By Jackie Acho, Eva Basilion, and Monica Tanase-Coles
Dear CEO of a Large Organization,
You were raised to believe that cash is king, top-grading is leadership development, and workaholism is something to be exploited. Your business school competed you against your peers, which was vital practice for the years to come as you rose through the ranks. You came up when productivity, command and control, and leaning in were all the rage. You drove efficiency, and you did it well.
But CEO, the old way is not working as well as it used to. The data show that you struggle with innovation - the kind that has real positive impact, requires multiple viewpoints and novel ideas, and will renew and sustain your company. Behind closed doors, your homogeneous leadership team recommits – again – to elusive diversity. And employee engagement is at an all-time low. The lifetime of a corporation on the S&P 500 is steadily declining. Do you stay up at night, wondering if your company will be the next one to fail, and will it be on your watch?
Why, you ask, is it so hard to lead innovation?
Because CEO, the world is changing in profound ways, challenging our most basic assumptions about the nature of economics.
“The market economy is far too slow to take full advantage of the speed and productive potential made possible by the software and communications revolutions. The result is that we are witnessing the birth of a new economic system that is as different from market capitalism as the latter was from the feudal economy of an earlier era. “ Jeremy Rifkin, from Empathetic Civilization.
He goes on to say that an economy based on network systems requires “economic activity [that is] no longer an adversarial contest between embattled sellers and buyers, but rather a collaborative enterprise between like-minded players. The classical economic idea that another’s gain is at the expense of one’s own loss is replaced by the idea that enhancing the well-being of others amplifies one’s own well-being. The win/lose game gives way to the win/win scenario. “
What does this mean for large organizations like yours, if they are to survive and grow? What does this mean for chemical companies, banks, orchestras, manufacturing companies, universities, etc.? What does this mean for YOU?
Rifkin again – “If there is an ‘invisible hand’ at work it is that empathy matures and consciousness expands to fill the temporal/spatial boundaries set by the new energy regime. Empathy becomes the thread that weaves an increasingly differentiated and individualized population into an integrated social tapestry, allowing the social organism to function as a whole.”
TRANSLATION: It means that we must shift the way we are doing business at every level and in every way to steward a currency of empathy, in addition to money. The very thing that we have avoided in business all these years – leaning into our humanity – is the very thing that will save your company.
We know, CEO. It sounds soft and fuzzy and a little abstract. But stay with us.
In smaller companies, relationships are harder to escape. Authentic human interactions are more commonplace. That’s why small companies and entrepreneurs disrupt you. You had been thinking it was because they have brilliant ideas. But why is that? They have the kind of trust that helps them collaboratively innovate, moving through fear and failure together until they succeed.
That used to be you. But as you grew, trust eroded and processes multiplied…or vice versa. The market expects you to continue to improve, but you picked the low hanging fruit years ago. Your Board hammers you, and you set high expectations for your people, but innovation remains elusive.
We can’t get to an abundant future with the creative destruction that has driven our economy to date. There is too much money, people, and power tied up in your organization and others like it. So we need YOU. We need you to lead the way. We need you to be an intrapraneur and create disruption from inside. You have no time to lose. How can you get your mojo back?
You must shift the way you are doing business, perhaps on many levels in many ways. You have to create an organizational system that grows leaders with empathy (ability to get themselves out of the way) and agency (capabilities). It’s not hard, but it is different. In 20 years of working with your peers on innovation, growth, and leadership development, we’ve learned that organizations that succeed feel small – like family – even though they are big. What do they do? 3 things. See below. This, CEO, is the New Way to Work.
1. Align everyone with meaning. We are built to work for meaning in collaboration with others. Every major spiritual practice tells us this, including yoga; can they all be wrong? Doing so brings people together at the most fundamental level – their moral blueprint. And togetherness is vital because innovation requires incorporating multiple perspectives, which can be threatening and confusing if you’re on different sides. Innovation also requires change, which is hard for people even when it’s good. Change brings fear, loss, frustration, and even rewiring of our brains. Knowing we’re not alone gives us the courage to move through it all.
