For companies to flourish and become a workplace of tomorrow, they must jettison not just their legacy systems and infrastructure, but also their legacy thinking.
By Frank Wander
Corporate America is slowly being reinvented. Winning companies understand they must unlock the full talent potential of their workforce in order to efficiently turn ideas—this era's most important raw material—into products. They innovate to win; they are nimble, because people are encouraged to think and given the freedom to do so; these companies know professionals are assets, not expenses, and therefore seek out the best and embrace and nurture them; lastly, they are not burdened by an accumulation of legacy systems and legacy thinking, the last being the largest hindrance. Getting the human factors right will be what differentiates the workplaces of tomorrow, a pattern that is increasingly visible in today's best companies.
In contrast, traditional corporations struggle to innovate as they are weighed down by legacy infrastructures, outmoded people practices, and dependent on financial innovation to boost their balance sheets and earnings per share. Although their quarterly results may please Wall Street, they mask a worrisome reality: The world of work has changed. With 70 percent of American workers disengaged, per Gallup, pressure is building for a giant shift toward improving and nurturing the human side of business. As this shift occurs, traditional hierarchical management structures will slowly loosen their grip, relinquishing more power and control to the knowledge workers, the "machines" that power the innovation economy forward. The companies that fail to embrace this change will die untransformed, eaten alive by high fixed costs, a continual brain drain and unproductive management practices.
In the best workplaces, high-performing cultures and human understanding are the engines of workforce productivity. Unfortunately, the leadership skills to leverage these talent management practices are too often in short supply. Corporate leaders know a great deal about their processes, technology, marketing, sales, finance and product development, yet they know almost nothing about their organization's primary source of competitive advantage: their employees.
Traditional corporations remain steeped in the mindset of the industrial era where employees are expenses—and are treated by management as little more than interchangeable parts. Such organizations are blind to the re-humanization of work that is transforming the competitive landscape, so they seek outside advice on how to improve workforce productivity and unleash innovation. The correct answer: "Look inward. Your people are your factory. Learn to free the large, untapped pools of talent potential you are already paying for, and innovation will begin to flow."
Today's winning companies understand this simple truth. They have relied on informed people practices from their founding, and view the workforce as mostly assets, not expenses. These companies are repeatedly cited amongst the best places to work; they have track records of success built on innovation and employ a workforce that possesses the ability to flex and change with the market. Also, they invest time to find and hire individuals who are a cultural fit, then nurture, grow and retain them.
Understanding the human factors that unlock workforce productivity and innovation has become an undeniable source of competitive advantage. As Irish author and philosopher Charles Handy has said, "Karl Marx would be amused. He longed for the day when the workers would own the means of production. Now they do."
What Successful Companies Do Right
In the still evolving world of post-industrial work, you find successful corporations like Google (search, advertising), Valve (gaming), Auttomatic (open source software), Zappos (online retail), W.L. Gore (advanced technologies), NetFlix (streaming media), SAS (enterprise software), and many more. They employ a variety of leadership strategies such as self-forming teams, a latticed organizational structure, workplace flexibility, nurturing employee cultures, workplace democracy, happiness as a barometer of organizational health, sponsors instead of managers, and true empowerment. These enterprises are not successful accidents, but the products of purposeful design. Some are still young (Netflix), others are enduring examples of the value of understanding the human side of business (SAS and W.L. Gore).