The Human in Organizations

There’s no Business Like Shoyu Business

How many companies can you think of that have been in continuous operation since 1630? How about companies with manufacturing plants in both urban Tokyo and rural Wisconsin? Not getting any easier? Here’s a hint: it manufactures the world’s oldest condiment from fermented soy beans and wheat. Give up? It’s Kikkoman-one of Japan’s oldest and largest companies and known worldwide for its soy sauce (called shoyu in Japanese).

Kikkoman soy sauce holds a commanding 50 percent share of the market for oriental bottle sauces in North America and 30 percent share in Japan. To meet worldwide demand (soy sauce is sold in 100 countries around the world), production at Kikkoman has increased tenfold during the past 20 years. In 1997 alone, Kikkoman produced and sold some 116 million gallons of the ebony- colored- liquid-an enormous quantity considering that soy sauce is sprinkled sparingly onto foods to help bring out their natural flavors, not gulped like a soft drink. Another reason this statistic is so impressive is that Kikkoman makes its soy sauce using a method that dates back to the seventeenth century and requires several months of brewing time.

Although it relies on traditional, natural ingredients (including a proprietary microorganism to create a culture called Koji) instead of the chemical substitutes used by competitors, Kikkoman is far from ancient in its manufacturing process. Its state-of-the-art manufacturing plants in Walworth, Wisconsin, and the Netherlands use the most modern technology available. In fact, outside of the soy sauce business, Kikkoman is regarded as a world leader in genetic engineering, biotechnology, and biochemistry. Using cell-fusion technology, Kikkoman has even developed an entirely new species of citrus fruit-hardly what you might expect from a company pushing 400 years old.

Actually, Kikkoman is unusual in several ways. First, its founder was a woman-incredibly rare for 1600s. Also, unlike most Japanese companies, which produce goods that originated in the United States (e.g. cars and electronic goods), Kikkoman has turned its uniquely Japanese product into a staple found in kitchens around the world. Still, the company adheres to the strongly held Japanese tradition of being loyal to its employees. In fact, Kikkoman’s commitment to treating individual workers like family permeates all aspects of the company’s operations.

Interestingly, it was Kikkoman’s adherence to the honored Asian traditions of harmony and loyalty that made it an attractive partner for U.S based companies (e.g. Xerox) expanding into the Japanese and Chinese markets. Today, in large part because of such partnerships, Kikkoman is considered a key player in the world of international business.

Despite its long, international reach, Kikkoman is faithful to the countries in which it does business. In the Walworth, Wisconsin, plant, for example, the only items-including both ingredients (mostly soy, wheat, salt, and water) and equipment-that are not procured locally are the specialized items needed to make soy sauce. In addition, Kikkoman has been a generous contributor to the local community, not only in terms of expanding its tax base but also in making contributions to everything from 4-H projects to college scholarships for high-school students.

It is obvious that Kikkoman, with roots going back to feudal Japan but also poised on the cutting edge of biotechnology, has taken more than its share of risks over the years. As the ancient Japanese saying goes, “A frog in the well does not know the ocean.” Clearly Kikkoman left the well long ago to explore many different oceans.

The more closely you examine the previous case, the clearer it becomes that success involves several factors. At the root of the company’s success is an excellent product, but this is only the beginning. The road to failure is littered with many good products made by poorly managed companies that, as a result, are no longer with us. Kikkoman, however, has been around for such a long time and has had such a great financial success because its commitment to people-its employees, it’s suppliers and its neighbors in the community. In addition, the company has been actively involved in new ventures, pushing the edge of technology and its own influence to the farthest reaches of the globe.

This blend of old and new makes Kikkoman a unique and interesting organization in the history of business. Yet, in many ways, at the base of this company’s success lies a key ingredient (not soy!) that is responsible for success in all organizations-people. No matter how good a company’s product or service may be, no matter how far a company’s equipment pushes the cutting edge of technology, there can be no company without people. From the founder to the loyal employees, it’s all about people. In fact, if you’ve ever managed a business, you know that “people problems” can bring down an organization very rapidly. Hence, it makes sense to realize that “the human side of work” is a critical element in the effective functioning – and even basic existence – of organizations. This people-centered orientation forms the basis of the field of organizational behavior, which specializes in the study of human behavior in organizations. 1

