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Good Work and our Times
Report of the Good Work Commission
Lucy Parker and Stephen Bevan, July 2011
ConTenTs


exeCuTive summAry                            5

ChApTer 1: Work in our Times                 8

ChApTer 2: meAn...
ForeWord




ForeWord


Making work more rewarding for the individual, their organisation and society, is not a new subjec...
ForeWord



valuable. In short, answering the question, “Is there a purpose to what I am doing and can I be proud of
doing...
The Good Work Commissioners


Alan Parker                                John Hannett
Chair of the Commission – Founder an...
exeCuTive summAry




Good Work And our Times –
exeCuTive summAry


This is the report of the Good Work Commission. The Co...
exeCuTive summAry



The Explicit Deal is what people sign up to when they take a job. It is central to any employment
con...
exeCuTive summAry



Employees and employers alike recognise that, these days, guaranteeing job security is unrealistic.
H...
Work in our Times




Work in our Times


The chapters which follow make the case for more ‘good work’ but, by way of intr...
Work in our Times



organisations which are driven by maximising profit. They illustrate the scale of today’s challenge t...
Work in our Times



significant shift of traditional UK industries to elsewhere in the world, whether in steel, shipbuild...
Work in our Times



Yet we should pause to remember that ‘we’ are ‘them’. Outside work, we are the consumers that are
cha...
Work in our Times




     Commissioner perspective
     from Kim Winser, Agent Provocateur and 3i – on global markets

  ...
meAninG And purpose




meAninG And purpose


People want their work to have meaning. When people speak of the meaning of ...
meAninG And purpose



        •	 Social purpose – doing something which is useful to others
        •	 Moral correctness ...
meAninG And purpose



of their satisfaction and motivation. Towards the end of his career, Hertzberg distilled his core m...
meAninG And purpose



As an employer, it is important not to assume you know what your employees’ priorities are, but to ...
meAninG And purpose



      even of our own existence. But it also happens surprisingly often at work – as long as the
  ...
meAninG And purpose



               Peter Sands, Standard Chartered

               Bankers must play our part in restor...
meAninG And purpose



In their book, ‘Leaders: The strategies for taking charge’, leadership gurus, Bennis and Nanus, obs...
meAninG And purpose




   Commissioner perspective
   from Richard Chartres, the Bishop of London – on the sense of narra...
meAninG And purpose




  Commissioner perspective
  from Clare Chapman, National Health Service – on purpose and values s...
meAninG And purpose



Recognising this sense of personal disassociation, including amongst the leadership of organisation...
meAninG And purpose



To quote Will Hutton again:

        There was a general downgrading of the pursuit of an identifie...
meAninG And purpose



Of course, the great majority of businesses and organisations are not touched by scandal and do not...
meAninG And purpose



The CusTomer mAndATe
While rallying behind a strong sense of meaning and social purpose is relative...
meAninG And purpose



freedom to respond to complaints with the offer of a free meal. This visibly reinforces the link be...
meAninG And purpose



However, a study carried out for the Department of Business, Innovation and Skills (BIS) showed tha...
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This is the report of the Good Work Commission. The Commissioners are a group of individuals with a great breadth and depth of experience in leading organisations across all sectors, including business, government, the unions, the church, media and the voluntary sector. They believe that ‘good work’ is a benefit to employees, employers and society alike – and that it is possible to make it more rewarding for all involved.

Flowing from that, the purpose of the report is to explore what makes ‘good work’ and how to create more of it. It is based on two key assets: the great breadth of experience and views of the Commissioners and the considerable body of research produced by the Work Foundation over the past decade. The Work Foundation presented a set of eight Provocation Papers to the Commissioners to inform their thinking and stimulate debate. The report draws heavily on those papers and over twenty other studies produced by the Foundation, as well as a wide range of literature produced by others in the UK and elsewhere. Personal perspectives from the Commissioners are incorporated throughout the report, reinforcing and accenting the research-based narrative about the nature of ‘good work’.

The aspiration is for the report to be useful for people who have leadership and management roles in organisations, prompting reflection about how effectively their organisation is dealing with these issues and providing practical suggestions about how they could take it to the next level.

