OP-ED: Corporate America can profit by putting people first

When times are tough, character shows through. Companies, like people, are put to the test in times of economic adversity.

When times are tough, character shows through. Companies, like people, are put to the test in times of economic adversity.

It will take corporate America a long time to discipline its behavior and rehabilitate its image after this year's revelations of pervasive ethics scandals. There is a way to begin strengthening both its reputation and its long-term productivity. Raising ethical standards must focus on the human component of business: The central value must be to treat customers and employees with sensitivity as individuals, earning their loyalty and encouraging their creativity. Thus far, corporate reform efforts have mostly dictated new rules for corporate governance and corporate structures. That trend is fine - as far as it goes. Yet reform efforts must extend far beyond the boardroom: They must reach every aspect of corporate behavior. Too many firms sacrificed their ideals about how to treat employees during the financial excess of the 1980s and '90s. To achieve overly ambitious profit targets, managers worked staffs to the brink of burnout, or beyond. Managers stretched their employees' workload, and, when they still didn't hit their numbers, accountants stretched the truth. Cooking the books, falsifying transactions, and tolerating executive greed have been just the most visible signs of the cultural deterioration. A dehumanizing pace, a sweatshop atmosphere, and relentless cost-cutting have consumed many white-collar professions - the sector of the economy that once prided itself on being far removed from the assembly-line mentality. Embittered associates at law firm Clifford Chance recently vented their anger about soulless over-billing and an atmosphere where senior partners sneer to colleagues, "We own you." Jittery stockbrokers, investment bankers, and Wall Street analysts toil amid the fear of continued downsizing. Stressed-out staffers throughout the service sector exhaust themselves to generate 2,000 or more billable hours each year under management's grim watchword, "We live to bill." Companies now have a choice to make, and they should recognize that the right thing to do is also the smart thing to do. Amid the "war for talent" in a knowledge-driven economy, creative workers cannot be treated like interchangeable parts to be discarded when they wear out. Employees with higher-level, higher-value-added skills will gravitate toward firms that take a more balanced view - those that make profitable work also rewarding work. Firms with humane corporate cultures will, over time, attract the talent that flees the white-collar treadmill. Chastened firms must now re-establish their corporate character by rebuilding their corporate culture. Caring companies must extend their vision beyond the next quarterly earnings forecast, allowing CEOs to inspire a "race to the top," not a "race to the bottom." Humbled CEOs must promote a values-driven culture that balances a company's need for profit with its people's desire for satisfying career growth through meaningful work. CEOs often blandly recite the business-school mantra, "People are the firm's most important asset," yet they often neglect to invest in those human assets' long-term creativity. That's one of the differences between corporate managers and corporate leaders. Managers calculate how much profit they can extract by speeding up the assembly line, but they fail to consider that strategy's merciless impact on the quality of corporate life. Leaders, by contrast, do something more than calculate profit and loss: They aim to shape a corporate culture that inspires their colleagues, elicits their loyalty, and evokes their best thinking. The firms that will have staying power in the knowledge-based economy are now rightly reevaluating what kind of organizations they want to create. Corporate leaders must be the standard-bearers of a values-driven culture. "Celebrity CEOs" must be replaced by civic-minded CEOs. Community-oriented commitment to external constituents must accompany attention to employees' creative needs. A sense of realism about their shareholders' profit demands and their employees' family priorities must promote a healthier work-life balance. And a sense of humor about the Dilbert-like folly of cubicle pressures can ease the inevitable frictions of workaday routine. Reasonable economic expectations must replace the monotony of the Sisyphean billable hour. Realistic candor toward the work force must replace the dread of ever-deeper downsizing. Rigorous codes of ethics must emphasize workers' dignity, along with management's responsibility to respect employees' personal needs. Our corporate system, and our society, must choose a new business model to replace the now-discredited excesses of the past two decades. Rather than crank up the dispiriting white-collar assembly line again, we must promote a more humane corporate culture - profit-oriented yet people-focused - that balances value-added labor with values that inspire loyalty. By creating a values-based business culture that rejects the callous calculus of cost-cutting, we can promote an ethical environment that inspires lasting loyalty and liberates personal creativity.
  • Tom Hoog is chairman of The Counselors Academy of the Public Relations Society of America.

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