The business world is advancing fast. A few years ago, shark-minded capitalists were highly respected, feared and had their way.
Milton Friedman was an American economist who won the 1976 Nobel Prize in Economics for his research on consumption analysis, monetary history and theory, and the complexity of stabilisation policy.
He captured the thinking of the shark-minded capitalist era when he stated, “The business of business is business.”
Today, the spirit of the age is of compassionate capitalism. While a business that is not making money is not likely to stay open, the other side of the coin is that if business is focused only on making money it is a short-sighted vision.
The April 2014 edition of the Harvard Business Review has an article titled “Making Business Personal.” It states that companies that turn employees’ struggles into growth opportunities are discovering a new kind of competitive advantage.
Gone are the days when an order was obeyed simply because it was from a senior at the workplace.
Millennials obey the orders that they understand: And even then, instructions should not come as orders because they resist anything that appears to take away their power of choice.
Managers therefore have to learn how to be understanding, empathetic and emotionally intelligent.
Loyalty from millennials cannot be demanded. It has to be earned. If in an organisation employees receive only what they can get elsewhere—money — then the turnover is likely to be high.
Factors that inspire loyalty are rooted in how the workplace makes the employee feel. A feeling of belonging and value tops the list of these factors.
When an employee knows that they have a voice and are empowered to initiate even uncomfortable conversations, they will be loyal.
Many companies are discovering that motivated workers are those whose needs are given attention. Recognising the humanity of the team will inspire them to pass it on to the customer, and this will in turn profit the business.
Another attribute of organisations that are compassionately capitalistic is that recognition is given to idea generators.
In the book Tribal Leadership, by Dave Logan, a business was turned around because people were recognised for ideas like suggesting where a flower pot should be placed.
Although these may sound trivial to the mind trained in cut-throat capitalism, nothing builds a sense of ownership like recognition.
Once ownership is ingrained, the employees will be loyal to their company. There was the case of a company that was going through financial hard times and the employees took loans and refinanced their homes to raise money for the firm.
Only a compassionate environment could have inspired them.
Compassionate capitalism builds respected leaders who put people first. It creates an environment in which people are seen not just for who they are but also for who they can become.
When people relate only with their brain and not their heart, they cannot get the best out of the employee.
Making a difference and making profits are not mutually exclusive. We are in business to solve problems. Let us start by solving the problems of the people who keep us in business—our employees.
Wale Akinyemi is the chief transformation officer, PowerTalks