In today’s vernacular, we often hear people stipulate that employees are key stakeholders, and their needs must be considered along with the needs of customers and investors.
Think about it for a moment. Stakeholders are entities outside the organization that the organization serves. An organization serves customers by providing goods and services, and it serves investors by providing a financial return. Clearly customers and investors are outside the body of the organization.
However, employees are not outside and served by the organization; they are the organization. Like the cells of our body, the employees collectively comprise and form the organization’s body.
An organization can exist without customers or investors, it cannot exist without employees.
Think of the startup. The organization is born and comes into existence even before it has its first customer. The body, the living organization, exists and precedes customers.
Furthermore, most startups are bootstrapped so there may not be any investors outside of the founder of the organization.
Hence an organization can exist, and often does without customers or investors.
But an organization cannot exist without its employees. It may be only one employee or a handful to start with but without the employees, there is no organization.
The mistaken view of employees as stakeholders comes about because we think of the organization as the leadership or management of the organization. In this framework, the leader programs the machine of production and employees are simply cogs of that machine. Employees are outside the body of the organization (the collective of leaders and managers) and become yet another outside resource. From this framework, one can argue that employees are stakeholders.
But this way of viewing an organization sets up an unfortunate side effect. Employees and management are not on the same page. In fact, in too many organizations, the employee – management relationship is an adversarial one, mitigated by unions and laws and other transactional negotiations. That does no one any good.
One of the reasons The Living Organization® Framework was created was to change this way of viewing an organization. How would you as a leader relate to your employees if you thought of them as the living cells of your organization’s body? They aren’t your most important assets, they are the organization, period.
Shifting to this new paradigm will not be easy. It will require a shift by both leaders and employees (and maybe even society overall).
Leaders’ roles shift from one of defining direction, directing activity, and evaluating performance to setting context, developing people and building community. It also starts a shift in the power dynamics from heroic leader to a servant guide.
Employees also have a role to play to enable this shift in paradigm. No longer can they play the role of the aggrieved cog in the wheel. They must choose to belong to the organizational community because they want to make a contribution to its purpose. They must take ownership, accountability and responsibility for their very important contribution to the success of the whole. They have to work in collaborative partnership with all the other “living cells” of the organization.
Employees and leaders each have their role to play. Like every partnership relationship, it will not succeed without recognizing the codependent and creative roles everyone plays in the living body of the organization.