never apologize human side

Never Apologize for The Human Side of Business

There’s an utterly common misconception out there that the Human Side of Business is somehow a less profitable side of business.

I hear it from board members and CEOs who say things like, “We’d like to be more human-centric at our firm, but we can’t afford those kinds of changes right now. Our market is too competitive,” or “our profit margin is too slim.”

Wrong.

I hear it from authors, speakers, and consultants whose careers are dedicated to promoting the Human Side of Business in the little things they say, such as, “It’s important to put people before profits,” “there’s more to business than profits,” or “we need to change from a single-measure model (the single bottom line measure of profitability) to the emerging three-measure model of people, planet, and profits: the triple bottom line.”

Wrong! Please, stop that. I beg of you!

Is this some kind of heresy against my own trademark business heresy? Am I going back on my life’s work? Have I rethought everything I stand for? Am I selling out and firing up my stogie to grumble “har har har” with the old schoolers of Wall Street?

Hell no!

The Human Side of Business is more profitable. Absolutely, indisputably, and with a full stop.

I’m doubling down, and it’s time you did, too.

I am sick and tired of excuses from leaders who would like to change, if only they weren’t under so much pressure to make their bottom line perform. I am bone-weary of my own friends apologizing for our movement. They don’t do it to purposefully undermine the Human Business movement, not at all. And no, not every one of my peers does it – some are already with me in framing the Human Side of Business. But many aren’t there yet, and this is their wake up call. Ready, here it is:

The Human Side of Business is more profitable. Absolutely, indisputably, and with a full stop. We don’t need a triple bottom line, because even if we’re just measuring by the one, simple bottom line of the Industrial Age, guess what? There’s more green stuff in the Human Side of Business.

Here’s something that occurred to me recently and inspired this post: I do not know a human-centric company that is not incredibly competitive, and more profitable than its old school rivals.

Think about that for a moment. I study companies of all sorts for a living – for my life’s calling! I compare competing companies to figure out why some thrive while others trying to sell the same products and services in the same market languish. Of course my own experience is anecdotal – maybe I’m just not looking hard enough – but I haven’t found one human-centric company that’s failing? Isn’t that kind of… weird?

I do not know a human-centric company that is not incredibly competitive, and more profitable than its old school rivals.

Weird, or for a very good reason. I’m convinced it’s the latter. And stay tuned, because in June we’re going to feature a whole bunch of remarkable companies that, together, will make this point to the world.

But even before our June series launches, here are a few data points among so many:

  • Start with the three companies I featured in my top post of 2013, Good Karma is Good Business. Especially remarkable to me is Parnassus, an investment firm that outperforms the market year after year by only investing in other good-karma businesses. So that one company is an intro to hundreds (or thousands?) more like it.
  • Many of our Top 75 Human Business Champions are heads of their own corporations. They don’t just talk about how business can be run more profitably by focusing on the humans involved: they do it!
  • Our Friend Rich Sheridan’s software company, Menlo Innovations, is human-centric to the core, and thriving as a result.
  • Patti Johnson runs her firm in such a human-centric way that we recently added her to the League of Extraordinary Thinkers. Read her work and see for yourself.
  • Or check out longtime Leaguer Frank Sonnenberg, whose human-centric business has done so well for so long that he’s one of the world’s most trusted leaders.
  • Barry-Wehmiller runs on the Human Side of Business and, again, crushes it – and they’re a massive multinational focused on commodity industries like mining.
  • Stay tuned for the wisdom of a new contributor, NetApp’s Vice Chairman Tom Mendoza, whose posts will share the how and why behind his companies perennial spot on Fortune’s 100 Best Places to Work list. As he and I have discussed, his firm has become as successful as it has because of its focus on the Human Side of Business. Because.

This isn’t a “people first, profits second” movement, but a “profits as a direct result of putting people first” movement.

This list is a tiny sample. It’s completely unfair to so many of the other incredibly successful business leaders focused on the Human Side of Business that we here at Switch and Shift have identified over our careers. If that’s you, I hope you can pardon me for not mentioning you in this post.

But if we haven’t featured you already, we will soon. Brace yourselves!

