What Peter Drucker might have said about the Hon Hai Suicides


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Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University, wrote an excellent analysis that might shed light on why 10 workers at the Hon Hai Precision Industry plant (which manufactures the new Apple iPad) committed suicide this year. An article which illustrates once again that management is not merely about  scheduling and product lines, it’s also about human relationships and fostering a sense of community. AFter all, work IS life.

Peter Drucker and the Hon Hai Suicides

We will never really know why 10 workers at a Hon Hai Precision Industry plant in China have committed suicide this year and three others there have attempted to kill themselves. Yet their actions are a stark reminder for managers everywhere: The most complicated thing you will ever deal with, by far, is not some elaborate IT system or intricate financial model, but rather the people you must lead and inspire every day.

Work “is impersonal and objective,” Peter Drucker wrote in his 1973 classic, Management: Tasks, Responsibilities, Practices. “But working is done by a human being. … As the old human relations tag has it, ‘One cannot hire a hand; the whole man always comes with it.’ ”

Because of this, Drucker believed, working has five specific dimensions, each of which recognizes that what we do on the job is “an essential part” of our humanity.

First, there is a physiological dimension. “If confined to an individual motion or operation, the human being tires fast,” Drucker pointed out. What’s more, he added, people perform best if they’re able to vary “both speed and rhythm fairly frequently” as they tackle a particular task. “What is good industrial engineering for work,” Drucker concluded, “is exceedingly poor human engineering for the worker.”

In China, some labor activists maintain that the shifts at Hon Hai, also known as Foxconn, are too long, the work is too repetitive, and the assembly line churning out products for Apple (AAPL), HP (HPQ), and others moves too fast. The company, based in Taiwan, has denied these charges. But there is no getting around the fact that all over the world, including in the U.S., Japan, and South Korea, a huge body of research has found that many people are overworked and their physical health is declining as a result.

Knowledge Workers Suffering, Too

This problem isn’t confined to those in factory jobs; knowledge workers are suffering similarly. Late last month, a senior executive at Bank of New York Mellon in London sued the firm for, among other things, allegedly piling on too much work. He had previously complained to his employer that “we are all working … unbearably hard.”

The second dimension of a person at work is psychological. “Work is an extension of personality,” Drucker wrote. “It is achievement. It is one of the ways in which a person defines himself or herself.”

Tellingly, perhaps, a 19-year-old Hon Hai worker who jumped to his death last week from a fifth-floor window of a training center left behind a note indicating that he had “lost confidence” in the future and had become convinced that what he once hoped to accomplish at work “far outweighed what could be achieved.

Although this young man’s reaction to such feelings was obviously extreme, the struggle to find meaning and fulfillment on the job is hardly unusual. Earlier this year, the Conference Board reported that only 45 percent of the Americans it surveyed are happy with their jobs, down from 61 percent in 1987—a long-term slide that the research organization said “should be a red flag to employers.”

The third dimension of working, according to Drucker, is that it provides a sense of community. Even in cases where people have outside activities, he wrote, the workplace is where they find much of their “companionship” and “group identification.”

In the case of Hon Hai, some observers have suggested that the company has grown so quickly, with about 400,000 workers at its sprawling Longhua complex, it has been difficult to forge these social bonds. One news report from Beijing quoted a former employee as saying: The factory “is too big. When I was walking to and from work … I felt helplessly lonely.”

How to Foster Community?

Those employing knowledge workers, meanwhile, face their own challenges on this front, as people have more and more choices about where they live and work and with whom they affiliate. For managers, this pattern leads to a tough question: How can you foster a close-knit community in an age of worker mobility?

Drucker’s fourth dimension of working is that it’s “a living”—”the foundation” of a person’s “economic existence.” In the U.S., Conference Board officials have made a direct link between people’s low job satisfaction and the dual hardship of stagnant wages and high out-of-pocket health-care costs.