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Good Work and our Times

  1. 1. Good Work and our Times Report of the Good Work Commission Lucy Parker and Stephen Bevan, July 2011
  2. 2. ConTenTs exeCuTive summAry 5 ChApTer 1: Work in our Times 8 ChApTer 2: meAninG And purpose 13 ChApTer 3: The expliCiT deAl 38 ChApTer 4: The impliCiT deAl 52 ChApTer 5: WhAT hAppens When Work Goes 71 ChApTer 6: on The horizon – FuTure Trends 88 ChApTer 7: CreATinG more Good Work 94 Good Work And our Times 1
  3. 3. ForeWord ForeWord Making work more rewarding for the individual, their organisation and society, is not a new subject, but it is a big one. The larger the frame you put it in, the larger it gets. So from the beginning we recognised that we needed to assemble a range of diverse voices to debate the subject and take a holistic approach to ensure we could examine the detail without losing sight of the wider context. It was therefore enormously valuable to have such a great mix of Commissioners prepared to invest time and thought in what has been a long and rewarding process. We were hugely fortunate to benefit from the business expertise of some of the country’s top Chief Executives, combined with contributions from forward-thinking Trade Unionists, leaders in the public sector and the Church. It was a remarkably powerful and exciting forum in which to explore the subject. Our concepts of work have deep historical, social, and often religious roots. The evolution in thinking and practices has developed enormously in the last two hundred years, and in the last few decades, huge developments in technology and globalisation have created not just new ways of working, but new global forces such as the global capital markets and consumer engagement. The importance of the values of ‘good work’ become increasingly clear as we consider our future in the twenty first century. In the last 20 years it seems that the primacy of financial capital has overshadowed the contribution and investment potential of the people working within or for an organisation. If we can take any true positives out of the credit crunch, one of them is an overdue rebalancing of this view. The recent financial crisis crystallised a lot of profound concerns about how we do business. In times of crisis the “how” becomes more important from a risk management point of view, but the bigger trend is how ‘good work’ can be at the heart of high performance organisations. Whether as an individual or as an organisation, it is a key ingredient in creating the winners of tomorrow. If you were ever of the school of thought that the best way to achieve top performance is by focussing an organisation on its profits or return on financial capital alone, then I can only recommend you ask Philip Dilley, CEO of Arup, to outline why the “Big Speech” by Ove Arup given in 1955 is not just still relevant, but is at the heart of their global success as an organisation. That speech, available on their website, defined so many of the principles of how they want to work and has undoubtedly helped them become world leaders in their industry. Their approach to how they do business has not only made them more profitable but their success has made a direct impact on the cities all over the world that they have helped design and create. This is the value of ‘good work’ writ large - in their case, actually on the skyline. At the same time it has benefitted the lives of everybody in the firm and the people they deal with. We have had the privilege of many such contributions so it is hard not to be inspired by the opportunity ahead. Another new and powerful force behind the increasing recognition of the value of ‘good work’ is the growing interest and demand from the end consumer. In addition to the perennial concerns such as price and quality, how something is made, whether it is electricity, food or motorcars, and how that organisation operates is now rising rapidly up the consumer agenda. This is closely linked with the employee agenda and what is generally titled “employee engagement”. There is a huge amount of work dedicated to this area and we have had some valuable debates on the subject. Central to all of it is the power of belief. The belief that the job you are doing is important and 2 Good Work And our Times
  4. 4. ForeWord valuable. In short, answering the question, “Is there a purpose to what I am doing and can I be proud of doing it well?” It does not matter what level or type of job it is - these are not just powerful but universal questions. One of the key differentiators of great organisations and strong leadership is that they set out to answer them. One of the most interesting issues is why more organisations do not pursue the opportunities when the body of knowledge is so strong. This is partly why we wanted to draw on the enormous experience of the Commissioners - so that we could better understand what does not work and what the barriers are to progressing this thinking in different types of organisations. It is also why we conclude with a practical agenda and a framework for discussion which can be used by leadership teams in any organisation. I would like to thank all the Commissioners and their organisations for their untiring support and enormously valuable contributions. We also had fantastic insights from a lot of other organisations and individuals, such as McKinsey, Richard Donkin and the Bishop of London. I would also like to thank Lucy Parker for pulling together the enormous range of work evidenced here, and the writing of this report , and finally I would like to thank Stephen Bevan and The Work Foundation team, who were both the originators of the idea and stalwart supporters throughout. I hope this report inspires both interest and action, as the power of ‘good work’ must surely be one of the most liberating and creative forces in society. There is an enormous amount of it being done, and the opportunity for greater progress is, I believe, both a challenge and an inspiration. Alan Parker Chair, Good Work Commission Good Work And our Times 3
  5. 5. The Good Work Commissioners Alan Parker John Hannett Chair of the Commission – Founder and General Secretary, Usdaw Chairman, the Brunswick Group Peter Housden Andy Bond Permanent Secretary, Scottish Government Chairman of Republic and former Chairman of Asda Will Hutton Vice Chair, The Work Foundation Clare Chapman Director General of Workforce for the Jim McAuslan National Health Service and Social Care, General Secretary, British Airline Pilots’ Department of Health Association Richard Chartres Peter Sands The Bishop of London Group Chief Executive, Standard Chartered Tracy Clarke John Varley Group Head of Human Resources Formerly Group Chief Executive, Barclays and Communications, Standard Chartered Kim Winser Adam Crozier Chairman, Agent Provocateur, and Senior Chief Executive of ITV Advisor, 3i Carolyn Gray Human Resources and Pensions Director, Guardian Media Group 4 Good Work And our Times
  6. 6. exeCuTive summAry Good Work And our Times – exeCuTive summAry This is the report of the Good Work Commission. The Commissioners are a group of individuals with a great breadth and depth of experience in leading organisations across all sectors, including business, government, the unions, the church, media and the voluntary sector. They believe that ‘good work’ is a benefit to employees, employers and society alike – and that it is possible to make it more rewarding for all involved. Flowing from that, the purpose of the report is to explore what makes ‘good work’ and how to create more of it. It is based on two key assets: the great breadth of experience and views of the Commissioners and the considerable body of research produced by the Work Foundation over the past decade. The Work Foundation presented a set of eight Provocation Papers to the Commissioners to inform their thinking and stimulate debate. The report draws heavily on those papers and over twenty other studies produced by the Foundation, as well as a wide range of literature produced by others in the UK and elsewhere. Personal perspectives from the Commissioners are incorporated throughout the report, reinforcing and accenting the research-based narrative about the nature of ‘good work’. The aspiration is for the report to be useful for people who have leadership and management roles in organisations, prompting reflection about how effectively their organisation is dealing with these issues and providing practical suggestions about how they could take it to the next level. The first chapter of the report, Work and Our Times, sets the context. The significance of work is an enduring theme. Throughout history, cultures have been shaped by the nature of work and the tools which people have at their disposal. The subject has been given new emphasis in our times by the information revolution, which has transformed so much so quickly about the way in which individuals, businesses and society live and work. In recent years too, the impact of the financial crisis and the global recession has shaken assumptions about the purpose and value of business to society. And even beyond the financial crisis, there is widespread distrust of leading organisations – and leaders – that crosses business and social sectors. Though this was not the impetus behind producing the report, it has highlighted the importance of articulating the principles of meaningful and good work. The chapter also draws in the major global trends, from technological change to the rise of the consumer, which are having a direct impact on the workplace today – and which create the backdrop this report. The chapter on Meaning and Purpose argues that finding meaning in work matters to people and is intrinsic to the nature of ‘good work’. Indeed, it is impossible to think of ‘good work’ which people find meaningless. Our proposition is that this principle is universal; it applies to everyone whatever kind of job they do and wherever they fit an organisation. The challenge for employers is to find new ways of responding to that aspiration for their entire workforce, rather than just for a lucky few. Meaningful work is made up of a subtle mix of factors which is not the same for everyone and can change over someone’s lifetime. While leaders cannot provide meaning, as such, they can provide the conditions for people to do that for themselves by clearly setting out the purpose of the organisation. And there are practical ways to reinforce the connection, including through ownership models and giving employees a voice in the organisation, through to designing jobs and workflow to make work more worthwhile and rewarding for both the organisation and individuals involved. Good Work And our Times 5
  7. 7. exeCuTive summAry The Explicit Deal is what people sign up to when they take a job. It is central to any employment contract, but it is not the whole employment relationship. Similarly, while pay is an essential element of ‘good work’, it is by no means the whole deal – or even the primary motivator. How pay is allocated, for instance, is as important to people as absolute pay. One of the most significant factors influencing the employment contract today is the enormous momentum behind the trend for greater transparency. The desire for a sense of fairness about pay, especially the gap between the top and bottom levels, is fuelling the trend. But it encompasses more aspects of organisational culture than pay; for instance, performance management, where the challenge of tackling poor performance is as significant as rewarding strong performance. Our view is that there is a real opportunity for employers to embrace the trend towards transparency and actively work with it as a mechanism to establish fairness and build trust. Though recent years have seen a decline in the number and membership of unions, they continue to play a significant role in the workplace. There is a broader negotiating agenda than ever before, reaching beyond pay, grievance and discipline, to cover skills, diversity and flexibility – because those are central to the concerns of today’s workforce. Among the progressive unions, the trend has been moving away from a sometimes adversarial position to a dialogue based on defining mutual benefit – a more modern paradigm that is relevant to the employer-employee relationship, whether or not it falls within formal union negotiations. The Implicit Deal explores the many other aspects of the employer-employee relationship which add up to the day-to-day experience of work. This chapter argues that making the connection to the core purpose of the organisation is the key to ‘employee engagement’. That is what elevates employee engagement programmes above the transactional level into adding value to the business and to employees. There are multiple facets to creating a committed workforce, from giving people autonomy in their jobs to a voice in the organisation; from matching qualifications and skill levels to the job in hand to the capability for fostering innovation. One of the most significant modern factors is the growing desire for flexibility, which is coming from both employees and employers. The complexity of these inter-related topics requires thoughtful orchestration; it is not possible to rely on them occurring spontaneously. The competence of front line managers is a decisive factor in the culture and performance of an organisation: they are the conduit for communicating purpose and the day-to-day experience of work for employees – good and bad – is largely governed by how they carry out their role. Therefore how they are selected, trained and equipped is vital – and they need to know their responsibility for making it a good place to work. The alignment between employees’ experience of ‘good work’ and successful business performance can be measured in a number of different ways – including, on one hand, the health and well-being of the workforce leading to reduced absenteeism and, on the other, customer satisfaction driving sales growth. The investment in time and resources required to create an engaged workforce is a win:win – a business case for employers in improved performance and productivity; a more meaningful and rewarding experience of work for employees. In this report on the nature of work, we have chosen to include a chapter on the subject of What Happens When Work Goes. This report argues that a company’s approach to managing job loss can be seen as the acid test of its claim to be a ‘good work’ organisation. The individual and societal cost of unemployment is a powerful expression of the value of work itself. During the downturn of recent years, there have been many examples of employers and employees working collaboratively to find innovative ways of mitigating the most damaging effects of redundancy. Apart from the practical result of protecting jobs for the long term, those instances exemplify many of the principles of what makes up good work, such as shared decision making, flexibility, transparent communications. 6 Good Work And our Times
