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Mind over management

Orla Leonard

A DISCIPLINE as ordered and professional as financial management may seem a world away from psychology, but the two are more compatible than most people think. The first management psychologists were pioneering techniques in business more than 70 years a go and they succeeded in turning the practice into a serious and important resource for business. The fresh approaches it brought to tasks were seen as important and useful tools, and the principle of psychologists helping to boost commercial profits soo n gained credibility.

As a psychologist working in commerce, I am not trying to smuggle psychotherapy into the workplace under a different name. My job is not to `fix' people, rather to help organisations become more successful through better management of the human side of t heir strategy.

The higher people climb in an organisation, the more important the psychological context becomes. This is because the further they travel up the corporate hierarchy, the more their jobs tend to focus on leading other people who are carrying out the funda mental tasks of the organisation, rather than carrying out those tasks themselves.

In the case of management accountants and financial managers, the burden of psychological factors can become particularly heavy as they gain promotion, because, right from the start, this profession allows little time to develop interpersonal and people management skills.

Many financial managers are puzzled to find that, although their careers are going well, there are aspects of company activity that cannot be explained away simply by applying the principles of accountancy.

For example, the figures for one of my clients showed excellent growth, and management accounts from its various profit centres presented the image of a highly successful organisation. But the company was having problems because its high-flyers tended to leave or were successfully headhunted after only a few years. Replacements from outside did not seem to last long enough to make a difference.

This is where management psychologists come in. Problems whose professional skills combine practical business disciplines and a heavyweight psychological background. Psychologists bring to the party several powerful tools designed to help managers unders tand what might he holding back the organisation at a cultural level, as well as to understand how to make the most of their own careers.

One of the questions most frequently asked by clients is ``why can't organisations solve their people problems for themselves?'' In fact, organisations do solve most of their own day-to-day people problems. But when companies attempt bold expansion, or u ndergo major changes to cope with an increasingly competitive environment, advice that embraces both human and organisational effectiveness can be a great benefit.

Such organisations are usually up against challenges they have never faced before. To deal with these they need to be able to step back from the tumult of their day-to-day activities and get a new perspective on what they are doing. The perception of psy chology in business is changing. Some people remain cynical about it, although this cynicism usually evaporates when they work with psychologists and realise how helpful they can be.

More and more people in business are accepting the idea of using psychologists. Some financial managers may initially resist bringing them in to deal with problems that they see as peripheral to the company's core activities. But any problem that affects the bottom line of an organisation is far from peripheral, and if hiring management psychologists is the best way of solving these problems, that decision -- far from being something finance directors should oppose -- could both save the organisation mo ney and help to boost its profits.

We should never forget that organisations are composed of people. As financial managers become increasingly wrapped up in operational, technological and management issues, it is surely short-sighted for them to dismiss any discipline designed to make the organisation and its people perform better. On the contrary, this should be seen as a vital part of the organisation's decision-making.

(Edited extracts from Financial Management, a journal of CIMA, London. www.cimaglobal.com)