enhances sales prospects who appreciate the charitable work. But, although philanthropy may be lauded externally, inside corporations it's often perceived as a drain on profits and an unnecessary operating expense, especially in market downturns. Further, just because a company is philanthropic doesn't mean it treats employees well.
Philanthropy communicated through corporate websites and annual reports tout externally focused “corporate social responsibility” programs. There is nothing wrong with this: doling out resources and funding to communities and causes should continue to be highly regarded. But charity alone will not help corporate culture survive the coming decades. Valuing people, not just valuing profits, is the long-term solution. Investing in the people inside our enterprises—in their education, growth, and well-being—strengthens the communities and marketplaces where businesses operate. It's also the way to strengthen the employee-employer relationships needed to innovate and drive businesses forward.
True corporate compassion can't be a separate subsidiary or a spin-off of the primary enterprise. It's not something that can be tacked on as an afterthought. Compassion begins with leadership that integrates the values of courage, inclusion, purpose, and equality into business practices as foundational to the internal business culture.
Compassion: What's in It for Me?
A business culture with compassionate characteristics as the foundation is linked directly to improved employee performance, according to 2013 research by UC Berkeley's Greater Good Science Center:
Happy employees also make for a more congenial workplace and improved customer service. Employees in positive moods are more willing to help peers and to provide customer service on their own accord. What's more, compassionate, friendly, and supportive co-workers tend to build higher-quality relationships with others at work. In doing so, they boost coworkers' productivity levels and increase coworkers' feeling of social connection, as well as their commitment to the workplace and their levels of engagement with their job.21
Some researchers chide organizations for measuring empathy in a corporation (which many people equate to compassion on a broad level). They believe measuring it “takes the heart out of it.” Rather, they say, compassion should simply be a key value at the corporate level, not treated as a quantifiable metric.22
The point of agreement is when employees feel engaged at their company, the company sees a quantifiable difference in employee performance. For example, according to a Gallup Survey:
Engaged employees and teams experience 17% greater productivity.
Engaged employees experience a 20% increase in sales.23
Feeling appreciated opens the door to feeling comfortable and becoming more creative at work. Employees who feel valued will share more ideas and, as a result, offer more value. In the end, this cultivates innovation, which improves both the culture and the corporation's bottom line.
Making Tough Decisions Compassionately
But what happens when business pressures increase and, in the heat of the moment, a company's needs outweigh employee well-being and creativity? For example, there may be business expansion opportunities calling for employees to work for a period of time in a hazardous environment, with no health protection. Or a market downturn may occur when management foresees the need for employees to work longer hours to get a product to the market, but the company won't have the income to pay them right away.
Look at it this way: when business is booming, the economy is solid, and customers are buying in large numbers, it's easy to put employees first. Managers may even seek to share power, giving employees a say on how the organization's culture is governed. However, when revenue is on the line, the economy is tanking, and customers are unable or unwilling to buy products, typical corporate culture reverts to a hard-line approach. Managers are inflexible to the needs of employees and exclude them from decision-making.
In tough times, corporate culture can get even tougher on employees. What happens when an action that might inconvenience employees could nonetheless improve the company's long-term growth? Even for the most fair-minded business leader, profits will likely weigh more than compassionate treatment of employees in those examples. The scary thing is, in our super-competitive market environment, these scenarios have become more commonplace. C-suite leaders are making decisions about the health, well-being, and personal economies of thousands of people. These leaders see before them a limited number of alternatives to business problems. Each alternative has “casualties.” Consequences for those casualties can be debilitating.
Even in these situations, leaders should be tethered to their guiding principles dictating the type of leaders they are and the type of culture they uphold. Compassionate leaders are creative, engage a variety of stakeholders for feedback, and use their intelligence and imagination to deliver the best results. They see people as their most valuable resource. Their guiding principles include cultivating people.
The root of the problem is that business leaders resort to thinking of employees as expendable, instead of viewing them as the lifeblood of the business and should be treated with compassion and dignity, even in arduous circumstances when there are no “good” options to choose from. Commoditizing people in the workforce, and not adhering to a people-first business mentality, has steadily eroded corporate culture. Today, corporate culture is slowly shifting toward more of a people orientation. But, to return to our ship-turning analogy: this change won't happen overnight. There are still plenty of corporate leaders who instinctively view shareholders as the primary (if not sole) concern in decision-making.
There is always room for grace here. Making poor decisions does not equate to intentionally desiring to harm employees. In fact, it's possible the majority of leaders feel they have no choice when making decisions that negatively affect employees. They may not have the resources and information needed to expand their view of business solutions in challenging environments.
The Old Days: Carnegie and the Homestead Strike
Andrew Carnegie is a great example of philanthropy and the ideal of leading with compassion and integrity. Leadership is complex, with many variables. Looking critically at key decisions Carnegie made that affected employees provides a teachable moment as well. Giving grace to leaders and moments where they falter is important. Learning lessons from poor decisions to prevent repeating them is critical in turning toward a new corporate culture built on compassion, equality, and inclusion.
Carnegie is arguably the most celebrated philanthropist of his ilk from the 20th century, and for good reason. His philanthropic contributions remain unmatched. He gave away over $350 million during his lifetime—by one estimate, that would be about $65 billion today.
I first became familiar with Andrew Carnegie through Napoleon Hill's book Think and Grow Rich and Dennis Kimbro's Think and Grow Rich: A Black Choice. Millions of readers like me saw Carnegie as a generous teacher sharing universal keys to success and giving new generations an understanding of how faith, determination, and belief in one's self outweighs obstacles. He did well financially, he made many investors wealthy, and he accomplished even more after his lifetime by directing his wealth to be used for good globally.
In his 1889 article, “The Gospel of Wealth,” Carnegie discussed the chasm between wealthy and working classes and how inequality can quickly become the norm in large corporations:
We assemble thousands of operatives
