The shareholder value era is over, says Heather McGowan.
She would know: As a future-of-work strategist and author, she helps leaders prepare for the Fourth Industrial Revolution, which is marked by the rapid advancement of tech and our collective need to continuously learn and adapt. She also leads a think tank called Work to Learn and is a faculty member of the Swinburne Centre for the New Workforce in Melbourne, Australia.
The idea that a company’s sole focus should be returning profits to shareholders, she says, simply didn’t work in practice.
“We didn’t make better value. We decimated our communities, we trashed the environment, and our employees are burnt out and disengaged,” she says, noting that her notion was corroborated by the 2019 meeting of the Business Roundtable, a collection of CEOs from the largest companies in the United States, where they discussed the topic. “We’re on the birth of the human value era where the greatest investment we can make is in our collective human potential.”
Even before the forced social experiment of the pandemic, the global workforce has been reexamining the default settings of work: where it happens, how, and if we are all truly committed to the ‘hustle’ culture as we once thought.
— Heather McGowan, Future-of-Work Strategist and Author share
She points to the “great resignation” as proof that talent is now more mobile than ever before, and that executives need to get used to it. And while the “great resignation” gets all the headlines, McGowan outlined four other changes in how and where people are working that are just as, if not more, impactful right now:
The great retirement: Boomers are leaving the workforce — which we should have seen coming — which will leave us with labor shortages for the next decade.
The great reshuffle: Workers are leaving jobs they hate, and retraining for jobs they want; 53% of people who quit jobs in the U.S. in 2021 went into a different industry.
The great refusal: Essentially a strike, as minimum wage has been stagnant for too long.
The great relocation: According to Upwork, 19 million people are looking to move to a new location as a result of both the increase in remote opportunities and reprioritizing where work fits into their lives.
“This is an empowered workforce, and you have to lead it differently because it’s not about where work takes place, it’s how well work fits in their lives,” says McGowan. “That’s the first major transformation between individuals and organizations, and it’s an opportunity to humanize work.”
It all culminates with the need to redefine the relationship between individuals and organizations. She broke it down into four shifts leaders should be making.
A mindset shift – from managing process to enabling success
Leaders need to create an environment of coaching and championing, where they must communicate clearly with their organizations.
A culture shift – from peers as competitors to peers as collaborators
The expectation from leadership should no longer be on individual performance, or even on team performance, but on employees’ ability to harness potential peers as collaborators. This means executives must support collaboration, remove forced rankings and establish policies that reward the collective approach.
“We can’t rely anymore on individual intelligence as leaders,” says McGowan. “We have to be able to harness collective intelligence, and that’s a different way of leading.”
A shift in approach – from extrinsic pressure to intrinsic motivation
When you approach work from a place of intrinsic motivation, it becomes a form of expression, McGowan says. Executives can’t be afraid to experiment with job sculpting, tours of duty, and implementing more project-based work, effectively moving away from fixed job boxes.
A shift in behavior – from driving productivity with domination and fear to creative effectiveness through inspiration
When workers feel inspired, their human potential is released. This means CEOs should not reward leaders simply for their own individual performance, but also for their succession plans and the talent pipeline they leave behind, as that contributes to the sustainability of your organization.
Heather McGowan addressed business leaders at EDGE, YPO’s premier annual event and the largest gathering of CEOs in the world. For three days in New York City, more than 2,500 chief executives from 80 countries gather with influential thought leaders and experts to learn about and discuss critical topics in business and beyond. EDGE fosters a culture of trust, respect and inclusivity, where global leaders emerge with solutions to drive change and help shape our collective future. YPO EDGE returns to New York City in 2023 and 2024 and is open to all YPO members. Learn more about EDGE
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