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Suicides Spur Management Shake-Up at France Telecom

Outgoing CEO Didier Lombard faced pressure to resign after two dozen suicides by workers during the past two years amid a restructuring effort.

A recent management shake-up at France Telecom in the wake of worker suicides is a sign of shifting attitudes in Europe regarding attention to employee concerns. It also speaks to the importance of winning over workers when making major changes as well as a difference in U.S. and European management styles.

These are among the lessons workplace experts draw from reports in February that France Telecom intended to accelerate its plan to appoint a new chief executive. Outgoing CEO Didier Lombard faced pressure to resign after two dozen suicides by workers during the past two years amid a restructuring effort.

France Telecom’s move, along with a recent leadership change at German software firm SAP, shows corporate boards are taking worker morale more seriously, says Marc Effron, president of consulting firm The Talent Strategy Group. “Employees are being seen as a significant stakeholder in organizations,” Effron says. “It’s not just happy talk anymore. It’s reality.”

The Financial Times reported that SAP’s supervisory board lost confidence in CEO Leo Apotheker after an employee survey found that just half the employees gave a positive vote of confidence for the executive board. SAP declined to comment on the report.

A number of France Telecom workers who killed themselves reportedly left notes blaming unbearable working conditions and enforced job changes.

The telecommunications giant cut about 18,000 permanent jobs in France between the end of 2005 and late 2008, leaving the company with roughly 100,000 employees. It also moved thousands of workers to areas such as customer relations.

Such changes may have been motivated by business realities, but the company appears not to have done enough to appease workers, says Anne McSorley, founding partner of consulting firm WorkBest Consulting.

“The bible of change management is, get a buy-in,” McSorley says. “From my reading, they didn’t.”

France Telecom did not respond to a request for comment.

Last year, the company took steps such as the creation of a hot line for employees and an audit by a third party that included an employee survey and medical analysis of recent suicides.

Nonetheless, in early February the company announced a plan to have Lombard retain the chairman’s role and have Stéphane Richard assume the CEO post March 1.

The proposed transition reportedly was set to occur much earlier than expected.

Chetan Dhruve, author of the book Why Your Boss Is Programmed to Be a Dictator, says most workplace cultures tend to be dictatorships, which can contribute to feelings of powerlessness. “The only way to remove corporate culture as a factor in suicides is to change the workplace system—to one in which subordinates vote for their bosses,” Dhruve says. Effron says the upheavals at France Telecom and SAP are part of a more confrontational style of labor relations in Europe. Large U.S. companies he works with are in the habit of taking employee concerns seriously through engagement surveys.

“It leads to a more continuous change process than what we see in these European examples,” Effron says.

Workforce Management, March 2010, p. 6, 8Subscribe Now!