My last article on employee capitalism generated huge reactions. A C-level officer called me to discuss the quote from the article. In the article, Babs Olugbemi wrote, ‘If you reward a few leaders for others’ work and believe all you need are the leaders and the result they produce; you are leading your company into oblivion soon.’ My caller was hysterical and discussed how the treatment of employees is a significant difference in organisations.
I am an idealist on the infinite stake theory, and here is the devil in the details.
Employees are part of the stakeholders in any organisation, even in the most robotic settings. Take the decisions, discretions and the emotions of people out of any venture, and then you have a failed outcome in waiting. Most employees who contribute to the organisation’s success are in what I termed as the pivot group. Take a staff strength of 15,000, for example. There is the likelihood of having a minimum of 75% of the 15,000 employees in the pivot group. 11, 250 employees out of 15,000 are critical stakeholder with perceived insignificant power and influence. The other groups are what I termed the Drivers and the Directional teams. The drivers are responsible for the pivot group, while the directional teams are the directors and the business owners.
Most organisations, in theory, recognise the importance of the pivot group. That is why we have many kneejerk slogans on employees, but a few leaders practising what they proclaimed. Employees are claimed to the most critical assets, but they are treated like cost. Employees are dismissed at a slight offence and at times without a clear and mutual performance appraisal understandings. The apologists of Jack Welsh and Milton Friedman must do it in the interest of shareholders’ wealth. Who is creating wealth?
Organisations who adopt my infinite stake theory recognise the inherent power and influence of the mass employee group – the pivot team. Rather than rewarding few people in the driver and directional groups, why not develop a culture of reward that permeates beyond those who report performance to those who makes it happen. The mistake of those who reward leaders only for other people’s performance is thinking that leaders or their leading style generate results. No. Leaders are measured by the result and are responsible for those that achieve the result. The ability to influence those directly responsible for the result by creating an atmosphere for the expected outcome is the work of leaders.
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Employees are claimed to the most critical assets, but they are treated like cost. Employees are dismissed at a slight offence and at times without a clear and mutual performance appraisal understandings
The Drivers and Directional groups are accountable for the Pivot groups, who, in a real sense, are the producers of the result for organisations, anywhere and anyway. Thus, no football coach achieves results or wins the tournament with his or her players. It was the invincibility of the Arsenal team in the glorious years of The arsenal that made Arsene Wenger a good coach; not just his knowledge and intelligence.
Therefore, where too much focus is on fellow top leaders without a conscious effort to create an enabling culture where the goose that lays the golden eggs are nurtured and rewarded, the decline in brand image and performance metrics is inevitable. A senior team member will earn a bonus on behalf of others but will not serve the organisation for many years or produce the cumulative output of the pivot team. The reality of not focusing on the pivot team is an organisation being led under disguise. Disguise for customer service especially. The focus of all, including the owners, is on what they can get- their take-home and perquisites, not building a sustainable institution that lasts the test, stress and stretch of time.
If 75% of your team interact with your customers or are your mouthpiece in the market, would you instead make them think like the owners? Or will you focus on less than 25%?
Time is always the great revealer of truth. In the long run, the difference will be whether an organisation treats its employees fairly or is just living with customer services and employee engagement as a slogan.
I recently visited a variety store, and I heard the announcement concerning the protection of staff and customers in the store against COVID-19. The statement mentioned the staff first. ‘In the interest of our staff and customers, it says. This is different from what most companies will do, especially in Africa, where playing to the gallery on employees’ engagement and fair dealing is high. We will put the customers first in a similar announcement. It is not wrong to put the customers first, but there will be no customers if the internal customers are not treated as the internal kings and brand ambassadors.
My team at Mentoras Leadership have equally practised the infinite stake theory and employee capitalism with one of our clients. As part of my culture and business re-engineering assignment, we advised the client. First, stop claiming industry leadership in terms of customers and financials. Rather than using finite metrics, use infinite parameters. We developed infinite objectives for the company. Infinite goals are those that focused on providing services that will outlive the current staff and owners. We developed trusted teams where the will of the people, their resilience toward achieving the company’s objective is more than the finite measurement of profits and the number of customers. We encourage the treatment of staff as an essential asset. The company invested more in the professional and mental capacity of the team.
In weeks, employees developed high engagement and satisfaction level. We helped them to find ‘meaning’ in their daily routine and work. The sales volume and figures moved up. The connection and trustworthiness index with the customers increased. People are having a work-life balance even when spending more time in the office. This is because they see meaning in their work and love the brand they are building.
Because we focus the company on infinite objectives, things changed. The owners and directors focused more on ‘business eternity’ and not being headline-chasing sensationalists. They stopped chasing their wealth, though they gain more wealth and fulfilment. They are more contented with stable growth and profitable finite metrics but with more infinite resources within the company on a perfect pathway to being a going concern; a company that is built to last. And not built to be lost!
Babs Olugbemi FCCA, the Chief Vision Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on[email protected] or 08025489396 or on Twitter @successbabs.
