Being Human Creates Higher Returns

by Jay Deragon on 10/29/2013

BEING-HUMAN-logo-It seems odd to think that business leaders are just now recognizing that their business results have a direct correlation to the organizations ability to think, act, speak and feel in human terms.  Yet instead of measuring the organizations human abilities leaders still focus on measuring, thinking and chasing outcomes in financial terms.

Consider what business has done as a result of social technology. For most instead of looking at the enhanced human dynamics created with the technology they have merely made it a tool to extend marketing efforts. Instead of using the technology to enrich their company’s culture they have restricted the use of it at work. Instead of using it to enable more human engagement they have written rules of engagement which basically say “we don’t trust you”.  Instead of using it to enable people to “get involved in the business” they tell people what to do and how to do it as if the people had no valuable comments about how to do anything better.

It is no wonder corporations have lost credibility with people. Just maybe it is because they are acting anything but human.

Being Human Is Free Unless You Are Not

As humans we enjoy lots of freedoms and the greatest of all is choice, or used to be.

We are free to think, feel, act and speak unless we choose to use such things to cause undo harm onto others then our freedoms become reckless. Reckless suggests wild carelessness and disregard for the consequences and such actions or decisions are not typical of being human.

The human network has watched the behaviors of corporations for decades in bewilderment of their recklessness. From insider trading schemes, politics as usual, top down controls and total disregard and disrespect for the value of human capital and now business expect people to believe they can suddenly be “human”.

Meanwhile the same people who buy from businesses go to work each day for these businesses and see the high cost incurred by themselves and others for environments, processes, products, engagements and mental models that do not reflect the natural dynamics of a human.  And then people wonder if business leaders are really interested in improving their results when they know what business leaders ought to know such as:.

  1. U.S. employee engagement is still stagnating at just 30 percent of the workforce, according to Gallup’s 2013 State of the American Workplace report.
  2. As a result, U.S. employers lose between $450 billion to $550 billion a year in productivity.

Additionally people know more about the value of creating the right organizational culture than most organizations know. Yet corporate culture seems like an intangible concept to most organizations.

In many organizations, there is a huge difference between what the company says it values and what people believe it values. That is the credibility gap that produces the disengagement and distrust that has a direct correlation to company performance and growth.

An 11-year study by John P. Kotter and James L. Haskett included 207 companies in 22 industries. The results showed that companies that managed their corporate culture significantly outperformed similar companies that did not. Between managed and unmanaged corporate cultures, the research found:

  1. Revenue growth of 682 percent (managed) compared to 166 percent (unmanaged)
  2. Stock price increase of 901 percent compared to 74 percent
  3. Job growth of 282 percent compared to 36 percent
  4. Net income growth of 756 percent compared to just 1 percent

People enjoy the freedoms provided to the human race. Take those freedoms away and you pay a higher price. Enable those freedoms and you’ll get a better return. Get it?

{ 18 comments }

Jeff Hoffman November 1, 2013 at 6:29 am

What exactly does “manage a corporate culture” mean?

How do you tell if a corporate culture is managed or not?

Why does a company with a managed corporate culture generate more revenues?

Mack Story November 1, 2013 at 9:52 am

My opinion is that leaders don’t “manage corporate culture” because we manage things and processes an we lead people. I believe that leaders “should model corporate culture.” Abraham Maslow stated, “If we are not MODELING what we are teaching, then we are teaching something else.” Aristotle said it this way, “We are what we repeatedly do, excellence is not an act but a habit.” The people buy into the leader before the buy into the vision. A true leader accepts responsibility and in doing so understands that they are either making it happen or allowing it to happen. True leadership is about serving the team and helping them accomplish the mission. As I say often, as a leader, “We must get out of the way and lead!” Leading is not about taking yourself to the top. It’s about helping others get to the top.

Mary Graf November 1, 2013 at 11:57 am

I completely agree that as leaders we need to support our teams and let them do the work they were hired to do. From a more humanistic approach I think it helps when a corporate culture supports leaders during times of struggle so they can grow from their challenges and not be crushed, then thrown to the curb. Unfortunately when people in leadership roles show vulnerability, they lose credibility. Even if they come out of the struggle with new knowledge and strength, getting back their status is next to impossible in many organizations. So I wonder if there are examples of true learning organizations that support their leaders and provide them the support to embrace and extract wisdom from struggle. Let’s face it, there will always be challenges in leadership but if companies provide support it can become an opportunity for the culture to learn.

