Happy IN work vs. Happy AT work

I had an email from a reader who gave me permission to anonamise it and share:

[After working in sales and feeling something was missing] I moved into the care sector, retrained and was running the company after 3 years. He’s where it differed, there was and still is very little margin in the sector for any financial rewards. Care practitioners are on slightly more than minimum wage and do not have a reasonable fuel allowance. In domestic care they are accountable legally for the care/support they give and must attend quarterly supervision (by law) and have to retrain yearly. They work 24/7 365 on a rota.

Last year I moved to a new company and had to explain to 300 staff why their duties would expand due to ward closures, their area of travel would increase, but I wasn’t or rather couldn’t pay them any more. They were not happy. As qualified care practitioners, they were on less than staff on supermarkets check-outs.

I had of course checked the budgets, asked the directors for an increase and took another look over the council contract, where I realised that the contract was worth less than the previous year. When I queried this, I was told “carers do it because they care, not for the money“.

How about that for assumption. I handed my notice in soon after…

Classic management screw up, making an assumption about their people ‘they do it because they care, not for the money.’

The huge flaw in that logic is not understanding the difference between being happy IN work and happy AT work. The carers were happy to be IN work in a profession where they had real meaning and improved people’s lives, but it´s impossible to be happy AT work if you’re paid so little that money is a huge, pressing stress and you’re worried sick about paying the bills.

This is all too common in the charity sector where employers believe it’s enough for people to be working for a cause they feel passionate about and so don’t pay people enough or create a good working environment. At best, this is de-motivating, and at worst it makes great people leave and take their talents elsewhere.

Conversely, in many corporate jobs, including sales much of the time, the opposite is true. You get paid really well and have a nice comfortable life so you feel happy AT work but if you feel like you’re just being paid in order to make even more money for shareholders then there’s very little to make you happy IN work. And again this can cause great people to lack motivation or leave.

The key therefore is to create organisations with a very clear, higher purpose that people believe in and want to be a part of, and to ensure that you pay people enough to take money off the table as an issue so that they can focus on work. Once these base level needs are met you can then work up to higher levels of human satisfaction through recognition, social belonging and mastery of their craft which will take their motivation and performance to soaring heights.

Why do we accept giving up all of our rights at work?

I’m reading Beyond the Corporation by David Erdal at the moment and so have been thinking a lot about employee ownership. It’s making me wonder why we accept so little in the way of rights at work than we otherwise enjoy in the free and democratic societies we live in.

In a democratic country we have the right to choose the leadership and hold them to account; we have a right to transparency and information and we have the right to speak our minds, dissent, make our voice heard and participate.

In almost all businesses the employees have no equivalent rights. The rights belong only to the owners of the business – the shareholders. The shareholders are the only people with rights to information, to appointing or removing the management and ultimately deciding what the business does. Further, the shareholders are the only people with the rights to the profit and capital gains that it generates. Shareholders can sell these rights to whoever they choose in spite of any feelings the employees may have about it. The employees in the business create all of the value that it generates, yet they are merely ‘rented’ in return for pay, like a piece of machinery.

Why is it that we accept so little in the way of rights at work that we take for granted in society? Perhaps it’s because life is generally OK and we don’t feel hugely repressed, in spite of the lack of rights. Perhaps it’s because the status quo is so deeply entrenched in our history that we accept it as ‘the way things are’ and it cannot be changed. I wonder if this the same as the burgeoning middle classes in China who have decent jobs and access to consumer goods and perhaps don’t worry too much about the fact they cannot oppose or hold their politicians to account or have access to free information. But surely we can do better than this.

I am convinced that the solution is more than just democratic organisations. It is full ownership of companies by the employees. Only by the transfer of all rights from external shareholders to employees can we have true democracy at work.

Many democratic organisations are not actually true democracies at all. Whilst there are 10 principles of democratic organisations, what sets a true democracy apart is inalienable rights, not just operating principles which can be changed at the whim of the owners.

Most ‘democratic companies’ are actually benevolent dictatorships. The company I co-founded (and have now left but am still a shareholder in), NixonMcInnes, is a classic example. The company truly buys into democracy and has been independently assessed and shown to be living by the 10 principles. There is a huge level of transparency and employee involvement, from fully open financial information to guest seats for employees to attend board meetings. Employees have a say in selecting and evaluating managers, contribute heavily to strategy and planning, and have the right to ‘dissent’ by raising their own ideas, challenging anything that they are not happy with, and know that they will be listened to. There is also a generous profit sharing scheme in place. However, none of these things are actually rights – they are the policies set by the owners and can theoretically be reversed at any time, and the owners still have the right to sell the business to anyone they like who would be free to do as they please.