Our aspiration is for any one of you to have a one-stop resource to draw from any time someone says, “We’d like this business to focus more on the Human Side, but we just can’t afford it right now.” Any time that happens, you can say to them, “You know, I used to think that too. But there’s this website I’d like to show you….” That website is Switch and Shift. And going forward, we promise to only make this case stronger, less deniably.

So you’ll never have to be meek or hesitant again when you tell business leaders,

There’s a more human way to do business. In the Social Age, it’s how we engage with customers, collaborators and strategic partners that matters; it’s how we create workplace optimism that sets us apart; it’s how we recruit, retain (and repel) employees that becomes our differentiator. This isn’t a “people first, profits second” movement, but a “profits as a direct result of putting people first” movement.

If you know of a company that focuses on the Human Side of Business and thrives as a result – or one that is failing! – please, let me know in the comments below. I’m dying to add to my collection of fascinating companies!

 

Did you like today’s post? If so you’ll love our frequent newsletter! Sign up HERE and receive The Switch and Shift Change Playbook, by Shawn Murphy, as our thanks to you!

Copyright: sahua / 123RF Stock Photo

Keynote speaker. Author of A World Gone Social: How Companies Must Adapt to Survive. Three-time CEO. Chairman and Founder of Switch and Shift. Ted Coiné is one of the most influential business experts on the Web, top-ranked by Forbes, Inc., SAP Business Innovation, and Huffington Post for his leadership, customer experience, and social media influence. Ted consults with owners, CEOs and boards of directors on making their companies more competitive by making them more human-focused. He and his family live in Naples, Florida.

  • reply JohnRichardBell ,

    Reading through this terrific post, I couldn’t help think about the evolution of leadership. Never has so much been written about leadership . . . and yet, people continue to struggle with it. Thankfully, Switch & Shift leaguers such as Ted are a long way from giving up their roles as journalistic mentors.

    • reply Lisa Shelley ,

      Couldn’t love this more! Two thoughts… 1)Does anyone have an example of an “old-school” business that has successfully transformed into a human-centric one? and 2) Isn’t the necessary shift in business thinking one of sustainable profit AS A RESULT of maximizing value to all stakeholders in the business system? When we focus solely on driving the output – profit – we invariably fall into the trap of trading value from other stakeholders (customer, employee, supplier, environment…) to achieve it, thus limiting the capability of the system, and the ability for the overall system to grow. The profit generated comes as a result of squeezing the existing system, rather than from growing the system through innovation.

      I believe the system value mindset comes much more naturally to small businesses and start-ups who have the benefit of close relationships with their stakeholders. They recognize these relationships as the key to their success. Unfortunately, without a strong human-centric culture, that recognition doesn’t always scale well.

      • reply Future State ,

        Thanks for this post, Ted! I’ve been following your posts for a year and just really resonate with your human side of business insight. You asked about other companies who look at business this same way so I want to introduce you to Future State – a change management consulting firm in the Bay area. Their whole approach to change management is looking at the human first. Here are a few blogs from their president that demonstrate this aligned way of thinking – http://www.futurestate.com/roi-of-change/heres-the-secret-to-employee-adoption/#.U21AlIFdXHQ.

        and this one – http://www.futurestate.com/roi-of-change/change-management-metrics-adoption-roi/#.U21BUoFdXHQ

        • reply Ben Simonton ,

          Those people who bother you Ted are just plain ignorant and lacking in integrity. They might honestly believe what they say but honesty is far too low a standard for business. Business needs integrity.

          Stephen Covey wrote – “For many managers today, breaking the “human barrier” or status quo performance is as difficult as breaking the “sound barrier” was for aeronautical engineers four decades ago. Why? Because people are often seen as limitations, if not liabilities, rather than advantages and assets. Thus low performance is often institutionalized in the structure and systems, procedures and processes, of the organization. Some executives pilot their single-engine, propeller-driven firms at slow speeds and low altitudes, cocksure that anything smacking of high performance would cause them to lose control and crash. Meanwhile, a few well-trained and courageous managers are breaking the mythical human barrier and proving that gains in human performance of 500 percent – not just 5 percent – are possible …..”

          “Only 95 Per Cent Of A Workforce’s Problems Are Created By Management”
          W Edwards Deming

          “The consummate leader cultivates the moral law and strictly adheres to its methods and discipline. The moral law causes people to be in complete accord with their ruler so that they will follow him regardless of their lives, undismayed by any danger.”
          Sun Tzu 544-496 BC The Art Of War

          And more recently – John Kotter and James Heskett studied the performance of 207 large firms over an 11-year period. They wrote of their findings 1992:
          “Corporate culture can have a significant impact on a firm’s long-term economic performance. We found that firms with cultures that emphasized all the key managerial constituencies (customers, stockholders, and employees) and leadership from managers at all levels outperformed firms that did not have those cultural traits by a huge margin. Over an eleven-year period, the former increased revenues by an average of 682 percent versus 166 percent for the latter, expanded their work forces by 282 percent versus 36 percent, grew their stock prices by 901 percent versus 74 percent, and improved their net incomes by 756 percent versus 1 percent.”

          There are literally hundreds of examples of the success of Theory Y

          My own experience as an executive proved that both Covey and Sun Tzu were right.

          • reply Aline Badr ,

            Great insight as usual, Ted. And as you know, one very good example of a business that thrives as a result of leading from the human side is Tangerine, led by Peter Aceto.

            • reply Peter Barrett ,

              Awesome article! Thanks

              • reply TedCoine ,

                Thanks John – coming from one whose leadership acumen I admire, this is a great compliment!

                Leadership is no different from any other skill we humans undertake: it takes both practice and coaching, and there’s no “done:” we can always get better at it. Think of how many people play golf, and how many of them seek improvement. Good leadership is hard, and we can always improve.

                • reply TedCoine ,

                  Ben, what a resource-rich comment! Thank you, I really enjoyed it.

                  This stat from Kotter and Heskett is especially worth repeating: “…improved their net incomes by 756 percent versus 1 percent.” OUCH!

                  Sun Tzu has always struck me as a psychopath. Sorry, but the murder of the ruler’s favorite concubine (to compel obedience in the rest of the concubines, in order to prove that any group can be compelled to obey commands) has always stuck in my head as particularly obscene. I don’t think he can teach anyone about morality. Business may be war to some, but I prefer to think of it as art ;)

                  • reply TedCoine ,

                    Thanks so much! I’m headed over to check those posts out now!

                    • reply TedCoine ,

                      Thanks Lisa! I’m really proud that this post resonated with a thinker of your caliber.

                      For question 1, I’m almost desperate for examples. I’ve recently begun asking that question of every flat organization leader I interview, for instance: so many people study flat organizational structure, and yet most of the flat companies I’ve found started that way. Granted there are other ways of running a human-centric company than this one model. In an upcoming episode of The Human Side TV, I ask this of Paul Green of Morning Star’s Self-Management Institute. His answer is interesting.

                      As for the profit-focus: good luck! Mark and I talk about this at some length in our upcoming “A World Gone Social.” The short version, I believe, is for the entire culture to be aware of profit, so every member of the organization can create ways of saving money or increase revenue in processes. BUT… But leaders should almost ignore profits (and absolutely ignore stock price!) and tend to their culture. That’s the only way that culture is actually going to bring them profits.

                      Small firms and startups have a vast advantage because large firms fall victim to the outdated fallacy of economies of scale. One easy example: picking up the phone quickly and staying on it as long as necessary, rather than “saving money” through frustrating phone trees, wait times, and call-center metrics that repel customers. I think by now, it’s pretty clear, we’re in an age where the real issue of scale creates a dis-economy.

                      Pretty clear to some of us, anyway. We have our work cut out for us as we spread that gospel :)

                      Leave a comment

                      nine + = 10

                      • footer-logo

                        There’s a more human way to do business.

                        In the Social Age, it’s how we engage with customers, collaborators and strategic partners that matters; it’s how we create workplace optimism that sets us apart; it’s how we recruit, retain (and repel) employees that becomes our differentiator. This isn’t a “people first, profits second” movement, but a “profits as a direct result of putting people first” movement.

                      • Contact Us



                        email: connect@switch&shift.com
                        1802 North Carson Street
                        Suite 206
                        Carson City, NV 89701


                        Terms & Conditions  |  Privacy Policy

                      •  

                        × five = 30