Why Elite Organizations Design Routines

They are to so simple; we overlook them. In our technical sophistication, we assume anything routine should be changed. Yet we are all creatures of habits and routines. Charles Duhigg, in his book The Power of Habit: Why We Do What We Do in Life and Business discovered the power of simple routines. He calls them “keystone habits.”

In their book titled Evolutionary Theory of Economic Change, Richard Nelson and Sidney Winter, both of Yale University concluded ten years of research, with this statement, “In our evolutionary [organizational] theory, these routines play the role that genes play in biological evolutionary theory. They are a persistent feature of the organism [or enterprise] and determine its possible behavior.”

  • I found in my study of high-performing organizations that they design their routines rather than let them evolve. For example:
  • A manufacturing organization makes Lean/kaizen a daily affair and trains every worker to conduct their own kaizen.
  • An award-winning hospital makes standard Lean work for every leader and manager and requires that the results be publicly reported on every Friday afternoon.
  • The U.S. Marine Corp requires the highest-ranking officer to eat last in the cafeteria.
  • A Native American healthcare organization requires Personal Development Plans for every leader and manager, not as a focus of discipline or “growth,” but to connect everyone to strategy, mission, and vision, and
  • An elementary school principal engages her neighborhood, and every fall before school starts, 75-100 volunteers prepare the school for students.

Organizations that consistently perform at the highest levels make routines of excellence. When they do, they create a performance-based culture that is the norm rather than the exception. I like what Admiral William H. McRaven, put it. “If you want to change the world, start off by making your bed.”

How Elite Organizations Maintain a Competitive Edge

Scaling Leadership

I had finished a tour of a manufacturing company. They design and manufacture custom commercial and retail furniture. Their size prohibits them from being a household name, but many of their customers are well known globally. What I had witnessed was breathtaking and pure inspiration. We put a lot of trust on first impressions, so here is mine:

  1. People are smiling. I arrived twenty minutes before the tour began, just as workers were coming to work. It sounds simple enough, but virtually everyone that walked in the door looked over at where I had parked my car and smiled at me. 
  2. Whiteboards were everywhere. But not the simple whiteboards that hang on a wall. They had desks made of whiteboard material. Large floor to ceiling movable walls were made out of whiteboard material. When the walls were structural, they had sprayed walls with a coating so that workers and guests could write on them. Dry Erase markers were abundant. 
  3. No bosses and supervisors. This is not to say there was no leadership. Quite the opposite. They just dropped a lot of titles for the more common “mentor.”

The tour itself was a model of the Toyota Production System. They have implemented it so well that by all rights, they should not even be in business. They are in an area of some of the highest labor and home values in America. Yet they easily compete with competitors in the American South and internationally where labor is substantially cheaper. They do it because they are singularly obsessed with the elimination of waste and the creation of value for their customers.

Yet during the tour, I did hear one word about leadership. So, when the tour was over, I asked if there was a broad purpose or intent to their leadership. Todd, the production manager, got up from his chair, squared his shoulders to me, and said, “we practice servant leadership.”

Anyone taking their tour, of which 40,000 people have done, will see and hear kaizen or what many will call Lean. However, from my perspective, what I saw that made it work so effectively, was a system of leadership where leaders and managers are trained in how to be mentors, coaches, in short servants to those who are on the front lines to find and eliminate waste. 

Many organizations, consultants, and theorists espouse lean. However, what I saw, and from my own experience, to make Lean work, leaders must know how to coach and mentor, they must know how to serve. What I had witnessed was a system that had scaled these core values throughout the company. They were not just the values of the president or a few senior executives. Servant leadership, coaching, and mentoring were practiced at all levels. It was a system, and everyone was trained in how to execute the system.

How Elite Organizations Design Their System of Leadership

Organizational Genetics for Scaling Leadership

No organization in the world takes leadership as seriously as the military. In the chaos of war, good leadership is not the difference of a few pennies of EPS (earnings per share). Good leadership is a matter of life and death. I’m reading General Jim Mattis’ book, Call Sign Chaos.

General Mattis grew up in Richland, Washington, hiking the Cascade Mountains, and exploring the west. He joined the US Marines after graduating from a small college in Washington State, where he was an average student. He would rise to the rank of General, serving as the commander of the United States Central Command and then going on to be the nation’s Secretary of Defense. Stories of his personal leadership, of leading and serving his fellow soldiers, are legendary.
However, in reading his book, I am struck by the subtitle, Learning to Lead. Both the content and the subtitle leads me to two observations:

  1. Personal leadership is a skill that is ever-evolving and growing. There is always room for growth.
  2. Organizationally, there is a code, an organizational DNA, to which the US Marines trains its officers.

