Let’s Start a Human Revolution in Business

Over the past few months, there has been increasing conversation about the decreasing U.S. unemployment rate. For the most part, it’s been on a steady decline since the number of unemployed in the U.S. hit 10% during the 2009 recession.

So, if most of the country has a job now, why aren’t people happier? After all, having a job means having money, and if you have a job and money, you’re happy, right?

According to Gallup:

“The American workforce has more than 100 million full-time employees. One-third of those employees are what Gallup calls engaged at work. They love their jobs and make their organization and America better every day. At the other end, 16% of employees are actively disengaged — they are miserable in the workplace and destroy what the most engaged employees build. The remaining 51% of employees are not engaged — they’re just there.

Only about one in five say their performance is managed in a way that motivates them to do outstanding work. Employees feel rather indifferent about their job and the work they are being asked to do. Organizations are not giving them compelling reasons to stay, so it should come as no surprise that most employees (91%) say the last time they changed jobs, they left their company to do so.”

 These statistics do not paint a picture of a workforce that is happy.

 For quite a while, I’ve quoted this statistic from a Gallup poll: The number one determinant of happiness is a good job. What is a good job? Here’s another Gallup quote with resonance:

“…the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.”

How did our leadership in business begin to fail “the great American dream”? How did we get to this point and, more importantly, how do we get to the point where people feel again like they have a good job?

Our approach to business--our approach to the people whose blood, sweat and tears make that business possible--with its roots in the archaic practices of the Industrial Revolution, is no longer working. Time for a Human Revolution.

But, first, a little history.

Dignity and the Industrial Revolution

If you look at the Industrial Revolution, the beginning of mass production when Henry Ford started making Model T Fords, mass production was about mass production. It was not about human dignity or human growth.

There were many economic benefits. We give great credit to the Industrial Revolution for raising the standard of living in our country, which isn’t a bad thing. Factories for cars, shoes and appliances came to small communities.

Henry Ford paid people fairly well, compared to what they could make on a farm. But we took a farmer who had a craft and a pride in his craft (though also an unpredictable income stream), and we gave him a job in a factory. And he went from being a craftsman in his trade or working on a farm and we put him on an assembly line where he put on a hubcap every 15 seconds.

Then we measured how fast he put on those hubcaps and we thought, maybe we can get him to do this in 12 seconds. Why? Not to create a more meaningful role for this man or woman, but because we wanted to make more money. We wanted to get our cost down so people would buy more cars. We were enamored with mass production and the wealth it created.

And, because we were focused on wealth creation and not people, Unions were formed to protect the people we employed because we were more interested in our product and our customers than our people.

At some point, companies started making so much money, we could afford to be nice to people because we needed them to meet our market demand. We gave them vacation time and benefits because we had to compete for skilled talent. But, just as before, we didn’t do it to improve the lifestyle of the person, we did it because we needed them to produce product and wealth.

All of a sudden, in the 1950s and early 1960s, America started facing more international competition. Their prices were lower than our prices. Once this happened, we decided we couldn’t afford to give that skilled assembly worker $15 an hour in Evansville, Indiana or Toledo, Ohio anymore.

To maintain our profits and compete, we started moving good paying jobs to places like Mexico, then to Brazil. Factories in Evansville and Toledo were abandoned. Now we’ve moved those jobs to China, because we’re constantly in the search of the person who would work for considerably less than the last person.

Eventually, those more price competitive imports were of good or better quality. So, we went overseas to study innovations in industrial process improvement like Lean. But again, it was never to enrich the person’s experience, it was to eliminate waste.

Somewhere in the latter part of the Twentieth Century, the purpose of business became about serving the shareholder only and a new type of business executive was created. As my friend Raj Sisodia said:

“At first, these top executives were relatively modestly paid; it was really about power. That started to change sometime in the latter part of the twentieth century when we began to see a lot more emphasis on shareholder wealth creation. We then started to have CEOs being paid not only high salaries but also large amounts of stock and stock options. We entered an era where the leaders were primarily those individuals who were most motivated by money. They were promised that if they were able to raise the stock price, they could make tens of millions, in some cases hundreds of millions, of dollars.”

And the needs of people moved further away from the thoughts of company leadership.

