Shrimp, weenies, and the end of "perkwashing”
Why your company needs a skin-in-the-game culture, not another reward program.
As the business cycle reached an inflection point in 2022, two major forces are now at play, that will shape the future of work for years to come: Companies are bringing the focus back on the bottom-line, while talents are expressing high frustration with their work environment through abysmal engagement scores. Both challenges have their own root-causes, but one way to address them is to re-align companies and talents definition of performance and personal achievement by developing a skin-in-the-game culture, at speed and at scale.
In a Twitter thread, Steven Sinfosky, the former president of Microsoft's Windows business, recently resurfaced a 1993 memo written by Mike Murray, the HR leader at Microsoft at the time. The memo echoes themes that many companies, including those in the Technology and Financial sectors, are experiencing today - macro-economic challenges and slowing sales. Against this backdrop, Murray identified three opportunities for Microsoft employees to change their behavior and make a difference:
Treat the company’s money as if it were yours: “…we fly coach class; we stay in reasonably priced hotels; when dining at company expense, we order weenies, not shrimp.”
Do more with less: “If a task absolutely, positively needs 5 people in order to get the work done, we allocate 4 heads to the task (and the work does get done).”
Lead by example: “(Mircrosoft’s) corporate culture is perpetuated by visible actions, not by a list of values printed on coffee mugs.”
Murray's memo aimed to bring the ownership mentality at the center of the game.
As we progress into 2023's "year of efficiency," companies are shifting away from the "growth at all costs" mindset that defined the post-pandemic period, where fierce competition and labor shortage drove a sharp increase in wages (up to 6.7%, year-on-year, in August 2022, source). While significant layoffs are taking place today, executives are also recognizing that human capital is crucial to success. Attracting and retaining top talent is the #1 challenge for many CEOs in the next decade, according to Fortune. As cycles continue to accelerate, best performing organizations will be those who can create a thriving work environment to attract and retain the right talents while showing agility to pivot and mobilize workforces on challenges and opportunities that matters the most at any given point in time.
Employee engagement is a critical component of performance, and low engagement costs the global economy $7.8 trillion, as reported by Gallup in 2022. The times when new employees, entered a great company, worked their way up and gave the best years of their life before happily retiring are gone and younger generations are not afraid to “fast quit” if they don’t feel valued. Unfortunately, investments in traditional engagement programs and perks have failed to move the needle, with less than 15% of employees feeling engaged at work today. Worst, at a time when younger workers deeply question their relationship with the workplace and its authenticity, rewards and perks can be seen as disingenuous and counter effective. In a recent article, Ellen Scott, Deputy Digital Editor at Stylist, explains how rising standards for jobs (compensation, flexibility, values) have led many companies to “inflate what they truly have to offer”. This phenomenon is called “perkwashing”. Moving forward, “simply offering access to a mindfulness app will no longer cut it”. Employees don’t want more time away from their company or more freebies, they want a decent compensation, flexibility, experiences and tools that will help them grow and own their professional career.
What if their day-to-day contributions was more clearly focused on outcomes that matter to them and to their company? What if, instead of collecting points to buy the next piece of electronics, employees could “claim” mentoring time with their favorite company executive, “buy” equity in the company or even “earn” the right to vote on key company decisions?
As businesses prioritize the bottom line, they're also realizing that traditional incentives (e.g. free massage or gift cards) don’t work. Even equity programs like Restricted Stock Units (RSUs) have their limits, leading to highly qualified workers with a "rest and vest" mindset that can harm both employee and company performance over time. Part of the problem is that these rewards don’t really align with the problems that need to be solved to create a great performance. Companies need modern tools, driven by AI, to better assess business opportunities and challenges, mobilize talents and resources in real time and reward contributions.
At OWN, we believe it is high time to re-write the script on how modern workplaces can be boosted to offer talents (employees and external contributors) the recognition and care they deserve and help companies bring the best of their workforce to tackle mission critical goals. Our mission is to help our clients develop a “skin-in-the-game” culture to drive individual achievement and collective performance through fluid, systematic work ownership. Click here to learn more about our product.