The Remnants of the Second Industrial Revolution

The traditional ways in which organizations are viewed started to form through the First and Second Industrial Revolutions. It was during that time that people began to organize business and managerial responsibilities.

In 1913, Henry Ford revolutionized business by installing the first moving assembly line for mass production of the car. The assembly line was work that was repetitive, required minimal training (if any), and could be done by almost anyone. Tasks were standardized and for the worker, there was no autonomy, only the same, repetitive task day after day. Humans were seen merely as resources and were interchangeable. In 1910, 13.5% of the adult US population had a high school diploma or higher education. Creating tasks that fit an uneducated workforce made sense.

During the Second Industrial Revolution, the idea of Scientific Management became popularized. The goals of Scientific Management were to increase economic efficiency, particularly through productivity gains in workers. While the theory lost favour almost 100 years ago, many principles remain to modern day. The mechanistic frame from which the organization was viewed has continued to plague the modern workforce.

Many organizations are still built for standardized practices, efficiency, and elimination of waste. Unfortunately for those companies, these more traditional frames of organization limit leaders from creating the experience necessary to truly improve productivity. By seeking consistency and creating rigid leadership, companies have robbed people of the individuality needed for a great employee experience.

Society Has Changed

People are different than they were 100 years ago and their expectations are different. The aforementioned dehumanizing practices need to be contrasted with the modern workforce. In 2019, 35% of the adult US population has achieved four or more years of college. This is a far cry from the uneducated population that was being employed on Henry Ford’s assembly line. Gen Z is the most educated generation entering the workforce. Most millennials (94%) want to use their skills and capabilities to put toward a cause.

The pace of change in society and in business has increased significantly over the last 100+ years. It took 64 years for air travel to reach 50 million users. In 2016, the popular game Pokémon Go achieved that in 19 days. Companies can’t organize based on early 20th century principles and expect to succeed in 2020. While companies used to be able to rely on traditional frames of management, change happens faster now and companies need to organize for both stability and innovation in order to survive over time.

The Scientific Management philosophies that have remained have treated people as replaceable, lacking the requirement to focus on employee wellness. Today, employees have an expectation that their employer should be committed to their personal wellness.  In 2016, the APA reported that only 17% of employees who perceive their leadership as being committed to their well-being would actually recommend their company as a great place to work.

Frames That Need to Evolve in Order to Enable Great EX

Frames acquired during the First and Second Industrial Revolutions have taken the focus away from creating human-centric organizations. Here are three traditional ways of viewing companies that need to change in order to create the environment where leaders will care about intentionally crafting experiences that serve the people and the business.

Traditional Frame 1: The Company Only Exists for Its Customers and Shareholders

How many hours a week does your customer think about your company? How much does your company impact their quality of life? How often do you think about your employer? How much do they impact your quality of life? Companies impact their employees’ quality of life 24/7. The belief that companies exist purely for their customers and/or their shareholders should have ended with the 20th Century.

Reframe 1: The Company Also Exists for Its Employees

Aside from with our families, there's no single more impactful experience we have in our lives than with our employer. We spend an estimated 90,000+ hours at work with countless time spent thinking about it. From the money we earn to the amount of time we have to sleep, our work shapes our lives. As such, employers have a duty of care to their employees. By changing the nature of the relationship between employees and their employers, companies will realize the societal value in creating great experiences.

Traditional Frame 2: Compensation and Perks Drive Retention and Productivity

There is a major disconnect between what employers think leads to productivity and what actually does. Unfortunately, the people in charge of designing most organizations (and I use the term ‘design’’ very loosely) don’t align incentives with what truly makes people tick. Even now, many companies are still built around the idea that money drives performance. According to a study of almost 20,000 post-exit interviews, 89% of employers believe that their employees left for more compensation, but the reality is that only 12% do. The causes of human motivation are not what most leaders think they are.

Reframe 2: Great Experiences Drive Retention and Productivity

Great experiences aren't just about making people happy. As many companies learned the hard way, foosball tables and company lunches won’t keep people engaged and retained. Aligned experiences are necessary to elicit the behaviours that will make both the company and the employee successful. However, experience isn't one-size-fits-all. Experience is individual. That is why truly great EX needs to be co-created with employees. Both the organizational perspective, as well as the employee perspective are needed to build a company that supports the success of each.

Traditional Frame 3: The Manager’s Key Role is Control

People tend to leave bosses, not jobs. In fact, 75% of employees who voluntarily left their jobs, said it was because of their manager, not the job itself. According to Gallup research, managers are responsible for at least 70% of the variation in engagement. Whereas the traditional role of the manager was to be in charge, tell people what to do, and have the answers; this behaviour does not elicit the outcomes that the company is seeking.

Reframe 3: The Manager’s Key Role is Experience Creation

People don’t like to be controlled. Managerial control is fleeting and diminishes people’s commitment to the work. The goal of the manager should not be to control people. Instead, managers need to understand what they can do to elicit the outcomes they seek. To do so they need to learn two things: 1) the relationship between EX and outcomes, and 2) the impact the manager has on EX. By setting their people up for success through context, clarity, and opportunity, managers find they have greater likelihood of meeting their goals. Managers are already impacting their team’s productivity and retention, they should be held accountable for doing so.

Evolving Leadership Mindsets Allows EX to Thrive

The basis for how we have organized our companies was founded in a time when society was significantly different than it is now. This method of designing companies lacked consideration for the humans who did the work. Employers vary in how much they contribute to the stress of their people. The less that leaders consider their people, the less chance they have of creating a supportive experience. Changing mindsets for leadership responsibilities include the creation of an environment that allows people to thrive. Reframing the role of the company to include its people will encourage decisions that serve the people. Leaders need to evolve new ways of acting, 21st century employees require 21st century leadership.

Written by Gil Cohen