08 Feb #159 – Caring for People–Heart, Hype or Hustle?
ESSENCE: The right WHY is central to leading faithfully in alignment with Biblical beliefs, principles and priorities. Doing the right thing for the wrong reasons looks good and probably “does good”, but it is missing God’s heart for our work. When an organization puts in places practices, or takes positions, that care for (or appear to care for) people (or the broader creation), it is important to look behind the actions and words to find the real WHY. Is it driven by heart, hype or hustle? In order for actions or words that “care for people” to come truly from heart, we believe the organization must embrace the heart change that moves it from business as usual to business a better way. It must have shifted profit from being its purpose to being a means. If an organization is still stuck in business as usual with Profit as Purpose, then its caring actions or words are likely hype or hustle.
If you have been reading our posts, you know that the right WHY is central to leading faithfully in alignment with Biblical beliefs, principles and priorities.
Business a better way requires heart change in an organization, and a key heart change is reversing the roles of people and profit, prioritizing the flourishing of God’s creation (particularly people) and putting profit in its proper place as a necessary means toward that end rather than the end toward which the organization is managed.
When an organization puts in places practices, or takes positions, that care for (or appear to care for) people (or the broader creation), it is important to look behind the actions and words to find the real WHY. Is it driven by heart, hype or hustle?
Defining Heart, Hype and Hustle
You might be wondering what we mean by heart, hype and hustle as the potential WHY’s behind an organization’s actions and words toward caring for people.
Heart. In order for actions or words that “care for people” to come truly from heart, we believe the organization must embrace the heart change that moves it from business as usual to business a better way. It must have shifted profit from being its purpose to being a means (and a very necessary means).
Like a person, an organization can have only one ultimate ambition or identity — one true “heart” (recall Matthew 6:24, “No one can serve two masters”). If profit is the “end” to which a business is managed, then, by definition, people can never be more than a “means” — tools of production to be managed toward that end. That true heart may be hidden among other “priorities” (you can’t have more than one, but that is a topic for a future post) in good times, but it is THE priority that remains “when push comes to shove.”
If an organization is still stuck in business as usual with Profit as Purpose, then its caring actions or words are likely hype or hustle.
Hype. What we mean by hype is when an organization’s actions or words toward caring for people are really about impressing or placating third parties such as employees, customers, vendors, owners or regulators.
It is not about caring for people because they are the organization’s priority and because it is the right thing to do. It is about caring for people (or at least appearing to care about people) because the organization’s leaders have determined that the appearance of caring for people will influence third parties in a way that is good for the goals of the organization–the bottom line (or the stock price) in the case of business as usual.
The Bible warns about hype in Luke 16:15:
You are those who justify yourselves before men, but God knows your hearts. For what is exalted among men is an abomination in the sight of God.
Hustle. What we mean by hustle is when an organization’s actions or words toward caring for people, particularly employees, are really about hustling to attract or retain employees.
Like hype, it is not about caring for employees because they are the organization’s priority and because it is the right thing to do. It is about caring for employees because the organization’s leaders have determined that the actions or words are ultimately good for the bottom line.
It is the appearance of caring for people for the purpose of manipulation and furthering a purpose that is not about the people. As we have pointed out in prior posts, business as usual and its assumptions of Scarcity and Self-Interest call for control and manipulation. People are particularly vulnerable to workplace manipulation through hustle when work as usual has led them to view work as an Idol and Identity–their source of worth and value.
Examples of Hype and Hustle
Are we being unfairly cynical in suggesting that actions and words about caring for people come from a WHY of hype and hustle when an organization is engaged in business as usual? Let’s look at what others have observed.
Hype. Again, hype is about caring for people (or at least appearing to care about people) because the organization’s leaders have determined that the appearance of caring for people (or the broader creation) will influence third parties in a way that is good for the bottom line (or the stock price).
