How to Create a Class System in Your Organization

(And how to prevent it, too)

The CEO of a large established company was making tough cuts across the entire organization. He had given to subordinates the directive, across all divisions and units, to reduce expenses and do more with what they already had. Amidst this activity, the CEO purchased an expensive specialized technology solution for his quarterly meetings. When the fancy new tech was rolled out at the next meeting, the employees of the company recognized the duplicity. Instead of using the existing available technology (which would have telegraphed “I’m one of you”), his actions sent the message, “I don’t have to do the same as you. I’m special.

The above is a true story relayed by a longtime colleague within that corporation, but it could happen anywhere because the same type of behavioral gap easily can be cultivated within any organization. “We expect others to do this, but we’re exempt, because we’re special” reinforces elitism and privilege, bolsters a sense of “us vs. them” in the workforce, and practically guarantees a class system will develop.

Here’s how it works:

Whatever the top feels they’re exempt from, the next level down will witness, and what they see modeled, they imitate. “Oh, I see. I’m supposed to pass this expectation downward, but us above the others are exempt.” And this is modeled for those beneath, repeated on and on.

Once this attitude traverses the organizational structure to the point there are no more levels to pass the expectation while claiming exemption, the bottom becomes the working class having to carry it. They observe the rule sets being applied to themselves clearly are separate from those applied to the “elite,” “privileged,” or “exempt” classes above them. They’re the lower class and are keenly aware of it, while the upper class may be oblivious to their privilege. As a result of this gap, you can look forward to contentious labor disputes, slogging productivity, decreased loyalty, and possibly a thinning talent pool.

This is why the leaders in the top echelons of the organization — especially the one at the very top — must model and live out the desired behaviors, regardless of their credentials. Larry Senn, one of the pioneers of corporate culture research, has noted, “organizations become shadows of their leaders.”

Hence, it is critical for the leaders at the top to understand human nature — to expect in advance they might unknowingly but easily abuse their position to pardon themselves from the conditions and constraints they expect of others. Avoiding such temptations can only result from rare pre-established qualities deep within the leader: courage and vulnerability. Ideal leaders with these traits would, upon appointment to their role, voluntarily and preemptively establish a checks and balances system through which they can receive unavoidable feedback on their behavior.

Without transparency and accountability that stem from courage and vulnerability, it’s just far too convenient for management to self-justify how more responsibility, higher status, or having “earned my stripes” excuses oneself from having to take the same medicine as “the others.” It’s easy to rationalize why oneself is “special.”

In the case of the specific company I’ve been profiling, this exact attitude apparently had been built into the management culture over time with some intentionality. My tenured colleagues there tell me that many years ago the “leadership development” unit commissioned a customized web portal for management-facing content. Those responsible not only wanted different content from the non-management employees’ development portal, but they also insisted it have an entirely exclusive look and interface. When the lead web designer questioned this, suggesting it would be more cost-effective for ongoing maintenance to use an identical architecture for both but with different content stocked on each site instance, the idea was immediately rejected by the leadership development project team with this (exact quote): “They [leadership] need to feel special.

Back to present day, almost a year after starting the expense reduction activity, the expense metric had not yet dropped to the desired level. All those beneath the CEO weren’t spending less, strangely enough. Furthermore, it was by no means the only behavioral contradiction found in the organization, but none of this should surprise anyone. If cultural management patterns seem to embrace contradictory stances — and you can probably supply your own stories and examples here — you can bet this is what’s being modeled, reinforced, and rewarded somewhere higher up. The behaviors also will likely be defended with privilege-based excuses.

In short, if it’s tolerated for the uppers but punished for the lowers, you will have created the perfect class system, a conflicted environment where high morale and productivity will be difficult to achieve.

Unfortunately, this phenomenon has existed a long time, dating back to Frederick Taylor and the origins of management itself. These two quotes from Matthew Stewart’s insightful treatise, The Management Myth, capture well how human nature has often played out within management:

“Curiously, Taylor and his college men often appeared to float free from the kind of accountability that they demanded from everybody else.”
“Much of management theory today is in fact the consecration of class interest — not of the capitalist class, nor of labor, but of a new social group: the management class.”

The class system is what inevitably results culturally when management clings to privilege while shunning courage, transparency and equal accountability.

In light of such a gloomy diagnosis, I’ll leave you with an encouraging proverb and exhortation: an ounce of prevention is worth a pound of cure. Work diligently to select humble leaders who are aware of their propensity to fall into the privilege trap and who assume they are not immune to the illness. Encourage them to enact preemptive and corrective frameworks in advance, and openly applaud all who use those frameworks as intended to prevent corporate class systems and their destructive implications.

For more thoughts on business, technology, culture, and human nature, follow Ben Kobulnicky on Medium & LinkedIn and subscribe to his YouTube channel.