter sacred management cows, on a regular basis, and enthusiastically devour sloppy-thinking HR directors for breakfast. Indeed, the basic premise of this series is that non-evidence-based management practices, particularly prevalent in senior HR ranks, are risible and rightly deserve every bit of criticism coming their way.
Being this critical has meant that I have only ever reviewed a couple of management books in my life. Gushing is not my thing and I firmly believe there is nothing new under the sun, so there is a 99.9% probability that I will be underwhelmed by what I am asked to read. So you might be pleasantly surprised to hear a very different ‘me’ for a change, one that is extremely positive (don’t sound so surprised). In fact, I could not put down this particular ‘management’ book after I bought it and had no hesitation in making it my very first book review here.
‘Beyond the corporation – Humanity Working’ (Bodley Head 2011) by David Erdal is written so lucidly and with such passionate argument that it left me in a state of euphoria (stop me if I start gushing). Mainlining a large injection of humanity into your system, in one sitting, can have a rather disorientating effect. This is no short-lived, feelgood-factor ‘high’ though; the sort of natural, human sensation so cynically abused by so-called, inspirational, conference speakers. This is a deep-rooted yet heightened sense of awareness and it does not wear off.
I only saw David Erdal in the flesh last Monday (21st March 2011) when he came to Bristol to talk on ‘Employee Owned Organisations’ and he comes across as a very quietly spoken presenter of ideas of great and universal import. He appears humble and unassuming but underneath you sense a magma chamber of indignation that occasionally erupts in the book. Everything he says is well-conceived and pre-tested for any potential flaws, theoretical and practical, all of which adds gravitas and power to his argument. He is the sort of man you would trust with your life and I bet many of his previous employees would as well. He is the perfect counterpoint to ‘greedy bankers’ and ‘fat cat’ CEO’s. He is the epitome of that very rare and elusive beast – authentic leadership.
This could all be an illusion but it is unlikely because Erdal provides a superb exposition of the real power of evidence-based thinking. So much so that I immediately urge you to get your order in now before the first print run is sold out. Believe me, it is in your own interests, because if you thought you knew how to get the best out of your people you are going to have to think again. Compared to the case studies covered in Erdal’s book you have not even begun to scratch the surface of what it means to unleash the full force of human potential.
Erdal’s basic thesis is extremely simple and passes the first, common sense test with ease – employee owned organisations will perform better than equivalent companies driven purely by shareholder and senior executives’ interests. Erdal does not leave it at that though, unlike the vast majority of books on ‘people management’ he supports every step of his well-argued case with very convincing evidence. Along the way he dismantles much of conventional economic theory and management practice, especially managers whose practice fails to find the best in people. At the same time he manages to cover every page with a warm layer of humanity – a very rare skill indeed. So this book will worry many vested interests – private equity asset strippers; investment bankers; anyone who makes large fees from M&A; CEO’s who pay lip service to the notion of managing human capital effectively and their HR directors who think their current practices get anywhere near to getting the best out of people.
But there is much more to David Erdal. He has actually done it himself as Chairman of his previous, family-owned, business Tullis Russell, which he ‘handed over’ to his employees. He has actually experienced what it feels like to transform the way people think about their work and how to build trust in the most trying of circumstances, whilst never shying away from the really tough business decisions. If I were you I would clear the shelves of any books you might have on change management – this knocks them into a cocked hat and does not hide the harsh realities that are an inevitable part of the journey towards significant and long-lasting change.
Erdal does have several bêtes noires and chief amongst these is the theory, ideology and doctrine of ‘capital market discipline’ which can rightly be blamed for much of the financial collapse of 2008. Only then does his ire slip into the occasional, fully understandable, but still relatively gentle rant. In Chapter 8 he analyses the causes of obscene and unjustifiable CEO salary rises over the last decade and sees much of capitalism’s present malaise rooted in that classic management debate – power – where it resides, its uses and abuses. This is at the heart of the thesis – power should reside with the collective, employee ownership of the enterprise with ‘ownership’ the core concept – more powerful than its close relative, cooperativism.
“..if employees are not owners – not even indirectly through trusts – then you cannot achieve the ownership effect by tricking them into feeling as if they are. There is good evidence that ownership itself is a vital part of the equation – ownership may be indirect, but it must be real.” (p.207)
Apart from the self-evident veracity of what Erdal has to say ‘Beyond the Corporation’ is also just a damned good read (and in pure readability terms his book ‘Local Heroes’ is even better). If you still feel compelled to skim, despite this advice, you might choose to skip the heart-rending anecdotes in Chapter 7 because even I felt a lump in my throat. In the hands of a lesser writer these would seem slightly tacky or mawkish but here Erdal knows just how to tap into the power of their understated intensity without over-doing it.
Alternatively, Chapter 9 on the employment contract does cover ground already well known by students of labour history and employment rights, but then this is just a precursor to the ground-breaking theory in Chapter 10 – ‘Thinking it through’. This is another very thoughtful piece of writing but the only occasion when I felt that the argument was less convincing when set against the context of the world we currently inhabit. However, as Erdal takes a very long-term, visionary view of what is possible it is entirely in-keeping and coherent with his philosophy.
Other than that you skip sections at your peril, and to your great loss, because in essence this is a book about leadership, decision making and participation. It presents a very sophisticated paradigm for the most mature form of organisational management. Employee owned organisations already exist in significant numbers and Erdal’s book will help to push the world further in this direction but, at the end of the day, you either ‘get it’ or you don’t. If you get it you will never see the world in the same way again, especially if you have any concern for humanity and want to bring that concern to bear in your evidence-based, people management practice.
‘Beyond the corporation’ will not have the CEO’s of very large, global organisations quaking in their boots, just yet, and moving to employee ownership is not an easy ride when re-education is needed to make old, hardened attitudes soften and change. Any CEO or HR director should be struck though by one very disconcerting revelation – there is conclusive evidence here that employee commitment and productivity, in employee owned organisations, are bound to exceed any attempt at employee engagement and talent management that ‘progressive’ HR management fads, fashions and fixations might hope to achieve in more conventionally owned and managed enterprises. In fact, all HR Directors that have enrobed themselves in these gimmicks are suddenly going to find that their nakedness is now in full view – employee ownership and participation has offered an entirely new benchmark. David Erdal describes this movement as a ‘quiet revolution’ – it might be quiet but it’s definitely a revolution.
For personal development linked to this topic visit the Consummate Professional Series