— How the Psychological Recession Is Alienating Employees and Hurting American Business —
In December 1997, Daniel H. Pink declared the rise of Free Agent Nation on the cover of Fast Company magazine. Its population consisted of the traditionally self-employed, many newly minted independent contractors, and the “temp” workers placed in businesses by agencies each day. At the time, the total exceeded 24 million people, many who were out on their own by choice. In the years since, however, virtually the entire workforce has been set free, rarely of its own volition.
Globalization. International competition. Downsizing. Right-sizing. Whatever you want to call it, life as a worker bee in corporate America (or any version of America) is seriously different now. Judith Bardwick calls it the “psychological recession” and chronicles how it undermines our economic well-being, whether we’re individuals or business owners, except, of course, if we’ve had the good fortune to be a CEO with a golden parachute.
One Foot Out the Door is part history lesson, part human capital handbook, and part economic imperative. Bardwick is clear — and cites respected sources — about the significant cost and effect bad management has on employee productivity and the financial health of organizations. She pulls no punches here, stating clearly in the title for Chapter Four that “Bad Management Is (Really) Expensive,” and, for Chapter Five, that “Good Management (Really) Makes Money.”
Bardwick outlines the reasons behind the dominant role the United States played in shaping its own and the world’s economy following World War II. Of course, that war helped pull the U.S. out of the Great Depression of the 1930s — the looming and graphic example of the many times throughout the centuries when the “social contract” between businesses and workers collapsed. Bardwick makes the case that we again face dissolution of the collaborative nature of work (both workers and companies are needed) and describes how a sense of safety and security across the board is required for innovation. Put another way, management-by-fear, coupled with authoritarian pronouncements and economic uncertainty, stifles exactly the kind of creativity we need to get us out of whatever messes we’ve gotten ourselves into.
Part of the problem, Bardwick notes, is that the United States spent the last half of the 20th century with virtually no economic competition — much of Europe and Japan were bombed beyond recognition and China staggered under Mao’s Cultural Revolution — until very late in the 1990s. Oh, yes, the signs of change appeared earlier than that, but most of “fat, dumb, and happy” American businesses chose to live in comfort and denial, arrogantly declaring that we’re number one, the best, the only country on Earth that has its act together — all while on a playing field with no competition. Well, we’re still good, but lots of folks around the world have gotten better, and they’ve been eating our lunch for years. Bardwick wants us to get our mojo back. Like TV’s recent incarnation of Heroes, if we save ourselves (not “the cheerleader” this time), we save the world. Seriously. And we need to get busy at it. Pronto.
Bardwick sees the psychological recession stemming from the broken social contract between business and labor. “After so many years of being at the top and taking that status for granted, U.S. CEOs were completely unprepared for worldwide competition, and they panicked.” They saw the rising global economy, flailed around for 10 to 15 years with the management flavor-of-the-month while share prices continued to fall, and finally decided the only solution was to cut costs. “One obvious place to cut costs was the workforce. That’s when management decided to break the implied social contract of respecting employees as key stakeholders” in their businesses.
“Many people in many parts of the world, who had enjoyed the security of a job with one employer for their entire working career and lifelong freedom from economic risk, lost it all…. Too much economic security had been replaced by too little,” resulting in widespread fear. Even the “best and brightest” were not immune as white-collar knowledge workers were laid off and couldn’t find work for as long as five years. “This is disastrous for businesses,” says Bardwick. “People who are perpetually fearful have lost the wherewithal to do their best work. This crippling psychological condition may be the most lasting and most damaging result of the rise of globalism.”
We must do something and we must do it now, urges Bardwick. “With about half of our citizens feeling naked and abandoned by their companies, the nation needs a twenty-first-century safety net that will reduce the fear by providing financial support and a sense of community, while avoiding a reinstatement of entitlement attitudes.” Her book lays out the data about the very real, bottom-line costs of ignoring employees’ and customers’ feelings and emotional attachments to a business, supported by research from such industry leaders as Watson Wyatt, American Research Group, the Corporate Leadership Council, the Gallup organization, Hewitt and Associates, and the Institute for Employment Studies, among others.
In One Foot Out the Door, Bardwick explains that “feelings matter” and urges organizations to shift from measuring “morale and satisfaction” to assessing “commitment and engagement,” while creating “relationships between bosses and subordinates” in order to build the trust that’s crucial for productivity and success. Bardwick also proposes “a twenty-first century safety net” and reminds us — as is obvious in the disastrous financial markets of 2008 and beyond — that “psychology is more important than economics.”
We need to believe in ourselves again, which we can do when we have a realistic picture of our resources and the issues we must address, not when we’re crouched in fear or floating in fantasyland. Once we have the confidence of support, allowing us to lose our Henny Penny fear that the sky is falling, we’ll find the energy to be as innovative and creative as we need to be to succeed. Make it so, grasshopper.
Author: Judith M. Bardwick, Ph.D.
Published: New York: AMACOM/American Management Association ©2008
Copyright ©2013 Jill J. Jensen | Clarity from Chaos