China, where income inequality is widening, is now dealing with its own economic strife. A Honda Motor (HMC) transmission plant in Guangdong province resumed normal operations this week after the automaker offered to increase compensation by 24 percent to end a strike there. Also this week, Hon Hai announced that it would boost its workers’ pay by 30 percent. The company stressed that the raise was a response to a labor shortage, not the suicides, but one representative acknowledged that the move could help lift morale.

The fifth and final dimension, Drucker explained, is that there “is always a power relationship implicit … in working within an organization.” In any business, after all, “jobs have to be designed, structured, and assigned. Work has to be done on schedule and in a prearranged sequence. People are promoted or not promoted.” The trick, said Drucker, is to balance this authority with employee participation—to make sure that workers are given an adequate amount of freedom and responsibility.

But this is far from the only trick. Indeed, the thorniest job for any manager is to simultaneously address all of these things: the physiological, the psychological, the social, the economic, and the power dimension of working. The interplay among them, Drucker cautioned, “may be far too complex ever to be truly understood.”

Still, managers must try—with intelligence, sensitivity, and the constant realization that, while there is more to life than work, working is life.

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Mistaken Prediction #4


When we try to predict the future, we often allow our assumptions to argue for our own limitations, sometimes at our peril. In this series of Mistaken Predictions, we deride predictions that close our minds to the future and celebrate our collective visions that allowed us to imagine alternative scenarios. Equipped with tools that open us to near limitless options, we cheer the fact that the future is inherently unpredictable.

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“Drill for oil? You mean drill into the ground to try and find oil? You’re crazy.”

–Associates of Edwin L. Drake refusing his suggestion to drill for oil in 1859.

Only one hundred fifty years passed since the first attempt to dig out oil from the ground met such contempt. Now, much of the global economy rests on this “black gold”. This fast diminishing resource rests at the center of armed conflict from Sudan to Iraq, and environmental devastation from tar sands in Alberta to global CO2 emissions.

Rumaylah Oil Fields, Iraq (April 02, 2003) – U.S. Army Sergeant Mark Phiffer stands guard duty near a burning oil well in the Rumaylah Oil Fields in Southern Iraq.  (U.S. Navy photo by Photographer’s Mate 1st Class Arlo K. Abrahamson)


How Women Have Changed Norway’s Boardrooms


“Women tend to see the organization as more of a living thing,” said one former CEO and current board member.
It still surprises me (thought it oughtn’t) that women are increasingly found in positions of leadership. Sometimes due to increasing necessity (as in developing countries), sometimes due to increasing opportunity (as in developed countries) however grudginly granted. Norway recently had to be forced by law to accept women on publicly-traded company boards in any sort of real numbers.
Here is an interesting take on the benefits of having women in board rooms, as discovered by Karen Sweetman after a week of interviewing the sponsor of the legislation, then-Minister of Trade Ansgar Gabrielsen, and a host of Norwegian board members and chairs.

“Women tend to see the organization as more of a living thing,” said one former CEO and current board member.

It still surprises me (though it oughtn’t) that women are increasingly found in positions of leadership. Sometimes due to increasing necessity (as in developing countries), sometimes due to increasing opportunity (as in developed countries) however grudginly granted. Norway recently had to be forced by law to accept women on publicly-traded company boards in any sort of real numbers.

Here is an interesting take on the benefits of having women in board rooms, as discovered by Karen Sweetman after a week of interviewing the sponsor of the legislation, then-Minister of Trade Ansgar Gabrielsen, and a host of Norwegian board members and chairs.

via How Women Have Changed Norway’s Boardrooms – HBR Now – Harvard Business Review.

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July 27, 2009
by Kate Sweetman

It takes an open mind to incorporate the lessons that Norway can teach the rest of the world about the value of women on corporate boards. Two years ago, most publicly-traded Norwegian boards themselves had to be forced by law to accept women in any sort of real numbers. Traditional feminists (if there is such a term!) who believe that men and women are not only equal but the same may be tempted to reject the positive differences between men and women that the Norwegian board members say they experience. And men in charge of corporations everywhere who have genuinely tried to on-board women and either 1) not found them, or 2) found them lacking will have to re-examine how well they actually tackled that task.