What comprises “meaning”? A mission beyond profit and shareholder value. Goals with a human face in addition to numbers…even when the business is making widgets. With so many things changing around you, the maps become obsolete as soon as they are drawn. To move through all of this change together, people need a sense of True North and a compass even more than a strategic plan. And it’s easier to remember and embody True North if it is something people feel good about, something that contributes to somehow making the world a better place. A majority of employees will even trade money for that juice – 67% of people say they would work for less money in a company whose values and culture they believe in.
Don’t worry, holding people accountable will never go out of style. Nor should it. And sure, you’ll count money because you need to be financially sustainable, whether you are in business or a nonprofit. In fact, you’ll need a kickass performance scorecard so you’ll understand what drives value and everyone can know his role in getting to True North. The difference is that employee motivation will be intrinsic (vs extrinsic) which is essential to creativity.
For-profit companies can learn a lot from successful not-for-profits about the connection between MEANING and innovation. Take, for example, the Centers for Families and Children. They touch 20,000 clients, mostly in poverty, with early learning, mental health, and basic services. They have $42M in revenues and 500 employees. They’re big. They go beyond meaning (helping the people who need it the most) to build movements like the 2000 days campaign, putting laser focus on the importance of parent-teacher partnerships in early learning. They’ve more than doubled under the leadership of CEO Sharon Sobol Jordan. They run for-profit businesses inside and are financially sustainable in an industry with scarce funding. They are transforming social services.
For a for profit example, close your eyes, pop a honey-roasted peanut, and remember your last flight on Southwest Airlines. You may be tired of hearing about their disconcerting success in a beleaguered industry, but you have to admit that a clear True North is part of the secret sauce. Their mission statement is clear, putting people at the core of the business: “Follow the Golden Rule – to treat people the way you want to be treated, and pretty much everything will fall into place”.
And there are others. The Container Store thinks of itself as a business that helps people have a higher quality of life by providing excellent service and quality products that help people better organize their lives; their motto is “Get organized, be happy”. At Ikea, it is policy that if strict laws concerning chemicals are imposed in a country where it does business, all suppliers in all countries must conform to such laws. New Balance stands by its principles and refuses to pay star athletes for endorsements – a standard industry practice. Bayer Crop Science Bayer abides by the “Bayer Human Rights Position”, to not employ children and not tolerate child labor in their supply chain and it does so in an active way not only by imposing a contractual ban against child labor, but by funding education programs aimed at improving the school and job prospects of disadvantaged children.
2. Grow people. We are also built to improve and evolve. Most employees today are scrambling to adapt to difficult circumstances rather than develop mastery. There are still some organizations which remind us how to practice the art of apprenticeship writ large. They do excellent professional and leadership development. Hint, this is not outsourced “training”; it is semiannual reviews done right, coaches/mentors/champions who really take care of people, and role models who would make your mother proud. The prize for getting it right is servant leaders. These are people who operate with agency and empathy as two sides of a coin. They see new truths. They bring others along, whether they have positional authority or not. This is what you need, CEO.
Our former employer, McKinsey & Company has been a top source of Fortune 500 CEO’s for years, and it’s not a mystery why. Their world-class leadership development is so disciplined and strategic that it forces the right conversations. Like paint by numbers, it’s hard to get wrong. It’s also more about growth than judgment. The good news is that those tools can be adapted anywhere. We’ve done it with clients in manufacturing, chemicals, universities, and the arts, to name a few.
Google and General Mills pay attention to the emotional intelligence of their employees through well-established meditation and mindfulness programs. Trader Joe’s accelerated employee training develops people through a multi-prong approach: (i) formal training in their Leadership Development Program and Trader Joe University, (ii) on-the-job mentorship and coaching, and (iii) fostering a culture of multi-tasking without regard to job description (think store manager jumping in to sweeping the floor, stock shelves or man the register). Wegmans puts great faith in their employees who have wide latitude to do whatever is necessary to ensure that a customer leaves the store fully satisfied – without consulting a manager. When a customer messed up the dinner she was cooking for guests, a Wegmans employee sent one of their chefs to her home to help.
