Human companies

Photo by Skeeze

Conversations about the future of business and work tend to focus on technology — right now, automation, machine learning and Artificial Intelligence are the buzz topics. But companies are increasingly being judged and defined by how they treat human beings — both customers and employees.

Every business pays at least lip service to the idea of ‘investing in people’ — in some way adding value to the lives of the folk who produce the work, above and beyond a pay packet. And no company would be insane enough to promote the idea that they put their financial performance above the wellbeing and happiness of their employees and customers, even if the primary driver of shareholder profit (or in the public sector, working within increasingly austere financial constraints) means that this really is the case.

Over the past few years, a string of legal actions, online campaigns, journalistic investigations and pushes for regulation on the part of government would seem to suggest that the ‘people’ aren’t happy with the manner in which companies behave towards humans when left to their own devices. The real question now is whether this dissatisfaction is going to change anything. And if so, how much?

Gig economy

The gig economy can and has been portrayed as a new way of working demanded by workers themselves — digital, nomadic millennials who crave flexible working and really want to have a range of different jobs, side hustles and sources of income. But it’s fairly clear that it was employers rather than employees driving the change.

Photo by Skitterphoto

There are two motivations at work here. One is the instinctive desire to push as many costs as possible outside of the organisation as possible (‘externalisation’). All businesses try and do this — why take on costs that you don’t have to? Under the fancy cloak of ‘disruption’, businesses have tried to save huge amounts of money by treating their workers as suppliers rather than employees. I should say that I have no problem with this in theory — I run my own business, selling my services to clients while taking responsibility for my own costs, sick pay, holiday pay, pension and other benefits. However, I can and do say no to clients — a right that plenty of delivery drivers and people on zero hours contracts don’t have. And in return for taking on the risk of the business doing badly, I directly reap the rewards of it doing well.

As well as shaving costs by ditching employee rights and benefits, companies can also try and replace middle management, with a combination of user reviews and monitoring software. (Think about the reviews you give on the Uber as the equivalent of your performance review at work).

The second motivation is an expectation that over time, those pesky humans can be phased out anyway. Cab drivers will be replaced by self-driving cars, warehouse staff replaced by robots, waitresses and short order cooks replaced by automated systems. In this view of the world, staff are essentially human batteries that can be swapped out until their more efficient successor arrives.

Sweating the assets

The American scholar and organisational consultant Warren Bennis once said: “The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

Photo by Pashminu

While companies await this bright future, the interim step is to try and make humans work operate as much like machines as possible — in terms of productivity, and measurability. This we see in Amazon fulfilment centres, and the way Uber or delivery company drivers are tracked. Or when Disneyland experimented with the ‘gamified’ workplace by installing big screens to show how fast workers were getting stuff done, numbers glowing red for the laggers — a system the employees called the “electronic whip”.

Consumers that don’t care

Of course, the families wandering from their hotel room to Big Thunder Mountain, shaking hands with Mickey on the way, are unlikely to be thinking about workplace gamification in the laundry station. And in our day to day lives, the sheer convenience of many of these ‘disruptive’ businesses stops us from dwelling too long on how they treat their gigging workers.

A business that’s bad to humans isn’t necessarily going to suffer. Apathy on the part of consumers certainly acts a brake on changes that might improve for workers, but attitudes can and do change. Today we’re less willing to buy products with dubious supply chains than we were in the past — whether clothes produced using child labour, or food reliant on animal cruelty. We’re not perfect — the lure of low-cost items can blind us to ethical considerations — but we are much more aware, and a similar shift could happen with the rights of workers in the businesses that we interact with. Legislation and regulation can either lead the charge, or bow to evolving public opinion.

Employees that don’t care

In any case, it may actually be changing attitudes on the part of employees that drive change. Surely no business can really believe, in the long term, that they can thrive with employees who are apathetic about the work that they carry — still less if they’re actively angry and resentful. But this is exactly where the ‘human batteries’ approach leads. High staff turnover, poisonous internal company politics and brand-damaging publicity from fallouts with employees are not a boon to the bottom line or shareholder satisfaction.

This is not a new, digital age problem. Gwynn Guilford wrote a persuasive, in-depth argument for Quartz that traced recent layoffs at General Motors back to its drive to turn people into machines in the 1970s. Guilford quotes Joseph Godfrey, head of General Motors Assembly Division in the 1970s, as saying: “Within reason and without endangering their health, if we can occupy a man for 60 minutes [per paid hour], we’ve got that right.” This is hardly the kind of motivational quote you’ll see on a corporate poster, but it’s a philosophy that could easily apply to many ‘disruptive’ companies today.

