Directors Roundtable: Democratization of the Workplace

How do companies encourage workers to share their opinions and foster greater employee engagement, while also setting limits on the topics that are up for discussion? Adam Bryant, Directors Roundtable Editor, interviewed three prominent executives with deep board experience on how to navigate the challenges raised by the growing democratization of the workplace. Their comments were edited for space.

People + Strategy: We are at this remarkable time in the history of the American corporation where employees increasingly feel like they should have a voice and a vote in the company’s policies and who they do business with. That is an incredible leadership challenge. How should we think about this? 

Sue Desmond-Hellmann: I’ll start with a couple of high-level points about this topic. One is that, first and foremost, employee engagement is a net positive. I’ve had the pleasure of working on things like solving blindness, curing cancer, global health and other issues that engage a lot of people to bring all their passion and intellect to work. 

Now as a board member, if you start with thinking that employee engagement is a net positive, the question isn’t how to dampen it. The question is how to make sure that you are aware and enthusiastic about employee engagement, but are clear about the limits, the downsides and the watch-outs.

Mary Bush: I believe it’s a net positive, as well. It has to be managed and led. CEOs have to be incredibly agile today in order to respond to all manner of issues, to lead the company and to figure out how they will make a positive out of all of this energy and passion that’s coming from employees. 

It’s already a positive, but they’ve got to make it a positive in terms of the way the company operates. They’ve got to make it a positive for shareholders, and that can be quite challenging. Boards have to embody a lot of emotional intelligence nowadays.

Mark Templeton: This trend is growing in part because the workforce is becoming younger. We now have digital natives and millennials who have different expectations about the work experience. In these groups, there’s often confusion about having a voice, which is very important in a healthy corporate culture, versus having a vote. Those are very different, and on a day-to-day basis it’s incumbent on CEOs and CHROs to navigate that kind of mindset in the new workforce.

It has to start at the board level, potentially with the governance committee, formulating some point of view and philosophy about this issue. The philosophy I practiced is based on the idea that businesses are obligated to grow, create profit and to follow the regulatory rules that apply to their industry. That’s the basic framework. Then a lot of other issues can start to impinge on that framework including politics. That’s where you have to start drawing lines, making rules and communicate them. 

P+S: Part of the context is that many companies over the years have encouraged their employees to bring their “whole self” to work. Many employees have indeed done that, but now there seems to be a bit of push-pull on just how much of their whole self is the right amount. 

Desmond-Hellmann: That’s why the CHRO, the CEO and the rest of the leadership team need to be clear about what bringing your whole self to work means. After all, work is work and there’s a certain expectation for creating value and getting something done while also managing and supporting causes. A clear-cut, open, honest dialogue about balancing those things is essential. 

"Part of the art of leadership is making sure that the people you are leading know when you're going to make what's more of an autocratic decision." —Sue Desmond-Hellmann

Bush: An approach that some companies take is to give employees a day periodically when they can go work for their favorite charity, or to give them a certain number of hours per month when they can just be creative and innovate in ways that will make a difference for the company in terms of its growth or profitability. 

Those kinds of things empower employees, and they can be part of bringing that whole self. When you get into political issues, particularly if it involves whether you’re a Trump person or a Biden person, that gets very touchy. There are clearly some social issues that used to not come into the workplace so much, but now they are, and that presents a challenge to many CEOs and boards.

Templeton: That’s one of the challenges of this topic because it can be very subject-matter-specific. For example, the focus on diversity and inclusion, and owning it in a significant and serious way as an organization. It’s one of the best things that I’ve seen happen in the workplace in the last 10 years, because it’s about addressing underrepresented groups in the places where it matters most, and that is hiring for internships, entry-level positions, developing high-potential people and who gets promoted into middle management. 

I believe this is the solution to the systemic part of diversity and inclusion that’s keeping us from having the kind of workforce that looks like the population. It’s not just about who you hire at the top, it’s about how you hire, develop and promote to the top. There’s an example of something where I’d want everyone to have not only a voice; I want them to be engaged. But I’ve always believed that issues like politics and religion are not suited for discussion at work. 

You have to be very clear about the cultural values of the organization so that you can align workplace discussion topics to those values. For example, one of our core values at Citrix, where I served as CEO for 16 years, was respect. We weren’t kidding around about it. The way we defined respect was to teach that hierarchy is a necessary evil of managing complexity. It’s not a proxy for respect. When it comes to political conversation, I’m okay with people talking about it, but in line with the cultural norm of respecting others. 

P+S: Let’s go deeper on that. What is your advice to CHROs and CEOs who are facing more questions about the company’s stance on all manner of issues? How should they handle those conversations with employees? 

Desmond-Hellmann: Not all issues are the same in terms of how companies should engage on them. For example, diversity, equity and inclusion are an essential part of managing and leading today. Companies need to be transparent and invite feedback from staff. But issues like climate change and customer interactions are in a different category, and what is most important is that your staff knows who you are. 

For example, Microsoft was clear that they respected and appreciated staff feedback on who they were going to include among their customers, but the company was also clear that they were not going to change. If employees want to give you more feedback, that’s fine, but you also have to be decisive. 

I’ve seen companies get into trouble when their actions don’t match their words. Companies have to pick their most important attributes and values that they want to be known for and focus on those. That means be clear about what you aren’t going to do, and recognize that you could lose some of your talented staff these days if they disagree with you.

Bush: I agree with that. Many people are knocking on the doors of companies for many different issues nowadays, and some of those are the companies’ own employees. Any company has to pick its spots in terms of where it feels that it can have an impact and make a difference while staying aligned with the culture of the company and shareholder interests. 

