Humanising business – the new organisational imperative

The role of business in society has changed and it is no longer enough to focus on profit alone, according to Micael Johnstone and John Rosling

What does humanising business mean? It seems crazy that organisations should need help on something so fundamental but in our experience almost all of them are in desperate need of new thinking. In an increasingly digital and information led economy, understanding the true value of human capital is vital to ensuring business success. The global pandemic has accelerated trends that had been building over the last few decades and there is no going back to the way things were.

The role of business in society has changed and it is no longer enough to focus on profit alone. Businesses have been grappling with how they can show up differently to ensure they play a positive role in society and are addressing the climate crisis. Incremental steps towards more sustainable business models and an investor focus on ESG plus a wider ‘multi-stakeholder’ focus were all happening before the covid pandemic.

The approaches taken so far have not led to the profound shifts needed to combat the interconnected social and environmental challenges we currently face. This has led to an erosion of trust in established institutions. Employees and society at large are calling for new models and are rejecting organisations that aren’t willing to authentically embrace change.

Declining trust and rising unease

According to the Edelman Trust Barometer, most people now feel that capitalism does more harm than good. This is a view that is rising among the best future business leaders. A growing desire for businesses to behave differently is also set against a backdrop of alarming mental health and wellbeing statistics.

Burnout is on the rise. A recent report by Indeed, found that more than half of workers experienced burnout in 2021. The American Institute of Stress reports that 83% of workers suffer from work-related illness. The UK Health and Safety Executive says that 17 million days of British workers’ time is lost to stress every year. Meanwhile the World Health Organisation (WHO) places the cost of depression and anxiety to the global economy at $17 trillion USD. Before Covid the WHO declared stress to be the single biggest health epidemic of the 21st Century.

Employees who were under stress before the pandemic often found that their workloads increased during it. With perks like business travel and social gatherings stripped away, the ‘always on’ culture that has been exacerbated by the digital transformation of organisations got worse. With people spending their days on video meetings while working from home, they were often unable to separate their work lives from their personal lives. This led to increased levels of stress and anxiety but also caused people to reassess what they were looking for in their work.

A Gallup poll pre-pandemic found that only four in 10 employees strongly agreed that the mission or purpose of their organisation made them feel that their job is important. Being disconnected from their workplace and colleagues has created additional tension between employers and employees, as evidenced by the Great Resignation. Human-centred organisations have found something remarkable over the pandemic. Across the globe, retention rates amongst people who believe their organisation stands for something meaningful have remained remarkably resilient.

Creating more human organisations

So what does a more human organisation mean in practice? Human centred organisations see themselves as a collection of unique individuals rather than mechanistic hierarchies where employees are just cogs in a machine. They are moving from the narrow goal of maximising shareholder returns in the short term, towards a mindset that considers the impact of strategies and actions on broader systems.

The evidence increasingly shows that human beings thrive, are happier, more loyal and perform better over the longer term when they have a more balanced approach to work. The famous Peter Drucker line: ‘culture eats strategy for breakfast’ couldn’t be more relevant today. MIT Sloane research recently showed that a toxic culture is by far the strongest predictor of attrition and is 10x more important than compensation in predicting turnover.

This is borne out in all our engagements with large organisations. Creating happy cultures where employees have a sense of purpose and meaning in their work beyond just making money is paramount – and drives successful performance.  People want to feel trusted, to be valued and know that they are contributing to something bigger. There is an increasing body of research to support this view. In 2020 Accenture found that companies that demonstrate a wider purpose outperform the market by 5–7% per year.

Employees who identify with organisational purpose are significantly more engaged wherever they work, but numbers from the Contexis Index® show that remote workers are hyper-sensitive to the positive impact of organisational purpose. Our extensive research on organisational effectiveness has seen us working with the leading behavioural scientists from around the world, led by researchers at The University of Cambridge. Our findings show that the impact of purpose on feelings of commitment and responsibility amongst remote workers can be a remarkable three times stronger than amongst their office-based peers.

The data shows that in remote teams the emotional connection that an activated purpose creates leads to significantly higher levels of productivity, a greater ability to sustain autonomous work and dramatically stronger feelings of responsibility, care and commitment.  As well as impacting motivation and mental health. That has huge implications for hybrid ways of working in a post Covid world.

Reimagining business after the pandemic

Modern businesses know that the 9-5 and a daily commute is now a thing of the past. To keep the best talent, companies are essentially having to re-invent the old model where employees might work from home one day a week. They’re having to get really creative about how to engage teams and build loyalty and engagement. Days in the office need to be worth it – and more human experiences than they often were previously – to ensure people feel valued and listened to. Such a radical change isn’t easy and organisations are having to rapidly reassess how they relate to their people. The tyranny of the office has been overturned and we know that our people can be trusted. Great Place to Work surveyed 800,000 employees and found stable or increased productivity after employees started working from home.

The pandemic has shown that process-focused meetings can be done virtually, so in-person days should be about bonding and building relationships. Using that time in a more human way to be creative, think about longer-term opportunities and catching up on any challenges face-to-face is a better use of that time. Mixing up these days with some social and fun time can mean that people look forward to those commute days rather than the old Sunday evening feeling of dread.

We have way too many emails. Having a day or two break from them during more creative face to face days with the team should be part of a wider rethink about the different communications channels we use – and how necessary or urgent some of the deadlines we create for ourselves really are. The sense that all emails need to be responded to urgently is part of the reason we’ve ended up with so much work-related stress, anxiety, and burnout. Unplugging is vital to ensure employees get the right balance at work.

Time to switch off is essential if we want creative, innovative, and happy individuals and teams. In a world where machines are increasingly replacing humans at work, humans need to use all our unique strengths that technology can’t replicate!

Seven elements of a more human approach to business

1Reimagine leadership. Build trust by encouraging vulnerability and collaboration to share and tackle problems and develop new solutions and products. No one likes being told what to do by people who claim to have all the answers.

2Measure human performance. Explore ways to accurately understand and track where human capital in your organisation is thriving and where it is failing so that you can take meaningful action to improve things.

3Listen to your employees and give people agency. Your people are best placed to identify barriers to change and give you authentic feedback on the lived experience and culture within your organisation.

4Embrace diverse perspectives. Look for creative ideas outside of the corporate world. Groupthink often makes businesses unaware of the opportunities and impacts beyond their bubble. 

5Close the purpose ‘say-do gap’. If purpose or vision statements aren’t lived they can be seriously de-motivating and do more harm than good. Many organisations talk a good game but employees day-to-day experience and the work they do doesn’t feel purposeful. Purpose must be a key decision-making filter. The science is clear about what bridges that gap between purpose and experience. Trust/psychological safety and employee ownership are fundamental.

6Get uncomfortable and be bold. Real transformation and progress feel uncomfortable. If they’re not, then it’s likely you’re not really changing things. In the rush to embrace purpose and ESG (and make money from these things) companies are often unwilling to explore barriers to living their purpose and making a positive impact in the world. If the most successful companies today don’t move beyond old ways of working, new ones will render them obsolete.

7Give people time. Time to think about how your purpose and ESG strategies relate to their work or part of the business, but equally importantly time away from emails and meetings. Making time for rest and self-care drives creativity, ideas, and innovation.