Companies are bands of people

Stick figure drawing of a team of employees.
The team” by Edwin van Geelen  is licensed under CC BY-NC-ND 2.0

Companies are not things; they are groups of people. This fact seems to be simultaneously well-known and lost on everybody. Perhaps this was more obvious in the days before modern brands when businesses were smaller. Now it is all too easy to think about companies in terms of their products, buildings or stock performance.

Yet products, buildings and stock performance do not a company make. These things are the result of the sum total of the labor of a company’s employees. Many companies forget this when they prioritize investment in new technology, real estate or other ‘things’ over employee happiness and productivity. I am not saying give everybody a Segway. What I am saying is instead of investing in a panacea like information technology, invest in “employee technology” by establishing a culture where employees take ownership of their roles as author Daren Martin explains. Once you begin to put this culture in place, bring your employees from all levels of the organization to the table and ask them what investments you should make.

Consider this “human energy model” of business:

  • When I work in a company, I add to the sum total of its people’s energy.
  • When I purchase from a company, I trade value with the sum total of its people’s energy.
  • When I partner with a company, I leverage the sum total of its people’s energy.
  • When I invest in a company, I buy the future dividend of the sum total of its people’s energy.

Notice the order of priorities: employees first, then customers, then the community, and finally investors. This order of priorities is explained in the book Delivering Happiness by Tony Hsieh and the book Joy at Work by Dennis Bakke. In my opinion, it is a great formula for delivering long-term gains and staying ahead of the competition. In fact, I wish that there was a passive global index fund of companies with this ethos because it would be a low risk/high reward bet over 30 years.

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