1 Jerald Greenberg-Robert A.Baron. 2000. Behavior in Organizations. New jersey. Prentice-Hall, Inc.

The Human Relations Movement

The human relations movement was a natural response to some of the issues related to and the under-socialized view of the worker that ignored social aspects of work. The key uniting characteristics of the scientific management theory researchers: Taylor, Weber, and Fayol were the ideas of efficiency produced through either operational, legal, or administrative improvements. One of the principal assumptions was an emphasis on rationality.2

According to scientific management, there was a logic to actions, and formal and knowledge authority were the principal catalysts of workplace . Scientific management tended to downplay the effects of social pressures on human interactions.3

The human relations movement enhanced scientific management because it acknowledged that peoples’ attitudes, perceptions, and desires play a role in their workplace performance.

The human relations movement was founded by sociologist George Elton Mayo in the 1930s following a series of experiments known as the Hawthorne studies, which focused on exploring the link between employee satisfaction/wellbeing and workplace productivity.

Essentially the Hawthorne studies concluded that when employers take an interest in workers and make decisions based on their natural needs and psychological makeup, productivity increases. They also found that people work best when organized into groups, when they can have effective two-way communication with their leaders, and when leaders communicate and share information freely as part of an overall cohesive decision-making process. 4

The human relations movement is seen as the precursor of the modern human resources function. Before the human relations movement, workers were typically seen as replaceable cogs in organizational systems that put the ultimate value on higher output.

2 Jeffrey A. Sonnenfeld, “Shedding Light on the Hawthorne Studies.” Journalof Occupational Behavior, 1985, 6, 111- 130. 3 Wren, D. A., & Bedeian, A. G. 2009. The evolution of management thought. (6th ed.), New York: Wiley. 4 Roethlisberger, F.J., & Dickson, W.J.(1939). Management and the worker/ Cambridge, MA: Harvard University Press

In other words, relationships between workers and management affect employee efficiency. If workers are being analyzed by their boss, they will be more motivated to do well – a phenomenon known as the Hawthorne effect.5

Being part of a group and having a specific responsibility in that group also increased employees' motivation. Workers want to feel that their personal goals align with their team's overall goals and that their work is valuable.

Theory X and Theory Y

Management professor Douglas McGregor later created Theory X and Theory Y, two opposing perceptions of employee motivation. Here are the basics of the two theories, according to McGregor's 1960 book The Human Side of Enterprise:

Theory X: Negative outlook on workers

1. Management is responsible for organizing company components in the interest of economic ends.

2. Managers should direct workers' efforts, motivate them, control their actions and modify their behavior to suit organizational needs.

3. Managers must persuade, reward, punish and control workers to stop passiveness and resistance.

Theory Y: Positive outlook on workers

1. Management is responsible for organizing company components in the interest of economic ends.

2. Passiveness or resistance to organizational needs to develop with experience in organizations.

3. Motivation, potential for development, capacity for assuming responsibility and readiness to direct behavior toward organizational goals are naturally instilled in people.

5 Roethlisberger, F.J., & Dickson, W.J.(1939). Management and the worker/ Cambridge, MA: Harvard University Press

4. Above all, management should focus on creating a system where workers can achieve their own goals in line with company objectives.

Theory Y shared similarities with the human relations movement, noting that workers can be trusted and are naturally motivated and efficient. However, American psychologist Abraham Maslow had developed a theory of hierarchical needs, which McGregor referred to in his book, to indicate employee incentives to perform well. From lowest to highest in the hierarchy, those are physiological needs, safety needs, social needs, ego needs and self-fulfillment needs.

The two theories were important additions to management studies, and the human relations movement progressed by aligning individual needs with organizational needs.

What were the results of the human relations movement?

The human relations movement was a crucial event in management history and a major contribution to today's style of leading. The behavioral sciences helped managers and theorists understand how to increase productivity by ditching the primary focus on organizations over their workers. Contemporary theories, like the contingency theory and the systems theory, focus more on the importance and effect of every individual in a company and how they can achieve their own goals while benefiting their organization.

Which is easier for organizations: Humanizing the organizations or mechanizing “dehumanizing” the humans?

In their pursuit of profit or even existence, organizations struggle with managing its human power and try as much as they can to push people to be less humane and more “business-oriented”. This seems as if there is a kind of opposition between being human and being business oriented, which is not true. However, many organizations adopt this understanding and try to lessen what is “human” in favor of what is “business”.

