Episode Transcript
[00:00:00] Good morning, everyone. Today I want to talk about the role of kindness in business.
[00:00:06] And the reason I kind of felt like I needed to get this off my chest was I happened to be reading the Atlantic, and I know a lot of you probably don't read the Atlantic, and the front page article is an article called the Gleeful Cruelty of the White House X Account. And I read it and I was just shocked. And if you go look at the X account for the White House, you'll see what I'm talking about. Because we're living in a world where kindness in the public sphere seems to have vanished. In fact, there's more animosity than ever. We're going to take over Canada, we're going to take over Greenland, we're going to fight with Mexico, we're going to fight with Europe. We don't like Europe anyway. These kinds of narratives that are coming out of Washington are penetrating our lives. And at least for me, I wince every time I hear them. And I have to ask myself, is transactions success independent of kindness? And I think this is a legitimate thing to consider in the business community because you don't have to be kind to make a buck. You can lay people off, you can be really hard on people, you can berate people. And most likely, if you have a good product, you'll still have people that want to work for you and your company will still make money. So do you have to be kind in business? Maybe not. I mean, there's a lot of evidence that Elon Musk isn't particularly kind. I know a couple people that work at Tesla, and they like it. They like the company and they like the work. I don't know if they like him, but when. When companies lay people off now, quite frequently, it's done in a very unkind way, although there might be nice benefits provided you'll get an email or your email will get shut off. And so this general idea of kindness and respect and personal empathy just feels to me like it's declining. And so I want to sort of ask the question for a little while, does this matter? And if you don't believe me that this is happening, read the Edelman Trust Barometer as of only a month or two ago, about the state of trust and empathy that people feel in their lives. The data from that survey, which I've been reading that survey for more than a decade, is the worst I've ever seen. 60 to 65% of people believe that their boss or their CEO of the company they work for is lying to Them, which is just unbelievable to me because I don't believe it's true. And 35, 40% or more believe it is okay to retaliate against the company. In other words, practice some form of hostile activism if the company doesn't treat you well or if you don't feel that the company is living up to your expectations. I mean, that's just amazingly low. And then the employee engagement levels in general, if you look at Gallup, are about as low as they've ever been. So whether this is a kindness issue or not, the manifestation or observable reality of the data is that people don't feel particularly good about the way they're being treated.
[00:03:00] And I think that that's one of the reasons that Joe Biden lost the election in the United States and that these make the make America Great again times of themes are working because people feel that they're not being treated respectfully. Now, I think this goes back to two things. It goes back to psychology and it goes back to just sound business thinking. From a psychology and human relations standpoint, being kind to people creates a sense of warmth, a sense of psychological safety, a sense of empowerment, a sense of authority, and brings out the best in people. So even though you may be upset because somebody did something wrong, or you might be frustrated that something's not working well, or pulling your hair out because some part of the organization's underperforming and you're just not sure what to do about it, if you blow your top and treat people poorly, which of course happens all the time, the people on the other side of that conversation are not going to take it well and they're going to slow down, they're going to feel threatened, they're going to react negatively, they might push back on you, and you've just wasted a lot of time and a lot of energy and a lot of productivity and a lot of potential customer value on that interaction. So while I know many people maybe were raised in a family or a community where punishment was the teaching style of world in which they lived, in the business world where people have options, they're not your family, they, they work voluntarily, in some respects, a lack of kindness will result in lower productivity. It will also result in high turnover. We did a study, oh, maybe 10 years ago or more on employee recognition. What we found, we did a lot of analysis and surveys from many hundreds of companies. And we grouped companies into high recognition companies and med on low recognition companies, recognition being a form of kindness or respect. And the high recognition companies where People take time to thank others and respect and appreciate what other people are doing. Had a 70% lower voluntary turnover rate. That is a big, big number. Turnover is a financial problem. It isn't just an employee engagement thing. If people are leaving your company, you're losing skills, you're spending money rehiring, you're probably not getting much productivity out of people. You may be losing the best people, might be losing people early in their careers and therefore you're not getting the return out of your investment in training and so forth. So just from a financial standpoint, I could show you a pretty good argument that kindness is a good financial investment. The second issue with kindness is your ability to reinvent and transform and grow your company. I think there's, you know, to simplify a very complex topic. If you look at all the AI transformation that's going on in all these companies that we're talking to, and it's pretty much the same story everywhere we go. What we're trying to do in most businesses is we're trying to move from point A to point B. Point A being the current model of our company and the, you know, somewhat static or slightly underperforming situation we may be in. And it may be, you know, seriously bad in the case of intel or Boeing, or it might be sort of a lagging problem that we haven't fixed yet at Starbucks, or it might be an opportunity based problem at Nike. I mean, there's just all sorts of things like that. To get to point B, which is the better situation, and in order to get from point A to point B, you have to have a vision of where you're trying to go. You have to have plans and specific programs and investments to get you to point B. And then you have to convince people to come with you. Now that's often called change management.
