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A New Economic Model Requires A New Business Model
How far are you willing to embrace employee participation?
We all know that business is fundamentally changing and a new kind of economic system may be on its way. But how much are we willing to embrace that change?
We also know that it is lonely at the top. But does it have to be?
New studies out of the US have shown us that many of the most successful startups are founded by people in mid-career and one of the most successful models is that of a family business. Something this think tank ought to know a great deal about.
Germany and Sweden are often cited as having more democratic business structures with greater employee representation, stronger employee freedoms and impressive productivity statistics. The silicon valley way of business is finally being questioned as perhaps a little too testosterone rich, hiding behind ‘employee share ownership’ to drive a relentless and sometimes ruthless work ethic.
The Coronavirus lockdown has called time on all of this and thrown a great deal up in the air. As we took time out and rebooted, it seems as though our attitude to work might have changed. Great crises generally make us question our way of life. Materialism and boundless consumerism gets challenged. So too our work/life balance.
At the same time, millennials are coming through the ranks of management with new attitudes and approaches. They are open minded and inquisitive, digitally smart, more media savvy and better suited to absorbing simultaneous, disparate data sources. They beg ‘experiences’ over ‘ownership’ and they care more about the planet, equality and diversity. They crave flatter management structures with less hierarchy and bureaucracy.
Millennials are happy working online for freelance platforms such as Upwork, so if they’re going to consider one dedicated employer it had better offer a great deal more than an online platform. It might look more like working for a cause than a normal business. More like Patagonia than McDonald's.
If we want to appeal to the changing employee attitudes we may have to rethink business structures. The benefit of a family business is that it is perhaps more embracing and supportive. It may also inherently think longer term with perhaps more of an eye on product or service quality given the family reputation is on the line.
Equally non-family owned businesses can be seen as faster moving, more dynamic and more egalitarian. Share ownership is more widely available, perhaps until you learn the ins and outs of complex and sometimes rigged share ownership schemes.
The accelerator for employee involvement will prove to be the digital era which is unleashing the roots of a participation society. Thanks to the internet access to information is technically open to anyone, so we should participate more in society and in the businesses in which we work. Employee communications and feedback loops in the digital age go way beyond foosball fuelled back chat.
As we head down the wave of another economic downturn it will be the brave few that decide to bet their business on a new business approach. One that perhaps competes for talent as effectively as it competes for customers and innovation. One that weaves some of the theories behind a participation society into it’s business model.
The new norm might prove to be a business that understands that the secrets to sustainability in an eco-driven world include long term, repeat customers AND employees loyal to a brand and its cause. Like Toretto in the Fast and the Furious franchise reminds us that his code is family. Perhaps ‘code’ for brand will be ‘cause’.
It’s our brand alongside customer and employee relationships that need to last forever as our products and services evolve more rapidly. And businesses that know best how to listen to their customers tend to win. So too for employees.
We might be wise to help our employees participate more in their business and its decision making process - as we should already be doing with our customers. Employee supervisory boards could be considered more widely. Flexible working embraced. Offices redesigned for a post pandemic world. Office systems about collaborative, democratic decision making.
Green, eco credentials should be taken as seriously as diversity and opportunity for all. Equality and diversity driven training and mentoring should be prioritised so companies can broaden their recruitment processes towards new sets of skills and qualifications including life-skills, not merely an endless race to the top with MBA students ruling the roost.
Employee wellbeing should be reinvented along with the company meeting and time inside walls torn apart. We need to foster community that works without cliques or class structures. Organisations should be flattened further with managers ‘sitting’ in the middle and not on top.
Employee ‘ownership’ is vital in the participation economy. We really need to think through what ownership means because it will not be the same for everyone. Some might want to own part of the company they work in, some will like more flexibility, some like to own a process or product. Others will want to own a group of customers or a new slogan. Some would like to own a bigger slice of the cash bonus pool or company profits.
Perhaps this all starts with each of us having real conversations with our employees about what participation means. It will likely prove eye opening and help to re-enforce the company’s future strategy, brand, ethics, mission and values. Heck, it might even help innovation happen harder and faster.
And as we get better at understanding what true employee participation looks like we might also develop a better line on how the company should participate more widely in society and on this planet. Taking us full circle onto developing a more sustainable, authentic and equal organisation that makes a positive and measurable environmental impact.
Crack this and it won't just be your employees that reward the company. It may well ripple across your customers, suppliers and partners. Crack ‘participation’ and the money will follow. Maybe that's the post pandemic economic secret.