The following review has been excerpted from my October 4th Huffington Post blog entitled "'The High Engagement Work Culture': A New Perspective for Framing the Debate About Capitalism." The full blog entry can be found at [...]
In August, management consultants David Bowles and Cary Cooper, following up on their 2009 book "Employee Morale: Driving Performance in Challenging Times," published "The High Engagement Work Culture: Balancing Me and We." The fact that this book exists at all, in this stubbornly pro-employer environment, may be remarkable in-and-of itself. However, perhaps much more to the book's credit is how compellingly the authors make their argument that work cultures that favor "the lone hero" have led to an overall indictment of Capitalism, increasing exposure to corporate risk and constraining long-term profitability.
Employers wringing out incrementally more productivity from the workforce--not through positive motivation and reinforcement but through every employee's deepest, darkest fears that their next paycheck may be their last if they don't "toe the line"--has become the new normal in the "post-apocalyptic" economy. Consequently, I mistakenly thought "The High Engagement Work Culture" would be a management primer focused principally, if not exclusively, on how managers and H.R. directors can create work environments that maximize worker satisfaction with their lot, through some form of "participation" in the bigger picture (employing that old workplace meme: "A happy worker is a productive worker").
However, Bowles and Cooper's approach is much broader than that, tying the book's premise into the Great Recession, and suggesting that what is at least partly to blame for the events leading up to the free-fall of financial, mortgage, and residential markets nationwide is not simply Wall St. greed but a larger problem of toxic corporate cultures, particularly in the worldwide financial services industry. This summer's LIBOR rate-setting and Standard Chartered scandals, on top of revelations about J.P. Morgan's potentially $9 billion loss in bad proprietary trades on credit derivatives (initially mischaracterized by Wall Street rock star and JPM CEO, Jamie Dimon, as unfortunate but nonetheless garden-variety interest-rate hedging transactions), would seem to support the book's thesis.
"The High Engagement Work Culture" may be worth reading just for the opening chapter, in which the authors summarize the causes of the collapse of the financial services, residential mortgage, and housing markets in the U.S. To my knowledge, no one has taken a look at the symptomology leading up to the 2008 crash from the perspective of Wall Street's prevailing corporate culture, with the insights only these two authors can provide.
"In the financial services industry, it is generally accepted that cultures of the member firms are hard driving, individual (`hero,' `star') oriented, always on the knife-edge, much like the businesses they are in. Firms like Morgan Stanley and Goldman Sachs make their money from trading, from being brokers for others who trade, from advising companies on mergers/acquisitions and from listing new companies on stock exchanges, among other things.... The low tide of the Crash exposed the dark side of the culture of these companies."
The book, quoting Nobel-prize winning economist Joseph Stiglitz, goes on to state:
"Too little has been written about the underlying moral deficit that has been exposed--a deficit that is larger, and harder to correct... We have created a society in which materialism overwhelms moral commitment, in which the rapid growth that we have achieved is not sustainable environmentally or socially, in which we do not act together to address our common needs ... There has been an erosion of trust--and not just in our financial institutions. It is no too late to close these fissures."
After identifying fundamental flaws in the overall corporate culture of U.S. financial services companies as a significant, contributing factor leading up to the Great Recession, the authors set out a complex framework for understanding all work cultures, offering a hierarchy of factors, among which "external factors" such as national culture, norms, values, and practices, form the base. For anyone interested in what kinds of paradigm shifts might need to take place within our capitalist system in order to avoid another crash of the size and magnitude of the one from which we're still digging out, this book is worth what is perhaps the less-engaging technical sections in which the authors lay out this framework.
The section describing what comprises "worker engagement" is particularly enlightening as well. There is also a very interesting discussion in the technical section of the book about the role of ego in work cultures generally. The book concludes with two, extensive case studies--BMW Group and Whole Foods Market--to elucidate the authors' theories about how a high-engagement work culture contributes, among other things, to a stronger brand, increasing market share, and higher capital values, all things generally lauded in a capitalistic system.
In addressing how this high-engagement work culture improves the bottom line at BMW group, co-authors Bowles and Cooper state:
"[N]ot only is [BMW Group] one of the largest and most successful industrial companies in the world, but it has a distinct philosophy that favors its overall workforce, and not just those at the top. It values people, and rewards them based on that value. The benefits of this flowed to BMW after the Crash in spectacular fashion, when the "rebound" effect caused by unprecedented demand from Asia required a level of teamwork that would not have existed at those companies that had 'slashed and burned' between 2007 and 2009."
Regarding Whole Foods, Bowles and Cooper state:
"Like BMW, Whole Foods takes a stand in favor of its workers, and caps the rewards of its top management in order to balance things across the whole organization. But both companies go much, much further than the area of pay in the respect they pay to their workforce. Like BMW, Whole Foods benefits from this with everything from high engagement to the ultimate recognition that the market can confer: a high share price."
The Right has framed the discussions about the U.S. and Capitalism, disjointed as such discussions have been in this election cycle, as a zero-sum game: You're either in favor of unbridled, unregulated Capitalism (because this is, indeed, the only way to grow the economy, or so goes their meme) or you're a Socialist bent on transforming America into a complete Nanny State, where an extremely small minority of "makers" prop up an increasingly larger group of "takers" (what Romney claimed in his $50,000-a-plate Boca Raton fundraiser is comprised of 47% of Americans; the lazy freeloaders who refuse to be accountable for their own economic and social circumstances).
Regrettably, the Left has repeatedly failed to explain how, by restoring the fundamentals of a truly free-market form of Capitalism--one in which the special interests with the most buying power no longer get to game the system to their advantage and everyone else's detriment--the U.S. economy will return to a more robust pace of growth.
"The High Engagement Work Culture" perhaps bridges these two extremes, offering a fascinating and important perspective into how organizational and industry cultures can benefit greatly--or, in the case of the Great Recession, bring to its knees--an economic super-power such as the United States. The authors have done an excellent job of laying the foundation for their thesis. There's much here that can and should be applied to the larger debate about what kind of Capitalism the U.S. should practice in the future.