Under pressure: deadline-driven decisions and age bias
Often ageism is singularly associated with personal bias. Overcome a personal bias towards ageism, so conventional wisdom goes, and issues of age-based discrimination become a distant memory. Yet, we know this is not true. Last month we discussed how many Australian companies heavily investing in ‘Unconscious Bias’ training remain hotbeds of ageist work practices. Institutionalised ageism continues to make life tough for younger and older workers alike.
Our own research has confirmed how powerful institutional factors are in maintaining the existence of work-place ageism. When 20 senior HR leaders of large blue-chip organisations all personally subscribe to a completely inclusive view of talent and yet then go on to maintain very exclusive views of talent in their employing organisations that actively discriminate against the older worker you know something is happening in their work environment influencing their decision-making.
Our research identified operating under time pressure as a contributor to work-placed ageism. The impact of ‘time’ as a discrete variable influencing attitudes to age in a work-setting is often overlooked. This view has been reinforced this month in reading a book on the influence of Jack Welch on long-term corporate behaviour and another on the nature of time and the need to transform how we understand its existence. Jack Welch, the CEO of General Electric (GE) from 1981 to 2001, is credited with changing how business leaders think about business purpose, in the process reducing corporate decision-making times frames to a focus on delivery of quarterly profit targets largely at the expense of investment in long-term business sustainability.
If you were a General Electric shareholder over Welch’s time as CEO there was little to complain about. An annualised share price growth of about 21 percent a year saw the organisation grow from a 14 billion to 600 billion dollar company in two decades, becoming the most valuable company in the world. Welch was the first disciple of economist Milton Friedman’s then untested theory that economic growth is an outcome of a free market unfettered by government regulation with the only role for companies in this world to maximise shareholder returns at any cost.
In delivering this huge share price growth Welch overturned a previous relatively harmonious equilibrium that existed between corporations, workers and government, instead prioritising the corporate behaviours of downsizing, restructuring, deal making involving relentless merger and acquisition activity and dubious financial management decision-making to secure the needed corporate earnings required to meet the quarterly GE profit targets. Perceptions of employees changed from valuable assets to a replaceable commodity. Job security became a thing of the past.
Managers unable to meet their quarterly targets found themselves at the wrong end of GE’s ‘rank and yank’ performance system where the bottom 10 percent were annually fired.
Welch’s ongoing success inspired countless imitators as an entire generation of leaders sought to emulate his techniques, growth strategies and values. As these leaders have mentored countless others, the ripple effects of Welch’s behaviours have become institutionalised as the norm for much of today’s business behaviour. The kicker to this story is that whilst Welch became fabulously wealthy through his exploits, GE’s underinvestment in research and development and new product innovation during Welch’s time saw its share-price collapse by 80 percent following his retirement, needing a huge government bail-out in the 2008 financial crisis and ultimately leading to the company break-up and selling in 2021. A relentless focus on the short-term ultimately killed the company.
An interesting story you might say, but how does it help explain the influence of ‘time’ on perpetuating work-place ageism? Our research reveals that a relentless focus on short-term outcomes encourages risk-averse decision-making, a preference for maintaining practices that have historically worked and discouragement of views that could possibly challenge the prevailing business thinking. The increase in perceived job-insecurity is a powerful disincentive to ‘rock the boat’. What’s scary is that in a survey of over 400 senior US business leaders, nearly 80% said they were willing to take decisions that they knew would harm the company’s value in order to deliver on their short-term earnings promises (See Fisher pg 57). That’s how time pressure can distort personal values and attitudes. That’s how perceived job insecurity might encourage a compliance to institutionalised norms possibly at odds with creating company value. If you are a senior HR leader, championing a change to create an age-inclusive workforce might represent an unacceptable personal risk to reputation or employability when the company has no incentive to invest in long-term work force development. In the case of work-based ageism, its existence might not be so much a reflection of individual bias but more a time-based institutional bias exerting significant influence on personal choice.
Although Western capitalism is dominated by companies with an institutionalised focus on delivering short-term quarterly results there is still a group of organisations who choose to operate in defiance of this accepted wisdom. They are known as deep-time organisations. Richard Fisher’s book on time identified a number of European and Japanese companies that have continued to exist for hundreds of years. A singularly defining characteristic of these deep-time organisations is that they are recognised as almost always delivering a broader societal change or stability that the wider community benefits from. They are often associated with a long-term public purpose that serves the common good- not just the shareholder, customer or high paid CEO.
A fascinating coincidence with both books is that in discussing how to overcome short- term time pressure on business thinking they cited the example of Paul Polman’s time as CEO of Unilever. On the first day of his appointment, he announced the company would stop issuing quarterly reports and instead focus on long-term projects that might not pay off for years. His message was clear.
Unilever which had been around for over 100 years planned to be around for several hundred more. The share market initially punished this apparent snubbing of its importance with Unilever’s share-price declining and remaining volatile for a couple of years. However, over time Unilever’s long-term value was restored as its short-term investors sold out of the company to be replaced by those with a longer-term investing perspective. A decade on and Unilever was outperforming many other comparable companies still caught in the short-term reporting cycle.
We are interested in this story because of the implication that in reducing the influence of time on behaviour choice Unilever might have a different view of its workforce and the role of age within it.
Unsurprisingly it does. The company has a job role ‘Head of Age, Longevity and New Employment Models’. They get the ageing demographic is a very significant trend and that people will stay in work longer but with a need for more flexibility. Unilever is actively working to establish a truly representative view across the generations to create better ideas and better decision-making that leads to stronger business growth. Not only are they smart in adopting a long-term work force development approach they also ahead of the pack in understanding old people buy stuff too. It’s possible that removing short-term time pressure from strategic and financial decision-making is allowing Unilever leaders to embrace new ways of conceptualising their purpose and links with the common good including the importance of adapting to an ageing world and developing work-force age inclusivity. Now that is something to celebrate and support.
If the above discussion has made you reflect on your workplace dynamics, please contact us and let us help you take practical steps to transform your existing workplace into an inclusive age neutral one that develops your competitive and performance capability.
References
Gelles, D. (2022). The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America – and How to Undo His Legacy. Simon & Schuster.
Fisher, R. (2023). The Long View. Why We Need to Transform How the World Sees Time. Wildfire.
Berwick, I. (2023). All hail older workers. Financial Times (July 13).
Hessell, T (2021). ‘Talent and Age: How Do Human Resource Manager Meanings of Talent Influence
Their Perceptions of Older Workers?’ PhD Thesis. University of Newcastle.
