A clear correlation exists between companies that do well and companies that are good – that is to say, organisations that promote goodwill internally and externally, and work proactively with stakeholders, employees, society and customers to achieve those goals. Vlatka Hlupic has spent 20 years investigating this, developing an insightful critique of why such strong evidence has had limited impact on changing general business behaviour and providing a practical approach that any employer can implement in order to overcome the unique challenges faced by their organisations.
Supported by insights and stories from interviews with leading thinkers from businesses who exemplify such behaviours, including Simon La Fosse, Humane Capital argues for a radical reassessment of current business models. See below for an extract from the novel.
As described by Simon La Fosse, the approach to establishing Level 4 leadership is to keep matters simple, with a tight focus on hiring people with the right mindset:
One of the basic premises of management and leadership used to be that you had to spend a lot of time telling people what to do, whereas if you have highly capable people with the right values and mindsets you don’t really need to tell them what to do in the same way. You need to give them a framework within which to operate and a collective sense of how we like to do stuff and, after that, you let them get on with it.
We do not recruit people who are good enough. We recruit people who are exceptional. Undesirable behaviour tends to stem from having the wrong values and that is a key consideration in the hiring process, and a key factor when monitoring performance. The critical thing in my view, the difference between outperforming a competitor and the difference between success and failure, is the quality of [your] people.
Treat people like human beings
Simon reports that many people who have been through recruitment agencies do not feel that they were treated well. La Fosse’s success is underpinned by the business opportunities that flow from the concept of radically improving the candidate’s experience in the recruitment process. This means treating all individual’s well, not just those whom the agency successfully places.
Create an environment that is a pleasure to work in
The other key piece of advice is to treat the people you work alongside with the same level of care and respect.
If we extend the same value system to our colleagues, we will then enjoy working there even more and, if you think about it, you work five days out of seven so you spend more time with your colleagues than you do with your family. When you realize that, you realize the importance of creating a working environment where it’s a pleasure to work.
Remove the divide between management and workers
There has been a conscious effort to reduce the difference in status and the difference in treatment between managers and workers. He added:
One of the reasons for the divide, certainly in the recruitment industry, is that, typically, the senior people in the organization hold a disproportionate amount of the equity, with the result that they are building capital value in addition to the money they were taking out of the company in the form of salaries and dividends. This situation continues to the point when the company is floated on the stock market and it is those senior people who benefit disproportionately from the value that has been created. There is not much left over or handed out to the ninety per cent of the organization that was driving the value.
I just thought,‘What’s an appropriate and a fair amount for me to take as the risk-taker, as the person that started it?’ It felt like sixty per cent, which left forty per cent for other people.’
Provide share options for people who join
He informed all members of staff that the plan was to share forty per cent of the wealth that was created by the people who helped build the company:
That fundamentally created a different perspective, one where people were not working just for themselves. They were now working toward the common good and that, I think, has been a significant part of our success and will continue to drive the business forward. Importantly, it hasn’t just gone to only those people who joined me at the start of the business, share options are available to all people when they join. It is no longer them and us, we’re all in it together and it feels fundamentally fairer. The consequence of that is we get a lot more discretionary effort, a lot more loyalty and people really caring about the brand and the reputation of the company.
The thing that has developed over time is a clear sense of purpose and an understanding that we stand for something different, and that, collectively, we are developing a business that treats people in a fundamentally different way to previously accepted business practices. What really excites us is that by doing [as we are doing] and achieving commercial success, others will follow [our lead] and change the dynamics of the recruitment industry. This will then have the effect of improving the treatment of hundreds of thousands of people who, when they are looking for a job, are at a vulnerable point in their lives.
The results from starting the company at Level 4
One tangible result of moving towards Level 4 has been a succession of ‘Best Company to Work For’ nominations; an accolade that adds greatly to our employer brand. We have achieved a top 40 position ( out of over 900 entrants) for the last six years in a row. Other rewards include low staff turnover, with higher levels of motivation and discretionary effort. There is an understanding that people take the initiative as opposed to just following process, knowing that that is the right thing to do for our organisation. At the time of the interview, annual growth was thirty per cent, making it one of the 100 fastest growing companies in the UK for three consecutive years. If we did not start at Level 4, I think we probably would have gone out of business. Recruitment businesses are very sensitive to downturns in the economy and within a year of setting up the business we went into one of the greatest downturns the British economy has ever seen. We grew through that, and that was when I think we realised we were onto something.
Operating at Level 4 is priceless
I think it [operating at Level 4] is priceless for two reasons: firstly (and I think this is the least important reason) it’s given us a commercially successful business and, secondly, which is much more important for me, is that it, Level 4, has created a business that I fundamentally enjoy working in.
I believe that the vast majority of the people working here believe so too. You spend most of your life at work so if you can make sure that you work in the kind of environment you want to be in, then we’ve made a difference to your life.
Making a social and environmental impact
The company’s sense of responsibility extends to society and to the wider environment. It commits to tree planting, to ensuring a carbon-neutral footprint and to maintaining a commitment to donate a chunk of annual profits to charity. This provides about one third of the annual budget of a school in Malawi. Another charity is an inner-city school where many of the children have grown up in an environment where no one in their affinity is employed. The company works with the school, coaches the pupils, gives the interview practice and so on to assist the pupil’s chances of gaining future employment.