Episode Transcript
[00:00:07] Employees just want to be free. That's the topic I want to talk about today. And this particular podcast is the summary of a whole bunch of things that I've been doing this last week that I want to share with you. And they have to do with employee activation, the four day work week, the infinite game, my trip to transform, and a few other conversations. I had my discussion with the head of HR at OpenAI. So the first thing I want to start with is just to sort of point out something that you may not be aware of, which is that we, as companies, live in an ocean of workers.
[00:00:50] We can't tell workers what to do. They essentially tell us what to do. And sort of the analogy that I've come up with is if you're in a fishing boat and you go out into the ocean to find fish and the fish aren't eating your bait, you don't get to change what the fish are going to do. You got to change the bait. And this is what's been going on to the workforce, and it's hit us like a ton of bricks in a big hurry. The workforce, the population of employed workers, has radically changed in the last few years, and we have to adapt to this. And in a sense, they are now telling us what we need to do in our companies. We're not telling them now. What do I mean by all this? A whole bunch of evidence to point this out. First of all, there was a really funny podcast in the New York Times about what it's like to be 32 years old. And as I listened to the podcast and I was looking up the data, the largest cohort of workers in the US, the greatest number of people, is in the segment, 31 to 33 years old. Those are baby boomer children who have now reached that age. There's almost nine to 10% of the US workforce in that segment. These are people who are having a hard time buying a house. They're deciding whether they want to have children or not. Some of them are questioning their gender identity. They're wondering where they want to live. They've grown up in a society where they had access to global information every minute of their lives. Digital technologies are natural to them. They've gone through a tremendous trauma from the pandemic, because the pandemic hit them right at the beginning of their careers, the most formative time in their professional or working lives. They've been going through inflation, and they are working in a job market where there aren't enough workers. So they see a lot of opportunities, and so they as in a sense, the leaders of this new cohort of workforce are saying to us, I'm not going to do what you tell me to do. I want you to do what I want to do. I don't want to work on Fridays. I'll get my work done four days a week. I'm going to take Fridays off. I hope that's okay with you. I'm going to work from remote. I'm not going to come to this meeting. I'll listen to the recording. I'll check in later when I have time. You know the employee activation story, I talked about this a few weeks ago, and the evidence of that is the fact that if you look at all of the memes that have hit the Internet, whether it be quiet quitting or lazy girl jobs or work your wage or a bunch of others, these are the feedback or the reactions of younger workers who just live in a very, very different world than we did. I'm in my late 60s, so I'm not in the cohort. I'm in the baby boomer, the late baby boomer cohort. But this is a situation where we don't set the rules of what the job is they tell us, and not with bad intentions. Most young people who are in the workforce actually have a lot of good ideas. In our particular company, for example, we have mostly younger people. The whole big reset initiative is run by younger people in our company that I would never have dreamed that it'd be so successful. The whole JBA is run by a much younger group of people than me. So this is a completely different way of thinking about our job as HR people, our job as organizations. And it led me to the conclusion that when we did the research on the dynamic organization that we launched two weeks ago with Gloat that I talked about in the last podcast, organizations are not becoming dynamic because some McKinsey consultant or some Burson associates consultant told them it was a good idea. They're becoming dynamic because they have no choice. The workers, the employees, the workforce is saying to companies, if you don't treat me in a more flexible, dynamic way, I'm not going to work here or I'm going to check out. And so dynamic career mobility, promoting people earlier in their careers, giving people leadership opportunities early in life, giving people developmental growth, allowing them to move between roles, giving them flexibility in their location and time.
[00:05:14] These are mandates being foisted upon us by the fish in the sea in which we live. So this isn't us telling them, this is them telling us. So this whole idea of how the workforce has changed in the post industrial age is a very, very significant thing. I'm going to talk a lot about it. Irresistible. I have a lot more things to share on it now. One of the outcomes, and really symptoms of this effect is the four day work week. Four day work week sounds like a productivity initiative that was developed by some consultants. I don't think that's what it is. I think what it really is is employees all over the world saying to their bosses, I got other things to do. I really would like more time for this, that and the other thing. I have a dog, I have children, I have some family. Things I want to take care of. I want to do some traveling. I'd like more flexibility and companies realizing that in this day of productivity, we need to try to institutionalize a more flexible work environment. In our company, we have enormous amounts of flexibility for people. We don't really care what they do as long as they show up to two meetings a week. SAP allows people to share jobs with their peers.
[00:06:29] Many, many companies are implementing talent marketplaces to create more flexibility. But the demand from the workforce has led to the experimentation of the four day week. Now, the historical context for the four day week is that Henry Ford in the 1920s came up with the idea of the five day week, which was then coded into federal law for hourly workers, that if you work more than 40 hours a week, you get overtime. And most states have enforced that. So a group of politicians in Washington, led by Bernie Sanders, decided that they were going to institute a 32 hours week mandate as a federal law. And they actually asked me to contribute to this hearing that took place this week. I couldn't get there, so I wasn't involved. But I talked to them about it in the process.
