Our society in the United States of America is infused with a capitalist mindset. We typically assign the highest value to desired results when they are developed and delivered effectively and efficiently. “Convenience”, for example, often yields a premium price, as does a novel product. Take a straw poll in your board room, and you’ll find most of us agree that this is exactly how it should be. In fact, we would likely not be in business if that weren’t the case.
The heartbeat of a company matches the heartbeat of its people
In most companies, services and products they produce are designed to deliver specific results, based on their sector. For instance, in the learning technologies business, a core competency is helping well-meaning organizations upskill people and improve their processes. A company that doesn’t consistently deliver the results clients want will fail. Quickly.
Every CEO’s reality is that their company only continues to live and breathe by delivering customer-defined value each day. Delivering valuable results requires careful planning and execution, because there are no easy answers. But collaboration is definitely important, and working in synergy means we will deliver more as a group than as individuals. It is true that by constantly looking for ways to improve, and by putting heads together to solve problems, continuous growth can be earnestly achieved.
With so much data available these days, though, it is easy to get lost in the numbers. Going after the next project, keeping on schedule, coordinating effort, refining strategy and tactics,…all these deliver value to our clients and stay in business. At times, so many priorities can make it easy to forget what ultimately makes a company’s success possible. Even project managers in the elearning industry talk about how the work feels like something akin to herding cats.
It’s not the technology or the careful calculations. It is not the standardization of processes or accurate timelines. It’s not a 5-year playbook or carefully crafted tactics. Those are all important, but in the end, the most important factor is a company’s people. People want to bring their passion and their craft to bear, their creativity and their experience to the table, and it is ultimately your people who deliver these amazing results for clients. Numbers do not have passion, craft or creativity. Forgetting this baseline tenet can doom a business or organization in the long run. Here is an example...
Jack Welch, former CEO of General Electric (in better times), wrote a book called “Jack: Straight from the Gut” talking about his approach to profitability. Here’s the gist on how he divided the GE workforce into 20-70-10:
The top 20% were the highest performers and were celebrated and rewarded as such.
The middle 70% were “vital moderates” and kept their jobs—for now.
The lowest 10% each year were fired, as simple as that.
As you can see, this was a dog-eat-dog, ‘survival of the fittest approach’. It forced top performers into a place that pitted them against potential challengers to that coveted 20%, even leading them to actively sabotage of others’ efforts. As a strategy, it was wrong. Yes, in the shorter team, profits went through the roof. But in the long term, it undermined morale. While a corporation is impacted by a large number of factors, such as volatility and market risk, these numbers alone do not provide the full picture or define its success – or failure. In fact, many believe Jack Welch’s morale killer approach to be an important reason behind the under performance of GE. Who can truly give their best when their best can be so devalued?
A 2018 drop in quarterly dividend from $.12 to $.01 and an all-time per share cost of $6 in early 2020 indicates a severely steep decline... and that was even before Covid set in. The point is simply that robust capitalism alone will eventually fail. It will go from thriving to being on life support, to disappearing altogether. That is why this no-heart capitalism approach needs a reboot. This underlying dynamic explains it.
Don’t tread on us... or we’ll call in “sick”
For the most part, human beings, while complicated, are actually rather predictable. Although competent evaluation can uncover more nuanced motivations that undermine performance, there is a starting point of civility. Treat employees with respect and kindness, act with integrity towards them, appreciate them, and you’ll likely get that in return. People dig that kind of stuff. It’s pretty common knowledge outside of the board room that most people thrive on this approach, giving their best, from their hearts, in return for respectful treatment. But step all over them, yell at them, micromanage them, or ignore their efforts to connect or provide input and … well … you can expect that you’ll get the same back. That’s just how it works.
Most people give out what they are given. Sometimes a little more, and sometimes a little less. And sometimes when they feel abused and dish it back at you, you don’t even realize they’re doing it, because they do it behind your back:
they grouse with fellow employees.
they don’t have as much energy to bring to their work.
they take more time off.
they get sick more frequently.
they quit.
This grousing and the accrued results are collectively called ‘guerilla’ or ‘underground’ resistance, and that resistance festers and grows, leading to diminished productivity, a revolving door of quitting or being fired, and greater costs in running the organization. In fact, a May 2, 2019 Forbes article cites a Gallup poll that found disengaged employees have 37% higher absenteeism, 18% lower productivity and 15% lower profitability, with a cost of 34% of a disengaged employee’s annual salary.
Culture matters. And company cultures can actually become ‘sick’ because of perpetual low morale. Sick companies are like sick people. Not cared for, they will weaken and eventually fade away into oblivion.
It’s probably not a stretch to imagine that the CEO or a leader of some kind within the organization is personally caught up in this vicious cycle of ‘capitalism without a heart’, believing they must run that treadmill faster, more effectively and efficiently, producing more with less. After all, isn’t that what got them to the top of the heap? And yes, while we can be creative and come up with awesome new approaches that deliver more with less, ‘doing more with less’ simply means that the work is piled higher on the backs of already over-burdened employees.