Photo by Denniz Futalan

In the past two years we’ve seen a employee-led push towards better treatment and terms. In the UK, both Uber and Deliveroo have faced legal challenges to their definition of drivers and riders as non-employees, and delivery firm Hermes struck a deal with the GMB union to give workers paid holiday and guaranteed wages. While news leaked out about 100 hour work weeks at Rockstar Games in the push to finish their epic Red Dead Redemption 2, Game Workers Unite has been pushing for worker mobilisation and better conditions in this most modern of industries. And at Google, employees have publicly protested against both the company’s handling of sexual harassment claims, and its strategy — particularly regarding the censored and surveillance-enabling search engine its developing for China, known as ‘Project Dragonfly’.

John Naughton wrote for the Guardian about the particular risks for even the most elite tech companies of alienating talented staff with anti-human behaviour. As Naughton pointed out, “Engineers of this calibre can work anywhere. What turns them on are technical challenges and hard problems. But also, for some, it’s important that the company’s mission resonates with them.”

Power to the people

There are also signs that business leaders are taking steps to ensure that they’re not left of behind in a move towards better treating of human employees. Heather Landy has written for Quartz about the rise of the Chief Human Resources Officer. As well as elevating the status of HR from the back office to the C-suite, this change also moves the people department from a compliance role (“Let’s avoid getting taken to court”) to a strategic role (“How do we put people at the centre of what we do?”). When Tesla announced its revamped board of directors in December, the inclusion of Oracle co-founder Larry Ellison grabbed plenty of headlines. But the more significant addition was Kathleen Wilson-Thompson — global head of HR at Walgreens Boots Alliance.

It’s no coincidence that this kind of change at senior management level has happened alongside the #MeToo movement, and the decline of the dick CEO — a swaggering, unapologetic and aggressive archetype for the leaders of rapidly growing startups, equally oblivious to external and internal criticism or constraints. They may have been late to realise it, but ambitious companies probably don’t want leaders who reign over over sexist work cultures or bullying work cultures, treat employees the same as raw materials, or randomly call people pedos when they don’t agree with them.

Photo by NeONBRAND

There are also indications that even the most hardcore adherents of free market capitalism are feeling the wind change, and thinking about the implications for their bottom line. Larry Fink is Chairman and Chief Executive Officer of BlackRock (the largest money-management firm in the world). In a (now widely circulated) letter to CEOs at the start of 2019, he advocated a long-term, purpose-driven strategy that included valuing the lowly workers. “Profits are in no way inconsistent with purpose,” he said. “In fact, profits and purpose are inextricably linked. Profits are essential if a company is to effectively serve all of its stakeholders over time — not only shareholders, but also employees, customers, and communities.”

The future of humans

Despite these positive signs, there’s no guarantee of a shift of the relationship between humans and the businesses they serve. Old school shareholder capitalism, supercharged by technology for rapid growth, may still be the most effective way to generate returns — with treatment of workers either a ‘nice to have’ or an irrelevance. The tech giants are doing fine, and new startups do have a tendency to imitate their attitudes and practices to try and mimic their success.

Dan Lyons (author of ‘Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us’) wrote a brilliant piece for LitHub on the attitudes towards employees that he encountered on a trip to the TechCrunch Disrupt conference in New York. On one veteran tech CEO he met, “He asked me what I was working on, and when I told him I was writing a book about companies that treat workers well, he dismissed the idea as unrealistic: “You can’t do any of that stuff when you’re a venture-funded company,” he said. The venture capitalist investors would not allow it. Once you go public, Wall Street won’t tolerate it, either.”

Photo by Pexels

But Lyons’ piece goes to highlight rising awareness of the tangible benefits of treating employees well, creating a great place to work, and providing a mission that everyone can rally behind. Attracting and retaining talent, fostering innovation, bolstering public opinion towards your brand, pre-empting employment regulation and legislation — these things only happen if you have a proactive people strategy alongside your business model. 
 
As historical delineations between different businesses by industry or nationality are broken down — as international tech companies encroaching on multiple different areas of commerce — the human factor could become the most meaningful differentiation between enterprises. Whether you’re a leading figure in a major corporation, or launching and growing a new venture, it’s a worthwhile question to ask: Are you a human business, or aren’t you?

Fire Plus Algebra runs training and consultancy to help humans thrive in a digital world. Visit our website, follow us on Twitter, or sign up to our newsletter.