A Cog In The Machine
I shared this thought on LinkedIn the other day (queue the Letterkenny intro song):
…and since this seemed to resonate with people, I thought I would expound on it.
I often hear companies say that their people are their most valuable asset, and yet they are the first thing to be cut and the last thing they invest in. Treated like a renewable resource, labeled COGS (cost of goods sold), and then organizations wonder why employee engagement, which has rarely been above a third of all employees, is on the decline (See: U.S. Employee Engagement Slump Continues).
The Legacy of Jack Welch
According to David Gelles of The New York Times, Jack Welch’s hyperfocus on maximizing shareholder value by any means necessary has led to the greatest socioeconomic inequality since the Great Depression. Welch’s approach, combined with Reaganomics Trickle-Down Economics and the resurgence of Ayn Rand’s Objectivism, set the stage for a shift in corporate America in the 1980s. However, it was Reginald Jones, Welch’s predecessor at GE, who pioneered the offshoring movement in the ’70s, laying the foundation for organizations to prioritize profits over loyalty to employees.
This marked the beginning of an era in which organizations ceased to demonstrate loyalty to their employees, and individuals began to notice this shift. People no longer exhibited blind loyalty towards organizations and stopped seeking careers solely focused on climbing the corporate ladder. The advent of the internet facilitated greater access to information, and individuals became aware of facts such as Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less. Consequently, people started seeking employment opportunities that served their long-term career growth, regardless of the specific organization. This transactional approach to work became prevalent in both directions, as employees sought personal advancement while organizations focused on their own interests.
Similarly, with the rise of technology, work has become more complex and demanding. Henry Ford’s infamous quote, “Why is it every time I ask for a pair of hands, a brain comes attached.” highlights the shift from physical labor to knowledge work in the Digital Revolution. However, as minds are powerful but require motivation, organizations must recognize the need to create an environment that fosters intrinsic motivation.
In Pursuit of Purpose
The concept of choosing a job you love to avoid feeling like work has gained popularity over the past few decades. Psychologists Edward Deci and Richard Ryan’s research in the ‘70s on human motivation challenged the notion that money is the primary motivator. Autonomy, competence, and relatedness emerged as the core elements of motivation according to the Self-Determination Theory. As a result, organizations started embracing purpose-driven approaches to attract and engage talent, aligning their vision, mission, and values to appeal to employees’ desire for meaning.
Society, education, and media further encourage the idea of finding one’s life purpose, achieving success, and then attaining happiness. However, the definition of success is ever evolving, leading to a perpetual chase for the next milestone. Positive psychologist Shawn Achor argues that we’ve had the equation wrong – happiness doesn’t come after success, and success doesn’t come after hard work, instead happiness actually promotes success. It’s important to recognize that work, even if enjoyable, still requires effort and can be physically and mentally taxing. Tying one’s worth and happiness solely to a position or company can lead to burnout and dissatisfaction.
Work Is Not Your Family
While the phrase “we’re like family” may seem well-intentioned, it blurs the line between work and personal life, often leading to unspoken expectations and burnout. It further enforces this concept of finding purpose and relatedness in your company. Comparing colleagues to family members can create a sense of obligation to go above and beyond, which contributes to disengagement and health issues. It’s crucial to maintain clear boundaries and understand that no matter how much you like them your colleagues are not your family. Afterall, would you ask your CFO to pick up your kid from soccer practice? Would you reduce your family size due to declines in the market?
No One Owns Your Company
In publicly traded organizations, ownership is divided among shareholders, and CEOs are hired by a board elected by shareholders. 71% of whom are institutional investors that are investing on behalf of someone else with promises of returns. Thus, executives prioritize shareholder interests, and their primary customer is the shareholders, not their employees, not the purchasers of their products or services. Plus, the average tenure of an executive is 5 years, so it’s likely just a job to them too. Understanding this dynamic is important to avoid misconceptions about loyalty and decision-making within the organization.
Employees are often undervalued and treated as expendable resources, despite claims that they are a company’s most valuable asset. The legacy of maximizing shareholder value, combined with changes in the nature of work and employee expectations, has shaped the current state of corporate culture. Recognizing the need for purpose, setting realistic expectations about work, and establishing clear boundaries can contribute to a healthier and more engaged workforce. Understanding the dynamics of publicly traded organizations helps employees align their expectations with the reality of the business landscape.