Internal employee view vs external business view of a company
Employees’ understanding of what a company is all about, is very different to the market’s understanding of the business. This is because employees have an idealistic view of the company, whereas the financial markets take a commercial view of the company.
An example of the non-idealistic business perspective, is the commonly held view that the only ideal that a business should have is to increase its profits.
There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
Although this is a healthy perspective as far as investors are concerned, thinking that the only goal of the company is to increase its profits, would very quickly demoralise the most enthusiastic company woman or man. Employees have the need to believe in a higher purpose in their daily tasks, other than making money for the company’s shareholders.
In response to this need for professional self-respect, companies create an internal world in which there is inherent pride in doing your job. Management organises the company in a way that if everyone does their job well, then the company will be financially successful. Employees do not need to ponder over the financial significance of their work, however.
Let me once again emphasize that instilling feelings of pride in your employees is an essential part of the environment that stimulates them to do their best.
Pride in who I work for, or pride in my company, is the first and most important. It is having the feeling that where you work is a good place, that it makes a product that is good, and that it is one of the best, or the best in their industry. It is feeling good when you tell someone where you work.
Pride in what I do is the feeling that my job, and especially how I do it, makes a difference… It is a feeling that you stand out in your profession. It is knowing that you are doing the best of the best.
The Workplace Family: A Framework for Getting the Best From Your Employees, page 85
Context for accomplishment
To create an internal company world where professional pride is insulated from the financial evaluation of the company’s work force, the following elements must be present:
- Feeling of goodness: Employees must have a good feeling about the products or services that they produce. In other words, employees must feel that the goods or services that the company produces are inherently good and desirable. If employees feel proud of the goods or services that they produce, then they will feel good about their share in making this result possible, without having to think about the financial evaluation of their productivity.
- Professional pride: Employees must feel proud that they are doing professional work which requires their unique skills, talent and knowledge. If employees feel pride in their work, then they will gain a sense of professional self-respect, without having to think about the financial value of their skillset.
- Recognition and respect: If employees feel that their contribution to the company’s success is recognised, this will motivate them to succeed, without having to view themselves as the cause of the company’s profits.
The basic ingredients for developing a healthy internal company work-attitude are respect for the company’s products, respect for the skills needed to turn out the company’s products and recognition of employees’ part in creating the company’s products. Together, these attitudes create a self-contained world of striving and accomplishment, which insulates employees from the commercial evaluation of their activities.
The market’s perspective of employees’ work is very different to the perspective of the employees who do the work. The market evaluates employees’ work from a commercial perspective, however employees assess the value of their work according to its inherent usefulness and goodness.
To be successful, companies must respond to the market’s commercial expectations, and also foster an internal work-environment of striving and fulfillment in which employees can feel good about themselves because of their accomplishments. For this to happen, the company’s leadership must translate the commercial pressure on the company into internal dynamism, and also align the company’s internal creativity with the commercial expectations placed on the company.
In 2004 Drucker said, “The CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers…”
My experience validates Drucker’s observations, and my actions since those early days and weeks have been consistent with them… Over time I’ve come to see the power in Drucker’s words about linking the outside to the inside…
The CEO is uniquely positioned to ensure that a company’s purpose, values, and standards are relevant for the present and future and for the businesses the company is in. The CEO can and must make the interventions necessary to keep purpose and values focused on the outside. To sustain competitive advantage and growth, he or she must create standards to ensure that the company wins with those who matter most and against its very best competitors.
True leadership requires emotional involvement and inspired guidance within the company’s internal world, combined with forthright and astute business practices when selling the company and its products.
By translating commercial pressure into internal inspiration and internal inspiration into financial results, managers can be popular with both staff and investors.