[00:06:51] It's called culture. There's all sorts of words and, you know, programs and ideas and models for doing this. But what you find out in most companies is that the new plan, the new strategy, the new model, which maybe McKinsey helped you, built it or you did it yourself, isn't really the answer. The really the answer is how do we get there from here? How do we encourage, inspire, motivate, develop, train, coach, prod people along so they know what their role is in this new world we're trying to create? Well, if they're afraid and they don't feel respected and they feel like they're going to be judged, they may not go along or they'll go along Slowly, or they'll pretend to go along, but they won't really go along. And I would argue that being kind to people is one of the best ways to get them to transform themselves. Because the biggest reason people don't is transform themselves is fear. You know, some of us, I happen to be someone that's kind of reinvented himself, you know, multiple times. So I'm used to it. But most people aren't used to it. They're nervous about changing a new role, new company, new job, new division, new geography. And so there's this sense of fear that they have. And it's not, you know, massive, but it's there. And they want to know that if they jump into this new pool with you and they go in this new direction, it's going to pay off for them. And that is, to me, the reason that that Edelman data comes out is that because of AI, because of the political situations going on in the world, because of the changing nature of the economy, we're all a little bit nervous about what the future looks like. It's not clear what somebody's career is going to look like two, three, four, five years from now. If you're a manufacturing worker, obviously you've already been facing this through plant closings or some other automation project. But if you're a white collar worker, you're making the same, you're going through the same kind of mental gymnastics about, well, what happens if HR does get smaller, what happens if we do automate the employee and customer service? What happens if all the training systems are run by AI? What happens if recruiting is done by AI? What happens to my job? What happens to me? So the human side of business, the human side of transformation, the human side of growth, the human side of performance is very much a balance between ambition and excitement and energy and creativity and fear on the other side that maybe I can't pull this off and maybe I'll go find a job somewhere else. And honestly, the solution to that is kindness. The solution to that is empathy. The solution that is listening. For those of you that are parents, you know this, that every developmental opportunity or situation you're in with another person is some dose of kindness and some dose of tough love. And that's what business is like. I've had, I just had an interview this week and somebody asked me about my best manager, the best manager I ever had. And the best manager I ever had was a guy at IBM who I still just greatly respect. He's deceased now. And I really was kind of heartbroken when he left us, but he was a generally kind of crusty, very formal, button down, IBM type of manager. But he loved his team and he would do anything for us. And he was tough on us and he was honest and he was grumpy sometimes, but he made sure that we always did the right thing for the customer. And when there was a mistake, he was very, very open and clear that we shouldn't let that happen again. And in the one situation I had with him where I put together a massive proposal that had some pricing problems in it, he said to me, look, you know, this was a mistake and you know, it cost us a lot of time and energy here. Luckily the customer was fine with it. This is going to hold back your career. Your personal career, which could go a long way in this company, is going to be limited if you don't do a better job paying attention to detail. And that conversation, which was, to me, tough love, but it was done in a kind way, is something I never forgot. I reread and edit and re analyze everything I do now almost to a ridiculous extent to try to make sure I don't make mistakes. And I tend to be the one in the company that finds the typos or the fonts that are off sometimes more than everybody else. And it's not because I want to do that, but it's because I've learned that from him. There was a massive amount of kindness going on in his heart when he would give us that kind of feedback. And by the way, the people that worked for him followed him anywhere. We never wanted to have another manager. So this actually works now. Why are companies sometimes not kind? All sorts of good reasons. We're in a hurry. We have to get this done quickly. We can't take three weeks to go through the layoff process. We have to do it in three days. So let's just get it done and