Episode Transcript
[00:00:06] Good morning, everybody. Today, I want to talk about politics a little bit. Citizenship, and then just a touch on inflation.
[00:00:13] Of course, we had over the last week the Donald Trump conviction. And, you know, that adds to the long list of political issues in the United States that people are debating about, immigration, the war in Israel, the war in Ukraine, income inequality, taxes, etcetera. And there is no end to these issues because political systems are designed to arbitrate differences of opinions. That's the reason we have a political system. So let me take a step back and talk about the topic. I had a call on Friday from a reporter, and she asked me, what should HR people do about this? And I gave her a pretty bland answer, and I'll go through it now on the podcast so you can all think about it. The reason we have political systems in the world is to find a way for individuals and businesses to legislate, debate, argue, and negotiate the resource allocation of a country, of a state, or a city. And that includes, you know, our tax system, in some sense, has a lot of political implications. Our laws, where we put cities and buildings and streets, the resource allocations for education, the resource allocations for infrastructure, and all of the things that affect our daily lives. Generally speaking, most human beings in every part of the world have exactly the same aspirations. Safety, health, a place to raise a family, a good life, a career, some fun, a good environment, a healthy, safe living experience, whether it be in an apartment or a house, and, you know, an environmental experience in the world that is positive wherever you live, whether it be in the beach, in the country, in the city, whatever, the question is, how do you get there from here, and how do you allocate the resources? And the political system is designed to prevent out and out wars, out and out fights, arm wrestling, and other things to allow that to happen. The one we happen to have in the United States is called a liberal democracy. It's often called our democracy. And we have voting, and we have legislators, and we have representative government where we don't all participate in the government. We vote for people who participate in the government, so forth. Short of that, you have people fighting with each other.
[00:02:48] Now, in some sense, companies are very similar to societies. I've always felt that a company is essentially a small society. We have to make decisions in a company on how we allocate resources as well. How do we pay people, how are we going to decide who gets promoted, who do we hire, who gets laid off if things go poorly, where we allocate resources for products and investments, etcetera. You could sort of presume that the CEO makes all those decisions, but they don't have all the information on what to do. These are imperfect decisions. They can hire consultants and all sorts of support staff to make those decisions. But in effect, they are also forced by the employee base, by the stakeholders, and by customers to make decisions that benefit everybody. I was at a Starbucks last week when I was at irresistible. I was getting up early and going for walks around town, and I went to the Starbucks near the LA live center several times. They open at 05:00 a.m. and you walk in there at five, after five and there's a bunch of orders that have been collected through the Internet. And this poor woman is sitting in the Starbucks trying to make them as fast as she can. And you can tell she's not in a good mood. She didn't even have any help. There was only one person in there. And then somebody else comes in, about 515, I think. And, you know, we're getting our coffee, the people that are standing in line, and it's not a particularly positive experience for anybody, her or us, because she's too busy. I know the CEO of Starbucks is working on this, and Howard Schultz is involved in it too. That is not a good thing for Starbucks. That is not a good thing for us. It's not a good thing for the employees. So whether the CEO of Starbucks thinks that he or she can make more money by automating and forcing employees to work harder doesn't really matter, because those employees will rise up. They will activate themselves, as we call it, and they will do things to force the company to adapt. And we believe, and we have done research on this. And we had a whole workshop, we had a series of workshops out at last week that if you don't accommodate and listen to the citizens or employees of your company, they will make it hard for you to run your company. There will be a union. They'll quit. They will quietly quit. They'll have low productivity, low levels of innovation, low levels of customer service. So politics to me, in a general sense, is very similar to what we do inside of our companies as it is in the outside world. Now, when we get involved in national politics in the company generally, it's a problematic situation. So most companies really try to prevent or avoid taking political positions, first of all, pragmatically, because, you know, politics change. And if you've taken a position on one side or the other, you will oftentimes pay for that in the next administration. Most companies lobby for legislation that's on their behalf in the United States. That's actually considered to be the right thing to do because the lobbying system is actually the way our system works. You could argue about whether citizens United was a good decision or not, but when individual employees are unhappy about what's going on, we don't really want arguments and fights to break out in the workplace. That is in some sense a category of our DeI strategy. I don't think very many companies really want to take a position on Donald Trump one way or the other simply because they don't know the implications of doing that. But employees will, of course, because they're voters and they're going to want to talk about it. So what we want to do is let them talk and just make it clear that if they're not happy about the way things are going in the outside world, they should discuss and debate and be inclusive and respectful of the other people in the company about their opinions. And very few companies will take a company wide position on these kinds of topics. Occasionally it happens, but I don't think it's very common, but I think it's in some sense a lesson for us on how we run our own companies and how we deal with the issues that we have in organization and governance in our corporate structures.
