October 8, 2023

Investing In People

Investing In People

Two books that talk about re-orienting employee management strategies in diverse ways for both humanitarian and financial gain.

2009-10 has been a very difficult year for employers and employees. The Wall Street debacle has shown the high cost that society has to pay when compensation and benefits are structured to encourage greed at the top. There has been a hue and cry about bank CEOs taking bonuses, unmindful of the countless numbers who have lost jobs because of them. This raises some fundamental questions: Is there any way for the company, its employees and the community to succeed together? Can investing in rank and file workers actually lead to higher profitability? Are we getting too obsessed with the creamy layer and forgetting that our core business differentiators are our unsung heroes on the shop floor? In her seminal book, Profits At The Bottom Of The Ladder, Jody Heymann has addressed just that. The book, according to her, answers the key question: Is it truly financially beneficial for companies to cut wages and limit flexibility, or is there a path forward from which companies can profit financially along-side employees?

Heymann has traveled across the world studying companies in diverse environments: Isola in a socialistic, developed economy like Norway, SA Metal in AIDS stricken South Africa, American Apparel, Jenkins Brick and Costco in the cut throat free market economy of USA, ACC in rural areas with nil infrastructure in India. She has demonstrated resoundingly through live case studies that it pays to invest in your critical workforce especially during downturns. This is true across industries and across borders. She points out that in any business there is a core set of employees whose performance can make a significant difference to the top-line and bottom-line of the company. These are the factory workers in a manufacturing business, the warehouse employees in a retail store, call center based support agents for a technology company and so forth. The companies highlighted in the book have invested in their core but non-elite employees by understanding their needs and aspirations, and meeting them effectively. For instance, SA Metal in South Africa set up an on-site Aids Clinic to meet the needs of its employees and in doing so greatly improved employee attendance. Similarly, Costco effectively met the aspirations of its employees by establishing a culture of hiring and training where a simple cashier could one day become the CEO. ACC had to set up plants in the hinterlands of India with no physical infrastructure, and therefore took it upon itself to build schools, hospitals, housing, and roads, an entire township for its employees.

In short, the book reinforces our faith in doing good not just at a philosophical level but also at an economic level. It emphasises that ‘profits’ need not be divorced from doing the right thing by your employees. Not surprisingly, Judy found that the list of companies that met her criteria were predominantly held privately. This goes to show how corporate behavior especially towards the silent majority has become distorted, dictated more & more by short-term expectations of Wall Street. This book is a must read for all CXO’s who value the means as much as the end, and who want to touch people’s lives in a positive way as they build profitable companies. Indeed, as Mike Jenkins IV, CEO of Jenkins Brick, eloquently says, if you invest in ‘quality’ people, you get ‘quality’ output . How simple!

The second book interestingly addresses the same issue in a different way

Can we help employees perform to their potential by tailoring organisations to fit employees? The authors argue very effectively with case studies that this is not a Utopian dream anymore. In fact many companies are doing it already on a case-by-case basis, though it leaves them open to charges of unfair treatment by employees. So Susan M Cantrell and David Smith have detailed in their book The Workforce Of One the multiple ways to go about customizing the HR initiatives to suit the diverse needs and aspiration of an increasingly complex workforce.

Workforce Of One is a powerful concept, which ought to be studied seriously by the HR professionals in India given that our economy is driven by the exponential growth of knowledge workforce. The book argues passionately that today’s workforce is the iPod generation used to consuming its own unique content. The same person when he comes to work in an organisation will expect that the work, compensation, benefits, training et al. should also be designed for their specific needs. No two individuals learn the same way and neither do they look for the same benefits. It is amply seen in the way women in workforce have been demanding more flexible timings. The authors point out six trends - including among others, the increasing diversity of the workforce, and technology which allows us to know each employee intimately - that are driving the workplace to become ‘MyPlace’. The lengths to which organisations cited in the book have gone to customise work environment is a real eye opener. Microsoft with its multiple workspace options allows employees to work from a Spa or an Xbox lounge. Best Buy with its highly flexible “results-only” work environment allows employees to customize their jobs, schedules, and place of work. Container Store has done away with the employee manual, relies on just a few simple HR guidelines, and allows employees to define their work-life & career path. Susan & David make you want to start your career all over again in one such company! The book is a veritable bible for any forward looking HR professional or CXO who wants to implement a new way of managing talent to increase productivity. It not only demonstrates why this approach is the way to go, but also tells organizations how to do it by adopting any of the four options suggested by the authors, or maybe even a hybrid one.

We finally have an HR management tome, which puts employees’ right and square in the middle of all policies meant for them, and shows that it is the only way forward for organizations that depend on people to deliver ever increasing productivity. We should keep in mind though, that the Workforce of One approach, while motivating employees to give their best, may still not be the panacea for all ills. It did not, for instance, prevent Microsoft from losing its leadership edge over the last ten years. But it is definitely the way to go if we want to ready the organization for the new generation workforce.