At NixonMcInnes, the concept of employee ownership has been discussed at length. I remember when we first talked to the employees about the idea and all of the rights that it would give them, they weren’t as excited as I thought they would be. The reason for this was that they felt they were already enjoying a lot of the benefits through the democratic principles, and the only real difference would be a big chunk of debt to pay off the old shareholders. In other words, life was OK under the benevolent dictatorship. I had to agree that this was a fair point, but I think there is something bigger at stake here.

Perhaps I am wrong, but I can’t help thinking that there is something hugely important about concrete rights that are set in stone forever – hopefully hundreds of years in the case of NixonMcInnes and certainly beyond the lifetime of everyone working there today. Rights that cannot be eroded over time or given up to new masters who want to do things differently. I think there is a massive difference between principles and true rights.

This is all sounding very socialist which is not a notion I’m terribly comfortable with to tell you the truth. In talking to socialist friends, they often say that the solution is for workers to unionise and to force (usually begrudging) employers to give them better rights. Personally I think the goal of better rights for employees is spot on, but the further polarisation of the situation into ‘them’ and ‘us’ is incredibly negative. It actually accepts and reinforces the status quo of the shareholder-employee relationship and misses out on huge opportunities to build amazing businesses that benefit the employees as well as society and the planet as a whole.

I would like to see far more employee ownership in order to give people these enduring rights at work. Perhaps unions could work towards raising finance to buy companies outright for the employees. I would also like to see bids for public companies to be taken out of the hands of short-term investors on the stock markets and into the hands of the people who work there.

This is not just social ideology. It is actually great business sense too and this is what gets me excited as an entrepreneur. In Beyond the Corporation, the myths about the supposed flaws in employee ownership (lack of innovation, inability to make tough decisions, bureucracy, short-termism etc) are thoroughly debunked by the reality of employee-owned companies like John Lewis, Arup and Publix who consistently out-perform their peers across all traditional measures of business success. It’s clear that employee owned companies can actually be more agile, innovative and better able to cope with tough times.

There are compelling reasons why employee ownership would be a far better and fairer standard framework for business than the current shareholder model. To test this theory, imagine for a moment that employee ownership was already the standard and employees had parallel rights at work as they do in society. Would any sane person suggest that it would be a good idea to remove all of these rights and give them up to owners who don’t actually create the value within the firm? Would anyone believe that these businesses would perform better? Would anyone think it would be better for society? Of course not. The current model only hangs on by virtue of the fact that it is ‘the way things are.’ But I don’t think it should or even can hold on forever. The day of the employee-owned firm is coming.

Building a team from the bottom up

I’m working on a business plan for a new venture at the moment which I’m hoping to get going next year once I’m settled back in the UK (disclaimer: all plans are subject to change, especially whilst I’m still travelling!) I will make the plan publicly available for comment soon (the anti-non-disclosure-agreement) but I can tell you now that it includes setting up a large cafe/restaurant.

I’ve got a fair bit of entrepreneurial experience, but the hospitality business is completely new to me. So I figured that the first team member I need to get on board is a restaurant manager. Then I got to thinking, I wonder if you could run a restaurant without a manager at all and instead share the responsibilities with everyone working there. It would be unusual (I think) for a large restaurant and you would need to carefully implement some democratic systems and processes to make sure that the place runs smoothly, but I think it could be do-able.

My next thought was that to build a new team, instead of starting with the traditional approach and recruiting a manger first who then hires the rest of the team, how about hiring some junior employees first then working with them on the business plan (after all, they will be in the front line of actually delivering it and I’m sure will have some brilliant idea of their own too.) Then together with them you could talk about the management responsibilities and see if they could be effectively distributed. And if not, then the employees could hire their own manager. Not as their boss, but as an equal, just with a different set of responsibilities.

I think the benefits of this could be enormous. The employees would see that they really are the most important people in delivering the service to customers. They’re not just working ‘for’ a manager who has the real responsibility. And who knows how it might lead to a better team and customer experience if all front-line staff share the responsibilities and power of a manager.

What do you think? I would particularly like to hear from anyone who has worked in a restaurant but all views are welcome.

The secret to out-aping a primate boss

Much of human behaviour, specifically at work, mimics the behaviour of our hairy ancestors and cousins.

