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  • Lessons from Great Workplaces for Great Government and a Great Society

    Published on Saturday, August 18, 2012

    There’s no shortage of political discussion this time of year and of course much of it is focused on creating economic stability. Many people start their arguments by saying that economic stability is good. Most of us don’t step back and ask the question ‘why is economic stability good’ – we simply know that it is.

    Thankfully, a few people have stepped back to ask the ‘why’ question. They’ve produced some powerful reports that document the benefits of broad based economic development for the many that creates economic stability for the society as a whole. The stability they cite is not a stability based in poverty for the many and wealth for the few. It is the stability that comes with economic well-being for as many people as possible.

    This may seem to be an obvious point yet at times the obvious point needs to be made to crystallize the argument.

    Economic stability for a particular society could involve many people being poor and a few people being very rich – and the system could hypothetically be stable with not much change in the percentage of people who are poor and the percentage of people who are very rich. Significant controls would probably need to be in place for a semblance of stability to exist yet hypothetically it’s possible.

    Yet when most of us argue for a society with economic stability we talk about the benefits that come from a strong vibrant middle class, and lower limits on the number of people in poverty. We even argue for limits on how poor any person ought to be and vote to establish programs that will keep people from going below those limits. Economic stability in this case means economic well-being for the many.

    Where government is responsive to the broad citizenry, countries are far better at doing the things that create long-term growth, like investing in education and infrastructure, and ensuring that economic gains translate into a better quality of life for all citizens. (Politico)

    Businesses do the same thing. They seek economic stability because business leaders know that economic stability is what enables an organization to develop its resources – human and material – so that great inventions, products and services can be created. And it is this cycle of stability leading to creativity leading to new products and services that enables a business to be profitable and keep the system flourishing.

    The 100 Best Companies are as a group and over time great examples of the power of creating economic stability for the many. They are pioneers in developing systems to create and share wealth with the people who work there, with over 40 of the current Best Companies having an ESOP or ESPP plan. Other Best Companies offer profit sharing programs, contribute to employees 401k or 403b plans and support the financial stability of their employees in many ways.

    Why do they do this? Because leaders in these companies not only believe that fair sharing is vital to the creation of a cohesive work force, they also know that creating economic stability and well-being inside the organization leads to financial success for shareholders.

    Best Companies have lower turnover than their industry peers, an easier time recruiting with more applicants for job openings, provide more training to employees, and are involved in significant community service initiatives. And they achieve significantly better financial performance than their peers.

    They do this with credible leaders who treat people with respect and promote fairness in their organizations. Practices that promote fairness and organizational success include fair pay and profit sharing, fair sharing of benefits and recognition, fair promotion practices and a fair appeals process.

    Economic stability that supports a vibrant middle class, and places limits on poverty and support to those in need works.  And what happens to those at the very top? In the Best Companies, senior leaders do not suffer from economic distress because of low wages or a lack of health insurance. They are paid well by anyone’s measure. AND so are other people in these businesses – especially relative to the larger population of companies out there.

    Senior leaders at Best Companies go out of their way to figure out how to share. They share wealth, benefits, training and other forms of support.  And many of them take the first cut when times are tough – reducing their own salaries more than others. Many have set up systems where those with more money pay a higher proportion of their health care costs than those with fewer resources – because they value prosperity and stability for the many, not the few.

    A great business is one in which everyone has the opportunity to benefit. A great society should be the same.

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