Rolls-Royce’s new CEO told his employees that the company is a “burning platform” and that they should be prepared for an aggressive efficiency and optimization program (i.e. job cuts).

Why? “Every investment we make, we destroy value,” he explained, according to news reports of his recent global broadcast to staff.

When he says “value,” he’s referencing the company’s stock price, which has lagged its competitors and currently stands at about a fifth of what it was in the 2010s. Investors have found this underperformance intolerable — he has been talking to them since starting at the company last month — and their feedback led him to believe that changing course now is its “last chance.”

There’s nothing more inspiring to employees than threatening them with termination unless they find ways to make investors richer.

I get the need for the dose of reality, and profitability is a prerequisite for any measure of company success. It’s easy for employees at big, established companies to become detached from the competitive reality of their business. Past successes tend to blind folks to future challenges. Individuals feel less empowered, and therefore less responsible, for a team’s collective performance.

It’s how those big, established companies get disrupted.

But Rolls-Royce’s problem isn’t value, is it? It’s customers certainly value it. So do its suppliers, employees, and their communities. End-user consumers value the performance of its jet engines. The company’s IP and know-how have value.

In this instance, “value” is the generic term that management and IT consultants use to describe the effects of whatever nonsense they’re proposing. It’s a surefire bet that binders of a brilliant reorg plan are on the CEO’s desk that recommend cutting staff, then changing titles and switching around the reporting structures of those employees who survive. Oh, and spending lots more tech that replaces people with algorithms and machines.

There’s nothing equity investors like more than mass employee firings, at least in the short term. The problem is that the only way employees can create that value is by losing their jobs.

What they could do instead is embrace the need for massive, revolutionary change in how they work because they are a part of something important. Part of something that matters.

Do you know why the world needs Rolls-Royce? I don’t. How about what key products or services it’s working on that will change the way we travel or move things around?


It’s that sort of external transformation that could inspire the needed internalchange.

Rolls-Royce could cast projects and business units as their own moon shots, informed with impossible goals and limited resources. Efficiency and optimization would be enablers of those missions, not purposes in and of themselves. Be blunt and tough and shocking, but be purposeful.

Then, the company could tell investors and other stakeholders that it’s willing to live or die based on achieving those goals…to delivering value that external groups could assess with whatever metrics they saw fit.

People work toward tangible business outcomes, not on on creating value, so talking about it evidences little more than the tyranny of consultant doublespeak. I would have skipped the “burning platform” metaphor too, only because it suggests that the only option people have is to jump into the ocean.

There are better words (and reasons) for transformative change.

Categories: EssaysInnovation