New Work | #money-follows-happiness
Why New Work is much more than just goodies for employees
tl;dr What is the essence of New Work? I would argue, in its core it is the focus (and optimization) of employee fulfillment. While this sounds simple in theory, it’s vastly difficult in reality (we can tell from 10 years of our own experiences).
Do you know the parable of blind people assessing an elephant? Of course you do (if not, the picture tells the whole story). In ancient times, several groups of blind people analyze an elephant and only by combining their observations they “see” that they are standing in front of an elephant.
In 2020 this elephant can be named “New Work”. Or “Future of Work”. Among other buzzwords, of course.
The different perspectives on this topic are quite diverse, yet it’s hard to see the big picture through all the buzz. While reading this article by Emma Brudner this became apparant to me, once again: she discusses the concepts of employee happiness vs. employee fulfillment and essentially sparked this article as it got me reflecting about our perspective at Dark Horse on New Work. This thought exercise felt like a good fit at the end of a year, so let’s dive right into it.😇
Before we are getting into it, a quick disclaimer: this text is trying to achieve the impossible and trying to tame the buzzword into some sort of structure to get an overview of the field. Needless to say, this attempt will be highly subjective, will not claim to be complete and might even provoke different views altogether. If so, let’s explore the differences and be all wiser at the end of the day 🙂
Ok, enough prelude, here are my (radical) hypothesis on the essence of New Work:
New Work = New Capitalism
Let’s start with the very core and arguably most radical interpretation of this:
New Work is a new form of capitalism, where organizations strive to optimize for employee needs and not for financial output anymore.
Why is that? Why would companies suddenly make this shift towards employee needs and not focus on revenue and turnover anymore? The delicate answer here is: it is not “either-or”, it is “cause-or-effect”. Let me explain by zoom out to the big picture:
We live in the era of digital transformation & digital revolution. We see massive shifts in market paradigms, massive shifts in transactional costs and hence, massive shifts in user behavior.
We live in the post-era of the Taylor Bathtub: complexity is back.
We live in the era of tankers and speedboats. Tankers were built for high efficiencies, for a long straight crossing of a big, predictable ocean. Tankers built the wealth we experience now. But tankers are not a great vessel, if the outer environment is changing, if complexity is creating big unknowns.
Digital transformation is like crossing the Arctic sea: you never know where the next iceberg is coming from nor do you know the actual size of it (all underwater and such, you get the idea). You don’t want to sit on a tanker.
This is why everybody likes speedboats these days. Incubators, accelerators, startup boot camps, innovation hubs, they all try essentially the same: building new speedboats to help guide the tanker through the Arctic Sea. Or even replace the tanker to do so.
So, how do we build great speedboats? Where the focus is on creativity & speed, not efficiency & command and control. The answer is manifold (agile, scrum, lean startup, etc.) but the essence of it is to unleash the human power that is not tamed by efficiency regime.
Ok, so coming back to the original question: why should a company focus on employee fulfillment and not on financial output? The simple (or simplified) answer is, because employee fulfillment drives the creation of speedboats, financial outcomes does not.
However, successful speedboats will have successful financials. Because they found a way to cross the Arctic Sea (aka creating user value) and hence they can capitalize on a “willingness to pay” of the users they created value for. (Read more on how to rethink tankers & speedboats for corporate innovation here)
Money follows happiness!
What is employee fulfillment vs happiness?
The difference is actually not a purely semantic one. I like the distinction of Daniel Gilbert in his book “Stumbling on happiness”. He basically argues that happiness is short-time spikes on your feeling of the moment (“I just won the lottery”), whereas satisfaction is more stable and long-lived than happiness, it is also broader in scope.
There are astonishing studies about people that became paraplegic after severe accidents and the impact of such accidents on their happiness and satisfaction level. While happiness obviously is crashing after such events, the astonishing part is that the satisfaction level will regenerate to its original level before that accident.
This distinction is crucial for “New Work” as it should focus on the satisfaction (aka fulfillment) part and not on the happiness part. This is why we don’t necessarily believe in Chief Happiness Officers at Dark Horse (you cannot delegate your happiness responsibility nor should you focus on happiness). Disclaimer: We do have two team member that own the unofficial title of Chief Happiness Officers: our office dogs.
New Work = user-centered organizational design
If focusing on employee fulfillment, you basically design for the users of your organization: employees. As each employee has different needs and each organization different employees, there are two things to note here:
- User-centered design does not mean to fulfill every single need of every single employee. That would be “Ponyhof”
- There is no such thing as a “one fits all” solution (anymore). Actually, no organization design will be alike another. They may use the same elements in their designs, but there is no such thing as “THE New Work model” or “THE operation system for New Work”
The solution for 1) is somewhat the same as for user-centered products: you need to segment around user needs. And you need to exclude. While exclusion sounds hard, this quick example makes it clear that, actually, it isn’t.
If one of my dreams, my true fulfillment, would be to start a great career as a barista, this is a need I do not fulfill in the context of my organization. So while I personally have an array of needs, not all of them should be considered when designing a user-centered organization. And while a barista career does not fit into my organization’s context, it may very well fit into the context of a cafe or coffee machine producer.