Diversity, equity and inclusion are obvious for most companies. Another one is the environment because so many companies now are being called upon to operate more sustainably. It’s incumbent upon the senior leadership to decide, based on the company’s culture and values, what issues warrant the company’s engagement and then to ask employees for their input and their help. It’s about drawing clear lines.

"One could see an issues like diversity, equity and inclusion as a great social goal, and it is, but it's a lot more than that." —Mary Bush

Templeton: I like the idea of CEOs saying that we’re going to take a position on things that have a line-of-sight impact on our business, and we’re not going to take a position on things that do not have a line-of-sight to our business. I think that’s a good way to start to parse out the issues for which you need to have a policy and position, and what should be left to employees as individuals. 

P+S: We’ve seen examples of employees pushing the idea that they do have a vote on business decisions. For example, the editors at Hachette Publishing walked out in March 2020 over the company’s decision to publish Woody Allen’s memoir. That’s a heck of a leadership challenge. 

Templeton: The answer is that you have to get ahead of it as opposed to being on the defensive. We had an example at DigitalOcean where we found out that a group publishing extremely false ideas was using our cloud infrastructure. It became a huge employee discussion around what we should do. It was a highly spirited discussion around free speech, which can be a nuanced and difficult issue. In the end, we eliminated the publisher from our cloud because we decided that it didn’t fit the core principles that the company was using to guide many other terms-of-service decisions.

Desmond-Hellmann: Part of the art of leadership is making sure that the people you are leading know when you’re going to make what’s more of an autocratic decision. It’s about saying “I’ll take your input, but this isn’t democracy. There’s no vote, and even if 75 percent of you disagree with me, I’m going to make the decision if I think it’s the right decision. I’m the decision-maker on this.” Good decision-making principles are always important. 

Bush: It’s so important for the CHRO to meet with employees because they will get a sense of how people are thinking, what they are interested in and how their opinions are evolving. Those conversations can inform how the leadership of a company anticipates issues that might come along. If you can anticipate, then you’re better able to set parameters up front as to where you would like input, where you might have flexibility and how you want to formulate your position on issues. 

P+S: Many broader societal challenges seem to be rolling past the front doors of government agencies and landing on the front door of companies to solve. Is that good? Bad? Mixed? 

Bush: One could see an issue like diversity, equity and inclusion as a great social goal, and it is, but it’s a lot more than that. When companies look for talent, they need to look in the broadest pool possible in order to get the best people. If certain parts of the population, be they female, Black, Hispanic or other ethnicities, are excluded, then the company is limiting itself and might be missing out on great innovation and new thinking.

Part of the reason that CSR [corporate social responsibility] is winding up at the doorstep of companies and not just government is that more and more people are beginning to focus on it. Even large shareholders like Blackrock and Vanguard and State Street are emphasizing the importance of CSR and the contributions that CSR can make to the business. Whenever we’re looking at CSR, we’ve got to look at it from the standpoint that this could be something that could be good for the company and good for shareholders, not just a social goal.

Desmond-Hellmann: What I’ve always liked about capitalism is that people do what gets rewarded. It’s like Pavlov’s dog. Companies are engaging on some of the issues that the Business Roundtable talked about because they are rewarded for that. People give them positive feedback, but it’s more than that. 

They’re rewarded with the best talent, because the best talent goes to companies that have the values and culture that people who are talented want to work with. Customers want to buy products from companies that are good companies. I think it is an example of the Business Roundtable rewriting capitalism to the path that it should be on, which is the path that the customers and the talent want it to be on. I hope that’s true because then it’s sustainable. 

Templeton: These issues are landing at the doorstep of business in part because companies are in the best position to make something happen on an issue like diversity, equity and inclusion. It’s not government. I believe corporate America is where the problem can get addressed in a meaningful way. 

"There's often confusion about having a voice versus having a vote. ... It's incumbent on CEOs and CHROs to navigate that kind of mindset in the new workforce." —Mark Templeton

P+S: It does seem like younger employees are making more demands of their companies than they did in the past. How is this going to play out in decades to come? 

Desmond-Hellmann: Part of that conversation is a positive one. You want to create a virtuous circle of wanting the most talented employees to work for your company. That means that they require a lot to stay, and you have to work hard to keep them. I think that’s generally good. The slippery slope is, when does that become entitlement? 

Bush: There are more demands being made of companies, especially by younger people. But I was on the board of Marriott for more than a decade. The philosophy of the founding family was that if we take care of our employees, they will take care of the customers. That philosophy has stayed with the company for decades. 

People who work there stay for a long time. They produce for the company. That culture has been a big part of the company’s success. It’s about getting ahead of the game and figuring out what supports employees, makes them happy and makes them feel appreciated that they are contributing.

Templeton: It does go back to the idea that you have to draw lines, because people do have more expectations. I’ll share a story from my time at DigitalOcean, where 60 percent of our employees were remote even before the pandemic. 

One of our guiding principles was that we wanted your onboarding and entire employment experience to be identical, whether you were remote or working in an office. One of the things we did was to pay for gym memberships for people who worked remotely because we had a gym at headquarters. But then someone asked, “Well, I don’t go to the gym. I’m a runner. Will the company pay for my running shoes?” There’s an interesting dilemma where lines are tested. In the end, the answer was no. 

Part of getting ahead of questions like that was to always remind people at the company that everything we do is with honorable intent. We will make mistakes. We are imperfect. But our intent is always 100 percent honorable. It keeps coming back to the importance of culture, and being clear about your culture enables you to draw those lines for all the issues that inevitably come along.