[00:07:23] Now, you know, I've studied this for 27, 28 years, and I remember the very first industry study I ever did was called the High Impact Learning organization. It was the one thing that I did that made me realize that I was actually going to end up being a good analyst. And when I looked at corporate training investments, which is a $275 billion market, so it's a very big area of business and companies, it tends to have political issues. If you centralize a lot of decision making about anything, but particularly L and D, the organization responds by revolting against the centralized group and doing their own, essentially revolutions and doing their own thing without telling you. If my salespeople are not getting trained by the sales training department in headquarters or wherever it may be located, and I can't get it to respond, I'm going to do it myself, or I'm going to hire somebody, and I'm not going to tell them that I'm doing it unless they find out and act like the police to stop me. You know, that's kind of like a political statement.
[00:08:35] And the way we need to think about all of these decisions about how we accommodate stakeholders in the organization, which is very similar. The way we accommodate stakeholders in the political world is using a word which I call citizenship. Citizenship, to me, is a really wonderful word, because what it tends to mean is you as an individual. We as individuals have two fundamental roles in society. One is our own personal role. What do we want to do for ourselves, our family, our friends? And the second is, what is our role? To help take care of everybody else and the system around us.
[00:09:14] I won't get into debating Donald Trump's positions on all this, because, I don't know, I think you could argue about his biases. But in general, we all have to be good citizens to participate in the collective decision making of the company. If the company decides to do x and we think it's a bad idea, we have to discuss it, debate it, decide what role we play in it, and do the best we can to go along. Now, I worked at a company in the eighties, early nineties, where there were a lot of problems between different groups who didn't agree on the company strategy. And we had this weird culture that lost its citizenship tone, where we called it watching the train wreck, where one group of the company would watch another group of the company fail and point at them, but not contribute to the solutions. I can't quite figure out how that happened. This is a software company I work for. I'm not going to mention the name of it, but I think a lot of the reason it happened was the leadership team was doing a poor job of collective listening to understand the collective opinions and information in the company. They were making a lot of top down decisions on their own. A lot of people didn't agree with them for a variety of reasons. And so there was a tendency to not work together on projects, and the company eventually was sold, and for much less than it should have been. Just like in the United States, you know, in our government, if anybody in the United States decides not to contribute to the political system, to disobey the law, to start a fight, whatever, they're taking a risk for themselves and for the country. The way it works in the political world, outside of a company, of course, is you vote for elected representatives and you advocate and take political action and so forth inside the company. It's kind of the same thing. If you, as an employee or as an HR person, really don't believe that the company is doing the right thing for a whole bunch of reasons, business wise or socially or otherwise, you really should speak up, and there should be systems and tools to help people speak up. Ergs are kind of like that. I think ergs start out as accommodations to people so they feel better. But I think ergs are actually a source of new ideas for the company when they're done well. Open town hall meetings, empowering managers to make decisions locally, just like we have a local government in the United States and a state government. We want to localize decisions as much as we can. I actually think that localization process is not used enough in companies from what we learned in a lot of our workshops. And also reinforcing the culture, the culture of respect, the culture of innovation, the culture of growth, the culture of cost reduction. Whatever your culture, the culture of safety, whatever your culture may be, you don't have to do all those things. Companies have different cultures. Premium brand companies have cultures around quality customer service, legacy history. Other companies have cultures of safety. Other companies have cultures of low cost, of quick service, of customer intimacy, etcetera. When you have a strong management and corporate culture, these sort of political differences between people can be arbitrated pretty easily because you can go back to the culture and rely on it for decision making, just like in the United States. We believe more or less, in having a free country on individual freedom, on growth, on opportunity, on fairness, and all the other things that make the United States what it is. And so we, and in some sense, not only participate in the political system, but we actually have our own political system. And when terrible things happen, and, you know, I think the conviction of Donald Trump doesn't go down to me as a terrible thing. It's just a very strange thing. But, you know, the death of George Floyd, for example, and other things that most people would say are really bad. We in our companies rely on our internal citizenship to assimilate and adapt and understand what these things mean. Now, the last couple of years, there's been, for example, a real backlash against Dei. It's interesting, it's kind of toned down lately, but it's still a big problem. There's some research we're going to publish in the next couple weeks on pay equity that we just finished doing with some data from vizier, and it shows that pay equity is still a problem for the same job, the same level, the same tenure. Women make net less than men. I don't have the data on African Americans or other minority groups, but it's probably still true in a lot of different