In a week of interviewing the sponsor of the legislation, then-Minister of Trade Ansgar Gabrielsen, and a host of Norwegian board members and chairs, I heard them say:

…that women as a group provide particular, identifiable benefits to boards.

Women, in sufficient numbers, change board dynamics for the better. Why? Because as a group, women tend to display a different set of characteristics from men as a group — characteristics that broaden discussions, reduce unnecessary risks that a corporation takes on, and punish people who would increase foolish risks.

For instance, women tend to demand more facts and details. Said one former CEO and current board member: “If I had to generalize about the differences between men and women on boards? Women are more interested in getting the facts. Much more prepared; ask many more questions. Men tend to shoot from the hip. Women on boards are also more interested in how the organization will actually work. Think of an acquisition or a re-org to take a company more global. When women are in the discussion, they ask questions like: ‘Don’t just show me the Powerpoint. Who are these people? What are their responsibilities? Matrix type questions. Women tend to see the organization as more of a living thing.”

Women also tend to be more independent. When Statoil Hydro was confronted with its own malfeasance in Iran a couple of years ago (bribes paid to secure access to oil fields): “The board did not handle it well. The chairman was informed about possible corruption but gave no reaction. The CEO also failed to act. It was the women members of the board who drove the change.”

Women are less about jockeying for position in the group, and more about understanding and solving the problem with as much information as feasible: “In my observation, women don’t drive for prestige as much as men do,” said one experienced male board chair. “They are more frustrated when they can’t get their arms around everything that has to be done — but no executive can do everything that has to be done. Women are more diligent and responsible — they prefer to take on what they can get done, rather than simply take things on. Women tend to be more honest about their shortcomings than men are, and that puts them at a disadvantage.”

…that most women need support to enter the board successfully.

Women need encouragement. Observed one long-time female board member (and former CEO): “Even very successful women need more encouragement.” This includes recognizing their style. For example: “Women need all of their ducks in a row to feel confident. Women spend much more time preparing presentations. Men shoot from the hip more.”

Women need coaching. Jannik Lindbaek, former Chairman of the Board of StatoilHydro, likes to support women entering what he calls “the fraternity of men” on boards: “I help her to identify the stereotypes she will encounter so she knows what she is dealing with. I give her the tools to handle the social process she is entering into. This includes hints for how to handle the first board meeting, advice on what to do and what not to do. I also give advice on how to ask questions — and which questions to avoid…I help them to distinguish between curiosity and relevance.”

Finally, women need to make men feel at ease around them. Many board members I talked to observed that many men feel insecure in the company of women. The women can choose to help to make them feel more comfortable.

…that the leadership task of the Chairman of the Board is harder on a diverse board.

This message came through loud and clear. A very diverse board is much more difficult to lead than a homogeneous one: harder to prepare for the meeting, harder to organize the agenda, harder to manage the group and harder to steer members toward a decision. The advice they share to other chairs:

  • Prepare yourself as Chair. The Board Chair needs to think through and act on the dynamics of the diverse team. Be willing to work communications outside of the meeting room. Give feedback that lets members know what they are doing that helps the board (doing their homework, for example), and when they are letting it down (shutting down other board members, for example).
  • Be clear about the demands you must make of others. “On a diverse board, everyone needs to be prepared,” as one person told me. “If they are not ready to participate, then the value of their diversity is lost.”
  • Make everyone feel valued: build trust. “Diversity on the board changes the job of the leader of the board. The leader needs to let the discussion open up, let the discussion flow. In terms of time, spend less time on the management presentation and more time on discussion. Allow the board members to speak their minds. Let them open up and speak.”

How can we get more women on Boards in the US? In other countries? Do you think that companies would be run any differently?

Kate Sweetman, a former editor at the Harvard Business Review and co-author of The Leadership Code: 5 Rules to Lead By, creates leadership development solutions at the individual, group and organizational levels. She can be reached at katesweetman@verizon.net.

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