There was a heated debate going on inside the boardroom of an emerging sector B2B company*. The order book was slowing down, the employee cost was at a new high and the new product being developed to secure future was at least 6 quarters away. The current and projected cash flows demanded immediate action.
The board of directors were presented a turn-around plan that entailed reducing the employee bench strength by over 40%. The CFO & Finance Director assured the Board that “the proposed surgery will ensure that neither the existing clients shall be impacted, nor shall we disturb the buffer capability required for developing the new products crucial for future-readiness”. Further, he added that “we will not skip the annual increment for our star performers. In this era of uncertainty, when many companies are skipping the increment cycle, we would be a company that would recognize, reward and retain our very best.”
An Independent Director, who was attending only his second Board meeting, proposed and played a different drum. Gradually, a la Ek Ruka Hua Faisla** A very different decision was taken. What followed was, a transparent communication to the organization followed by 10% cut in the remuneration of the Board Members, CEO and all employees. Fast forward two years — contrary to the initial arguments put up by the executives about disgruntled workforce, the company bounced back to a new level of prosperity: Employee attrition was at lowest, client loyalty & employee engagement was on a new high with an upbeat market image.
Often in situations as in this story, the executive and the governance team tend to position people at the basement of Maslow’s hierarchy, while placing themselves in the penthouse*** of Maslow’s triangle. Many an executive believe that employees are at the bottom floors (believed to be stuck on with tangible physiological and safety needs) of the whereas their image self is that of the pursuit of the higher steps of ladder viz. aesthetic, actualisation and transcendence needs on the Maslow’s steps. Often many people misconstrue the Maslow’s model as one, made of steps where higher order is unattainable without fully transcending the lower steps. The reality is, we all get motivated by being valued & recognized for non-selfish acts as much as financial payoffs and security in social & vocational spheres. When we treat others at levels lower than ourselves – we rob them a chance of wholesomeness and belittle their ability to stay motivated without narrow personal interests. The corporate story cited here is one of the many examples that we could see around us in day-to-day life.
Additionally, the story cited here is a testimony to the presence of humanness in a Boardroom, in which the ID honoured purity of people’s intentions and abilities. His influence to delay gratification catalysed the organization to thrive. There are several such narratives having significantly impacted stakeholders. There are also narratives of ‘humanness going on a holiday’ in corporate Boardrooms leading to acrimony within the Board or a set of stakeholders being taken for a ride. Perhaps, we shall talk about it another time.
In the meanwhile, we will be happy to capture your experience of “Humanness in Boardroom”. Should you have inclination to share, do not hesitate to ping us, we will be happy to call and capture your narrative.
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