Excerpted and adapted from The Six New Rules of Business: Creating Real Value in a Changing World by Judy Samuelson. Copyright 2020. Reprinted with permission of Berrett-Koehler Publishers.
The Voice of the Employee
RULE #4: Employees Give Voice to Risk and Competitive Advantage
A human management will demand that we incorporate a concern for the freedom and well-being of those we manage as much as for their productivity; that we consider the environmental as well as the economic consequences of strategic choices. . . . That we hear and amplify a broader set of voices, not only those that fit a narrow view of management and of its concerns, but also those that defy it, and in so doing, enliven it.
—GIANPIERO PETRIGLIERI, “ARE OUR MANAGEMENT THEORIES OUTDATED?,” HARVARD BUSINESS REVIEW
Restoring Trust in Business
In October 2019, 250 Facebook employees publicly posted a message to CEO Mark Zuckerberg. The letter challenged the assumption that the company was right to protect political advertising as “free speech” and called for tougher standards—a radical change in business as usual.
The communication from the employees opened another chapter in a story that may play out for years as the social media giant tests the limits of how it utilizes, and sells, personal data. The story is a demoralizing tale of how Facebook executives ignored, tried to hide, and then misrepresented Russia’s use of the popular social media site to influence the 2016 US presidential election. With the revenue model of paid advertising at risk, everyone but a few whistleblowers remained silent. It was employees who eventually challenged the leadership to stop taking political ads until protocols to determine veracity could be established.
If anyone in the disheartening story can be called heroes, it’s not the executives with the most influence, access, and power. It’s the employees who witnessed malfeasance and bypassed protocols to bring it to the highest levels of the company but were ignored or told to look the other way. The proposal to drop all political ads was considered a critical step forward in a complicated give and take between business profits and societal well-being. It was the employees who identified protocols to restore trust—and morale.
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As Boeing’s fiasco with the 737 Max makes clear, sometimes embracing rather than rejecting superior knowledge of employees can be a matter of life and death.
No one has a better or more consistent view of both immediate and long-term effects of management decisions, inside and outside the gate. Employees are now wired for action, have the relevant social networks to amplify their voice, and, as recent examples demonstrate, will no longer stay silent.
The rules and protocols for a new era of employee engagement have not yet emerged. But clear alignment between the workers’ desire for economic security and the financial health and long-term reputation of the employer is ripe with opportunity. It’s what makes workers so powerful.
Who cares more about the reputation of the company than its employees? No one. Who knows more about the conduct of bad actors who can bring harm? Who is the most trusted agent when it comes to assessing the efficiency of the machinery, where to tighten the pipe to reduce emissions, or how to structure work to facilitate childcare and other demands that enable employees to show up ready to work? The employees. Employees are in a unique position to connect the inside and the outside—business and the health of the commons.
Real value is created when employees are encouraged to identify and act on long-term risks to the enterprise. We are all better off when employees are productively engaged in what business does at its best: create useful products and services that respect the constraints of nature and individual and community welfare, and secure the brand by ensuring that the company aligns its intentions and actions.
An example of a company that supports the value creators on the front lines of the business is Levi Strauss. CEO Chip Bergh and his team employ a formula that keeps the company on the cutting edge of innovation: values stated must connect firmly with values employed. It’s not the cheapest way to operate, but the rewards of doing so are clear. And when you define and design your product with the health of workers and the planet in mind, talent will beat a path to your door.
At Levi Strauss, internal change agents have been free to tackle a host of complex problems—like eliminating toxins from the process of treating denim, creating the “waterless” jean, rewarding best-in-class practices in factories from Mexico to Asia, and leading an industry campaign for sustainable practices in growing cotton. The company also demonstrated first-mover instincts when it chose to publicize the locations of its factories, inviting outside-in accountability.
Chip Bergh joined the company in 2011; he led the turnaround of Levi’s and burnished the brand. He has also leaned in on issues like gun control that lie outside the day-to-day concerns of building the business but loom large in the public sphere. This is the kind of company that young people dream about joining—one where your aspirations connect to your paycheck.
For three decades, Levi Strauss was a private company, able to invest in product research, brand building, and efficiency. The company went public in 2019. The founding family still has a controlling interest, and Levi’s has been at this rodeo before—it was a public company from 1971 to 1985. The future will tell what demands emerge in a public market that still values return to shareholders over long-term investments, labor, and environmental risks. The decision to furlough workers while continuing to pay a dividend to shareholders in 2020 in the middle of the COVID-19 business meltdown could suggest strong pressure to support the stock price.
Everyone has a role to play; consumers and investors who align their money and their values are critical actors in a system that still rewards short-term thinking and amplifies shareholder pressure. Yet the role of employees is unique. Employees demonstrate a keen understanding of real value creation. It’s the employees who have the best line of sight and command of the most useful tools to support the company when conflicts arise.
Judy Samuelson’s new book, The Six New Rules of Business: Creating Real Value in a Changing World, is now available online and at your local bookstore.
About the Expert:
Judy Samuelson is vice president at the Aspen Institute and founder and executive director of the Aspen Institute Business and Society Program. She previously worked in legislative affairs in California and banking in New York’s garment center and ran the Ford Foundation’s office of program-related investments. Samuelson blogs for Quartz at Work and is director of the Financial Health Network.
