Homo ex machina: The human side of business

The Fortune ‘100 Best Companies to Work For’ are also the best companies to invest in, far outperforming the S&P 500 Index. Why? Because a happy, engaged workforce has become an advantage for companies utilising new models of people management geared towards improved employee engagement. But, according to Dr Jane Cherrington, companies can’t just create employee engagement, they have to create the right conditions for engagement to occur.

Today, against the backdrop of increasing diversity and globalisation, examining the implications of variance in the people side of services and industry is more an imperative than a curiosity. Any proposed solutions to positive management of the complex realities of interactions between diverse groups of individuals must be flexible, adaptive and above all, thoroughly human. 

Business needs to see people as human as opposed to thinking about them in a market model that sees people in the abstract, as if they were a resource. To face this challenge, we are now seeing movement towards new models of people management geared around improved employee engagement and organisational productivity. 

There is also increasing recognition that in order to care about what they do, people need to have a real sense of purpose to their work and the ability to be more self-directed in determining how to go about it. The profit motive, especially when it is someone else’s profit, is no longer sufficiently motivating.

As an increasingly rapid pace of change overturns any semblance of stability, we find ourselves in a world where the constant demand is to acquire new skills, change direction easily, and collaborate and cooperate flexibly, both internally and externally, for our organisations. These priorities are dialling up attention on the so-called ‘soft skills’, now acknowledged as key competencies for future success.

As leaders, we (with our teams) will have to become very competent mechanics for the people side of our organisational engines. This will require an ability to overcome the human psychological proclivity for habit, over breaking new ground in developing less comfortable processes to engender creativity and innovation. We will need to be able to communicate effectively and to cultivate the skills of accelerating and facilitating, instead of planning and managing. 

Across geographies and generations, people are demanding more meaning and enjoyment from their working experiences. To stay competitive, organisations and their leaders will need to learn how to deliver to these growing appetites. A key driver of this change in employee expectations is social. The old world of working under poor conditions for little reward is no longer acceptable, at least not within privileged
Western communities. 

It’s reasonable to pause and acknowledge that this is, after all, a very privileged Western story – in many parts of the world harsh conditions, highly inadequate rewards, rampant exploitation and even slavery (outlawed by all countries but with an estimated 29 million plus people enslaved today) are the terrible reality of ‘work’. For our part, the ‘we’ to whom this report refers, live in an increasingly diverse and globalising culture where our basic needs are well met by worldwide standards. In psychologist Abraham Maslow’s terms, we are now long past survival mode and into spaces concerned with meaning, identity, autonomy, respect, values and a sense of fulfilment and contribution. 

As well as being recognised psychological drivers, these are also the common themes in a diverse range of research and reports about effective employee engagement. They are behind the attraction and retention of talent and happy workplaces that are beating benchmarks for productivity through a focus on the employee experience.

What you can do to gain this advantage

A TED talk by Chip Conley, former boutique hotel CEO and current head of global hospitality and strategy for Airbnb, contains perhaps the most powerful idea there is around engagement. He talks about happiness and recounts words from the Prime Minister of Bhutan. He had asked this man, “How can you create and measure something which evaporates, in other words, happiness?” And the answer was: “Listen, Bhutan’s goal is not to create happiness. We create the conditions for happiness to occur. In other words, we create a habitat of happiness.” 

As a leader, this is what you should aim to do: Don’t try to create employee engagement, create the conditions for engagement to occur

Create the right conditions and people will engage. Engaged people will drive results. The formula is: be clear about the values shaping your culture; respect and involve your people; ensure their work has purpose and meaning; empower them to contribute and to work with self-direction and autonomy.

Meaning and Identity: Give it purpose

Identity and belonging have become prioritised drivers in contemporary Western culture. Many people are less anchored in traditional identity frameworks of community, culture and religion. The sense of purpose once obtained through local society and practices has become less available as traditions have eroded and people have migrated. But the human need for life’s meaning remains undiminished. We want to feel our lives are meaningful.

