The value of human centric leadership is demonstrated in Ed Catmull’s book “Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration.” Ed is the President of Disney Animation Studios and co-founder of Pixar, one of the world’s most creative and innovative companies. it also attracts top talent and the best people. So when he uses an unusual word in the context of the employee experience, and innovation, it is worth noting. It is not a word ever heard in my MBA program. Yet he uses it freely and openly. It is the word “love.” In discussing the need for candor, in a process called brain trust, he states, “frank talk, spirited debate, laughter, and love.” Is there a better word to describe the human-centric leader, than love?
The Human-Centric Leader
Unfortunately, we equate love with romance and strong emotions. Therefore, we don’t usually use it in the context of leading high performing teams. It is a word that makes me uncomfortable. Yet, in separate interviews with two senior officers of the U.S. Army, both used the word, love in the context of leadership. One officer was a full colonel, Army Ranger, and member of the Special Forces. The other was a 32-year veteran, holder of multiple purpose hearts, and a 4 Star General by the name of Barry McCaffrey. When I asked both officers how the Army approaches leadership, they immediately mentioned servant leadership and then spoke candidly of love. Love in the context of leadership was not something I was expecting to hear. But there it was and was plainly evident from my conversations with these very human-centric leaders.
The Morality of Human Centric Leadership As a Driver of Revenues
Maybe like you, I have heard countless talks read countless articles, and books that speak of the morality of human-centric leadership. One such book was Joy at Work, by Dennis Bakke. Dennis co-founded Applied Energy Services in 1982. Within eighteen years it grew to be a global energy company
with operations in thirty-one countries, 40,000 employees, and nearly $34 billion in assets. That same year, ING Barings named Dennis Bakke CEO of the year.
In the book, he speaks about a decision to pay a livable wage to every employee, no matter where they lived. This value meant that in some parts of the world, they were paying labor costs that were higher than normal competition would indicate. However, doing so was one of their core values, so they did. It was a values-based moral argument to take care of their people and team. There is nothing wrong with a decision based on a moral argument or value. However, in the constant demand for revenues, the morality of paying a livable wage can easily be lost in the demand for profit. Unfortunately, this often overlooks the impact a human-centric leader or culture can have on productivity and quality.
When Values Drive Revenue and Attract Talent
Too many CFO’s fail to realize that leadership that focuses on the creation of human-centric culture often creates more output. While Applied Energy Services may have paid more in labor cost than competitors, they also received more value from that labor cost than their competitors.
Example #1: Of Human Centered Values Driving Growth and Excellence
Costco has been widely criticized for its high labor costs relative to its competition. This was especially true during the last recession of 2007-2008. Financial analyst on Wall Street was screaming for them to drop medical coverage for many of their employees. However, Costco stayed with its values and today Costco is a darling of Wall Street.
Example #2: Of Human Centered Values Drives Business Growth and Excellence
A friend of mine, a professor of business, recently told me a story about an Australian businessman. It is an extreme example but illustrates the point. This entrepreneur is really good at creating businesses from nearly nothing. One day he was visiting a brick-making company in Pakistan. The owner offered to sell the company to him for $20,000 (US). There was just one catch. With the company came a group of slaves who were responsible for making the bricks. So this created a moral dilemma. Should he NOT buy the manufacturing plant because it would mean buying slaves, or does he allow the slaves to continue in their human misery?
Human Centric Leadership Frees Slaves AND Drive Revenues
So he decided to buy the plant and immediately created reforms that in the short-term, generated more cost. His reforms included putting a roof over the area where children and families were making bricks. This roof shielded them from the scorching sun. He then made sure there was plenty of clean water available for the slaves to keep them hydrated. Then he took the audacious step of giving every slave the opportunity to work themselves out of the debt that kept them and their children enslaved. This required them to make a few extra bricks each day. But there was one more change. Part of the “cost” of repaying their debt was that they would also have to make a few additional bricks a day that would go into a kind of bank account. It was a “savings account” of bricks. However, the reform was that when they fully paid off their debt they would also have enough bricks in their savings account to build their own home.
Of course, production soared. Quality went up. Costs per brick went down and people were freed from generational slavey. There is a postscript to the story. The other brick manufacturers, who relied on slavery, were being put out of business. So they put out a contract on his life. He became too much of a threat.
Human Centric Leadership is Tough and Demanding Leadership
A feel-good story about freeing slaves from a brick factor sounds wonderful. And it is. But it does not mean that human-centered leadership is soft or simple. The U.S. Army has a core value of Selfless Service. This value is defined as “put the welfare of the nation, the Army, and your subordinates before your own.” Anyone who has been through boot camp or any of the Army schools will attest that there is a demanding rigor in executing “selfless service.” In my interview with General Barry McCaffrey, I asked about his training as a U.S. Army General. He laughed and said, “when I became a one-star, the Army sent me to a nine-month school in how to execute the responsibilities of a One-Star General.” Each succeeding star? Another nine-month school. There is no equivalent to the intensity of this training anywhere outside the military.