Dr. Barbara Kellerman has been researching and writing about leadership for over 25 years. She currently teaches at the John F Kennedy School of Government at Harvard University. In her book, Professionalizing Leadership, she addresses both these observations when she states:

Let me state this as plainly as I can: Learning to lead in the American military is unlike learning to lead anywhere else in America. Learning to lead in the American military is better. Learning to lead in the American military is harder, broader, deeper, and richer. And it is longer. In the American military, learning to lead lasts a lifetime.

What gives the military the ability to train better officers is a kind of genetic code, an organizational DNA to which they teach and develop military leadership. This is what allows the US Marines to scale their principals, core values, intent, and objectives across a workforce of 200,000 active and reserve Marines. The US Army does the same only the scale is ten times larger with a workforce of 2,000,000 active and reservist. Both services begin with a foundation of servant leadership. Their system gives them the ability to scale these core principles across the breadth of their workforce.
For example, some of their training is amazingly simple. In the cafeteria, the highest-ranking officer eats last. It is a rule, and by making it routine, they build servant leadership into institutional muscle memory. Do they do it correctly, of course not. By building simple routines into standard work, they create an organizational DNA that demonstrates that leaders are servants to their subordinates.
It was Christmas, 1998. Location, Marine Corps Combat Development Command headquarters at Quantico. A young Major was assigned to the Duty Station. He is young, married, and with a family. Then Brigadier General Jim Mattis decides he should be with his family on Christmas and takes his place. For us non military types this may not sound like much. Corporately, it might be likened to the COO of a S&P 500 corporation taking security duty so the guard can spend Christmas with his family.
How does the American Military develop these kinds of leaders? They train them to a genetic code, a sort of organizational DNA that begins with the purpose of servant leadership.

Why Elite Organizations Design Their System of Leadership

Dawn of the Leadership System – Part 1

It was in October of 1987. Place, New York City. The keynote speaker was slim, silver-white hair, confident, and articulate. He had just been named CEO of an industrial giant that was troubled. Quality was suspect, profits not what they should be, labor unrest, and he was an outsider, a government outsider. His first words were these, “I want to talk to you about worker safety. Every year numerous Alcoa workers are injured so badly that they miss a day of work”. Paul O’Neil hardly made a confidence-building speech to the financial community at his introduction as the new CEO of Alcoa Aluminum.

It is fitting that we pause to remember. He passed away just a few days ago at the age of 84. By anyone’s measure, Paul O’Neil ranks as one of the great corporate leaders in a generation. Over the 13 years of Paul’s guidance, Alcoa’s market valuation surged from $3 billion to $27.5 billion, and net income rose from $200 million to $1.5 billion, while also making Alcoa one of the safest places in America to work. When he retired, it was safer to work in an Alcoa foundry with 2000-degree(f) liquid aluminum flowing around than it was to work in the back office of an insurance company shuffling paper.

The question is, how did he do it? Was it his charisma, charm, ability to see into the future, or strategic brilliance? Or was it something more fundamental? More structural? As I have studied his leadership, it strikes me that he designed a structured system of leadership, then trained, modeled, coach, and required every leader and manager to lead according to its requirements.

Donella Meadows, one of the giants in Systems Theory, says, “The least obvious part of the system, its function or purpose, is often the most crucial determinant of the system’s behavior.” By making workforce safety, the purpose of his system of leadership, every leader, manager, production lead, and coordinator had a singular transcendent purpose, safety of the workforce. When corporate meetings, operational or at the Board level, begins with the safety report, everyone goes on notice, safety is critical. When O’Neil gives out his personal phone number and tells the workforce to call him if their supervisor is not listening about their ideas to improve safety, everyone knows, safety is essential. When plant managers understand they will be fired if they do not report to O’Neil an accident resulting in a day of work off work, safety is recognized as critical.

The result? Safety became the lens through which every process and procedure could be evaluated and improved. Instead of costing Alcoa money, Alcoa enjoyed the best economic returns in its history.
The first step in designing a leadership system is to determine its purpose, which always will include the employee experience. For Alcoa, it was the safety of the employee. Determining the purpose is likened to harnessing the iceberg’s unseen power, the part that is below the waterline. It is this mass that determines the course and speed as it drifts the ocean currents.

