Meaningless targets

One of the world's largest banks wanted to reduce its overhead costs. The strategy was a reasonable one. All banks were going through a difficult period, the European down–cycle. Viewed from its New York headquarters, the international offices were reporting expense ratios that were a little high. Unfortunately, in the way so many such decisions are implemented, no one thought about the differing motivations, fears, frustrations and day–to–day realities on the ground in London, Paris, Milan or Moscow. Nor had anyone thought about the profound reasons for wanting to regulate certain overhead ratios, or for them to be out of balance. The ratio levels themselves may have been right or wrong; the reasons for them being out of budget may have been justifiable or not. 

The city and national offices may have been beating their income and profit targets or not. Their markets may have been in differing states of flux. None of this was given consideration. Most importantly of all, none of this was shared or discussed with the international offices in question. The first the local teams heard was an emailed directive to all staff to reduce out–of–pocket costs, and to cut support staff perks. In fact, all four European offices had been doing well in a difficult cyclical market. The new European CEO had injected a fresh purpose. As a result of great efforts all round, involving weekend and late–night working and a new pan–European spirit of collaboration, the American bank was beating the trend set by its local competition.

The directive specified in particular two areas:

  • closing the corporate restaurants and cafés for all staff;
  • de–ferring the use of late–night taxis for support staff from 1900hrs to 2000hrs. As far as the New York staff was concerned, they had identified two areas for saving money, the results would now flow, the ratios would now stack up. If only! Remember we are talking here about the basic drivers that lie behind our navigating 50–60% of our lifetime – our working day – so that we can achieve some sense of fulfilling and satisfying purpose. What were the feelings of the staff?
  • The senior executive and his team felt ignored even humiliated. They had created a new sense of joint purpose, they were taking lumps out of the competition – now this common purpose became trained on a new enemy, corporate headquarters in New York.
  • Staff had used the in–house restaurants and cafés as a convenient focus for meetings, debate and discussion, both formal and informal. For many, this had become the primary way of seeing, watching and meeting the local executive. And the food was excellent! Not only did the in–house eateries save time, they had become a motivation – part of the bonding process within the massive and otherwise inevitably impersonal offices. They helped everyone to feel part of the team, and valued.
  • As for the late–night taxis – they had were a totem of the aggressive and fresh work:life balance the new European team had established. As the market had picked up for them, so all staff had worked harder, stayed for longer, cut corners to keep ahead of the game. The cafés had allowed teams to take quick and high quality meals together, to mix, to be available – no small benefit in London, Paris or Milan, where lunches and dinners can easily take up costly travel expense and inconvenience. The taxis had become a badge of honour for secretaries working late, wanting to get home quickly and evade the often threatening streets of night–time capital cities in Europe. For many, they were not just a reward for working longer hours, they were a defence against a threat that was perceived by them, their families and the local executives as being entirely real

So far so good. The European executive and staff feel defensive, ignored, slightly humiliated and hence excluded from the bank's core family. "Our" well–earned benefits and rewards are being taken away by "them". Our driving needs for bonding, acquiring and defending are being flouted by this one little email. And of course that, this "one little email" syndrome was the final straw, and perhaps the most telling negative in the tale. New York gave no one in Europe any opportunity to learn, to help develop an imposed system, to buy into the process. As one secretary said to me:

"Why didn't they even think about asking us? They want to save 10%, fine, let's discuss it; we know how we can save 10%, more, even, if that is important, but ask us. We didn't need the new stationery, we didn't need the new database system, we didn't even need Independence Day off – it was nice, but the rest of London was at work. The ratios are fine, but the business is not so well run now. We are going out to local cafés for our break, but that means we are taking our full lunch period and we don't get to meet together so much. As for taxis, if we work late, we organise a carry–out, chat for 30–40 minutes till the new trigger hour comes round and then take the taxis home anyway. It works pretty nearly as well for us, it's just now we feel pissed off with New York. ".

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