Serving Those Who Serve Us
The second in a series on service to all stakeholders.
After yourself, the next stakeholder group to consider when aiming to be of service to all stakeholders is workers. “Workers” here includes employees (both full- and part-time) as well as contractors. Companies often rely on a variety of structures to engage people to work on their behalf. It’s worth considering the various sub-groups of workers, since you may be treating each differently without much thought.
Most people work to meet personal needs for income; however, as the Biblical scholar William C. Creasy told his students, “Money is a pacifier, not a satisfier.” Financial reward is a means to an end, not an end in itself. But it does provide a sense of security, and its potential diminishment or loss is anxiety-provoking. People fear being “out on the street,” with no home and unable to feed themselves and their family. This doesn’t mean companies should provide guaranteed employment. But they should be aware of this dynamic, as an aspect of being of service to their workers.
But income is often not enough in itself to create a connection to purpose. If you’re passionate about animal welfare but paid well for your work at a software company, you’ll feel a lack of connection with your work and the company and therefore not be fully engaged with it. You might find ways to bridge the gap, such as volunteering at an animal shelter. But if your primary work is with an animal shelter, or a company in the veterinary field, the alignment of your ideals and your work will energize you.
Conversely, businesses do well by hiring people whose personal missions and passions are aligned with the company’s purpose. In his 2009 book Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink addresses this idea. By hiring for alignment as much as for technical or functional skill, a company is far more likely to end up with workers who do their best to serve the company’s customers and other stakeholders.
Unfortunately, some companies with strong brands, like Nike and Disney, that do this aligning will then take advantage of their workers’ passions to pay lower wages. Basically, they’re saying, “You get to work here, so we don’t have to pay you a fair wage.” This is a short-sighted policy.
Evolutionary businesses pay workers as much as possible. Workers are to a company what a body is to a human. If you undernourish your body, it withers and eventually dies. The same is true for companies that underpay their workers. You will have anxious workers and won’t get the most from them. Why risk that? Instead, pay people as much as possible. Seattle entrepreneur Dan Price caused a media firestorm a few years ago by setting a minimum wage of $70,000 per year at his credit-card processing startup. For a company with more than 100 employees, this is a fairly big deal. What happened? The workers were ecstatic and the company’s profits soared. Price dropped his own salary from $1.1 million to $70,000 but will doubtless benefit far more from the increase in the company’s value that has stemmed from this decision.
Price’s company, Gravity Payments, was at a point where he determined that a $70,000 annual minimum salary would work. For other businesses, a more nuanced approach may be required—say, hewing to a salary range of between 6:1 and 12:1, so that your highest-compensated folks are paid, at most, six to twelve times as much as the lowest-compensated workers. If your CEO makes $1 million per year, your entry-level administrators should make at least $83,000. Can’t afford to pay them that much? Pay your CEO less!
Salaries aside, rewards for your workers can come in many forms, some small but powerful, others extravagant and symbolic. An example of the former: A team in the office-software company Slack Technologies’ business operations division gets a “golden baton” when it has done an outstanding job of handling work from another team or passing it on to yet another, an essential aspect of the division’s role. The team members who receive the golden baton are recognized and celebrate their win, further instilling a sense of camaraderie and pride at being of service, in this case to an internal stakeholder group. While the golden-colored baton cost Slack nearly nothing, it is a meaningful reward to the workers who receive it, especially when combined with the other rewards and compensation that Slack gives its workers beyond good salaries: stock, healthy free food and drinks, health insurance, funds for personal development, and more.
A sales team at a pharmaceutical company we worked with gave their top salespeople and their spouses an all-expenses-paid trip to a five-star resort in Anguilla, along with BMWs and Rolex watches. This company was built around its sales culture, and success in driving revenues was the company’s key attribute. While we don’t think its emphasis on sales is a very evolutionary approach, its sales team was offered something beyond basic compensation to aim for. The company grew rapidly as a result, and was sold for an enormous sum—the primary goal of the founders. All of the company’s workers— including assistants and others on the lower rungs of the corporate ladder—benefited financially from the sale through their equity ownership in the business.
Providing workers with equity is of course another way to align their interests with those of the company. Most Silicon Valley startups, and many other American companies, give employees stock so that they can share in the success of the business as it grows and its value increases. This form of ownership is a powerful way to both motivate people and keep them engaged over the long term. Companies might set aside at least 20-30% of their equity for such a purpose so that there is enough stock available to share with workers.
For the hotel chain Ritz-Carlton, ownership means that when a staff member sees a guest spill a drink on himself in the lobby lounge, she not only offers to replace the drink but to get the guest’s clothes cleaned. Companies like Ritz-Carlton strive to create a sense of ownership among their employees through means other than bestowing equity, such as referring to them as “teammates” and holding daily, small-group “homeroom” meetings where they review the company’s values and principles (teammates are given a card, with these spelled out, for their wallets).
At Starbucks, workers are known as “Partners” to connote their importance to the business. The company was the first in the United States to provide health insurance to its part-time employees. It also offers to pay college tuition for all employees. These measures have engendered loyalty to the company and, according to former CEO Howard Schultz, the ambassadorship of the brand and maximal service to customers, allowing Starbucks to grow rapidly worldwide.
A further way to give workers a sense of ownership is to offer them a role in company governance. Rather than isolating workers from owners and other shareholders who control a business and thus setting the stage for conflict, companies can create a sense of partnership and mutual benefit by seating workers on a well-managed board of directors. The Basque-Spanish industrial giant, Mondragon, has done this well. I will describe this concept in a future article.
Finally, companies can be of service to their workers through training and development. Many companies do this in a check-the-box fashion, presenting employees with a menu of uninspiring and ineffectual classes while reserving more valuable services like executive coaching for the top team. But successful companies invest heavily in development programs for all of their employees. The renal-care company DaVita made training and development a core aspect of its culture after it emerged from near-bankruptcy in 1999 under its new CEO, Kent Thiry. The company invested year after year in building an internal development team and programs that not only benefited workers across the company but ensured that they would be passionate about their work and the firm’s patients. Others noticed this transformation, and now many companies, especially those in Silicon Valley, like Slack, make coaching and other meaningful forms of development available to most or all of their workers.
Another service that Slack and many other Silicon Valley companies offer to their workers is extended family leave for both parents after the birth of a child. The norm used to be two weeks of just maternity leave. Now, evolutionary businesses regularly offer several months of leave, for both spouses, which supports a mother’s return to work and a father’s connection with an infant, among other things.
Cleo, a startup company whose services are a favorite among Silicon Valley employers, including Slack, offers their clients a variety of services for their workers who are parents, including birth planning, postpartum care, and other offerings that take over where traditional health care leaves off. In these ways, businesses are providing services to their workers that are similar to those offered to the populations of Nordic countries, closing the gap for some fortunate U.S. workers. Now, can this practice spread to all companies and workers at all levels?
There is an incredible amount of effort being put into service to workers in evolutionary businesses like the examples given above, and many more exist that are worth exploration. But for now, we will leave this and move on to the next stakeholder group: customers.