H.Ruadez November 3, 2013 at 5:58 pm

I totally agree!!! I ‘d like to add a phrase by Dan Sperberg’s explanation of culture “Culture is a giant, asynchronous network of replication, ideas turning into expressions, which turn into other related ideas” Explaining Culture, 1996.
Regards
HR

John Aves November 1, 2013 at 6:01 am

The Gallup data and the service profit chain work of Haskett, Jones et al both point to the causal relationship between engaged employees, productivity, the customer experience and profitable growth. Whilst these relationships are well research by academics their acceptance by business leaders is patchy. The scorecards and KPIs of many companies are still dominated by traditional and often short term financial metrics with lip service being paid to culture, values and behaviour.

Thankfully there is a growing number of business leaders who understand the importance of creating employee commitment to the organisation’s purpose (beyond profits which is not a motivator for most employees) and the building of a culture that supports and sustains the purpose. This takes an authentic brand of ‘human’ leadership that creates engagement, alignment and trust. Some companies have discovered this compelling business logic themselves and other have been forced to find a different way because they have faced scandals and disasters (some of the banks and energy companies). With increased competition, raised customer expectations and employees who demand more, the pressure on companies to provide ‘human’, authentic leadership will only increase.

Peter Johnston November 1, 2013 at 5:02 am

“People enjoy the freedoms provided to the human race.”

We were born free. It wasn’t provided to us. But, throughout our lives people try to take it away, then try to make us think we are only free because they are being generous to us.

Governments are the worst. They were set up as a system for us to pay some people to do things which we all needed but didn’t want to spend time on or hadn’t the skills to do.

We were happy to give away 10% of our hard-earned income to protect our village, take care of our children and tend to those who are unwell.

But somewhere along the way the tail started wagging the dog.
Now governments tell us what we can and can’t do.
Companies only learned these tricks from them.

Susanne van der Bij November 1, 2013 at 4:11 am

I agree that the organizational culture is an important factor in organization success and change. In some of the comments above culture seems to be a seperate entity that should be managed and exists on its own like a resource. But culture is formed and sustained by the behavior (as a representation of norms and values) of all the people within the organisation, at every level. People are their culture. Even if I disagree with the organizational culture, but do nothing about it I am part of the formation of the culture. Sometimes managers are blamed for sustaining a culture that is not helping the company to achieve it’s goals. As if managers are the only ones making the culture. By doing nothing or accepting the way things are done employees also sustain a bad culture. I think employees should be more aware of their own influence on the organisational culture. It is in their day to day behaviour.

What a complex subject it is, but how interesting.

Eric Abrahamson October 31, 2013 at 1:47 pm

Oh hum…. Agree with Marco and feel motivated to post something because am a bit tired of seeing the repetition of the same simplistic argument again and again. My research on the popularity of management techniques since the 1900 indicates that attention to more “humanistic” and opposed to “mechanistic” views of management have come an gone three times since the 1900s. The more “mechanistic” approach assumes that employees are not as smart as managers (else they should replace them), that employees are more like cogs who are motivated to turn by money or the threat of layoff, and who should not act independently, less these cogs cause the machine to fall out of order, reducing its efficiency (think Business Process Reengineering or six sigma for instance). The more “humanistic” approaches assume that employees are social, emotional, and cognitive beings and that removing mechanistic constraints on their work will enable their creativity, intrinsic motivation, judgement to burst forth leading to all kind of benefits such as greater efficiency, creativity, innovation and so on. (think Job Enrichment or corporate culture for instance). In my opinion, why leaders and managers “get the big bucks” is because they have the skill to combine mechanistic and humanistic approach in ways that are best suited to the contingencies facing their unit, organization, and industry. The “Being Human creates higher returns” article is but one of literally thousands upon thousands of articles restating the humanistic position. BTW one of the pillars on which the humanistic approach rest is very hard to demonstrate scientifically and might well be wrong. Namely, that “happy workers are productive workers”. This for the simple reasons that certain types of workers are happy precisely because they don’t have to work hard to be productive.

Big Dave October 31, 2013 at 10:08 am

that’s fantastic.. so the latest leadership/management concept is that we should start being human ????? that we should treat each other as human beings rather than just pawn’s or assets in an impersonal game of how much money can we make irrespective of the human cost ? Should we congratulate all of the busienss educators and senior execs who have got us to this point or just gather them all and send them to Disneyland for re-engineering ? When did it become acceptable for nmen and a growing number of women to leave their family unit in the morning and go off to work somewhere putting the $$$ before the person ? Who made it that way ?

Shocking.. a really degrading sign of our society. Thats right up there with signs that say no pushing or shoving while standing in this line…

Mark Moody October 31, 2013 at 7:28 am

Obviously an interesting post & many credible comments, however does this post not raise a question or questions, that from digesting such an informative post relate to a ‘collective or individual conscience’ within the framework of the organization’s philosophy and or business culture? IF indeed we are to be ‘real’ humans then by the comment; “We are free to think, feel, act and speak unless we choose to use such things to cause ‘undue harm’ onto others then our freedoms become not only reckless but have no conscience or bearing!
‘Reckless suggests wild carelessness and disregard for the consequences and such actions or decisions are not typical of being human’; shouldn’t we also continually be made aware of the ‘conscience of our decisions, individual & or group & the organizations “human values?”
AND yes; “now business expects people to believe they can suddenly be “human”,and furthermore ‘with a conscience’ for the good of ALL people (not just a few) and not purely for profit at any cost?

