We see growing evidence from all quarters that many companies are not loyal to their employees and that employees are less and less likely to express loyalty to their companies. People in leadership positions are challenged to find some basis other than company loyalty to hold an organization together and accomplish its objectives.
On the corporate side we see sweeping organizational flux because of the application of new technologies by traditional and new competitors, the impact of globalization and the rapid flow of capital within and across national bothers. Product lines are abandoned in the quest for greater profitability; corporate giants downsize, removing tens of thousands of workers, from the payroll; companies relocate headquarters or plants; acquisitions and mergers result in job losses. Quite often, such corporate measures have an impact on employment across national boundaries.
Loyalty versus Globalization
At the same time we see significant changes in behavior and expectations on the market side of the loyalty equation:
Employees’ willingness to relocate and change employers:
A more entrepreneurial approach to careers, with the growing possibility of pursuing multiple careers over a lifetime;
A search for the transcendent connection, community, and intimacy that people haven’t found in traditional workplaces;
Resistance to the segmentation of work and personal life.
It has become obvious that companies can no longer promise lifelong employment and that fewer and fewer workers truly seek it. Workers and managers alike are increasingly apt to operate without bothers, whether on the global map or on the organizational chat or in their mix of work and non-work interests.
A transition to something better
While it might be interesting to trace the causes of the death of the old loyalty or implicit contract in the hope of restoring it, there is little value in doing so. It’s more valuable to recognize the present situation as a possible transition period between one kind of bond between worker and organization and something far more effective and rewarding to both parties. What we are experiencing is a painful aspect of the transformation in our concepts of work and organization.
Under the old loyalty system, managers controlled and workers complied in organizations built on alliances of reluctant adversaries. Workers submitted to corporate demand in exchange for financial compensation. In such an atmosphere, loyalty was a cruel misnomer. Compensation was truly that – a counterbalance or recompense to make amends for something given up – as employees separated their work from other aspects of their lives and performed tasks that required them to be less than their full selves. These conditions fostered competition and even hostility both between employees and the organization and among employees.
This kind of bond hardly optimized what people could do in an organization. It was tolerable only in situations in which the leaders’ primary function was maintaining the status quo. As we turn to the future, leaders will be challenged to find or create a far more meaningful bond than the one forged by control and rigidity.
Convergence of Corporate and Individual Needs
The apparent parting of the ways between the organization and the individual masks the convergence of corporate and personal needs. The drive for innovation invites three key factors in organizational life:
Creativity arising out of an interplay of learning and doing in a risk-taking environment.
Collaboration that opens the way to innovation, from generating ideas to implementing them. It is widely recognized that innovation emerges through group process – “communities of practice” – much more than individual pursuits. The production of intellectual assets depends primarily on voluntary relationships instead of competition.
Commitment to shared purpose in an era of worker mobility and corporate flux, leaders have to find ways to get people to commit, for a time, to mutual goals and common value.
These three ingredients match basic needs shared by most individuals, leaders do not need to inject them into people. To be creative, to collaborate with others, and to have something meaningful to commit to are common human desires. Leadership therefore implies discovering ways to capitalize on this convergence of needs and align people in ways that follow them to fulfill their inner needs while serving those of the organization.
Bonds Built On Trust
What will be the basis of building bonds, with others and with the organization that will allow personal and corporate needs to be met? To a large degree this will come primarily through personal bonds, between leaders and follower and among followers. These bonds will depend on more than warm feelings towards others. They must be fashioned through working relationships in which individuals can rely on one another to work together toward some common purpose. People need something they can deeply commit to, even if on a relatively short-term basis. They need a group purpose – something more substantive than the pins, pizza parties, and propaganda extended by so many quality and productivity improvement programs. Relationships won’t be structures by corporate designers, but will have to grow naturally in human dimensions. This means that leaders face the challenge of rewarding their humanity and recognizing the humanity in others in order to sow the seed of trust.
The strength of an organization will depend increasingly on its level of openness and risk taking. Rather than looking to formal organizational structures to provide energy and direction, leaders will have to nurture bonds among people who have no set borders for where they work, on where they fit into the group or how this work fits into their lives. Earning trust is the first step in generating the bond needed for strong, creative working relationships. The resulting loyalties will be more genuine than the old company loyalty despite the fact that in a fluid world they offer no lifetime guarantees. The new loyalty will go much further than the old in promoting risk taking and creativity.
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