There is good reason author Simon Sinek is enjoying a such a strong response to his work on purpose as an engagement tool for business. People are far more motivated and engaged by meaningful corporate purpose than they are by profit. Purpose sets clarity of direction and describes a line of sight to one person’s contribution. If work is designed so that individuals and groups can understand their involvement in a higher, socially meaningful purpose, then you have a powerful engagement tool. This idea is not new, it’s just taking a while to really catch on. In 1969, a janitor at NASA was asked what his job was. The answer, while holding a broom, was, “I’m helping put a man on the moon.” Obviously we can’t all link to such a motivating goal. But we can try to define one clearly.

The idea of contribution is critical. A lofty goal is fine but people still need to understand how they are contributing to its achievement. One example, again from Conley’s TED talk, is Vivien, a cleaner in one of Conley’s hotels. Cleaning well is not her primary driver. Her motivation is to make guests feel at home. A beautifully clean room is part of what creates that feeling. This might sound shallow if it were not the maid’s own story about why she loves her job. When she told him, it was an ‘Ah-ha!’ moment for Conley as her employer. He suddenly realised the importance and power of purpose to make people feel happy and engaged. What he didn’t focus on, but is equally important, is that Vivien had developed her own sense of purpose in the absence of other direction from him.

He took her lesson and applied it to develop that direction for all his employees going forward, to make it part of the fabric of the business. And, according to Conley, it worked. Employees like Vivien are not automatons waiting for purpose to arrive; they are out there creating their own meaning in their lives and work. This signals the really important role people in an organisation can have if you work with them to bring their existing values and drivers into view and work from there to inform the wider culture.

Autonomy and respect: Recognise and empower roles                                                             

The human side of Vivien’s work was not on her job description. Until she was asked, her motivation and contributions – like her interactions with guests – were invisible. This is

a problem for organisations. Some of the most valuable work being done is invisible. A significant study on workplace and roles looked at the work of hospital janitors. The research identified that the human side of their work was nowhere to be seen in terms of the actual descriptions of their roles and tasks. Yet, as evidenced once interviewed, these people were involved in countless important human interactions with patients and families on a daily basis. In just one example, a worker cheerfully incurred supervisory caution by not vacuuming a room. They did so because the family in the room had been up all night with their loved one and finally fallen into an exhausted sleep that the worker had decided not to disturb.

This human side of someone’s individual role is rarely given visibility or attention. Once looked at properly it becomes obvious how important these interactions are as a contribution, not only to the employee experience but also to that of the customer. Organisations that recognise this are putting power back into the hands of their people and allowing them to make decisions, like the one to not disturb a family. This is application of what psychologist Barry Schwartz terms ‘Practical Wisdom’. Allowing that people like Vivien and the hospital janitor are wise enough to make a call on what needs to be done and giving them the power to make the choice.

Psychologically, empowering people to make the right decisions answers our human needs for respect and autonomy. It also answers the organisation’s need to improve customer experience. Often, customers are most frustrated in their experience right at the front line in interactions with call centres, tellers, service desks and cleaners, and with administrators, like those in finance, where bills are queried. People in these roles are usually facing frustration without the power to put things right. Both customer and employee suffer loss of respect as a result. The alternative is to put power in the hands of someone who can do something about it. Examples of companies now doing this are growing rapidly, but one has been around for quite some time: the Ritz-Carlton Hotel. Every single Ritz-Carlton employee, without approval from their general manager, can spend up to $2000 on a guest if they feel there is reason to do so. And that’s not per year. It’s per incident. This displays the company’s deep trust in their people’s judgment and they report that it is never overused.

Moves to reorganise to flatter structures with self-directed teams depend on this logic of trusting people’s ability to be autonomous and to make wise choices in order to succeed. It does not mean policies and processes are not required, it just humanises them. These policies may be needed to construct organisational design logic, but they do not rely on that logic, they rely on culture, on: ‘How we do things around here.’ The anchor for this always comes back to the role of values.

Values

As has already been identified, people need to be anchored to a sense of community. The word “community” is derived from the Old French “comuneté”, in turn from the Latin “communitas”, from “communis”: things held in common. It is defined as: a social unit of any size that shares common values. Values are the socially and culturally produced beliefs about what is important and how to behave that drive how we think and act. Understanding this offers access to a very powerful tool for organisations. While there may not be a written or spoken set of principles in place, they will already exist in the logic of how people treat each other and do things in a company. These are complex things to think about because, like social systems and human aspects of roles already covered, they are always there but not visible or deliberate unless you make them so. The opportunity is to find ways of bringing them to people’s attention and thereby engage people with assessing and setting the organisation’s value compass.