So, the first step in designing a system of organizational leadership, determine what it is to produce. As Meadows describes, every system has three parts. The most important of which, is the purpose.

Why Elite Organizations Have a Passion for Engagement

Developing the Causal Relationship to Strategy

In January 1994, the United States Navy formally commissioned the USS Santa Fe, its newest nuclear-powered fast attack submarine. Five years later, despite being one of the more modern ships in the fleet, her operating performance put her at the bottom of the fleet.

Reenlistments were low, officer retention was zero, and training program effectiveness was rated at “not effective.” She was the ship every sailor wanted to avoid.

Captain David Marquet, author of the book, Turn the Ship Around, tells the story of spending a year preparing to command the USS Olympia, an older but one of the best performing ships in the fleet. In his training, he learned every system, button, lever, valve, and sailor in preparation of taking command. His superior technical knowledge of the ship would be the platform of his leadership. However, in a last-minute change, he was assigned to the USS Santa Fe. The Santa Fe was a different ship, with a different reactor, with a different acoustical system, and with different personnel. Leading from a foundation of superior technical knowledge was not going to work.

In his book, Captain Marquet tells the story of taking the ship out on its first training cruise as Captain. He ran a standard drill to test the crew’s ability to operate on battery power, simulating a reactor that went offline and had to be restarted. In true Navy tradition, he tells the Navigator, who had two years’ experience on the ship, to speed up, “ahead two thirds.” Who, in turn, ordered the Helmsman “ahead two thirds.” Who should have turned a dial to read two thirds. Except nothing happened. On this ship, there was no two thirds on the electric motor. Captain David Marquet had given a command that could not be carried out, to a subordinate who knew it could not be carried out, but went ahead and issued the command to another subordinate who could not carry it out.

He had to design a new system of leadership. A system that would engage every sailor to be “independent, energetic, emotionally committed and engaged men thinking about what we needed to do and ways to do it right.” In short, Captain Marquet’s strategy to improve the performance of the USS Santa Fe was to engage 135 sailors to be fully engaged.

A year later, the USS Santa Fe received the best performance scores in its history, and a year after that, the best scores in the history of the Navy. Which begs the question,
Can engagement of the workforce, be THE strategy to achieve business objectives?

I do not believe the engagement of the workforce can always be THE strategy to achieve business objectives. However, there is ample evidence, which shows that organizations that consistently achieve their business objectives enjoy a highly engaged workforce. From my research, they make engagement a strategic priority by creating a causal link between the engagement of their workforce and their business strategy.

Gallup reports that an engaged workforce will generate:

● 41% Lower absenteeism.
● 58% Fewwe patient safety incidents, (healthcare application).
● 24% Less turnover in high-turnover organizations.
● 59% Less turnover in low-turnover organizations.
● 28% Less shrinkage.
● 70% Few safety incidents.
● 40% Fewer defects in quality.
● 10% Higher customer ratings.
● 17% Higher productivity.
● 20% Higher sales. and
● 21% Higher profitability.

Clearly, there is plenty of reasons to make an engaged workforce a strategic priority. The only question is how.

Creating Cultures of Collaboration

Pixar is arguable one of the most creative and innovative companies on the planet. Their blockbuster animation hits include Toy Story (1,2,3, and 4), Finding Nemo, and The Incredibles. In his book on the history of Pixar, CEO ED Catmull writes about a routine called The Brain Trust.

This is a regular event that for creative writers, producers, and technicians to come together to collaborate work on a story. The essential elements of these events are “frank talk, spirited debate, laughter, and love.” These are so important to the culture that Steve Jobs, an early investor and larger than life personality did not attend because of his propensity to overshadow all others. Furthermore, even the placement of the chairs is arranged in such a way to encourage collaboration and candid perspectives. Pixar has built a culture and leadership system that respects and values candid communication and their workforce views.

In contrast, I recently came across an article published by FastCompany titled, 6 Ways To Communicate With More Authority, (1-11-16). The message was how to be heard within your company, and while somewhat predictable, the ideas were no less valid. The six methods are:

METHODSUPPORTING IDEA
Decide On Your Convictions. “You need to have a strong conviction in your ideas before asking others to consider them.”
Don’t Hedge.“Never lead with an apology.”
Stand Your Ground.“the ideas most worth sharing are likely to be at least a little controversial.”
Be Willing To Challenge Others. “…they (senior leaders) like it when people challenge each other and share contrary views”
Always Show Respect.“Ultimately, the best way to show respect for upper-level managers is by sharing your best ideas with them.”
Be Authentic.“There’s no need to resist corporate culture in your effort to become a more powerful communicator.”