areas. Diversity and inclusion, whether you organize it as a whole, big corporate DEI, police force, or as just a cultural value, is a business practice that most companies believe in. It is a strong correlation to financial performance, has a long, strong correlation to customer service and growth. And the reason is it's pragmatic when people consider each other as peers and they talk to each other, it's easier to hire people. It's easier to build teams, it's easier to innovate. It's easier to build a growth mindset in the labor market, which is very tight. It's easier to find people that want to work for you in different geographies, you're more representative of your customers and so forth. So, you know, there are many things that we do in HR that feel like citizenship programs, including environmental programs, giving back to the community, etcetera, that are both good for external citizenship and good for internal citizenship. I remember about a year or two, probably two years ago, I interviewed the person at the time who is the head of DEI and employee citizenship for Workday. And she said, one of the things they do at workday, and I think a lot of companies do this, is they localize the citizenship investments in the different cities around the world where workday does business. So a workday office in Boulder, Colorado, could spend its money and time cleaning up trails and contributing to environmental causes in the local community. One in Paris could do programs to help the homeless or blighted parts of Paris, etcetera. So we actually, in some ways, in our companies, have the same structural systems as our society. I'm not trying to tell you things you don't know, but I'm trying to point out that when I talked to this reporter and she was asking me, what should people do companies do about the Donald Trump trial, I said, well, I don't know. This really isn't that different from everything else that happens in the world. That's controversial. There will always be controversial things. The acceleration of change is kind of astounding. If you think about where we now sit in mid 2000, 220 24, we have two wars, big wars going on in the United States. Inflation has not receded. The unemployment rate is an all time low. Despite that, young people are having a hard time finding jobs. If you read the Wall Street Journal article that came out last week, because employers are not sure who to hire based on the skills they're looking for. AI is ripping through our businesses, potentially disrupting and revolutionizing what we do. We have global climate change. So I don't know that this level of change is going to change. I think the pace of change is what it is. It's something we're always going to have to deal with. Many, many controversial issues. For example, in my city, I live in Oakland, California, which is a very, very heterogeneous, diverse city. We have potholes. And we have people who want to put bike lanes here and there and crime, all sorts of things, you know, that people are really upset about. The mayor keeps getting recalled.
[00:18:00] At least we're talking about it. I actually look at this as thank God the system is working. Thank God we have the system, because these are intractable problems to solve by any one human being, and we have to work together on them.
[00:18:15] My big story about what we do about the political situation now is we have to talk to each other. We have to work with the system, improve the system as much as possible. And our senior leaders have to pay close attention to the hearts and minds and aspirations and ideas and innovations and good ideas of our employees, just like we want our political leaders to do the same thing for us as citizens, too. So if I take a step back and look at where we are, I think I've given and written articles on this at least half a dozen times during my career as an analyst, maybe more, whenever something big happens in the outside world. So the way I would sort of summarize this podcast today is whatever position you're taking on the political climate in your country, and every country is different. I know that we have to do two things. We have to act as citizens of our country, which really isn't my place to tell you what to do, but you know what that implies. But use the same idea inside your company.
[00:19:26] Companies are collections of individuals. Great companies work as teams. They're not top down hierarchies driven by dictators. Some companies are like that, but they tend to underperform. When we create systems and a culture, discussion and debate and people feel included and they're involved in decisions, you won't end up with the watching the train wreck type of problem that I talked about earlier. Your company will adapt. You will be what we call a dynamic organization, and you will live truth to your cultures and your values. When external things happen like the one that happened this week, we just have to talk about it inside the company and not focus on it, because it isn't really our mission in the company to deal with those topics. We have our own challenges and issues in the company, and that's really where we should be spending our time. I don't know if this podcast was that helpful, but given that I've been dealing with these issues for 28 years and talking to HR people about them for so long, I thought this might give you some perspectives. And I'm really interested in your feedback on some of these things. I hope you guys know how to reach me. You can reach me on LinkedIn. You can reach me on email. You can send us forms on the website. By the way, let me just point out one more thing.
[00:20:50] In the Josh Burson Academy, we have a series of courses and a collaborative experiences that you go through on citizenship, on diversity, on inclusion, on well being, on leadership culture that are really, really well done. I mean, we don't charge probably enough for the JBA, but if you want to get online with some other HR people and talk about this stuff, that is a fantastic place to go. So go check it out. We have a bunch more courses coming out this summer. And, you know, I'll be in there with you and we'll get, we can get online and talk about stuff there. Okay. Have a great week. And I'll talk, talk to you guys next week.
