Managing Uncertainty - ESRC
It is almost sixty years since the social psychologist Abraham Maslow said we all have a basic desire for security. According to him, there is a hierarchy of needs. Until those of personal comfort and security are met, we cannot concentrate on the 'higher order' needs of achievement and self-actualisation. Many now dispute the scientific validity of his claims but the Manhatten atrocities demonstrate that, intuitively, he is right.
No longer does the world seem a certain place. From global politics to our job prospects, everything appears at risk. The old orders have collapsed and we are unsure how to move forward. How do we manage these uncertainties? Security and personal safety has now moved to the top of politicians and citizens' personal agendas. We are even more nervous about flying, about working in high-rise office buildings and trusting the people who have recently joined our different organisations as employees, students, and secondees. The ramifications are evident. Airlines and the international tourist industry are being cut back. Architects and planners are revising their approaches to high rise city centre developments. Governments are having to tackle issues of personal security and human rights. There are, of course, huge economic, social and political consequences that stem from these developments.
Suddenly, we find ourselves living in cultures of insecurity and anxiety. But it extends beyond this. We now all feel more vulnerable. This is not solely in terms of whether the buildings that we work in, or the trains we travel, are likely to be the next terrorist targets. It is also the longer-term outcomes for our jobs and employment prospects. The war on terrorism, fought in all spheres and as a drawn out process, greatly exaggerates what are already experience as more vulnerable and insecure work patterns and life styles.
These anxieties and insecurities are in addition to a constantly changing business environment of corporate mergers and acquisitions, organisational re-structuring and downsizing. It is leading to a re-rating by city institutions of corporate stock and the economic prospects of different sectors. It is generating a more cautious lending and funding attitude among venture capitalists and other financial institutions. It is not going to be so easy to raise money for business start-ups. Business plans will be more closely scrutinised. These outcomes are not so much as a result of a collapse in business confidence but of a more generalised unease about how we view the future. It is these feelings of uneasiness that have forced the central banks to cut their base rates. They are attempts to re-install some belief in the future.
As we all know to well, what is important in the business world is not so much what we are doing today as what we plan to do tomorrow. It is projections of future net earnings that investors and shareholders are interested in. Risks and uncertainties generated in the macro- political and economic environment and over which we, as businesses, can neither plan nor control, are what give us the sleepless nights. They are the factors that mitigate against the pursuit of rational, calculative business strategies.
None of these developments can be directly attributed to the American atrocities. But what these have done is to create cultures of uncertainty. It is these that eat into business cultures, affecting not only the operation of corporate planning processes but equally as important, personal self-confidence. Without optimism and a belief in the future, employees under-perform. They become de-motivated and they are less likely to come forward with innovative ideas. The result is poorly performing businesses.
How do companies re-assure and discount these feelings of unease? This is when there is the need to give priority to corporate sociability. For business leaders to strengthen the corporate psychological bonds with their employees. It means making employees feel they are valued corporate resources. This can only be achieved through transparent organisational processes with open, supportive leadership styles. They were always limits in the extent to which internet technologies allowed for the adoption of the virtual organisation. The present-day personal anxieties re-emphasise the importance of the face-to-face, human corporation. The return to corporate sociability is already occurring in United States and beginning to appear in the United Kingdom.
But unfortunately, quite the reverse can also happen. Feelings of vulnerability bring with them cultures of distrust and suspicion. In uncertain business environments, companies become more closed and secretive. Corporate leaders like to keep their options open and to themselves, to act quickly should the occasion arise. As part of this, they are inclined to close down their internal and external communication channels. Information flows are carefully managed with every memo, email and press release drafted and re-drafted. The outcome among employees is rumours, suspicion and distrust. This is not only in regard to our attitudes to our bosses but also, towards each other. Who is and who is not in the know about the company's future plans? How will they affect me and my job? The questions being asked by Middle East nations about American war plans, have their parallels in every day corporate settings. Uncertainty and secrecy generate rumours, suspicion and distrust.
In business environments, this extends to managing cultural diversity. We are more comfortable with working with people that we know. This accounts for the stifling conformist corporate cultures of the past when management consisted almost exclusively of privately educated white middle age men. Unfortunately, it still does in some companies. But in high performing international businesses, global teams consisting of colleagues from a diverse range of national and ethnic backgrounds, are now taken for granted. In an uneasy international political environment, and in more uncertain corporate settings, personal suspicions and prejudices are more likely to emerge. We have seen extreme instances of this on the streets of Europe and the United States over the past few weeks. But verbal abuse and minor forms of personal harassment can easily surface among even the most sophisticated of colleagues in corporate times of uncertainty and vulnerability. The governments intended law on ' hate' and language abuse is a recognition of this problem
In these uncertain times, the response of the majority of employees is to retreat into their own private worlds. They re-negotiate their psychological contracts with their employers. They factor greater risk into their forward planning, accepting the greater prospect of job loss and restricted promotion opportunities. Personal lives take on a greater priority with the work-life balance re-assessed. Employees re-negotiate their corporate commitment within the parameters set by personal and family considerations.
At the macro- level, the American atrocities will impact upon the role of government in highly significant ways. It marks the end of a belief in the superiority of free markets with little government intervention. An age of insecurity heralds the need for government to re-generate a sense of security through its management of economic policies. But in an uncertain world, it also entails re-constituting a national culture of community through the adoption of socially inclusive policies and legislation. Give free reign to the culture of suspicion and distrust and the problems of alienation, exclusion and social fragmentation will become even more exaggerated. On the global scene, it entails far more forceful inter-governmental strategies to alleviate Third World poverty and the growing resentment among the mass poor generated by free market globalisation. In the absence of these global divisions, together with the sub-contracting of US airport security services (driven by efficiency rather than effectivity criteria), could the American atrocities have been avoided? Unfortunately, there will always be terrorists but it is within our own capabilities to minimise their support and what they are able to do.
© Professor Richard Scase