  8. 8. exeCuTive summAry Employees and employers alike recognise that, these days, guaranteeing job security is unrealistic. However, skills are increasingly becoming a passport to employability in the modern labour market – and employers have a role to play in helping to ensure their people are equipped with the kinds of transferable skills which will be their best asset in the future. On the Horizon looks at the trends which are likely to influence the workplace in the coming years. Growing globalisation and the interconnectedness of markets, growing technological innovation and the widespread use of it in and beyond the workplace, and the growing power of the consumer are forces we recognise today, and they are all set to intensify. For people leading organisations – public or private, large or small – the challenge is to recognise how those great macro-trends will translate into the workplace and directly affect the experience of work. Creating More Good Work is the final chapter of the report. The experience of the Commissioners, and many other experts in the field of employment, is that people are becoming increasingly vocal about what they want from work. The report aims to turn the insights into a provocation for action. Therefore, in conclusion, we have set out a series of questions that provide a framework which can be used in any organisation to prompt discussion about how to make work more rewarding for employer and employees. The framework aims to help people who lead organisations and teams to formulate their own answer to the questions, ‘Why is this a good place to work and what can be done to make it better?’ Good Work And our Times 7
  9. 9. Work in our Times Work in our Times The chapters which follow make the case for more ‘good work’ but, by way of introduction, we begin by setting out the context which is influencing work in our times. Work And The humAn CondiTion The importance of work in our lives is an enduring theme, of course. The history of civilisations has been bound up with the nature of work in society – and even defined by the tools which people have at their disposal. The evidence can be traced back to the agrarian communities of 10,000 years ago, when the invention of new tools and new ways of producing and storing crops enabled mankind to make the radical shift from the lifestyle of hunter gatherers to farming – and fundamentally changed the way we live. It happened again during the 18th and 19th centuries when steam-based mechanisation created the basis for an industrialised society – transforming the nature of work and life once more. So, as Richard Donkin1 puts it, since the start of human evolution, the tools we have invented have played a vital role in ‘extending our ambition and stimulating creativity’. Today, Donkin and others argue, we are in the midst of a third revolution – the information revolution. Once more, born out of technological innovation, new tools are bringing huge changes into the workplace, which prompt a re- examination of what work means in our times. TodAy’s Crisis oF TrusT There is also a contemporary context for this report. Since the financial crisis, some of our basic assumptions about how the economy works and the purpose and conduct of organisations have been shaken. There are immediate economic consequences of the credit crunch and recession, which are visible in higher levels of business failure and unemployment across all developed economies, along with severe cuts in public spending and rising taxes to follow. But the significance of the crisis in relation to the workplace reaches still further than that. It has also exposed issues of business purpose and leadership, and of morality, transparency and trust. The values of work are in the dock. How can work which leads to such consequences be thought of as ‘good work’? How can the judgement of such leadership be trusted? After decades during which so much economic activity has been driven by the rise of the capital markets worldwide, the primacy of shareholder value as the dominant definition and benchmark of successful companies has been challenged. Some commentators think everything will return to ‘normal’ as the spectre of recession fades and the desire for a swift return to economic growth intensifies. Others take the view that the rules have changed forever and new standards of public accountability and regulatory oversight need to be applied. It is still not clear how it will play out, but the near collapse of the banking system will have been a watershed moment for this generation: there was one set of assumptions before it and another after it. These are the same few years which have seen BP’s environmental disaster in the Gulf of Mexico, the expenses scandals in Westminster and the loss of confidential data by government departments, and apologies for breaches of trust from the highest level of church organisations. They have all led the headlines repeatedly, building on each other and reinforcing a common culture of distrust in the leaders of our major institutions. This erosion of confidence goes way beyond cynicism about commercial 1 Donkin R, Work Futures, The Future of Work: Provocation Paper 1, Good Work Commission, 2009. 8 Good Work And our Times
  10. 10. Work in our Times organisations which are driven by maximising profit. They illustrate the scale of today’s challenge to re- establish trust, and re-state the purpose and values of the organisations we work in throughout society. Though the financial crisis began to unfold at the time the Commissioners first gathered, it was not the reason for taking on the task. But the events of these few years have thrown into sharp relief the relevance of articulating the principles of ‘good work’. GlobAl Trends In painting the backdrop to this report, we should sketch in broad brushstrokes the part played by the forces of globalisation as they relate to work. The financial crisis itself powerfully demonstrated how the business sector is woven tightly into a fabric of interdependence around the world. The reality is that many businesses, large and small, are now trying to compete and grow in the context of a global marketplace. For many large businesses, customers and investors are now global, but so too are work forces and supply chains. The story can be told through how the operations of many familiar British corporates have transformed over the past ten to fifteen years. Rolls-Royce, for instance, has grown from a Midlands manufacturer to a global player with almost 40,000 employees worldwide, 40 per cent of them outside the UK, compared to only 7 per cent 20 years ago. As BP’s recent troubles highlighted, 40 per cent of the company’s shareholder base is in the US, as are 40 per cent of its employees. KPMG, a UK accountancy firm founded in the 19th century, has expanded into 146 countries to meet the needs of its increasingly international customers. Marks and Spencer once built its reputation on its British produced products and faced protests when it first extended its supply relationships beyond the UK in the 1990s, whereas today it cites an integrated international supply chain as key to its growth plans. Many well-known household names in the UK are owned outside the country, and are now inherently part of the global strategy of other organisations. Abbey National, once a consumer name on the High Street in Britain, is part of Spain’s Santander Group. Boots is part of the Allianz Boots group, now head quartered in Switzerland. British Airways has merged with the Spanish airline, Iberia. The energy generator and supplier, npower, has been acquired by RWE based in Germany. Corus – and the once mighty British steel industry – is bound up in the fortunes of the Indian based Tata Group and the global steel industry. The requirement to operate on a global platform is not the preserve of big companies alone. All over the country smaller businesses are adapting fast. Take Pennine Healthcare in the Midlands: it started as a local family business in the 1960s and has evolved into a global manufacturer of healthcare products with customers from New Zealand to the Middle East, competing over the internet for contracts with companies based in South Korea. Or Meachers in Southampton: a local trucking firm which has transformed into a sophisticated international logistics business, with established partners in China and IT systems that can track the goods across the world. These examples are simply fragments of the broader picture of globalisation in the business world – a sign of our times.2 Yet, it remains true that for many employees in the UK, and indeed many employers, their own direct connection to a global market is not immediately obvious to them. It may be that the horizon of their workplace and their customers are limited to the neighbourhood they are based in because they are in local service jobs – anything from hairdressing to nursing, car mechanics to graphic design. The forces of globalisation are relevant to them, nevertheless. The sustainability of their jobs is ultimately dependent on the ability of people in the local area or the government of the day to pay for their services. Indeed, the most deprived communities in the UK where people are trapped in a third generation of worklessness prove the point. On the surface, these are the most isolated from the influence of the global capital markets. But the lack of work entrenched in those communities has been caused by the 2 FutureStory, Talent and Enterprise Taskforce, with Department of Business, Innovation and Skills, Department of Children, Schools and Families, and Centre for Cities, 2010. Good Work And our Times 9
