Society and Organisational Success

The Business School’s Management division recently gathered together its “Leaders in Residence” - 70 high level executives that work with our students. We split attendees into groups of six, assigned people to sides, and asked them to debate the topic "Organisations can and should help to improve society".

The content of the debates was enlightening, but even more so were the emotions that emerged. Voices were raised, fingers were pointed, and normally calm people were agitated. It is amazing how this topic gets people heated up. Is it really the role of an organisation to do more than satisfy its shareholders? Should it be focused on anything other than improving its bottom line? I've met people who argue passionately, coherently and persuasively… for both sides of the argument. So which side is right?

Rather than pick a side, I'm going to suggest that we get rid of the question altogether. I believe that we can have our cake and eat it too; we can take a fresh look at the role of organisations in society and see that helping society can actually help with organisational success.

There are two main ways that an organisation can improve its bottom line – by improving productivity and improving competitiveness. 

First, productivity. As any organisational psychologist will tell you, productivity comes down to your employees. But can you do things that make employees productive and that also improve society? Let's take a look:

1. The more you help and support your employees, the more they will help and support you. 
One of the fundamental rules of being human is that we love to reciprocate and we hate inequality. Ever been given a gift by someone and you didn’t get anything for them? Or worked really hard to help someone but then they turned around and didn’t help you when you needed it? You'll know the feeling then. In organisational terms, we call this an "exchange relationship".

Essentially this means that when you give to your employees, particularly in non-financial and personal ways it not only helps them and their families, it also helps productivity because your employees will want to give back to the organisation - and that can only be good for organisational success.

2. Trust your employees. 
One of the best ways to motivate somebody is to give them control over what they are doing. This not only shows that you value them, it also allows them to take ownership and make decisions about what is right for them. 

Claire Mason, from the Australian Commonwealth Scientific and Industrial Research Organisation, and I evaluated self-leadership training conducted in organisations that supported and trusted their employees, and found that people who took control of their own life were happier and more creative at work. We do it with our kids as they are growing up; why do we forget when people become our employees?

3. Encourage physical and mental well-being. 
Everybody knows the benefits of exercise, but too often we see that as being a responsibility that occurs outside of work. Many of us expect our employees to sit at a desk for eight hours a day, leaving too little time for people to exercise in their "home" time. Encouraging exercise at work does help society's medical bills – what’s interesting though is that it also helps to improve cognitive functioning (that is, how well you think) and work performance, as shown in a meta-analysis by Chang and colleagues in 2012. 

Similarly, while it might seem contradictory, you'll get more productivity if people work less! Research by Sabine Sonnentag and colleagues has clearly shown that people perform better when they have recovered properly during vacations and in the evenings by doing things other than their work; those people who continued to think about work during this time were more fatigued and needed to put in more effort afterwards. 

Finally, we all know what it feels like to be stressed - you have so much on, or it is so difficult to do, or there are people who just drive you insane that you can't focus any more on what it is you are supposed to do! Stress reduces performance. The key message is: keep on top of your employee's workloads to make sure they are challenging but feasible and make sure external stressors are kept at bay. Again, it will help society's medical bills but it also helps your productivity.

4. Nurture diversity and ban discrimination. 
A diverse workforce can yield incredible benefits. You help society by employing people from non-traditional workforce populations, and you are also more likely to get increased creativity, innovation, flexibility and performance. But, and it's a big "but", these benefits only emerge when people feel safe. We all have biases that we are not aware of (try taking the implicit association test at implicit.harvard.edu) and these can have a big effect on behaviour and decisions unless you are aware of them. 

Productivity is one way of achieving organisational success, the other is improving competitiveness. Of course, the more productive you are, the more competitive you will be. But there are also some other ways you can improve your competitiveness. And again, these will help society as well!

1. Strong ethical values attracting Generation Y. 
Generation Y is the new workforce, entering workplaces and going through their first promotions. They are notorious in the media for being "out of sync" with the traditional organisation and for being difficult to please. So how do you compete to get the best Gen-Y talent? Well, we know that many of them have strong ethical values and that they believe that organisations should also have strong ethical values. Companies that meet these expectations are more likely to attract and keep this vibrant new population compared to organisations that focus solely on shareholder value.

2. Community expectations to deal with climate change. 
Gen-Y are not the only ones who have expectations of today's organisations. In research conducted by myself, Matt Davis, Leeds University Business School, and Sally Russell, Griffith University, we found that people across the community, from 18 to 82 year olds, felt that organisations were most to blame for climate change and were to be held more responsible for dealing with climate change than the international community, state and local governments, individuals and families and environmental groups.

Companies that renege on this perceived obligation are likely to be thwarted by customers and suppliers, reducing their competitiveness; organisations who see this as an opportunity, on the other hand, are likely to be viewed positively and reap the associated rewards.


In the end, it comes down to thinking differently. We don't have to pit profits against society, they don't need to fight it out in boardrooms or in academe. Instead, let's aim for the symbiotic relationship - helping society can help organisational success, it's just a matter of putting it into practice.