deal with the fallout later. And you know, I was just reading this book, Careless People about meta, which may or may not be true, but there's some pretty shocking things in there about what happens in that company. And you realize that sometimes companies are very unkind in the inside, but they perform very, very well on the outside. Maybe the conclusion you come to at some level is we can only afford to be so kind because frankly, we got to run a business here. So we've gone far enough and that's it. So we're going to just, you know, push ahead. So you have to figure out where that line is. I'm not going to tell you where that line is. It's different in every company. Our particular business, the one that we run here, we think about ourselves in the hospitality business, believe it or not. I know that sounds weird, but we really take care of our clients. And I would say through the last few years of getting to know our business, we find that the better we are hospitable and empathetic and good listening listeners, the better we do with our clients. And so we tend to be a very kind company. And I think it has to do with the people that we've hired and our leadership team and a lot of other things. I don't know if the typical company that makes parts or wheels or furniture or guns or ammunition or whatever it may be treats their employees that way. It probably comes down to the founders and the managers and the leaders of the company. But I'll tell you, regardless of the type of business you're in, the companies that are kind are the ones that outperform. I'll tell you, I'll tell you about my experience with Walmart, just really at a high level. When I was at Deloitte I visited Walmart multiple times. It's a very large account. Got to know a lot of people there and there were at the time a lot of articles written about why Walmart, Walmart was underpaying people and creating poverty in the country and all sorts of stuff. It's just sort of bad news. Well, when you go in and meet them, this is one of the kindest, most people centric companies I could ever have imagined. It was so different from the press at the time. And you know, I think you find you see that at Microsoft, you see that in Nvidia, there are lots of really high performing companies that actually are very respectful and very kind to their people. So for all of the companies that are, you know, tough and hard nosed and brutally competitive internally, there are probably 10 others that are the opposite. And then the final thing I'll leave you with, because this is kind of a high level podcast, is just what does this mean to you? You know, as somebody who's been around for a while, I'm, you know, practically 70 now. Every time I found that I wasn't kind or I wasn't respectful enough, or I went too fast or I jumped on down somebody's throat for some reason and I've done it, I really regretted it later. And I think we all come to work with our family histories, our personal histories, our psychological baggage, whatever it may be. And I think we have to think logically, if possible, that the golden rule of treating people the way you would like to be treated is by far the most powerful tool you have. Because when people believe in you, when they trust you, when they care for you and they know that you care for them, just like my old boss at IBM, they will do anything to help, to move, to transform, to change, to perform. They'll work weekends, they'll work nights, they'll double triple check stuff and they'll learn new things because they know it's in their best interest. So if you think about, you know, the way we're treating the world politically in the United States right now, there's going to be all sorts of negative implications of being unkind to other countries, just like there are in business. So I will just leave it with that, that there's a huge role for kindness in business. You need to think about this, you need to talk about it, and you need to sort of assess in every major decision you make. Are we doing this on the kindness meter? Far enough to the left that it's going to be perceived as a positive experience for the employees? Not all the way to the point of charity, of course, but are we kind enough? Because if we are in the transformational period of time we're in right now, and it's going to get even weirder in the next coming, coming quarters, I can guarantee you that we're going to need everybody with us on this journey. And I think kindness is an incredibly important tool and something we should just think about every day. Okay, there you go. Lots of interesting things coming next week. I think next week I'll introduce our new version of Galileo to you and talk a little bit more about some research we're doing on L and D&TA and some other things that are bubbling up here that'll be launched in the next couple of weeks. Thanks a lot. See you guys later. Have a good.