(Note, photo is General Jim Mattis, USMC, Secretary of Defense)
U.S. Military Training Instills Core Values and a Respect for the Soldier
Much of the training the Army uses is to install core values into officers and soldiers. The impact of the training is seen on the battlefield. A soldier who sees his commanding officer put his life on the line first, is more likely to sacrifice themselves for the good of the mission and to save their buddies. Is there a better way of describing love than this? We can only imagine what would happen in our healthcare institutions, manufacturing companies, and technology firms if leaders were trained to “put the welfare of their customers, their firm, and their subordinate before their own?” From my own research, customers would be stampeding to the doorstep as well as the most highly qualified candidates looking for work.
But how to create human-centric leaders across the organization? How can we create organizational cultures where every leader, not just a few, but every leader, will put the welfare of the customer, the firm, and subordinates above their own? This is a high calling for leadership and will require a designed system. Only by making leadership a designed system, will this kind of extraordinary performance be realized.
Five Powerful Strategies to a Culture of Human Centric Leadership
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How to Create a Human Centric Culture
- It begins with Leadership
Or more precisely, the leadership system. Leaving human centric leadership and culture up to the personal values of individual leaders is too risky. For example, in many healthcare organizations, patient safety is a report. In others, it is THE strategy because they run every decision through the lens of patient safety. This may not sound like much until we realize that recent studies document that in the U.S. 161,000 avoidable deaths occur in hospitals each year. The U.S. Army is so good at servant leadership because its entire system is built on the principles of servant leadership.
- Behaviors Rule
Peter Drucker famously said, “culture eats strategy for breakfast.” What I found in my research is that “behaviors each culture for lunch.” In fact, one of the shocking discoveries of my research is how serious high-impact organizations take the behaviors of their leaders. They realize that behaviors that run counter to values make values obsolete. Therefore, they expect all leaders to model behaviors that will support values.
- Develop Human Centric Rules and Routines
One of the senior leaders in a healthcare organization widely recognized as one of the safest in America explained to me how and who solves problems. By rule, leaders and managers are trained to not be the primary problem solvers. This would be disrespectful to their people and team. In addition, by routine, leaders, and managers should be conducting a daily Gemba with their staff. In this way, the leader is the one who reaches out to her subordinates. The difference may be nuanced, but when the leader intentionally checks in with her subordinates it shifts the power dynamic. The leader is effectively saying, “I value you and I want to make sure you have everything you need.”
- Develop People
The human centric organization recognizes that the people who come to work every day are human beings with unimaginable capacities. These capacities include the basic human capacity for problem-solving, creativity, and innovation. Therefore, they strive to develop the whole person, not just the professional bits. They understand that the best strengths of the workforce come free of charge with the professional skill they bring.
- Extract Fear from the Workplace
Fear is widely considered the most debilitating emotion there is. Yet most of us work in cultures laced with fear. Human centric cultures work hard to eliminate fear in the workplace. The result are cultures of daily innovation, higher productivity, and lower turnover.
Creating a Powerful Human-Centric Culture To Drive Value and Innovation
The individual leader is the focus of leadership development. Most of the articles and books on leadership speak to developing individual leaders who will take care of their people. It sounds good enough and as long as the team is small, it works. However, today a small hospital will have a thousand employees. A small manufacturing company will have several hundred people on the payroll. Technology giants will have hundreds of thousands of employees. So developing human-centric leaders one at a time will never scale to meet the need. The solution is to treat leadership as an organizational system. Only a system can scale the values, behaviors, routines, and activities required to create a human centered culture.
The Leadership System
The leadership system is the way key organizational resources interact to produce a purpose or outcome. If the purpose of leadership is to generate profit, then profit it will create. Unfortunately, this misses an important reality. The profit margin is largely determined by the engagement level of people. When people feel valued, respected when they feel they have a voice they contribute more. High-impact organizations understand that the best approach is to focus on their people, and people will take care of profit.
Therefore, to scale the output of human-centric leadership and the resulting culture, will require a system. The system becomes a common way individual leaders will lead. Leadership becomes a symphony rather than a group of one-act plays trying to outduel each other for an audience. Ewards Deming famously said, “Every system is perfectly designed to get the results that it does.” Therefore, if the purpose is a human-centric culture, design the leadership system accordingly.
About the Author
For twenty-five years Daniel Edds, MBA has been a practicing management consultant. He has worked with hundreds of organizations from the local government, healthcare, State Government, K-12 Education, and higher education. He is the author of two books. The most recent, Leveraging the Genetics of Leadership, cracking the code of sustainable team performance, demonstrates how elite organizations are recreating the workplace by designing systems of leadership.