It is not a coincidence that the most of successful corporates pay a great attention to people, and the more they invest in the human capital, the higher profit they achieve.

Let’s go deeper and ask:

What does it mean to “Humanize” the Organization?

Humanizing the organization is about building a place where people feel inspired to do their best work. ... The business gets to prosper and employees get to have extra time for themselves and their families at the end of their work 6

But how can we create a culture that helps us become a humanized organization?

To answer this, we will need first to differentiate between a strong culture and a weak one.

Strong Versus Weak cultures:

In a strong culture, the organization’s core values are both intensely held and widely shared. The more members who accept the core values and the greater their commitment to those values is, the stronger the culture is. Consistent with this definition, a strong culture will have a great influence on the behavior of its members because the high degree of sharedness and intensity creates an internal climate of high behavioral control. For example, Seattle-based Nordstrom has developed one of the strongest service cultures in the retailing industry. Nordstrom employees know in no uncertain terms what is expected of them, and these expectations go a long way in shaping their behavior.

One specific result of a strong culture should be lower employee turnover. A strong culture demonstrates high agreement among members about what the organization stands for. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in return, lessen employee's propensity to leave the organization.

In a study of 230 organizations from different industries around the world, and from regions including Asia, Europe, the Middle East, North America, and Africa, having a strong and positive organizational culture was associated with increased organizational effectiveness. The study, published in the journal Organizational Dynamics, found that the strong and positive aspects of organizational culture most critical to success across regions generally included:

• Empowering employees • Having a team orientation • Having a clear strategic direction and intent • Possessing a strong and recognizable vision

Though there were similarities when comparing regions in terms of organizational culture and effectiveness, there were some differences when researchers compared individual countries.

6 https://www.trustradius.com/buyer-blog/5-ways-hr-leaders-can-humanize-the-organization

Yet, overall, the study confirms that having a strong productive organizational culture is associated with increased sales growth, profitability, employee satisfaction, and overall organizational performance regardless of where the organization is physically located. 7

Case Study: Southwest Airlines- The Southwest Statistics Say So Much: • Southwest boasts a 2.5 percent voluntary turnover rate compared to a 23 percent national average • Southwest maintains some of the lowest numbers of customer complaints in the U.S. airline industry • 85 percent of employees say they’re proud to work at the company • The average length of employment is a remarkable 11.5 years • There have been no layoffs or furloughs in the history of the company • Southwest executed its 45th consecutive profit-sharing award, sending $544 million back to employees (amounting to approximately 10.8 percent of each eligible employee’s compensation). 8

What makes Southwest Airlines special?

Southwest Airlines started over 50 years ago, but it wasn’t until the last 10 years that leaders of this dynamic company decided to focus on infusing strong culture into their workplace as a business practice. They began by identifying the six values they wanted to honor.

The Six Southwest Airlines Values:

• Warrior Spirit • Servant’s Heart • Fun-LUVing Attitude • Safety and Reliability • Friendly Customer Service • Low Costs

7 Stephen P.Robbins. Timothy A Judge.2008.Organizational Behavior. New Jersey. Pearson Prentice Hall 8 https://thinkwhy.com/news-detail/southwest-airlines-business-culture-has-magnetic-draw

Back to the previous question; “what makes Southwest Airlines special”:

1. An Evolved Culture

Southwest Airlines has been in existence for over 50 years, and it started without explicitly articulated values but a shared sense of what the Southwest spirit was. About ten years ago, the leaders decided to formalize their workplace culture by identifying six values they wished to honor. They have created a department of Culture Services, whose mission is to retain focus on company values, the employees and “low cost,” which is one of the company’s values. One way they remind employees of the culture is through “Culture Blitzes,” in which a Culture Services team visits an airport and touches every Southwest employee there with food and fun. The team even cleans the planes for the flight operations employees.

2. Equipped “leaders,” regardless of what position they have.

Leaders are recognized at all levels of the company hierarchy, not just at the top of the hierarchy. Leaders and high potential associates attend extensive training, up to three weeks at a time, and are exposed to the company’s managerial best practices and what they call the “way we do things around here.” Leaders are encouraged to know about their employees' needs outside of the workplace and are given authority to spend money to care for associates in ways such as sending flowers after a death along with sending Southwest-branded baby items to an employee’s newborns.

