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What's happening to CEOs? Today's hectic business climate is demanding a high price at the top levels of corporate life. (Management Trends).

There is little argument with the notion that workplace stress has become a familiar workplace reality. Since the late 1990s, management experts have expressed a growing concern with the toll that globalization, mergers, and downsizing have had on North American workforces -- and their CEOs.

Bill Wilkerson, himself a CEO and expert on the effects of stress on organizations, acknowledged the impact work-related stress has had at the top in a recent Globe and Mail interview. As recently as 10 years ago, year-end results marked the measure of CEO success. A "new" CEO could expect to wait two years for the effects of his or her leadership to show. Today, a disappointing quarter can be financially devastating to share values and market capitalization. Wilkerson notes that at one time, a CEO could expect to have 15 years to fully implement his or her agenda. CEOs today, however, have a little over two years, or sometimes less, to prove their worth to stakeholders.

While long hours and truncated family life have been the price paid for the privilege of stewardship of a major corporation, the current crop of CEOs are paying an even larger price, including eroding health, alcohol abuse, obesity, high blood pressure and diabetes, failed marriages and dysfunctional parent-child relationships. CEOs are "burning out" in record numbers, in record time, and the pace shows no sign of slowing.

In his article "Help for the Exhausted Executive: How to Manage 'Hecticity'," (Harvard Business Review, December 1997), Tom Brown suggests that corporate North America has become a perpetually unstable work environment not only for CEOs. The problem, he says, is "not that today's workplace is hectic, but that it is hectic all the time."

Warren Bennis and James O'Toole examined the problem of the shortened life cycle of the North American CEO in their article "Don't Hire the Wrong CEO" (Harvard Business Review, May 2000). Dubbing this phenomenon "CEO churning," they 1ooked to the findings of a study conducted by Rakesh Kurana of MIT's Sloan School to explain it. Kurana found that CEOs appointed in the years following 1985 were three times more likely to be fired than CEOs appointed before 1985. CEOs appointed before 1985 developed their leadership skills in a relatively calm business environment, while those appointed after 1985 were baptized by fire. Bennis and O'Toole identify the primary cause of CEO failure as the tendency of boards of directors to "pick the wrong CEOs because they pay no heed to real leadership as a selection criterion." For Bennis and O'Toole, the problem is not so much that the times were wrong for the CEOs, but that the CEOs were wrong for the times.

Bennis suggests that in the volatile North American business environment, the successful CEO will be the one with that "combination of personal behaviours that allow an individual to enlist dedicated followers and create other leaders in the process." These leaders "demonstrate integrity, provide meaning, generate trust and communicate values" as their dominant contribution to the organization.

In his classic discussion of the manager's role in. "The Manager's Job: Folklore and Fact" (Harvard Business Review, March 1990, Henry Mintzberg, a Bronfinan professor of management at McGill University, found that nearly 50% of a CEO's time is spent with organizational subordinates. Mintzberg suggests that the reason some CEOs fail is because they do not adequately communicate information to their subordinates, limiting the effectiveness of their second level management decision-making. Mintzberg also finds that CEOs who fail to adequately distinguish between issues requiring immediate action from those that do not, ultimately relinquish control of their time as a resource and limit their ability to initiate and drive their agenda.

Other factors that may have a significant contributory effect on CEO stress and success levels are suggested by current research into the relationship between working Canadians and their employers. A 1999 Canadian Federation of Independent Business (CFIB) study, entitled Study on Workplace Satisfaction in Private-Public Sectors, found that only 30% of employees in medium- to large-sized firms expressed a high level of trust in their employers, and that only 40% of employees of large businesses said that they were satisfied with their jobs.

These findings are echoed in the results of The 2000 Global Employee Relationship Report Benchmark Study, a joint undertaking by Walker Information Global Network and The Hudson Institute. The study data strongly suggests that employers, and especially Canadian employers, are not keeping employees satisfied with either their work or the organization employing them. Dissatisfied employees become underperforming employees.

These findings are consistent with recent data released by the Conference Board of Canada identifying the primary workplace issues challenging corporate management: employee stress, employee morale, recruitment and retention. Between June 1999 and December 2000, the Conference Board of Canada released a series of briefing papers for member organizations on the results of research into the issues of work/life balance.

The study findings indicate that nearly half (46.2%) of Canadian workers experience moderate to high levels of stress as they attempt to balance the demands of their work and home lives, nearly double the rate reported just 10 years ago (27%); and more than one quarter (28.1%) of Canadian workers report difficulty balancing their work and personal lives. The study concludes that there is a strong connection between job stress, job satisfaction and job performance, and concern over these issues has intensified in the past ten years.

The Conference Board briefings draw the following conclusions:

(1) One of the top four reasons given by Canadian workers not satisfied in their jobs has to do with poor supervisor-worker relationships and "bad management."

(2) Canadian workers whose managers are sensitive to their personal/family needs are more likely to be satisfied with their jobs and report higher levels of job satisfaction.

(3) Canadian workers whose managers are sensitive to their personal/family needs are more likely to view their employers as "doing enough" vis-a-vis work/life issues.

(4) Managers supportive of their staff are rewarded with lower levels of absenteeism and associated costs.

(5) Managers who insist on employees separating work and personal lives risk poorer performing employees.