  11. 11. Work in our Times significant shift of traditional UK industries to elsewhere in the world, whether in steel, shipbuilding or car assembly. Genuine regeneration in these areas is dependent on the creation of new work, often requiring new skills, in businesses and industries which can thrive in today’s global markets. Employers in developed economies cannot succeed by competing in low value products and services, and on low wages. So sustainable employment will need to come from higher value work and higher value skills. In the UK, growth and new jobs will be driven by the knowledge economy. Over the past ten years, for every new job created in the more traditional industries, twelve have been generated in the knowledge economy3, encompassing sectors such as the creative industries, high-tech manufacturing, telecommunications and low carbon technologies – which indicate where the jobs of the future are likely to come from. Technology is one of the forces driving globalisation and changing the shape of work for many people. Increasing automation is replacing many of the semi-skilled and even skilled roles of the past, from bank tellers to booking agents. And it is increasing the requirement for non-routine skills, from analysts to customer service. For individuals in their day jobs, the arrival of new technological processes can bring contradictory effects. The constant push to take products or services to market ahead of others, and to achieve that with a lower cost base, can create a relentless culture in business, putting pressure on working conditions and rewards. For some, technology expands the opportunity for autonomy and creativity. For others, it reduces discretion because jobs and processes are monitored to a degree of detail never possible before. In some types of jobs, it offers high levels of fulfilment and challenge. In others, it leads to greater intensity and stress, with evening and weekend working, and no license to turn off the blackberry: the ‘always-on technology’ creating ‘always-on jobs’. Many employees are interacting with wider and wider circles of people – which for some people represents broader horizons and, for others, makes for an unsettling boundariless world, breaking up a sense of immediate community and leading to insecurity. The arrival of new technologies has established a new literacy in the workplace. Employees are required to have basic ICT skills, even in jobs which are not traditionally associated with technology – such as waiters, shop assistants or lorry drivers. Patterns of work are altering: e-commmerce and services are changing the skills and resources needed in retail businesses; computer aided design enables manufacturing business to pass projects around the world on a 24 hour clock. In all sectors, from advanced manufacturing to filmmaking, from banking to healthcare, technological innovations are changing how things are done and what it possible. New technologies are driving consumer markets too – and consumers are increasingly in the driving seat. Indeed, the way society engages its citizens today is as consumers, rather than producers. And as consumers, we continuously demand higher quality goods and services, we expect to shift provider when unsatisfied and – because of globalisation – we have got used to lower prices. Companies are using novelty to win the hearts and minds of consumers, for example, with everything from new apps for mobile phones to design-your-own-trainers. That, in turn, drives the need for higher levels of skills and flexibility from employees and a culture of speed and customer responsiveness in organisations. Over the past ten years, there has also been a transformation in how individuals entertain themselves, acquire information and communicate outside the workplace. Through search engines and open access tools, blogs and social networking, people have access to an enormous wealth of information – and increasingly they expect to get it for free and on the move. As important, they know they can author and publish content themselves, which is then available worldwide. It has created a much more outspoken culture than in the past. People expect to be able to make their voice heard and to innovate directly themselves. 3 How cities can thrive in the changing economy? The Work Foundation, Ideopolis Final Report, July 2008. 10 Good Work And our Times
  12. 12. Work in our Times Yet we should pause to remember that ‘we’ are ‘them’. Outside work, we are the consumers that are changing the face of work. So the values we express in our lives as consumers feed back into our expectations and aspirations for the places we work. So, like the agrarian and industrial revolutions of history, the digital tools and technologies at our disposal are creating the revolution of our times – and radically changing the way we live and work. What becomes clear is that old assumptions do not always apply any more and there is a need for us to construct new ways of operating and new paradigms suited to our changing times. There are enormous and complex forces acting on the kind of work we do and the places we work in. Though they are sweeping macro-trends, they directly affect the personal experience of work. They help to provide a contemporary interpretation of the eternal theme of how work contributes to an individual’s sense of self and social value. The exceptional financial turmoil and crises of leadership of the past few years; global interconnectedness; the many new forms of technological tools available to us; our own rising expectations as consumers and citizens – all require us to look afresh at the meaning of ‘good work’ to employers, employees and the society in which we live. Commissioner perspective from John Varley, formerly Barclays – on the strategic issue of trust Given what we’ve all lived through over the last two to three years, with the banking crisis leading into recession in many parts of the world, there’s an intensification of the need for worth and purpose and value in work. Employees want to feel that the organisation they work for is trusted. Indeed, it’s difficult to see how organisations can offer ‘good work’ in circumstances where trust has broken down. In my conversations with customers, I’ve noticed that they often draw a distinction between ‘banks’ and the bank employees who work in their local branch. They regard the one as an object of suspicion, but the other as a friend. I see this through customers who have written to me when things have gone wrong. They will speak with warmth about the cashier in their local branch, saying that she’s doing her very best to help and she’s only applying the policies which ‘you impose on her’. They distinguish the organisation as represented by the leadership from the human face of the organisation they encounter physically when they walk into a branch, or electronically when they talk to a call centre. It strikes me as very significant that five years ago many people would have said that if the work of a business was legal and profitable, that was sufficient justification. Today it’s clear that legality and profitability, in the absence of social contribution, are regarded as insufficient. That’s a big shift over the last few years and it seems to me to have been catalysed by the credit crunch. When I look at the contribution of big business today, it’s clear that the restitution of trust is an important strategic issue. It’s especially relevant for the banking industry, but it’s also part of a more general malaise about big business. An organisation that wants to offer ‘good work’ has to be sensitive to this change in expectation. Employers who show insensitivity here will find it increasingly difficult to recruit good people – or hold good people – and maintain trust with their customers. Good Work And our Times 11
  13. 13. Work in our Times Commissioner perspective from Kim Winser, Agent Provocateur and 3i – on global markets One key factor that matters for our future is the global market. The world has become a smaller place in so many business areas and that’s not likely to change. I have worked across many countries in different businesses and I see how globalisation is having a serious impact in the marketplace, in our lifestyles and, of course, on the businesses themselves. Your competitors are no longer just the people down the road who you used to know by name; they are people you’ve never even heard of – they could be Chinese, or Japanese, American, or Swedish. Your business is in a much more vulnerable position because your competitors are people you don’t know and you can’t predict. That unsettles many people. For those who are very determined, and love a challenge, it probably incentivises them more. But for the majority, it probably scares them a little. We need to realise there are things which the Chinese, for example, do well and there are reasons why they do them well. But there are also things British people can do really well. We need to stop the global market being a subject in which we lack knowledge or talent. We must not fear our new competitors or try to emulate them. We need to understand them and their strengths, but then use that to reflect on our strengths and points of difference so that we can take up the market opportunities with confidence. We must turn what looks like a negative, with the growing threat of global competition, into a positive result for UK business by facing the challenge with good intelligence and understanding, and through the development of innovative talent and renewed energy. 12 Good Work And our Times
  14. 14. meAninG And purpose meAninG And purpose People want their work to have meaning. When people speak of the meaning of work, typically, they use the phrase to indicate more than the value of simply having a job. What is meaningful to an individual, by its nature, is subjective and personal to them, therefore not easy to generalise about. However, the concept and what it encompasses has been studied and written about many times over the years. The seArCh For meAninG The idea that work fulfils a profound human need has a long history and has often been the theme of the great philosophers. Immanuel Kant said: If a man has done much he is more contented after his labours than if he had done nothing whatever, for by work he has set his powers in motion.4 In other words, work has the power to animate us. Taking a view across the modern studies of what makes work meaningful, what quickly comes across is that, though the categorisation or emphasis may alter, the core elements remain very consistent and probably recognisable to most of us. The essence is captured by Studs Terkel’s famous words from the foreword of his 1974 book on work: Work is about a daily search for meaning as well as daily bread; for recognition as well as cash; for astonishment rather than torpor; in short, for a sort of life, rather than a Monday- to-Friday sort of dying.5 Jesper Isaksen6, for instance, identified eight routes through which employees construct meaning – despite what he called ‘the drudgery of repetitive work’: • The possibility of attachment to the workplace or the work • The possibility of engaging in social relations at work and caring for others • The feeling that the work is useful and a necessary part of a larger meaningful project • The feeling that the work accomplished is important to the well-being of other people • The possibility of learning and the pleasure of finding fulfilment in one’s work • The possibility of contributing to the development of work procedures and the improvement of working conditions • The experience of autonomy that gives a sense of freedom • A sense of responsibility and pride in one’s work. The organisational psychologist, Estelle Morin7, identifies six key categories of meaning in work which have emerged from studies since 1977. Her analysis reinforces the idea of consistent themes, which according to her are: 4 Kant, I. Lectures in Ethics. Trans. P. Heath, Cambridge University Press, p154. 5 Terkel, S, Working: People Talk All Day About What They Do All Day and How They Feel About What They Do. Pantheon, 1984; first published 1974. 6 Isakson J, Constructing Meaning Despite the Drudgery of Repetitive Work, Journal of Humanistic Psychology, 40(3), 84-107, 2000. 7 Morin, EM, The Meaning of Work in Modern Times, 10th World Congress on Human Resources Management, Rio de Janeiro, Brazil, August, 2004; (speech). Good Work And our Times 13
  15. 15. meAninG And purpose • Social purpose – doing something which is useful to others • Moral correctness – the justifiability of work processes and results • Achievement-related pleasure – enjoying one’s job and developing one’s potential • Autonomy – the use of skills and judgement to solve problems and make decisions • Recognition – adequate salary and affirmation • Positive relationships – trust and interesting contacts. Especially at a time when unemployment is high and economic stability is fragile, some may say that philosophical reflection and in-depth study is unnecessary. The matter is very simple: it all comes down to pay. Certainly, at its most basic, people need to earn a living: work means they can pay the rent, buy their food and to pay their way in the world. But while financial reward is intrinsic to the meaning of a good job and to the motivation to work, the evidence is that it goes hand-in-hand with other factors. The balance between different motivations has been well documented down the years. When a Work Foundation study asked people if they found their work to be a means to an end, 51 per cent agreed – and, in the same survey, 69 per cent said their work was ‘a source of personal fulfilment’, and 78 per cent that it was ‘stimulating and, or challenging’.8 There was a very strong resistance, 86 per cent, to the notion that work was ‘meaningless’. This pattern has been echoed in international investigations of the meaning of work. A major study of 15,000 workers from the US, UK, Japan, West Germany, Sweden and Israel found that, although different social norms prevailed in different countries about the work ethic, the ‘economic rationale’ for work was held in a similar balance.9 Just over half of the respondents identified financial reward as the pre-eminent motivator, while just under half favoured the expressive characteristics, including interest, friendship, identity and a chance to be useful. Asked about their ‘work goals’, all respondents put pay towards the bottom of their priorities, with opportunities to learn new things, interpersonal relationships and promotion at the top of the list. All this suggests that, for many people, pay is a necessary but insufficient driver of fulfilment at work. In 1955, two sociologists, Nancy Morse and Robert Weiss, first asked the question, ‘If by chance you inherited enough money to live comfortably without working, do you think you would work anyway?’ A total of eighty per cent answered, ‘Yes’.10 The question has been repeated by others in large scale research exercises during the 1960s, ’70s and ‘80s, with similar results.11 It is not surprising then that it is common for lottery winners to choose to carry on working. As Graham Forrest, the MD of a snuff- making company in Cumbria who won £2.7 million in 2009, saw it like this: I left school at 15 and went to the company as a trainee manager. I’ve worked my way up. I’ve given my life to it. There’s been some good times and bad times, so there’s no way I’ll be giving it up. I wouldn’t know what to do with myself.12 In practical terms, employees’ desire to find meaning in their work matters to employers because it is so closely associated with motivation – and motivation has a direct relationship to the commitment and discretionary effort people are prepared to put in. The grandfather of organisational behaviour, Frederick Hertzberg, spent many years trying to pin down the fundamentals of employee motivation and performance, beyond the purely economic.13 His work focused on the differences between what he called the ‘extrinsic’ characteristics of work such as pay and working conditions and the ‘intrinsic’ aspects of jobs such as variety, challenge, discretion and autonomy from which employees draw most 8 The Work Foundation, The Joy of Work, 2006. 9 MOW International Research Team, The Meaning of Working. London: Academic Press, 1987. 10 Morse, N. C. and Weiss, R. S,. The function and meaning of work and the job. American Sociological Review, 20(2), 191-19, 1955. 11 Gini, A, My Job Myself: Work and the Creation of the Modern individual, Routledge, 2000. 12 Snuff maker who won £2.7 million on the lottery will keep working, Daily Telegraph, 31 March, 2009. 13 Herzberg, F, The Motivation to Work, New York: John Wiley and Sons 1959. 14 Good Work And our Times
  16. 16. meAninG And purpose of their satisfaction and motivation. Towards the end of his career, Hertzberg distilled his core message into an elegantly simple phrase: If you want someone to do a good job, give them a good job to do.14 Businesses have an interest in knowing more about what motivates their employees to do a good job for them. The starting point is recognising that it goes beyond a simple response to financial incentives. Motivation is made up of a complex and moving mix of elements. As Professor Furnham says: People’s motivation and their needs change over their lifetime. I say to businessmen, ‘Would you rather have three thousand pounds worth of cash or a week of holiday?’ and they will say a week’s extra holiday. You say that to my students and they will say, ‘Three thousand pounds cash.’ 15 In recognition of how personal priorities change, an increasing number of employers are offering flexible benefits packages. In some so-called ‘salary sacrifice schemes’ – in which employees can buy or sell annual leave – it is common to find that younger staff sell some of their leave entitlement to generate more cash, while older workers sacrifice cash to buy more annual leave. Time, it seems, becomes a more valued commodity as people get older. Another example of how needs and values change over a lifetime was highlighted in research carried out by The Work Foundation and the Future Foundation.16 The study found that both younger and older employees attached higher importance to the ‘ethical performance’ and social responsibility of their employers than those in middle age, whose primary concerns were about flexibility of working hours, rewards and employment security. For the younger and older age groups, the ethical issues were of sufficient importance to influence their decisions about staying in or leaving the job. As Commissioner, Adam Crozier, recognises, priorities change at different stages of life: Adam Crozier, ITV People spend vast amounts of time at work and it’s a big part of their lives. And I think everybody wants that to mean something. But what it means is a very individual thing. For some people the meaning is, ‘I just work to get money’. For others it’s, ‘I’m doing something I believe in’. Or, ‘I’m doing something I love.’ Some want to be sociable; meeting and working with other people. And over a career, it’s often all of those things at various times. It used to be that people went to work somewhere and stayed there most of their working lives, but that’s less the case now. Now people go through stages more, and the meaning of work changes as the stages change. Someone might need to get a job right now because they need some money to tide them over, so others things matter less to them. Or, someone is looking for a career path ahead of them. People who are in their fifties might be preparing for semi-retirement and be looking at the type of work they would have never even considered in their thirties. So, as you go through life stages, your attitude and what your work means to you changes. 14 Herzberg F, Workers’ Needs: The Same Around the World, Industry Week, 21 September 1987, p.30. 15 http://www.employeebenefits.co.uk/cgi-bin/item.cgi?ap=1&id=7542 (Accessed 24 August, 2010). 16 Bevan S and Wilmott M, The Ethical Employee, The Work Foundation/The Future Foundation, 2002. Good Work And our Times 15
  17. 17. meAninG And purpose As an employer, it is important not to assume you know what your employees’ priorities are, but to take the trouble to investigate. For instance, a study which looked at why women pharmacists in the NHS were leaving work, found that managers clearly understood the motivations of their early years in work, but had assumed that when the women returned to work after having children, what they wanted was part time work and ‘pin money’. The study uncovered that, in reality, what they wanted was to recapture momentum in their careers – and it was this mismatch in understanding that was causing female pharmacists to leave.17 Similarly, research undertaken by Commissioner, Clare Chapman, illustrated how the assumption that is typical in so many large organisations, that what people are looking for is to move up through the levels of the career structure, is not always accurate: Clare Chapman, National Health Service We did an interesting piece of work when I was in retail to understand more deeply what staff wanted from their work. It’s easy to assume that what you want from work is what everybody else wants. It was a sobering lesson to find that wasn’t true. There were large numbers of our staff who wanted participation and not promotion, and their expectations of the workplace were very different. If we carried on treating everyone as though they wanted promotion we ran the risk of completely missing the point in terms of what ‘good work’ looks like to them. We changed our practices quite a lot when we realised that, for a significant proportion of our staff, job enrichment was a far better motivator. People’s needs from work have changed in the course of the late 20th and early 21st centuries. The work of the American sociologist, Ronald Inglehart and the World Values Survey18 which he pioneered, shows how the priorities for citizens in countries which are in the process of industrialising are economic growth, security, and faith in the power of science and technology. But these are not the priorities of people in countries – like the UK – that have already reached a state of ‘post-industrialisation’. In these countries, ‘post-materialist priorities’ such as self-expression and the quality of life have become progressively more pronounced in the culture as a whole. This, in turn, has a bearing on motives and perceptions of what constitutes rewarding work: There is also a gradual shift in what motivates people to work: the emphasis shifts from maximising one’s income and job security towards a growing insistence on interesting and meaningful work… [and] we find a growing emphasis on more collegial and participatory styles of management. These findings are echoed in research conducted at Harvard University by Howard Gardner and his colleagues, who talk about the concept of ‘flow’ being applied to work much as the notion of being ‘in the zone’ is used by athletes. People in a state of ‘flow’ feel they are engaged in a creative unfolding of something larger and meaningful. Some of us might recognise ‘flow’ experiences through those activities in which we become totally absorbed and which seem to make time stand still, whether at work, or involved in hobbies or service. This informs what Gardner and his team describe as ‘good work’:19 Doing good work feels good. Few things in life are as enjoyable as when we concentrate on a difficult task, using all our skills, knowing what has to be done. In flow, we feel totally involved, lost in a seemingly effortless performance. Paradoxically, we feel 100 per cent alive when we are so committed to the task in hand that we lose track of time, of our interests – 17 Bevan S M, Buchan J and Hayday S, Women in hospital pharmacy, IMS Report 182, 1990. 18 www.worldvaluessurvey.org/ (Accessed 24 August 2010). 19 Gardner, H, Csikszentmihalyi M, and Damon, W, Good Work: When Excellence and Ethics Meet, Basic Books, 2001. 16 Good Work And our Times
  18. 18. meAninG And purpose even of our own existence. But it also happens surprisingly often at work – as long as the job provides clear goals, immediate feedback, and level of challenges matching our skills. When these conditions are present, we have a chance to experience work as ‘good’ – that is, something that allows full expression of what is best in us, something we experience as rewarding and enjoyable. This description clearly aims to express an almost transcendent relationship with work. There is no suggestion that all workers in developed Western economies either reach, or aspire to, this higher plane of experience. Yet, Gardner’s study, the World Values Survey and other related investigations all point to a growing sense that these intrinsic and expressive characteristics are becoming an important part of what a growing number of people are looking for from work in our society today. purpose And leAdership Understanding then that people are seeking meaning in their work – on top of all the other things we expect from leaders in modern organisations – should we now add the requirement that they provide meaning for their staff? The answer must be an unequivocal, ‘no’. Indeed, they cannot do so, because meaning is individual and subjective. However, leaders have a vital contribution to make. Leaders can animate the purpose of the organisation. They set the context in which employees can build their own sense of meaning from their work and help them to understand the part they play in that larger organisational purpose. Commissioner, John Varley, sees it as the responsibility of leaders to describe purpose and make it relevant to their employees: John Varley, formerly Barclays Leaders have to convey business purpose, a sense of direction and a sense of vision. These things are different from ‘meaning’. Meaning is created from employees empathising with business purpose. By that I mean, if they deliver on purpose, employees feel their professional lives are meaningful. As the leader of an organisation it is unhelpful to define ‘meaning’ because meaning is personal for each individual employee. But what isn’t personal is the collective direction of the business, and its purpose as an organisation. Commissioner, Peter Sands, as Chief Executive of Standard Chartered, is another leading voice in the banking sector who sees clarity of purpose as a central leadership responsibility. He sees it as essential to the challenge of restoring trust which faces the financial sector today: Good Work And our Times 17