When values are well managed as the social phenomenon that they are, they can be at the heart of the engine of behaviours. Work around values in organisations can be very potent but needs to be done properly to be effective – there are landfill-sized tributes in the form of meaningless slogans that have walked across many corporate walls. But, done well, work with values can be the key to turning on emotional connections in the human engine and provide the energy needed to create changes in direction. To bring them to life requires unpacking them properly.

Integrity, respect, commitment, curiosity: these are used frequently in descriptions
of companies’ values. But what do they actually mean in the day-to-day of doing a job? You have to do the work of finding out. And it is worth reasserting that an executive team cannot impose values by developing a set of words and creating those posters. To make them real requires genuine engagement throughout the company to let people explore, interrogate and articulate what the ideas behind the words mean to them in their day, in the light of the work they do, and how they might want to make them real.

One way in which ‘value words’ can be considered is in the most common daily task in organisations: communication. If you have a word like ‘respect’ as a stated value, what does it mean for the way you communicate? In an interesting experiment, one company decided to make the value of respect more tangible and focus on its importance by setting themselves
a communication challenge. They would practise respect through ‘active listening’. What they defined this to mean was: do not interrupt; focus on the speaker without planning your response; and try to deeply understand what the other person is trying to say and where they are coming from. The overall results were fascinating. Meetings became focused, flow was improved, tensions reduced, outcomes were more easily agreed and people reported they felt more engaged. It was one small piece of value work but it had a big impact.

Fulfilment and contribution: Corporate roles and responsibilities

The increasing clarity around the connections between commercial systems and social and environmental ecosystems is breaking through formerly complacent corporate borders. This has seen a more recent but potent driver emerging from the workforce, that of demand for social accountability and social contribution from employers. While this receives a reasonable amount of press, it is still not a deeply impacting shift. Yet. But it is important to prepare for this journey. It is no small matter for a business to account genuinely for its cradle-to-grave footprint on the world. The first step is to acknowledge it exists. The next is to plan what it looks like for your organisation. Involving your people in that process is very powerful.

What about reward: money

Cash is not a key driver of motivation or engagement. Unfortunately, because we have long thought of it as this sort of mechanism, many reward systems in organisations are set up around financial incentives. Worse, financial incentives are often set up so the rewards in place work actively against other key drivers, experiences and values. It seems sensible to acknowledge the large body of work arguing that money is not motivation. Money is an entry point, which can be answered by fair pay.

The other money issues to consider are in grumblings against the profit model and pay gaps more generally, which may become a bigger problem. The damaging effects of a short-term focus and the lack of engagement when the main purpose is achieving shareholder profit are well documented. But what of a growing disquiet with working really hard to simply create wealth for others, or the huge inequities around who gets paid what? The old theme of equity is still very much with us.

Swedish bank Handelsbanken is one example of a model designed to address this challenge. It shares its profits, but not in a traditional way. If the bank exceeds the average profitability rate of its peers, surplus profits are put into a fund and distributed to all employees. But such profit-driven answers to equity don’t necessarily mesh with drivers based on greater good and social accountability. Some companies address this by going a step further than delivering profits to employees – offering the time and energy of their people to support less advantaged communities. Done well this can be a very engaging tool that rewards both employees and communities in positive ways. New forms of cooperative models, social enterprise models, trading trusts and global good partnerships are all emerging as alternative ways of determining who profits and how.

SETTING UP YOUR CONDITIONS FOR ENGAGEMENT:

Many tools exist to support an organisation on a path to setting up the right habitat for high engagement. A commitment to want to achieve this – preferably from the board down – is the necessary first step. If driven by a CEO and their team, the vulnerability is in what happens when key people leave. Mapping the current context and planning the way forward at all levels with the teams involved is the next step. Some useful things to think about for this work on creating a good context are:

Jane Cherrington is co-director of String Theory and research director for The Briefing.