Monday, October 01, 2007

The next great businesses will be able to create passionate employees AND make profits

I recently read this quote in "Business and the Buddha" by Lloyd Field, and it summed up a lot of what I've been thinking about for the past year:

I have encountered very little "joy" in the thousands of workplaces I have visited during my more than thirty years as a management consultant. Joy, happiness, satisfaction with one's life and career, or pleasure in the intrinsic value inherent in the work being performed: these all seem to be rare indeed.... This does not mean, of course that well-intentioned business leaders and employees prefer dissatisfaction. It means that, once we finish wishing for empowerment or satisfaction to be part of everyone's job, including our own, we face the reality that we are in the profit business, not the employee-satisfaction business.

Here's another observation, from Gary Hamel's upcoming "The Future of Management":

According to [a 2005 Towers Perrin study], a mere 14 percent of employees around the world are highly engaged in their work, while 24 percent are disengaged. Everyone else is somewhere in the tepid middle. In other words, roughly 85 percent of those at work around the world--from Montreal to Munich, from Pittsburgh to Paris--are giving less of themselves than they could. This is a scandalous waste of human capability, and it helps to explain why so many organizations are less capable then the people who work there.

Tom Redburn, the New York Times reviewer of "The Shock Doctrine," points out that alternatives to capitalism haven't worked well either:

While Ms. Klein occasionally nods to Scandinavian-style social democracy as an alternative to the “neo-liberal” American-style model she condemns, it turns out that nothing short of a socialist utopia — an economy of worker collectives running environmentally benign enterprises with nationalized banks to direct investment — will actually do.

What she is most blind to is the necessary role of entrepreneurial capitalism in overcoming the inherent tendency of any established social system to lapse into stagnation, as all too many socialist countries — and some nonsocialist ones, too — have shown. Like it or not, without strong economic growth and its inevitable disruptions , there is little hope for creating the healthy middle classes necessary to sustain democracies, much less an improvement in the lot of the poor and dispossessed Ms. Klein seeks to represent. And yes, that means some people will become rich and powerful.

So, herein is the problem. If private-equity-based restructuring is not the ideal future of business, what is? If the pure, unadulterated "profit business" is not the answer, and "socialist utopias" have been anything but, what will the new bargain look like?

This seems to me one of the most important problems of the next ten years.