This little graph should illustrate the point much better:
To make this more concrete, let me link those levels to known frameworks:
- Me: the most basic (and widely criticized) framework is Maslow’s pyramid to understand the different dimensions of personal needs.
- Team: I personally like Google’s re:work framework a lot as it shows different factors and levers for team success
- Org: this is a difficult but popular one and you will certainly come across “Purpose” and “Culture” when discussing this level. No wonder, concepts of Laloux (“Reinventing organizations”) or Otto Scharmer (“Theory U”) offer compelling perspectives on this level and link it closely to a humanistic idea of man. Regarding “culture”, I find the work of Bunch.ai and Charles O’Reilly quite intriguing. He argues that an organization needs to prioritize similar work norms to establish an effective culture. The notable thing here is, that it’s not important what norms are priorized, but that the priorization is widely accepted. There are no good or bad norms, just norms fitting to certain organizational environments. Interesting, especially considering the hype around startup culture and speed!
Strong culture happens when a team combines intense commitment to 1–2 central normswith a consensus about the priorities of the remaining (4–5) norms (O’Reilly & Chatman, 1996).
- Society: This is directly interrelated with the purpose of the organization. Ultimately, user-centeredness means that the organization is serving the society its embedded in as its ultimate user. The question is, why the organization exists (i.e. which value it can offer for society as such). That question focuses on the “content” of an organization (e.g. Patagonia is working towards environmental impact through its sold products and services). Another question to ask is how. That question has a strong normative level and focuses on the values & norms an organization wants to demonstrate while running its businesses. This would apply to us at Dark Horse as well as e.g. Sipgate which focuses on spreading a “freedom of choice” through their telecommunication products (in their own words: “Hacking Telco”).
The Road Salt Test
The answer to society level is an intriguing one for me: is the organization a value-driven company or a purpose-driven company? While these concepts are often used synonymously, I do believe there is a big difference here. At Dark Horse, we use a “road salt” test to get a better understanding of that.
Would we sell road salt as our only product if we could have a signification impact on the lived values around us? Or in the Sipgate case: would they sell road salt if they could create more freedom of choice? If the answer is a roaring “hell yes!” that you are a strong value-driven company. If you answer that question by quitting your job, well, you are purpose driven. If that sounds simple, I can tell from experience, it is definitely not.
There is no black and white, no either-or here. In truth it’s a melange of both that makes it so difficult. But it’s a good mental experiment to gauge where you personally are positioned.
The difficulty is in the detail, though: which needs are personal, which needs are organizational? This discussion is a very difficult and personal one and part of the user-centered design process for organizations.
New Work = employee-owned organizations
I consider this more of an effect of user-centered organizations. If the organization focuses on employee needs, then it is only logical that those who profit most from that organization actually own it as well.
Arguably, there is another beauty in employee-owned organizations that directly tie back to “Money follows Happiness”: an organization is only successful if it can deliver value (and be paid for that value) to its customers.
Hence, linking the salary of employees to the value the organization has created, finally closes a feedback loop: your salary is based on your impact on your customers. And employee-owned companies are the simplest way to incorporate that effect.
At Dark Horse we do exactly that: every employee has a share in the overall outcome of the organization. While the allocation of shares can be designed (and should be), the effect is that we don’t have salary negotiations whatsoever. If we as a company are creating value for our customers, we all profit financially. If we fail to do so, we won’t profit financially. No negotiation needed. Money follows happiness.
This dimension is sort of political as well, as our friend Armin argues: transforming ownership can “fix” capitalism. If this thesis sounds interesting (or absurd), you should watch his TED talk:
Summary: Stages of New Work
So, what is the essence of New Work? I would argue, in its core it is the focus (and optimization) of employee fulfillment. While this sounds simple in theory, it’s vastly difficult in reality (we can tell from 10 years of own experiences).
However, observing the discussions and concepts on “New Work”, I see nuances of that though being implemented in different ways. Hence, I would distinguish these levels of “New Work”:
- “New Work”-Washing: similar to green-washing it is essentially putting up a mask to seduce. It is the famous tabletop football in the hallway
- “Employer branding”: while in this stage genuine efforts are made to improve the working conditions (mostly by HR departments), the true notion is still to attract new employees and not work on the core system.
- “Transformation units”: the famous speedboats frequently implement some sorts of “New Work” principles into their daily work-life and prioritize employee needs. However, they are usually linked to a tanker with an efficiency regime, so they can only implement what is not affecting the bottom line and/or the “collaborative interface”. Hence, they usually have an unofficial internal system and need to translate/map for external communication.
- User-centered organizations: well, if you read that far, you know the notion. As a tanker (almost) never will transform into this stage (because of their shareholder interest), we do see mainly small, bootstrapped companies emerging in that stage. However, we observed highly interesting transformations of privately owned SMEs that design their succession (when the old leader is stepping down) into employee-owned companies. Amazing stuff!
Ok, that’s it! Hopefully these few lines helped you getting a little bit closer to understanding the elephant of New Work in the wealth of individual perspectives.
If this is thought-provoking, absurd or genius, I am happy to discuss and explore. Drop us a comment 🙂 Thanks for reading and sharing your thoughts 🙂
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