3. Empowering and appreciating employees.

When the company needed new uniforms for their flight attendants, they recruited a task force of flight attendants themselves to help design the uniforms. When customers use social media or other means of communication to compliment an employee, Southwest’s team of responders, in turn, forwards the compliment to the employee and her boss. In fact, Southwest receives over 7,000 of these kinds of compliments a month! Another way the company encourages employee acknowledgment is through peer to peer recognition. With this, the company created a system which encourages employees to give “points” to colleagues. In turn, with these “points”, employees can purchase from a catalog of items that the company provides.

4. Modeling the way

Executives and managers are fully expected to lead the way with their behavior in the workplace. To reinforce this idea, executives are video-recorded telling personal stories that illustrate the values and spirit of Southwest Airlines. In turn, managers coach associates who fail to live out the values and expected behaviors of the organization, while many newer hires simply self-select out of the system when they recognize that their behaviors don’t conform to the prevailing workplace culture.

5. Designing the physical space to enforce culture.

At Southwest Airlines’ headquarters in Dallas, Texas, the office has been recently redesigned around “culture centers” on each of the floors. Each center highlights one of the company’s values and provides break services (coffee and kitchen facilities), meeting rooms and quite a bit of color, photos, and flair to demonstrate that particular value. Different departments, such as accounting and marketing, are clustered around the centers, encouraging communication and chance encounters between employees across departments.

Culture Matters

Southwest Airlines’ culture is a role model for other companies. The airline’s success demonstrates the need for a strong and vibrant company culture that puts its employees first.9

If we go back to the initial question at the beginning of this article about whether we should humanize the organization or institute the employee, the answer from research and based on successful and profitable organizations lies in employees productivity and performance based on creation of culture that promote employees empowerment to get the best out of each and every one.

9 https://www.humansynergistics.com/blog/culture-university/details/culture-university/2018/05/29/southwest- airlines-reveals-5-culture-lessons

How then can we create a Humanized organization?

1. Promote Equality and Diversity

A humanized organization is one that supports diversity and equality in the workplace.

Since the New York Times published that expose on the now-disgraced film mogul Harvey Weinstein’s sexual impropriety, Hollywood and various other industries have made great strides to overcome workplace inequality.

Through global movements such as #TimesUp and #MeToo, women and men from all around the globe have gained a platform where they can speak up and stand up against the prejudices and injustices they often have to face, especially from those in power at their workplaces.

Step 1: A committee on equality and diversity should be created and tasked to ensure that the company promotes equitable hiring. Of course, this team must be diverse in nature.

Step 2: You must offer job opportunities to a diverse audience. Always encourage minorities and women to send in their applications, and make sure hiring managers and team leads give these applicants equal consideration.

Step 3: Review company policies and make sure the organization complies with federal laws. Rewrite if you must, and have the legal department review the policies before they are implemented. Schedule periodic reviews, and keep the policies up-to-date.

Step 4: You must invest in workplace diversity, sensitivity, and harassment training. These programs can equip employees with the necessary skills and strategies to advance their careers. Plus, it should strengthen workplace relationships. For new hires, set mentoring programs to make the adjustment process easier for them.

Step 5: Set progressive disciplinary procedures for the company to follow whenever an employee files a complaint against a co-worker or their boss. Reprimand the necessary people if they convey racial discrimination and other inappropriate behavior.

And, remember to set a good example. Don’t be afraid to take the necessary measures if your own boss happens to be in the wrong. So many employees are counting on you. If you fail to address the elephant in the room, they will continue to lose trust.

For equality to be prevalent within the organization, gender, religious beliefs, and other aspects of cultural identity should not dictate employees’ rights. Everyone must have equal opportunities for employment and equal access to resources and benefits for development.

2. Encourage Open Communication

Effective communication is what will help you establish strong relationships with co-workers. It is what will get things done. Although businesses need a managerial structure, traditional hierarchies often impede innovative thoughts. So, open up communication channels and encourage employees to take part in important conversations and provide feedback.

Step 1: Start by establishing rapport with your employees. You can take new hires, for instance, out to lunch. But instead of talking about business, you should take it as an opportunity to break the ice and get to know each other.

Step 2: Actively listen to employees and encourage them to do the same towards their colleagues. Statistics show that nearly a quarter of employees don’t trust their own employers, as indicated by the American Psychological Association.

