Breaking The Cycle of Failure

Why do companies behave like Hyatt Hotels and Circuit City?

By treating employees as costs they minimize their investments in employee training. The result is poor employee morale, substandard performance, and customer dissatisfaction. [Once again, here’s Drucker >>] 

I first met this idea in an article I read in the Bechtel library in Houston. I was new to the corporate world, and I was trying to figure out what companies should be doing to be the “employer of choice” in their particular industry.

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Of course, now I know this as an example of a vicious circle.  The opposite of this approach, a virtuous circle – seems far more rare – in business, non-profits, and learning institutions as well.

I now see this as Management 101. In fact, it seems so obvious, you wonder why anyone would choose to destroy their company this way. 

My guess: the culprit is executive pay. And in government? It’s the lobbyists.

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