3. Let people be whole, even as they grow in leadership. Why? Because people who are not worried about loved ones are fully present at work. Because people who build authentic relationships at home will do it at work. Because people who invest in the community are networked and resilient. Because growing children is serious conditioning for the marathon of growing into a servant leader, not to mention that it orients you to the future. You have all the technology your employees need to integrate work and home. We are not just talking about moms; in fact, if they are the only ones balancing “work” and “life” in your company, you’re in big trouble. Partnership at the highest levels has got to be part of the solution too, and we see these models at some of the most innovative organizations. If you have done #1 and #2 well, you have nothing to lose and everything to gain by letting people be whole.
Still, it’s tough to find great examples of leading and being whole. Just Google “work/family balance” and the 179,000,000 hits tell you how much we’re still sorting out. Moreover, being whole means so much more. It means employees – women, men, black, white, gay, straight, parents, nonparents who would say: “I can manifest my entire self at my workplace, and contribute with all my skills and creativity to our mission, even if it is outside of my direct job description. I feel compelled to give my best, as the company cares for me and its stakeholders. This is more than a job; it is my professional home.”
Isn’t it fascinating to Richard Branson running an innovative company while blogging from a boat near his island home? Here’s a little secret – most of us who work independently blend our personal lives like that – minus the private island. It’s more fun than working in your organization, CEO, and we make a good living.
But back to you, CEO of a large organization…
Another example you may be tired of hearing about is Zappos, but let’s learn from their success on this dimension of helping people be whole. The popular online shoe retailer grew in 10 years from inception into a $1 billion a year revenue when it got acquired by Amazon. The company stands out for its customer service, with 75% of its customers being repeat clients. Its CEO Tony Hsieh, believes in the importance of work-life integration for the employees: “We want the person to be the same person at home or in the office because what we’ve found is that’s when the great ideas come out, that’s when their creativity shines and that’s when true friendships are formed – not just coworker relationships. When people are in that environment, that’s when the passion comes out and that’s really what’s driven a lot of our growth over the years.” Under such leadership Zappos employees must be a fulfilled bunch, as the company consistently ranks as one of the best places to work.
At the industrial design firm IDEO, employees are encouraged to take an afternoon off every now and then and see a movie or ball game, allowing them to develop a distinct sense of identity; unplanned breaks are the norm, and so are diversions, silly pranks, field trips together, indoor mini golf. Patagonia and New Balance offer flexible work schedules allowing parents to be home with their children after school. Google grants employees the right to spend 20% of their time at work on independent projects of their own choosing; this is how new important offerings were developed, this is part of why Google is so innovative.
Do you do these 3 things?
1) Do you align everyone with meaning?
2) Do you grow people?
3) Do you let people be whole?
Do you do them all at once so they reinforce each other? Taken alone, they don’t work any magic. Do your results in innovation (e.g., %revenues from new products and services, profits) and inclusion (e.g., diversity in leadership) show that you have this flywheel of humanity working in your company? Do you know what it takes to do these 3 things really, really well? We do. With a series simple tools, systems, best practices, and/or choices for how you relate to one another, you can do this. Focus on these and you can forget about everything else. Stop wasting time and money, and especially talent. So many people entrust you with their talent.
Or they don’t. They check out mentally, if not physically. They leave large organizations for entrepreneurial ventures. Or not. They just leave. And, yes, these are often the women who break your heart by leaving after you groomed them for leadership. They are also often the ones with the most to offer because they practice the most poignant form empathy – that with their children, ground zero for empathy. It’s not too late to get them back, but you have to change how you do business, perhaps on many levels in many ways. The New Way to Work will help Complete the Revolution for this generation and their children. This, CEO, is a collateral benefit of the New Way to Work. We’ve left you out of this conversation far too long.
Millennials want all of this also. You need to figure this out, CEO.
We invite you to take a survey which will lay bare exactly what YOU need to do on each of these 3 dimensions to get your mojo working. Please contact us to be involved at firstname.lastname@example.org, email@example.com, or firstname.lastname@example.org.
What do you have to lose if you do? What do you have to lose if you don’t?
Since we started this blog over a year ago, it’s become popular to write about empathy and innovation. But you have to do more than implore leaders to be more empathetic. Empathy is not the same as asking someone to be nice. Empathy requires getting yourself out of the way and this is something you have to work at. You have to create an organizational system that grows leaders with empathy and agency. It’s not hard, but it’s a New Way to Work, and we need YOU to lead it.