  19. 19. meAninG And purpose Peter Sands, Standard Chartered Bankers must play our part in restoring trust in the financial system and in supporting the recovery in the real economy. This requires honesty and rigour in acknowledging what went wrong in the financial crisis; it requires a clear articulation of the essential role banks play in the economy; and it requires carefully prioritised actions by regulators and banks themselves. The onus, however, must be on banks to move swiftly to re-establish confidence and trust with all its stakeholders, but particularly its employees and customers. The banking industry has already taken some important steps in raising capital and tightening credit standards but more work is needed. At its most fundamental, this means continuing to build businesses that have a real sense of purpose, that can attract and engage talented people and that can support our clients and customers buy homes, start businesses and invest for the future. A recent study by The Work Foundation has explored in some depth, through over 250 interviews, how outstanding leaders strive to communicate both vision and purpose.20 The research centred on what leaders themselves believe leadership to be and how they practice it, with perspectives from both senior leaders and their direct reports in six major companies, including Tesco, Unilever and Guardian Media Group. The effectiveness with which leaders helped to ‘bring meaning to life’ was identified as one of the important attributes which differentiated ‘outstanding’ leaders from those who were merely ‘good’: Outstanding leadership enables a strong and shared sense of purpose across the organisation as sustainable high performance comes from a shared determination to overcome challenges for the long-term benefit of stakeholders, staff, customers and society. Outstanding leaders tangibly demonstrate a sense of purpose in their work, bringing meaning to what they and others do. Contributions are connected to the organisational purpose, people are respected for what they offer and what they aspire to so that they feel purpose-full in their work. Outstanding leaders find an emotional connection for people; they focus on passion and on ethical purpose. In practice, the research found that many leaders recognise the power of conveying the purpose of the organisation and are skilled in articulating it and where employees fit into it. As one leader put it: I always have the concept of a journey. To me, leadership is about engaging with people to work out how to take that journey; getting clarity around it and being able to articulate it clearly enough for people. Then engaging and motivating people to move the organisation on from where we are today. It’s trying to give people the reason; the catalyst to change what they’re doing today. Another highlighted the importance of personal authenticity in how the purpose is conveyed: Leadership is the ability to explain something and to engage and motivate people to participate in it. It is greatly helped by personal characteristics. So if you’re believable – if people perceive you to be honest and fair – your ability to engage and motivate people on that journey is helped. 20 Tamkin P, Pearson G, Hirsh W and Constable S, Exceeding Expectation: the principles of outstanding leadership, The Work Foundation, 2010. 18 Good Work And our Times
  20. 20. meAninG And purpose In their book, ‘Leaders: The strategies for taking charge’, leadership gurus, Bennis and Nanus, observed: Great leaders often inspire their followers to high levels of achievement by showing them their work contributes to worthwhile ends. It is an emotional appeal to some of the most fundamental human needs – the need to be important, to make a difference, to feel useful, to be part of a successful and worthwhile enterprise.21 In high performing organisations, the ability of the leadership to offer clarity of purpose is often a differentiating characteristic, as illustrated by The Work Foundation study on how firms succeed, called Cracking the Performance Code:22 High performing firms had unique organisational structures resulting from geography, size and history, which enabled continued success. They had a higher degree of informality and continuous dialogue supported by simple – though not simplistic – processes that allowed faster decision-making. They openly shared information between peers and networks of managers that needed timely and accurate information in order to get the best job done. They had visible and accessible leadership and management, combined with a clear articulation of business purpose and high expectations of those in decision making-roles. Yet while leaders play a vital role, effective organisations cannot be reliant on the ’heroic’ or charismatic qualities of an individual taking all the responsibility onto their shoulders for imparting purpose through sheer force of personality. Recent studies shine a light on modern ‘distributed’ or ‘shared’ models in which leadership and influence is spread across teams. The work of Carson, Tesluk and Marrone emphasises the value of such models in the circumstances where the complexity of teams and the speed of change requires rapid responsiveness from the front line of organisations.23 For instance, businesses in the aerospace sector are organised with ‘cells’ focused of different parts of the process. They are likely to be self-managing against clear parameters, in a system which is pushing leadership down and out to the smallest sensible unit. In retail, supermarket managers have overall responsibility for the store, but section heads are expected to lead their teams directly. These ‘distributed’ models require the organisation to provide delegated authority which carries with it an expectation that those people will provide leadership to their teams. Yet whatever the corporate model, leaders are employees – and people – too. And it is tough to communicate purpose to others with conviction when, maybe, it is not clear to you. A survey of 1,000 business leaders, by Linda Holbeche of the Roffey Park Institute, showed that around two thirds of board directors, senior managers, and over 70 per cent of middle managers, were themselves looking for a greater sense of meaning in their work. Her research identified a range of reasons for their questioning about what it all adds up to, including specifics such as the experience of work itself, dissatisfaction with long working hours, the prospect of longer working lives and uncertainty over pensions, right through to broader ethical issues – such concerns about society becoming more materialistic and secular, high-profile cases of corporate corruption and global political instability. Some believe their organisation’s corporate responsibility policies are a sham and that senior managers do not ‘walk the talk’ on values. Holbeche concluded that organisations where the sense of purpose and meaning are weak are likely to find change is harder to manage, often as a result of employee cynicism. Where leaders experience a lack of meaning at work, they also tend to report a lack of trust in the integrity of their organisation. She argues that the business case for supporting people’s desire for meaning is built on a simple premise: people who feel their work lacks meaning are more likely to leave their jobs – a conclusion supported by the fact that 42 per cent of her respondents were looking for jobs at the time of the survey.24 21 Bennis, W. and Nanus, B. Leaders: The strategies for taking charge. New York: Harper & Row, 1985. 22 The Work Foundation, Cracking the Performance Code: How Firms Succeed, 2005. http://tinyurl.com/3934kcj (Accessed 25 August, 2010). 23 Carson, J. B., Tesluk, P. E., and Marrone, J. A. Shared leadership in teams: An investigation of antecedent conditions and performance. Academy of Management Journal, 50, 1217-1234, 2007. 24 Holbeche L and Springett N, In Search of Meaning in the Workplace, Horsham: Roffey Park Institute, 2004. Good Work And our Times 19
  21. 21. meAninG And purpose Commissioner perspective from Richard Chartres, the Bishop of London – on the sense of narrative in leadership I’m struck by the deficit in historical awareness in concepts of leadership. I think this is a general social problem and it’s a problem in business as well; not understanding the narrative. Leadership requires being clear about where we’ve come from and how we’ve moved over time, as well as providing a direction of travel. One of the general problems of the recent era has been leadership without that kind of narrative understanding. Summing it up simply: a leader with a sense of history and no sense of destiny is a very dull and uninspiring figure. A leader with a sense of destiny and no sense of history is an extremely dangerous and disruptive element in any culture. What I believe is that, if you have a rich memory, it is possible to respond to change with a sense of the extent of the choices you have. Whereas if you have an impoverished memory, you can only react to change from a surface understanding and from what is obvious to you. There’s all the difference in the world between responding to change out of a rich memory and reacting to change out of your impoverished understanding as a provincial person in space and time. Many people are only able to operate on the few glimpses, understandings, nostrums, that they have accumulated recently, but are not really capable of seeing the new signs of the times. So they just react, they are not able to respond to change in a creative way. Creative response is seeing opportunities that nobody else can see, because they’re not obvious to your contemporaries. If you want to build a sense of significance and meaning into your work and your organisation, it needs to respond to this need for narrative. The fact that that an organisation has that kind of intentional and conscious sense of where it has come from, of having had a story, means it’s in a good position to respond rather than react to change. It doesn’t become sclerotic like a dinosaur because it understands itself as a living organism, and that is an extraordinarily important ingredient in discerning what is genuinely new. Part of the puzzle we’re in today is what constitutes the rules of what we account for. How can we measure what is actually the impact of a business or how it’s operating? At the moment we’re only looking into historical costs, so we have a very flattened view of what constitutes profit. But now we’re coming to see, for example, that the ‘commons’ and our impact on them is not free. And therefore we need to evolve our accountancy rules to accommodate this impact on our common planetary home. As a matter of fact, we’ve reached a point where economics itself has to be married to concepts of human flourishing and wellbeing, which in its classical formulation we find extremely difficult to handle. One of the difficulties which we are facing right now is how to turn regulations, derived from unease about this whole area, into an ethos which actually informs the behaviour and the decisions of people in the boardroom. The whole issue is there in the question, what is ‘good work’? That imports an astonishingly challenging language into this world which, of course, largely goes by balance sheets. 20 Good Work And our Times
  22. 22. meAninG And purpose Commissioner perspective from Clare Chapman, National Health Service – on purpose and values shaping decisions One of the things that gives us an anchor in the Health Service is the NHS Constitution because that is where we laid out what the deal with the public is. It’s the expression of what the service means to the citizen and what it means for us as the professionals who deliver the service. It’s what gives people meaning and social purpose, rather than just statements of good intention. It seems to me that a constitution in this form helps to establish your democratic legitimacy in terms of delivering public purpose. The statement of purpose at the beginning of the Constitution is: ‘The NHS belongs to the people, it is there to improve our health and wellbeing, supporting us to keep mentally and physically well, to get better when we’re ill, and when we cannot fully recover, to stay as well as we can until the end of our lives. It works at the limits of science, bringing the highest levels of human knowledge and skill to save lives and improve health. It touches our lives at a time of basic human need, when care and compassion are what matters most.’ It’s only six statements but it captures such a strong sense of purpose that you can’t possibly say it without feeling it. We worked hard to make sure it expressed the voice of patients and the public and staff. As a consequence, it provides a tremendous compass in times of difficult choices about what is it that we’re here to do. During that process, I remember one particular workshop in the Midlands that felt very difficult and stilted. In the end, we said to the participants, ‘We don’t want you to talk intellectually about the values. We want you to talk about what matters to you.’ As soon as we said that, the conversations became much freer. So we wrote the values as a result of what people said was important to them. I learnt there is a way of connecting employees to purpose through the expression of the meaning. For me, a part of this equation that I learnt a lot about at Tesco was values. A lot of people think values are about social engineering, whereas the real point is that they inform what you choose to do. For example, when I joined Tesco from America, I said, ‘Why don’t you put impulse stands by every till because you’d sell a lot of sweets if you did that?’ They looked at me as though I was nuts and answered, ‘Because the customers don’t like that’. That was an example, for me, of what ‘Being first for customers’ meant. Based on your values, there are certain things which show up as red lights; situations where, if you didn’t have those values, you would make a different decision. So, for instance, one of the values in the NHS Constitution is ‘Everyone counts’. Therefore, when you’re working in a health economy and people have a significantly different life expectancy dependant either on their geography or background, we know we can’t rest – because that reality doesn’t represent our values. In my experience where I’ve had most impact is where I’ve been able to align a deep sense of purpose with purposeful action. It’s easy to be cynical about purpose because, in the day-to-day decisions you make in life, often things don’t feel that momentous. But it is the day-to-day decisions you make in life that add up to meaning. Good Work And our Times 21