While each of these methods is valid, there is another perspective. Why do individual contributors and emerging leaders need to be coached in these methods in the first place? The fact that writers need to write about having your voice heard is a statement that leadership is broken, disrespectful, and unwilling to listen to competing ideas.

For example, if someone lower in the organizational power rankings needs must stand their ground, it means that those in the higher power rankings don’t respect the perspective and voice of those with less power. In the same way, if one must work on being authentic, could it mean that the culture leadership does not value authenticity?

Collaboration, open communication, respect of the workforce, “our people are our most important asset” are all widely accepted values and principles of management. Yet Gallup still reports that nearly two-thirds of the workforce is either actively sabotaging the workplace or contribute little to innovation and value creation. Why is there such a disconnect between what we know will create thriving workplaces, yet there is so little implementation?

Jeffrey Pfeffer of Stanford University is a leading critic corporate leadership and programs that are designed to develop leaders. In his book, Leadership BS, he states, “When leaders’ own jobs and salaries depend on how well they look after others, they will do so. Until then, relying on leaders’ generosity of spirit or the exhortations of the leadership literature is an ineffective and risky way to ensure that leaders take care of anyone other than themselves.”

Creating a Psychological Safe Workforce

I recently had the privilege of reviewing Dr. Timothy Clark’s book, The 4 Stages of Psychological Safety. I was struck by how this book parallels my research into high performing organizations and how they approach the practice of leadership.

In the book, Dr. Clark argues convincingly that the path to innovation and employee engagement is not with short-term trinkets, recognition programs, and better benefits (although these certainly are important). Instead, he says, the path to innovation and employee engagement is a workforce that feels psychologically safe. This idea is a take-off from a significant Google study that concluded that the number one determinate in team performance was psychological safety.

For me, the defining statement in the book is this, “innovation is almost always a collaborative process and almost never a lightbulb moment of lone genius.

One of the subjects of my research was an innovative manufacturing firm called Kaas Tailored. They design and manufacture custom and retail furniture. They have fully implemented kaizen or the Americanized term lean, as their method of finding and eliminating waste. However, they do not “do” kaizen as much as they practice kaizen. But their success is more than a manufacturing technique. During my tour, I asked if there was an overriding or primary purpose to the way they approach leadership. Todd, the Production Manager, stood up, squared his shoulders, and with some authority, said, “we practice servant leadership.”

The result is a highly successful organization that engages every member of their workforce to find and eliminate waste in the design and manufacturing process. From my observation, they are a collaborative incubator that removes waste and replaces it with value. They are so good at it, that with 200 employees the employees generate 1,000 – 1,250 kaizens every year. Each one saves the company approximately $1,000, which is a lot like an annual dividend. To do this, employees must feel psychologically safe to identify and implement opportunities to remove waste and error. They are full contributors to the success of the company.

The employees are a great model of Dr. Clark’s framework:
• Inclusion safety. They are an ethnic melting pot, so they feel inclusion.
• Learning safety. Learning is a critical function of the organization, and training happens every day from 8:00-8:05 every morning. Yes, in five-minute increments.
• Contributor safety. From my observation, employees are fully engaged to contribute to the mission of Kaas Tailored.
• Challenger safety. From my tour, I witnessed employees who were encouraged to challenge standard processes if they saw a way to improve them.

As I write this, we are in the midst of the COVID-19 crises. Healthcare workers are on the verge of running out of essential healthcare equipment like face masks. Kaas Tailored has just announced a partnership with a major healthcare system to supply 1,000,000 faces masks. To do this, they are shifting their production as well as mobilizing individuals with a sowing machine. Why am I not surprised?

New Economic Models Require New Leadership Models

Chairman and Co-CEO of Salesforce Marc Benioff recently declared, “Capitalism as we have known it is dead.” In making this claim, Mr. Benioff was stating that the traditional model of business economics – maximizing shareholder value is dead. Instead, he argues that we are entering a new phase of capitalism, the age of stakeholder value. In this model, shareholders are but one entity that must be acknowledged. The others are the workforce, community, and even the environment. When highly successful titans of industry make these kinds of prophetic statements, we tend to give them the weight of Biblical oratory. Members of the media frantically copy down each word for their next article or book.

