Tuesday, October 6, 2009

Ringing the changes at France Telecom?

Crane and Matten have both been spending time in different parts of Europe this week, and the big business ethics story of the moment here is the fall-out around the France Telecom suicides. The company has experienced some 24 suicides among its employees in the last 20 months, leading to a very public denouncement of the company's increasingly aggressive human resources policies. Many of the suicides have been accompanied by complaints or even suicide notes by the victims about extreme pressure at work, and the anxiety brought on by forced relocation, demanding targets, and insensitive management practices.

This week saw the announcement that the company's no.2, Louis-Pierre Wenes, has stepped down in response to the worsening crisis, as reported here by the BBC. Wenes had been responsible for pushing through the harsh cost cutting measures at the firm and had been widely regarded as a key architect of the new management practices at the firm, as well as the 22000 lay-offs that have befallen France Telecom employees since 2006. The company had earlier announced a moratorium on its controversial job reassignment policy.

The starkness of the personal tradegies involved is pretty much unavoidable. What can a company say when its employees are terminating themselves in the most extreme way and laying the blame directly on the work culture? Probably the worst way to handle it of course is to deny the problem and just hope it goes away, which is pretty much the strategy that France Telecom appears to have adopted before this week. Suicide is hardly an early warning signal that something is amiss in the human resource area. The company clearly should have dealt with the issues long before they bubbled up into this kind of crisis. Whatever the numbers of suicides - even if it was only a handful - there must have been a whole host of other indicators - absenteeism, poor performance, harassment etc, - that should have been picked up months if not years ago. To say, as Paul Betts does in the Financial Times, that the company simply "mishandled" the crisis, and that the government was in effect to blame for forcing the changes on the company seems woefully inadequate as an analysis of a seriously flawed ethical culture prevailing in the firm and the very real executive accountability that the firm's leaders will have to acknowledge.

Muddying the waters somewhat is the debate that has arisen around the typical suicide rate among any large number of people. Earlier suggestions by the FT that the per capita rate of suicides at France Telecom was no more than the national average seem somewhat disingenious when what we are talking about here is not simply whether this is a statistically significant number of suicides but whether the suicides have arisen from a common cause. We're not seeing anyone saying that in fact France Telecom was really a happy and friendly place to be, or that it was a successful nurturing culture that made people feel rewarded and respected. Employee suicides are just one extreme manifestation of a toxic culture - they naturally become the media story but they're not the beginning and the end of the story by any means.

Of course, all this is easy to see in hindsight ... though clearly the unions involved have been warning of problems at the company for some time - warnings that in the main have gone unheeded. You'd have thought that such a company would have been on top of the basics such as having an ethics hotline. What could be more natural for a telecoms company? As for companies watching the crisis unfold at France Telecom, they may well be sighing in relief that its not them caught in the maelstorm. The smarter ones though will be thinking its probably about time to check on the employee satisfaction ratings. The even better-prepared ones won't even need to check because they'll have been tracking them all along. There is no excuse for waiting until even one employee cracks under the pressure and takes their own life. Twenty-four is beyond any boundaries of acceptability. Whatever the stats on 'normal' rates.

Photo by Leo Reynolds. Reproduced under creative commons license

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