The WSJ cites an author who observes two colleagues talking over coffee and how the more powerful one ‘stares down’ the subordinate when a contentious issue is raised in the conversation. Classic non-verbal alpha male behaviour of the kind we’ve all seen at work.

But what’s not mentioned in the article is that by being a human rather than an ape we can transcend this kind of primate behaviour using the very human skill of empathy. A less ‘dominant’ but smart and empathic human can say something like ‘Gosh you look like you tensed up when I said that. Are you OK? Did I offend you? How are you feeling about what I just said?’ Suddenly, the non-verbal ‘threat’ is made much more visible and the dominant is forced to interact at a higher, more human level. At that point the primate advantage is lost and you’re on a level playing field for a fair and constructive conversation.

If it were true that alpha male types are better suited to, and more succesful in leadership roles then wouldn’t we see the majority of positions of power filled by men like this? Hmmm oh dear, yes unfortunately we actually do. BUT this is changing fast.

I can’t recall any serious article in recent times advising on aggressive, domineering alpha male behaviour as a recipe for success at work. However I do see a big trend towards empathy, communication and, frankly, more female traits as the recipe for success.

Next time anyone tries to use alpha male tactics on you, don’t ignore it or try to fight it head-on, just use a little empathy to uncover their true feelings.

Dangerous and wrong assumptions about human nature

Human Nature

In almost every decision made within a business there are embedded assumptions about human nature. We make assumptions about what customers want or how they will behave, and we make assumptions about human nature to try to get the best out of the people working there.

The danger comes when these assumptions are made subconsciously, or worse still, based on folklore or narrow experience rather than the truth about our species. The best companies deeply understand what makes humans tick and build their culture, products and services around this.

So what are the assumptions we make about the nature of the humans inside a business? These assumptions, conscious or not, shape the very fabric of a company: It’s structure, values, culture. Everything else that the business does follows this. But how much time is spent actually making conscious and wise decisions that really reflect what makes humans tick? By most businesses, not much.

Here are two scenarios:

First off, what happens if you assume that humans are fundamentally selfish? Assume that they care about themselves and those closest to them and everything else is deeply relegated. Above all else, they are motivated by what they can get out of the company for themselves. This is the assumption implicit in much of business-as-usual today.

These kinds of assumptions lead to hierarchies (because you need clear lines of ‘control’), ‘line management’ (because you can’t trust people to do their job of their own volition) and carrot-and-stick motivation tactics. If these assumptions are true, the only way you can really get people to do what’s best for the business is offer rewards for cooperation and punishment for behaviour you don’t want to see. The most visible example of this is offering bonuses or rewards for hitting performance goals. The reason it’s so popular is that it can generate short-term results (or motivate people performing highly procedural simple tasks – not the direction work is heading today). However, the inconvenient truth is that there is no social science research that I’m aware of to back up the usefulness of these assumptions, whereas conversely there is research to show that it can actually cause worse performance and lower motivation over the long term. It’s actually even been shown to be true in apes! In one experiment with children it was proved that kids who naturally enjoy drawing can actually become demotivated and will draw less if you introduce rewards for doing it.

To make it personal, how would you feel at work if you believed that your employer held these assumptions about you? Would you be able to deliver your best work in these conditions? Would it inspire your creativity and ability to innovate? Would it foster good relationships with the people you work with? I expect the answer to all of these is ‘no.’ Sure, you might work harder for a while if a bonus was dangled in front of you, but it wouldn’t sustain optimal performance and you’d probably leave as soon as you could find something just a little bit better.

In the second scenario, what happens if you assume instead that people certainly care about themselves and their families, but these are base needs and can be relatively easily satisfied by fair pay and good working conditions. Once these are met, there are much higher things that humans need and strive for which a business can tap into for the benefit of the individual as well as the company. This is the theory put forward at Abraham Maslow with his famous Hierarchy of Needs model, and something I wrote about before. If you follow Maslow, you satisfy base needs to take things like money and survival off the table, and create a culture that works up the hierarchy of needs, providing recognition and social belonging (not replacing family with work but recognising that great relationships help us to enjoy work and perform better.) Then further up still there is the opportunity to create ‘self-actualising’ experiences’ for employees. Setting up the conditions for them to be the best they can be and to master their craft.

Social science has also given us the ‘Theory Y‘ of motivation. This is the insight (which is bloody obvious to anyone who’s ever worked in a job they enjoy) that there can be ‘intrinsic motivation’ at work. Essentially – shock horror – that we can be motivated by the actual task itself, and to exercise self control outside of any rewards on offer.