[00:07:21] And the theory coming out of Washington, by the way, this law is very unlikely to be adopted. But the theory is, because of workforce productivity, tools and AI, we don't need as many workers. The impact of overwork is negative on people's lives and their health. And therefore, we're going to mandate that companies reduce their work hours to 32 hours of pay at the same wage as 40 hours.
[00:07:48] Now, the reason, again, this has happened is because the politicians seem to have picked up this signal from the workforce that they want more flexibility. I don't think they're barking up the right tree, though, because the solution is not to force employers to do this. It's to assist employers in doing it and provide more education to employees so that they can get more work done in the four days and be more productive. In a sense, technology to improve productivity is going to happen regardless of what the federal government does. Every company makes a financial decision between labor and technology and capital. And when the labor cost is higher, they can spend more money on capital. And that's just the way the economics work. That's not an opinion or a value judgment. It's just the way that the business cycle works. And so if we want to take advantage of people's opportunity to work four days a week, what we really need to do is incent employers to do more of this experimentation so that they can implement it. And by the way, it's happening right now. I mean, a lot of you, I'm sure, have workers that check out on Friday afternoons, and they do their work over the weekends or whenever they have time. So I thought that was kind of an interesting discussion. The other thing that came up in that whole congressional hearing was Sean Fein, the head of the UAW, was making a big, impassioned plea for the four day week because auto workers get tired and they get sore backs and sore feet and so forth for working long hours. And once again, I think most employers know that, and that's the reason they make accommodations, various things, to make it easier and easier for people to work more hours. They also know that it's easy to lose employees so that they want to give them flexibility so that they'll stay. I know that's very true in healthcare. That's very true in retail. That's very true in many manufacturing industries. And as to the issue of wages, if you want to raise wages in a highly flexible culture and workforce like we have today, the number one correlated factors of wages is skills and education.
[00:09:54] Not the number of hours you work or don't work, or whether your employer has to pay you overtime. In fact, the thing that employers want more than anything else, and you know this as well as anyone listening to this podcast, is more highly skilled workers. How do we create more highly skilled workers? It's actually not that easy. Most people who are working for a living don't have time to go back to school. They don't have time or money to go back to school. They need to either learn on the job or on their spare time to the degree they have any. So, as I have always said, the learning curve is the earning curve. So if we want to create more flexibility and increase the wages of people, it's not about mandating four day week overtime. It's about giving them the education they need to develop more skills and I know as well as you do that most corporations are going to do that themselves, even if the federal government doesn't mandate it. So this new, highly flexible, highly diverse workforce is forcing a lot of issues to be discussed that affect us in HR, including, of course, diversity. We now have gender diversity, we have cognitive diversity, not just racial diversity, all being very, very common issues in this young 30s workforce that simply wants to be free of the restrictions and the definitions that were made about work many, many years ago. In fact, decades ago. Now, the second thing I want to talk about is the transform conference. I had the opportunity to go down to Vegas one more time. I was just there last week, talk about Galileo and meet a lot of people. And what I did is I told the audience the story of how we built Galileo and what it does, and Galileo is going into general availability for all of our clients this month and next. And then we're going to do a public launch at our conference about some new things coming, which you're going to be pretty jazzed about. And I told that story and really had a lot of interesting conversations with lots and lots of people. But as you wander around the conference, it's a little bit of an OD conference. About a third of the people, there are vendors, about a third of the people there are VCs or in the venture community, and then of the remainder are either HR people, retired HR people, and consultants. And they had a trade show. And I went through the trade show, and it was really, really fascinating to me. About 80% of the vendors were selling what I would call very next generation, over the top benefits programs. Programs to help employees buy their first house, programs to help employees who have cancer, programs to help employees who have long term disabilities, programs to help employees who have cognitive issues, programs to provide psychedelic drugs to employees that have mental health issues, programs to help people with menopause, programs to help people with fertility. These are things that would have sounded ridiculous a decade ago, and they sounded kind of OD five years ago, but now they're becoming kind of mainstream benefits. And I was asking myself, why is this because workers want them? Because this new, highly empowered, flexible, younger workforce is asking for help with these issues. On the whole category of mental health, the positive thing is we've destigmatized it. When I was a young man and had various issues in my family that had to do with mental health, nobody ever talked about it. Never. You would never tell somebody that you're going to a psychologist or a psychiatrist. Today, it's talked about in podcasts and articles and daily life. It's an accepted issue that we all have to deal with. We all went through the stress and trauma of the pandemic. We can all relate. OCD, depression, the impostor syndrome. Issues are commonly discussed issues. And that is a really, really healthy thing for us. So I would just say that the transform conference is one more set of evidence to me as I stitch together the connections of how empowered and important it is to rethink what is going on in the workforce. And when I say employees want to be free, I don't mean they want to work for free or they don't want to work. I mean they want to be freed from your shackles that you created in your company that held them back. And that leads me to the topic of leadership. We have been doing some fascinating work with Hydrakan struggles on leadership, and I'm going to be giving a webinar on this one week from today if you'd like to come up with the sign up. It's pretty full already. And what we're going to be talking about is how AI is enabling companies, just beginning to enable companies to identify hidden leaders, pools of leadership that you never knew you