  23. 23. meAninG And purpose Recognising this sense of personal disassociation, including amongst the leadership of organisations, has never been more relevant than in the current climate. Commentator and Good Work Commissioner, Will Hutton argues25 that, since the collapse of the banks and the widespread rise in cynicism about the motivations of financial institutions, the capability to cascade a broader sense of purpose from the leadership outwards throughout the organisation has become strategically important in all business sectors: Clarity of business purpose will create clear values in turn. This is the route to trust in relationships between directors and staff, the company and its customers and supply chain. If companies have a clear idea of who and what they are everything becomes easier; who to recruit, investment priorities and which markets to target. It allows companies to align their brand, business model and purpose. It is the basis for any credible narrative for the investment and banking communities. Declared business purpose... ...Ambitions for market positioning – To help our customers connect to the – To provide world-class people and things that matter to them telecommunications and information (Telecommunications) products and services and develop and exploit our network at home and overseas – To build strong communities by creating – To become one of a handful of universal opportunities for people – including banks leading the global financial services customers, shareholders and associates – industry to fulfil their dreams (Bank) – Caring for the world, one person at a time – To become a diversified global healthcare (Pharma) leader The table above contrasts the declared business purpose of a telecom, a bank and a pharmaceutical company with an organisation in the same sector that declares a market ambition rather than its purpose for being. The purpose translates into a ‘strategy’ from which the company aims to be a profit-maximiser. This difference is important. Purpose declares what the business is about and what its capabilities need to be. It creates an animating framework for the pursuit of profit, rather than making profit the sole purpose of the company. Subtle – but important. The banking crisis was a powerful illustration that defining purpose in terms of financial reward alone is not enough. Other goals, such as ensuring the business model is sustainable and operating with integrity in relationships with stakeholders, were set aside. The purpose of some of the banks was seen to be perverted towards serving their own narrow and short term self-interest – which, in the end, precipitated the longest and deepest recession since the 1930s. Interviewed by Prospect magazine in September 2009, Adair Turner, summed it up: Some financial activities which proliferated over the last ten years were ‘socially useless’, and some parts of the system were swollen beyond their optimal size.26 25 Hutton, W. Are we heading for a fairer workplace? The Work Foundation, 2010. 26 Turner A, How to Tame Global Finance, Prospect Magazine, September 2009. 22 Good Work And our Times
  24. 24. meAninG And purpose To quote Will Hutton again: There was a general downgrading of the pursuit of an identified businesses purpose as companies’ core business mission, and instead the over-riding business goal became the maximisation of short term profits in whatever way possible. Company boards were part bullied, part in thrall and part anxious to join the party by the demand, glamour and extravagant rewards offered by Big Finance.27 To many, it was a failure not just of organisations but a failure of leadership. It exposed questions about the basis on which the leaders of those organisations made decisions, what set of values informed them and in whose interest they were made. It raised doubts about what employees were being led to do and – given the resulting crisis – how that could possibly be considered ‘good work’? As Rob MacGregor, Unite’s National Officer for the financial sector, told the Scotsman: One of the things about bank workers is that they are incredibly loyal to the organisation they work for. But I don’t think you can overstate the damage this episode has done to their confidence in the company and their general morale. Words like betrayal are bandied about quite regularly. People are dismayed.28 The sense of public unease has been compounded by other corporate crises, political scandals and media investigations, from BP’s crisis in the Gulf of Mexico to MPs’ expenses in Westminster or cash for questions, apologies from the highest level of the Catholic Church and arrests of journalists for phone tapping. This period has led to a heightened sense that organisations, if unrestrained, may well act against the wider social interest and that many leaders have lost sight of their core purpose. This view has, to some extent, become pervasive in public consciousness. Research by Ipsos Mori, for example, has found that only 20 per cent of the public trust Chief Executives to tell the truth when talking about their business, with 52 per cent feeling that corporate profits are too high.29 In addition, a survey by the Institute for Business Ethics found that the proportion of 16 to 34 year olds who believe that companies generally behave ethically has fallen by 13 percentage points, from 64 per cent in 2008 to 51 per cent in 2009. Over three quarters of respondents across all age groups were cynical that corporate behaviour will change, believing that most large companies will not be open and honest about their activities unless they are forced to be.30 Once dented, trust requires a lot of effort to rebuild. So this erosion of confidence in the good faith of our leaders may be hard to restore. In the process of repair, authenticity will matter enormously – and that must come from a renewed commitment to connecting people to ‘what we’re here to do’, ie: the core purpose of the organisation in the broadest sense; its value to its customers, its employees and the wider community in which it operates – including, if it has them, its shareholders. Anne Mulcahy, who took over the leadership of Xerox in 2001, understands what it is to fight back from a position of weakness to one of confidence. When she took over as CEO, the business had enormous debt, had posted five consecutive quarters of losses and had correspondingly low employee morale: When you’re a big company going through massive amounts of change, which we were, employees are kind of like volunteers. They have to want to perform, so your job is to make sure that they get it – they know what the story is, feel a part of it and want to make a contribution. That’s the magic that makes big companies work.31 27 Hutton W, The Landscape of Tough Times, The Work Foundation, 2010. 28 http://thescotsman.scotsman.com/scotland/Sir-Fred--39may-.5040198.jp (accessed 6 September 2010). 29 Simms, J, Will the public ever trust UK plc again?, Director Magazine, April 2010. 30 www.ipsos-mori.com/researchpublications/researcharchive/poll.aspx?oItemId=2528, (accessed 6 September, 2010). 31 Pellet, J, Rebuilding trust in the CEO: how can business leaders revive stakeholder confidence?, Chief Executive Magazine, September 2009. Good Work And our Times 23
  25. 25. meAninG And purpose Of course, the great majority of businesses and organisations are not touched by scandal and do not operate in the public spotlight. However, there is a widespread mood of distrust and a readiness in the public to ascribe self-interested and unethical motives to today’s leaders – and most of ‘the public’ are employees during the day, after all. So even in organisations where there is no direct challenge, the leadership is likely to find real value in re-asserting purpose, acting on their values and communicating with authenticity – at minimum to set themselves apart from prevailing preconceptions. Up to now, we’ve been focused largely on the commercial sector. But in the light of the growing emphasis on social value, what can we learn about the nature of what work means to people from the public and voluntary sectors? In much of the public sector, there is an implicit mandate from society: society wants children educated, criminals caught, hospitals run effectively and so on. So there is often a civic relevance to what people do, which also carries the symbolic power of working ‘for the public good’. Results from the British Social Attitudes Survey32 suggest that there is a ‘public service ethos’ which enables employees to tap into a clear sense that what they are doing is worthwhile and meaningful in the context of society. As the chart below shows, it makes them twice as likely as their private sector counterparts to say that they are doing a socially useful job which is very important to them. TAble 1 – imporTAnT ATTribuTes oF A job, privATe And publiC seCTor employees 2005 % say “very important” to them Private Public Difference sector sector – a job that is useful to society 15 32 +17 – a job that allows someone to help other people 18 27 +9 – a job that allows someone to work independently 15 22 +7 – an interesting job 46 53 +7 – job security 50 49 -1 – good opportunity for advancement 24 21 -3 – a job that allows someone to decide their times and days of work 14 11 -3 – high income 18 12 -6 Base 507 260 Source: British Social Attitudes Survey, 2008 Even private sector businesses which today deliver public services are beginning to evoke the ‘public service ethos’ to describe what they do and why they do it. Serco, for example, says that: We must recognise that, unlike customers for commercial enterprises, many users of public services have restricted choice over where and how they receive the services they require. This places a special responsibility on those who plan and deliver public services. We are therefore committed to solutions and services that genuinely meet the needs of service users while at the same time representing best value for the taxpayer.33 In the charity sector, also, the connection to organisational purpose is easy for individuals to make. Therefore voluntary sector organisations are likely to be able satisfy the desire employees – and volunteers – have for their work to be meaningful in the broadest social sense. Typically, that is reinforced by the fact that they are working with people who share a commitment to that purpose; it is in some measure self- sustaining because that is why they joined, why they work hard and why they stay in the organisation. 32 Park, A., Curtice, J., Thomson, K., Phillips, M., Johnson, M. and Clery, E. (eds.) 2008, British Social Attitudes: the 24th Report, London: Sage. 33 www.serco.com/about/socialresponse/publicservice/index.asp (accessed 6 September 2010). 24 Good Work And our Times
