When making strategic decisions, who's supreme? Shareholders or employees? On today's podcast, Andy Alsop, CEO of The Receptionist, shares his enthusiasm for building a truly hybrid company where the focus and attention is on prioritizing employees over shareholders.
What is Employee Supremacy?
Shareholder supremacy, a term coined by Milton Friedman in the 70’s and 80’s, was basically about decision making. Under shareholder supremacy, leaders are responsible for increasing the value of shares to each one of the company's investors, and every decision is based around that mission.
For example, under shareholder supremacy, if you're trying to determine how much to invest in employee benefits (an expense that is seen as primarily negatively impacting the bottom line) you naturally want to drive the cost of benefits down to the lowest possible amount. You would choose the bare minimum necessary to continue to attract employees so that you can increase profits and thus shareholder value.
Alternatively, with an Employee Supremacy mindset, you want to increase the amount of benefits that your employees have. Doing this helps your employees feel secure, feel that thecompany trusts them, and gives them a sense of ease knowing that they aren’t going to have to worry about whether they can make ends meet in the case of an emergency because those benefits are there for them.
The result: your employees feel valued, safe and have greater trust in the company they work for. And when employees feel trusted and trust the company, they make decisions that are in the best interest of the company, allowing them to better serve their customers.
Under the employee supremacy mindset, when leaders make decisions, they increase productivity with their company, give better service to their customers, and create trusting teams that help achieve their company’s mission and goals. In the end both methods drive shareholder value but focusing on employee supremacy drives shareholder value more quickly.
Decision Making Examples from an “Employee Supremacy” Mindset
When COVID hit, Andy and his leadership team did three things:
Implemented a COVID Family Travel Program
--The company paid to send young, single workers to fly home to their families,
Improved Health Benefits
--They eliminated insurance premium contributions for employees, and increased the contribution towards families.
Instituted the company’s Just Cause
--Focusing on the company’s employees and its community, they have changed how the leaders make decisions.
Because of these three decisions based on “Employee Supremacy,” they learned that making all of these decisions during a pandemic the team knew they were with a company that was focused, not on short-term results, but on the “long game.” They created what Simon Sinek describes as “Trusting Teams.”
The Role of Company Values and a Just Cause in Employee Supremacy
At The Receptionist, their values are an acronym called FABRIC (Fun, Authentic, Bold, Respectful, Innovative and Collaborative). Andy says the important part of core values is you actually have to live them. Could potential candidates who are seeking a position at your company actually see those values being lived out? During the pandemic their company chose to fall back on those values and really focused on making sure that these values became a part of daily-life working at their company.
Hosted on Acast. See acast.com/privacy for more information.