The most important component of long-term sustainable advantage for any firm –regardless of its size–is its ability to attract, retain, inspire, and grow talent.
Talent is the sustainable advantage.
It is talent and only talent that creates and/or preserves every other form of sustainable advantage whether it be innovation, new ideas or superior service.
If a Brand is experience it is employees who ideate, create, design, and deliver the experience.
If cost management is a key goal, then focusing on a fewer better paid and trained employees working at their full potential with minimum external monitoring, but maximum internal motivation is likely to yield lower costs than hiring the cheapest labor.
Employees as advocates.
Today potential employees and customers have access online to a spectrum of resources to evaluate culture and advocacy of existing employees of a firm.
Employee advocates attract other employees and are the best salespeople to convince potential customers.
So maybe instead of focusing on customers or technology or shareholders we should focus on the key to everything.
Rather than Net Promoter Scores, ESG goals, ROI metrics we should better understand the people who drive the results we are monitoring.
Let us focus on the players rather than the equipment, the field, or the scoreboard.
There are several ways to evaluate employee joy from observed metrics such as average tenure, turn over, percent of offers accepted, the premium one has to offer to hire a person, to exit interviews, custom surveys, focus groups, town halls, and tracking comments on third party sites and more.
Regardless of how and what one measures what is key is that every manager up to the CEO recognize and be motivated so that a huge portion of their success and compensation is based on how they lead, nurture, and grow people.
Many studies of the best CEO’s show they tend to focus on three key areas which are strategy, capital allocation and people rather than operations, revenue generation, investor relations or customer management. And those who have been superb at strategy and capital allocation like a Jeff Bezos but did not pay enough attention to people have recognized that it is now key.
Why is the importance of employee joy growing?
Today regardless of the type of job one is trying to fill whether it be a cook for a restaurant or an engineer firms have open jobs they struggle to fill even with significant compensation increases.
Some of this may be attributed to government benefits that enable one to not work at least temporarily.
But the issue is far deeper as we approach the two-year anniversary of the Covid-19 Virus which has through a combination of separating an employee from their place of work, concentrating one’s mind on the fragility of life and breaking rote habits has made many people re-think their lives and careers.
According to a recent Microsoft Survey 41% of employees globally are thinking of handing in their notice with that number soaring to 54% among generation Z ( 18 to 25 year olds).
And by companies insisting on a return to office when neither Covid is gone or talent are hankering for old ways gives further pause to the very people they are trying to cajole, threaten or implore back to containers and ways of the past.
What do employees want? How to ensure joy?
Regardless of industry, country or demographic group research conducted for Restoring the Soul of Business: Staying Human in the Age of Data identified six components of joy:
1) Money: People expect to be paid fairly.
2) Fame (Recognition): We all want to be recognized and feted for what we do even if it is to be acknowledged for a well completed project
3) Power (Autonomy): For some people this is authority but increasingly it is autonomy to be able to get a job done in ways and places that fit versus being monitored and micro-managed.
4) Connectedness (to bosses/fellow workers/customers): While work is not family it is a part of one’s identity, a portion of one’s community and feeling connected in positive ways to a boss, fellow workers and clients/customers who are respectful versus treating one as servile.
5) Purpose (Values and Culture of company): Increasingly purpose drives a lot of career decisions especially among Millennials and Generation Z. Purpose is about a set of behaviors and not just words and Culture is what happens when nobody is looking rather than posters and chants!
6) Growth (including skills): Every few years the landscape of every industry is changing and in addition to career growth many individuals are looking to build skills that will keep them relevant and sought after so they do not find themselves unemployable. Training programs, opportunities to try new assignments or work in different markets are all critical to growth.
Companies that win in the long run tend to deliver on all six but are particularly good at connectedness, purpose, and growth since this retains and grows talent for the long run.
As technology expands and gets more powerful and cheaper more and more work done by carbon based analog feeling things (humans) will be replaced by silicon based digital computing objects (computers) and the companies that thrive will combine the best of technology with the best of talent working with joy.
Because low-cost talent with no joy is an unfeeling commodity that can be replaced by a machine or can be underbid by someone with cheaper FTE (a full-time equivalent which itself telegraphs we are all replaceable widgets!)
People make the business.
Miniature Dioramas by Tatsuya Tanaka from the Miniature Calendar Series. ( Thank you to David Thurm former Chief Operating Officer of the Art Institute of Chicago and a reader of this thought letter for pointing me to them as something to feature. Take a look they are amazing.)
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Rishad Tobaccowala (@rishad) is the author of the bestselling “Restoring the Soul of Business: Staying Human in the Age of Data” published by HarperCollins globally in January 2020. It has been described as an “operating manual” for managing people, teams and careers in the age we live in and The Economist Magazine called it perhaps the best recent book on Stakeholder Capitalism. Business and Strategy named it among the best business books of the year and the best book on Marketing in 2020. Rishad is also a speaker, teacher and advisor who helps people think, feel and see differently about how to grow their companies, their teams and themselves. More at https://rishadtobaccowala.com/