Book Extract: No conflict

Companies need to recognise that adding value to employees and generating value as an organisation are not competing activities

WHY SHOULD ANYONE WORK HERE?
WHAT IT TAKES TO CREATE AN AUTHENTIC ORGANIZATION
Author: Rob Goffee and Gareth Jones
Publisher: Harvard Business Review Press
ISBN: 9781625275097
Price: Rs 995

This organizational imperative corresponds to the statements in the diagnostic, "We generate value for ourselves by adding value to others" and "Compensation is fairly distributed throughout the organization." Note that the first statement works on both an organizational level and an individual level, in which any value added (to oneself or to an organization) fosters a positive virtuous cycle of continued and expanded value adding.

Companies need to recognize that adding value to employees and generating value as an organization are not competing activities. They are clearly symbiotic: add value to make value. In addition, the distribution of rewards needs to be perceived as broadly fair. In fact, income inequalities at work have risen dramatically in most of the Western world.

Zhang Ruimin, CEO of the highly successful Chinese company Haier, picks up on the value-adding theme as follows:

I want each employee coming to work for Haier to have the sense that he or she can find a place in the company to realize his or her own values as well as creating value for the enterprise. I have no desire to oversupervise employees. Nor is my goal to grow the company to a certain size.

The list of the world's largest 500 companies changes dramatically every decade. Size is no protection against failure if you are not able to fill each employee with vitality. Instead, I want Haier to get to the point where all employees create their own value on a globalized platform. If we are able to accomplish this, we can make Haier a very competitive enterprise.

More prosaically, think of your favorite bar or restaurant. What makes it your favorite? Most likely it's the food, the service, and the ambience, yet all of those things also rest on the skill of the staff. Value added in one area generates increased value in another, and another, and another.
This point relates to the opening of this chapter, where we argued that both Taylorist and Marxian accounts of the workplace are flawed. Neither theory grasps the idea that adding value enriches both employers and employees-and of course delights customers. This is not to say, however, that there are not still legitimate questions about how the value created is distributed.

McDonald's offers a view of the value-added dynamic in practice with its two-semester, blended learning curriculum that culminates with a five-day capstone simulation at the company's own Hamburger University, where general managers learn how to develop department managers and to create and execute business plans.

The virtuous cycle triggered when employees become better educated cannot be overstated. Knowledge begets more knowledge-and knowledge sharing. One can imagine how a frontline of qualified workers sharing their latest learnings with their shift teams changes the whole working environment for the better.

Customers on the other side of the counter also will experience those improvements in product and service when ordering their burger and fries. And of course the dynamic reverberates further out to the franchise owners and to corporate headquarters, where lowered employee turnover rates (satisfied workers don't tend to leave their jobs) mean money saved in hiring and training costs.

Consider another example, a well-known, prestigious luxury goods company with which we worked, where a key value-add for employees is reputational capital. Part of the company culture is to recruit "well-developed" people-that is, individuals who have received extensive management and leadership development- from companies such as L'Oreal, Unilever, and Procter & Gamble, and then see how they can adapt to the considerable opportunities they are given.

In this highly entrepreneurial firm, "employee development" takes a different form. If the new recruits can thrive (or even simply survive) in this competitive environment, they acquire considerable value in the labor market after leaving the company. The tricky question for them can be when to cash in this value.

This is a key consideration for both employees and executives in this organization. At what point in a person's career is the value added crystallized? At the big four accounting firms, for instance, there is always a raft of people who at some point realize they won't make it to partner. Some have left it too late and must come to terms with becoming "career directors" not always happily.

Reprinted with permission of Harvard Business Review Press