By Owen Phelps, Ph.D.
Director, Yeshua Institute
If you want your organization to thrive, treat your people – all your people – well.
That’s not the whole story of organizational success, of course.
But it’s clear that organizations reach their peak performance only when they take good care of their people.
Study after study shows that organizations which are great to work for also perform much better than their peers in terms of growth and profits.
False dichotomies
Research shows, time and again, that taking care of profits or taking care of people are not polar opposites. The notion that you face a choice between profits and people is a false choice.
In fact, they go hand-in-hand.
That’s true in nonprofit organizations as well, where the real choice is never between taking care of your people and serving your mission. Again, the two go hand-in-hand.
It turns out that the basic Christian tenet that all people have dignity is constantly reflected in organizational performance. Leaders neglect it at their own peril. And if their organizations are trying to improve the world, they neglect it at the peril of the world, as well.
New research
The newest research focuses on for-profit organizations, where performance is easier to measure. In this case, the firm Great Place to Work, which produces Fortune magazine’s annual list of100 Best Companies to Work For®, measured company growth and profits.
For 20 years the research firm has measured employees’ perceptions of innovation, leadership effectiveness and trust. Companies that rate high – called “great places to work” -- consistently outperform other companies in terms of growth, profit and other business metrics.
But its latest research project shows that it’s not enough for a company to have high average scores among its employees. Rather, it matters that companies have high scores for every employee segment of their workforce. Where there are significant gaps between segments, company performance lags.
The gaps can be between men and women, salaried and hourly workers, engineers and non-engineers, physicians and non-physicians, to name just a few segments that arise in companies.
New frontier
“We are entering a new frontier in business,” says Great Place to Work’s new report. “This new, largely uncharted territory is about developing every ounce of human potential, because every employee matters in an economy that is about connectivity, innovation and human qualities like passion, character and collaboration.
“In the emerging business climate, organizations need to create an outstanding culture for everyone.”
The report distinguishes between great places to work and great places to work for all. While great places to work perform better than their peers, great places to work for all perform even better than that.
Some metrics
Here are some metrics about companies whose for all rankings put them in the top quartile.
- They had 3.6 times the median revenue growth of companies in the bottom quartile.
- They performed 32 percent better in terms of the stock market valuations than companies in the S&P 500.
- Their annual mean returns were 35 percent higher than S&P 500 companies over a period of five years.
“Our economy has evolved through agrarian, industrial and knowledge phases to the point where the essential qualities of human beings are the most critical, where a culture of innovation is vital to sustainable success and where everyone’s contributions count,” the study says.
“In this new business frontier, businesses will reach their full potential only when they realize all their human potential. That means organizations need to create an outstanding culture for everyone, no matter who they are or what they do for the organization.”
Which is just another way of affirming – as Christianity does -- that all people have dignity.
JUST FOR LEADERS – See how you and your organization can affirm the dignity of your workforce -- and yield incredible growth and profits for your efforts – by reading this very short (148 page) classic by Max De Pree, former CEO of Herman Miller, Inc.
Leadership is an Art