Some people argue that capitalism with a heart will render us at last place in competition against other countries, such as China. They suggest that without that razor focus, relentless drive, and the cut-throat ‘take-no-prisoners’ stance, the United States – we - will lose out. We think not. In fact, we can be even more competitive and relentless when capitalism has a heart. When you remove the dehumanizing factors, create a better quality of work life, provide a more respectful culture throughout your organization, and when your people know they are valued, they will overall work harder, sharper and more effectively than when they were working impossibly hard in fear of losing their livelihood.
What does this incessant demand for faster/better/cheaper do to each of us, deep down? The answer is simple: it eventually makes us operate just like machines. It averages out the fringes, according to value, attempting to normalize performance and excluding outliers. It reduces the priority on inclusion, such as considering the needs of people that require accessibility accommodations. And when leaders treat themselves mechanistically, that is likely how the company treats everyone underneath them. Which is precisely what capitalism without a heart is.
Leaders in executive roles must find a way to step out of the ‘hamster running around the wheel’ experience. While the almighty dollar is what many of us are in this for, without our people, without humanity, we are simply cogs in a manufacturing process. You can only mistreat yourself and others for so long before a price is paid.
There is a different way.
Peacemaking can heal the heart, and bridge the breach
Enter peacemaking. It is an approach that enables capitalism to grow a heart. To appreciate its value, leaders need to understand the difference between peacekeeping and peacemaking:
In peacekeeping efforts, we don’t fundamentally solve problems – we just slap on solutions that ‘keep the peace’, but they don’t achieve the peace. We try to mollify angry people, but we don’t address the underlying issues that lead to angry people. Peacekeeping fixes the problem without fixing the heart piece. It’s a manifestation of the concept of capitalism without a heart, and it doesn’t work because it frequently leans on faulty or harmful assumptions that undermine business performance.
In peacemaking, we have to ‘look under the hood’ at the causes and conditions that have led to morale issues and find ways to humanly, and humanely, bridge the chasm that has developed often due to no-hearted capitalistic approaches. It doesn’t mean that others don’t contribute their part to the issue, but we as leaders must examine all of this AND bring our hearts into the issue. While leaders must first work to clearly see the forest as well as the trees through ‘leading from the balcony’ [a useful corporate management approach] so that they see and understand the true causes and conditions of organizational challenges, as peacemakers, they must then quickly come down from the balcony, reengage with their hearts, and repair the cause of the breach in a way that brings people together.
This ‘capitalism with a heart’ approach enables an organization to function far more effectively in the long run. For some, it might lead to sacrificing a bit of the ‘efficiency’. But harnessing and empowering your greatest resource (i.e. your people) with heart enables the business to truly stay agile, responsive, and efficient. This is because as people are treated with dignity, respect and appreciation, they will surpass all nominal expectations. Given these right conditions, humans are amazing achievers.
Change management often takes the same approach as peacekeeping. A plan is put into place for the new rollout of process changes, personnel changes, restructuring, or any combination of the above. A messaging plan is created and disseminated out to employees according to schedule. People are moved around, and we let go of some of them while replacing them with others or just load more on the backs of those who remain. There are daily or weekly check-in points to determine how the implementation is going along, with adjustments when things get bumpy. In general, there’s a huge PUSH to move from here to there, all in the service of improved effectiveness and efficiency in the organization. Standard practice.
Bring everyone across the bridge to success
But far too often, this change management approach leaves your greatest resource, your people, behind. They are never given the chance to weigh in through a forum like table-top learning experiences, to feel like they belong, to be understood, and to have a sense that they are valued. Because of incentives like bonus structures and other perceived ‘best approaches’, time is often not allocated to do the complicated but necessary work of bringing your people along in the process with respect and dignity and honor. What happens is that things look more effective and efficient on the surface, but inside the company, the seeds of its destruction grow.
We live in a great country that enables the leaders of companies to grow their business, lead projects, exceed expectations, and thrive. But we leaders all must make sure that we don’t forget that none of us is a robot, and neither are our people.
When you go to work tomorrow, sit down, look around, and ask yourself, “Where is my heart, and how do I connect my heart, along with my head, to those with whom I work, and within myself?” Remember also that change is slow, and this process might Initially slow you and your people down a bit. It’ll also take awhile to get reciprocation. This is not a quick fix at all, and your persistence is essential for peacemaking to deliver. But we promise you that in the long run, it’s worth it. Capitalism with a heart is the best way to positive sustainable results.
Written by Sue Ebbers, Ph.D. and published in 2021. Article was last updated on November 8, 2023.
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Workforce Alignment: How To Align Employees To Organizational Results
Why Effective Organizational Change Requires Correctly Understand Context
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