• A recent Wall Street Journal article about the trend toward “mission-driven” companies notes “A big part of it is still about the money, namely chasing consumers’ pocketbooks and trillions of dollars of potential investment from environmental, social and governance funds.“
• When the Business Roundtable did an about-face to downplay maximizing shareholder value and stress the importance of other stakeholders, the Wall Street Journal published an opinion piece titled “Is There Real Virtue Behind the Business Roundtable’s Signaling?” Sadly, the authors concluded:
These findings suggest that Business Roundtable signatories aren’t leaders in socially conscious environmental, social or governance practices or stakeholder orientation. Instead, the average signatory is more likely to enjoy a large market share, and has an incentive to pre-empt regulatory scrutiny . . . .
• In 2018, the CEO of BlackRock, Inc., Larry Fink, emphasized in his annual letter to CEOs the need for companies to “benefit all stakeholders” because “society is demanding that companies, both public and private, serve a social purpose. . . . Without a sense of purpose, no company, either public or private, can achieve its full potential.”
Fink’s 2022 BlackRock letter is much more honest that “stakeholder capitalism” is about Profit as Purpose, but with a longer-term view–unlike the 2018 letter, it is not trying to put a “social purpose” alongside profit. When rhetoric is pushed aside, this view of “stakeholder capitalism” justifies serving all stakeholders because it maximizes long-term profitability for shareholders.
Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke”. . . . Make no mistake, the fair pursuit of profit is still what animates markets; and long-term profitability is the measure by which markets will ultimately determine your company’s success.
• In his book Woke, Inc.: Inside Corporate America’s Social Justice Scam, author Vivek Ramaswamy takes an in-depth look at hype with some scathing observations:
I’m fed up with corporate America’s game of pretending to care about justice in order to make money.
Once corporations discovered wokeness, the inevitable happened: they used it to make money.
Woke consumerism is born when woke companies prey on the insecurities and vulnerabilities of their customers by deflecting our focus away from the price and quality of their products. As it turns out, morality makes for a great marketing tactic.
Wokenomics is crony capitalism 2.0, and here’s how it works: big business uses progressive-friendly values to deflect attention from its own monolithic pursuit of profit and power.
• E.S.G. (Environmental, Social, Governance) investing initiatives have come under scrutiny and been subject to much criticism. For example:
The New York Times recently published an article titled “The Pushback on E.S.G. Investing” noting that “There is a profit motive to E.S.G. . . . If shoppers and investors are looking for environmentally positive offerings, then it makes sense for businesses to respond“.
A recent Bloomberg article talked about a top executive admitting “His firm’s low-carbon portfolios didn’t address global warming in a robust way. They were instead created simply because of client demand.”
Harvard Business Review published an article in 2021 titled “An ESG Reckoning is Coming”. It noted “According to research last year, investors who signed onto the United Nations [Principles for Responsible Investment] did not improve the social and environmental performance of their investments. According to the researchers, signatories ‘use the PRI status to attract capital without making notable changes to ESG’.“
Hustle. Hustle is about caring for employees because the organization’s leaders have determined that the actions or words are ultimately good for the bottom line. Hustle occurs when businesses are trying to avoid the cost of employee attrition or when they need to make special efforts to attract and retain employees in a tight labor market (such as existed recently during the “Great Resignation”) or a tight labor sector (as has existed in the technology sector).
Technology companies became famous for the perks and freebies offered to employees. During the tight labor market created by the Great Resignation (which we explained in post #120 should really be called the Great De-Humanization), companies began offering additional benefits, including the flexibility to work remotely, to attract and retain employees. The real WHY behind these “caring” actions and initiatives is becoming evident as the economy declined and the labor market loosened. Consider the following:
In August 2022, the Wall Street Journal published an article titled “Companies Are Cutting Back on Maternity and Paternity Leave“. The authors noted:
Many employers are shrinking the number of paid weeks of maternity and paternity leave they will offer. New data show that the share of employers offering paid maternity leave beyond what is required by law dropped to 35% this year, down from 53% in 2020 . . . . In the two years leading up to 2020 when the pandemic hit, many companies were contending with hiring shortages and rolled out enriched perks, including more time off , as a way to lure new talent. In the Covid-19 era, cognizant of the stresses that many working parents faced, many employers expanded benefits such as paid time off.