Mack Story October 31, 2013 at 7:17 am

As a John Maxwell Certified Leadership coach, trainer, speaker, we teach that leadership is influence: nothing more, nothing less. One of the principles we teach on connecting is that you must touch a heart before you ask for a hand. The foundation of influence is trust. Every time you interact with someone you are building trust, not only with that person but with all those that are watching as well. I read a quote recently that “you can lead a person to knowledge, but you can’t make them think.”

Our biggest challenges as profession leadership is getting organizations to truly and sincerely want to develop the people for the sake of developing people. Most still want to do it to impact the bottom line and the people know it. Therefore, the people feel they are being manipulated instead of helped. Buy-in is difficult when people feel manipulated.

There’s a fine line between manipulation and motivation. Manipulation is for my benefit only. However, motivation is for mutual benefit. I’ve always said you can’t hide people issues in the corporate office no matter how hard you try because the people don’t work in the corporate office. They know when they are being manipulate as don’t mind voicing to the teammates. So, no matter how much of a secret the leadership wants to keep the motivation behind their actions, the people will ensure that everyone knows.

Kehinde Abisola October 31, 2013 at 5:36 am

Many company follow the multitude. Competitor’s action and macro environmental variables determines their actions and strategy. No formidable culture. This has multiplying effect on the staff morale and productivity.

Clare October 31, 2013 at 5:11 am

This is a great overall point.

I feel the article could also really use some examples in point form. A comment from today, about Olivetti of the typewriter fame, makes a few suggestions for humanizing andnthe general benefits of it to the company productivity: that company had child care, in-house medical organization, decision sharing, better wages.

Can our article writer think of a few more examples and add them and the ones from Olivetti to the article? It would make the article easier to read and absorb, if it had some suggestive examples of “being human” in a company structure,

Thanks for writing the article and for maybe adding examples, too.

Marco Makaus October 31, 2013 at 2:58 am

Very interesting, but hardly new.

Adriano Olivetti changed his family’s local typewriter factory in a model of efficiency, research (his was the first portable machine, mechanical calculators and groundbreaking early computers… all in the 1940s and ’50s…) and human relations.
His factory had child-care, in house medical organization, decision sharing, better wages, and more.

His fellow industrialists fought him hard, and unfortunately he did not have enough time to grow big enough to fight back – as Henry Ford did in the 1910s…

This must mean that these are not management theories – they are part of ourself, we just have to dig them out, and it’s about time!

muchiri October 30, 2013 at 11:34 pm
Rayan Zreik October 30, 2013 at 5:44 pm

Dear All,

Organizational culture according to Hofstead is based on 4 factors : a/ Femininity vs. Masculinity b/Individualism vs. Collectivism c/Low Power Distance vs. High Power Distance d/ Low Uncertainty Avoidance vs. High Uncertainty Avoidance … This is a very important approach and can be used also to understand Western versus Eastern Cutlures .. The West / the better organization would be characterized by Femininity (Equal opportunities for men and women in the same organization), Individualism (More reliance on self to execute tasks and not the entire group), Low Power Distance (The boss is one of us/no fear from the boss) and Low Uncertainty avoidance (Risk takers in the business is what make it succeed) …

Thank you

Magdalena Wojdat October 30, 2013 at 12:39 pm

Recognizing the impact of a company’s culture on productivity is definitely the most important step. It is often an area, which unfortunately, does not get enough attention. Having information about a company’s culture helps us to understand and manage it. There are various ways of measuring culture available on the market, but Crenshaw Associates has developed one that provides quantifiable data to assess culture. Thanks to its statistical orientation, which provides verifiable and reliable descriptive data of the key dimensions of an organization’s culture on a very granular basis, even the most skeptical audience begins to appreciate and understand the effect culture has on its organization and its productivity – and what to do about it.

Mike Abbott October 30, 2013 at 9:17 am

You can get a handle on a company’s culture, measure it simply and effectively, and manage it using Hofstede’s research with IBM completed some while ago. There is no such thing as the perfect culture – and it depends on a lot of factors. But in the end it is for any commercial organisation how profitable they are that matters, but certainly anything which helps to motivate staff and manage them more effectively is a good thing.

Most companies are totally unaware of their own culture (and may be horrified if they were), so have no chance of managing it.

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