  26. 26. meAninG And purpose The CusTomer mAndATe While rallying behind a strong sense of meaning and social purpose is relatively straightforward in the voluntary and public sectors, it can be more complex to express that in commercial organisations which have to make a profit from their products and services. In the commercial arena, many businesses derive their ‘mandate’ from the customer. For example, Terry Leahy, until recently Chief Executive of Tesco, has always put customers at the centre of the Tesco narrative, as described in an interview with Management Today: We’ve worked very hard over the years to organise ourselves, from A to Z, so that we listen to customers,” says Leahy. Whether it’s the Clubcard loyalty scheme or focus groups in stores or letters to him, Leahy puts them first. He answers every customer letter he gets personally. “They really do matter. It’s their values we live by.34 Leahy is not alone; many successful business leaders express the core purpose of the organisation in terms of what they do for the customer. It is a theme which has resonance for all the Good Work Commissioners and John Varley expresses it this way: John Varley, formerly Barclays How leaders behave (including how they spend their time) sends a powerful signal about what they regard as important. And in this context the key question is: are leaders in touch with customers? In big organisations, the more senior you get, the more remote you can become from those who you are in business to serve. It can easily happen. You become a prisoner of other priorities – your earnings statement; your interface with the media; your discussion with your executive committee or your board. These are all important stakeholders, but you have to ensure that there is visibility of the business purpose. And in a service organisation, that business purpose is absolutely clear: it’s helping customers achieve their goals. There is nothing more important. If as a leader you’re seen to be so grand, or so busy, that you haven’t time either for the customers themselves, or for those who serve customers, then quickly the credibility of business purpose – in any event the business purpose articulated by you – breaks down. And that has dire consequences for the meaning of the enterprise. Psychologists have found that when employees have a clear line of sight between their efforts and the value to the customer, they feel it gives their task significance and makes their job worthwhile. And research into a number of service sector organisations provides evidence that employees devote more energy to delivering high quality customer service if they are truly convinced that the organisation is genuinely committed to customer service.35 Call centres, for instance, have sometimes been referred to as the ‘sweat shops of the 21st century’ for their formula of relentlessly pushing staff to handle a set number of calls in a set number of minutes, regardless of the outcome. It delivers low customer service, low employee commitment and an endless round of repeat calls. Yet, First Direct has topped the charts in customer satisfaction surveys by a large margin for 10 years by turning that model upside down. They focus their employees on resolution of queries, which both makes the work more satisfying for the employee and satisfactory for the caller. Increasingly, the industry is following suit. Some business cultures consciously empower employees to use their discretion to provide outstanding customer service and a personal touch – for instance, the hospitality industry giving restaurant staff the 34 www.managementtoday.co.uk/news/421098/the-mt-interview-sir-terry-leahy/ (accessed 6 September 2010). 35 Renn, R. W. and Vandenberg, R. J. The Critical Psychological States: An Underrepresented Component in Job Characteristics Model Research. Journal of Management, 21, 279-303, 1995; Johns, G., Xie, J. L., and Fang, Y. Mediating and moderating effects in job design. Journal of Management, 18, 657-676, 1992. Good Work And our Times 25
  27. 27. meAninG And purpose freedom to respond to complaints with the offer of a free meal. This visibly reinforces the link between the employee and good service to the customers as pivotal to the success of the organisation, while at the same time giving the employee the opportunity to act autonomously and the feeling that they are trusted – which, as we have seen, are significant characteristics of ‘good work’. It can be argued that, following an era dominated by the power of labour and the unions, followed by an era driven by the power of capital and shareholder interests, today customers are the rising power. Already there are signs that consumers are actively prepared to use their purchasing power. A Work Foundation report on corporate responsibility found that 18% of customers had boycotted products on ethical grounds, and 21 per cent said they had chosen to buy from certain companies on similar grounds. The report showed that consumers are increasingly likely to say that they feel their actions can affect corporate behaviour – so the trend is likely to intensify.36 At one end of the retail market, consumers are increasingly looking for novelty, quality, customisation and emotional content, and are prepared to pay accordingly.37 But at the other end of the market, they are relentlessly trading down; buying basic ‘value’ goods so long as they are cheap and standardised. Increasingly, firms are having to understand the tastes and behaviours of their particular consumers. And improving customer value can drive business while simultaneously becoming a route to improving employees’ faith in the organisation and its leadership. Meanwhile, the rise in women’s participation in the labour market has led to fewer households being able to access services during normal hours, ie: 9-5, which influences the growth in services delivered outside the traditional working week. Added to all this, it is clear that consumers are becoming more demanding and less loyal.38 The media and the internet make it easy for individuals to investigate and switch to alternative options, and the more technically savvy, in particular, are taking advantage of that. So organisations are finding they need to work much harder to demonstrate to individuals that they are the right choice. For example, supermarkets, such as Sainsbury’s, are now opening longer hours, diversifying their products and finding out more about their customers through loyalty schemes. Banks, such as First Direct, are offering online, call centre and face-to-face facilities outside traditional banking hours as a source of differentiation and competitive advantage. Clothing retailers, such as Zara, are changing their stock every few weeks to offer new reasons for customers to return. Travel agents and hotels are increasingly allowing individual consumers to tailor holidays online to meet their exact requirements. All this has a direct impact on the world of work. It alters routes and speed to market, cost and revenue models. It affects working patterns and the types of flexible arrangements put in place. It changes the deployment of people and skills. It requires employees to ‘connect’ with customers in different ways. Where they feel empowered, skilled up and supported to use their initiative and their imagination to rise to that challenge, they will also be more likely to invest the task with significance, connect to the purpose of the organisation and build a sense of meaning in their work. oWnership The past 20 years or so have seen the development of a variety of share ownership and profit share schemes designed to attach people to the purpose and goals of the organisations they work in. In Britain around 20 per cent of workplaces utilise some form of share ownership, covering over 30 per cent of people in employment. Such schemes grew along with the rise of the capital markets and a belief that giving people a financial stake in the business provides a sense of belonging that will translate into behaviour.39 They also represent participation in the enterprise, which works positively as long as the company’s fortunes – and share price – are on the rise. 36 Bevan S M, Isles N, Emery P and Hoskins T, Achieving High Performance – CSR at the Heart of Business. London: The Work Foundation/The Virtuous Circle, 2004. 37 Silverstein M J and Butman J, Treasure Hunt: Inside the Mind of the New Consumer, New York, 2006. 38 Omwando, H. Symbiotic Loyalty: The Next-Generation Consumer Loyalty Strategy: Forrester, 2004. 39 Kersley, B. et al, Inside the workplace: Findings from the 2004 Workplace Employment Relations Survey, London, Routledge, 2006. 26 Good Work And our Times
  28. 28. meAninG And purpose However, a study carried out for the Department of Business, Innovation and Skills (BIS) showed that rewards from share ownership or profit related pay schemes were largely regarded by staff as windfalls; nice to have as part of the package but not central to their long term relationship with the workplace.40 There was some evidence that they affect retention because people are concerned about losing out, but they do not act as an incentive in the classic sense of influencing behaviour. ‘A Share of the Spoils’, from the Institute of Employment Studies, cited Shell as an example of a company where share options going underwater had a disproportionately demotivating effect on people, compared to any positive impact that could have been achieved by holding shares which appreciated in value.41 It is clear that financial participation alone fails to win people’s loyalty, because essentially it is a transactional model. However, overlaid with other forms of participation, it can help to instil a greater sense of involvement and engagement. Asda, for example, has a share ownership plan which, in 2008, paid nearly £38 million to 17,000 employees and it is implemented as part of a wider set of participative processes which give employees a voice in how their job is performed, from workflow design through to employee councils.42 So to be successful, linking employees to purpose has to go beyond financial participation to the way the business is managed. The John Lewis Partnership is a much cited example of a shared ownership model which clearly supports a high degree involvement and has generated consistently strong performance.43 However, precisely because the structure was set in the constitution from the outset, it is hard to emulate. More recently, there has been a recognition of the degree to which senior managers of public companies are themselves beholden to the timeframes and priorities of the capital markets, and unable to set the agenda. The power of institutional shareholders has grown, with institutions owning 70 per cent of UK shares today, compared to just 25 per cent in the 1960s.44 There is a natural tendency for company managements to frame their goals predominantly in the context of shareholder expectations. A challenge today’s leaders face is how to transcend those short term pressures on their corporations, and on them as individuals, and find credible ways to set out a purpose and sustainable long term vision for their businesses which have resonance across wider society. This concern about the role of companies pre-dates the financial crisis but has been highlighted since. There has been live debate about ‘good capitalism’ versus ‘bad capitalism’. The issue is not whether the developed economies will continue to operate within a capitalist model but, rather, how to make that model work better, delivering social value as well as economic value. A new language is beginning to be heard from a number of business leaders. Paul Polman, Chief Executive of Unilever, for instance, recently set bold aspirations for a new sustainable model of growth for the business. His view is that ‘we are coming out of the financial crisis into ‘a new normal’ created by tremendous pressure on the resources of the earth’: Too many investors have become short-term gamblers: the more fluctuations in share price they can engineer, the better it is for them. It is not good for the companies or for society, but it is influencing the way firms are being run, all the same… To drag the world back to sanity, we need to know why we are here. The answer is: for consumers, not shareholders. If we are in synch with consumer needs and the environment in which we operate, and take responsibility for society as well as for our employees, then the shareholder will also be rewarded.45 Jeffrey Swartz, CEO of Timberland, is another business leader who has stepped into a leadership position through his commitment to improving the environmental footprint and social value of his business: 40 Williams M, How does the workplace affect quality of employment?, Employment Relations Occasional Paper, Department of Business Innovation and Skills, November 2009. 41 Reilly P A, Cummings, J and Bevan S M, A Share of the Spoils: Employee Financial Participation, IES Report 373, 2001. 42 http://www.asda.jobs/why-join/benefits_and_rewards.html (accessed 8 May 2011). 43 Cox, P, Spedan’s Partnership: The Story of John Lewis and Waitrose, Labatie Books, 2010. 44 S Davis et al, The New Capitalists, Boston, MA: Harvard Business School Press, 2006. 45 Management Today, Andre Saunders, 1.3.2011. Good Work And our Times 27

This is the report of the Good Work Commission. The Commissioners are a group of individuals with a great breadth and depth of experience in leading organisations across all sectors, including business, government, the unions, the church, media and the voluntary sector. They believe that ‘good work’ is a benefit to employees, employers and society alike – and that it is possible to make it more rewarding for all involved. Flowing from that, the purpose of the report is to explore what makes ‘good work’ and how to create more of it. It is based on two key assets: the great breadth of experience and views of the Commissioners and the considerable body of research produced by the Work Foundation over the past decade. The Work Foundation presented a set of eight Provocation Papers to the Commissioners to inform their thinking and stimulate debate. The report draws heavily on those papers and over twenty other studies produced by the Foundation, as well as a wide range of literature produced by others in the UK and elsewhere. Personal perspectives from the Commissioners are incorporated throughout the report, reinforcing and accenting the research-based narrative about the nature of ‘good work’. The aspiration is for the report to be useful for people who have leadership and management roles in organisations, prompting reflection about how effectively their organisation is dealing with these issues and providing practical suggestions about how they could take it to the next level.

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