by Shayne Thomas
01 May 2020
Stakeholders vs. Shareholders: Will COVID-19 Force Us to Change Our Priorities?
This is not the time to debate whether ‘people’ or ‘profits’ are most important
If you grew up in the United States, you likely were raised to believe, even if somewhat subconsciously, in the concept of “hard work pays off” and other similar tropes.
To say that work plays a big role in how we identify as Americans would be a serious understatement. In fact, since the very beginning of U.S. history, the principles of the Puritan work ethic have shaped our unique relationship to work that people in many other countries often find crazy. But this, in many ways, is the root of American capitalism as we know it.
Now, the purpose of this little history lesson isn’t to get into a philosophical discussion about the virtues of hard work or the relative pros and cons of capitalism. You can go down that rabbit hole on your own time. But talking about the central role that work plays in both the American identity and psyche is an interesting lens through which we can ask hard questions about what’s happening to us and our businesses during this ever-so-strange time of crisis.
A world of stark binaries
On one hand, the world is fearful of getting sick and has, therefore, retreated into hiding until a viable solution is brought to the table to cure us all. This has banded people together in many ways and, further fueled by technology, created new definitions of community and comradery.
On the other hand, however, the COVID-19 pandemic, while a health crisis at its very core, has disrupted the world’s economies in ways that no one ever could have imagined. We never saw this coming. And because it has left millions of people jobless in the U.S. alone, the role of work and how it defines and supports our very existence has been brought up, front, and center.
You could, therefore, say there’s an uncomfortable tension growing between humanity versus humans-as-capital. Businesses—and their employees—are starting to grapple with this unusual game of tug-o-war the longer the COVID-19 crisis continues. Many have had no choice but to ask a hard question: what’s most important, supporting the well-being of your stakeholders (i.e. your employees, the people who drive your business forward each and every day) or keeping your shareholders financially fit? It’s the age old balancing act of people vs. profits.
Normally, outside of a crisis, you’d say both are important and that the success of one more often than not leads to the success of the other. But during unprecedented and uncertain times, do we have to swing the pendulum of our priorities in one direction or the other?
There’s no wrong answer, per se, but there’s certainly a right answer. As a business, your greatest asset is your employees—and troubling times like this remind us just how true this is.
Unfortunately, as the COVID-19 crisis continues to wreak havoc on the world, it’s becoming easier and easier to lose sight of the health and well-being of employees in the face of economic turmoil. To avoid falling into this rut, here are a few things to keep in mind:
Human capital is the new currency of success
Up until a couple of months ago, people could only talk in terms of “performance” and “results.” And while that’s all well and good—and an important way of measuring the success of any kind of work—it may need to take a back seat for just a little while. This doesn’t mean that you suddenly throw caution to the wind and let accountability go out the window.
It’s actually quite the opposite: by showing true compassion for your employees, enabling their success during this challenging time, you can get far more value out of them than if you just continued to be a drill sergeant demanding results on the fast-and-cheap.
Not to mention, you never know what kind of innovations and innovative thinking—especially around new approaches to work in this digital-first work environment—that can emerge when you give people the flexibility to adapt to change at their own pace.
Everyone is a customer, and we all have a say
Whether or not your role is customer-facing, in the most traditional sense of the word, the overall dynamic of work today has become much more customer-centric than ever before.
In fact, the definition of “customer” has evolved significantly. As HR leaders, for example, your customers are the employees within your company. They rely on you to watch out for their best interests and to keep them safe, especially during precarious times. As such, it’s your responsibility—or opportunity—to think without your customer service hat on. You have to ask yourself constantly, “How can I make my customers happy or enable their success?”
This applies to all roles within an organization, too. Today, making sure people’s needs are met is critical. Digital and social media has closed the gap between businesses and their customers. Similarly, within companies, the relationships between teams and dynamics between employees involve a lot more give-and-take than they ever had in the past.
Therefore, if we approach everyone we work with as though they are our own customers, regardless of what that working relationship may be, then we almost naturally begin to adopt a customer service mindset that places greater focus on the well-being and happiness of others as a key priority at all times. This can quickly create a psychological paradigm shift in how you approach everything you do. (And it can be pretty powerful!)
Every employee is an essential employee
Life today has been categorized, almost across the board, into “essential” and “non-essential” boxes. While this may be easy to digest when you label businesses as such, if you take that one step further and apply that same thinking to the employees within those businesses—especially those deemed “non-essential”—then we realize we’re now dealing with a true human crisis.
Obviously, there’s no way around making tough decisions today. But how can you say, with good conscience, that there is such a thing as a non-essential employee?
This is where we, as humans, are struggling. We use business—or the tumbling economy—as a scapegoat for neglecting each other. We care about money and profits above people being able to put food on the table. Or we willingly let certain employees, like those brave souls in the hospitals and grocery stores, stand in danger’s way without batting an eye. Why? Because it’s essential to keep the economy moving forward.
But if this doesn’t open your eyes and make you realize just how essential every employee is, that it’s not a game of who’s more essential than anyone else, it’s not likely anything will. When we can so easily put something—a business, an employee, an activity—into the “non-essential” box, we are unknowingly chipping away at our own sense of humanity. This is a huge problem.
Where do your priorities lie?
In all honesty, even though this article paints the “shareholder vs. stakeholder” questions in black and white terms, the reality of today’s situation is much more complicated. There’s a lot of gray area. And just because you may place a priority—perhaps not the priority—on profits in order to keep your business afloat, it doesn’t mean that you don’t value people: the human capital underpinning your business’s success.
If anything, what’s happening right now should be a wake up call to make sure that, as tough decisions are being made every day, you don’t forget just how important and essential the many people are who drive these results you so love to achieve. We’re not just experiencing a health crisis. Or an economic crisis. It’s a human crisis.
And if we’ve learned anything thus far, it’s that we need to stick together. If you need help figuring out how to shift your priorities back to your employees, Cornerstone is here to support you.