Rehumanizing The Organization
Our greatest costs ride up and down our elevators each day to and from work,” said the CFO of a large company that my firm was working with a few years ago. Shortly thereafter I had a conversation with the company’s CEO, who remarked, “Our greatest assets are our people.” Obviously, these two executives were not aligned on the value of their human capital, which unfortunately is not uncommon in many organizations today.
This divergence is emphasized by companies that make large investments in warranties and service plans for technology to ensure their IT systems are up to date, but invest only a small percentage of revenue in the development of people to assure they are well-trained, engaged and working to their highest potential.
Another disconnect is when leaders try to squeeze maximum productivity from current employees instead of hiring additional employees, yet they don’t invest in tools, such as technology, to help employees achieve those goals. That builds resentment rather than productivity.
This dissonance between employees and leadership is the result of the trend of dehumanizing people in the workforce and the impersonal nature of business. The Industrial Revolution began by forcing children and poor immigrants to work in terrible conditions, and although, thankfully, society has made a lot of changes for employee rights, human capital is still largely considered an expense to be managed instead of a resource to be nurtured.
Business today is conducted through electronic screens, which have replaced face-to-face meetings and handshakes. Decisions are made and communicated by impersonal emails and the impact those decisions have on others is not physically seen or heard.
Have you heard of the Milgram Experiment in 1961? Stanley Milgram, a psychologist at Yale University, wanted to gain insight into the justification for acts of genocide by those accused at the World War II Nuremberg war crime trials. The defense often argued that the defendants were simply obeying orders from superiors.
In summary, 65 percent of the experiment’s participants obeyed orders to push a switch to give a severe—possibly deadly—electric shock to someone else in a separate room. The participants could not see or hear how the shock affected the victim (the “victims” did not actually receive a shock, but the participants did not know that). While this experiment is disturbing by today’s standards, the concept of obedience to a standard, no matter the impact on others, is not unlike corporate groupthink today, where obedience to the pursuit of profit is absolute, no matter the impact on other stakeholders, including employees.
Sadly, the relentless pursuit of profit has left the majority of employees believing that the company they work for does not care about them. Business leaders have been taught that their job is to create shareholder value, which means profit, and therefore people are costs to be managed. Promotions, rewards and success are bestowed upon leaders who manage people resources, and that’s how layoffs, downsizing, below-par wages and benefits, and so on are justified.
This treatment of people as costs instead of important resources results in employees who go home every night feeling like they have no purpose or value. This effect may be disastrous on marriages and families. Also, during the day at work, undervalued employees become less loyal and more disengaged, which has a disastrous impact on productivity.
The good news is this is a problem that can be solved. I’ve had the pleasure of working with leaders who not only believe that their people are their greatest asset, but walk the talk. They understand they are stewards of their people resources, and their personal mission is to create an environment that validates, supports and encourages. They believe their most important goal is not just to increase shareholder value at all costs, but to serve all stakeholders for long-term sustainable growth.
If you’d like to be that kind of leader, start with leading by example. Think about your actions toward creating a corporate culture that values people as much as profit. Are you communicating a long-term shared vision, developing leaders from within the ranks and helping people go home each night with the feeling they are valued?
Other elements of people-centric leadership are creating authentic development and educational plans for each employee; allowing people to voice their opinions and ideas and carry them out instead of micro-managing; and rewarding and recognizing people who exhibit these values and behaviors. Evaluate internal communication methods and make a real effort to have more face-to-face communications, make more handshakes, and give more “atta boy” and “atta girl” pats on the back.
The most rewarding aspect of leadership is knowing that you succeeded in making people feel valued and important. I’ve observed how this makes a difference: When employees feel good about themselves, they become better spouses, parents and community members. This, in turn, has a profound impact on the children of these valued employees and perhaps is the most promising way we can reverse many of the ills of today’s society.
It’s time to turn capitalism upside down and view human capital as a precious resource instead of a cost to be managed. When we can stop sacrificing people’s happiness for the benefit of profit, the chasm between leaders and employees will shrink. This type of people-centric, enlightened leadership will cultivate trust and loyalty, and your people will surprise you—and more importantly, themselves—at what they can accomplish.
Mark W. Sheffert (email@example.com) is founder, chairman and CEO of Manchester Companies, Inc., a Minneapolis-based advisory services firm specializing in business recovery, transformation, performance improvement, board governance, and litigation support