Activist Employees: A price worth paying

November 20, 2018

By Dov Seidman

When employees go public with objections to the perceived moral shortcomings of their companies, most executives react with a sigh of relief — glad it wasn’t their company. In the past year, employees at organizations ranging from Google and Amazon to Deloitte and McKinsey have protested the handling of sexual harassment allegations and petitioned management to stop working with customers that they consider unethical, immoral, or damaging to society.

Most recently, Google employees in the United States, Europe, and Asia walked out on Nov. 1 to protest handling of sexual misconduct charges and demand changes in what they allege is a culture that tolerates sexism and racism. At McKinsey, employees and alumni said working with US Immigration and Customs Enforcement (ICE) violated the consulting firm’s ethical standards. Google employees also have objected to working with the Department of Defense and cooperating with the Chinese government to censor search results.

But maybe when executives learn of these instances of employee activism, they should react with envy. Maybe they should be asking, “What’s wrong with us?”

Why? Because when employees feel that it’s their duty to hold their companies to high moral and ethical standards — and when they know that it’s safe to speak up when they see a problem — we’re seeing evidence of a healthy, high-functioning organization. The employees who signed petitions and protested did so because they have a strong commitment to their companies; if they didn’t care, they wouldn’t bother. These workers chose to work at these companies because they were looking for more than a pay check. They stay because they are inspired by management that has earned the moral authority to lead.

Smart leaders will welcome the opportunity to engage on issues that matter to their activist employees. No, this does not mean that leaders must acquiesce on every issue. But they need to start a meaningful two-way conversation, embrace employee concerns, and then provide a thoughtful response. For example, when Salesforce CEO Marc Benioff received a petition from 650 employees who wanted to sever ties with U.S. Customs and Border Protection because of its role in separating refugee families, he saluted his workforce in a Tweet: “I’m proud to work with 30K employees who make their voices heard and serve their communities.” Benioff didn’t scuttle the contract, but he did contribute $1 million to a charity that aids separated children and voiced his objections to the family-separation practice.

Executives like Benioff are gratified to see employees engage management on ethical issues not just because of what it says about the culture. A strong belief in a company’s mission and its ability to be a force for good in the world also correlates with superior performance. This is both because of the desire of workers to find meaning in their jobs and the changing nature of work itself.

We are moving rapidly from the Information Economy to what we call the Human Economy, where intelligent machines take on routine work. Rather than perform repetitious tasks — like machines — employees will be called upon to contribute their full character and creativity. Jobs will be less about doing the next thing right and more about doing the next right thing — imagining what to do to serve customers better or make the company more effective. In the Human Economy, employees will need the freedom to make the most of their uniquely human talents — curiosity, independent thinking, innovation, collaboration, and creative problem solving.

To unleash these powerful capabilities, organizations need moral leaders, who can enlist the hearts of employees as well as their minds. Instead of micromanaging and motivating with carrots and sticks, leaders will need to elevate performance and behavior — and inspire employees with their own behavior. Inspired employees who believe in the company’s noble purpose will be more passionate about the work, more willing to take the initiative, and more likely to go the extra mile. LRN’s research shows that organizations whose employees are inspired by a sense of purpose score higher in market share, customer satisfaction, employee loyalty, and other key outcomes.[1]

Unfortunately, many organizations have a long way to go before legions of eager, self-governing employees start blowing the doors off. A recent LRN survey found, for example, that only 20 percent of employees believe their CEO pursues a significant and noble purpose that makes the world a better place. Only 30 percent say that they have observed their CEOs behaving in ways they expect from a moral leader, and only 23 percent say managers act like moral leaders. In the same LRN survey, 83 percent of employees said their companies would make better decisions if they considered the foundational ethical principle — the golden rule, which says treat others as you would like to be treated.

Moral leadership is not the kind of thing that you can fake. It can’t be a bolt-on or this year’s management initiative. Employees are justifiably skeptical about corporate ethics programs. They have seen companies make bold pronouncements about a newly discovered purpose and trot out values-based practices — then watch as leaders continue to behave in the same old ways and maintain the same old priorities. Leaders only earn their moral authority by demonstrating their commitment to a noble purpose, asking the tough questions about right and wrong, and showing that when it counts ethics take priority over profit. Moral leaders also treat people ethically in their daily interactions. They are listeners. They work on helping people succeed.

I happened to be a discussion leader at the New York Times Dealbook Conference on Nov. 1 and was in the room when Google CEO Sundar Pichai made his first public response to the employee walkout. Sundar did the right thing. He acknowledged that the company had not lived up to the expectations of its employees. And he committed to working with them to address the issues. “Words alone aren’t enough and, you know, you have to follow up with actions,” he said. Now, employees have to do the right thing, too. They must work in good faith with leadership and understand that their walkout and demands are the start of a conversation and a collaborative effort to end harassment, abuse, and discrimination, and truly live up to the company’s values.

It turned out to be an unusual Dealbook conference — Sundar was only one of many participants who dealt with ethical issues. On almost every panel, the conversation came around to ethics, whether it was talking about sexual harassment or responsible investing. It is great to see ethical concerns moving to the heart of business conversations — where they have always belonged. A week after the conference, Google announced that it would reverse a policy that forced employees to settle harassment claims through arbitration. Facebook and Airbnb quickly followed suit.

There is always a risk in becoming a moral leader. If you succeed, you will be rewarded with an energized, engaged, and activated organization, where people bring their best selves to work every day. You may find that your reputation with customers is improving and you are taking share in your markets. But you might also find that your employees take ethics more seriously than ever and they may start asking you many more uncomfortable questions and holding you accountable. My advice: do not forget to thank them. This is a small price to pay for building an organization that can compete and grow, no matter how many disruptive changes come your way.

[1] In LRN’s How Report, we found that about 8 percent of companies had adopted moral and ethical leadership approaches that enabled employees to be “self-governing,” leading to superior performance in their industries.

Originally published on Medium

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