Good people are hard to please and always mobile, says Big Mouth MD, Lucy Saunders.

Simon Galbraith, founding CEO of Red Gate Software, a successful company based in Cambridge, says that his top management priority at the moment is management itself.  Red Gate employs 150 people. It has grown rapidly over the last three years with a strong reputation as a great place to work. The culture of the company matches the priorities for life of that type of recruit, a graduate who aspires to a life with more than work.

Losing the balance
The company emphasises work/life balance; there is a great deal of independence to arrange working hours around a core day of 11am - 3pm, a lot of contact with senior management as well as a good financial package - including pay, ability to buy or sell up to 5 holiday days, pensions, health insurance – all that stuff.

Despite the excellence of the environment, the satisfaction levels of Red Gate employees has declined. Eighth on its first appearance in the Sunday Times 100 best small companies to work for in 2006, Red Gate came out 81st this year, with two low scores in particular on team feeling and relationships [1]with middle management.

Emotional intelligence
The question is how does an organisation expand without losing the positive feelings of staff, which may be based less on tangible benefits like pensions and health insurance and more on how people feel individually and in teams.

Galbraith highlights a recent experience with a particular team.  He says that several members of the team were telling him that they were unhappy with the team leader, but because this was expressed in sideways comments, like ‘I hate the way he always taps his fingers’, Galbraith didn’t really connect with the effects of these feelings and didn’t see it as his role to do something directly.

The team leader left to join a smaller company, an interim team leader took over the unhappy team and the results were almost immediate. Productivity and individual satisfaction increased dynamically.

Statistics tell a different story
As a software company, Red Gate has more electronic scoreboards than you can shake a stick at - anything that is measurable is measured, so it was easy to see the difference.

Then a full time team leader took over, and those scores immediately went down again – not as far as before, but down.  There is no way of knowing, bar allowing enough time, whether the new regime will ultimately prove to be more productive and more satisfying than the old one.

It is impossible to judge how much the interim period boost was the joy at the previous team leader leaving.  An exit always gives everyone the chance to bring the skeletons out of the cupboard and deal with them.

Dashboards measure what is measurable but a large part of management is an intangible realm of feelings that directly affect productivity. The initial honeymoon period is that magic time when everyone is more likely to say yes to what they want to change. The question is whether you back off and let middle management manage for themselves or set the management style in stone and ask people to follow it.

The role of the CEO
What is the moment that you, as the CEO, intervene and dictate, particularly when your company culture is based very firmly on respect for the individual?  The human aspects of management get ever more attention.  Only one in six bosses have done more to motivate staff since the recession began, according to a survey published this week sponsored by Keeping Britain Working.

Good people are always mobile and headhuntable, according to Galbraith. Motivating them is critical during a downturn but that still begs the question of how to manage people well as a business grows and matures.