What Does it Matter? Is There Any Real Value to Employee Engagement in a Global Economy?
“There is only one valid definition of business purpose: to create a customer. The customer is a foundation of a business and keeps it in existence. The customer alone gives employment…”
Peter Drucker
“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice. That’s disappeared. Profits and efficiency have trumped generosity.”
Betsey Stevenson, former chief economist at the U.S. Department of Labor Department
If you are someone who is concerned about employee engagement yet also appreciates the complexity of the global economy and the challenges and benefits it offers, you will probably find the article ‘Apple, America and a Squeezed Middle Class’ to be compelling reading, I certainly did. The article, authored by David Barboza, Peter Lattman and Catherine Rampbell, appeared on both January 21 and 22 in the New York Times
It is a common axiom these days among those of us involved in workforce development or talent management to accept that more employee engagement is better than less. If he was here to offer his opinion, Peter Drucker, as seen in the above, might offer his provisional agreement so long as employee engagement supports the creation of customers.
The quote above from Betsey Stevenson begs a different question which has long lingered in the mythology of the American psyche. Do American companies have some sort of obligation to the American worker to maintain jobs in America? It is still both popular and comfortable to believe that they do yet the macro level of corporate behavior over time would suggest that if there ever was any truth to the myth, it is rapidly crumbling. I say this, there was a time, and it was now a while ago, when American companies could convince themselves and us that they were in fact benevolent to the degree we all wanted to believe. That was because they could afford to put forth that appearance and “afford” is the operative word. That time, as you will hear from an anonymous Apple executive whose words appear below and in the article mentioned, has apparently passed.Many American executives would also echo a similar sentiment yet the American psyche still clings to the myth as reflected in the words of our national political dialogue.
“We sell iPhones in over a hundred countries; we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”
Many American executives would also echo a similar sentiment (most anonymously) yet the American psyche still clings to the mythology of corporate benevolence as reflected in the words of our national political dialogue.
The words from Peter Drucker I opened with here are often used in an abbreviated form as a matter of convenience and I think for benign reasons…
“There is only one valid definition of business purpose: to create a customer. The customer is a foundation of a business and keeps it in existence. The customer alone gives employment…And it is to supply the customer that society entrusts wealth-producing resources to the business enterprise”
What Drucker was foreshadowing for us is that the “chickens of capitalism” will eventually come home to roost. I am not sure however that even Peter Drucker imagined a society in which an overwhelming percentage of the wealth producing resources were concentrated in the hands of a small segment of citizens to the degree that has become the case in America. At over $400/share, the average citizen will have a hard time managing to have much Apple in their stock portfolio.
So what then is there to be said for our pursuit of increased employee engagement? I think it safe to say that at Apple if employee engagement allows the company to make the best product possible…with the highest return to investors… then the employees will probably have their jobs for another day. When the day comes, and it did at Apple, that a lower cost, faster moving, more flexible and efficient workforce becomes available elsewhere, you can expect the jobs to follow, regardless of how engaged the incumbent workforce may be.
Henry Ford priced his product, the iconic Model T, so that the workforce that built them could be the customer…he saw the growth of the U. S. middle class as the marketplace of the future…
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces."
Ford’s words were uttered at a time when the only viable market for his product would be the American consumer. I wonder what he would say now if he was facing global competition.
American corporate leadership has faced this reality of the global economy; it is well past time for the American workforce to do the same. Engagement is an absolute must but it is not a magic pill that guarantees employment.
- What are you doing to make sure your workforce knows the game we are really playing these days?