The Conference Board recommends the following specific organizational strategies to enhance employee perceptions of employer work/life supports:

* Determine the behaviours managers are to demonstrate in support of sensitive approaches to work/life conflict in the workplace.

* Hold managers accountable for demonstrating appropriate behaviours supportive of employee work/life needs.

* Provide focused training related to the desired behaviours.

* Provide managers with the tools they need to do the job.

* Reward and recognize managers for demonstrating the behaviours desired by the company.

The Bank of Montreal (BMO) has taken steps to develop what they cull a "people strategy" to focus the attention of managers at all levels on the performance issue. Under the leadership of Maria Gonzalez, vice-president of strategic initiatives, corporate planning, the bank undertook a major research initiative designed to identify the "key factors" affecting corporate performance in order to design a process to enhance organizational performance and productivity.

The BMO research identified a clear statistical correlation between profitability, customer loyalty, productivity, employee retention and what they call a "healthy organizational climate." The bank's strategy, outlined by Gonzalez in "Shifting the Performance Curve" (Ivey Business Journal, July/August 1999), is based on the recognition that the organizational climate is, to a large measure, determined by three factors. The first is the quality of the individual relationship between manager and employee throughout the organization. The commitment of employees to the organization is the second, and the third is the role of managers in creating and sustaining the climate. The creation of a new organizational climate is seen as dependent upon the identification of desirable managerial behaviours and the measurement of managerial performance against those desired behaviour standards.

The linkage of organizational performance to the basic behaviours of individual managers throughout the organization is consistent with the findings of both the Conference Board study and a landmark study by Linda Duxbury, Ph.D., and Christopher Higgins, Ph.D., entitled "Supportive Managers: What are they? Why do they matter?" (The HRM Research Quarterly, Volume 1, Number 4, Winter 1997). Chief among the Duxbury and Higgins findings is that employees want and need increased workplace flexibility in order to maintain a high level of job commitment and performance. They refer to this flexibility as "supportive management." A supportive manager is one who engages in two-way communication, provides positive feedback, mentors, allows employee autonomy, recognizes the effects of non-workplace stressors on employee performance, and facilitates completion of work.

The Conference Board report suggests managerial training as the way to achieve these change objectives. One company, out of Stouffville, Ont., is employing a different approach. TDG International, Inc. has developed a manager's toolkit called "The SWEET Workplace" to accomplish the same objectives. This program focuses managerial/supervisory attention on the specific behaviours associated with supportive management and allows individuals to self-assess and supervisors to assess direct reports based on those behaviours. The SWEET Workplace process provides individual employees with the tools and the opportunity to implement these behaviours on an "as-you-go" basis, without the need for training interventions. The change dynamic is a combination of repetition and measurement.

The impact of this new "facilitative" approach to management cannot be underestimated. A study by The Gallup Organization of Princeton, New Jersey, reported in the premiere edition of the new Gallup Management Journal (March 2001), found that 19% of approximately 1,000 workers surveyed were "actively disengaged." In other words, they had no clear idea of what was expected of them on the job. The employees claimed to lack the tools to do their jobs effectively, and were unable to get the attention of their managers. Gallup claims the annual cost of this "active disengagement" to the U.S. economy ranges between $292 billion and $355 billion US.

In the best-selling change management book First, Break All the Rules (Simon & Shuster, May 1999), based on that research, Gallup found that business units whose employees scored in the top quarter percentile on their Q12 index showed a 50% higher productivity rate, reported 13% lower turnover, 44% higher profit, and 50% higher levels of customer service over businesses in the lower quartile. The Q12 index is based on worker response to the following 12 questions:

* Do you know what is expected of you at work?

* Do you have the materials and equipment needed to do your work right?

* At work, do you have the opportunity to do what you do best every day?

* In the last seven days, have you received recognition or praise for doing good work?

* Does your supervisor or someone at work seem to care about you as a person?

* Is there someone at work who encourages your development?

* At work, do your opinions seem to count?

* Does the mission/purpose of your company make you feel your job is important?

* Are your associates (fellow employees) committed to doing quality work?

* Do you have a best friend at work?

* In the last six months, has someone talked to you about your progress as an employee?

* In the last year, have you had opportunities at work to learn and grow?

The data strongly supports the existence of an underlying workforce performance issue in most North American Corporations, and particularly within Canadian organizations, that must contribute to skyrocketing CEO stress levels, burnout and failure rates. Work-related stress has been identified as a significant cause of individual and corporate underperformance through erosion of employee commitment and effort. The research has also established clear criteria for the development of programs that will successfully reduce the impact of workplace stress and increase workforce productivity. To achieve that success, programs must focus on changing the nature of the relationship between managers and their direct reports through influencing and changing managerial and employee workplace behaviours.

Michael J. Landa, CHRP, is president of Organization Assessment and Change, and specializes in the identification and elimination of barriers to productivity and employee Commitment in organizations. Michael can be reached at (416) 250.1241 or via email at mlanda@consultant.com.
COPYRIGHT 2001 Society of Management Accountants of Canada
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Title Annotation:job stress
Author:Landa, Michael
Publication:CMA Management
Geographic Code:1CANA
Date:Nov 1, 2001
Words:2014
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