Step 3: Don’t be condescending, even unintentionally. To avoid coming off as offensive, be more aware of how you communicate.

Avoid saying things like: “Is that the best you can do?”

Instead, show people how they can improve in the future. Before you set assignments, you must make your expectations absolutely clear.

Step 4: Don’t make quick assumptions. For example, when employees are lagging behind in areas where you thought they would excel, don’t jump to conclusions. Don’t assume they failed because they slacked off.

Establish a non-confrontational setting where employees can tell you how they have been doing. They might be going through the death of a loved one, a break-up, or they might be overwhelmed by juggling several projects at once.

Step 5: Schedule weekly or monthly one-on-one meetings. Your employees might often be apprehensive to approach you and share their recent concerns or triumphs but by establishing recurring meetings, you can keep an open line of communication with your employees.

Meetings don’t always have to be at the office. You can do this by getting coffee together or you can go for a stroll.

Effective communication in the workplace is an ingredient to success. Hence, strive to keep the team’s lines of communication open.

3. Infuse Appropriate Fun

“All work and no play make Jack a dull boy.” The same can be said about your employees. Creativity is crippled and the joys of work are taken away from them when they are deprived of “playtime.”

Though the origins of the proverb remain unclear, research supports the idea that playing at work has numerous benefits for employees, teams, and entire organizations, because workers feel less fatigued and stressed. “Playtime” can mean time to socialize or take a brain break, or it can mean structuring work to be more playful. By presenting tasks in a creative fashion, employees become more invested in these tasks. They are also willing to dedicate more time to accomplish their tasks.

For teams of employees, playtime at work does the following:

• It increases trust • It enhances social interaction and promotes a sense of solidarity • It decreases a sense of hierarchy

For the organization as a whole, playtime does the following:

• It creates a friendly work atmosphere • It increases levels of employee commitment • It promotes a flexible organization-wide decision-making process • It boosts organizational creativity

4. Focus on the Little Details

These person-oriented strategies don’t always have to be so grand. Something as simple as allowing workers to display personal items such as family photos in their cubicles can have a profound effect on their experience and how they perform.

Another approach to humanizing the workplace that won’t cost the organization resources is by allowing casual Fridays, or a more relaxed dress code overall. By letting employees come to work dressed as they like, you are permitting them to express their personalities through their clothes.

At times, this policy of relaxing the dress code confuses people, especially if they belong to different age groups, so be sure to inform them about what constitutes casual wear and what’s just plain inappropriate.

5. Understand Millennials

Millennials believe more in life than in work-life balance, according to Fidelity Investments’ Evaluate a Job Offer Study.10 When made to choose between financial benefits or improving the quality of work life, about 58% of the respondents chose the latter.

This generation demands a say in their contracts, their work arrangements, as well as their benefits. Compared to other generations, they live for flexibility and mobility.

On average, they want a $7,600 pay cut.

A survey conducted by PwC revealed that 66% of millennials feel the need to gain international experience to progress in their careers. About 72% made sacrifices to get into a company, and almost 60% will seek employees that embody their own principles about corporate responsibility. Not to mention, one-third of them don’t expect to work regular office hours.

Obviously, they are quite a handful.

The emergence of this entirely new workforce will present fresh challenges to the HR team. As early as today, you must start looking into employing digital tools and strategies that can maximize their potential.

Why should your company invest in the millennial generation?

Millennials are going to make up the bulk of the workforce in a few years’ time. They are going to represent 40% of the total workforce by 2020. And in the next 10 years, they will represent 75% of the workforce, according to a Governance Studies at Brookings report.

10 https://www.fidelity.com/about-fidelity/individual-investing/better-quality-of-work-life-is-worth-pay-cut-for- millennials

Invest well in these tech-savvy natural-born multi-taskers as they are primed for success.

Lead your Organization by Putting the “Human” in HR

The HR team is responsible for keeping the heart of the organization beating strong. Hence, be empowered to maintain an organization that upholds a culture of well-being, learning, and meaning, and that can balance the demands of a diverse workforce.

Humanizing the organization is about building a place where people feel inspired to do their best work. So, keep investing in what makes us inherently human: emotions, empathy, imagination, and vulnerability. The business gets to prosper and employees get to have extra time for themselves and their families at the end of their work. It’s a win-win.11

11 https://www.trustradius.com/buyer-blog/5-ways-hr-leaders-can-humanize-the-organization