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People First – Putting Humanity Back into the Balance Sheets!

With the COVID-19 pandemic having a longer shelf-life than initially expected, the conversation has been shifting from enabling remote teams to integrating hybrid teams into the way organizations are designed and operate. This is especially so as companies recognize the importance of dealing with possible future black swan events. With that, a slew of "new" buzzwords have arisen and are trending. There has been a fair amount of discussion on:

  • resilient leadership;

  • self-care;

  • how leaders and senior managers can better manage virtual/hybrid teams; as well as

  • what leaders and employees can do to make sure that they do not burn out.

This shift requires leadership to put humanity back into the balance-sheet by:

  • moving past a numeric or margin-focused approach to a humanistic way of doing business;

  • doing the right thing rather than say the right thing when it comes to people: and

  • being held accountable for their actions in a meaningful and equitable manner.

1. Shifting from shareholder value maximization to stakeholder value generation

There is a world of difference between the term “shareholder” and “stakeholder”. Shareholders are those who share in the earnings of the company. However, a stakeholder has a vested interest in a company and can either affect or be affected by a business' operations and performance. Typical stakeholders are investors, employees, customers, suppliers, communities, governments, or trade associations.

For decades, businesses have focused on Milton Friedman’s belief that a company’s “one and only social responsibility” is to “increase its profits”. But now, it’s time to shift to Larry Page’s definition of a business’s social responsibility – “to make sure that everybody in the company has great opportunities and they feel they are having meaningful impact to the good of society”. The World Economic Forum calls this "Stakeholder Capitalism."

The only way businesses can ensure that they empower their employees, is to focus on something outside of promotions and pay hikes. Cutting to the crux, businesses today need to look beyond numbers and margins and also consider the human side of operations.

Humanistic management is the way forward

As Stephen Covey once said, "Human beings are not things needing to be motivated and controlled. They are four-dimensional: body, mind, heart, and spirit." One thing companies sometimes forget, is that employees are as much a part of the community/patrons they serve. Your employees’ friends and relations may be hugely impacted by what you do.

During this pandemic, 45 of the 50 most-profitable American companies have made tremendous profits.

"The data reveals a split-screen inside many big companies this year. On one side, corporate leaders are touting their success and casting themselves as leaders on the road to economic recovery. On the other, many of their firms have put Americans out of work and used their profits to increase the wealth of shareholders."

Essentially, these companies were focusing more on how to make the balance sheet more profitable (margins) during this period to reward their shareholders instead of their stakeholders. Walmart for example, gave $10 billion to its shareholders, while 1,200 office employees lost their jobs. This despite having pledged, alongside other prominent CEOs, that maximizing shareholder profits no longer can be the primary goal of corporations.

Such decisions will negatively impact an employee's motivation and performance. In a UK survey, 65% of respondents stated that they wished to leave the company after the pandemic due to the poor treatment they received from their employers. The case is similar across the world.

In focusing on the human side of operating and taking a humanistic management approach – leadership must consider wisely the employees’ needs especially when it runs counter to their own or shareholders before taking operational/strategic decisions.

Cut down speculation with your own narrative - prepare stakeholders for change

There is nothing worse than speculation and rumor-mongering, especially during stressful times. Such speculation can lead to wrong information leaking out into the company and the world, spawning more problems. This is why leaders should create a positive and hopeful narrative that stakeholders can lean on. The truth is, your stakeholders will truly trust you, only when you are completely transparent about what’s going on. For example, accept that you are in a financially weak spot. But affirm that you will do your best to keep job cuts or pay cuts away as long as you can. This is still hopeful. Staying silent about it can lead to paranoia about job/pay loss, even when that isn’t the case.

In focusing on the human side of operating and taking a humanistic management approach – it is important to choose the appropriate medium to share this narrative.

Email, text messages, and bulletin boards can be effective for getting information out quickly and en-masse. However, meetings and one-on-one discussions can be more impactful in dispelling or addressing people's fear and myth.

2. Design thinking and humanistic agile development will lead the way

The current pandemic is proof that unexpected challenges can continue to twist and transform beyond recognition as time passes. With the Delta variant and now the Columbian variant, there’s no guarantee if or when the pandemic will end. In leadership committing to and taking action to put their people, their people's needs, and their people's experience at the center of their business operations, mission, and vision, design thinking and humanistic agile development can go a long way.

Here are a few steps companies can follow to do this:

Empathize with your stakeholder’s needs

Leadership must put themselves into the shoes of their stakeholders – be they employees, suppliers or customers. Understanding what the stakeholder needs or wants can be the best way to channel the company’s efforts especially during black swan events. Maslow’s Hierarchy of Needs theory can be a good starting point to judge what a particular group of stakeholders may want from you.

By being empathetic to stakeholder needs, companies need to be smart and strategic in their plans, making their long-term solutions more sustainable and resilient to the changing times recognizing the value of longer-term strategic goals.

Offer engagement that generates true value to stakeholders

Stakeholders can feel a variety of emotions during these painful times. From stress to fear to sorrow to survivor’s guilt, there are many ways they can be affected severely. Companies can explore:

  • Setting up a helpline where stakeholders can connect with the company to seek information about the brand and its offerings

  • Providing opportunities for emotional healing and spiritual growth in the form of –conversations with counsellors over a dedicated helpline, meditation/yoga classes, subscriptions to fitness apps, online prayer groups etc.

  • Having a fully operational command center that’s equipped with people and tools who can support employees on-the-job.

  • Affirmative and supportive promotional messaging to keep customers calm.

  • Investing in community development through charitable acts, volunteer work, hiring of local talent etc.

Such initiatives recognize that stakeholders are people with fears, hopes, feelings, and emotions and that they can count on your support.

Fix the crisis you have at hand, before exploring new opportunities

Black swan events are hardly the time to focus on idealization. The primary order of business should be company triage. This is where humanistic agile development comes in.

Companies must consider their people’s needs for technology and develop tools/software that put users at the center. In essence, simplicity and pragmatism are essential in technology development. The technology developed must be dedicated to serve the humans using it and not the other way around. For example, using AI to predict by when financial shortages are likely to affect the company and taking precautionary steps to protect employees from money/job loss. Or using a drone to deliver food packets to the buyer’s doors, instead of doing hand-to-hand delivery during the pandemic.

The priority here is to focus on quick delivery of technology and resources, over perfection. At sensitive times like these, the solution’s elegance is of less importance; rather the speed of delivery can make all the difference in the world.

Doing the above, are some of the key things you can commit to, to bring humanity back – not just into your balance sheet – but also your business.

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