If we believe this second set of assumptions, we can make radical changes to business-as-usual. We can throw out hierarchies and sometimes even management altogether (because we don’t need to control people) and we can focus on setting up the environment and culture to give people autonomy, great relationships and the opportunity to master their craft – the things that have been proven to actually motivate people.

Social science has offered us this second scenario and it is backed up with 50 years of research. It’s not a naieve and fluffy view – it’s created by neutral boffins – and it is finally starting to catch on. You can read some of the descriptions of how the ‘Most democratic workplaces in the world‘ operate and you can see these assumptions in action.

I think it’s time for all businesses to face up to the assumptions that they have been making about human nature and start a process of recognising the true potential of our species which can improve everyone’s life as well as generate success for the business.

Inspiration Sunday: Why happiness is the new productivity

Here’s an awesome presentation from Vishen Lakhiani the founder of one of the Worldblu Most Democratic Companies – Mindvalley.

There’s so much I love in here:

  • The focus on being happy NOW (not putting off happiness until you’ve achieved other things)
  • Achieving a state of Flow
  • Rituals like ‘ringing the bell of awesomeness,’ ‘the gratitude log’ and even guided group meditations!

All of this has created an incredible workplace at Mindvalley that attracts and grows fantastic people, and that leads to success for the company as a whole.

The only thing I’m not sure about is the idea of sharing 10% of company profits on a monthly basis. I am all for profit sharing, but my fear would be that with it being a monthly thing, people may quickly grow used to it and instead of it feeling like a bonus it could come to feel like an entitlement. I’m sure that it is a motivator but I’m not convinced of the long-term value of it. But it’s part of a mix that’s working for Mindvalley so good luck to them.

Oh and if you’re thinking that all of this wacky stuff is fine for a company whose average age is 24 but not for a ‘grown up’ business, then just remember that these ‘Generation Y’ people are the senior leaders of the future so if you want to have them developing in your company then you need to create the right environment for them NOW.

Using Maslow to create happy employees, customers and more

Chip Conley’s book ‘Peak: How successful companies get their mojo from Maslow‘ is brilliant for two reasons. Firstly it’s an amazing turnaround story of a business (The Joie de Vivre boutique hotel group) on the brink of failure; and secondly it provides an incredibly simple but powerful framework for thinking about what a business offers to its key stakeholders.

Using Maslow’s Hierarchy of Needs, you can think of each group as having a pyramid with three levels. The base needs of a stakeholder group at the bottom, working up towards delivering self-actualising, transforming experiences for them at the top (what Chip calls ‘Peak’ experiences.) Once you have got the base needs covered, it’s these Peak experiences that can truly set a business apart and will lead to success.

For example, the base needs of an employee are to be paid a living wage and have a safe working environment. Working up to the second level they have the human need for recognition for what they do and have good relationships with colleagues. Then above this, right at the top are things like opportunities for mastery of their area of skill and working towards a higher purpose which they truly believe in and transcends both themselves personally and the company.

Any business can expand on these three levels of the pyramid with specific policies and practices, but the key thing is that once the base needs are covered, it’s focussing attention on the higher needs at the top that creates the magic.

For customers, the baseline is a product that satisfies their needs at an affordable price; then moving up from here we have things like listening to and responding to their wishes and right at the top we have experiences that are beyond the customer’s expectations and meeting new needs and wants. Think Apple creating the iPod in the age of the Walkman or a time when a business has really treated you like a VIP and gone out of their way to help you (doesn’t happen too often, sadly, and this is an opportunity!)

Chip goes on to explain how you can use this same principle for investors too and I also think that the same can apply to suppliers and the local community although Chip doesn’t cover this in his book.

I’m working on a new business plan at the moment and have found it a really helpful framework to have a pyramid for employees, customers, investors, suppliers and local community and fill in the three levels for each to show how the company will deliver real value, right up to Peak experiences. It’s a very exciting process as you begin to see how your business steps up from the ordinary to do very special things. I also found that thinking about the top of the pyramid sparked new ideas and made me think bigger and higher about how the business can be awesome.

As an experiment you could try creating a pyramid for each of your company’s stakeholder groups and filling in how base needs, right up to Peak experiences are being delivered at the moment. You’ll probably find some gaps which can be filled in, and you can also reflect on how you’re allocating your energy – whether it’s purely to satisfy base needs or deliver truly transforming experiences. It’s no co-incidence that Zappos – the online retailer bought by Amazon.com for $1BN and famed for its incredible happy working environment and delighted customers has Maslovian pyramids on its walls, and makes Chip’s book required reading for new employees.