The case for long service

It will not have escaped anyone’s attention that Her Majesty Queen Elizabeth II passed away at the great age of 96, and that her state funeral was yesterday, marking the end of the period of Official Mourning.  Her influence reached far beyond the UK, and even beyond the Commonwealth.  I had the slightly surreal experience of hearing the news whilst in Greece and continuing to follow the news in Italy.  In both countries there was continuous coverage of the breaking news, with lots of talking heads invited to comment on her reign and the influence she had on the world.

Although at the time of her birth she was not expected to become a future monarch (that only happened after her uncle abdicated), she ended up on the throne at the age of 25, and became the longest-serving monarch in UK history.  Whatever you might think about monarchies in general, or the UK form specifically, nobody has challenged that she was fully committed to that role over that entire period, even formally appointing our new UK Prime Minister in person just two days before her passing.  Yet she clearly also had a human side, best exemplified by her ‘parachuting’ into the Olympic Stadium with Daniel Craig in 2012, or enjoying a marmalade sandwich with Paddington Bear just a few months ago during her Platinum Jubilee celebrations.

I had the merest glimpse of this last year when visiting the Royal Windsor Horse Show.  She played a formal role at various points, being driven down in a limousine in formal wear to sit in the Royal Box for various events, but my experience was walking along one of the internal roads, and noticing that people were looking at me – or more precisely past me, as following a metre or so behind was the Queen.  She was dressed casually, driving her own Range Rover, patiently waiting for me to notice and get out of the way.  When I moved aside – prompted by my fiancée who was a bit faster on the uptake then me – she put the pedal to the metal and drove with some pace up the access road to the Castle.

Her passing and the related press coverage did make me think about the value of continuity of service.  All organisations have long service awards in some form, even if that will generally mark tenure of far less than seventy years.  However, we have had, and still have leaders in the auto industry who have extreme long service, and the business they lead do not appear to have suffered from that.  I’m thinking of Roger Penske, still very active and on top of the detail at 85, Ferdinand Piech who stepped down from the VW Supervisory Board at 78 and Osamu Suzuki, who only moved into an advisory role last year at the age of 91.  This is in contrast to compulsory retirement of Board members at a relatively youthful 60 in companies like BMW.

In a year when the expectation of developing your career in a single company has reduced compared to a few decades ago, the opportunity for long service also reduces.  It is more likely that you will work for a number of companies, and potentially in quite different sectors and roles than was the case in the past.  This raises the question of what the balance is between the positives and negatives from both an employer and employee perspective of stability versus churn.  Stability provides consistency, an accumulated knowledge base and the opportunity to build stronger relationships – all attributes noted about Queen Elizabeth.  Churn can introduce frequent changes in strategy and direction, decisions made on the basis of poor knowledge and data, and weaker relationships with partners.

I believe that it was a Harvard Business Review case study that compared the performance of Ford of Europe vs GM Europe during the 1990s when GM consistently outperformed Ford, and the key reason they identified was that Ford rotated the senior people on a three year cycle, whereas GM had relative stability.  The different approach served GM Europe well at the time, but clearly not in the longer term as they never managed to crash the challenge of taking on VW in terms of customer or product perception.  I would argue that Hyundai is closer to achieving that goal, and that is a company that has had consistent leadership at the top over the long term.

You can only have one monarch, but few organisations are run on those lines, so I believe that the right approach is actually a balance.  In my experience, the best organisations employ a diverse (in the traditional sense, not the current quota-based forced model) range of people.  This may relate to their tenure with the company, but also their educational background and character, as well as all the demographic characteristics that are the focus today.  In my previous big consultancy experience with A.T. Kearney, the common denominator was simply that new recruits had demonstrated success in some aspect of their live – whether that was business, community activities, sport, or something else.  You then have some balance between ‘group think’ and challenge, between stability and innovation.  The perceived success of the late Queen – despite of, or perhaps leading to – her long service, may have been down to the inclusion within the extended Royal Household of others who helped her broaden her thinking.