However, if anyone would pay attention, millennials rejected the standard shareholder value model long ago. They went on record by refusing to be reduced to a simple unit of production. In their minds, their value cannot be measured by the revenue they produce for shareholders. How did they make this kind of bold statement? With their feet.

All their lives, older adults have reached out to millennials to encourage and nurture their dreams and aspirations. When they enter the marketplace, they expect the same kind of treatment from superiors. Unfortunately, in the workplace, managers are not trained, nor are they supposed to care for the aspirations of their subordinates. From their perspective, the primary role of the workforce is to create revenue. Plain, simple, and clear.

However, millennials reject this value system and walk. In response, they are labeled self-centered and loyal only to themselves. Unfortunately, this is the way they were raised. Frankly, I see nothing wrong with this. Their only crime is being twice as smart as their parents and grandparents when they were the same age. This should terrorize existing managers and leaders because millennials are not only asking for authentic relationships with their superiors, they fully expect it. The fact that 6 in 10 millennials are looking for a new job should be a wakeup call. Our total understanding of leadership will need to be reinvented if organizations expect to hire and retain the best millennials.

This new understanding of leadership is what Dr. Barbara Kellerman, professor of public leadership at Harvard’s Kennedy School of Government, refers to as the “system of leadership.” When leadership is understood as a system, it can be designed for specific requirements. If the system says leaders are to be mentors and coaches, then specific training and feedback loops can be designed to teach leaders and managers how to be coaches and mentors. Unfortunately, when this training is provided outside the context of a designed system, it becomes a good suggestion but not a requirement. When it becomes a requirement, training is then aligned with system requirements that will establish a culture of coaching.

In my research, I discovered a small manufacturing organization that has built the principles of servant leadership into their system of leadership. Every leader, manager, production lead, and supervisor is trained to be servants and mentors to those they lead. They are called mentors. Their job is to facilitate their subordinates to find and eliminate. This begins with the President and CEO. Want to see him? He will not be at his desk. He does not have one. In fact, there are no offices in the facility at all. The company has determined that offices are a waste of space and a bottleneck to improvement and waste reduction. The CEO can only be found working directly with his staff. The result is a workforce with very low turnover and a waiting line of customers.

The Number One Difference Between High and Average Organizational Performance

Erin is the principal of an elementary school that, in 7 years, went from failing to the holy grail of closing the achievement gap. When I asked her about her approach to leadership, she said:

Leadership? I don’t know anything about leadership

She then went on to describe to me an eloquent system of leadership that is simple, scalable, measurable, and replicable. If each principal were trained to its requirements, I believe each would enjoy the same success. The challenge is our entrenched cultural baggage that leadership is about personal influence rather than an organizational system, intentionally designed to deliver value to the customer, or in this case, the student.

In an earlier post, I defined a system of leadership. In this post, I will address how high performing organizations approach three key resources that every organization uses to create and deliver customer value:

1) People;
2) Money; and
3) Knowledge.

The greatest difference I found between average and high performing organizations is this: average organizations manage these resources as assets, (a nice way of saying controlled); high performing organizations understand these are resources to be developed. Developing these resources means greater value delivered to the customer.

People

High performing organizations understand their workforce as the primary source of innovation and value creation. Therefore, the more than can develop their workforce, the more value they can deliver to their customers. Case: Virginia Mason Hospital has been recognized as one of the safest hospitals in America for 12 consecutive years. A rare achievement. One of my takeaways from a half-day tour was their intentional methods of developing their people. One of these methods is an important rule – leaders are NOT to be problem solvers. If a subordinate asks a manager how to solve a problem, out of respect to the worker they don’t, the manager can help frame the problem, but they do NOT solve it. Solving a problem for a worker is disrespectful to the worker because of a fundamental belief that the worker closest to the problem is in the best position to solve it.
This develops its workforce in at least two ways:

1) It gives them confidence that they have the power to identify a problem and design solutions; and
2) It gives them opportunities to learn new technical skills in problem-solving such as the 5-whys.

Within this environment, emerging leaders blossom and grow. Unfortunately, traditional leaders who see problem solving as a source of power, have difficulty giving this up and frequently move on.

Money

High performing organizations see money as a resource that can grow in value. So, when they extract waste, they create more options for how to deliver greater value that will pay dividends now and into the future. Case: Kaas Tailored is a manufacturing firm with 200 employees Within their system of servant leadership, they train, coach, and mentor every employee, leader, manager, supervisor, and production lead how to do daily kaizen. Each year, their employees identify and conduct 1,000 -1,250 kaizens, with each saving the company $1,000. While the actual cash savings may flow to the company or the employee’s retirement account, customers received greater value through faster delivery, greater satisfaction, and confidence. It is not a coincidence that many of their clients have been with them for decades, even though there are cheaper alternatives.

