Accelerating the Evolution of Work
A movement is underway. It has been gaining momentum for well over a decade and it is changing the very foundation of how the global business community views the role of the corporation. Coronavirus is only serving to add velocity to the momentum.
An Elite Organization of Capitalist Power
The Business Roundtable is a powerful US lobby group made up of nearly 200 prominent CEOs. It’s members are the who’s who of capitalist power in the world’s largest economy. Tim Cook (Apple), Mary Barra (General Motors), Jeff Bezos (Amazon) and Safra Catz (Oracle) are among its members. Their purpose has traditionally been to create a formidable united front in supporting C-Suite power inside large corporations and opposing legislation that would tilt the power dynamic towards employees.
A Sea Change In Thinking
Against this backdrop it’s even more remarkable that, last year, the Business Roundtable changed its “Statement on the Purpose of a Corporation” that has survived since 1997. For over two decades, the statement followed the “Friedman Doctrine”. which postulates that a corporation’s main responsibility is to maximize returns for shareholders. Clearly, most public companies continue to drink this Kool-aid!
But the drastic changes to this important statement last year served to broaden the list of stakeholders to include customers, employees and local communities. This is a sea change in thinking compared to its previous statement.
The question is “Why?”. Why would such a powerful and clearly self-serving group of right-leaning aristocrats suddenly embrace stakeholder groups traditionally reserved for the social causes of leftists? The answer is stunningly simple…Because there’s money to be made from it.
It’s No Longer a Baby-Boomer’s World
Over half of the global workforce are now millennials. In five short years, this will rise to 75%. Millennials are a different (and kinda awesome!) breed. Born and raised on technology that many baby-boomers still don’t understand, millennials are creative, resourceful, and motivated more by social causes than any generation preceding them. And it’s not just lip service – they vote with their feet. When a smart millennial is making a buying or career decision, they almost always consider the purpose and values of the business in question.
A Squeezed Lemon Always Runs Out of Juice
The Friedman Doctrine gave rise to a pervasive belief system in western society that employees should work as efficiently as possible while being compensated as sparsely as possible. The shareholder was always king. And large corporations were organized around this central construct.
Except, somehow the academics and senior leaders failed to consider human nature. Reciprocation is a principle that is deeply embedded in the human psyche. A tit for a tat, an eye for an eye, scratch my back I’ll scratch yours…etc. When people feel like they are being squeezed, they eventually lose the motivation to bring their very best to work.
Studies abound from reputable think tanks like Harvard Business Review, Gallup, and Forbes, which clearly demonstrate the economic value to a corporation in nurturing engaged employees. The question is not whether engaged employees add real dollars to the bottom line. The question most commonly pondered today seems to be “What creates engagement?”.
A Question Worth Answering
I believe it’s the wrong question. I believe the right question is “What creates disengagement?”. It’s a nuanced difference but it’s important. Let me explain.
For the most part, humans are fairly predictable creatures. Our operating systems all come from the same source code. We are driven by a foundational set of psychological needs that are universal across the population. Specifically, we are hardwired to seek freedom, connection, competence and purpose. In a Utopian world without obstacles, we would all be free to pursue these needs, and nearly all of us would.
So the real question becomes “How do we create and nurture a business environment that empowers people to pursue their inherent needs without friction?”. In fact, it’s not an overstatement to say that it is also about the future of competitive advantage. This is the subject of much of my current research, and at present, our isolation has powered up a military grade spotlight which is scanning the landscape for answers.
More to come.