Want to improve the employee experience? Create a more conscious corporation

In recent years, a growing number of researchers and writers have started calling for a fundamental shift in the way that we think about business models, organizational performance, and the social responsibilities of corporations. In The Healing Organization, for example, Raj Sisodia and Michael Gelb argue that by focusing on the wellbeing of employees, customers, the environment, and society, organizations can create a better world while increasing performance and profitability. In Dying for a Paycheck, Jeffery Pfeffer highlights the dire consequences of workplace stress and argues that business leaders must make their workplaces more fair, flexible, and healthy. Even the Business Roundtable, a community of chief executives from prominent US companies, has joined the Conscious Capitalism movement. In their recently released Statement on the Purpose of a Corporation, they redefined the role of corporations, emphasizing that businesses that focus exclusively on meeting the needs of shareholders are no longer tenable. Instead, corporations must “create value for all … stakeholders,” especially the customers they serve, the people they employ, and the communities where they operate.

Inside many organizations, this philosophical shift is raising hopes and concerns. Many business leaders are inspired by the tenets of conscious capitalism and already strive to create value for their stakeholders. But some also wonder if their organization is living up to these new standards.

So, what’s the best way to ensure your organization is creating value for all its stakeholders and making the world a better place? Based on our research, we’ve found that the most exceptional workplaces share five common cultural characteristics.

1. They focus on long term objectives. According to a recent study by FCLTGlobal, corporations are more short-term oriented now than they have been in a decade. Based on a growing body of research, this is not just bad for business, it’s demoralizing for employees. We’ve found that when employees think they are working in a short-term environment – where decisions are based on short-term perspectives and goals are focused on short-term profits – they feel significantly less engaged and committed, less creative, and less confident in the future of their organization. They also feel significantly more stressed, overloaded, and unable to balance their work and life. If your organization’s primary focus is satisfying investors and increasing quarterly profits, you likely have a workforce that is exhausted, alienated, and underperforming.
2. They take sustainability seriously. In recent years, sustainability has become a priority for an increasing number of businesses around the globe. Based on research from the Governance & Accountability Institute, the percentage of Fortune 500 companies publishing sustainability reports has increased from just under 20% in 2011 to 86% in 2019. Other researchers have found that corporate sustainability is a core concern for employees and customers.  We have found that when employees believe they are working for an organization that has a positive impact on society, they are significantly more likely to feel proud of their organization, satisfied with their job, optimistic about their future, and willing to recommend their employer to colleagues and friends.
   
3. They practice partnership principles. Peter Drucker once encouraged leaders to “accept the fact that we have to treat almost anybody as a volunteer.” Based on our research , this is advice worth heeding. We have found that leaders and managers display one of four different relational styles with their direct reports. Some create collaborative relationships (partnership style), while others act as caring parents (paternalistic style), bottom-line minded supervisors (transactional style), or brutal bosses (adversarial style). Of these, the partnership style creates the most positive employee experiences. When employees feel they are working for a leader or manager who wants to partner with – rather than power over – them, our research shows they feel more energized at work, intellectually invested in their job, and optimistic about the future.
   
4. They take a holistic approach to motivation. In the 20^th century, most reward systems and Employee Value Propositions (EVPS) were designed based almost exclusively on extrinsic motivators and financial incentives. But as a result of economic changes, cultural shifts, and technological advances, a growing number of scientists and practitioners have called for a more comprehensive approach to understanding what employees want at work. For example, in The Good Job Strategy, Zeynep Ton argues that the best jobs meet both the basic needs (e.g., pay, benefits, work schedule) and the higher order needs (e.g., growth, purpose, belonging) of employees. Our latest research shows that this makes sense. Based on data from over one million employees working in 128 organizations, we found that employees are more engaged at work when both their extrinsic and intrinsic needs are met. If you are trying to win the war for talent, it is critical to develop a holistic understanding of your workforce, considering not just their financial interests, but also their psychological needs, physical health, and emotional wellbeing. Focusing narrowly on just one element – particularly extrinsic motivators like compensation – may not be effective.
   
5. They are preparing their employees for the future of work. These are disruptive days. New technologies and innovations are changing the world of work, altering work processes, job responsibilities, and entire industries. Economist Klaus Schwab argues that because of technological breakthroughs across a variety of domains – including artificial intelligence, robotics, nanotechnology, and biotechnology – we are on the brink of a fourth industrial revolution that will “fundamentally alter the way we live, work, and relate to one another.” Inside organizations, these changes are already creating new jobs and eliminating others. Many business leaders are realizing that to compete in the future, they need to start reskilling their workforce now. Fortunately, the majority of employees are motivated by continuous learning. In our own research, we have found that learning, development, and career growth are critical needs for most employees. When employees feel they can reach their full potential at work, they work harder, stay longer, and perform better. When they feel stagnant, many start making plans to leave. With the dual goals of organizational evolution and employee engagement in mind, the most forward-thinking organizations are working diligently to prepare their employees for the future of work.
   

Creating a conscious organizational culture isn’t easy, particularly given the pressures that modern corporations face. But mounting evidence shows that it’s worth it. The best way to find out what kind of culture your organization has is to ask your stakeholders – starting with your employees – about their experiences and observations. As Edgar Schein has noted, “If you do not manage culture, it manages you.”