“The motherlode of wealth runs not through the executive corridors but through the vocational landscape of frontline employees.” I know I quoted this, from “Firms of Endearment: How World Class Companies Profit from Passion and Purpose” by Raj Sisodia, Jag Sheth and David Wolfe, in my last piece.  The truth that underpins the words, however, is so powerful that I believe they are worth repeating, and cannot be stated too often! It should be at the forefront of every business leader’s, if not every businessperson’s, mind.

Why?

What is the key driver of the success of your business? Pause and take some time to think about the answer to that question. When you have done so write down your answer in as few words as possible. Then, and only then, read on.

Energy, food, fuel – the costs of all the basic essentials of life are increasing dramatically and rapidly. No wonder there is concern about inflation and widespread talk of a “cost of living crisis.” For all but the highest earners and the wealthy, life is increasingly becoming a question of what to do in order to survive.

This puts pressure on employers. After all, if you want to safeguard your operations, you need to ensure that you have the full attention, capacity and capability of your employees. In such circumstances this is hardly likely. Yet, while the news is full of stories of people who are struggling from payday to payday, there are never any reports of employers who are doing anything about it.  

There can be little doubt that the world is in crisis. The number of issues humanity is facing seems to increase daily. Soaring inflation and a cost of living crisis, climate change, the war in Ukraine and the threat of global food shortages, millions of displaced people, increasing political polarisation are only some of the challenges we face. And all are largely unprecedented. And one thing is certain – we cannot meet them with historic solutions. As Albert Einstein said, “You cannot solve a problem with the same thinking that created it!”  

Many of these problems are the result of issues that have troubled me for years. However, as someone who always looks to solve problems rather than criticising or complaining about things, I have always sought to answers. And as matters have increased my concerns, and made me anxious about the overall trend, my efforts have multiplied. This has led me to make more effort to develop and share my solutions, culminating in my latest book, “Searching For Better.”

Unless you’ve been out of the UK for the past week or so, you will undoubtedly be aware that P&O Ferries has been in the headlines. This followed their firing of 800 employees and immediately replacing them with agency staff. Now, it is hardly unheard of to announce a redundancy programme of that sort of number of employees, but it is pretty unusual when that number represents 46% of your entire workforce! Yet even that wasn’t what created the backlash of this announcement.

No, what really created the storm is the way the whole affair was handled, because:

1. The employees (a number with over 30 years’ service) were notified via a short (three-minute) video-link and expected to immediately evacuate their vessels and go home with security guards on hand to escort them off;
2. Their agency replacements were waiting on shore to board immediately after they had disembarked.  

Not since I saw the redundancy of an entire division of employees who were all in the top ten percent of performers, have I witnessed anything like it. Headlines are referring to it as an extreme example of the ugly side of capitalism. But it isn’t. It is just a further revelation of asinine management and the complete lack of understanding of the value of people and the consequence of treating employees exclusively as costs.

A quick attempt to model the numbers gives a quick idea of the thinking behind the decision.

“In this world nothing is certain but death and taxes.” Benjamin Franklin may have been correct about the inevitably of death and taxes, but they are not the only certainty in life. You can definitely add change to the list.

Describing change and the pace of change and the increased complexity it creates as a critical factor of modern life is rather a cliché. It is so much a factor of life that, as long ago as 2010, managing it was cited as the biggest concern for C-Suite executives. (IBM: Capitalizing on Complexity. Insights from the Global Chief Executive Study)  Yet it seems odd how little the need for adaptability follows from such discussion. Or, even worse, how little adaptability is recognised as being a people management issue.  

“Motivation is the reason that people develop talent in the first place.” That line from Adam Grant’s book “Give and Take” really made me stop and think! Imagine the talent, and its impact, if everyone was motivated – especially in business! Yet somehow we don’t do enough to realise this.  

Several years ago the “war for talent” was a major management topic. Now you seldom, if ever, hear it mentioned. Instead the big themes of today seem to be “big data” and “artificial intelligence.” No doubt these are important and denote significant changes to the way businesses and organisations operate, but you risk failing to reap their full benefit if you neglect talent.

I have long championed employee ownership, which is a key element of my ‘Every Individual Matters’ Model. It has always seemed self-evident to me that a sense of ownership would increase productivity, create greater cultural cohesion and secure strategic integrity with a clearer line of sight between strategy and its operationalisation with reduced industrial conflict. So much so that I have often felt naïve in putting it forward as a benefit.

A recent experience, however, showed me that, if anything, I have probably under-estimated the power of ownership.

