- For half a century, bankers and venture capitalists have been told that they are the only ones who matter, that companies exist solely to deliver the biggest possible return to them. That’s the gospel of shareholder capitalism, the doctrine created by Milton Friedman.
- CEOs, under pressure from management consultants, business gurus, and academics, push employees beyond their limits.
You would think that tech companies and startups would be a great place to work but that’s not the case. Most people who work in new tech fear that they might lose their jobs. People who live with the uncertainty and dread of losing a job end up suffering even more psychological harm than people who just get fired. Low job security correlates with all sorts of problems, including higher rates of depression and suicidal thoughts. Unfortunately, nearly half of us now live with that stress.
Henry Ford, in his 1928 autobiography, My Life and Work, declares that creating jobs and providing as many people as possible with the chance to make a good living was the whole point of building his company. It wasn’t about money, and it wasn’t even about cars — it was about people. Ford built a trade school where kids apprenticed and once had his executives make up a list of jobs that could be done by disabled people, so that he could create work for them.
Today that is ancient history.
“If you treat people the way you’d like to be treated, if you praise them, and thank them, what a surprise! They do a good job on the whole.” However, you can’t do any of that stuff when you’re a venture-funded company. The venture capitalist investors would not allow it. Once you go public, Wall Street won’t tolerate it, either. [inlinetweet prefix=”” tweeter=”” suffix=””]For half a century, bankers and venture capitalists have been told that they are the only ones who matter, that companies exist solely to deliver the biggest possible return to them. That’s the gospel of shareholder capitalism, the doctrine created by Milton Friedman.[/inlinetweet]
What about the great places to work? Most of these legends are not publicly traded. They are privately held or owned by employees.[inlinetweet prefix=”” tweeter=”” suffix=””] If there exists a connection between being publicly traded and having unhappy workers, it is probably because IPOs enrich a few people at the top, but don’t do much for everyone else, and because once you go public Wall Street starts pushing management to take stuff away from employees in order to boost returns to investors.[/inlinetweet]
Brands haven’t realized that unhappy employees can lead to an erosion of market share as well sales and profits. Not making an effort to retain talented people is costing companies a lot in this economy, but they don’t seem to care. Here’s a great example.
A Delta airlines employee won’t allow a Delta Platinum customer on an earlier flight, even though there are seats available because of the price difference in flights. The customer, who travels more than 160,000 miles a year decides that she is never going to fly Delta again and has since given all her business to a competitor.
A marketing VP is being questioned about the effectiveness of a new marketing campaign. Rather than approach the push-back with facts he decides that some people under him didn’t do a good job of “selling” the strategy and puts three people on a performance plan. Within a month, two people quit and the third has requested a new position in a different department. He quickly replaces them with new people who take up to 90 days to become familiar with the company culture enough to be effective. In the meantime market share trends down and the sales force says that “marketing is out of touch” with their needs.
You would think experiences like this are rare, but they happen too often. Amazon, in my opinion, is going to have a hard time staying on top because Bezos treats employees like just a cost entry.
Perhaps if we treat people like family instead of team members we’ll understand the benefit.