is essential to a smoothly performing operation. In most firms, “control” systems pushed by auditors and managers limit each person’s ability to make decisions on spending the company’s money. The amount is set at zero or near zero for the lowest employees on the organizational ladder. This number usually climbs with each layer of supervision. At the top, the executive director, president, or CEO can often make a decision to spend millions of dollars, and the board of directors or trustees have leeway to spend even more. When it comes to financial matters, average employees and lower-level supervisors enjoy the same level of trust as they did in the 19th century.
“Human resources” has a dehumanizing connotation.
The nomenclature of business also remains largely the same. Labor or labor costs, personnel or personnel departments, are all in common use. Economists still put people in an economic formula (labor plus material plus capital equals production). In effect, people (labor) are simply variables like money and material. Similarly, the label “human resources” has a dehumanizing connotation. We have financial resources, fuel resources, and human resources.
In reading annual letters by CEOs, I have noticed that when an organization wants to make a positive statement about its employees, the letter often says something like, “Our people are our best assets.” After I used similar language in one of my annual letters, I had second thoughts about using the word “assets” to describe people in my company. What do we do with assets? We use them. We buy and sell them. We depreciate them. When they are used up, we dispose of them. I vowed that I would never again use that word to describe the people in my organization. I don’t even like the word “employee” because it has a lingering association with the demeaning workplaces of the Industrial Revolution. (I reluctantly use the word “employee” in this book because it is familiar to readers—so familiar, in fact, that most have never given its connotation a second thought.)
Earlier, I noted that most of the recent books written on organizational success treat uniquely human factors—principles and values, for instance—as nothing more than techniques to achieve wealth and success. The behavior of people is equated with the cost of raw materials and plant equipment. One bestselling book a few years ago was Re-Inventing the Corporation. Invention is a word usually associated with machines or processes, yet much of the book is about the people who work in corporations. How do you reinvent them? Even more problematic from my perspective was the title of another bestselling book, Re-engineering the Corporation. Engineering is a word almost exclusively related to machines, but here again the book was primarily about people and the structure in which they work.
Many business leaders are far more concerned with the tasks people perform than with the people themselves. As Henry Ford famously quipped, “Why is it I get a whole person when all I want is a good pair of hands?”
Several years ago in China, I was visiting with three young women employed by AES. All three had returned to their homeland after attending Ivy League schools in the United States. They told me how in each case their parents had made the decision for them about which school to attend and what classes to take, even though none of their parents had ever attended a college or even traveled outside of China. The parents had treated their grown daughters as small children.
We turn things upside down in the United States. When our children are young, we (wrongly, I believe) let them pick their friends, their schools, their clothes, their movies and music, even their religion, assuming they choose any faith at all. By contrast, when they go to work, their bosses tell them what to do, how to do it, and when.
When I attended business school in the late ’60s, a good deal of pioneering research had been done on how employees respond to different conditions in the workplace. In cynical moments I characterized most of this research with the phrase, “Be nice to the ‘machines’ and they will produce more for you.” That said, many experts over the past 50 years have argued that we should replace outmoded assumptions about workers and fundamentally change the workplace.
Indeed, most thoughtful people today reject the assumptions about working people that guided business leaders at the time of the Industrial Revolution. We understand more about what makes people grow and learn and enjoy work. We have experienced political and individual freedom and love it. Most of us believe that every individual is unique and valuable.
Why, then, has there been so little real change in our large organizations? If we have different assumptions about the nature of people today, why do our workplaces have so many characteristics that their forerunners had two centuries ago? Why are compensation arrangements still designed as if people work primarily for money? Why do managers exercise most of the power? Why do staff officers still hold so many of the levers that control organizational behavior? If we believe that the workplace of Collin Doherty leads to drudgery, emptiness, and dissatisfaction, why hasn’t there been an Information Age “revolution” to correct the problems?
I believe there are three reasons for this resistance to change. The first is inertia. Anytime something is moving in one direction, it takes extraordinary forces to change its course. Restructuring the working environment shaped by the Industrial Revolution is like trying to stop a powerful locomotive heading down a mountain pass. Nothing in the contemporary workplace has matched the power of the innovations that occurred during the 18th century.
Second, the Industrial Revolution produced so much good that no one wants to risk tampering with its successful workplace formula. In a few hundred years, the gains in health care have extended life expectancy by roughly 40 years around the world. Average family income is up, and, even with the large disparity between rich and poor, poverty has been reduced substantially. The green revolution has made it technically possible to eliminate hunger and famine, as long as corrupt governments and civil wars don’t intervene. Few would question that our corporate system has produced social progress and an enormous amount of wealth. Even if a side effect has been to create a workplace that is stifling and joyless, most business leaders consider it a price worth paying.
Third, to change the workplace in a positive way would require executives to give up a large measure of their power and control. This is the chief impediment to a radical overhaul of our working environment. Even if a corporate leader were convinced that surrendering these prerogatives would improve the lives of millions without hurting economic performance, the rewards of power are usually too strong to give up. The result is that few leaders have been willing to take the bold steps necessary to junk a workplace model that reduces employees to little more than gerbils on a treadmill.
Not all workplaces are miserable, of course. Exceptions can be found in all types of institutions—businesses, nonprofits, and governments. But these exceptions usually are not as progressive as their leaders think. Small organizations, especially those where most of the workforce is homogeneous, with similar educational and socioeconomic backgrounds, will often have a more collegial feel than organizations of the industrial age. Law partnerships and consulting groups often operate in ways that make the work enjoyable—at least for the partners. Associates, clerical people, and others in the firms may have a work experience as unhappy as Collin Doherty’s.
Many forces conspire to return organizational structures to the “tried and true” model of the past. Rapid growth diverts the energy needed for organizational innovation. Pressure from aggressive investors or lackluster economic performance can prompt executives to play it safe and organize their enterprises along conventional lines. Finally, no change can be sustained unless leaders have an unwavering conviction that change in the workplace is both right and necessary. This requires leaders with courage, stamina, and a high degree of moral clarity.
These are extremely difficult barriers to overcome. The qualities needed to bring about radical change are rare, even among leaders who share my philosophy and recognize that the results are compelling. It does not surprise me that so few large organizations have instituted workplace reforms and that fewer