More recently, The Wall Street Journal published an article titled “The Bosses Are Back in Charge” Here are some of its observations:
America’s bosses are starting to feel bossy again. Many executives say that they are no longer scrambling to retain workers, after several years of doing whatever it took to keep people on staff. Pay increases are slowing. . . . Inside many organizations, there is a shift in sentiment, executives and their advisers say. Employers who felt they had less leverage in the tight labor market of the past couple of years say they have more power in negotiations with employees. Many feel less pressure to hire quickly to avoid losing a top candidate. Others are enforcing in-office attendance mandates that previously were ignored by some staffers. . . . For companies, obstacles that bubbled up earlier in the pandemic are beginning to fade. Whereas executives once bemoaned the “Great Resignation” and a steep uptick in turnover, many companies now say staffers are staying in their jobs longer.
In January, 2023, online food publication Delish reported “Free Food And Drink Coming To An End At Some Tech Companies“.
Also last month, the Financial Times reported “Bye-bye massages and free food: Big Tech cuts back perks.”
Amid fierce competition for people at a time of huge profits, workers have had a sweetheart deal from Silicon Valley. Companies used an array of benefits and freebies to attract and retain talent as well as to keep employees in the office, preferably wearing branded clothing. . . . But with the balance of power tilting away from employees in the current market and with investors putting pressure on executives to boost profitability, companies are cutting back.
God is more interested in why you do what you do than he is in what you do. (Rick Warren)
The Importance of Heart
As it says in 1 Samuel 16:7:
But the Lord said to Samuel, “Do not look on his appearance or on the height of his stature, because I have rejected him. For the Lord sees not as man sees: man looks on the outward appearance, but the Lord looks on the heart”.
We devoted post #158 to faithful integrity. At the core of faithful integrity is an alignment of organizational purpose, values and culture arising from a commitment to Biblical beliefs, principles and priorities that leads a person or organization, instinctively, to do the right things, in the right ways and for the right reasons.
Doing the right thing for the wrong reasons looks good and probably “does good”, but it is missing business a better way–it is missing God’s heart for our work.
One of our favorite cultural commentators, Seth Godin, summarized the idea that a faithful leader must choose the purpose they will serve:
There are two paths, really: “I will serve just enough to make the maximum profit” or “I will profit just enough to provide the maximum service.”
Caring for people can occur along either path, but if the heart of the leader and the organization is to “serve just enough to make the maximum profit”, then that caring is likely to be the product of hype or hustle.
As we said earlier, the heart of an organization may be hidden among other “priorities” in good times. But the real heart of an organization–people or profits–is exposed in tough times. Consider the recent layoffs, cost-cutting and stock buyback programs announced by the tech giants (and the impact on share price).
A MarketWatch headline proclaimed “Zuckerberg and Intel are shipping the proceeds from their layoffs straight to Wall Street”.
Meta announced it was laying of 11,000 people and then announced a $40 billion stock buyback program. Its stock jumped 20%.
The Washington Post reported: “Now, tens of thousands of layoffs from Google, Microsoft, Amazon, Facebook and dozens of other companies have made it clear: The golden age is over. Speeches about austerity have replaced the free-flowing stock grants and free sushi lunches.”
It appears that some of these actions have been in response to pressure from activist shareholders to cut costs and return greater value to shareholders. Perhaps it is a mixture of shareholder greed and poor stewardship by management. Whatever the explanations, shareholder and profit primacy seems to be winning the day over humans. The Washington Post article titled “Lackluster earnings reports show Big Tech’s golden age is fading” concludes (emphasis added):
After a decade of largesse, the biggest tech companies are casting off their reputations as places that offer lifetime employment with free food and high salaries as they embrace the reality that they’re calculating corporations focused on one thing over everything else: making money.
