The key for your company to thrive in the post-Covid era is your people’s level of emotional intelligence
A blessing because I can experience the society from within while retaining sufficient critical distance to see things in perspective (my education in systemic dynamics also comes handy in this regard). A curse because there are a few things happening in the Czech society right now that, seen in perspective, cannot be un-seen. More, when you look at the root of the issues and the possible scenarios ahead, you can’t prevent a cold shiver down the spine. These things that I cannot un-see are the topic of the following lines.
It all started in 2008 when the global economic crisis hit the Czech Republic. Till then foreign investors, who have been the main driver of economic growth in the Czech Republic after the fall of communism, were splitting the profits made on the Czech market roughly 50-50 – half of the profit was going back to the headquarters and half remained in the Czech Republic for re-investment and local development.
I’m sure many of you can remember the good old times when companies were “throwing money through the window” on items such as sponsoring, advisory, training, team building or prolonged company retreats. Well, the crisis put a halt to that. What the crisis didn’t actually stop was profit-making – the companies were still making good money, otherwise they would have closed down shop. But the split of profit changed – according to a 2016 report by the Czech Statistical Office since 2008 roughly 70 to 75% of profit was pulled out of the Czech Republic by foreign investors – some companies took it to a mind-blowing 97% - with local subsidiaries left to wipe tears and chew on the profit leftovers.
Another side effect of the crisis was the outburst of restructuring, some of it natural – many companies expanded beyond healthy boundaries in 2000-2007 - and some of it irrational, driven more by attempts to spot new sources of savings to secure the habitual high profit (at least on paper) than by dreams of growth and long term prosperity and sustainability on an increasingly competitive Czech market.
All these moves left the Czechs incredibly frustrated. Some lost their jobs, mainly in managerial positions vulnerable to restructuring, some stayed and had to work way more than before for fewer benefits. The level of frustration grew in intensity and blew out straight in companies’ faces starting with 2015 when the Czech labor market started to unfreeze and people started to change jobs at an accelerated path. All of a sudden reputable foreign companies with a previous 5 to 7% fluctuation rate were confronted with fluctuation beyond 30% (surprise surprise – those companies who pulled away most profit between 2009-2014 were the first to see their fluctuation figures going through the roof).
What’s worse, companies started to lose key talent and put a cap on new business projects because of lack of labor force, because during previous years they had no money or energy to invest into strategic labor planning, HR staff education or quality, meaningful retention policies.
Beyond the obvious economics, what happened in the Czech society between 2008 and 2015 is something that I would dare to call historical re-traumatization. Because of its exquisite geographical position, the Czech Republic found itself abused numerous times along the history by foreigners – the Habsburgs, the Germans, the Russians. A country’s historical memory is very much alive, same like a personal history of trauma that lives in a body years after the traumatic situation occurred.
By pushing the profit-taking pedal way too deep foreign companies unwantedly stepped on a sensitive item that triggered a response powerful beyond expectations. After the fall of communism and driven by hopes and the glamour of the West, Czechs developed towards foreigners something called “tolerance.” By no means read inclusion – in the Czech emotional vocabulary tolerance means: “Whatever. Do whatever you want as long as you don’t come in contact with me, don’t limit or put pressure on me, and you don’t tell me what to do.” Oh well.. that’s not exactly what happened since 2008 in this country.
Therefore, we can’t be so surprised that the Czech discourse and societal mood changed from “tolerance” to “I knew it. It’s just a matter of time till you show your real face, you bloody foreigner!” And, as if the economic aspects hadn’t been enough, the migration crisis of 2015 put the crown on an already tensed societal and economic context. The Czech reaction to this perfect storm was the emergence and growth in influence of an anti-democratic political discourse, mainly carried by a populists such as Tomio Okamura (a more-than interesting character from a systemic perspective, he is half Czech, half Japanese and he happily gives voice to all Czech hatred towards everything foreign – which, by definition, includes half of himself). Anyway, his political party Freedom and Direct Democracy (SPD) got the third place in the Czech Parliament, becoming a quite significant political player right now.
Right, quite a gloomy outlook, you might say. What can we do about it?
When I started my business in May 2010 - I launched a media training business at the start of the economic crisis AND in English, silly me – I started to observe a specific mental and emotional feature of the Czech culture. Czechs wouldn’t by no means speak up – in fact they wouldn’t even feel the need to show up, to take care of their image, personal brand or the way of being perceived by the outside world until they couldn’t do otherwise (which was usually too late). By the way, why do you think that so many companies started to fix their employer brands only since 2015? And why so many companies are still failing miserably in new recruitment despite the huge amount of money poured into communications for the last two years?
What I observed therefore was that, on the Czech market there was no understanding whatsoever of the strategic importance of well thought-through communications – of showing up, of speaking up timely, clearly and with dignity, of taking action and responsibility for one’s own communications, image and, ultimately, life before it was too late. It is usually a crisis that pushes local people and companies into doing something about their communications. Of course, for a trendsetter like me that societal tendency was and still is incredibly frustrating – but it’s the way things are on this market and, as long as I want to operate here, I can only accept the reality and work with it. Which takes me back to the question: what to do about what’s going on in the Czech Republic?
It is a fact: the Czech Republic is dependent on industry and on foreign trade. Faced with growing labor costs, local companies can do nothing but to increase the speed of investments into automatization and robotization. This trend will only increase the bottom-line fear of the blue-collar workers that “the foreigners are out to get them.” If companies do nothing to spot this fear, address it in time and communicate their intentions well, they will only further contribute to the already existing frustration, which will add to the political unrest, which will lead to the country falling more and more into undemocratic political hands, which will turn against market policies, which will ultimately push the “bad, bad foreigners” out of the country. Sounds like science-fiction? Take a trip to Hungary and ask them about their latest political and economic experiences.
So in my view the challenge for leadership in the Czech Republic is multi-fold: