All Companies Will Become Great Workplaces
I want to suggest that the World’s Best Multinational Workplaces represent far more than a collection of winners of the ultimate workplace Oscars. They represent something very important for society in general. They are – I believe– the vanguard of the workplace of the future.
Before looking forward, consider for a moment that this event would have been unimaginable some 28 years ago when Milton Moskowitz and I published "The 100 Best Companies to Work for in America.” It was the first book that actually evaluated companies from the viewpoint of the employees. Previously companies were only viewed from the perspective of investors or managers or from the standpoint of society if they did something really bad, such as an oil spill or being associated with a defective product.
But by judging companies on the merits of their workplace cultures, our 1984 book was actually the first Best Workplace list. And today, our organization alone produces Best Workplace lists in 45 countries. And the list we recognize tonight represents the pinnacle of these lists, the world’s 25 best multinational workplaces culled from nearly 6,000 companies we survey every year.
Not only has there been a proliferation of lists since our first book was published, but we also can point to a marked improvement in the quality of the best workplaces over the years. For instance, if you compare the average score on our Trust Index© employee survey on the first “100 Best” list we published with Fortune magazine in 1997 versus this year’s list, you will discover that the average jumped 10 points. For the list of the World’s Best Multinationals Workplaces that we honor tonight, the average Trust Index© employee survey score jumped 1% for the 25 companies as a whole and a whopping 5% among the top 5 just in one year.
But the numbers only tell a part of the story. For these survey scores reflect a dramatic improvement in the quality of the workplace environment among the very best workplaces. Besides providing great benefits and perks, your companies offer superlative two-way communications vehicles, show appreciation in a wide variety of ways for good work and extra effort, provide challenging opportunities so that your people can grow professionally, and share the wealth produced by everyone’s common efforts.
Certainly, if most companies treated their employees as the companies here do, many problems in our society wouldn’t be as severe – health care costs would be lower, productivity would be greater, innovation would soar. Most of all, however, we would have a much better society because the quality of work life has such a huge social impact. Since people spend most of their waking hours at work, the quality of work life defines the quality of society as a whole.
Can All Companies Become Great Workplaces?Of course, the obvious question is whether it is actually possible that most companies can be great workplaces? Is it possible that in another 25 years most workplaces can be truly great? At present, most companies consider being a great workplace a nice to have issue. But I believe that over the next two decades or so, it will become a must have imperative for any company that wants to succeed.
Before I explain why, I have to say that it will not be easy. The Conference Board says that most people are not happy with their workplaces. As of last spring, the Board’s most recent annual study had revealed that only 45% of U.S. workers said they were satisfied with their jobs, down from 61% in 1987. Worse, the Conference Board study was part of a steady downward trend, completely unaffected by booms and busts in the economy.
Looking back even further, we can trace the roots of the problems in the contemporary workplace back to the beginning of the Industrial Revolution some 250 years ago when workers began to be explicitly treated as objects, as cogs of a machine, as numbers. Sound familiar? Has anybody here ever heard that? Has anyone here ever felt that they were treated that way?
Well, it’s not been an accident. Indeed much of management theory, if not practice, has reinforced this view of employees as objects rather than as people. Go back about 100 4 years ago and consider the work of Frederick Winslow Taylor, the father of scientific management. Taylor’s work led to efficiency experts where every action conducted by employees was supposed to fit into a detailed system.
Indeed, I would argue that most of the approaches since then, including the work of Elton Mayo, the father of the human resources field and even the work of many people involved in what is called “employee engagement” are actually perpetuating a newer version of that same old perspective about employees. That is, they are all different ways of getting them, the employees, to do what we want them to do. They are variations on the theme of seeing people as objects in the chain of production.
I believe that there is something qualitatively different about great workplaces. From what I’ve seen, great workplaces create a culture of generosity where management gives more than is expected. We see this culture of generosity in the companies named among the World's Best. We see it not only in the distinctive perks and benefits you offer but also in the more open and respectful way you treat your employees. Employees appreciate this and are, themselves, willing to give more in return, creating a self-perpetuating cycle where everyone gives more than is required for the sake of the organization.
Deep Forces at WorkSo, when we are talking about most companies being great workplaces over the next quarter of a century, we are talking about a major change in the way people experience work. There are deeper forces at work that make me optimistic – and why I think these companies represent the workplace of the future.
Look at the three main groups that any business has to deal with:
1. Employees – Companies all over the world are finding that there is a great shortage of highly qualified workers, even now with the residual effects of the economic downturn. C-suite executives increasingly find themselves spending time and attention finding ways to attract and retain the best employees. The firms that will get the best, qualified employees are the ones with reputations of having the best workplace cultures. The companies named on the World's Best list prove the point: Of the 25 companies 5 represented here, you have an average of 11 job applicants for every existing job – not job opening – in your organizations.
2. Customers – Everybody would prefer to do business with companies where employees are happy campers. Businesses certainly are sensitive to the opposite. Ask the folks at Apple about the PR nightmare they faced some time back because of revelations about labor conditions in iPad and iPhone factories in China.
Companies want far more than to avoid being seen as bad employers. They see the value in letting their customers and clients know they are recognized as great employers. Here in the United States, every time you walk into a Whole Foods, a Starbucks or an REI store, you see prominently displayed signs that let you know that these companies are on our Fortune “100 Best” list.
I don’t have to tell any of you that this is a phenomenon found all over the world. Many companies proudly display the Best Workplace list logos on their web sites and in their buildings. For example, while driving into Mexico City from the airport last year, I saw a huge billboard advertising a pharmaceutical company’s products. Prominently displayed at the bottom of the billboard were our Great Place to Work® list logo and a message proclaiming that the company was on the Mexico list of Best Workplaces.
3. Investors – It only makes sense that companies with great workplaces have employees that cooperate better with each other and are more innovative – and hence have a stronger bottom line. Many of you have seen the charts that show how the Fortune “100 Best” companies outperform the Standard &Poor’s Index by two or three times in terms of financial return on the investment. This is a result we have seen not only in the United States, but also when the Best Workplaces are compared with their competitors in others countries such as the United Kingdom and Brazil. The investment community should insist on getting information about the quality of the workplace. It’s a lot more important to the long-term success of a corporation than many of the other, strictly financial measures they currently track.
I believe each of these stakeholders – employees, customers, and investors – are going to put increasing pressure on all corporate leaders to create great workplaces.
Moreover, I believe the changing workforce demographics will accelerate this movement. In particular, Generation Y and the Millennials – those born since 1980 – are going to be a huge factor. Partly because of the widespread publicity given to our Best Workplaces lists, most Millennials all over the world now know that great workplaces exist. That means they realize they don’t have to put up with lousy workplaces. And Millennials have new means of communicating with one another through social media and can express their dissatisfaction or their satisfaction with the ways things are going in their workplaces. Finally, Millennials are more interested in finding companies that express their values and have a sense of social responsibility.
The Tipping Point for Most CompaniesAt some point, we will reach a tipping point where, as I said earlier, companies will understand that they must have a great workplace if they want to succeed.
Can this really happen? Yes, it can. Remember the quality movement that swept the corporate world in the 1980s and 1990s? For those of you who are unfamiliar with the background, the quality movement started in Japan during the 1950s, largely as a result of the efforts of two Americans, W. Edwards Deming and Joseph M. Juran. By the late 1970s, Japanese manufacturers, especially in the auto and electronics industries, began to outsell their American and European competitors because of the higher quality of their products. To meet Japanese competition, firms all over the world adopted an approach called “total quality management.” Today, virtually every company, especially in manufacturing and in many services industries, devotes a considerable amount of effort to achieve the highest quality standards.
What’s important is that in the early 1970s, quality was seen by most companies as optional, something that was nice to have but not necessary. Today adherence to quality standards is seen as a necessity. Similarly, today most companies see being a great workplace as optional or a low priority. But as more and more companies become great workplaces, a tipping point will be reached. And the pressures from employees, customers and investors will create a world where creating a great workplace will be the norm, not the exception.
I don’t have a crystal ball to tell me when this tipping point will be reached. And I certainly am not 100% positive this will happen by 2037. But I do believe that we are poised to see a major shift within the next decade.
This is a dream worth pursuing because of the huge benefits this will have for everyone in society. I believe that you share this dream with me – and that by the mere fact that you are here tonight – each of you is doing your part to make it happen.
That’s because every great workplace that gets created is an example of what’s possible. And the stories that get told about what you do changes the way people behave. By your examples, you show what’s possible.
Any Company Can Be a Great WorkplaceOn an even more practical level, the World's Best Workplaces provide the ultimate argument against what I call the “Can’t do it here” syndrome. Ever since Milton and I wrote our first book, people have often approached me with such comments as, “That’s fine for big companies, but you can’t create a great workplace here because it’s a small company.” Or, “That’s fine for small companies, but you can’t create a great workplace here because it’s a big company.” Although these companies are large multinationals, many of their subsidiaries that made the national lists have fewer than 100 employees.
I’ve heard the same thing again and again from people saying that great workplaces only exist in certain industries: “That may work in Silicon Valley with all those high-tech companies,” they say, “but it can’t work here because we’re in the conventional manufacturing industry.” Look at this list: conventional manufacturing is actually the most represented industry. And the list includes firms in all major industries.
Similar comments are said about national cultures. Indeed, every time we have launched a list in a new country, we have heard the following: “Sure, it’s easy to create a great work environment in the United States or Norway, but it can’t be done in a place like Argentina or Greece.” Just look at this list: Workplaces in 36 countries are represented here tonight.
And this list refutes the argument I’ve heard countless times from folks in multinational corporations: “You can develop a good workplace culture in one location, but we really can’t spread that culture because we operate in dozens of countries throughout the world.” Well, we have 25 companies that prove that multinationals can no longer use that excuse. They have proved that a company can spread a workplace culture across national boundaries. They do this every day.
The companies being honored on the 2012 Best Multinational Workplaces list are part of a growing global great workplace movement. Every company in the world can be a great place to work. They’re showing the way.
Robert Levering is the Co-Founder of Great Place to Work®, and current board member.