Then, technology advanced to the point where robots and artificial intelligence could do jobs quicker and more efficiently that people so more factories were closed and more jobs were lost. This second Industrial Revolution, the technological or digital one, is still going on today. And every day there’s new speculation about the dire consequences the American worker will face, thanks to continued prioritization on shareholder return and profit.

The unexpected costs

Despite the benefits of the Industrial Revolutions, after all this time, the way business has evolved and its way of looking at people has become far more damaging than we realize. It’s affecting our physical health. The workplace is killing us.

I was featured in a recent book by Jeffrey Pfeffer, Dying for a Paycheck, who, in an interview, summed up my comments correlating the workplace with the healthcare crisis in three points:

“The first point, which is consistent with data reported by the World Economic Forum and other sources, is that an enormous percentage of the health care cost burden in the developed world, and in particular in the U.S., comes from chronic disease — things like diabetes and cardiovascular and circulatory disease. You begin with that premise: A large fraction — some estimates are 75 percent — of the disease burden in the U.S. is from chronic diseases.

Second, there is a tremendous amount of epidemiological literature that suggests that diabetes, cardiovascular disease and metabolic syndrome — and many health-relevant individual behaviors such as overeating and under-exercising and drug and alcohol abuse — come from stress.

And third, there is a large amount of data that suggests the biggest source of stress is the workplace. So that’s how (Bob) Chapman can stand up and make the statement that CEOs are the cause of the health care crisis: You are the source of stress, stress causes chronic disease, and chronic disease is the biggest component of our ongoing and enormous health care costs.”

We give the Industrial Revolution and the evolution of business over the last century a lot of credit for raising the standard of living – providing housing, shelter and food. People can get jobs with a more predictable income and afford better housing and education.

All those things are good and can contribute to stability and happiness, but when dignity is removed from work, those things matter less. And this is where we are now. Generations of people who are hurting from a cycle that is in place to help them provide for their loved ones but is killing them in the process.

Leaders, this is the reason why we need a Human Revolution in business.

The Human Revolution

The Industrial Revolution was never about allowing people to express their gifts fully. It was about value creation, it was never about creating value in humans.

That’s the piece business has missed and that’s the piece we’ve found on our journey at Barry-Wehmiller. People are capable of doing amazing things if we just give them the environment in which they can discover, develop, share, and be appreciated for their gifts.

The Human Revolution is about organizational leadership reconnecting with their own humanity and recognizing the humanity of those they lead. Recognizing that the people within their span of care are not numbers on a spreadsheet that are part of the calculations that equal profit and loss, but someone’s precious children and should be treated accordingly. Recognizing that the people within their span of care are not just functions, but whole beings who are capable of so much more than the role they are pigeonholed into.

When we treat people with respect and dignity and create opportunities through which they can realize their potential and be appreciated for it is how we, in business, can fix the broken American Dream.

We can balance economic value with human value, where everyone benefits.

This quote from a CBS News article offers great perspective:

“According to a December 2014 New York Times poll, the number of Americans who still believe in the American Dream is slipping. It was 72 percent in early 2009, at the worst of the financial crisis, and 64 percent this past December, in spite of the improved economy… The flip side of the news that faith in the American Dream has slipped to 64 percent, is that 64 percent — nearly two-thirds of Americans — still DO believe in an idea that is often about much more than making money.”

People want to believe. It’s our responsibility as leaders to make the American Dream a reality. But this is not just about the American Dream, it goes beyond the American Dream. It's about the dream of building a better world.

We can do this by moving away from the singular focus on shareholder value and working towards leadership practices that create a “safe” environment. An environment where people feel valued for who they are and what they do as we collectively aspire to a vision that creates value for all stakeholders.

Business could be the most powerful force for good if it simply cared about the lives it touches. That is the Human Revolution and it is the revolution that will transform business and the world in a dramatic fashion.

Bob Chapman is Chairman and CEO of Barry-Wehmiller, a $3+ billion capital equipment and engineering consulting firm with more than 11,000 team members worldwide. He shares thoughts, stories and insights on leadership and business on his blog, trulyhumanleadership.com. His Wall Street Journal best-selling book, Everybody Matters: The Extraordinary Power of Caring For Your People Like Family, published by Penguin Random House, is available through online retailers and in bookstores everywhere. You can also follow Bob and Barry-Wehmiller on Facebook and Twitter and find out more about transforming the culture of your own organization through the BW Leadership Institute.