Imagine A Business Where Employee Contributions Are Genuinely Appreciated... And Rewarded

One of the greatest problems in our nation--indeed in all of the westernized/industrialized world--is the lack of appreciation of businesses for the sweat equity and intellectual equity of employees. While Henry Ford began the process of recognizing employees for their contribution to the Ford Motor Company--which he did out of self-interest rather than any form of altruism--most companies today are cutting the employee out of the equation when it comes to sharing the wealth generated by the business. Almost every business, not-for-profit agency and governmental employer is trying to cut out health care coverage, pension plans (and let us admit that 401K plans are a joke and unprofitable), and reduce the benefits offered.

In fact, many employees cannot use many of the benefits offered by most companies because there is not enough time to take advantage of them. More often than not, employees are being called upon to work an increased number of hours, take work home, be accessible and accountable during vacations, and are criticized for taking time off from work for doctor appointments, eye care appointments, dental appointments, or take advantage of other benefits.

Still, the battle cry for most businesses--even those posting record profits in the hundreds of millions and buillions--is cut costs by cutting wage, salary and benefit costs. Fundamentally, there has been a shift from the idea that business is a guest in our society and owes a responsibility to the workers, community and nation, as well as those that have a financial stake in the business. Today the overwhelming ethic of business is totally centered on the bottom line: stockholder payouts and dividends. Years ago these stockholders and stakeholders were comprised of smaller investors that pooled resources to generate profit from a business. Today, however, most major corporations are owned by majority stockholders that are a) already rich beyond most people's imagination, b) institutional investors and divestiture investment plans, or c) executive management teams that generate majority ownership through years of service and the awarding of stock and reduced-price stock options as part of their compensation package. Far too often, the distribution of stock holdings is overwhelmingly held by a small minority of individuals or large pooled investors. This, too, cuts out any real benefit to employees, even those with employee stock purchase plans.

Then, too, most companies will tell you, even if you own stock and have invested money, sweat and intellect in the business, that you do not have any right to change decisions, contribute new ideas, or challenge the direction that the executives seem to be headed. Indeed, I worked for one such corporation: RCN. Although I was a member of a nation-wide facilities management team, managing over 300 facilities across the United States and Mexico, and I knew that some of the decisions were erroneous and costly, I was chastised and even punished for pressing the issue on bad decisions. In fact, one project that I criticized before it even began as being wrought with bad planning and hidden costs, was originally slated for $1.5 million for the entire implementation. I wrote several memos and e-mails categorically stating the plan was wrong-headed, poorly planned, employed the wrong technology and would eventually cost at least 10 times the project budget. The project ended up costing $24 million, took almost three years to implement (as opposed to the one year allotted), and the technology never fully worked. The funny thing is I left the company under duress while the wrong-headed executives left with multimillion dollar golden parachutes, offers for board memberships, while leaving the company in bankruptcy and wiping out all the stock investments of all the employees and former employees in the bankruptcy process.

There are a few corporations/businesses that have gotten it over the years. Tom Peters has outlined a few of these companies over the years in his books, In Search of Excellence and Thriving On Chaos. One of the companies he has highlighted is 3M, which has employee incentive plans for ideas that prove profitable, time-saving, cost-saving or otherwise beneficial. This huge corporation also runs training programs that are not just focused on operational concerns, but on employee improvement, manager improvement and employee health and well-being.

Another company that has received attention for including employees in the equity and rewards for business success is SAS. The owner of SAS (that's right, it's a privately owned mulit-billion dollar company) has set up beauty parlors, barber shops, dry cleaners, gyms, coffee shops, day care, clinics, dentists and other amenities on the campus of the worldwide headquarters in North Carolina.

Microsoft had a reputation for providing amenities on campus for employees as well, but putting up with the Microsoft culture of being yelled at by Bill "I'm Always Right" Gates and being compelled to pull all-nighters 7-10 days in a row seems like a lot to give up for such amenities. Lately, there are reports that even those once famous amenities are being cut back.

So, when corporate big shots take a step back from being total rectal tissues (all the while claiming this is how business must be done) like we see in Donald Trump's Apprentice, and genuinely seek employee input, contribution, feedback and share the wealth, it is a bit of a shock. After all, we have come to expect corporate executives to be closed-minded, buried in pursuit of their own agendas, and completely dismissive of employee involvement in anything but doing what the boss wants at any whimsical moment.

Under New Management: Here's an Idea: Let Everyone Have Ideas

LIKE many top executives, James R. Lavoie and Joseph M. Marino keep a close eye on the stock market. But the two men, co-founders of Rite-Solutions, a software company that builds advanced — and highly classified — command-and-control systems for the Navy, don't worry much about Nasdaq or the New York Stock Exchange.

Instead, they focus on an internal market where any employee can propose that the company acquire a new technology, enter a new business or make an efficiency improvement. These proposals become stocks, complete with ticker symbols, discussion lists and e-mail alerts. Employees buy or sell the stocks, and prices change to reflect the sentiments of the company's engineers, computer scientists and project managers — as well as its marketers, accountants and even the receptionist.

"We're the founders, but we're far from the smartest people here," Mr. Lavoie, the chief executive, said during an interview at Rite-Solutions' headquarters outside Newport, R.I. "At most companies, especially technology companies, the most brilliant insights tend to come from people other than senior management. So we created a marketplace to harvest collective genius."

That's a refreshing dose of humility from a successful C.E.O. with decades of experience in his field. (Mr. Lavoie, 59, is a Vietnam War veteran and an accomplished engineer who has devoted his career to military-oriented technologies.)

Most companies operate under the assumption that big ideas come from a few big brains: the inspired founder, the eccentric inventor, the visionary boss. But there's a fine line between individual genius and know-it-all arrogance. What happens when rivals become so numerous, when technologies move so quickly, that no corporate honcho can think of everything? Then it's time to invent a less top-down approach to innovation, to make it everybody's business to come up with great ideas.

That's a key lesson behind the rise of open source technology, most notably Linux. A ragtag army of programmers organized into groups, wrote computer code, made the code available for anyone to revise and, by competing and cooperating in a global community, reshaped the market for software. The brilliance of Linux as a model of innovation is that it is powered by the grass-roots brilliance of the thousands of programmers who created it.