We don’t believe that these organizations being “calculating corporations focused on one thing over everything else: making money” is “the reality“–we believe it is “their reality“. It is the reality of business as usual–business in the way of the kingdom of the world.
Contrast a company we highlighted back in post #104 (Business a Better Way “Without Faith”)–-SAS Institute. SAS is renowned for the benefits it offers its employees, which look like many of the benefits reportedly disappearing in Silicon Valley. It is also renowned for its award-winning culture. A 2013 article about SAS noted that it had experienced 37 consecutive years of record earnings and following the 2008 financial crisis announced that none of its then 13,000 employees would lose their jobs.
We drew the conclusion that SAS founder, Dr. Jim Goodnight, whether or not he made the connection, appears to have built the culture of SAS by applying a simple but powerful Biblical principle–the “Golden Rule” of Matthew 7:12–treating people with the care and dignity with which he would have liked to have been treated.
Compare these statements by Goodnight to what is being seen among the tech giants:
It turns out that doing the right thing – treating people right – is also the right thing for the company.
The fact is that if our profits don’t grow and continue to grow every year so what? We have our comfort level of what our profits should be and we try to maintain about a 15% profit level. That is sufficient growth for us so we don’t have to be draconian and say “Oh my gosh, better go and lay off a 1000 people”. . . . It makes me really mad when a CEO lays off thousands of workers, and is rewarded with the stock increasing.
Watching the actions of the tech giants and the response of the markets, Goodnight must be really, really mad.
While we can be optimistic because every leader of every organization was created in the image of God with hard-wired “first-order beliefs” such as the Golden Rule, the pull of business as usual is powerful. In the words of Max Depree:
Unless somebody articulates something different, you are going to adopt a secular standard without even thinking about it.
Faithfully leading through business a better way requires a radical change in how you understand business and work and “do” business–“renewal” of the leaders’ minds and “heart” change in the organization. It’s essential to breaking your organization free from the kingdom of the world into “the reality” of God’s Kingdom.
PERSONAL NOTE (from PM): The tension between a business caring about the flourishing of people vs caring only about profit has been a topic for the movies.
Most classically, we have George Bailey vs. old Mr. Potter. And then there was Wall Street (1987) starring Michael Douglas (and his famous “Greed is good” speech). More recently (but still old) is Other People’s Money (1991) starring Gregory Peck and Danny DeVito. An even more recent movie is New in Town (2009) starring Renee Zellweger and Harry Connick. Below are links to Gregory Peck’s and Danny DeVito’s speeches to the shareholders of the New England Wire and Cable.
I’m not saying that the Bailey Brothers Building and Loan, Teldar Paper, New England Wire and Cable, or the New Ulm yoghurt manufacturing plant were being properly stewarded and maximized flourishing by continuing to operate, but the movies highlight a dark side of Profit as Purpose.
As a young lawyer, I was oblivious to that dark side–until one day in a Manhattan conference room.
My client was acquiring a company and we were sitting around a conference room table as a young investment banker presented an analysis of the facilities it made sense keeping open and those it would be better to close. The analysis was purely financial and the main concern was ensuring that notices were properly given under the WARN (Worker Adjustment and Retraining Notification) Act. All of a sudden, I began to grow a conscience. I started to imagine the employees who would lose their jobs in some small town. I imagined them coming home to tell their spouses, and I imagined the impact on their families. Then I started to think about the small businesses in that small town and how they (and their owners and employees and their families) would be impacted. I had a sense this young banker had never visited a factory floor. People were literally numbers on a spreadsheet.
It all hit home because I grew up in an industrial town, and my father was the plant manager of a factory that made automobile antennas. More than that, it was an industrial town that had suffered a devastating blow before I was born when two large manufacturers moved their operations to the South for financial reasons–it was devastating to the community (and our family).
GREGORY BECK - "OTHER PEOPLE'S MONEY"
DANNY DEVITO - "OTHER PEOPLE'S MONEY"
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