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By David Harder on June, 2, 2017

The History Behind the World’s Most Disengaged Workforce (Part Two)

“America’s greatness has been the greatness of a free people who share certain moral commitments.” Freedom without moral commitment is aimless and promptly self-destructive.”

John W. Gardner

In 1975, America had a relatively stable workforce that clocked-in & clocked-out. We were living the dream spawned almost 300 years before during the birth of the industrial revolution. The words employee engagement or disengagement were meaningless. Why? The “revolution” conditioned most workers to seek predictability and survival throughout our lives. What happened to that way of life?

In 1976 two famed economists Michael Jensen and William Meckling published the now legendary paper, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. In it, they argue that corporations needed to align the interests of management and shareholders. This new model changed how the corporate world conducts its business. For corporate executives, stock-based compensation became the alignment mechanism of choice. Consequently, their incomes skyrocketed. In the 1970s CEOs of large, publicly traded companies earned less than $1million in today’s dollars. Today, that average has grown to $11.4 million. The new model motivates CEOs to focus incessantly on stock value over enhancing the real, longer-term performance of the company.

Also during the past thirty years, the entire investment market shifted from long-term investment in building organizations and markets to getting as much out of stock value in as short a period of time as possible. Investment banking turned into a multi-trillion dollar industry. CEOs and hedge fund leaders became the foundation for how we dealt with workers in large organizations. With stock value becoming the number one pursuit, American businesses and CEOs traded the long view for volatility, thus shifting the dynamic interests between capital and labor. As providers of capital push CEOs for greater and greater returns, cutting back on labor is the easiest way to signal they are addressing corporate financial performance.

Many workers are quite supportive of the American dream. But over the last thirty years, the average income has stagnated while hourly compensation has dropped. Workers witness venture capitalists taking advantage of financial deregulation to buy companies, take out loans on the assets and pay huge dividends to themselves. Many of these acquisitions went bankrupt as employees lost their jobs, health insurance and pensions. These financial barons are often celebrated and admired, but it has also resulted in mass income inequality at an alarming trend.

America’s workers have watched their job and financial security go up in smoke. Anger, contempt, and cynicism turned into a raging fire as they read stories of greedy CEOs backdating stock options and pushing the envelope to immoral, and sometimes illegal degrees. But perhaps it was the amorality that angered them the most. In many organizations, the underlying message was that when needed, workers mattered. However, the cycles of hiring and laying people off reached such dizzying heights that we now have a labor force that basically understands that work has become more of a temporary assignment.

September 15th and 16th of 1990 represented the dawn of my professional life as President of Inspired Work. I walked into a hotel ballroom and delivered The Inspired Work Program for the first time to thirty-six participants. The program has the magic of getting people to break with their past and design an ideal relationship with their work. For two days I watched these remarkable souls dive into the process and emerge with dramatic shifts and new visions. I watched some of them walk in the door with a deep justification for their pain only to loosen the grip of that pain because a new and personalized vision pulled them forward. I related personally to everything happening with the participants because it was also happening to me. In that first program, all of us found at least the beginnings of the lives we were meant to have. It also became clear to me that once we truly experience the truth, there is no going back.

About a year after we launched Inspired Work, one of the nation’s largest banks became a client. After decades of success and stability, the CEO was looking for ways to generate more value for the shareholders. The plan backfired. Over the next five years, waves of employees were laid-off as the bank struggled to survive. They offered outplacement for those who wanted in finding another job and they offered Inspired Work to those who wanted a new life. It was an amazing experience because they were individuals who came from the old world with “jobs for life” with the courage to elevate this event into a turning point. Many came of them came in wearing blue suits and stickpins with the bank’s logo. In 1996, the bank merged with another financial institution and disappeared. Our graduates moved forward with unexpectedly diverse choices from art leadership, farm ownership, education, new jobs in emerging industries and yes, some returned to banking.

Career changes of the magnitude demonstrated by many of our participants were not “the norm” in the 90’s. In the many people I encountered, was a growing anger fueled by cynicism and contempt, a sense that something had been taken away from us. In our programs, when I explained the standards of predictability and survival, many realized that is what they had lost. But, it also became clear these were standards that had hemmed them into lives “by the book.” As many stepped outside of that line and used our process to define themselves, they found lives they wanted and possibly were meant to have.

Everywhere that I visited, I found a workforce angered by the breakdown of the industrial revolution and its promises. America had built the world’s most premium workforce and then turned much of it upside down. It had taken 25 years and many could not swallow that it happened for money. But, isn’t that human nature? We are always looking for a deal and the CEOs and shareholders had discovered one. That no longer works today.

Remember the turn of the century? Y2K seems like a long-ago and quaint memory. But, what was most alarming about the year 2000 is that we delivered our greatest asset, the talent living in the United States of America into the new millennium in a state of anger, cynicism, aimlessness, resignation, and disillusionment.

Then, we threw the Book of Change at them.

Tune in tomorrow for the final chapter.

Brought to you by David Harder, President – Inspired Work, Inc.

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