It’s true: you don’t know what you don’t know! So, logically, you cannot miss it. But that does not justify the old adage that “ignorance is bliss.” You can certainly miss the benefits that the knowledge could bring you, which means your ignorance creates an opportunity cost of which you are blithely unaware. But are you the only one incurring this? If your customers and clients are aware of it, you will be and your business will be uncompetitive and struggle. If they are not, then the cost is multiplied and you are doing them and yourself a disservice, and running the risk of losing goodwill when they realise the fact. That is why we should always be open to new ideas and learning new things – a lesson I learned afresh recently.

I cannot now remember where but I came across the term “social contract.” I had never consciously encountered the term before, so it seemed totally new to me. Thus it stuck in my mind, prompting me to look it up a few days later. I wasn’t surprised by its implications, but I was surprised to learn that it is far older than I would have surmised, for Wikipedia defines it as “an implicit agreement among the members of a society to cooperate for social benefits, for example by sacrificing some individual freedom for state protection. Theories of a social contract became popular in the 16th, 17th, and 18th centuries among theorists such as Thomas Hobbes, John Locke, and Jean-Jacques Rousseau, as a means of explaining the origin of government and the obligations of subjects.”

Certainly this is more wide-reaching than I had envisaged. While I would never dispute the need for a social contract between citizens and their government, I see a social contract as more fundamental: basically as the integral thread of any organisation, with government simply being a higher form of organisation. After all, any organisation is, by definition, a collective of people and, as such, involves reciprocal rights and obligations in order to survive and thrive. Thus you need a social contract to cement this reciprocity. More a matter of principle than legality and thus largely universal rather than specific, in an ideal world this should eliminate the need for individual employment contracts. In any case you would hope that these principles underpin all employment law.  

Ultimately, it boils down to the fact that every employee “invests” a significant portion of their short time on this planet in their work. In return they are entitled to respect, reward and recognition of their need to optimise their lives. Similarly, the organisation operates in an ever-changing, competitive world that demands an ability to recognise, respond and adapt to change. Those characteristic are people-dependent and thus there is no getting away from a need for people. Thus, in order to ensure that it survives and thrives, every organisation needs engaged employees who subscribe to and care about the organisation and its needs, and who are willing to take the action necessary to meet those needs.  

You would think this reciprocity would be recognised and every effort made to achieve it. Yet this is not the case. For centuries commerce has been disrupted by industrial conflict: distorted by adversarial attitudes, disputes and “class warfare” between managers and workers.  Who knows what the cost of all this has been? It certainly needs to end.

That is why I was excited to realise that the Zealise ‘”Every Individual Matters” Model provides the perfect basis for building in and integrating the social contract. It resolves that enduring challenge of how to value employees as assets, and thereby reverses the de facto accounting and treatment of them solely as costs. This ensures that it becomes mutually beneficial to optimise employees’ capabilities, while simultaneously offering the means to ensure a less adversarial and more collaborative and co-operative attitude within organisations, as well as a more equitable way of distributing the rewards of their endeavours. Together this ensures an effective social contract that creates a culture of collaboration that optimises performance and results.

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If you like what you have read contact me today to explore how my original thinking could help you break though logjams that are inhibiting your business or how my ‘Every Individual Matters’ Model could help you value your people and provide the catalyst to help you create an organic culture where everyone cares and the business becomes our business, embedding continuous improvement that engenders ‘love at work’ and transforms – and sustains – organic business performance.

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Bay Jordan

Bay is the founder and director of Zealise, and the creator of the ‘Every Individual Matters’ organizational culture model that helps transform organizational performance and bottom-line results. Bay is also the author of several books, including “Lean Organisations Need FAT People” and “The 7 Deadly Toxins of Employee Engagement” and, more recently, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped.

Newton’s 3^rd Law of Physics. You might not remember it is as that but you almost certainly know it or have heard of it:  “For every action there is an equal and opposite reaction.” Even if you are familiar with it, you are unlikely to think about it very much or very often. And certainly not in a business context.

This isn’t your fault. It is perhaps simply the inevitable consequence of our natural human need to label things. By categorising this as a “physical law” you inevitably compartmentalise it as “scientific” and so fail to consider its applicability to business. But perhaps you ought to.

After all science pertains to all life. It is only convention (that need to label things) that causes us to break science into different fields. We tend to treat these as discrete and distinct when in reality they are not. The boundaries – like any – are subjective and artificial. As a result we may be short-changing ourselves, as I suggest we are in this instance.