had. And here's why that's so different. In the traditional models of leadership, we had the Ram Sharon five stage, 35 year pipeline to general management, nine box grids, succession management, secret rooms filled with lists of people who we want to promote, et cetera, hypos. All of that still makes some sense for very senior leaders. But the majority of the leadership projects and roles you have in the company are actually not at the very senior level. They're people to lead projects, initiatives, sales opportunities, channel relationships, business initiatives in different geographies, restructuring things you guys do in HR. Most of the things we do need a leader, not necessarily a line leader, but a functional leader who knows what's going on. And those leadership opportunities oftentimes go to somebody in their 20s or their 30s who hasn't been through the Ram Sharon leadership pipeline. They're learning on the job. And so what we're doing with Hydrich, you're going to see this next week, is they're introduced a technology or a solution that's called leadership intelligence. It's the hydric navigator that shows you how to identify these latent leaders through using AI and some of their other assessment technology. And it's a really important dimension of this new workforce and freeing the new workforce to behave and gain the opportunities that they want and that they feel is appropriate for them at their stage of life. By the way, Joel Hellermark, who's the CEO of Sauna, who I have great respect for, we've become very good friends, is 28 years old. And we had a funny situation on the keynote where they were introducing him as one of the Forbes 30 under 30 technology leaders. And I stood up as I started the conversation with the audience, and I said, I'm really excited to be here with one of the 30 under 30 Forbes people. I happen to be one of the 30 under 70 Forbes people. Joel is actually younger than my son, but that's not relevant because his capabilities and his experience and his judgment warrants being the CEO of a very successful young company. And you've got people like that in your company all over the place. And that is another part of this idea of freeing the employees that you have in your organization to make them more successful. Now, the final point I want to talk about. I want to talk about two more things. I want to talk about talent density for a minute, and then I want to talk about the infinite game. I talked about talent density a lot last week. There's a whole article on it. I want to make one more .1 of the fascinating conversations I had this week was with the head of HR for OpenAI. And I won't get into too many specifics, but what she basically told me is talent density is almost the most important thing she's thinking about. Because the reason OpenAI is so successful is because there are a very small number of people who are responsible for some of the most important innovations they develop. And those people, if they leave, would potentially, or could potentially crater OpenAI. And as she described, the strategy is, this is a mission driven company. They are here to develop the safest next generation AI possible for the world. And that is their mission. Their mission is not to sell a bunch of software or to beat the competition or whatever else you might define. And she told me, and I believe this is true, that if you want to increase talent density, you have to always think about your mission, because you can then attract the most ambitious, high performing, intelligent, or skilled people into your organization, because they will align with your mission. And as you hire more highly skilled people, the idea of talent density is you don't dumb it down. As I described in the article, you increase the density by hiring smarter and smarter people who increase the productivity of everybody else. And that is the number one thing she's focused on over there at OpenAI, as they double the size of the company this year. And that leads me to the final point, before I wrap up, one of the things Joel gave us at Transform was a book called the Infinite Game by James Cars. And it's a very interesting philosophical book, and it describes essentially the world as two games, the Infinite game and the finite game. The finite game is the game that you either win or lose. The infinite game is the game that goes on forever. And you can think about business and politics and war and your life and everything else in the world in terms of either being the infinite game or the finite game. In the infinite game, you don't play to win. You play to continuously improve and continuously reach your ultimate vision, whatever that may be. The example he gives is the Vietnam War. Those of you that remember it, in the Vietnam War, the United States won every single battle of that war. More than 3 million North Vietnamese were killed in that war. Ten to 100 times more people than the Americans that were killed. Yet the Americans lost the war because we were playing a finite game, and they were playing an infinite game. You could argue that Russia is playing a finite game in Ukraine, and Ukraine is playing an infinite game. What does this have to do with business? Well, if you want to build a company that attracts these highly empowered younger people, if you want to build great talent density, if you want to sustain the competition and the transformation that's going on around you and be a dynamic organization, you have to have a mission. You have to know where you're going. You have to accept the fact that there will be interruptions, there will be competitors, there will be changes. And sometimes you're not going to do as well financially as you thought. But that's okay, because you're in the infinite game, and you're going to keep going. If you define your company about being a product or a revenue stream or a solution to your shareholders or some sort of market share grabber, you may not be in the infinite game. So I would encourage you to take a look at that. Simon Sinek's done a bunch of stuff on this, too, that concept. I particularly was attracted to that concept because Joel told me that's the way he's running sauna. And that's the way I've been running our company for a long time, which is that we're not in this to win a deal or to win a customer. We're in this to make the world of HR better for companies, for businesses, for employees, and for HR professionals. And that world never ends. That mission goes on forever. This is an infinite mission for me, and that means that we can be infinitely flexible and constantly come up with new ideas and innovations to solve against that mission. Galileo, of course, being one of those. So all of these sort of dots were connected for me this week. And so I want to leave you with that stuff to think about over the weekend. It affects performance management, it affects hiring, it affects leadership, it affects your culture. It affects the way you operate as an HR professional and hopefully gives you a little bit of a bigger picture on the value that you and we provide to our employers, our employees, and the society as a whole. Have a great weekend, everybody. Talk to you again, sooner.