Knowledge

Average organizations believe innovation is an expensive idea. High performing organizations understand that the most significant source of new knowledge and innovation lies within the workforce and its free of charge. Case: During my interview with Erin, the elementary school principal, she spoke about two ways of understanding knowledge creation and innovation.

• Knowledge creation (innovation); and
• Knowledge delivery or the actual use of new knowledge (innovation) in the classroom.

Knowledge creation. It takes ten years for an innovative idea to get out of academic research laboratories and into the classroom. As Erin explained, “this is too long,” yet innovation is a challenge because when it fails, the lost classroom time can never be recovered. When she described this to me, she pulled back the sleeve of her blouse and showed me the word “grace” tattooed on her wrist. She said, “sometimes great ideas fail, and we must forgive ourselves, learn from it, and move on. The next innovative idea may change the trajectory of a student’s life.

Delivering new knowledge. Erin believes that collaboration as foundational to the educational process. So, she installed peer review to increase collaboration. In this routine, a 3rd-grade teacher may observe a 5th-grade teacher teaching math. This peer review creates opportunities for collaboration, coaching, and mentoring. In doing so, new skills, approaches, and ideas are created, disseminated, improved, and passed on again. This routine creates a culture of learning within a learning institution.

Conclusion

In every organization, I have researched that has been able to achieve and sustain high levels of employee engagement; their approach to these key resources has always been development vs. management. Furthermore, all the research says that millennials are not interested in management (control), but they are wild about development.

Billionaire Salesforce founder: ‘Capitalism as we know it is dead.’

At the 50th annual World Economic Forum, Chairman and Co-CEO of Salesforce Marc Benioff declared, “Capitalism as we have known it is dead. This obsession that we have with maximizing profits for shareholders alone has led to incredible inequality and a planetary emergency”.

In an article published by Yahoo, author Oscar Williams-Grut, documents Mr. Benioff, outline of how the current obsession with maximizing shareholder value, has not only run its course, and is responsible for income inequality and environmental disaster. He argues that “stakeholder value” will become the wave of the future where shareholders are one among several stakeholders that must be recognized. These additional stakeholders include the employee, the community, the environment, and society. It is called “stakeholder capitalism.”

Mr. Benioff was joined in this assessment by chief executive Dan Schulman of PayPal, Bank of America chief executive Brian Moynihan, and Jim Snabe, chairman of industrial giant Siemens. What is more, both Snabe said Siemens advocated for putting the “remuneration system for the CEO and the executive team on an ESG (environmental, social, and governance) base.”

But the question is, what kind of leadership will be required to scale an entirely new corporate value system? Certainly, advocates will speak of courageous, dynamic, forward-thinking leadership. All well and good, but to install a wholly new set of corporate values, requires the thoughtful design of a new system of leadership to implement them.  While talking about advocating for employees is noble, to scale this kind of advocacy across an organization with even a few hundred employees, let alone tens of thousands, will require more than talking about it. It will require a dramatically different kind of relationship between supervisor and staff. New rules, routines, and behaviors will need to be identified and enforced. Organizations will have to get serious about workforce development beyond a simple tuition reimbursement program, which had never proved to be of any value anyway. They will need to recognize that when a person walks in the door, they bring with them that intrinsic capacity every human being carries – creativity and innovation – and find ways to engage them around the entirety of their humanity. Sister Mary Jean Ryan is the retired CEO and Chairwoman of SSM healthcare. At a conference, I heard her say, “We must never forget that when a worker leaves at the end of the day, they go home to become family nutritionist, educational tutors, transportation managers, and behavioral counselors. And when they come back in the morning, they do not magically lose those skills only to regain them once again at the end of the day.

Though Mr. Benioff spoke of stakeholder capitalism as a corporate obligation, the truth is that there is a tremendous opportunity for adopting this model. My research and the research of many others point out that merely increasing the engagement levels of the workforce creates an exponential benefit to value creation, innovation, and yes, the bottom line.   As one simple example, numerous studies documents that the number one variable in hospitality mortality is the levels of nurse engagement.

While Mr. Benioff should be applauded for his advocacy, the real test is how to scale these new values so that they become embedded in how leadership is executed daily by front-line managers, leaders, and directors.